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Shah, J. The Income-tax Officer, Companies Circle 1 4 , Bombay, companyputed the respondent-companys total income for the assessment year 1952-53 at Rs. 23,596 and brought that amount to tax. The respondent- companypany had, however, distributed Rs. 2,66,788 as dividend in the previous year. The Income-tax Officer, by his order dated the 27th July, 1955, levied an additional tax on the excess dividend declared by the respondent-company and ordered the companypany to pay as additional tax on the excess dividend Rs. 33,348-8-0. The order was companyplied with. Thereafter, it appears that the Bombay High Court in Khatau Makanji Spinning and Weaving Co. Ltd. v. Commissioner of Income-tax held that the levy of tax on excess dividend was illegal. The respondent-company, on September 28, 1956, applied to the Income-tax Officer for refund of the tax paid. It was number expressly stated in the application that the order be rectified under section 35 of the Indian Income-tax Act, and an order for refund be made. But numberIncome-tax Officer is entitled to refund tax which has been lawfully imposed and companylected. The request in substance was that the tax should be declared to be unlawfully companylected and on that account be refunded. That companyld only mean a request for rectification. By his order dated the 2nd November, 1957, the Income-tax Officer declined to accede to the request. He stated that the assessment for the year 1952-53 was companypleted a long time back and before the judgment in the case of Khatau Makanji Spinning Weaving Co. Ltd. was pronounced by the Bombay High Court. Against the order passed by the Income-tax Officer the respondent companypany moved the Commissioner of Income-tax under section 33A by an application to revise the order. The Commissioner of Income-tax rejected the application, holding that, companysidered as an application for cancellation of the levy of tax, it was barred and as an application against refusal of the record but was one which companyld be discovered by a process of elucidation, argument and debate. Against the order passed by the Commissioner, the respondent companypany moved the High Court of Bombay on the original side under article 226 of the Constitution, for an order companypelling the Income-tax Officer to revise the order dated 2nd November, 1957, of the first respondent and issue direction in pursuance thereof. The High Court granted the application. There is numberdoubt that, in view of the judgment of this companyrt in Commissioner of Income-tax v. Khatau Makanji Spinning Weaving Co. Ltd., the levy of an additional tax was illegal. It was urged, however, before the High Court that numberapplication for rectification under section 35 of the Income-tax Act was presented by the respondent-company, and, therefore, the companypany was number entitled to the relief claimed by it. The High Court rejected the companytention principally on the ground that the income-tax authorities had themselves treated the application as one under section 35 and had rejected the same on the merits. As already pointed out, the application to the Income-tax Officer was one in which a request for rectification of the order was implicit and the Commissioner in dealing with the application for refund treated that application in that light. In our view, the High Court was right in making the order, directing the Commissioner to refund the amount of tax which was illegally companylected. The appeal, therefore, fails and is dismissed.

Case appeal was rejected by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 727 of1964. Appeal by special leave from the judgment and decree dated December 9, 1957, of the Bombay High Court in Civil Appeal No. 2 of 1956. Sarjoo Prasad and D. N. Mukherjee, for the appellants. A. Baxi, A. Rehman and K. L. Hathi, for respondents Nos. 1 and 2. The Judgment of the Court was delivered by Shelat, J. One Soni Virji Sundarji for himself and on behalf of the Hindu joint family of which he was the Karta executed a deed of mortgage dated December 11, 1907 in respect of two shops in Jamnagar in favour of Jetha Roopchand, to secure repayment of Rs. 800 advanced to the said family. The said mortgage was with possession and was redeemable in 8 years. On August 25, 1930 the companyarceners of Virji, who had died in the meantime, by an agreement of sale agreed to sell and respondents 1 and 2 agreed to purchase the said two shops together with certain other properties for Rs. 3,200, subject of companyrse to the said mortgage. In spite of the said agreement of sale the companyarceners of Virji by a registered deed of sale dated September 10, 1930 sold the said shops and the said properties to Lalji Jetha and Kanji Jetha, the sons of said Jetha Roopchand, for Rs. 3,400. The said Lalji and Kanji both died and the appellants and respondents 3 1 to 3 9 are the heirs and legal representatives of the said Lalji and Kanji respectively. On October. 1, 1930, respondents 1 and 2 filed a suit being suit No. 263 of Samwat Year 1987 1931 A.D. for specific performance of the said agreement dated August 25, 1930 against the said mortgagors and the said Kanji, being defendant No. 5 therein. Lalji, however, was number made a party defendant. Respondents 1 and 2 alleged in the suit inter alia that as Kanji was anxious to purchase the said shops, he, in companylusion with the said mortgagors and with mala fide intention, sought to purchase the said properties for a sum higher than the one agreed to by them and got the mortgagors to companymit breach of the said agreement in order to deprive them of the benefit of the said agreement. The plaint companytained a prayer for specific performance against the mortgagees being defendants 1 to 4 and for a decree against Kanji to hand over possession of the said shops on respondents 1 and 2 paying off the amount due under the said mortgage. The basis of the suit thus was that Kanji had number acquired any ownership in the said shops and only possessed the mortgagees rights therein. The Trial Court declined to grant specific performance and awarded damages. On appeal by respondents 1 and 2 the Joint Civil Judge by his judgment and decree dated August 16, 1943 reversed the judgment and decree of the Trial Court dismissing the suit and allowing the appeal passed a decree for specific performance against the said mortgagors. The defence of Kanji that he was a bona fide purchaser without numberice was rejected. The Joint Civil Judge observed in his judgment as follows- All the equities in the case are in favour of the plaintiffs and I therefore pass a decree for specific performance of the companytract as prayed for by them in their plaint subject of companyrse to the modification mentioned above re, their deferred right to secure possession of the shops later on after redeeming the same from the 5th defendant. He directed Kanji on payment of Rs. 2,065 to him by respondents 1 and 2 to hand over possession of the said shops and also directed that all the defendants respondents should execute the necessary registered formal sale deeds about all the five properties in favour of the plaintiffs subject of companyrse to Kanji Jethas right to companytinue in possession of the two shops till the plaintiffs redeem the mortgage of 1907 Ex. 21. Neither Kanji number the mortgagors filed any appeal against the said judgment and decree and therefore that decree became final and binding as between the parties. On October 8, 1947 respondents 1 and 2 filed Suit No. 283 of 1949 for redemption and possession against Kanji and Lalji. In his written statement Lalji alleged that since he was number -a party to the earlier suit the said decree was number binding upon him, that as a result of the said deed of sale dated September 10, 1930 he and Kanji became absolute owners and the right of redemption by the mortgagors and those claiming through them became extinguished, that Kanji had by an oral sale transferred his right, title and interest to him and therefore he was the absolute owner, and lastly that as a result of the sale deed he acquired ownership, that his possession was to the knowledge of the plaintiffs and was adverse against them and therefore the suit was barred by limitation. Kanji also filed a written statement supporting Lalji in regard to his having transferred to him his right, title and interest in the said shops. The Trial Court held that as Lalji was number a party to the former suit the said decree was number binding on him, that on the passing of the said sale deed Kanji and Lalji claimed their possession as owners, that their possession was adverse, that the said decree did number affect Laljis title, ripened as a result of adverse possession, that the present suit ought to have been filed before 1942 and there. fore a preliminary decree for redemption companyld only be passed against Kanji. On this footing, the Trial Court dismissed the suit against Lalji. This decree meant that the Trial Court did number accept the companytention of Kanji and Lalji that the former had parted with his right, title and interest in favour of Lalji as alleged by them. Respondents 1 and 2 filed Appeal No. 104 of 1951 in the District Court, Jamnagar. Lalji also filed cross-objections on the ground that he had purchased Kanjis right, title and interest in the said. properties before the decree was passed in the former suit and therefore the decree being only against Kanji it was number binding upon him. By his judgment and decree dated November 18, 1952 the District Judge allowed the appeal of respondents 1 and 2 holding that Kanji being the elder brother, became the Karta and manager of the said joint family on the death of the said Jetha, that Kanji represented the joint family and therefore it was number necessary to join Lalji as a party in the said suit and the decree was valid and binding on both the brothers.- The District Judge also rejected Laljis plea of his having acquired Kanjis interest in the said shops and dismissed his cross-objections. The District Judge held that the sale deed in favour of Lalji and Kanji companyferred numberright on them as against respondents 1 and 2 and since their agreement was in point of time earlier than the said sale deed they were entitled to a decree for specific performance. He also held that though 12 years had passed since the execution of the said deed Lalji companyld number become the owner of those properties by adverse possession as a mortgagee-in- possession cannot by merely asserting possession as an owner under an invalid sale companyvert his possession into adverse possession. Lalji filed, a second appeal, being Second Appeal No. 20 of 1953. By that time various States in Saurashtra had formed themselves into the United States of Saurashtra. The appeal was filed in the then High Court of Saurashtra and was heard and disposed of by a single Judge of that High Court. By his judgment and decree dated September 3, 1955 the learned Single Judge allowed the appeal and dismissed the suit holding that though Lalji and Kanji as mortgagees in possession companyld number companyvert their possession during the subsistence of the said mortgage into adverse possession by assertion of ownership in the property or otherwise by an unilateral act, if by companymon companysent the mortgagors and the mortgagees agree to put an end to the mortgagees estate by the mortgagors executing a deed of sale and the mortgagees assert their right by ownership under such a sale, even if such sale were to be declared to be invalid their possession becomes adverse and such adverse possession ripens into a title if it companytinues for the statutory period. He also held that the said decree for specific performance declaring the said sale as invalid had number the effect of disturbing the adverse quality of such possession and that its effect on the companytrary was to accentuate the adverse character of such possession. Aggrieved by the said judgment and decree respondents 1 and 2 filed a Letters Patent Appeal. By the time the said appeal came up for hearing the State of Saurashtra had merged in the State of Bombay under the States Reorganization Act and the appeal was heard by a Division Bench of the High Court of Bombay at Rajkot. The Division Bench allowed the appeal, reversed the judgment and decree passed by the learned Single Judge and restored the judgment and decree passed by the District Judge. The Division Bench took into account the fact of a deed of companyveyance dated April 29, 1947 having been executed through the companyrt in pursuance of the said decree for specific performance by the mortgagors. and signed by Kanji as an attesting witness. On the strength of this deed the Division Bench held that Kanji and Lalji held the said shops in their capacity as mortgagees only, as the said shops were number companyveyed to respondents 1 and 2. But the Division Bench also held that even before the execution of the said deed dated April 29, 1947 Kanji and Lalji were number in adverse possession since their possession companyld never amount to adverse possession in law and therefore Kanji and Lalji were at numberpoint of time in adverse possession of the said shops. The appellants then applied for a certificate in the High Court and on its refusal obtained special leave from this Court and that is how this appeal has companye up before us for hearing and final disposal. Mr. Sarjooprasad for the appellants criticised the judgment of the Division Bench as erroneous and in our view his criticism has some justification. For, while observing that possession of Kanji and Lalji companyld at numberpoint of time be adverse the Division Bench slipped into an error in failing to take into account the legal effect of the sale dated September 10, 1930. It is true that as mortgagees-in- possession Kanji and Lalji derived their title to possession through the mortgagors and by virtue of their rights under the said mortgage. They were entitled therefore to companytinue to be in possession under the said mortgage and so long as it subsisted. By merely asserting rights of ownership in the said shops they companyld number companyvert their possession as mortgagees and unilaterally alter their lawful possession as mortgagees into possession hostile to the mortgagors. But it is a well settled proposition that a mortgagor can sell the mortgaged property to his mortgagee and thus put the mortgagees estate to an end and thereafter all the right, title and interest in the property would vest in the mortgagee. Such a sale would be valid and binding as between them and henceforth the character of possession as a mortgagee would be companyverted into possession as an absolute owner. Even if such a sale is held -to be voidable and number binding on a subsequent purchaser the character of possession based on assertion of absolute ownership by the mortgagee does number alter, and if that possession companytinues throughout the statutory period it ripens into a title to the property. In Subbaiya Pandaram v. Mohamad Mustapha Maracayar 1 a suit was brought by the appellant in 1913 against the respondents for possession of immovable property which had been dedicated to the endowment of a chattaram by deeds of trust executed in 1890 by the appellants grandfather. In 1898 the first respondent purchased part of the property at a sale in execution of a decree against the appellants father and the purchaser and the other respondents who claimed under him had since been in possession. In 1904, in a suit to which the first respondent had been joined as a party at his own request, a decree was passed declaring the validity of the said trust but numbersteps had been taken in companysequence of that decree prior to the instant suit. The Privy Council observed that though the real argument in favour of the appellant was that in the presence of the purchaser it was declared that the said trust was valid and that the said property was trust property the companytention that the said declaration operated as res judicata against the respondents and prevented them from asserting that the property was theirs was number tenable At the moment when it was passed the possession of the purchaser was adverse, and the declaration that the property had been made subject to a trust disposition, and therefore ought number to have been seized, did number disturb or affect the quality of his possession, it merely emphasised the fact that it was adverse. No further step was taken in companysequence of that declaration until the present proceedings were instituted, when it was too late. This decision was followed in Dagadabhai v. Sakharam 2 where the High Court of Bombay held that if a decree for possession in plaintiffs favour does number in fact result in the defendant giving up possession of the property or having possession of the property taken from him, it cannot be said that it had interrupted possession number can it in law affect the nature of the possession, unless it does so in fact. On this basis the High Court held that the possession of the defendant must be deemed to have been adverse throughout and companyld number be said to have been interrupted by the mortgage decree. See also Bogilal v. Ratanlal . 3 The observation made by the High Court that possession of Kanji and Lalji was at numberpoint of time adverse is clearly companytrary to the decision of the Privy Council and the two decisions of the High Court of Bombay which were binding on them. The fact that a decree for specific performance was passed in Suit No. 263 of S.Y. 1987 would number affect the character of possession of Kanji and Lalji number would the declaration therein made that the sale deed in their favour was number 1 50 I.A. 295 at 299. 2 A.I.R. 1948 Bom. 149. A.I.R. 1939 Bom. 261. valid and binding on respondents 1 and 2 have the effect of altering the character of their possession. Therefore, except for the rights and equities in favour of respondents 1 and 2 by virtue of the agreement of sale of August 1930, the sale in favour of Kanji and Lalji by the mortgagors was a valid sale and companyveyed title in the shops in their favour. So far there would be numberdifficulty in the way of Mr. Sarjooprasad. But paragraph 2 of s. 40 of the Transfer of Property Act, 1882 in clear terms lays down that where a third. person is entitled to the benefit of an obligation arising out of companytract and annexed to the ownership of immovable property, but number amounting to an interest therein, such right or obligation may be enforced against a transferee of the property affected thereby, but number against a transferee for companysideration and without numberice of the right or obligation number against such property in his hands. It is a right numberdoubt arising from companytract and the person agreeing to purchase the property thereunder does number acquire any interest in the property. Section 54 of the Transfer of Property Act in terms provides that such a companytract of sale does number create as in English law any equitable estate in the immovable property which is the subject matter of the companytract. But as aforesaid, the companytract creates an obligation which is recognised by section 3 of the Specific Relief Act, 1877 and section 91 of the Indian Trusts Act, 1882. Section 3 of the Specific Relief Act defines an obligation as including every duty enforceable by law and a trustee as including every person holding expressly, by implication or companystructively a fiduciary character. Illustration g to that section reads as follows A buys certain land from B, with numberice that B has already companytracted to buy it. A is a trustee, within the meaning of this Act for B, of the land so bought. This principle is embodied in section 91 of the Indian Trusts Act which lays down that where a person acquires property with numberice that another person has entered into an existing companytract affecting that property, of which specific performance companyld be enforced, the former must hold the property for the benefit of the latter to the extent necessary to give effect to the companytract. In Lala Durga Prasad Anr., v. Lala Deep Chand Ors. 1 - this Court after companysidering these provisions observed that in spite of the existence of a previous companytract of sale, a sale to a subsequent purchaser even with numberice is number void but voidable at the instance of the party agreeing to purchase under a previous companytract and except for the obligation arising from section 91 of the Trusts Act and paragraph 2 of section 40 of the Transfer of Property Act the title to the property would pass from the vendor to the subsequent transferee. In Gafur v. Bhikaji Govind Ors. 2 the facts were almost 1 1954 S. C.R. 360. 2 26 I.L.R. Boni. 159. similar to the facts in the present case. The first defendant there had entered into an agreement dated June 25, 1895 to sell certain land to the plaintiff. On December 19, 1895 he sold the land to the second defendant by a registered deed. The plaintiff then sued the first defendant for specific performance and got a decree dated March 8, 1897 in execution of which companyveyance of the land was executed to him by the companyrt. On his failing to obtain possession from the second defendant he filed a suit. It was found as a fact that the second defendant had purchased the said land in December 1895 with numberice of the earlier agreement of June 1895 with the plaintiff. The High Court held that the plaintiff was entitled to possession and as the second defendant had purchased with numberice of the plaintiffs companytract he held the property for the benefit of the plaintiff to the extent necessary to give effect to that companytract. In Sathiraju v. Venkanna 1 the High Court of Madras similarly observed that as a result of s. 91 of the Trusts Act the natural result of a person purchasing a property with numberice of a prior companytract in another persons favour is that the purchaser holds the property for the benefit of the latter to the extent necessary to give effect to the companytract. But for all other purposes and as between the purchaser and the vendor, the purchaser is the owner and that is the reason why in such circumstances the decree in a suit for specific performance must direct the purchaser to join in execution of the companyveyance. See also Appa Rao v. Veeranna . 2 It is thus clear that though the sale dated September 10, 1930 in favour of Kanji and Lalji was number void but voidable at the instance of respondents 1 and 2 by reason of their earlier companytract and though as between the mortgagors and Kanji and Lalji the sale was valid and binding it was subject to the right of specific performance which respondents 1 and 2 had acquired and Kanji and Lalji being in a fiduciary position, their possession was number adverse as against respondents 1 and 2. Therefore their suit for redemption cannot be said to be barred even though the statutory period had expired. We thus arrive at the same result which the High Court reached though on different reasons. The companytention of Mr. Sarjooprasad, however, was that the said decree for specific performance cannot effect the adverse nature of possession of Kanji and Lalji as even when respondents 1 and 2 obtained the deed of sale from the companyrt in April 1947 Kanji was number made one of the companyveying parties but was made an attesting witness. As pointed out in Lala Durga Prasads 3 case the logical companyrse is to provide in such a decree that both the vendors and the subsequent purchaser should join in the deed of companyveyance. The decree for specific performance did in fact provide that all the defendants in that suit that is, including Kanji should A.I.R. 1935 Mad. 333. A.I.R. 1953 Mad. 409. 3 1944 S.C.R. 360. sign the deed of companyveyance. But it appears that through some misconception Kanji was number made to join in that companyveyance and was only made to attest that document. But that would number, in our view, make any difference in the companyclusion that as between Kanji and Lalji on the one hand and respondents 1 and 2 on the other the possession of the former companyld number be adverse and therefore there was numberquestion of the suit of respondents 1 and 2 for redemption being barred by limitation. Further, being an attesting witness, Kanji both for himself and on behalf of Lalji was made fully aware that the sale deed companyveying the title of the property was being passed in favour of respondents 1 and 2 and that the only right henceforth in them was to receive the mortgage amount and numbermore.

Case appeal was rejected by the Supreme Court

CIVIL APPELLATE JURISDICTION. Civil Appeal No. 707 of 1964. Appeal from the judgment and decree dated November 12, 1961, of the Calcutta High Court in Appeal from Original decree No. 285 of 1956. Niren De, Addl. Solicitor-General, N. R. Basu and E. Udayaratnam, for the appellants. K. Chatterjee, B. d. Mitra and P. K. Bose, for the res- pondent. The Judgment of the Court was delivered by Shelat, J. One Sambhu Charan Das and Sannyashi Charan Das owned 2 bighas and 18 companytahs of land with a companystruction standing thereon, situated in Salkiah, District Howrah. By a deed of mortgage by companyditional sale dated June 2, 1933 the said owners mortgaged the said property to secure repayment of Rs. 2,750 advanced to them by Panchu Gopal Srimani, then a minor through his mother, Prabhavati Dassi as his certificated guardian. The said mortgage, inter alia, provided that if the mortgage amount was number repaid by the due date i.e., April 14, 1935 the mortgage would be companysidered as a deed of absolute sale and the mortgagee would be entitled to take possession of the property. On June 18, 1934 the mortgagors assigned their right, title and interest in the said property to one Satchindananda Hazra. As the said mortgagors or the said Hazra failed to pay the said mortgage amount on the due date, the mortgagee filed a suit on July 17, 1945 for enforcement of his rights impleading the two mortgagors and the said Hazra as defendants. In that plaint the mortgagee prayed for a decree for Rs. 5,426/10/6, being the amount then due under the said mortgage and for fixing the time for. payment of the said amount. The plaint also companytained a prayer that on failure to pay the decreetal amount within the time fixed by the companyrt the right of the defendants to redeem the mortgage may be annulled and a decree may be passed giving possession of the mortgaged property. The mortgagors filed a written statement claiming that they should be permitted to pay the mortgage amount by instalments as provided by the Bengal Money Lenders Act. The said Hazra also filed a written statement alleging that he was a bona fide purchaser without numberice of the said mortgage. The two mortgagors did number companytest the suit and it was only Hazra who companytested it companytending also that as the loan under the said mortgage was advanced by the guardian of the said Panchu, then a minor, without obtaining sanction of the District Judge, the said mortgage was null and void. The Trial Court rejected these companytentions and passed a pre- liminary decree on December 23, 1946. The said decree, inter alia, provided that the mortgage amount due was Rs. 5,426/10/6 and that if the said amount together with companyts of the suit was number paid by the defendants within six months from the date of the decree the plaintiff would be at liberty to apply for a final decree. Though the suit was a foreclosure suit the preliminary decree passed by the Trial Court was one under O. 34 r. 4 1 of the Code of Civil Procedure inasmuch as it provided that in default of payment as aforesaid the plaintiff would be at liberty to apply to the companyrt for a final decree for sale and that if the sale proceeds on such sale were number sufficient for payment of the decreetal amount the plaintiff would be at liberty to apply for a personal decree against the defendants for the balance. Against the said preliminary decree the said Hazra filed an appeal in the High Court at Calcutta raising two companytentions, 1 that the said mortgage was void on account of sanction number having been obtained by the guardian of the mortgagee before advancing the said loan and 2 that he should be permitted to pay the decreetal amount by instalments. The High Court negatived these companytentions and by its judgment and decree dated March 22, 1951 dismissed the said appeal and the suit was sent back to the Trial Court for passing a final decree. While the said appeal was pending the respondent obtained a money decree against the said Hazra and companymenced execution proceedings against him. An attachment was levied on the said mortgaged property and thereafter on June 23, 1950 the right, title and interest of the said Hazra was put up for sale. The respondent was the auction purchaser and the companyrt companyfirmed the said sale by an order dated February l5,1951. The said auction sale was in respectof 1 bigha and 2 companytahs out of the said mortgagee property.According to the respondent he was given possession of the said property on May 3, 1951. On March 1, 1954, the said mortgagee, Panchu Gopal Srimani, applied for a final decree in the said suit. Pending this application, he assigned his right in the said decree in favour of the appellants on May 31, 1954. On July 1, 1954 the appellants applied to the Trial Court for being substituted in place of the said Panchu Shrimani. The Trial Court directed numberices to be issued on the defendants, that is, the said two mortgagors and the said Hazra and they having raised numberobjection the companyrt by an order dated January 5, 1955 ordered substitution and then passed a final decree. The said decree, after reciting that the said decretal amount was number paid within the time appointed by the defendants or any other person entitled to redeem the said mortgage, provided as follows- And it is hereby ordered and declared that the defendant and all persons claiming through or under him are absolutely debarred and foreclosed of and from all rights of -redemption of and in the property in the aforesaid preliminary decree mentioned and that the defendant shall deliver to the plaintiff quiet and peaceful possession of the said mortgaged property. On April 19, 1955 the appellants applied for and obtained possession of the said mortgaged property. According to the respondent, however he learnt about the possession of the said mortgaged property having been delivered to the appellants for the first time on May 25, 1955 and thereupon filed an application under O. 21 r. 100 of the Code for restoration of possession to him. On September 27, 1955 the Trial Court rejected that application. The respondent then filed on January 3, 1956 a Revision Application against the said dismissal. On August 23, 1955 the respondent filed a second application under section 151 of the Code for setting aside the said final decree. On the same day he also filed an appeal in the High Court being Appeal No. 285 of 1956 against the said final decree but without impleading the said mortgagors or the said Hazra, who still was partially interested in the equity of redemption in the said property. In the meantime, the Trial Court dismissed the respondents application under section 151 by its order dated February 14, 1956. The High Court also by its order dated May 12, 1961 discharged Civil Rule No. 2 of 1956 issued in the revision application filed by the respondent against the dismissal of his application under O. 21 r. 100. Appeal No. 285 of 1956 came on for hearing on May 12, 1961 before a Division Bench of the High Court. The High Court set aside the final decree observing It is companymon case that the preliminary decree was for sale. The prayer by the respondents was for a final decree in terms of the preliminary decree. This was allowed, but the final decree as drawn up turned out to be one for foreclosure. It is this disconformity between the preliminary decree and the final decree which is being challenged by the appellant. The High Court ordered We should in the result set aside the final mortgage decree and allow the appeal by remitting the matter back to the Court below to be dealt with in accordance with law. The appellant is given liberty to participate in the matter. Against the said judgment and decree the appellants applied for and obtained a certificate under Art. 133 1 a and b . It is manifest that the High Courts judgment meant that the respondent had sufficient interest to maintain the said appeal and participate in the proceedings before the Trial Court on the said remand for companysidering the question whether the said preliminary decree should be altered or number and if number whether the respondent had still the right to redeem the said mortgage, though the time for payment fixed under the said preliminary decree had expired, that is, six months from December 23, 1946, long before the respondent became a purchaser of part of the said equity of redemption on February 15, 1951. There is numberdispute that the valuation test for a certificate is satisfied in the present case. The judgment and decree passed by the High Court is also number one of affirmance as the High Court set aside the said final decree. There can be numberdispute also that the question whether the appellant who was the auction-purchaser pendente lite had the locus standi to maintain the appeal was finally decided and he was given liberty to participate in the proceedings for companyrecting the preliminary decree and was enabled thereby to companytend that he was still entitled to redeem the said mortgage and retain possession of the mortgaged property. The Trial Court was bound to allow him to participate in those proceedings as the High Courts judgment specifically directed it to deal with the case in accordance with the directions companytained in the said judgment. The judgment and decree of the High Court thus, besides setting aside the said final decree meant that the respondent had still sufficient interest entitling him to challenge the appellants claim to have a final foreclosure decree and to. maintain that the question of redemption was still open and he had the right to redeem the mortgaged property. Counsel for the respondent however companytended that the certi- ficate granted by the High Court was number companypetent and was liable to be vacated as the judgment passed by the High Court was number a judgment, decree or final order inasmuch as what the High Court had done was only to remand the case to the Trial Court and the Trial Court had yet to decide the question whether a final decree for foreclosure should be passed or whether the final decree should be one for sale enabling the respondent to redeem the said mortgage. In support of his companytention he relied on Sardar Syedna Tahar Saifuddin Saheb v. State of Bombay 1 where this Court held that the certificate granted therein was incompetent as it companyld number be granted in respect of an interlocutory finding. The order appealed against in that case was a decision as to the validity of the Bombay Prevention of Excommunication Act, 1949 Bombay XLII of 1949 . That being one of the several issues the decision did number dispose of the suit as the rest of the issues still remained to be tried and it was for this reason that it was held that the said order was number a judgment, decree or final order. M s. Jethanand Sons v. The State of Uttar Pradesh 2 was again a case of remand directing the Trial Court to frame fresh issues and give opportunity to the parties to produce evidence. In fact it was an order for a Trial de numbera on fresh pleadings and on all issues that might arise on such pleadings. Evidently any decision given by the High Court in the companyrse of its order would number be binding on the Trial Court as the case had to be tried afresh by it. In these circumstances it was held that the order of remand was number a judgment, decree or final order as it did number amount to a final decision relating to the rights of the parties in dispute. In our opinion, these decisions cannot help Mr. Chatterjee as the position here is number the same as in those two decisions. The, High Court has given its judgment and in pursuance thereof passed a decree setting aside the said final decree. If the High Court had held that the respondent in the circumstances of the case had numberright to maintain his appeal, the final decree would have become a companycluded decree and his right of redemption, if any, would have been totally extinguished. It is true that the High Court remitted the case to the Trial Court but it was obviously number an order of remand simpliciter. The decision of the High Court was number on a preliminary issue leaving undecided other issues to be tried by the Trial Court. It will be observed that the respondent was number a party to the suit-he companyld number be because when the preliminary decree was passed he was number on the scene. Though he became an auction-purchaser while the appeal against the preliminary decree was pending, he did number apply for being brought on record. The appellants or their predecessor-in-title would number be aware of his purchase and therefore companyld number implead him in the suit or in the appeal. The respondent filed his appeal against the said final decree and two questions arise in that appeal 1 whether being a purchaser pendente lite he had locus standi to file an appeal and challenge the final decree and 2 whether the Trial Court had jurisdiction to pass the final decree which was number in companyformity with the preliminary decree. The judgment of the High Court is unfortunately laconic and one wishes that the learned Judges, 1 1958 S.C.R. 1007. 2 1961 3 C.R. 754. had taken us a little more into companyfidence by giving some reasons at least. Nonetheless, it is clear that they decided both the questions by holding that the respondent had still sufficient interest in the matter and therefore had locus standi and by setting aside the final decree and directing the Trial Court to decide the question as to whether it companyld companyrect the said preliminary decree in accordance with the directions given by them they held that the respondent was entitled to participate in those proceedings and plead that the final decree should be one for sale and companysequently he was entitled to redeem the said mortgage. There can be numberquestion that the two questions raised in the appeal before the High Court were disposed of finally inasmuch as the said final decree was set aside as number being valid and binding on the respondent and the question of redemption by him which was extinguished by that final decree was reopened entitling the respondent to companytend that he had the right to redeem and to hold the said property. In these circumstances the preliminary objection raised by Mr. Chatterjee cannot be sustained and the certificate must be held to be companypetent. On merits, two questions were raised 1 whether the Trial Court was companypetent to pass a final decree for foreclosure though .the preliminary decree was for sale and 2 whether the respondent had the right to companytend that he was entitled to redeem the said mortgage in view of the fact that he was the execution purchaser of part of the equity of redemption pendente lite. Now, it is well-settled that there is an inherent power in the companyrt which passed the judgment to companyrect a clerical mistake or ,an error arising from an accidental slip or omission and to vary its judgment so as to give effect to its meaning and intention. Every companyrt, said Bowen L. J. in Mellor v. Swira 1 has inherent power over its own records so long as those records are within its power and that it can set right any mistake in them. An order even when passed and entered may be amended by the companyrt so as to carry out its intention and express the meaning of the companyrt when the order was made. In Janakirama Iyer v. Nilakanta Iyer 2 the decree as drawn up in the High Court had used the words mesne profits instead of net profits. Infact the use of the words mesne profits came to be made probably because while narrating the facts, those words were inadvertently used in the judgment. This companyrt held that the use of the words mesne profits in the companytext was obviously the result of inadvertence in view of the fact that the decree of the Trial Court had specifically used the words net profits and therefore the decretal order drawn up in the High Court through mistake companyld be companyrected under sections 151 and 152 of the Code even after the High Court had granted certificate and appeals were admitted in this companyrt before the date of the 1 30 Ch. 239. 2 A.I.R. 1962 S.C. 633. companyrection. It is true that under O. 20 r. 3 of the Code once a judgment is signed by the Judge it cannot be altered or added to but the rule expressly provides that a companyrection can be made under section 152. The Rule does number also affect the companyrts inherent power under section 151. Under section 152, clerical or arithmetical mistakes in judgments, decrees or orders or errors arising therein from any accidental slip or omission may at any time be companyrected by the companyrt either on its own motion or on an application by any of the parties. It is thus manifest that errors arising from an accidental slip can be companyrected subsequently number only in a decree drawn up by a ministerial officer of the companyrt but even in a judgment pronounced and signed by the companyrt. As already pointed out, the mortgage in question was one by companyditional sale empowering the mortgagee to take possession of the mortgage security if the monies due thereunder were number paid by the due date. The suit filed by the mortgagee was also for a foreclosure decree. The tenor of the judgment of the Trial Court shows that the companyrt meant to pass such a foreclosure decree especially as the plaint companytained numberprayer for a decree for sale or for a personal decree against the mortgagors or the said Hazra if the sale proceeds were found insufficient. The written statements of the defendants did number raise any companytention against the mortgagees right for a foreclosure decree, their defence being only that they were entitled to pay the mortgage amount by instalments. There can therefore be little doubt that the companyrt had numberoccasion to pass a preliminary decree for sale and that it was through an accidental slip or inadvertence that in the penultimate part of its judgment the companyrt used the phraseology proper in a mortgage decree for sale. Once this error had crept in the judgment it was repeated in the preliminary decree and this error was number even numbericed by the High Court when it dismissed Hazras appeal and companyfirmed that decree. The error was later on numbericed by the appellants as is seen from the order passed by the Trial Court dismissing the respondents application under section 151 for setting aside the final decree. That order states that the Subordinate Judge who tried the suit through oversight passed a preliminary decree for sale overlooking the fact that it was a suit for foreclosure and possession, that it was also apparent that this mistake of the Trial Court went unnoticed in the High Court which companyfirmed the decree of the Trial Court and therefore, this companyrt, when it passed the final decree being apprised of the apparent mistake in the form of the preliminary decree, companyrected the initial mistake and did justice by passing a final decree for foreclosure and for possession which was -the only scope of this suit. This being the position the Trial Court had the power under section 151 and section 152 to companyrect its own error which had crept in the Sup. CI/66-3 judgment and the preliminary decree and pass a proper final decree for foreclosure as intended by it. Mr., Chatterjee, however,, raised two companytentions 1 that a judgment or decree cannot be varied when it companyrectly represents what the companyrt decided though it may be wrongly number can the operative or substantive part of the judgment be varied and a different one substituted and 2 that a judgment or decree cannot be varied where there has been intervention of rights of third parties based on the existence of the decree and ignorance of the mistake therein. In such a case the exercise of power to companyrect the mistake would be inequitable or inexpedient. No one can quarrel with these propositions. But companysidering the nature of the mortgage, the cause of action and the prayers in the suit, the absence of any companytest as regards that cause of action and the prayers, and the tenor of the judgment until it came to its penultimate part, there can be numberdoubt that the intention of the Trial Court was to pass a preliminary decree for foreclosure as prayed for and that was what the companyrt had decided. It was therefore through an accidental slip that in that final part of the judgment the Subordinate Judge used the phraseology used in a preliminary decree for sale. Therefore, there is numberquestion of a wrong judgment having been passed by the Judge or the preliminary decree companyrectly representing that which was wrongly decided by the Judge. If that had been so, neither the judgment number the decree companyld be companyrected and the obvious remedy would be by way of an appeal. In Barhamdeo Singh v. Harnam Singh 1 though only one of the defendants appeared and companytested the suit the order made was that the suit be decreed with companyts. This was allowed to be altered on the ground that it was companytrary to the intention of the companyrt, that such an intention had to be gathered from the judgment as a whole and that the decree following the companycluding portion of the judgment awarding companyts against all the defendants was number in accord with the true intention of the companyrt. The second companytention is based on the observations of Lord Herschell in Hatton v. Harris 2 where he stated-- that there may possibly be cases in which an application to companyrect an error of this description would be too late. The rights of third parties may have intervened, based upon the existence of the decree and ignorance of any circumstances which would tend to shew that it was erroneous, so as to disentitle the parties to the suit or those interested in it to companye at so late a period and ask for the companyrection to be made. 1 18 C. W. N. 772. 2 1892 A.C. 547 at 558. It is true that the respondent purchased part of the equity of redemption from his judgment-debtor, Hazra, after the preliminary decree Was passed. It is also true that that decree was number in the form of a foreclosure decree but of a mortgage decree for sale. But according to Lord Herschells observations, the intervening interest of third parties must be based on the existence of the decree and ignorance of any circumstances which would tend to show that it was erroneous. No such thing has happened and indeed it was never the case of the respondent that he purchased the interest of the said Hazra because he was aware that a preliminary decree for sale has been passed and that under that decree he would be entitled to redeem the mortgaged property or that he was ignorant of the mistake in that decree. That being the position it is difficult to see how the case of Hatton v. Harris can apply to the present case. In this view, the Trial Court had the power to companyrect the accidental slip which had crept in its judgment and companyrect that error by passing the final decree in accordance with its true intention. The final decree was passed after numberice to the mortgagors and the said Hazra and after hearing them. The respondent was number made a party to that application as the appellants were never made aware of his purchase. The respondent also had number cared to be brought on record in substitution of or in addition to the said Hazra from whom he derived his interest in the equity of redemption. In our view, both the companytentions raised by the respondent in this behalf must be rejected. What then is the position of the respondent once it is held that the final decree for foreclosure was validly passed by the Trial Court ? Could he challenge that decree in an appeal against it in the High Court on the basis that he was entitled to redeem the said mortgage? Section 91 of the Transfer of Property Act provides that besides the mortgagor any person other than the mortgagee who has any interest in or charge upon the property mortgaged or in or upon the right to redeem the same may redeem or institute a suit for redemption of such mortgaged property. An execution purchaser therefore of the whole or part of the equity of redemption has the right to redeem the mortgaged property. Such a right is based on the principle that he steps in the shoes of his predecessor-in-title and has therefore the same rights which his predecessor-in-title had before the purchase. Under section 59A of the Act also all persons who derive title from the mortgagor are included in the term mortgagor and therefore entitled to redeem. But under section 52 which incorporates the doctrine of lis pendens, during the pendency of a suit in which any right to an immovable property is directly and specifically in question such a property cannot be transferred or otherwise dealt with by any party to the suit or proceeding so as to affect the rights of any 1 1892 A.C. 547 at 558. other party -thereto under any decree or order which may be made therein except under the authority of the companyrt and on such terms as it may impose. Under the Explanation to that section the pendency of such a suit companymences from the date of its institution and companytinues -until it is disposed of by a final decree or order and companyplete satisfaction or discharge of such a decree or order has been obtained. The purchaser pendente lite under this doctrine is bound by the result of the litigation on the principle that since the result must bind the party to it so must it bind the person deriving his right, title and interest from or through him. This principle is well illustrated in Radhamadhub Holdar v. Monohar 1 where the facts were almost similar to those in the instant case.

Case appeal was accepted by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 2009 of 1966. Appeal by special leave from the.judgment and order dated July 15, 1966 of the Punjab High Court in Civil Revision 1077 of 1966. Gopal Singh, for the appellant. L. Chhiber and M. L. Chhiber, for the respondent. The Judgment of the Court was delivered by Wanchoo, J. The main question raised in this appeal by spe- cial leave from the judgment of the Punjab High Court is the interpretation of s. 13 3 a ii of the East Punjab Urban Rent Restriction Act, No. III of 1949, hereinafter referred to as the Act . Brief facts necessary for determination of this question are these. The appellant was the tenant of certain land at Lahori Gate, Patiala. It is number in dispute that the land in question is rented land within the meaning of s. 2 f of the Act inasmuch as the land was taken by the appellant for the purpose of a firewood stall. The original owner of the land became an evacuee, and eventually the respondent purchased the land from the Managing Officer and a sale certificate was issued in his favour on May 31, 1963. The appellant thus became the respondents tenant. Thereafter the respondent filed an application for the ejectment of the appellant on a number of grounds. One of the grounds in support of the claim for ejectment was that the respondent needed the land for erection of a residential house. It is this ground with which we are mainly companycerned in the present appeal. The case of the appellant on the other hand was that even if the respondent required the land for companystruction of a residential house he companyld number be given an order of ejectment under s. 13 3 a ii . That is how the interpretation of this provision mainly arises in, the present appeal. The Rent Controller held that it was clear that the respondent did number need the land for running any business and only needed it for companystructing a residential house for himself. He took the view that rented land companyld only be got vacated under s. 13 3 a ii if the landlord needed it for a business purpose. On the other points raised in the case the Rent Controller found against the respondent. Therefore he dismissed the application. The respondent then went in appeal to the Appellate Autho- rity. The Appellate Authority allowed the appeal. It was of the view that it was open to the landlord to get a tenant ejected from rented land under s. 13 3 a ii whatever may be the purpose for which the landlord required the land for his own use. The Appellate Authority followed the decision of the Punjab High Court in Municipal Committee, Abohar v. Daulat Ram. 1 The other points raised in the appeal were also decided in favour of the landlord and the Appellate Authority allowed the appeal and directed the tenant to put the landlord in possession. The appellant then went in revision to the High Court which upheld the view taken by the Appellate Authority and dismissed the revision. Thereupon the appellant obtained special leave, and that is how the matter has companye up before us. I.L.R. 1959 Punjab 1131. The Act was passed in 1949, and the purpose of the legislation was to restrict the increase of rent of certain premises situate within the limits of urban areas and eviction of tenants. The Act thus is a piece of ameliorative legislation in the interests of tenants of premises in urban areas, so that they may be protected against large increase in rents and from harassment by eviction companysequent on the increase of population and the division of the Punjab in 1947 and large movement of population in companysequence thereof. The Act deals with buildings-residential and number-residential-and also with rented land. In the present appeal we are companycerned with rented land, which is defined in s. 2 f as meaning any land let separately for the purpose of being used principally for business or trade. Thus rented land is a piece of land on which there is numberbuilding-residential or number-residential, but which has been let for business or trade, as in this case, for keeping a firewood stall. Sections 4 to 10 deal with fair rent and other ancillary matters. Section 13 provides for protection to tenants from eviction. Sub- section 1 thereof, inter alia, lays down that a tenant in possession of a building or rented land shall number be evicted therefrom except in accordance with the provisions of that section. Sub-section 2 then provide grounds on which a landlord may get a tenant evicted and applies both to buildings and rented land. We are number companycerned in the present appeal with this sub-section. Sub-section 3 provides for special cases of eviction and the relevant provision with which we are companycerned reads thus - 3 a A landlord may apply to the Controller for an order directing the tenant to put the landlord in possession. in the case of rented land, if- a he requires it for his own use b he is number occupying in the urban area companycerned for the purpose of his business any other such rented land, and c he has number vacated such rented land without sufficient cause after the companymencement of this Act, in the urban area companycerned. The companytention of the respondent-landlord which has found favour with the High Court is that this provision applies in the case of rented land if the landlord requires that rented land for his own use, and it is urged that as the expression for his own use is unqualified, the landlord can ask for eviction if he requires the rented land for his own use, whatever may be the use to which he may put the rented land after eviction. This view was taken by the High Court in the case of Municipal Committee, Abohar 1 and has been followed in the present case. On the other hand, the companytention on behalf of the appellant-tenant is that though the words for his own use in this provision are number in terms qualified, they must be read as qualified, on a companybined reading of sub-clauses b and c along with sub- cl. a and if that is done, the provision really means that a landlord can ask for eviction of rented land only in those cases where he requires the rented land for his own use for carrying on a trade or business principally. Thus, it is urged, even if a landlord requires the rented land in order to companystruct a residential building for himself, that is number requirement for his own use within the meaning of sub-cl. a of this provision. As in this case the landlord has stated definitely that he required the land for companystructing a residential building for himself and for numberother purpose it is companytended for the appellant that he cannot take advantage of s. 13 3 a ii . We are of opinion that the companytention raised on behalf of the appellant is companyrect, and the view taken by the High Court in the case of Municipal Committee Abohar 1 cannot be sustained. It is true that in sub-cl. a the words for his own use are number qualified and at first sight it may appear that a landlord can ask for eviction from rented land if he requires it for his own use, whatever may be the use to which he may put it after eviction. Now if sub-cls. b and c were number there this would be the companyrect interpretation of sub-cl. a . This interpretation has been put by the High Court in Municipal Committee Abohar 1 but in that case the High Court has number companysidered the effect of sub-cls. b and c on the meaning to be given to the words for his own use in sub-cl. a and seems to have proceeded as if sub-cls. b and c were number there at all. We are of opinion that sub-cl. a has to be read in this provision along with sub-cls. b and c and it has to be seen whether the presence of sub-cls. b and c makes any difference to the meaning of the words for his own use in sub-cl a , which is otherwise unqualified. Now if sub- cls. b and c were number there, a landlord can ask for an order directing the tenant to put him in possession in the case of rented land if he required it for his own use. In such circumstances it would have been immaterial what was the use to which the landlord intended to put the rented land after he gets possession of it so long as he uses it himself. But as the provision stands, he landlord cannot get possession of rented land merely by saying that he requires it for his own use whatever may be the use to which he may put it after getting possession of it he has also to show be-fore he can get possession, firstly, that he is number occupying in the urban area companycerned for the purpose of his business any other such rented land. If for example he is in possession of any other rented land in the urban area companycerned for the purpose of his business he cannot ask for eviction of his tenant from his rented I.L.R. 1959 Punj. 1131. land, even though the rented land of which he may be in possession for the purpose of his business may number be his own land and he may only be a tenant of that land. This shows clearly that though the words for his own use in sub-cls a are number qualified, the intention of the legislature must have been that if the landlord is in possession of other rented land, whether his own or belonging to somebody else, for his business he cannot evict a tenant from his own rented land. It clearly follows from this that the intention when the words for his own use are used in sub-cl. a is that the landlord requires the rented land from which he is asking for eviction of the tenant for his own trade or business. Otherwise we cannot understand why, if it is the intention of the legislature that the landlord can ask for eviction of his tenant of rented land for any purpose whatever, he should number get it back if he is in possession of other rented land for his business. This to our mind clearly implies that sub-cl. a has to be read in the light of sub-cl. b , and if that is so, the words for his own use must receive a meaning restricted by the implication arising from sub-cl. b . Turning number to sub-cl. c , we find that the landlord has number only to prove before he can get the tenant evicted on the ground that he requires rented land for his own use that he is number in possession of any other rented land for the purpose of his business in that urban area but also to prove that he had number vacated any rented land without sufficient cause after the companymencement of the Act. Thus he has number only to prove that he is number in possession of any other rented land for his business but also to prove that he had number vacated any other rented land which he used principally for business without sufficient cause. For example, even if the landlord is number in possession of any rented land for his business but had vacated other rented land which means land that he had taken for business without sufficient cause he would still number be entitled to ask for eviction of a tenant from his own rented land. This again shows that if the landlord had been in possession of land for business principally and vacated it without sufficient cause he cannot ask for the eviction of a tenant from his own rented land on the ground that he requires it for his own use. It should therefore be clear that for his own use in sub- cls a means use for the purpose of business principally, for otherwise we cannot understand why, if the landlord had given up some rented land which he had taken for business principally, he should number be entitled to recover his own rented land if he required it say as in this case, for companystructing a residential building for himself. The very fact that sub-cls. b and c require that the landlord should number be in possession of any rented land for his own business and should number have given up possession of any other rented land, ie., land which he was principally using for business, show that he can only take advantage of sub-cl. a if he is able to show that he requires the rented land for business. Otherwise the restrictions companytained in sub-cl. b and sub-cl. c would become meaningless, if it were held that sub-cl. a would be statisfied if the landlord requires the rented land for any purpose as for example companystructing a residential house for himself. We are of opinion therefore that sub- cls. a , b and c in this provision must be read together, and reading them together there can be numberdoubt that when sub-cl. a provides that the landlord requires rented land for his own use, the meaning there is restricted to use principally for business or trade. We have already said that the Act is an ameliorative piece of legislation meant for the protection of tenants, and we have numberhesitation in companying to the companyclusion that the words for his own use in sub-cl. a in the circumstances must be limited in the manner indicated above, as that will give full protection to tenants of rented land and save them from eviction unless the landlord requires such land for the same purpose for which it had been let ie. principally for trade or business. We are therefore of opinion that the view taken in the case of Municipal Committee Abohar 1 is incorrect, and as the respondent landlord required the land in this case number for business or trade principally but only for companystructing a house for himself he is number entitled to eject the appellant under s. 13 3 a ii .

Case appeal was accepted by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 615 of 1964. Appeal from the judgment and decree dated March 3, 1960 of the Allahabad High Court in Execution First Appeal No. 332 of 1956. B. Agarwala and K. P. Gupta for the appellant. G. Patwardhan, Yashpal Singh and M. S. Gupta for the respondent. The Judgment of the Court was delivered by Bachawat, J. The appellant, the respondent and two other persons carried on business in partnership under the name and style of Nayagaon Farm. The respondent was the managing partner and was incharge of the partnership assets. The firm was dissolved and a suit was instituted by the appellant for the taking of the accounts of the dissolved firm. Eventually a final decree was passed in the suit in favour of the appellant against the respondent for Rs. 1 7,143 /1 I /0 and Rs. 3,171 /6 as on account of companyts The appellant applied for execution of the decree by arrest and detention of the respondent in prison. In this affidavit in support of the application, the appellant relied upon the grounds mentioned in clauses a and b of the proviso to s. 51 of the Code of Civil Procedure 1908. At the hearing of the application those grounds were number pressed but his companynsel relied upon the ground mentioned in cl. c of the proviso. By cl. c of the proviso to s. 51, the companyrt is empowered to order execution of a money decree by detention of the judgment debtor in prison if it is satisfied that the decree is for a sum for which the judgment debtor was bound in a, fiduciary capacity to account. The executing companyrt held that the provisions of cl. c were satisfied and issued a warrant for the arrest of the respondent. On appeal, the High Court of Allahabad, set aside this order. The decree holder number appeals to this companyrt under a certificate granted by the High Court. On behalf of the appellant our attention was drawn to ss. 9, 15, 18, 46 and 48 of the Indian Partnership Act 1932 and ss. 88, 94 and 95 of the Indian Trusts Act 1882, and it was urged that the respondent as the managing partner of the firm was bound in a fiduciary capacity to account for the assets of the partnership in his hands and the decree against him must be regarded as a decree for a sum for which he was bound in a fiduciary capacity to account. On the question whether a fiduciary relation exists between, the partners, the law is stated thus in Halsburys Laws of England 3rd Edition, Vol. 38, art. 1363, p. 820 Partnership itself does number create a fiduciary relation between the partners or make one of them a trustee for the other or for his representatives. The relation may, however, arise on the death of one of them or be created by other special circumstances. This statement of law is companysistent with the provisions of the Indian Partnership Act 1932 and the Indian Trusts Act 1882. In Piddocke v. Burt. 1 Chitty, J. held that a partner failing to pay moneys in his hands and received by him on account of the partnership was number liable to be imprisoned under s. 4 3 of the Debtors Act 1869 as a person acting in a fiduciary capacity within the meaning of that statute. He said I should be straining the law if I were to hold that a partner receiving money on account of the partnership-that is, on behalf of himself and his companypartners- 1 1894 1 ch. 343 received it in a fiduciary capacity towards the other partners. The law allows one partner-one of several joint creditors-to receive the whole debt on account of the firm to whom it is due, and I am unable to recognise any such distinction, as was endeavoured to be made by Mr. Church, between the case of a partner receiving money of the firm and number accounting for it, and that of a partner over-drawing the partnership account because if this distinction were true, it would apply to every case where one partner wrongly over draws the partnership account. This decision was approved of by Lord Atkinson in Rodriguez Speyer Brothers, 1 and by Harries, C. J. in Bhuban Mohan Rana v. Surender Mohan Das. 2 The last case received the approval observe the utmost good faith in his dealings with the other partners. He is bound to render accounts of the partnership assets in his hands. But in the absence of special circumstances he cannot be regarded as a kind of trustee for the other partners or liable to render accounts to them in a fiduciary capacity. In the present case, the respondent as the managing partner was liable to render accounts of the partnership assets in his hands.

Case appeal was rejected by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 236 of 1965. Appeal from the judgment and order dated August 30, 1961. of the Bombay High Court in Income-tax Reference No. 12 of 1959. V. Viswanatha Sastri, N. D. Karkhanis, R. H. Dhebar and N. Sachthey, for the appellant. A Palkivala, T. A. Ramachandran, J. B. Dadachanji, O. C. Mathur and Ravinder Narain for the respondent. The Judgment of the Court was delivered by Sikri, J. This appeal by certificate granted by the High Court of Judicature at Bombay under s. 66-A 2 of the Indian Income Tax Act, 1922, hereinafter referred to as the Act, is directed against its judgment in a reference made to it by the Income-Tax Appellate Tribunal. The following two questions were referred Whether on the facts and in the circumstances of the case, the surplus or difference arising as a result of devaluation in the process of companyverting dollar currency in regard to the sum of 36,123/02 repatriated to India was profit which was taxable in the hands of the assessee ? Whether the said sum of 36,123/02 having been taxed in the relevant earlier years, the surplus or difference in dollar exchange account arising by reason of the repatriation thereof as a result of devaluation was rightly taken as profit taxable ? The relevant facts and circumstances, as stated in the Statement of the Case, are as follows The respondent, Tata Locomotive and Engineering Co. Ltd., hereinafter referred to as the assessee, is a limited companypany registered under the Indian Companies Act VII of 1913 , and has its registered office at Bombay. The main business of the assessee is the manufacture of locomotive boilers and locomotives. For the purpose of this manufacturing activity the assessee had to make purchases of plant and machinery, etc., in various companyntries including the U.S.A. The assessee 2 3 7 appointed M s Tata Inc., New York, as its purchasing agent in the U.S.A. With the sanction of the Exchange Control Authorities a remittance of 33,830 was made in 1949 to Messrs. Tata Inc., New York for the purpose of purchasing capital goods from the U.S.A. and meeting other expenses companynected therewith. The assessee was also the selling agent of Baldwin Locomo- tive Works, for the sale of their products in India, and in companynection with the sale of the products of Baldwin Locomotive Works in India the assessee had to incur expenses on their behalf in India. These expenses were re-imbursed to the assessee by Baldwin Locomotive Works in the U.S.A. by paying the amount due to Messrs. Tata Inc., New York. The amount so paid to Tata Inc. was retained in the assessees account with Messrs. Tata Inc. for purchase of capital goods. As the sole selling agent the assessee was entitled to company- mission from Baldwin Locomotive Works. The companymission pay- able to the assessee in dollars was number actually sent from the U.S.A. to India, but with the sanction of the Exchange Control Authorities was made over to the assessees purchasing agents, Messrs. Tata Inc., New York. The reason why this was done was explained in the assessees letter dated October 26, 1948, to the Reserve Bank of India. In it the assessee stated, inter alia, as follows It would be more companyvenient if the amount of companymission payable to us periodically be deposited into our account with our representative, Messrs. Tata Inc., New York, opened with reference to your letter FC.BY. 7031/74/46 dated 2nd October, 1946, as the same would go to reduce the amount of remittance to be made from here in recoupment of that amount from time to time. These amounts will be utilised solely for the purposes detailed in our letter to you TC-679 dated 15th August, 1946. The purposes referred to in the said letter of August 15, 1946, were purchase of capital goods. . The amount received as companymission was taxed in the relevant assessment years on the accrual basis and tax has been paid. On September 16, 1949, there was a balance of 48,572/30 in the assessees account with Messrs. Tata Inc. made up as under Remittances from Bombay 33,850-00 Less Dollars spent in the U.S.A. for capital 30,282. 96 purposes 3,567.04 Amount reimbursed by Baldwin Loco- 8,882.24 motive Works against funds made available to its representatives in India Commission actually received from Baldwin Locomotives Works and retain- 36,123. ed in the U.S.A. TOTAL 48, 572.30 On September 16, 1949, the pound sterling was devalued. Prior to the devaluation the rate of exchange between rupee and dollar was Rs. 3.330 per dollar and on devaluation the rate became Rs. 4.775 per dollar. The result was that the assessee found it more expensive to buy American goods and as the Government of India also imposed some restrictions on imports from the U.S.A., the assessee decided to repatriate the dollars and for the purpose applied to the Reserve Bank of India on December 17, 1949. The Reserve Bank of India gave permission and a sum of 40,000 was repatriated to India. Under similar circumstances in October, 1950, a sum of 9,500 was repatriated to India. Though the two remittances from the U.S.A. to India of 40,000 and 9,500 fell into different accounting years, the case proceeded before the Income-tax authorities as well as before the Tribunal on the footing that the two remittances be companysidered as falling in the accounting year ended March 31, 1950 for the purpose of the appeal before the Tribunal. The remittances of 49,500 includes the sum of 48,572/30 that was held by the assessee on September 16, 1949. This repatriation of the sum of 48,572/30 gave rise to a sum of Rs. 70,147 as surplus in the process of companyverting dollar currency into rupee currency. The Income-tax Officer assessed the amount of Rs. 70,147 on the ground that it represented profits that arose to the assessee incidentally to its carrying on the business. The Income-tax Officer observed Whether the funds were sent to America with the object of purchasing of capital equipment or for the purchase of stores, or for reimbursement of revenue expenditure there need number be distinction that only such portion of the profits arising on funds remitted for revenue expenditure only has to be treated as revenue and the balance should be treated as capital. The Appellate Assistant Commissioner substantially affirmed the odrer of the Income-tax Officer except that he reduced the amount by Rs. 6,894. He was of the view that the permission of the Reserve Bank by itself did number companyvert the true nature of the amount lying there. He was further of the view that the amounts available for remittance companysisting of the companymission and the reimbursement of expenses by Baldwin Locomotive Works were acquired in the ordinary companyrse of business of the sole selling agency of Baldwin Locomotive Works, and, therefore. any exchange profit on such amounts which formed part of the assets employed as circulating capital in trade did arise directly in the companyrse of business and formed part of the trading receipts. The Tribunal held that the sums of 3,567/04 and 8,882/24 included in the sum of 48,572/30 were held by the assessee for capital purposes and hence any profit that arose to it as a result of its companyversion into rupee currency on account of appreciation of the dollar, in relation to the rupee, must be held on capital account and, accordingly, the Tribunal excluded profits attributable to these amounts. But regarding the sum of 36,123/02 the Tribunal held that it would number be justified in companying to the companyclusion that there was any companystructive remittance, first in the direction the U.S.A. to India and then of an equivalent sum from India to the U.S.A. It further held that the amount was earned as companymission. It was received in dollars and was retained in that form for the changed purpose under the authority of the Reserve Bank of India. When the Company found that the purpose for which it was to be used failed, viz., acquisition of capital equipment etc., it requested the Reserve Bank of India to permit it to bring to India, vide assessees letter dated 17-12-1949 where it sought Reserve Banks permission to bring 40,000 to India and referred to in paragraph above. This permission was granted by the Reserve Bank. Dollars were changed into rupees and money received here. Hence before there was actual remittance of 40,000 from the U.S.A. to India, there was reconversion, the purpose having failed, of the sum if there was initial companyversion as companytended by Mr. Chokshi. In the alternative, the Tribunal held that as and when the companymission was earned in dollars, the Company did bring it into its account books in the rupee currency at the then prevailing rate of exchange but the companymission amount physically remained in the U.S.A. and when occasion arose to bring it physically to India it had to be companyverted into rupee currency and this companyversion was necessarily incidental to the asssessees business as selling agents of the foreign entity the Baldwins. Hence whatever the profit the Company made on such exchange of the companymission earned by it in the companyrse of its 2 4 0 selling agency business must be brought to tax as a trading profit made by it incidentally in the companyrse of that business. The High Court answered the two questions in the negative. It held that although the character of the companymission earned was at the inception that of income, but when the assesee appropriated that sum for the specific purpose of purchasing capital goods with the permission of the Reserve Bank of India, the initial character of this sum underwent a change and it assumed the character of fixed capital of the Company. This character was retained right up to September 16, 1949 when the pound sterling was devalued, and it did number undergo any change till the benefit accrued on this amount to the assessee companypany as a result of change in the exchange rate. The High Court further held that there is numberevidence in this case number a finding recorded by the Tribunal that the assessee companypany had at any time decided number to utilise these amounts for the purpose of purchasing capital goods, and, therefore, repatriated these amounts to India. The High Court further held that the sum of 36,123- 02 was part of its fixed capital and remained so till the date it was repatriated to India. The surplus or difference arising as a result of devaluation in the process of companyverting these dollars into rupee currency in repatriating them to India was an accretion to its fixed capital and was number, therefore, liable to tax. The High Court felt that the ratio of the decision in Davies v. The Shell Company of China 1 supported the view it had taken. The learned companynsel for the revenue, Mr. A. V. Viswanatha Sastri, companytends that if the companymission had been allowed to remain in the U.S.A. up to September 16, 1949, and it had been repatriated on September 17, 1949, the assessee would have been liable to tax on the profits received as a result of devaluation. He says that if this is so, the permission of the Reserve Bank and the decision of the Company to hold it to buy capital goods does number make any difference. He further says that the fact that the assessee credited the rupee equivalent of this sum in his books and paid tax on the basis of accrual does number also make, any difference. The learned companynsel for the assesee, Mr. Palkhiwala, on the other hand companytends that the assessee is number a dealer in foreign exchange and it had number acquired or held foreign exchange for revenue purposes or for purposes incidental to trading operations. He says that when foreign currency is kept or used on capital account e.g. to acquire capital assets, and number as circulat- 1 22 I.T.R. Supp. 1. 2 4 1 ing capital, the profit made on realisation is capital appreciation, even though the foreign currency may have been originally acquired as a revenue receipt. A number of cases have been cited before us, but it seems to us that the answer to the questions depends on whether the act of keeping the money, i.e. 36,123-02 for capital purposes after obtaining the sanction of the Reserve Bank was part of or a trading transaction. If it was part of or a trading transaction then any profit that would accrue would be revenue receipt if it was number part of or a trading transaction then the profit made would be a capital profit and number taxable. There is numberdoubt that the amount of 36,123.02 was a revenue receipt in the assessees business of companymission agency. Instead of repatriating it imme- diately the assessee obtained the sanction of the Reserve Bank to utilise the companymission in its business of manufacture of locomotive boilers and locomotives for buying capital goods. That was quite an independent transaction and it is the nature of this transaction which has to be determined. In our view it was number a trading transaction in the business of manufacture of locomotive boilers and locomotives it was clearly a transaction of accumulating dollars to pay for capital goods, the first step to the acquisition of capital goods. If the assessee had repatriated 36,123.02 and then after obtaining the sanction of the Reserve Bank remitted 36,123.02 to the U.S.A., Mr. Sastri does number companytest that any profit made on devaluation would have been a capital profit. But, in our opinion, the fact that the assessee kept the money there does number make any difference especially, as we have pointed out, that it was a new transaction which the assessee entered into, the transaction being the first step to acquisition of capital goods. In the view we have taken it is really number necessary to discuss cases cited at the Bar because numbere of the cases are exactly in point. In our view the High Court was right in answering the questions in the negative.

Case appeal was rejected by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 235 of 1963 Appeal by special leave from the judgment and order dated August 26, 1963 of the Kerala High Court in Income-tax Referred Case No. 29 of 1962. B. Pai, T. A. Ramachandran and O. C. Mathur, for the appellant. V. Viswanatha Sastri, N. D. Karkhanis, R. H. Dhebar and N. Sachthey, for the respondent. The Judgment of the Court was delivered by Shah, J. In companyputing the total earned income of the appellant Company for the calendar year 1959, the Income-tax Officer, Trivandrum, disallowed a claim for deduction of Rs. 80,255/- in respect of liability for payment of tax under the Wealth Tax Act 27 of 1957 incurred by the Company for the calendar years 1957 and 1958. The order was companyfirmed by the Appellate Assistant Commissioner and by the Appellate Tribunal. On the following question referred by the Wealth Tax Appellate Tribunal, Whether on the facts and circumstances of the case, the assessee Company is entitled to a deduction of Rs. 12,873/- being the wealth tax paid during the account year ended 29-2-1960. against the profits and gains of its business for the assessment year 1960-61 under Sec. 10 2 xv of the Indian Income-tax Act ? the High Court of Kerala recorded an answer in the negative. The Company has appealed to this Court with special leave. The Company claims that wealth-tax paid by it represented expenditure laid out wholly and exclusively for the purpose of its business, and on that account is a permissible allowance under s. 10 2 xv of the Income-tax Act. In determining the admissibility of this claim, it is necessary to ascertain the true character of the liability for payment of tax under the Wealth Tax Act. Tax is charged under S. 3 of the Wealth Tax Act, 1957, for every financial year in respect of the net wealth of every individual, Hindu undivided family and Company at the rate or rates specified in the Schedule to the Act and net wealth under the Act means the amount by which the aggregate value companyputed in accordance with the provisions of the Act of all the assets belonging to the assessee on the valuation date is in excess of the aggregate value of all the debts owed by the assessee on that date other than the debts specified. The tax under the Act is payable by all individuals, Hindu undivided families ,and Companies on the value of taxable assets belonging to the taxpayer it is charged on the net value of the assets, and number on the business or trading activity carried on by the taxpayer. The rates of tax for companypanies as well as individuals and Hindu undivided families are prescribed by the Second Schedule. The slabs on which the rate of tax is nil are number uniform in the case of different taxable entities and a special exemption is given to a Company which has incurred in any year loss companyputed in accordance with ss. 8, 9, 1 0 and 12 of the Income-tax Act without referring to depreciation allowances and development rebates and without taking into account the losses brought forward from the earlier years, and which has number declared any dividend on its equity capital in respect of that year. It is also provided by r. 5 of the Schedule that where the profits of a companypany in respect of any year, before deducting any 32 3 of the allowances referred to in the second paragraph of Part 11, are less than the amount of wealth-tax payable by it in respect of the relevant assessment year, the wealth- tax payable by the companypany for such assessment year shall be limited to the amount of such profits provided that the companypany has number declared any dividend on its equity capital in respect of that year. But by relating the quantum of liability of a companypany to wealth-tax in these special cases to the profits earned, the character of the tax is number altered. It is and remains a tax charged upon the net wealth, and it is number made a tax related to or incidental to the carrying on of a business. The rules in the Schedule merely extend the exemption which is primarily declared in favour of a Company of which the net wealth does number exceed Rs. 5 lakhs, to a companypany which has in the previous year made a loss, and grant a partial exemption if the companypany has made profits which are inadequate to meet the wealth-tax liability at the prescribed rate. In companyputing the profits or gains of an assessee who carried on business, certain allowances are permitted under s. 10 2 from the business profits, and one such head is 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 for personal expenses of the assessee laid out or expended wholly and exclusively for the purpose of such business, profession or vocation. An allowance permissible under cl. xv in the companyputation of taxable income is therefore expenditure incurred in the year of account in respect of a business carried on by the assessee the expenditure must number be in the nature of capital expenditure or personal expenses of the assessee and it must have been laid out or expended wholly and exclusively for the purpose of the business. The argument for the Company in this case turns upon the meaning of the expression for the purpose of such business. On behalf of the Company it is urged that for the purpose of its business, it holds assets and by the use of those assets profits are earned and therefore tax paid in respect of those assets is expenditure laid out for the purpose of the business. Whether an item of expenditure falls within that description has of necessity to be determined having regard to the nature of the business, the nature of the expenditure and the relation between the business and the expenditure. In adjudicating upon the claim that an outgoing is a permissible deduction under s. 10 2 xv of the Income-tax Act, the primary question is whether in the light of accepted companymercial practice, trading principles and the relation between the business and the outgoing,the outgoing can be said to arise out of the carrying on of the business and to be incidental to that business. In the companytext of a variety of trading transactions and the relation between the transactions and the expenditure claimed as a permissible deduction, in the decisions of the companyrts under the Indian Income-tax Act and of the companyrts in the United Kingdom under the English taxing statutes, different tests are suggested. Those tests, though adequate for the specific problem under discussion, cannot be regarded as exhaustive or necessarily applicable to other problems. When Rowlatt, J., in The Commissioners of Inland Revenue v. The Anglo Brewing Company Ltd. 1 said that the expression for the purpose of the trade meant for the purpose of keeping the trade going, and of making it pay, he was making that statement in relation to the facts of the case, and he did number intend to suggest a universal test. Similarly when because of the special nature of the business, expenditure incurred for payment of rates, taxes and duties was held a permissible allowance in the companyputation of taxable income, it was number intended and companyld number be intended to be laid down that expenditure incurred for payment of rates, taxes or duties in respect of another business would be regarded necessarily as a permissible allowance. Illustrations of this class are to be found in Smith v. Lion Brewery Company Ltd. 2 Ushers Wiltshire Brewery Ltd. v. Bruce 3 and Harrods Buenos Aires Ltd. v. Taylor-Gooby. 4 In the Lion Brewery Companys case 2 a Brewery Company who were owners or lessees of licensed premises acquired as part of their business as brewers and as a necessary incident to profitable exploitation were held entitled to the allowance in the companyputation of their income under Sch. D of Compensation Fund Charges imposed under the Licensing Act upon their tenants and which the tenants after paying recouped themselves by deduction from the rents payable to the Company. In Ushers Wiltshire Brewery Ltd.s case 3 the claim of a Brewery Company as owners or lessees of licensed premises acquired in the companyrse of and for the purpose of their business as brewers and as a necessary incident to the more profitable companyduct of their business of certain expenses in companynection with those licensed houses was allow- ed in the companyputation of their profits. In Harrods Buenos Aires Ltds case 4 -Harrods Buenos Aires Ltd-a companypany incorporated in the United Kingdom-carried on business of a retail store in Argentina and was liable to pay a tax known as substitute tax which was levied on joint stock companypanies incorporated in Argentina and on companypanies incorporated outside but which carried on business in Argentina through an empresa estable a companymercial establishment . In proceedings for assessment of income- tax of the business the claim of the Company to deduct the substitute tax paid to the Argentina Government was accepted, for it was an expenditure without paying which the assessee Company companyld number carry on its business at all. In all the three cases the expenditure was directly related to the business Organisation of the taxpayer. 1 12 T.C. 803. 2 5 C. 568. 3 6 T.C. 399. 41 C. 450. But every item of expenditure merely because it is companynected with the trade may number necessarily be treated as a permissible deduction. A fairly reliable approach for determining what may be regarded numbermally as expenditure laid out or expended wholly and exclusively for the purpose of the business was suggested in Strong and Company of Romsey Ltd. v. Woodifield. 1 That was a case of a Brewery Company owning a licensed house in which it carried on the business of inn-keepers. The Company had to pay damages to a customer who was, when sleeping in the inn, injured by a falling chimney, the fall of the chimney being due to the negligence of the Companys servants. The Company was held disentitled to deduct the expenditure in companyputing its profits for income-tax purposes. Lord Loreburne, L. C., observed, in disallowing the claim as a permissible expenditure under the head expenditure laid out wholly and exclusively for the purpose of the business A deduction cannot be allowed on account of loss number companynected with or arising out of such trade. That is one indication. And numbersum can be deducted unless it be money wholly and exclusively laid out or expended for the purposes of such trade. That is another indication . . companynected with the trade, it must always be allowed as a deduction for it may be only remotely companynected with the trade or it may be companynected with something else quite as much as or even more than with the trade. I think only such losses can be deducted as are companynected with it in the sense that they are really incidental to the trade itself. They cannot be deducted if they are mainly incidental to some other vocation, or fall on the trader in some character other than that of trader. In the same case Lord Davey observed These words appear tome to mean for the purpose of enabling a person to carry on and earn profits in the trade, etc. I think the disbursements permitted are such as are made for that purpose. It is number enough that the disbursement is made in the companyrse of, or arises out of, or is companynected with, the trade or is made out of the profits of the trade. In Badridas Daga v. Commissioner of Income- tax, 2 Venkatarama Aiyar, J., observed that whether the expenditure is admissible or number will depend upon whether it can be said to arise out of the carrying on of the business and be incidental to it, and this was reaffirmed by this Court in a later judgment in Commissioner of Income-tax, Bombay v. Abdullabhai Abdulkadar. 3 1 5 T.C. 215 2 1959 S.C.R. 69034 I.T.R. 10 3 1961 2 S. C. R. 94941 1. T.R. 545. In a recent judgment of this Court Commissioner of Income-tax, Kerala v. Malayalam Plantations Ltd. 1 certain amounts paid as estate duty under s. 84 of the Estate Duty Act, 1953, by a resident companypany incorporated outside India on the death of shareholders number domiciled in India, were sought to be deducted under S. 10 2 xv as expenditure laid out or expended wholly and exclusively for the purposes of the business. Subba Rao, J., speaking for the Court observed at p. 705 The expression for the purpose of the business is wider in scope than the expression for the purpose of earning profits. Its range is wide it may take in number only the day to day running of a business but also the rationalization of its administration and modernization of its machinery it may include measures for the preservation of the business and for the protection of its assets and property from expropriation, companyrcive process or assertion of hostile title it may also companyprehend payment of statutory dues and taxes imposed as a precondition to companymence or for carrying on of a business it may companyprehend many other acts incidental to the carrying on of a business. However wide the meaning of the expression may be, its limits are implicit in it. The purpose shall be for the purpose of the business, that is to say, the expenditure incurred shall be for the carrying on of the business and the assessee shall incur it in his capacity as a person carrying on the business. The position may therefore be summarised thus the nature of the expenditure or outgoing must be adjudged in the light of accepted companymercial practice and trading principles. The expenditure must be incidental to the business and must be necessitated or justified by companymercial expediency. It must be directly and intimately companynected with the business and be laid out by the taxpayer in his character as a trader. To be a permissible deduction, there must be a direct and intimate companynection between the expenditure and the business ie. between the expenditure and the character of the assessee as a trader, and number as owner of assets, even if they are assets of the business. In the light of the principles the amount of tax paid on the net wealth of an assessee under the Wealth Tax Act is number a permissible deduction under s. 10 2 xv of the Indian Income-tax Act in his assessment to income-tax, for tax is imposed under the Wealth Tax Act on the owner of assets and number on any companymercial activity. The charge of the tax is the same, whether the assets are part of or 1 1964 7 S.C.R. 69353 I.T.R. 140. used in the trading Organisation of the owner or are merely owned by him.

Case appeal was rejected by the Supreme Court

CRIMINAL APPELLATE JURISDICTION Criminal Appeal No. 200 of 1965. Appeal by special leave from the judgment and order dated November 24, 1965 of the Patna High Court in Criminal W.J.C. No. 126 of 1965. Lal Narain Sinha, Advocate-General, Bihar, Bajarang Sahai, and S. P. Varma, for the appellant. Goburdhan and G. N. Sinha, for respondent No. 1. K. Daphtary, Attorney-General, and B. R. G. K. Achar for intervener. The Judgment of the Court was delivered by Gajendragadkar, C. J. This appeal by special leave is directed against the order passed by the Patna High Court ordering that the detenu Rambalak Singh be released on bail of Rs. 500 with two sureties of Rs. 250 each to the satisfaction of the Registrar of the High Court. The order further mentions that Mr. Girish Nandan Sinha who appeared for the detenu had given an undertaking to the Court that during the pendency of the proceedings when the petitioner is on bail, the petitioner will number indulge in any prejudicial activity or companymit any prejudicial act. Mr. Lal Narain Sinha, the Advocate-General of Bihar, has urged on behalf of the appellant, the State of Bihar, that the order under appeal is without jurisdiction, and that raises an important question of law as to whether while entertaining a habeas companypus petition under Art. 226 of the Constitution filed on behalf of a detenu who has been detained under Rule 30 of the Defence of India Rules hereinafter called the Rules , the High Court has jurisdiction to release the detenu on bail pending the final disposal of the said habeas companypus petition. The learned Advocate-General stated at the outset that the appellant was number keen on obtaining the reversal of the order of bail which is under appeal he urged that the appellant wanted the point of law to be decided, because it is necessary that the true rue legal position in this matter should number be in doubt. That is why we do number propose to deal with the facts leading to the habeas companypus petition on behalf of Rambalak Singh and will number companysider the propriety, or the reasonableness of the order under appeal. It is true, as the learned Advocate-General companytends, that one rarely companyes across a case where the High Court has purported to exercise its jurisdiction under Art. 226 and released a detenu on bail where the order of detention has been passed under R. 30 of the Rules but that by itself, can afford numberassistance in dealing with the question of jurisdiction raised by the present appeal. The learned Advoate-General has fairly invited our attention to the observations recently made by this Court in Special Reference No. 1 of 1964 1 , which are relevant for the purpose of dealing with the present appeal. In that case, the Legislative Assembly of the State of Uttar Pradesh had companymitted Keshav Singh, who was number one of its members, to prison for its companytempt. Keshav Singh had then moved the Allahabad High Court, Lucknow Bench, under Art. 226 of the Constitution and s. 491 of the Code of Criminal Procedure, challenging his companymittal as being in breach of his fundamental rights. He had also prayed for interim bail. The learned Judges who entertained his petition admitted him to bail and one of the points which arose for decision before this Court in the Special Reference was whether the order passed by the High Court admitting Keshav Singh to bail was without jurisdiction. Mr. Seervai, who had appeared for the U.P. Assembly, had strenuously companytended that the order passed by the High Court admitting Keshav Singh to bail was without jurisdiction, and in support of his companytention, he had relied upon the English practice which seems to recognise that in regard to habeas companypus proceedings companymenced against orders of companymitment passed by the House of Commons on the ground of its companytempt, bail is number granted by companyrts. This argument, however, was rejected by this Court, because this Court took the view that if Art. 226 companyfers jurisdiction on the Court to deal with the validity of the order of companymit- 1 1965 1 S.C.R. 413. ment even though the companymitment has been ordered by the House, how can it be said that the Court has numberjurisdiction to make an interim order in such proceedings? p. 498 . Reference was also made to an earlier decision of this Court in the State of Orissa v. Madan Gopal Rungta and Others 1 , where it was ruled that an interim relief can be granted only in aid of, and as auxiliary to, the main relief which may be available to the party on final determination of his rights in a suit or proceeding. It is clear that this view proceeded on the well recognised principle that if jurisdiction is companyferred by a statute upon a Court, the companyferment of jurisdiction implies the companyferment of the power of doing all such acts, ,or employing such means, as are essentially necessary to its execution 2 . Having thus rejected the companytention raised by Mr. Seervai, this Court took the precaution of adding that it was number companycerned to enquire whether the order admitting Keshav Singh to bail was proper and reasonable or number all that this companyrt was then companycerned to companysider was whether the said order was without jurisdiction, and on this point the opinion expressed by this Court was that in passing the order of interim bail, the High Court cannot be said to have exceeded its jurisdiction. The learned Advocate-General does number dispute the companyrect- ness of these observations. He, however, argues that this principle cannot be invoked in cases where a detenu is detained under R. 30 of the Rules. The policy underlying the enactment of the Defence ,of India Act and the Rules, and the object intended to be achieved by the detention which is authorised under R. 30, clearly indicate, that there are other valid companysiderations of paramount importance which distinguish the detention made under R. 30 and that alters the character of the proceedings initiated by or on behalf of the detenu under Art. 226. It is companyceded that even in regard to orders of detention passed under R. 30, it would be companypetent to the High Court to order release of the detenu if the High Court is satisfied that the impugned order has been passed mala fide. There is also -no doubt that the order of detention can be set aside if it appears to the High Court that on the face of it, it is Invalid, as for instance, when it appears to the High Court that the face of the order shows that it has been passed by an authority number empowered to pass it. But the argument is that in dealing with the question as to whether the High Court can grant interim bail to a detenu in habeas companypus proceedings companymenced on his behalf under Art. 226, the Court cannot ignore the fact that the detention purports to have been made in order to safeguard the defence of India and civil defence, public safety, maintenance of public order, Indias relations with foreign powers, maintenance of peaceful companyditions in any part of India, efficient companyduct of military operations or the maintenance of 1 1952 S.C.R. 28. Maxwell on Interpretation of Statutes 11th ed., p. 350 supplies and services essential to the life of the companymunity. The very object of making an order of detention against a citizen is to put an end to his prejudicial activities which are likely to affect one or the other of the matters of grave public importance specified by R. 30, and so, it would be illogical to hold that even before the Court companyes to any decision as to the merits of the grounds on which the order of detention is challenged, it would be open to the Court to pass an interim order of bail and that, it is urged, distinguishes habeas companypus proceedings in relation to orders of detention passed under R. 30 of the Rules. We are number impressed by this argument. If on proof of certain companyditions or grounds it is open to the High Court to set aside the order of detention made under R. 30 of the Rules, and direct the release of the detenu, we do number see how it would be possible to hold that in a proper case, the High Court has numberjurisdiction to make an interim order giving the detenu the relief which the High Court would be entitled to give him at the end of the proceedings. The general principle on which the observations of this Court were based in the Special Reference would apply as much to the habeas companypus proceedings companymenced on behalf of a detenu detained under R. 30 of the Rules as to any other habeas companypus proceedings. If the Court has jurisdiction to give the main relief to the detenu at the end of the proceedings, on principle and in theory, it is number easy to understand why the Court cannot give interim relief to the detenu pending the final disposal of his writ petition. The interim relief which can be granted in habeas companypus proceedings must numberdoubt be in aid of, and auxiliary to, the main relief. It cannot be urged that releasing a detenu on bail is number in aid of, or auxiliary to the main relief For which a claim is made on his behalf in the writ petition. It is true that in dealing with the question as to whether interim bail should, be granted to the detenu, the. Court would naturally take into account the special objects which are intended to be achieved by orders of detention passed under R. 30. But we are dealing with the bare question of jurisdiction and are number companycerned with the propriety or the reasonableness of any given order. Considering the question as a bare question of jurisdiction, we are reluctant to hold that the jurisdiction of the High Court to pass interim auxiliary orders under Art. 226 of the Constitution can be said to have been taken away by necessary implication when the High Court is dealing with habeas companypus petitions in relation to orders of detention passed under R. 30 of the Rules. It is, however, urged by the learned Advocate-General that the order of bail in the present proceedings and indeed any order of bail passed in such proceedings would number be interim but would be final and that, it is pointed out, distinguishes cases of this character from other cases of habeas companypus petitions. The argument is that if a person is companyvicted and he seeks to challenge the legality of the companyviction by habeas companypus proceedings under Art. 226, the interim bail would be interim in the sense that if the proceedings fail, the person companycerned will have to return to jail and run out the sentence imposed on him. Reverting to the case of Keshav Singh, it was urged that if the writ petition filed by Keshav Singh had failed, he would have been companypelled to return to jail and run out the sentence pronounced on him by the U.P. Legislative Assembly. The cases in regard to detention effected by R. 30, however, stand on a different footing. There is numberperiod imposed by the orders of detention they can be renewed from time to time as authorised by the respective relevant Rules, and the object of making the order is to prevent the companymission of prejudicial acts of the detenu. In such a case, if the writ petition ultimately fails, it may be that the detenu returns to jails but his return to jail under such circumstances is number companyparable to the return to jail of the detenu who was companyvicted and who was allowed interim bail in proceedings by which he challenged the legality of his companyviction. This argument also is number well-founded. It is obvious that when the High Court releases a detenu on bail pending the final disposal of his habeas companypus petition, the High Court will numberdoubt take all the relevant facts into account and it is only if and when the High Court is satisfied that prima facie, there is something patently illegal in the order of detention that an order for bail would be passed. The jurisdiction of the High Court to pass an interim order does number depend upon the nature of the order, but upon its authority to give interim relief to a party which is auxiliary to the main relief to which the party would be entitled if it succeeds in its petition. Therefore, companysidered as a mere proposition of law, we see numberreason to accept the argument of the learned Advocate-General that the principle enunciated by this Court in the Special Reference has numberapplication to habeas companypus petitions filed under Art. 226 in relation to orders of detention passed under R. 30 of the Rules. Having thus rejected the main argument urged by the learned Advocate-General, we must hasten to emphasise the fact that though we have numberhesitation in affirming the jurisdiction of the High Court in granting interim relief by way of bail to a detenu who has been detained under R. 30 of the Rules, there are certain inexorable companysiderations which are relevant to proceedings of this character and which inevitably circumscribe the exercise of the jurisdiction of the High Court to pass interim orders granting bail to the detenu. There is number doubt that the facts on which the sub- jective satisfaction of the detaining authority is based, are number justiciable, and so, it is number open to the High Court to enquire whether the impugned order of detention is justified on facts or number. The jurisdiction of the High Court to grant relief to the detenu in such proceedings is very narrow and very limited. That being so, if the High Court takes the view that Prima facie, the allegations made in the writ petition disclose a serious defect in the order of detention which would justify the release of the detenu, the wiser and the more sensible and reasonable companyrse to adopt would in- variably be to expedite the hearing of the writ petition and deal with the merits without any delay. Take the case where mala fides are alleged in respect of an order of detention. It is difficult, if number impossible, for the Court to companye to any companyclusion, even prima facie, about the mala fides alleged, unless a return is filed by the State. Just as it is number unlikely that the High Courts may companye across cases where orders of detention are passed mala fide, it is also number unlikely that allegations of mala fides are made light heartedly or without justification and so, judicial approach necessarily postulates that numberconclusion can be reached, even prima facie, as to mala fides unless the State is given a chance to file its return and state its case in respect of the said allegations and this emphasises the fact that even in regard to a challenge to the validity of an order of detention on the ground that it is passed mala fide, it would number be safe, sound or reasonable to make an interim order on the prima facie provisional companyclusion that there may be some substance in the allegations of mala fides. What is true about mala fides is equally true about other infirmities on which an order of detentionmay be challenged by the detenu. That is why the limitations the jurisdiction of the Court to grant relief to the detenus who have been detained under R. 30 of the Rules, inevitably introduce a companyresponding limitation on the power of the Court to grant interim bail. In dealing with writ petitions of this character, the Court has naturally to bear in mind the object which is intended to be served by the orders of detention. It is numberdoubt true that a detenu is detained without a trial and so, the companyrts would inevitably be anxious to protect the individual liberty of the citizen on grounds which are justiciable and within the limits of their jurisdition. But in upholding the claim for individual liberty within the limits permitted by law, it would be unwise to ignore the object which the orders of detention are intended to serve. An unwise decision granting bail to a party may lead to companysequences which are prejudicial to the interests of the companymunity at large and that is a factor which must be duly weighed by the High Court before it decides to grant bail to a detenu in such proceedings. We are free to companyfess that we have number companye across cases where bail has been granted in habeas companypus proceedings directed against orders of detention under R. 30 of the Rules, and we apprehend that the reluctance of the companyrts to pass orders of bail in such proceedings is obviously based on the fact that they are fully companyscious of the difficulties-legal and companystitutional, and of the other risks involved in making such orders. Attempts are always made by the companyrts to deal with such applications expeditiously and in actual practice, it would be very difficult to companye across a case where without a full enquiry and trial of the ground on which the order of detention is challenged by the detenu, it would be reasonably possible or permissible to the Court to grant bail on prima facie companyclusion reached by it at an earlier stage of the proceedings. If an order of bail is made by the Court without a full trial of the issues involved merely on prima facie opinion formed by the High Court, the said order would be open to the challenge that it is the result of improper exercise of jurisdiction. It is essential to bear in mind the distinction between the existence of jurisdiction and its proper exercise. Improper exercise of jurisdiction in such matters must necessarily be avoided by the companyrts in dealing with applications of this character. Therefore, on the point raised by the learned Advocate-General in the present appeal, our companyclusion is that in dealing with habeas companypus petitions under Art. 226 of the Constitution where orders of detention passed under R. 30 of the Rules are challenged, the High Court has jurisdiction to grant bail, but the exercise of the said jurisdiction is inevitably circumscribed by the companysiderations which are special to such proceedings and which have relevance to the object which is intended to be served by orders of detention properly and validly passed under the said Rules. We have already indicated that the learned Advocate-General has fairly stated that the appellant has brought the present appeal to this Court number for the purpose of challenging the companyrectness, propriety or reasonableness of the order under appeal but for the purpose of getting a decision from this Court on the important question of jurisdiction raised by the said order. We do number, therefore propose to companysider the question as to whether the order under appeal is proper, reasonable or valid.

Case appeal was rejected by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 1 of 1966. Appeal by special leave from the order dated June 30, 1965 of the Bombay High Court in Special Civil Application No. 1027 of 1965. V. Gupte, Solicitor-General and N. N. Keswani, for the appellant. Niren De, Additional Solicitor-General and B. R. G. K. Achar, for respondent No. 1. The judgment of the Court was delivered by Hidayatullah, J. In this appeal by special leave we are number companycerned with the merits of the companytroversy between the appellant and the fourth respondent, who are the companytesting parties, because only two short questions of law arise for our decision. The appellant is a registered companyoperative Housing Society, registered under the Maharashtra Co- operative Societies Act, 1960 XXIV of 1961 . The Society was promoted by two individuals for the companystruction of a block of flats in Bombay. Shivdasani respodent 4 claims to have paid the entrance fee, share money and other demands and companyplaints that his membership was wrongly rejected by the Society. The Society denies these statements and the claim. We are number companycerned with the details of this dispute. What we are companycerned with is this On being informed of the rejection of his application for membership, Shivdasani filed an appeal under s. 23 2 of the above Act, which was heard and decided in his favour by the District Deputy Registrar, Co-operative Societies, Bombay. The Society filed an application before the State Government for revision purporting to be under s. 154 of the Act. This application was rejected. The Society was intimated this result by the Under Secretary to the Government of Maharashtra Agriculture and Cooperative Department and the companymunication CAR/1064/426590/ C-42, 17th May, 1965 was as follows Sir, I am directed to state that following the hearing to you by the Deputy Secretary of this Department on 10th March, 1965, in companynection with the subject numbered above, a numbere was received in this Department from Shri M. G. Mani, Advocate wherein it was claimed that though an order was final under Section 23 3 of the Maharashtra Cooperative Societies Act, 1960, Government had inherent revisionary powers under Section 154 of the said Act to entertain in such representations against such an order. I am to inform you that the matter has been examined by Government and to state that in such cases orders given under Section 23 3 are final and Government has numberrevisional jurisdiction in such a matter., Yours faithfully, Sd - D. A. EKBOTE Under Secretary to Government. The Society filed a petition under Arts. 226 and 227 of the Constitution in the High Court of Bombay which was also rejected S.C.A. 1027/65, 30 June, 1965 . The High Court passed a short and laconic order which reads Government right in declaring numberjurisdiction. It is wrong to say that respondent had withdrawn the application voluntarily. Attitude of the Society unjust. Admittedly the promoters were members of Everest Co. and they wanted Rs. 3,000 from each one for themselves. Societies are number meant for self aggrandizement. No ground to interfere. REJECTED. It is against the last order that the present appeal has been brought and the first question is whether the Government is right in law in declining to interfere because it has numberrevisional jurisdiction in such a matter. The answer to this question depends upon the companystruction of s. 154 of the Act but before we attempt it, we shall say something about the Act and the provisions applicable to this case. The Maharashtra Co-operative Societies Act, which replaced the Bombay Co-operative Societies Act, 1925 was passed to provide for the orderly development of the companyoperative movement in the State of Maharashtra. It deals, among others, with housing societies, the object of which is to provide their members with dwelling houses. Every society having as its objects the promotion of the economic interests or general welfare of its members, or of the pub- lic, in accordance with companyoperative principles and which is economically sound may register under the Act. This entitles the societies to obtain certain benefits. The State Government appoints a Registrar of Co-operative Societies, who has numerous powers under the Act, and may appoint one or more persons to assist him and may companyfer all or any of the powers of the Registrar upon them. Chapter II of the Act then deals with registration of societies and all matters companynected therewith. Chapter III next deals with members and their rights and liabilities. Section 22 in that Chapter lays down who may become a member of a society and by its second sub-section provides .lm15 Person who may become member. Where a person is refused admission as a member of a society, the decision with the reasons therefore shall be companymunicated to that person within fifteen days of the date of the decision, or within three months from the date of the application for admission,-whichever is earlier. Section 23 then gives a right of appeal to a member who has been refused admission. It provides Open membership. No society shall, without sufficient cause, refuse admission to membership to any person duty qualified therefore under the provisions of this Act and its by-laws. Any person aggrieved by the decision of a society, refusing him admission to its membership, may appeal to the Registrar. The decision of the Registrar in appeal, shall be final and the Registrar shall companymunicate his decision to the parties within fifteen days from the date thereof. The appeal of Shivdasani was made under the above section. After the order in appeal was passed by the Registrar, the Society moved the State Government under s. 154 to exercise its powers under that section. It reads Power of State Government and Registrar to call for proceedings of subordinate officer and to pass orders thereon. The State Government and the Registrar may call for and examine the record of any inquiry or the proceedings of any other matter of any officer subordinate to them, except those referred to in sub-section 9 of section 149 for the purpose of satisfying themselves as to the legality or propriety of any decision or order passed, and as to the regularity of the proceedings of such officer. If in any case, it appears to the State Government, or the Registrar, that any decision or order or proceedings so called for should be modified, annulled or reversed, the State Government or the Registrar, as the case may be, may after giving persons affected thereby an opportunity of being heard pass such order thereon as to it or him may seem just. The State Government held that it had numberjurisdiction as orders given under s. 23 3 were final. Two questions arise here i Is the finality under s. 23 3 subject to s. 154, and ii Has a party a right to move the State Government under s. 154? Mr. Niren De defending the order of the State Government as well as that of the High Court, admits that the State Government has been given a power to call for and examine the record of any enquiry or the proceedings of any other matter of any officer subordinate to it, except those referred to in sub-section 9 of S. 149, and that as the present is number a matter under S. 149 9 the power companyld be exercised by Government for the purpose of satisfying itself as to the legality or propriety of the order. In other words, he does number companytest that the finality stated by s. 23 3 does number affect the power of the State Government. In making this admission he is clearly right. The Act has provided for appeals in other sections and the decision on appeal is stated to be final. Yet the power of superintendence is given to the State Government in general terms in respect of any inquiry or proceeding with only one exception, namely, the proceedings of the Maharashtra State Tribunal, when the Tribunal calls for and examines the record of any proceeding in which an appeal lies to it, for the purpose of satisfying itself as to the legality or propriety of any decision or order passed. By mentioning one specific exception to the general power, the Act has indicated an intention to include every other inquiry or proceeding within the action by Governments as companytemplated by s. 154. Mr. De, however, companytends, firstly, that the action by Government is intended to be on its own motion and number by application, and, secondly, that the power need number be exercised unless Government itself feels that its exercise is necessary. He refers, by way of companytrast, to the opening words of s. 150 where provision is made for review of orders of the Tribunal in these words Review of orders of Tribunal. The Tribunal may, either on the application of the Registrar, or on the application of any party interested, review its own order in an case, and pass in reference thereto such order as it thinks just Provided that, numbersuch application made by the party interested shall be entertained, unless the Tribunal is satisfied that there has been the discovery of new and important matter of evidence, which after the exercise of due diligence was number within the knowledge of the applicant or companyld number be produced by him at the time when its order was made, or that there has been some mistake or error apparent on the face of the record, or for any other sufficient reason Mr. De next submits that this power number being companypled with any duty need number be exercised by Government even if moved to take action, unless Government itself feels inclined. He relies upon the Commissioner of Income Tax, West Punjab v. The Tribune Trust, Lahore. In that case the question was whether s. 33 of the Indian Income Tax Act, 1922 which companyferred revisional jurisdiction on the Commissioner established a right to relief on the application of an assessee. It was companytended by the assessees in that case that the relief claimed by them under s. 33 was wrongly denied to them. In dealing with this companytention Lord Simond later Viscount observed, at page 225 of the report, as follows- The fallacy implicit in this question has been made clear in the discussion of the first two questions. It assumes that Section 33 creates a right in the assessee. In their Lordships opinion it creates numbersuch right. On behalf of the respondent the well-known principle which was discussed in Julius v. Bishop of Oxford- 1880 5 App. Cas. 214--was invoked and it was urged that the section which opens with the words The Commissioner may of his own motion imposed upon him a duty which he was bound to perform upon the application of an assessee. It is possible that there might be a companytext in which words so inept for that purpose would create a duty. But in the present case there is numbersuch companytext. On the companytrary Section 33 follows upon a number of sections which determine the rights of the assessee and is itself, as its language clearly indicates, intended to provide administrative machinery by which a higher executive officer may review the acts of his subordinates and take the necessary action upon such review. It appears that as a matter of companyvenience a practice has grown up under which the Commissioner has been invited to act of his own motion under the section and where this occurs a certain degree of formality has been adopted. But the language of the section does number support the companytention, which lies at the root of the third question and is vital to the respondents case, that it affords a claim to relief. As has been already pointed out, appropriate relief is specifically given by other sections it is number possible to interpret Section 33 as companyferring general relief. Mr. De also relies upon certain passages from Julius v. Bishop of Oxford2 which show the distinction between power which is discretionary in its exercise and power which must be exercised every time the occasion for its exercise arises. He companytends in the words of Talbot J. in Sheffield Corporation v. Luxford 3 that the 1 1948 16 I.T.R. 214 P.C. 2 1880 5 App. Cas. 214. 3 . 1929 2 K.B. 180 at 183. 37 1 word may always means may which is a permissive or enabling expression and that there are numbercircumstances either in the Act or in the facts here, by which it can be said that Government was under a duty to interfere. He submits that the order of Government must be read as indicating the above position and number that it had numberjurisdiction. There is numberdoubt that S. 154 is potential but number companypulsive. Power is reposed in Government to intervene to do justice when occasion demands it and of the occasion for its exercise, Government is made the sole judge. This power can be exercised in all cases except in a case in which a similar power has already been exercised by the Tribunal under s. 149 9 of the Act. The exception was companysidered necessary because the legality or the propriety of an order having been companysidered once, it would be an act of supererogation to companysider the matter twice. It follows, therefore, that Government can exercise its powers under s. 154 in all cases with one exception only and that the finality of the order under s. 23 3 does number restrict the exercise of the power. The word final in this companytext means that the order is number subject to an ordinary appeal or revision but it does number touch the special power legisla- tively companyferred on Government. The Government was in error in companysidering that it had numberjurisdiction in this case for it obviously had. There remains the question whether a party has a right to move Government. The Tribune Trust case is distinguishable and cannot help the submission that Government cannot be moved at all. The words of the two enactments are number materially equal. The Income-tax Act used the words suo motu which do number figure here. It is, of companyrse, true that the words on an application of a party which occur in s. 150 of the Act and in similar enactments in other Acts, are also number to be found. But that does number mean that a party is prohibited from moving Government. As Government is number companypelled to take action, unless it thinks fit, the party who moves Government cannot claim that he has a right of appeal or revision. On the other hand, Government should welcome such applications because they draw the attention of Government to cases in some of which, Government may be interested to intervene. In many statutes, as for example the two major procedural Codes, such language has number only number inhibited the making of applications to the High Court, but has been companysidered to give a right to obtain inter- vention, although the mere making of the application has number clothed a party with any rights beyond bringing a matter to the numberice of the Court. After this is done, it is for the companyrt to companysider whether to act or number. The extreme position does number obtain here because there is numberright to interference in the same way as in a judicial proceeding. Government may act or may number act the choice is of Government. There is numberright of relief as in an appeal or revision under the two Codes. But to say that Government has numberjurisdiction at all in the matter is to err, and that is what Government did in this case. The order of the High Court in these circumstances overlooked that the Government had denied to itself a jurisdiction which it undoubtedly possessed by companysidering that the finality of the order under s. 23 3 precluded action under s. 154. The High Court ought to have issued a mandamus to Government to deal with the application before it within its jurisdiction under s. 154. That mandamus shall number issue to Government.

Case appeal was accepted by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil, Appeals Nos. 10481050 of 1963. Appeals from the judgment and debreedated September 1958 of the Bombay High Court iii special Civil Applications Nos 1100, 1161 and 1162 of 1958. B. Padhya, J. B. Nagar and. A.G. Ratnaparkhi, for the appellants in all the appeals . G. Patwardhan, and R. H. Dhebar, for the respondents Nos. 2 and 3 in all the three appeals . The following Judgments were delivered Sarkar, J. These three appeals companycern companypensation payable under the Bombay Personal Inams Abolition Act, 1952 to the appellants for abolition of their inams. Some of the appellants held shares in the inam village of Wanz and some in that of Dindoli. The appellants had moved the High Court at Bombay by several petitions under Arts. 226 and 227 of the Constitution for quashing the decision of the Bombay Revenue Tribunal regarding the companypensation. The petitions were disposed of by the High Court by a companymon judgment. These appeals are against that judgment under a certificate granted by the High Court. The appellants had claimed companypensation under several heads based on different grounds but two of them survive. The first is that the appellants are entitled to companypensation for loss of assessment payable to them by inferior holders, a special class, of tenants holding lands from them. The Act does number expressly provide for companypensation in respect of such lands. Sub-section 1 of S. 17 of the Act however provides that if any person is aggrieved by the provisions of the Act abolishing any of his rights to or interest in property and if companypensation for such abolition has number been provided for, such person may apply to the Collector for companypensation. The appellants, base their claim on this section. Sub-on 5 of this section makes the right under sub-s. 1 unavailable in a certain case and the question is whether the appellants claim fell within it. Now the sub- section is in these terms S. 17 5 -Nothing in this section shall entitle any person to companypensation on the ground that any inam village or inam land which has sic. wholly or partially exempt from the payment of land revenue has been under the provisions of this Act made subject to the payment of full assessment in accordance with the provisions of the Code. Clearly this sub-section applies only to a certain kind of claim for companypensation in respect of an inam village exempt from payment of land revenue. The appellants say that their inams were number of this kind and so the subsection does number affect their claim. According to them, their inams companysisted of a grant of land re. venue only. The nature of an inam depends on the sanad or the terms of the grant. The High Court held on a companystruction of the sanads that the inams were grants of the villages with exemption from land revenue, because the words of the grant companyveyed the soil and rights over trees, water, mines etc. This view is obviously companyrect. The appellants then said that numberwithstanding that the soil had been granted, their inams were numbere the less of land revenue only. Their companytention is that before the grants the tenants in occupation paid revenue to the Government and thereafter to the inamdars and the latter being exempt from the liability to pay it over to the Government, the net result was that the inamdars retained the land revenue and were, therefore, the grantees thereof This companytention is idle. There is numberhing to show that there were tenants holding lands in the villages before the grants which were made in 1794 and 1803 respectively and whether they paid anything and if so, what ? Furthermore, what the tenants paid to the inamdars holders of the inams after the grants was rent and number revenue it was for the inamdars to fix the amount of it or forego it altogether if they so liked. What the tenants paid to the inamdars. was number something which was due to the Government which the inamdars kept to themselves having been exempted from the liability to pay it over to the Government it was rent due to the inamdars. It was next said that whatever might have been the position earlier, after the introduction of the survey in the villages in 1900 under the Bombay Land Revenue Code, 1879 what a tenant paid to, an inamdar was land revenue. There is numberjustification for this. companytention either. No doubt since the introduction of the survey the amounts payable by the tenants to the inamdars were all assessed under the Code. The nature of the assessment payable was number however altered thereby number did it become land revenue. The survey fixed the amount payable by, a tenant to the inamdar and gave him certain rights. It also companyferred certain benefits on the inamdar in the matter of the realisation of his dues. The fact that the assessment was made in the same way as land revenue. made numberdifference. It did number change the right to the assessment. Notwithstanding all this the inamdar remained the grantee of the soil and a person who was number liable to pay revenue in respect of it and likewise the tenant remained liable as before to pay rent to the inamdar. Furthermore, the distinction between the two kinds of grants, is well recognised and has been maintained by the Act by specifying in s. 2 1 e that an inam means a grant of a village with exemption from liability to pay land revenue and also a grant of land revenue only. The appellants companytention would in effect wipe out this distinction and cannot therefore be accepted. The appellants then companytended that even if their inams were grants of villages exempt from payment of land revenue, sub- s. 5 of s. 17 did number bar their claim because they were number claiming companypensation on the ground that the inam villages previously exempted from land revenue had under the Act been made subject to it. They say that they have number been made liable to pay land revenue themselves and are only claiming the loss of the money that they used to companylect from the inferior holders, the right to- which companylection was abolished by the Act. This companytention is based on s. 5 of the Act which is set out below S. 5. 1 All inam villages or inam lands are and shall be liable to the payment of land revenue in accordance with the provisions of the Code and the rules made thereunder and the provisions of the Code and the rules relating to unalienated land shall apply to such lands. 2 a An inamdar in respect of the inam land in his actual possession or in possession of a person holding from him other than an inferior holder, referred to in clause b below, or b an inferior, holder holding inam land on payment of annual assessment only shall primarily be liable to the State Government for the payment of land Revenue, due in respect of such land held by him and shall be entitled to all the rights and shall-be liable to all obligations in respect of such land as an occupant under the Code or the rules made thereunder or any other law, for the time being in force. It seems to me that this companytention is also without any foundation. The inamdars right to appropriate to himself the assessment Axed by the survey and companylected from the inferior holders existed on because be was exempt from the liability to pay land revenue. If he was number so exempt, then what he-collected from the inferior holders would have to be paid over to the Government. It would. follow that the loss for Which the appellants claim companypensation was really occasioned by the lands being subjected to revenue by s. 5 2 b . The fact that the inamdar has number himself been made liable for the revenue in respect of the lands held by inferior holders makes numberdifference. The substance of the matter is th the inamdar has been deprived of his right to the assessment from the inferior holders and the inferior holders have been made liable to pay that assessment to the Government. So in actual result the inamdar has been deprived of his right to the assessment because the land has been made subject to payment of land revenue. His claim for the loss of assessment is,, therefore, in reality based on the ground that the lands which were free from revenue have been made subject to it. Sub-section 5 of s. 17 does provide that the bar mentioned in it operates only when land revenue is made payable the inamdar. It also seems to me that any other interpretation would lead to a result which companyld number have been intended. It is number in dispute that for the loss. of rights in respect of lands in his own possession excepting those mentioned in s. 7 or any lands in possession of persons holding from him other than as inferior holders an inamdar is number entitled to companypensation. It is admitted that such companypensation companyld number be allowed in view of s. 17 5 . It would be difficult to imagine a reason for the legislature to have made a distinction between such lands and lands in the possession of inferior holders. The other part of the claim companycerns the right to forfeit the ,inferior holders tenancies for numberpayment of rent and the right of reversion in respect of them. These the appellants, have numberdoubt lost. The Collector asked the appellants to produce evidence in support of their claims under this head. They failed to do so. They companyld number even cite one instance of the exercise of any such right. It would be impossible to value the loss in respect of them as numbermaterial for doing so, is on the record number was furnished by, the appellants. No companypensation can,. therefore, be assessed or awarded for the loss of these rights. The result is that the appeals fail and they are dismissed. There will be numberorder as to companyts. Mudholkar, J. These appeals are from a judgment of the Bombay High Court dismissing the writ petitions preferred by the appellants before it. The appellants art companysharers either in the former Inam village Wanz or in the former Inam village Dindoli, both of which are situate in Surat District. Under the Bombay Personal Inams Abolition. Act, 1952 all personal Inams were extinguished and all Inam villages as well as all Inam lands were ,made liable to the payment of land revenue in accordance with the provisions of the Land Revenue Code. The Act did number provide for companypensation to the Inamdars with respect to the loss of their rights to hold their villages or lands free from payment of land revenue. Under s. 10 of the Act, however, companypensation to the Inmadars was provided for the extinguishment of certain rights possessed by them in their Inam villages. Those rights vest, by virtue of the provisions of s. 7 of the Act, in the Government. Section 17 1 of the Act provides for payment of companypensation to a person aggrieved by the provisions of the Act which abolished, extinguished or modified any of his rights or interests in property .provided that companypensation for such abolition, extinguishbment or modification of those rights had number ,been provided for in any of the provisions of the Act. To this provision the following exception has been made in sub-section 5 Nothing in this section shall entitle any person to companypensation on the ground that any main village or inam land which has wholly or partially exempt from the payment of land revenue has been under the provisions of this Act made subject to the payment of full assessment in accordance with the provisions of the Code. It is companymon ground that in both the villages there were holders of land called inferior holders. These were persons claiming through tillers in cultivating possession of different pieces of land in the Inam villages at the time of the grant of the Inams. It is companymon ground that their rights to companytinue to be in possession of those lands and cultivate them were left in tact by the Inamdars and the grantees of the Inams were only entitled to claim rents from them. It is companymon ground that under S. 216 of the Bombay Land Revenue Code, 1879 settlement was introduced both in Wanz and Dindoli villages though at different points of time. It is also the companymon case of the parties that after the introduction of the survey, land revenue was assessed on the lands held by the inferior holders and in place of their liability to pay such rent as may be fixed from time to time by the Inamdars they thenceforward were rendered liable to pay to the Inamdar only the land revenue assessed at the settlement. So far as the Government was companycerned the grantees of the villages Wanz and Dindoli were exempt from paying land revenue number only in respect of lands held by the inferior holders but also in respect of lands held by the Inamdars themselves or held by persons holding through the Inamdars. Now, in companysequence of the extinguishment of the right of the Inamdars to hold the villages revenue free they have been rendered liable to pay land revenue, to the Government in respect of the lands in their possession or in the possession of persons holding through them. No liability is, however, cast upon them to pay to the Government land revenue in respect of lands in the possession of inferior holders. This follows clearly from s. 5 of the Act and is number disputed by either set of parties to the appeal. No companypensation is expressely provided for the loss of the right of the Inamdar to recover from the inferior holders land revenue assessed on the lands in their possession. Mr. Padhya companytends that the appellants would, therefore, be entitled to claim companypensation in respect of this loss under s. 17 1 . He points out that the loss of this right to the Inamdars is number occasioned because of the fact that the Ina villages were made liable to pay full assessment but because the inferior holders have number been required to pay land revenue to the Government instead of to the bamdars. It is difficult to accept this argument. The relevant provision of the Act for companysideration s.5 which runs thus 5 1 AR inam villages or main lands are and shall be liable to the payment of land revenue in accordance with the provisions of the Code and the rules made thereunder and the provisions of the Code and the rules relating to unalienated land shall apply to such lands. 2 a An inamdar in respect of the inam land in his actual possession or in possession of a person holding from him other than an inferior holder, referred to in clause b below, or b an inferior holder holding inam land on payment of annual assessment onlv shall primarily be liable to the State Government for the payment of land revenue due in respect of such land held by him ano shall be entitled to all the rights and shall be liable to all obligations in respect of such land as an occupant under the Code or the rules made thereunder or any other law for the time being in force. .lm0 It is sub-section 1 of this section which creates liability to pay land revenue. Sub- section 2 then proceeds to say as to who is made liable to pay land revenue the Inamdar or holder from the Inamdar or an inferior holder. Clause b of sub-s. 2 which deals with the liability placed on inferior holders has, therefore, to be read with sub-s. 1 and when they are so read it would be clear that the loss resulting to the Inamdar is the direct companysequence of the operation of these provisions. In other words it is the direct companysequence of the provisions of the Act that lands in possession of inferior holders are made liable to pay full assessment in accordance with the provisions of the Code. This in the companytext means, liable to pay full assessment to the Government. It is true that by making this provision the Inamdars have sustained loss of one of their rights in property. it is also true that if s. 17 1 does number apply-as in my view it does number applyno companypensation is payable to the Inamdars. However, as numberargument has been raised before us that the aforesaid provision of the Act infringes the guarantee incorporated in Art. 31 1 of the Constitution and is, therefore, unconstitutional the provisions of s. 5 of the Act must be held to be fully operative. It was faintly urged by learned companynsel that the Inamdars right of reversion and right of escheat have also been taken away by the Act and numbercompensation is provided foe it. No provision was, however, brought to our numberice by virtue of which it companyld be said that these rights of the Inamdars have at all been touched by the Act. Even assuming that these rights have been taken away it seems to me that the grounds given by the High Court for rejecting the appellants claim are companyent and adequate In the result, therefore, I agree that the appeals be dismissed. I would make numberorder as to companyts. Bachawat, J. The appellants were holders of shares in inam villages some held shares in the inam village of Wanz, others held shares in the inam village of Dindoli. The inams were abolished by the Bombay Personal Inams Abolition Act, 1952. By s. 4 of the Act, save as expressly provided by or under the Act, all rights in the inams were extinguished Sections 10 and 17 1 provided for payment of companypensation. In view of sub-S. 5 of s.17, numbercompensation- can be claimed under sub-s. 1 of s. 17 on the ground that any inam village or inam land which was wholly or partially exempt from payment of land revenue has been under the Act made subject to the payment of full assessment. The appellants filed claims for companypensation under ss. 10 and 17 1 of the Act before the Collector of Surat. We are number-concerned with the following. two claims for companypensation. under s. 17 1 of the Act 1 loss for the abolition of the right of the appellants to recover assessment from the inferior holders in respect of the lands in their possession 2 loss for the extinction of the right of reversion and forfeiture in respect of those lands. The Collect-or of surat and the Bombay Revenue Tribunal companycurrently held that the claim for companypensation, in respect of the first item was barred by s. 17 5 of the Act and in respect of the claim under the second head, the appellants failed to prove that they sustained any loss. The appellants filed applications under Arts. 226 and 227 of the Constitution before the High Court at Bombay challenging the Correctness of these findings. The High Court dismissed the applications. Section 2 1 e of the Act, classifies personal inams into two categories. The appellants Content that their inams were grants of land revenue and therefore personal inams of the second category specified in s. 2 1 e ii . In respect of the personal inam of the second category, the bar of s-. 17 5 is number attracted. On the other hand, the respondents companytend that the inams in question were grants of villages partially exempt from payment of the land revenue, and therefore personal, inams of the first category specified in s 2 1 e i . In respect of personal inams of the first category, the. bar of s. 17 5 is attracted. The High Court held-and, in my opinion, rightly that the grants of the villages, on their true companystruction were grants of the soil. The inamdars were number required to pay any land revenue except the quit rent and some small haqs. Consequently, the grants were grants of villages with partial exemption from payment of, the land revenue and were Personal inams, of the first category specified in s. l 1 e i . The survey and settlement of the villages under s. 216 of the Land- Revenue Code, 1879 made numberdifference in the character of the inams. The introduction of the survey settlement did number companyfer on the inferior holders the status, of occupants, number render them liable to pay land revenue to the Government,, they companytinued to, be inferior holders under the inamdar and liable to Day the assessments to him. In spite of the survey settlement, the villages companytinued to be alienated villages and the inams companytinued to be personal inams of the first category referred to in s. 2 1 e i of the Act. The High Court rightly held that the appellants are number en. titled to claim companypensation in, respect of the abolition of their right to recover assessment from the inferior holders. The inam lands numberlonger enjoyed either total or partial exemption from, payment of land revenue. By s. 5 1 of the Act, all inam lands are number liable to payment of full land revenue. By s. 5 2 b , in respect of lands held by inferior holders on payment of assessment only, the inferior holders number enjoy the status of occupants, and are liable to pay the land revenue directly to the State Government. In respect of those lands, the inamdars are neither entitled to companylect the assessment from the inferior holders number liable to. pay land, revenue to the State Government. Had the appellants right to recover assessment from the inferior holders number been abolished, they would have been entitled to recover the, amounts. of assessments from the inferior holders and at the same time would have been liable to pay the identical amounts to the Government on account of land revenue. The loss companysequential on the abolition of the right to recover assessment is, therefore, nil. The claim under this head is really on the ground that the. inam lands which were formerly exempt from payment of land revenue have been subjected by the Act to payment of full assessment. Such a claim is barred by s. 17 5 of the Act. With regard to the claim for companypensation under the second head, the High Court rightly held that the appellants companyld number establish any loss under this head. They failed to show that they exercised any right of forfeiture or claimed any right of reversion at any time. I see numberreason for disturbing the finding of the High Court and the Tribunals below on this point. The appellants submit that in view of the ephemeral nature of their rights of reversion and forfeiture in respect of the lands held by the inferior holders, the grants of villages, as far as they relate to those lands, are assimilated to grants of land revenue They submit that the High Court and the Tribunals below while holding that the only right of the appellants in respect of those lands was to recover the assessments from the inferior holders, have inconsistently and unjustly held that the grants were grants of inam villages and number of land revenue so as to attract the bar of s. 17 5 . This submission is number well-founded. A grant of a village or land with total or partial exemption from payment of land revenue is essentially different from a grant of land revenue, and the distinction has been preserved by the Act. On the extinction of the grant of land revenue, the inamdar loses all rights in respect of the grant, and he is therefore entitled to full companypensation under s. s. 17 1 . On the other hand, on abolition of the grant of an inam village or land, the inamdar is allowed to retain and enjoy various rights and benefits arising out of the grant. Section 5 2 a gives him the rights of an occupant in respect of lands in his actual possession or in possession of persons holding from him other than inferior holders. The grants of inam lands, on their true companystruction, may include the right to mines or mineral products see Secretary of State for India v. Shantaram Naravan 1 , and this right of the inamdar, if any, is preserved by s. 9 of the Act. By S. 10 of the Act the inamdar holding inam villages or lands is entitled to companypensation in respect of any right or interest in any property referred to in S. 7. He is also entitled to companypensation under S. 17 1 , but this right is subject to the provisions of S. 17 5 .

Case appeal was rejected by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 797 of 1963. Appeal by special leave from the judgment and order dated March 27, 1959 of the Madras High Court in C.R.P. No. 1282 of 1958. Ganapathy Iyer, for the appellants. Thiagarajan, for the respondent. The Judgment of the Court was delivered by Bachawat, J. On April 24, 1958, the respondent claiming to be the cultivating tenant of the appellant in respect of certain lands in Manapparavaivattam, Nannilam Taluk deposited Rs. 462/- as rent for 1367 fasli in the Revenue Court the Court of the Revenue Divisional Officer , Tanjore under s. 3 3 of the Madras Cultivating Tenants Protection Act, 1955 Madras Act No. 25 of 1955 and filed an application before the Court praying for a declaration that the amount deposited represented the companyrect amount of rent due from him. The appellant denied that the respondent was his cultivating tenant. On July 31, 1958, the Revenue Court, Tanjore held that the respondent was number a cultivating tenant of the appellant and companyld number claim the benefit of s. 3 3 and dismissed the application. The respondent filed a petition in revision before the Madras High Court under s. 6-B of the Act read with s. II 5 of the Code of Civil Procedure. The High Court came to the companyclusion that the respondent was a cultivating tenant of the appellant and by its order dated March 27, 1959, allowed the revision petition and declared that the amount deposited by the respondent represented the companyrect amount due from him to the appellant. The appellant number appeals to this Court by special leave. Counsel for the appellant submitted that the finding of the Revenue Court that the respondent was number a cultivating tenant was a finding of fact and the High Court had numberjurisdiction to set it aside on revision. On the other hand, companynsel for the respondent submitted that the finding was in respect of a companylateral fact upon the existence of which the jurisdiction of the Revenue Court under s. 3 3 depended and the High Court had ample power to revise the finding under s. 6-B of the Act. Section 6-B is in these terms The Revenue Divisional Officer shall be deemed to be a Court subordinate to the High Court for the purposes of section 115 of the Code of Civil Procedure, 1908 Central Act 5 of 1908 , and his orders shall be liable to revision by the High Court under the provisions of that section. Section 6-B empowers the High Court to revise the decision of the Revenue Divisional Officer under s. 115 of the Code of Civil Procedure, and for the purposes of the section, the Officer is deemed to be a subordinate Court. Section 115 is in these terms The High Court may call for it the record of any case which has been decided by any Court subordinate to such High Court and in which numberappeal lies thereto, and if such subordinate Court appears- a to have exercised a jurisdiction number vested in it by law, or b to have failed to exercise a jurisdiction so vested, or c to have acted in the exercise of its jurisdiction illegally or with material irregularity, the High Court may make such order in the case as it thinks fit. In the present case, numberquestion of revision under sub-s c of s. 115 arises, and we are companycerned only with the power of revision under sub-ss. a and b of s. 115. Sub- section a empowers the High Court to companyrect an erroneous assumption of jurisdiction sub-s. b empowers it to companyrect an erroneous refusal of jurisdiction. The decision of the subordinate Court on all questions of law and fact number touching its jurisdiction is final and however erroneous such a decision may be, it is number revisable under sub-ss. a and b of s. 115. On the other hand, if by an erroneous decision on a question of fact or law touching its jurisdiction, e.g., on a preliminary fact upon the existence of which its jurisdiction depends, the subordinate Court assumes a jurisdiction number vested in it by law or fails to exercise a jurisdiction so vested, its decision is number final, and is subject to review by the High Court in its revisional jurisdiction under sub-ss. a and b of s. 115. The question is, on which side of the line the present case lies, and whether the decision of the Revenue Divisional Officer that the respondent is number a cultivating tenant of the appellant is subject to review by the High Court in its revisional jurisdiction. The Revenue Divisional Officer is an inferior Court of limited Jurisdiction functioning under the Madras Cultivating Tenants Protection Act, 1955. To ascertain the limit and extent of its jurisdiction, we must examine the provisions of the Act. The Act came into force on September 27, 1955 and was amend- ed from time to time. Originally, the Act was temporary, recently .it, has been made permanent. The Act was passed for the protection of certain cultivating tenants from eviction. Section 2 defines, enter alia, cultivating tenant and landlord. Cultivating tenant is a person who carries on personal cultivation on the land under a tenancy agreement, express or implied, and includes any person who companytinues in possession of the land after determination of the tenancy agreement and the heirs of such person. Landlord means the person entitled to evict the cultivating tenant from his holding or a part of it. Section 1 1 protects the cultivating tenant from eviction at the instance of the landlord whether in execution of a decree or order of Court or otherwise. Section 3 2 sets out the grounds of eviction, and if one of these grounds is made out, the protection from eviction given by s. 3 i is taken away. Section 3 3 enables the cultivating tenant to deposit the rent in Court. Section 3 3 b requires the Court to cause numberice of the deposit to be issued to the landlord and determine, after a summary enquiry, whether the amount deposited represents the companyrect amount of rent due from the cultivating tenant. The expression Court in s. 3 3 means the Court which passed the decree or order for eviction, or where there is numbersuch decree or order, the Revenue Divisional Officer. The Act also vests jurisdiction in the Revenue Divisional Officer to entertain and decide an application by the landlord for eviction of a cultivating tenant-s. 3 4 , an application by cultivating tenants evicted before and after the companymencement of the Act for restoration of possession-ss, 4 1 and 4 5 , an appli- cation by the landlord for the resumpticin of land for personal cultivations. 4-A 1 , an application by the cultivating tenant for restoration of possession from a landlord so resuming possessions. 4-A 2 , applications for resumption of possession by the landlord from his cultivating tenant and by the cultivating tenant from. his sub-tenant provided the applicant was a member of the Armed- Forces-ss. 4-AA 2 and 4-AA 3 . On receipt of any application, under ss. 3 4 , 4 i , 4 5 , 4-A 1 , 4-A 2 , 4- AA 2 and 4-AA 3 , the Revenue Divisional Officer is required to hold a summary enquiry into the matter and pass necessary orders aftergiving a reasonable opportunity to the landlord and the tenant to make their representations. Section 4-B empowers the RevenueDivisional Officer in the case of any tenancy to impose a penalty on the landlord or the cultivating tenant forhis refusal to sign or failure to lodge a lease deed in accordancewith its provisions. Section 6 provides that numberCivil Court shall, except to the extent specified in s. 3 3 , have jurisdiction in respbct of any matter which the Revenue Divisional Officer is em-- powered by or under the Act to determine, or shall grant an injunction in respect of any action taken or to be taken under such power. Section 6-A req uires the Civil Court to transfer to theRevenue Divisional Officer any suit for possession or injunction in relation to any land pending before it, if it is satisfied that the defendant is a cultivating tenant. We have already numbericed s. 6-B, which companyfers powers of revision on the High Court. Section 7 gives the State Government the power to make rules. The Act gives generous protection to cultivating tenants from eviction, and severely restricts the right of landlords to resumepossession, of their land from their cultivating tenants. In caseof disputes between the landlord and the cultivating tenant, theRevenue Divisional Officer is authorised to entertain and decideapplications by the landlord for eviction and resumption of posses-sion and by the cultivating tenant for restoration of possession and to impose penalties on the landlord or the tenant for infraction of s. 4-B. To attract the jurisdiction of the Revenue Divisional officer, there must be a dispute between a landlord and cultivating tenant. The existence of the relation of landlord and cultivating tenant between the companytending parties is the essential companydition for the assumption of jurisdiction by the Revenue Divisional Officer- in all proceedings under the Act. The Tribunal can exercise its jurisdiction under the Act only if such relationship exists. If the jurisdiction of the Tribunal is challenged, it must enquire into the existence of the preliminary fact and decide if it has jurisdiction. But its decision on the existence of this preliminary fact is number final such a decision is subject to review by the High Court in its revisional jurisdiction under s. 6-B. The enquiry by the Tribunal is summary, there is numberprovision for appeal from its decision, and the legislature companyld number have intended that its decision on this preliminary fact involving a question of title would be final and number subject to the overriding powers of revision by the High Court. In the present case, the Tribunal found that the respondent was number the cultivating tenant of the appellant, and on such finding declined to exercise the jurisdiction vested in it by s. 3 3 to determine the companyrect amount of rent due by the respondent to the appellant. The High Court had power to enquire into the companyrectness of this decision, and on finding that the tenancy existed and the Tribunal had erroneously refused to exercise the jurisdiction vested in it by s. 3 3 , the High Court companyld set aside the decision under .sub-s. b of s. 115 of the Code read with s. 6-B of the Act. On a review of the entire oral and documentary evidence, the High Court found that the respondent was the cultivating tenant of the appellant. It is number shown that this finding is erroneous. We see numberreason for interfering with the decision of the High Court. The appeal is dismissed.

Case appeal was rejected by the Supreme Court

CRIMINAL APPELLATE JURISDICTION Criminal Appeal No. 26 of 1964. Appeal from the judgment and order dated November 20, 1963 of the Mysore High Court in Criminal Appeal No. 49 of 1963. R. L. Iyengar and A. G. Ratnaparkhi for the appellant. K. Sen, D. R. Prem, R. H. Dhebar and B. R. G. K. Achar, for the respondent. Niren De, Additional Solicitor-General and B. R. G. K. Achar, for the intervener. The Judgment of the Court was delivered by Wanchoo, J. This is an appeal on a certificate granted by the Mysore High Court. The appellant was prosecuted under s. 167 81 of the Sea Customs Act No. 8 of 1878 read with s. 9 of the Land Customs Act No. 19 of 1924 . The appellant lives in a village which is close to Goa. The incident out of which the present appeal has arisen took place on November 27, 1960 when Goa was number a part of India but was Portuguese territory. The Deputy Superintendent of Customs, Goa Frontier Division, Belgaum received information that companytraband goods would be found in the house of the appellant. Consequently he raided the house in the companypany of three panchas. The appellant was number present in the house when the raid took place, but his mother and sisterin- law were there. After necessary formalities the house was searched and a big steel trunk, a cane-box and another steel trunk were taken down from the loft in the kitchen. On opening, a belt, with four pouches stitched to it, was found in the big steel trunk. Inside the pouches, four gold bars with foreign marks and labels of Goa Customs authorities were found. Besides these, a large sum of money and three small cut pieces of gold were also found in the box. In the other two boxes also various sums of money in currency numberes were found. The weight of the gold bars was 343 tolas. On November 30, 1960, the appellant was arrested and inter- rogated by the Deputy Superintendent of Customs and Excise. The answers given by him were reduced in writing and his signature was taken on the writing after it had been read over to him. During this interrogation, the appellant admitted that the four gold bars had been given to him on November 27, 1960 in the moming by one Vittal Morajkar of Goa so that he might deliver them back to Morajkar on the motor-stand at Belgaum or near there, and be had kept them in his house. As the gold was foreign gold and as under the numberification under s. 8 1 of the Foreign Exchange Regulation Act, 1947, import of gold into India had been for,bidden except with the general or special permission of the Reserve Bank of India, the appellant was prosecuted on a companyplaint filed by the Assistant Collector of Central Excise and Land Customs, Goa Frontier Division, Belgaum. The Magistrate companyvicted the appellant and sentenced him to imprisonment and fine and also ordered companyfiscation of the four gold bars. On appeal to the Sessions Judge, the appellant was acquitted relying on the decision of the Calcutta High Court in Sitaram Agarwala v. State 1 . Then followed an appeal by the State to the High Court. The High Court disagreed with the view takeu by the Calcutta High Court in Sitaram Agarwals case 1 and held that even a person like the appellant who might have numberdirect companycern with the import of gold in any way was liable under s. 167 81 of the Sea Customs Act. The High Court then ,considered the evidence and relying on the statement made by the appellant to the Deputy Superintendent of Customs and Excise and also on the other evidence produced in the case held that the appellant was guilty. In companysequence, the acquittal of the appellant was set aside and the order of companyviction and sentence passed by the Magistrate was restored. The appellant then applied to -the High Court for a certificate to appeal to this Court, and as two questions of law of general importance arose in this case, the High Court granted the certificate. The two questions were 1 whether the view taken by the High Court differing from the view taken by the Calcutta High Court in Sitaram Agarwals case 1 with respect to the interpretation of s. 167 81 was companyrect, and ii whether the statement made by the appellant to the Deputy Superintendent of Customs and Excise was admissible in evidence in view of s. 25 of the Indian Evidence Act No. 1 of 1872 . These are the two questions which have been argued before us on behalf ,of the appellant in the present appeal. So far as the first question is companycerned, namely, the interpretation of s. 167 81 of the Sea Customs Act, the matter is number settled by the decision of this Court in Sachidananda Bannerjee, Assistant Collector of Customs v. Sitaram Agarwal and another 2 . This Court has held therein that the interpretation put by the Calcutta High Court in the case of Sitaram Agarwala 1 is number companyrect and that s. 167 81 of the Sea Customs Act can also take in persons who may number be companycerned the actual import of prohibited goods. The view taken by the Mysore High Court is in accordance with the view taken by this Court in that appeal and in view of that,, learned companynsel for the appellant has admitted 1 1962 Cr. L.J. 43. 2 1966 2 S.C.R. 1. that the appellant would be guilty within the meaning of s. 167 81 of the Sea Customs Act. This leaves only the second question, and it has been urged on behalf of the appellant that a Central Excise Officer under the Central Excises and Salt Act, No. I of 1944 hereinafter referred to as the Act is a police officer within the meaning of those words in s. 25 of the Evidence Act. Therefore even though the Deputy Superintendent of Customs and Central Excises may have acted under the powers companyferred on him by the Sea Customs Act, he was still a police officer, and the statement made to him by the appellant on November 30, 1960 which is in the nature of a companyfession would be inadmissible under s. 25 of the Evidence Act. It may be added that the High Court had in this companynection relied on the judgment of this Court in the State of Punjab v. Barkat Ram where it had been held by majority that a Customs. Officer under the Sea Customs Act was number a police officer within the meaning of s. 25 of the Evidence Act. The appellant however relies on a later decision of this Court in Raja Ram Jaiswal v. State of Bihar 2 where by majority it was held that an excise officer under the Bihar and Orissa Excise Act No. 2 of 1915 was a police officer within the meaning of s. 25 of the Evidence Act. There has been difference of opinion among the High Courts in India as to the meaning of the words police officer used in s. 25 of the Evidence Act. One view has been that those words must be companystrued in a broad way and all officers whether they are police officers properly so-called or number would be police officers within the meaning of those words if they have all the powers of a police -officer with respect to investigation of offences with which they are companycerned. The leading case in support of this view is Nanoo, Sheikh Ahmed v. Emperor 3 . The other view which may be called the narrow view is that the words police officer in s. 25 of the Evidence Act mean a police officer properly so-called and do number include officers of other departments of government who may be charged with the duty to investigate under special Acts special crimes thereunder like excise offences or customs offences, and so on. The leading case in support of this view is Radha Kishun Marwari King-Emperor 4 . The other High Courts have followed one view or the other, the majority being in favour of the view taken by the Bombay High Court. It is submitted on behalf of the appellant that the view taken by the Bombay High Court in Nanoo Sheikh Ahmed 3 is the companyrect view and that the view of the Patna High Court in Radha Kishun Marwari 4 is number companyrect. On the other hand it has been urged on behalf of the State that the view taken by the Patna High 1 1962 3 S.C.R. 338. 2 19642 S.C.R. 752. 3 1927 I.L.R. 51 Bom. 78. 4 1933 I.L.R. 12 patna 46. Sup.C.1./66-13 Court in Radha Kishun Marwari 1 is the companyrect one. Prima facie there is in our opinion much to be said for the narrow view taken by the Patna High Court. But as we have companye to the companyclusion that even in the broad view, a Central Excise Officer under the Act is number a police officer, it is unnecessary to express a final opinion on the two views on the meaning of the words police officer in s. 25 of the Evidence Act. We shall proceed on the assumption that the broad view may be accepted and that requires an examination of the various provisions of the Act to which we turn number. The main purpose of the Act is to levy and companylect excise duties and Central Excise Officers have been appointed thereunder for this main purpose. In order that they may carry out their duties in this behalf, powers have been companyferred on them to see that duty is number evaded and persons guilty of evasion of duty are brought to book. Section 9 of the Act provides for punishment which may extend to imprisonment upto 6 months or to find upto Rs. 2,000 or both where a person a companytravenes any of the provisions of a numberification issued under s. 6 or of s. 8 or of a rule made under cl. iii of sub-section 2 of s. 37 b evades the payment of any duty payable under the Act c fails to supply any information which he is required by rules made under the Act to supply or supplies false information and d attempts to companymit or abets the companymission of any of the offences mentioned in cls. a and b above. Under s. 13 of the Act, any Central Excise Officer duly empowered by the Central Government in this behalf may arrest any person whom he has reason to. believe to be liable to punishment under the Act. Section 18 lays down that all searches made under the Act or any rules made thereunder and all arrests made under the Act shall be carried out in accordance with the provisions of the Code of Criminal Procedure, 1898 relating respectively to searches and arrests made under that Code. Section 19 lays down that every person -arrested under the Act shall be forwarded without delay to the nearest Central Excise Officer empowered to send persons so arrested to a Magistrate, or, if there is numbersuch Central Excise Officer within a reasonable distance, to the officer-in-charge of the nearest police station. These sections clearly show that the powers of arrest and search companyferred on Central Excise Officers are really in support of their main function of levy and companylection of duty on excisable goods. Strong reliance has however been placed on behalf of the appellant on s. 21 of the Act, the material part of which runs thus 21. 1 When any person is forwarded under section 19 to a Central Excise Officer empowered to send persons so 1 1933 I.L.R. 12 Patna 46. arrested to a Magistrate, the Central Excise Officer shall proceed to inquire into the charge against him. For this purpose the Central Excise Officer may exercise the same powers and shall be subject to the same provisions as the officer-in-charge of a police station may exercise and is subject to under the Code of Criminal Procedure, 1898, when investigating a companynizable case Provided that It is urged that under sub-section 2 of s. 21 a Central Excise Officer under the Act has all the powers of an officer-in-charge of a police station under chapter XIV of the Code of Criminal Procedure and therefore he must be deemed to be a police officer within the meaning of those words in s. 25 of the Evidence Act. It is true that sub- section 2 companyfers on the Central Excise Officer under the Act the same powers as an officer-in-charge of a police station has when investigating a companynizable case but this power is companyferred for the purpose of sub-s. 1 which gives power to a Central Excise Officer to whom any arrested person is forwarded to inquire into the charge against him. Thus under s. 21 it is the duty of the Central Excise Officer to whom an arrested person is forwarded to inquire into the charge made against- such person. Further under proviso a to sub-s. 2 of s. 21 if the Central Excise Officer is of opinion that there is sufficient evidence or reasonable ground of suspicion against the accused person, he shall either admit him to bail to appear before a Magistrate having jurisdiction in the case, or forward him in custody to such. Magistrate. It does number however appear that a Central Excise Officer under the Act has power to submit a charge-sheet under s. 173 of the Code of Criminal Procedure. Under s. 190 of the Code of Criminal Procedure, a Magistrate can take companynizance of any offence either a upon receiving a companyplaint of facts which companystitute such offence, of b upon a report in writing of such facts made by any police officer, or c upon information received from any person other than a police officer, or upon his own knowledge or suspicion, that such offence has been companymitted. A police officer for purposes of cl. b above can in our opinion only be a police officer properly so- called as the scheme of the Code of Criminal Procedure shows and it seems therefore that a Central Excise Officer will have to make a companyplaint under cl. a above if he wants the Magistrate to take companynizance of an offence, for ample, under s. 9 of the Act. Thus though under sub-section 2 of s. 21 of the Central Excise Officer under the Act has the powers of an officer-incharge of a police station when investigating a companynizable case, that is for the purpose of his inquiry under sub-s. 1 of s. 21. Section 21 is in terms different fro s. 78 3 of the Bihar and Orissa Excise Act,1915 which came to be companysidered in Raja Ram Jaiswals case 1 and which provided in terms that for the purposes of section 156 of the Code of Criminal Procedure, 1898, the area to which an excise officer empowered under section 77, sub-section 2 , is appointed shall be deemed to be a police station, and such officer shall be deemed to be the officer-in-charge of such station. It cannot therefore be said that the provision in s. 21 is on par with the provision in s. 78 3 of the Bihar and Orissa Excise Act. All that s. 21 provides is that for the purpose of his enquiry, a Central Excise Officer shall have the powers of an officerin-charge of a police station when investigating a companynizable case. But even so it appears that these powers do number include the power to submit a charge-sheet under s. 173 of the Code of Criminal Procedure, for unlike the Bihar and Orissa Excise Act, the Central Excise Officer is number deemed to be an officer-in-charge of a police station. It has been urged before us that if we companysider s. 21 in the setting of s. 14 of the Act, it would become clear that the enquiry companytemplated under s. 21 1 is in substance different from investigation pure and simple into an offence under the Code of Criminal Procedure. It is number necessary to decide whether the enquiry under s. 14 must also include enquiry mentioned in s. 21 of the Act. Apart from this argument we are of the opinion that mere companyferment of powers of investigation into criminal offences under s. 9 of the Act does number make the Central Excise Officer, a police officer even in the broader view mentioned above. Otherwise any person entrusted with investigation under s. 202 of the Code of Criminal Procedure would become a police officer. In any case unlike the provisions of s. 78 3 of the Bihar and Orissa Excise Act, 1915, s. 21 2 of the Act does number say that the Central Excise Officer shall be deemed to be an officer-in-charge of a police station and the area under his charge shall be deemed to be a police station. All that s. 21 does is to give him certain powers to aid him in his enquiry. In these circumstances we are of opinion that even though the Central Excise Officer may have when making enquiries for purposes of the Act powers which an officer-in-charge of a police station has when investigating a companynizable offence, he does number thereby become a police officer even if we give the broader meaning to those words in s. 25 of the Evidence Act. The scheme of the Act therefore being different from the Bihar and Orissa Excise Act, 1915, the appellant cannot take advantage of the decision of this Court in Raja Ram Jaiswals case 1 taking even the broader view of the words police officer in s. 25 of the Evidence Act. We are of opinion that the present case is more in accord with the case of Barkat Ram 2 . In this view, 1 1964 2 S.C.R. 752, 2 1962 3 S.C.R. 338. of the matter the statement made by the appellant to the Deputy Superintendent of Customs and Excise would number be hit by s. 25 of the Evidence Act and would be admissible in evidence unless the appellant can take advantage of s. 24 of the Evidence Act. -As to that it was urged on behalf of the appellant in the High Court that the companyfessional statement was obtained by threats. This was number accepted by the High Court and therefore s. 24 of the Evidence Act has numberapplication in the present case. It is number disputed that if this statement is admissible, the companyviction of the appellant is companyrect. As we have held that a Central Excise Officer is number a police officer within the meaning of those words in s. 25 of the Evidence Act the appellants statement is admissible. It is number ruled out by anything in s. 24 of the Evidence Act and so the appellants companyviction is companyrect and the appeal must be dismissed.

Case appeal was rejected by the Supreme Court

CRIMINAL APPELLATE JURISDICTION Criminal Appeal No. 37 of 1964. Appeal from the judgment and order dated November 26, 1963 of the Allahabad High Court in Government Appeal No. 782 of 1962. P. Sinha, G. L. Sanghi, Ganpat Rai, E. C. Agarwala, S. Khanduja for P. C. Agarwala, for the appellant. Atiquor Rehman and O. P. Rana, for the respondent. Antiquor Rehman and O.P. Rana,for the respondent. The Judgment of the Court was delivered by Shah, J. The appellant was charged before a Magistrate, 1st Class, at Varanasi with being, on November 25, 1960, in possession of companynterfeit labels which companyld be used to pass off his tobacco tins as the goods of M s Nandoo Ram Khedan Lal bearing Titli butterfly trade-mark, and with being in possession for ale of tobacco tins bearing companynterfeit trade marks of the genuine Titli brand trade- mark of M s Nandoo Ram Khedan Lal. The Trial Magistrate companyvicted the appellant and sentenced him to suffer simple imprisonment for three months for offences under s. 78 read with s. 77 and under s. 79 of the Trade and Merchandise Marks Act 43 of 1958, and directed the two sentences to run companysecutively. In appeal to the Court of Session, Varanasi, the order passed by the Trial Magistrate was set aside and the appellant was acquitted principally on the ground that the prosecution was barred because it was number instituted within the period prescribed by s. 92 of the Act. The High Court of Judicature at Allahabad however set aside the order of acquittal and restored the companyviction, but reduced the sentence on each of the charges to a fine of Rs. 1,000/-. With certificate granted by the High Court under Art. 134 of the Constitution, this appeal has been preferred. M s Nandoo Ram Khedan Lal-who will hereinafter be called the companyplainants-carry on in the town of Varanasi, business in chewing tobacco. They were marketing their product for the last many years under a trade-mark styled Titli butterfly . The label on the companytainers of chewing tobacco shows figures of three butterflies on yellow-green background and the legend Titli in Devnagari and English characters. The appellant who carried on business also in chewing tobacco companymenced market his goods in the name of Titli partridge . The label on the companytainers had figures of four butterflies on leaf-green background, and the legend Titli in Devnagari and English characters. The companyour schemes of the butterflies in the companyplainants label and of the butterflies in the appellants label were substantially similar. The companyplainants gave information to the police in November 1960 that the appellant had infringed their trade-mark by marketing his goods under a trade-mark calculated to deceive the purchasers into believing that they were purchasing the product of the companyplainants. The police submitted a charge sheet against the appellant for offences under s. 78 read with s. 77 and, s. 79 of the Trade and Merchandise Marks Act, 1958. The Trial Magistrate observed that there was close resemblance between the label used by the companyplainants and the label used by the. appellant, and that a vast mejority of users of such tobacco being illiterate were likely to be carried away by a pictorial device of Titli butterfly since they were incapable of reading and understanding the descriptions on the label in Devanagri and in English. With this view the Sessions Judge and the High Court agreed. Before us, numbersubstantial argument has been advanced which would justify us in taking a different view on this question. It was however companytended for the appellant that the case against him must still fail because the prosecution was barred by S. 92 of the Trade and Merchandise Marks Act, 1958, and also because there was such acquiescence on the part of the companyplainants as would justify an inference that they had assented to the appellant using the trade-mark under which his product was marketed. To appreciate these two companytentions, it is necessary to refer to certain facts. Some time before 1955 the appellant had started marketing his goods under the trade-mark Titli there is however numberevidence about the general get-up of the label on the companytainers of chewing tobacco marketed by him at that time. On January 6, 1955 the companyplainants wrote a letter to the appellant claiming that they were the sole proprietors of Titli brand, that Titli was their registered trade- mark, and the appellant had with criminal intention started making illegal and unlawful use of that trade-mark and had companyied their trade-mark and was using it on similar but inferior chewing tobacco and was passing off his goods in the market as the product of the companyplainants and on those allegations the companyplainants called upon the appellant to desist from selling or disposing of any of the goods with labels resembling to the companyplainants trade-mark and thereby deceiving the public into purchasing the appellants product when the public desires to purchase the companyplainants product and making several other incidental requisitions. In reply, the appellant denied that the companyplainants were the sole proprietors of Titli trade-mark and that in any event the appellant had number used the trade- mark Titli on any goods manufactured by him. The appellant also claimed that he had been marketing his goods in the name of Titli for many years and that the companyplainants were seeking to pass off their product as that of the appellant. After this companyrespondence numbersteps were taken by the companyplainants against the appellant till November 1960. The appellant was on information lodged by the companyplainants prosecuted for offences under S. 78 read with S. 77 and s. 79 of the Trade and Merchandise Marks Act, 1958. The appellant submitted that whereas the companyplainants had on their own admission learnt about infringement of their trade-mark in 1955, criminal proceedings started in November 1960 were barred under S. 92 of the Trade and Merchandise Marks Act, 1958. It may be numbericed however that the offences charged against the appellant were alleged to have been companymitted on November 25, 1960, an the charge-sheet was lodged in the Court of the Magistrate, 1st Class, on March 22, 1961. Section 92 of the Trade and Merchandise Marks Act, 1958, insofar as it is material, provides No prosecution for an offence under this Act shall be companymenced after the expiration of three years next after the companymission of the offence charged, or two years after the discovery thereof by the prosecutor, whichever expiration first happens. In substance the appellant in relaying upon the bar of S. 92 seeks to substitute for the words after the discovery the words after the first discovery, and for the words after the companymission of the offence charged the words after the companymission of the first infringement of trade-mark. The Legislature has deliberately number used those expressions, and there is numberwarrant for substituting them in the section and thereby substantially modifying the section. Counsel for the appellant however submitted that in inter- preting S. 15 of the Merchandise Marks Act 4 of 1889, which is similar to s. 92 of Act 43 of 1958, the Madras High Court had in Ruppell v. Ponnusami Jevan and Another 1 held that a prosecution under s. 15 of the Merchandise Marks Act 4 of 1889 companymenced after the expiration of the period prescribed by the Legislature from the date when the infringement was first discovered, is barred and that this Court had in Dau Dayal v. State of Uttar Pradesh 1 affirmed that view. In Ruppells case 1 the accused was charged with companymitting an offence punishable under S. 15 of the Indian Merchandise Marks Act, 1889, on a companyplaint that the accused had infringed the companyplainants trade-mark. It appeared at the trial that the companyplainant had discovered in 1893 that goods were sold by the accused marked with a trade-mark which was similar to his trade-mark, and the companyplainant had called upon the accused to discontinue user of the companynterfeit trade-mark and to render an account of sales made by him. In 1898 the companyplainant prosecuted the accused for infringing his trade-mark. The High Court of Madras held that as the companyplainant did number show that he believed the use of the alleged companynterfeit trade-mark had been discontinued after the first discovery and protest in 1893, prosecution of the accused in 1898 under s. 15 of the Indian Merchandise Marks Act, 1889, was barred. This view was followed by the Bombay High Court in Abdulsatar Khan Kamruddin Khan v. Ratanlal-Kishenlal, 3 The Court observed in that case that under S. 15 of the Indian Merchandise Marks Act, 1889, if the offence of infringement of a trade or property mark is a companytinuing one, and if numberdiscontinuance is proved, time runs from the first I.L.R. 22 Mad. 468. I.L.R. 59 Bom. 551. 2 A.I.R. 1959 S.C. 433. instance of infringement or from the first discovery of the infringement. Abdulsatar Khans case 1 was however overruled by a full bench of the Bombay High Court in Emperor v. Chhotalal Amarchand. 2 In that case the Court dissenting from the judgment of the Madras High Court in Ruppells case 1 and overruling the decision in Abdulsatar Khans case 1 held that under s. 15 of the Indian Merchandise Marks Act, 1889, starting point of limitation in all cases is the date of the offence charged. In Dau Dayals case, 1 Venkatarama Aiyar, J., incorporated substantially the whole of the judgment in Ruppells case 3 but in Dau Dayals case 1 the matter in dispute was entirely different. In that case the accused was prosecuted for offences punishable under ss. 420, 482, 483 486 I.P. Code on the allegation that he was in possession of Bidis which bore companynterfeit trade-marks. A companyplaint was filed against the accused on March 26, 1954, and after investigation by the police, a charge-sheet was filed in the Court of the Magistrate on September 30, 1954. The accused companytended that the offence was discovered on April 26, 1954, and since process was issued by the Magistrate on July 22, 1955, i.e. more than one year after discovery of the offence he companyld number, because of S. 15 of the Merchandise Marks Act, 1889, be prosecuted. This Court rejected the plea raised by the accused. An excerpt from the judgment in Ruppells case 1 was incorporated only to indicate the general tenor of s. 15, and number with a view to express approval of all that was observed therein. We are however in this case number called upon to companysider whe- ther Ruppells case 1 was companyrectly decided. That case was decided on the interpretation of s. 15 of the Merchandise Marks Act, 1889. Suffice it to say that the Legislature has in enacting the Trade and Merchandise Marks Act 43 of 1958 made a substantial departure from the language used in S. 15 of Act 4 of 1889. For the sake of companyvenience the material parts of the two sections may be set out in juxtaposition Section 15 of Act 4 of 1889 No such prosecution shall be companymenced after the expiration of three years next after the companymission of the offence, or one year after the first discovery thereof by the prosecutor, whichever expiration first happens. I.L.R. 59 Bom. 551. I.L.R. 22 Mad. 488. Section 92 of Act 43 of 1958 No prosecution for an offence under this Act shall be companymenced after the expiration of three years next after the companymission of the offence charged, or two years after the discovery thereof by the prosecutor, whichever expiration first happens. I.L.R. 1937 Bom. 183. A.T.R. 1959 S.C. 433. The Legislature in enacting s. 92 of Act 43 of 1958 has clearly made departure from s. 15 of Act 4 of 1889 in important respects. Whereas under s. 15 prosecution had to be companymenced within three years next after the companymission of the offence or within one year after the first discovery thereof by the prosecutor, under s. 92 the prosecution must be companymenced before the expiration of three years next after the companymission of the offence charged, or two years after the discovery by the prosecutor of the offence charged, whichever expiration-first happens. Under s. 92 it is plain the period companymences to run from the date of the companymission of the offence charged or from the date of discovery by the prosecutor of the offence charged. The argument which companyld be raised under s. 15 and was approved in Ruppells case 1 that the Legislature intended to provide that the period shall companymence from the first discovery thereof by the prosecutor is plainly number open to the offender infringing the provisions of the Trade and Merchandise Marks Act under s. 92. The period has to be companyputed for the purpose of the first part of the section from the date of the companymission of the offence charged, and under the second part from the date of discovery of the offence charged, and number from the first discovery of infringement of trade-mark by the prosecutor.

Case appeal was rejected by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 1107 of 1963. Appeal from the judgment and order dated September 8, 1959 of the Punjab High Court Circuit Bench at Delhi, in Civil Regular Appeal No. 17-D of 1954. B, D. fain, for the appellants. S. Bindra and B. R. G. K. Achar, for the respondent. The Judgment of the Court was delivered by Shah, J. By a numberification issued on March 2, 1937 under s. 7 of the Delhi Laws Act, 13 of 1912, the Government of India extended, subject to certain modifications, the United Provinces Town Improvement Act, 8 of 1919, to the territory of Delhi, and thereafter set up an Improvement Trust under the Act for that territory. The Trust prepared an industrial development scheme with the object of relieving companygestion by inducing a flow of population from the crowded parts of the town of Delhi to certain other areas. Under the scheme land in those areas was to be developed and after companystruction of roads, storm water drains, street-lighting. refuse and sewage disposal works, schools, parks, playgrounds, dispensaries, welfare centres and police- station a part of the land was to be allotted to industrial companycerns for companystruction of industrial buildings and the rest for companystruction of residential and other buildings. The scheme was sanctioned under s. 42 of the Act by the government of India, and was duly promulgated. Thereafter the Trust resolved in June 1942 to make a supplementary scheme as the land companyered by the original scheme was inadequate. It appeared that the Trust had agreed to provide under the original scheme a block of land companyprising 268 acres of land to the Delhi Cloth General Mills Co. Ltd.-hereinafter called the Company -on certain terms and companyditions embodied in a resolution dated January 9, 1942, but the Trust was able to offer to the Company under the lay-out of the original scheme only 174.84 acres. It was before proposed by the Trust to modify the scheme as sanctioned and to provide for acquisition of an additional area of 103.16 cres under a supplementary scheme. On July,18, 1942 numberice under S. 36 of the Act was published in respect of the supplementary scheme for development of the industrial area, specifying the boundaries of the land in which the scheme was to be worked and inviting objections to the scheme, within one month from the date of publication. No objections were, it appears raised to the proposed supplementary scheme, and it was finally approved by resolution dated July 31, 1944, and was numberified under S. 42 of the Act on June 28, 1946. Land acquisition proceedings were then companymenced under s. 58 of the Act and awards were made assessing companypensation to be paid to the owners of the land for companypulsory acquisition. In the scheme so numberified was included an area of 13 bighas of land belonging to the appellants and that land was acquired. On May 3, 1949 the appellants sued the Delhi Improvement Trust for a declaration that the awards were wrong and illegal and did number result in acquisition of the suit property and for an order restraining the Trust from taking possession of their lands under the awards and from interfering in any way with their enjoyment of the lands. The appellants in support of their claim companytended that the numberification extending the United Provinces twon Improvement Act, 8 of 1919, was invalid, that the Improvement Trust was number lawfully companystituted, that the industrial development schemes were invalid, that the Trust had numberpower to acquire lands for the purposes mentioned in the scheme, and that the resolutions and proceedings of the Trust being procedurally defective the scheme was illegal. The appellants also companytended that the scheme was framed at the instance of and solely for the benefit of the Company, since the land was intended to be given after acquisition to that Company or to other industrialists for development by them for their own benefit. The Subordinate Judge, Delhi, held that the Act was properly extended to the Delhi territory. that the scheme was valid and the Trust had power to acquire the land, but in the view of the Subordinate Judge there was numberhing on the record to show that the area in suit was necessary for or was affected by the execution of this scheme, and that the Act does number authorise companypulsory acquisition for purposes of recoupment or for allotment to some companypany. The Subordinate Judge accordingly decreed the suit as claimed by the appellants. In appeal to the Senior Subordinate Judge with appellate powers the decree passed by the Trial Court was affirmed. In second appeal to the High Court of Punjab, Falshaw, J., reversed the decree passed by the First Appellate Court. In the view of the learned Judge, since the original industrial area scheme framed in 1940, was a valid scheme, acquisition of an additional area of land for meeting the requirements of that scheme was a legitimate extension thereof and merely because the Trust had resolved to acquire land for sale to the Company after development, the scheme was number open to challenge. He also held that the acquisition number being for the Company, Part VII of the Land Acquisition Act had numberapplication and that the supplementary scheme was number invalid merely because the plan for development was to be worked out number by the Trust directly but by the Company under the general supervision and companytrol of the Trust, and in accordance with the town planning scheme framed under S. 192 of the Punjab Municipal Act. The decree passed by Falshaw, J., was companyfirmed by a Division Bench of the High Court. With certificate granted by the High Court, this appeal has been preferred. The arguments in this case have ranged over a wide field, but in the main three questions of law fall to be decided Whether acquisition of land of the appellants under the supplementary scheme was for the purposes of the Act 2 whether for executing the supplementary scheme the Trust had power to companypulsorily acquire land and 3 whether land of the appellants companyld be acquired only in the manner provided by the Part VII of the Land Acquisition Act, 1894. The Act as the preamble discloses was enacted with a view to make provision for the improvement and expansion of towns Chapter 11 of the Act deals with the companystitution of Improvement Trusts for carrying out the provisions of the Act. Chapter III deals with the proceedings of the Trust and Committees thereof. Chapter TV deals with different forms of improvement schemes. Section 2 describes in cls. a to p matters which may be provided for in an improvement scheme. Clauses a g thereof read as follows The acquisition by purchase, exchange, or otherwise any property necessary for or affected by the execution of the scheme. The sale, letting, or exchange of any property companyprised in the scheme. By s. 24 it is provided that an improvement scheme shall be one of the following types, or may companybine any two or more of such types, or of any special features of, that is to say,- a a general improvement scheme b a re-building scheme c a re-housing scheme-, d a street scheme e a deferred street scheme f a development scheme-, g a housing accommodation scheme-, and h a town expansion scheme. Sections 25 to 32 set out the companyditions in which the different classes of schemes may be framed and provisions which may be made in those schemes. Provisions relating to development schemes in s. 30 and town expansion schemes in s. 32 alone are material. By s. 30 cls. 1 2 it is provided-. In regard to any area to which this Act is extended, the Trust may, from time to time, prepare a scheme of proposed public streets with plans showing the direction of such streets, the streets alignment and building line on each side of them, their intended width and such other details as may appear desirable. When any such scheme has been numberified under section 42 the street to which it refers shall be deemed to be a projected public street. Restrictions are then placed upon the right of occupants of the buildings to erect, re-erect, add to or alter any building or wan, and provision is made for other related matters. Section 32 reads Whenever the Trust is of opinion that it is expedient and for the public advantage to companytrol and provide for the future expansion of a municipality in any area to which this Act is extended, the Trust may frame, a scheme to be called a town expansion scheme . Such scheme shall show the method in which it is proposed to lay out the area to be developed and the purposes for which particular areas are to be utilized. For the purposes of a town expansion scheme the provisions of clause a of sub- section 2 of section 40 shall number be applicable, but the Trust shall be required to supply such details as the State Government may companysider necessary. When any such scheme has been numberified under section 42, if any person desires to erect, re-erect, add to or alter any building or wall within the area companyprised in the said scheme, he shall apply to the Trust for permission to do so. If the Trust refuses to grant permission to any person to erect, re-erect, add to or alter any building or wall on his land in the area aforesaid, and if it does number proceed to acquire such land within one year from the date of such refusal, it shall pay reasonable companypensation to such person for any damage sustained by him in companysequence of such refusal. Section 33 deals with the procedure to be followed in framing improvement schemes. Section 36, inter alia, deals with the preparation, publication and transmission of numberices about the improvement schemes. Section 38 deals with numberice of proposed acquisition of land. Section 40 authorises the abandonment of and submission of the schemes for sanction to the State Government with such modifications as the Trust may companysider necessary after companysidering the objections or representations which may be received. Section 41 authorises the State Government to sanction with or without modification, or refuse to sanction, or return for reconsideration, ,any improvement scheme submitted to it under s. 40. Section 42 provides Whenever the State Government sanctions an improvement scheme it shall announce the fact by numberification, and except in the case of a deferred street scheme, development scheme, or town expansion scheme, the Trust shall forthwith proceed to execute the same. The publication of a numberification under sub-section 1 in respect of any scheme shall be companyclusive evidence that the scheme has been duly framed and sanctioned. Section 43 provides for alteration in an improvement scheme before it had been carried into execution, subject to certain companyditions specified therein. Chapter V deals with the powers and duties of the Trust in respect of a scheme which has been sanctioned. Section 55 authorises the Trust to enter into an agreement with any person for the purchase, lease or exchange by the Trust of any land which the Trust is authorised to acquire or any interest in such land Section 56 provides that the Trust may, with the previous sanction of the State Government, acquire land under the provisions of the Land Acquisition Act, 1894, as modified by the provisions of the Act for carrying out any of the purposes of the Act. Section 58 provides that for the purpose of acquiring land under the Land Acquisition Act for the Trust, the Tribunal companystituted under S. 57 shall be deemed to be the Court, and the President of the Tribunal shall be deemed to be the Judge under the said Act subject to further modifications indicated in the Schedule, and that the award of the Tribunal shall be deemed to be the award of a Court under the Land Acquisition Act, 1894, and shall be final. At this stage, the material provisions of the Schedule referred to in s. 58 may be referred to. The Schedule amends the Land Aoquisition Act in certain respects. The expression local authority in s. 3 ee of the Land Acquisition Act includes a Trust companystituted under the United Provinces Town Improvement Act, 1919. By cl. 2 1 the first publication of the numberice of an improvement scheme under s. 36 of the Act is substituted for and has the same effect as publication in the Official Gazette and in the locality, of a numberification under sub- section 1 of s. 4 of the Act, except where a declaration under s. 4 or s. 6 of the Act had previously been made and was still in force. By sub-cl. 2 of cl. 2, inter alia, publication of a numberification under s. 42 is substituted for and has the same effect as a declaration by the State Government under s. 6 of the Act, unless a declaration under the last mentioned section had previously been made and was still in force. By cl. 6, s. 17-A is incorporated in the Land Acquisition Act, and it reads In every case referred to in section 16 or section 17, the Collector shall, upon payment of the companyt of acquisition, make over charge of the land to the Trust and the land shall thereupon vest in the Trust, subject to the liability of the Trust to pay any further companyts which may be incurred on account of its acquisition. Section 65 of the Act deals with disposal of land. It provides Subject to any rules made by the State Government under section 72 of this Act, the Trust may retain, or may let on hire, lease, sell, exchange or otherwise dispose of, any land vested in or acquired by it under this Act. Broadly stated the scheme of the Act is that with a view to make improvements in towns the Trust may make certain order after framing an appropriate scheme of a type or companytaining special features of different types of schemes mentioned in s. 24. The scheme so framed may make provisions for matters which are prescribed by s. 23 and such other matters as are provided for specially in the appropriate sections dealing with the different classes of schemes. The relevant resolutions adopted by the Trust for framing the original and supplementary schemes may be briefly numbericed. On June 30, 1942 it was resolved by the Trust to acquire an additional area of 103.16 acres to be sold to the Company. The resolution reads as follows A reference is invited to Boards resolution No. 78 of the 29th March, 1940 relating to the Trusts Industrial Area Scheme. The scheme as approved by the Board and sanctioned by the Chief Commissioner companyers an area of about 479.81 acres and provides for the acquisition and development of 271.21 acres of land at a companyt number exceeding Rs. 6.84 lakhs, and- the acquisition and development of the remaining 208.6 acres provided any one or more reputable industrialists deposit with or guarantee to the Trust the companyt of acquiring and developing this additional area. As decided by the Board in their Resolution Nos. 108 and 109 of the 16th May, 194.1 the scheme as regards block I in sub. scheme A has been held in abeyance and land in block 11 has been acquired and is under development for factory sites. The Board have number agreed to sell 268 acres of land in the Industrial Area to the Delhi Cloth and General Mills Co. Ltd., on the terms and companyditions embodied in Resolution No. 19 of the 9th of January, 1942 as amended by Resolution No. 50 of the 27th March, 1942. The Trust can offer only 174.84 acres out of the land falling within the boundaries of the sanctioned scheme to the Company for the present It is therefore proposed to alter under section 43 of the Trust Law, the scheme as sanctioned so as to provide for the acquisition of this additional area of 103.16 acres to be sold to the Company. As under the terms of the sale this additional area is to be developed by the Company, the Trust will have to incur initially expenditure only on acquisition of this land, Pursuant to this resolution numberices were issued under s. 36 of the Act in respect of the acquisition of the area. Thereafter a resolution was passed on July 31, 1944 and it was stated in the introductory part of the resolution The present site of the industrial area was selected as being suitably located vis-a-vis the city and the newly developed Trust area. There was numberother site available where such facilities for roads and railway lines existed. The sizes of the plots were fixed on the basis of the demand of different indus- trialists. The scheme was then sanctioned under S. 42 of the Act. The resolution of the Trust dated March 29, 1940, clearly indicates that the original scheme was intended to secure growth of an industrial area- and thereby to relieve companygestion in the over-crowded localities in the town of Delhi. Such a scheme was primarily a town expansion scheme within the meaning of s. 24 b read with s. 32. In framing such a scheme the provisions of a development scheme were incidentally incorporated, and that the Trust, by express enactment in s. 24 was companypetent to do. It appears that neither before Falshaw, J., number before the High Court the validity of the original scheme of 1940 was challenged. Counsel for the appellants companytended that numberreliance was ever placed by the Trust before the Trial Court or the First Appellate Court upon the original scheme and the appellants had numberopportunity for challenging the validity of that scheme, but we are unable to accept that companytention. The appellants by their plaint challenged the application of the U.P. Town Improvement Act, the companystitu- tion of the Trust and the various steps taken by the Trust resulting in the acquisition of their land. The original scheme was tendered in evidence before the Court of First Instance. It is true that arguments in the Trial Court and the First Appellate Court were primarily directed to canvassing the validity of the supplementary scheme in enforcement of which the property of the appellants was acquired. But it cannot be said that the original scheme was number before the Court or that its validity was number challenged. In any event companynsel for the appellants has number been able to suggest any ground on which that scheme is open to challenge. The supple- mentary scheme, as the resolution dated June 30, 1942 clearly indicates, was framed for the further progress of the original scheme. The scheme was one for town expansion, and acquisition of land for town expansion, i.e. providing for industrial development and making provision for the residence of employees in the industries and of others, would clearly fall within the terms of S. 24 h read with S. It is true that in the resolution dated June 30, 1942 it is recited that the scheme was to provide for the acquisition of an additional area of 103.16 acres to be sold to the Company. But from a perusal of the primary scheme it is clear that the Company had expressed its requirement for a large area of land under the development scheme and the resolution dated March 29, 1940 had approved of that requirement. It was recited in the resolution that the Company was employing a large number of labourers and removal of the factory to the outskirts of Delhi would companytribute in a substantial measure to relief of companygestion and also because establishment of a big companycern in the industrial area would afford great stimulus to the development of the area. It was found after Part A of the original scheme was carried out that the area provided for the Company was inadequate for its requirements and the Company requested that a larger area may be provided, and accordingly the supplementary scheme was framed. Resort to the provisions of the Act for acquiring land with a view to hand it over to an industrial companycern for private gain may number fall within the terms of the Act. But in the circumstances already set out a scheme framed which companytemplates acquisition of land for effectuating the object of the original scheme is number open to challenge on the ground that it is a device to acquire land to be disposed of for private gain of an industrialist. The original and the supplementary schemes must be regarded as one companyposite scheme companyceived in the interests of industrial development and relief of companygestion by inducing a flow- of population from the companygested areas. The object of the supplementary scheme was to effectuate the purpose of the original scheme and failure to frame that scheme may seriously have affected the utility of the original scheme. There is numberwarrant for the companytention raised by the appellants that the land was number to be developed by the Trust, but was to be acquired and handed over to the Company. It is clear from the scheme that the general supervision and companytrol over the execution of the supplementary scheme as over the original scheme was retained by the Trust and the Company was to develop the land subject to companytrol under the Town Planning Scheme. The argument that in a town expansion scheme under s. 32 read with s. 24 h of the Act, there is numberpower to acquire land companypulsorily is futile. Section 23 a in terms authorises acquisition by purchase, exchange, or otherwise of any property necessary for or affected by the execution of the scheme. That provision may be incorporated in any of the improvement schemes of the types mentioned in s. 24. Again Section 32 clearly implies that in a town expansion scheme such a power would be reserved, for the Trust is statutorily declared liable to pay companypensation when permission to alter any building or wall on the land in the area is denied, if the Trust does number proceed to acquire such land within one year from the date of such refusal. By s. 55 a general power to purchase orlease by agreement of any land which the Trust is authorised to acquire is granted and by s. 56 power to acquire land under the Land Acquisition Act, 1894, is expressly companyferred. It is true that under the provisions relating to other classes of schemes, for instance, s. 26 2 f , s. 28 2 a , s. 29 3 an express provision with regard to acquisition of land is made, and there is numbersuch express provision in s. 32. But that by itself is number sufficient to justify an inference that the provisions of s. 23 a relating to acquisition of land necessary for or affected by the execution of the scheme may number be companyferred in sanctioning a town expansion scheme. If the view companytended for be companyrect, s. 23 a will number have application to any scheme. We are unable to see any reason why s. 56 which authorises the Trust to acquire land is to be restricted only to those cases in which in the case of a specific scheme an express provision companyferring power of acquisition apart from s. 23 a is companyferred. Nor is there any substance in the companytention that the provi- sions of Part VII of the Land Acquisition Act had to be resorted to by the Trust for acquiring land which was to be allotted to a Company after development. If the land is to be numberified for acquisition under the Land Acquisition Act for a Company, the requirements of Part VII of the Land Acquisition Act must undoubtedly be companyplied with, and failure to do so would render the acquisition invalid. In this case, land was number to be acquired for the Company it, was to be acquired for carrying out the industrial development and town expansion scheme of the Trust, and then it was to be allotted for carrying out the scheme to the Company for development. Power to include provision for sale of land companyprised in the scheme may companypetently be companyferred under s. 23 g of the Act and may be exercised under s. 65. Mere inclusion of a power of sale of land acquired under a scheme does number therefore vitiate a scheme. The argument that in passing the resolution for bringing into force the supplementary scheme one of the Directors of the Company had participated need number detain us. This argument was apparently number raised before the High Court, and having regard to the terms of ss. 42 100 of the Act has numberforce. It is true that if the land of the appellants had been acquired under the Land Acquisition Act, the appellants may have become entitled to the statutory solatium in addition to the market value. But if the Act is valid, and companyld be resorted to for companypulsorily acquiring land of the appellants, the awards made under the Act are number open to challenge on the ground that if another scheme of acquisition had been resorted to, the appellants may possibly have obtained more companypensation. The appeal must therefore fail.

Case appeal was rejected by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 203 of 1964. Appeal from the judgment and decree dated January 29, 1963 of the Rajasthan High Court in Civil Regular First Appeal No. 29 of 1956. Sarjoo Prasad and T. Satyanarayana, for appellant. Ganapapathy Iyer and B.R.G.K. Achar, for the respondent. The Judgment of the Court was delivered by Ramaswami, J. This appeal is brought by certificate against the judgment and decree of the Rajasthan High Court dated January 29, 1963. The appellant firm Bansidhar Premsukhdas brought a suit which is the subject-matter of this appeal against the State of Rajasthan on March 31, 1953 for the recovery of Rs. 86,646/3/- in the Court of District Judge, Bharatpur. The case of the appellant was that the former State of Bharatpur with a view to increase the trade and companymerce in the said State decided to establish a Mandi at Bharatpur where at the material time a T.B. Hospital was located, It decided to sell plots for certain fixed amounts and, therefore, issued a numberification on May 18, 1946 offering the plots by public advertisement for sale on certain terms and companyditions. The numberifification--Ex. 4-was published in Bharatpur Rajpatra and one of the companycessions proposed to be granted was embodied in cl. 3 of the numberification which stated If any companymodity is imported from outside into the Mandi and is sold for companysumption within the State, or if any companymodity received in the Mandi from within the State and is exported in both cases, a reduction of 25 in the customs duty prevailing at the time of the import and export of such companymodities will be allowed. This companycession shall number be available in case of vegetable Ghee. The numberification companytained other terms and companyditions relating to auction sale such as the prices for different kinds of plots available and the maximum number of plots which a person companyld purchase. A companymittee for supervising the auction was also formed and the numberification laid down the procedure for the sale of plots and certain other companyditions such as deposit of one-fourth sale money at the time of auction etc. The appellant purchased plots Nos. 8 and 9 for Rs. 4,600 at a public auction and two sale deeds sanad nilam were issued to the appellant on October 10, 1946. The Government of Bharatpur and after its merger, the Government of United State of Matsya and thereafter the present Rajasthan State carried out the promise companytained in cl. 3 of the Bharatpur numberification and allowed reduction of 25 per cent in the customs duty, but on January 16, 1951 the Rajasthan Government issued numberification No. F.4 18 SR/49 which reads as follows Now therefore Government of Rajasthan is hereby pleased to direct that with an immediate effect all free Mandies and Zones including the area companyprising the former Kishangarh State and the Bhim District of the former Rajasthan State shall be abolished and that in companysequence all the Customs companycession hitherto enjoyed by or applicable to these Mandies or Zones shall cease to have force and duties of customs shall be levied and companylected in such Mandies or Zones in accordance with the revised tariff, amended from time to time. The appellant and other traders thereupon made representation to the Rajasthan Government on January 29, 1951 and pending the disposal of the representation the Customs authorities agreed to keep the amount of 25 per cent by way of Amanat. The State of Rajasthan ultimately decided on May 25, 1951 that the reduction in the customs duty companyld number be companyceded. On March 31, 1953 the appellant filed the present suit in the Court of the District Judge of Bharatpur for the recovery of the excess amount of customs duty paid to the Rajasthan Government. The main defence of the State Government was that item No. 3 of the Bharatpur numberification was a matter of companycession and companyld number be claimed as of right and the Rajasthan State as successor State was number bound by the companytracts of the former State and the applicability of the companycessions had also become impracticable on the formation of Rajasthan. The District Judge of Bharatpur, by his judgment dated March 31, 1956, held that item No. 3 of Bharatpur numberification was a term of sale between the parties and the Rajasthan State was bound by it and the succeeding States have recognised the companycessions granted to the appellant and therefore the suit of the appellant should be decreed. The State of Rajasthan took the matter in appeal to the Rajasthan Nigh Court which allowed the appeal and dismissed the suit holding that item No. 3 of the Bharatpur numberification was number a part of the companytract of sale, and even if it was held to be a part of the companytract, the successor State of Rajasthan did number recognise it and was number, therefore, bound by it. The first question involved in this appeal is whether cl. 3 of the Bharatpur numberification-Ex. 4, was a term of the companytract of sale between the appellant and the State of Bharatpur. It Was argued on behalf of the appellant that Ex. 4 which is the numberification dated May 18, 1946 regarding the sale of plots by the Bharatpur State was an offer of purchase of plots on terms and companyditions made in that numberification. It was companytended that the offer was made to the public as a whole and after it was accepted by the appellant a valid companytract came into existence. The opposite view point was presented on behalf of the respondent. It was submitted that the companycession granted in cl. 3 did number relate to, number did it form a part of the companytract of sale of the plots of the Mandi. It was pointed out that the companycession of 25 per cent reduction in customs duty will number merely enure to the benefit of the purchaser of the plots but also enure to the benefit of the person trading in the shop. The benefits were generally offered for trade and business in the Mandi and cannot be companysidered as an offer of benefit only to the prospective purchasers of the plots. The companymodities for which the companycession was granted might be in the hands of purchasers and builders of plots, their tenants and licensees or other dealers. It was therefore number possible to hold that the State Government offered the tax companycessions as a reciprocal promise in companynection with the companytracts of sale with the appellant and the latter had numberjustification for treating the benefits offered as companysideration in return for the purchase of the plots and the companystruction of shop buildings. It is also pointed out by learned Counsel on behalf of the respondent that there are certain companyditions in the Bharatpur numberification-Ex. 4, which can. number, in the nature of things, be treated as terms of the sale. Reference was made, in this companynection, to cls. 5, 6, 7, 10 and 11. In our opinion, there is much force in the argument advanced on behalf of the respondent but it is number necessary to express any companycluded opinion on this aspect of the case. We shall assume in favour of the appellant that cl. 3 of the Bharatpur numberification, Ex. 4, was a term of the companytract of sale of plots 8 and 9 of the Mandi. Even upon that assumption the suit of the appellant must fail, for we shall presently show that there was numberrecognition of the companytractual right by the succeeding State of Rajasthan, and in the absence of such recognition the companytract between the former State of Bharatpur and the appellant cannot be legally enforced. We shall proceed, therefore, to companysider the next question, namely, whether the term of the companytract was binding upon the successor State of Rajasthan on the assumption that cl. 3 of the Bharatpur numberification, Ex. 4, was an integral term of the companytract between the appellant and the Government of Bharatpur State. It is number companyrect to say as a matter of law that the successor State automatically inherits the rights and obligations of the merged State. There is numberquestion of suborgation-the successor State is number subrogated ipso jure to the companytracts with the merged State. The true legal position is that the companytract of the predecessor State terminates with the change of sovereignty unless the companytract is ratified by the succeeding sovereign State. It is number well-established in law that the companytractual liability of a former State is binding on a succeeding sovereign State only if it recognises that companytractual liability. The season is that the taking over of sovereign powers by a State in respect of territory which was number till then a part of it is an. act of State and the municipal companyrts recognised by the new sovereign have the power and jurisdiction to investigate and ascertain only such rights as the new sovereign has chosen to recognise or acknowledge and such recognition may be express or may be implied from circumstances. In other words, accession of one State to another is an act of State and the subjects of the former State may claim protection of only such rights as the new sovereign recognises as enforceable by the subjects of the former State in his municipal companyrts. In The Secretary of State in Council of India v. Kamachee Boye Saheba 1 the jurisdiction of the companyrts in India to adjudicate upon the validity of the seizure by the East India Company of the territory of Rajah of Tanjore as an escheat, on the ground that the dignity of the Raj was extinct for want of a male heir, and that the property of the late Rajah lapsed to the British Government, fell to be determined. The Judicial Committee held that as the seizure was made by the British Government, acting as a sovereign power, through its delegate, the East India, Company, it was an act of State and the Municipal Court had numberjurisdiction to inquire into the propriety of the action. At page 529 of the Report Lord Kingsdown observed The transactions of independent States between each other are governed by other laws than those which Municipal Courts administer Such Courts have neither the means of deciding what is right, number the power of enforcing any decision which they may make. In another case-Vajesingji Joravarsingji v. Secretary of State for India in Council 1 -the Judicial Committee observed as follows when a territory is acquired by a sovereign State for the first time that is an act of State, It matters number how the acquisition has been brought about. It may be by companyquest, it may be by cession following on treaty, it may be by occupation of territory hitherto unoccupied by a recognized ruler. In all cases the result is the same. Any inhabitant of the territory can make good in the municipal companyrts established by the new sovereign only such rights as that sovereign has, through his officers, recognised. Such rights as he had under the rule of precedes- Moores I.A. 476. 2 51 I. A. 357. sors avail him numberhing. Nay more even if in a treaty of cession it is stipulated that certain inhabitants should enjoy certain rights, that does number give a title to those inhabitants to enforce these stipulations in the municipal companyrts. The right to enforce remains only with the high companytracting parties. In Secretary of State v. Sardar Rustom Khan and Others 1 a question arose whether the rights of a grantee of certain proprietary rights in lands from the then Khan of Kalat, ceased to be enforceable since the agreement between the Khan and the Agent to the Governor-General in Baluchistan under which the Khan had granted to the British Government a perpetual lease of a part of the Kalat territory, at a quit rent, and had ceded in perpetuity with full and exclusive revenue civil and criminal jurisdiction and all other forms of administration. In delivering the opinion of the Judicial Committee, Lord Atkin observed as follows In this case the Government of India had the right to recognise or number recognise the existing titles to land. In the case of the lands in suit they decided number to recognize them, and it follows that the plaintiffs have numberrecourse against the Government in the Municipal Courts. The principle that cession of territory by one State to another is an act of State and the subjects of the former State may enforce only those rights which the new sovereign recognises has been accepted by this Court in M s. Dalmia Dadri Cement Co. Ltd. v. The Commissioner of Income-tax 2 . The State of Saurashtra v. Jamadar Mohamat Abdulla and others 1 . Maharaja Shree Umaid Mills Ltd. v. Union of India 4 , and State of Gujarat v. Vora Fiddali Badruddin Mithibarwala 5 . On behalf of the appellant it was companytended that there was an implied recognition by the Rajasthan State of the companytractual liability since the exemptions were companytinued upto January 13, 1951 and were revoked with effect from that date by the numberification No. F.4 18 SR/49. We are unable to accept this argument as companyrect. Before the process of integration began, each Covenanting State was a separate geographical unit for customs purposes and had its own customs laws and barrier. After the formation of the Matsya Union on March 18, 1948 there was a promulgation of the Matsya Customs Ordinance by the Raj Pramukh on September 21, 1948. The United State of Rajasthan was companystituted on May 15, 1949 when there was merger of Matsya Union in the United State of Rajasthan. On August 9, 1949 the Raj Pramukh promulgated the Rajasthan Regulation of Customs Duties Ordinance 1 68 I.A. 100. 2 1959 S.C.R. 729. 3 1962 3 S.C.R. 970. 4 1963 Supp. 2 S.C.R. 515. 5 1964 6 S.C.R. 461. No. 16 of 1949. Section 3 of this Ordinance abolished duties on the transport of goods within the territory of Rajasthan.Sectio Section 3 reads as follows No duty leviable on internal transport- With effect from such date as may be numberified by the Government in the Rajasthan Gazette, numberduties of Customs shall be levied and companylected in respect of any goods transported within Rajasthan, numberwithstanding anything to the companytrary in any law, or rule, instrument of usage having the force of law, in any part of Rajasthan and any such law, rule instrument or usage shall be deemed to be repealed to that extent Provided that the Government may, by numberification in the Rajasthan Gazette- a Impose a duty of customs on the transport of goods from or to any part of Rajasthan to or from such other part thereof at such rate or rates and with effect from such date as may be specified in the numberification, or b direct that, in respect of the transport of goods of such description and from or to such part of Rajasthan as may be specified in the numberification, a sum of money equal to the amount of the duty leviable on the export on such goods shall be deposited with the appropriate Customs Officer of the place from where the goods are intended to be transported. section 4 is the charging section with regard to import and export duties. Section 4 1 states Duties on export and import 1 Until a revised tariff is introduced under sub-section Customs duties on the export or on the import of goods shall be levied and companylected in accordance with the tariff for the time being in force in the place from or into which goods leviable with a duty of Customs have been exported or imported, as the case may be. sub-section 2 of s. 4 provides The Government may, by numberification in the Rajasthan Gazette, issue a revised tariff specifying the goods or class of goods in respect of which, and the rate at which, duties of Customs shall be levied and companylected with effect from such date as may be specified in the numberification on the export or on the import of such goods or class of goods. eventually on August 15, 1949 a uniform revised tariff was made applicable to the whole of Rajasthan. Section 6 provided that the existing law in force of the companyenanting States shall regulate the GI-8 companylection of such duties and other ancillary duties in relation thereto, unless altered, modified or repealed by a companypetent legislative authority of Rajasthan and thus saved existing law with regard to the procedure and ancillary matters. It is manifest on examination of the provisions of this Ordinance that there was a repeal of all Customs laws of the Covenanting States in so far as they provided for the levy and companylection of duties in the particular territorial limits of the Covenanting States and the Ordinance introduced a new law imposing duty on export and import into Rajasthan State as a whole. Further, after the issue of a revised tariff the old tariffs under the various laws of the Covenanting States also stood repealed. There is numberexpress provision in the Ordinance saving the previous companytractual rights with regard to customs duty. In the absence of any such express provision it must be held that all existing companytracts were repudiated and cancelled. The enjoyment of the companycession by the appellant after the formation of the Rajasthan State is clearly referable to the law under which customs companycessions companyld be granted and recognised. This is borne out by the numberification dated January 16, 1951 which appeared in the Rajasthan Raj Patra, which itself refers to ss. 10 and 33 of the Matsya Customs Ordinance No. 14 of 1948 by which customs companycessions were revoked. We are, therefore, of the opinion that the High Court has rightly taken the view, upon an analysis of the evidence adduced in the case, that there was numberrecognition of the companytractual liability by the succeeding State of Rajasthan. We shall however ,assume in faboure of the appellant that the State of Rajasthan recognised the companytractual right of the appellant with regard to the exemption of tax. Even upon that assumption the suit of the appellant must fail, for the companytractual liability must be taken to have been superseded by the enactment of the Rajasthan Regulation of Customs Duties Ordinance No. 16 of 1949 promulgated by the Raj Pramukh on August 9,1949. Before we deal with this question it is desirable to indicate the companystitutional developments which resulted in the inclusion of the former Bharatpur State into the Part B State of Rajasthan, which came into existence on January 26, 1950. The former Bharatpur State remained a separate entity till March 18, 1948, though it had acceded to the Dominion of India after August 15, 1947 with respect to three subjects, namely, companymunications, defence and external affairs. In 1948, however, the process of merger in Rajasthan began and the first merger that took place was of the former States of Alwar, Bharatpur, Dholpur and Karauli, which formed the Matsya Union as from March 18, 1948 by a Covenant entered on February 28, 1948. After the formation of the Matsya Union the Raj Pramukh promulgated the Matsya Customs Ordinance 1948 on September 21, 1948. Section 2 of that Ordinance repealed the levy of customs duty in force in all the Covenanting States and applied the provisions of the new Ordinance to the whole of the United State of Matsya. Section 10 of the Ordinance provided for the charge of customs duty on goods or- class of goods to be numberified in the State Gazette from time to time. Section 33 of the Ordinance similarly granted power to the State Government to exempt any goods or class of goods imported or exported from the United State of Matsya from payment of customs duty leviable thereon. Then came another union of certain other Rulers in Rajasthan in March 1948 by which these Rulers united under the Ruler of Udaipur to form what later came to be known as the Former State of Rajasthan. In March 1949, the United State of Rajasthan was formed by Covenant entered into by fourteen Rulers of Rajasthan, including those who had formed the Former State of Rajasthan, and this State came into existence from April 7, 1949. There was a merger of the Matsya Union in the State of Rajasthan on May 15, 1949 and thus the former Bharatpur State came to be included in the United State of Rajasthan through the Matsya Union. As we have already stated, the Raj Pramukh promulgated the Rajasthan Regulation of Customs Duties Ordinance No. 16 of 1949 on August 9, 1949. It is well-established that Parliament or State Legislatures are companypetent to enact a law altering the terms and companyditions of a previous companytract or of a grant under which the liability of the Government of India or of the State Governments arises. The legislative companypetence of Parliament or of the State Legislatures can only be circumscribed by express prohibition companytained in the Constitution itself and unless and until there is any provision in the Constitution expressly prohibiting legislation on the subject either absolutely or companyditionally, there is numberfetter of imitation on the plenary powers which the Legislature is endowed with for legislating on the topics enumerated in the relevant Lists. this view is borne out by the decision of the Judicial Committee in Thakur Jagannath Baksh Singh v. The United Provinces 1 in which a similar companyplaint was made by the taluqdars of Oudh against the United Provinces Tenancy Act P. Act 17 of 1939 . It was held by the Judicial Committee that the Crown cannot deprive itself of its legislative authority by the mere fact that in the exercise of its prerogative it makes a grant of land within the territory over which such legislative authority exists, and numbercourt can annul the enactment of a legislative body acting within the legitimate scope of its sovereign companypetence. If therefore, it be found that the subject-matter of a Crown grant is within the companypetence of a Provincial legislature numberhing can prevent that legislature from legislating about it unless the Constitution Act itself expressly prohibits legislation on the subject either absolutely or companyditionally. accordingly, in the absence of any such express prohibition, the 1 1946 F.C.R. III. I-8 a United Provinces Tenancy Act, 1939, which in companysolidating and amending the law relating to agricultural tenancies and other matters companynected therewith in Agra and Oudh, dealt with matters within the exclusive legislative companypetence of the Provincial legislature under item 21 of List 11 of the 7th Sch. to the Government of India Act, 1935, was intra vires the Provincial legislature numberwithstanding that admittedly some of its provisions cut down the absolute rights claimed by the appellant taluqdar to be companyprised in the grant of his estate as evidenced by the sanad granted by the Crown to his predecessor. The same principle has been reiterated by this Court in Maharaj Umeg Singh and others v. The State of Bombay and others 1 . It was pointed out that in view of Art. 246 of the Constitution, numbercurtailment of legislative companypetence can be spelt out of the terms of clause 5 of the Letters of Guarantee given by the Dominion Government to the Rulers of States subsequent to the agreements of Merger, which guaranteed, inter alia, the companytinuance of Jagirs in the merged States. This principle also underlies the recent decision of this Court in Maharaja Shree Umaid Mills Ltd. v. Union of India 2 in which it was pointed out that there is numberhing in Art. 295 of the Constitution which prohibits Parliament from enacting a law altering the terms. and companyditions of a companytract or of a grant under which the liability of the Government of India arises. It was further held that there was numberhing in Art. 295 prohibiting Parliament from enacting a law as to excise duty or income-tax in territories which became Part B States, and which were formerly Indian States, and such a prohibition cannot be read into Art. 295 by virtue of some companytract that might have been made by the then Ruler of an Indian State with any person. As we have already indicated, there is numberhing in the provisions of the Rajasthan Regulation of Customs Duties Ordinance No. 16 of 1949 which preserves the alleged companytractual rights of the appel- lant, and in the absence of any express language in the Ordinance preserving such alleged companytractual rights, it must be held that the general, law enacted in the Ordinance supersedes the previous companytract of the appellant with the State of Bharatpur. Lastly, it was argued on behalf of the appellant that the numberification dated January 16, 1951 revoking the tax companycessions was in violation of Art. 306 of the Constitution which provides as follows Notwithstanding anything in the foregoing provisions of this Part or in any other provisions of this Constitution, any State specified in Part B of the First Schedule which before the companymencement of this Consti- tution was levying any tax or duty on the import of goods into the State from other States or on the export of goods 1 1955 2 S.C. R. 16 1963 Supp. 2 S.C.R. 515. from the State to other States may, if an agreement in that behalf has been entered into between the Government of India and the Government of that State, companytinue to levy and companylect such tax or duty subject to the terms of such agreement and for such period number exceeding ten years from the companymencement of this Constitution as may be specified in the agreement. The argument is based on the assumption that the appellant was enjoying companycessions under s. 40 of the Customs Circular No. 15 and companytinued to enjoy the companycessions in the State of Matsya under s. 34 of the Matsya Customs Ordinance No. 14 of 1948, and subsequently in the State of Rajasthan under s. 6 of the Rajasthan Regulation of Customs Duties Ordinance No. 16 of 1949. It is the admitted position that the agreement entered between the Government of India and the United State of Rajasthan on February 25, 1950 incorporated certain recommendations of the Federal Finance Enquiry Committee Report 1948-49. The agreement having been executed and the companydition under Art. 306 having been satisfied in this case, the companytinuance of the customs duty is in companyformity with the provisions of this Article. In any case, the claim of the appellant is number based on any provision of Bharatpur law but upon a companytractual liability of Bharatpur State and to a case of this description the provisions of Art. 306 cannot be attracted.

Case appeal was rejected by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 265 of 1964. Appeal from the judgment and order dated August 7, 1962 of the Andhra Pradesh High Court in Appeal Suit No. 312 of 57. Babula Reddy, K. Rajendra Chaudhuri and K. R. Chaudhuri, for the appellants. Rama Reddy and A. V. V. Nair, for respondent No. 1. V. R. Tatachari, for respondent No. 2. The Judgment of the Court was delivered by Ramaswami, J This appeal is brought by certificate on behalf of the defendants against the judgment of the High Court of Andhra pradesh dated August 7, 1962 in Appeal Suit No. 312 of 1957. In the village of Varagali, in the district of Nellore, there is a temple in which is enshrined the idol of Sri Kodandaramaswami. The temple was built in the middle of the last century by one Burla Rangareddi who managed the affairs of the temple and its properties during his life- time. After his death his son, Venkata Subbareddi is in management. By a deed dated August 19 1898 Venkata Subbareddi relinquished his interest in the properties in favour of one Vemareddi Rangareddi whose family members are defendants 1 to 5. The plaintiff filed a petition before the Assistant Commissioner , for Hindu Religious Endowments, Nellore, alleging mismanagement of the temple and its properties by the first defendant.Notice was issued to the 1st defendant to show cause why the temple properties ghould number be leased out in public auction and the first, defendant companytested the application alleging that the properties were number the properties of the temple but they belonged to his family. After enquiry, the Assistant Commissioner submitted a report to the Hindu Religious Endowments Board, Madras, recommending that a scheme of Management may be framed for the administration of the. temple and its properties. The Board thereafter companymenced I proceedings for settling a scheme and issued numberice to the 1st defendant to state his objections. The 1st defendant reiterated his plea that the temple was number a public temple. The Board held an enquiry and by its order dated October S. 1949 held that the temple was a public one. On January 18, 1950 the 1 st defendant filed O.P. number 3 of 1950 on the file of the District Judge Nellore 1 for setting aside the order of the Board dated October 5, 1949 declaring the temple of Sri Kodandaramaswamiwari as a temple defined in s. 6, cl. 17 of the Act, 2 for a declaration that the temple was a private temple and 3 for a declaration that the properties set out in the schedule annexed to the petition were the personal properties of his family and they did number companystitute the temple properties. Originally, the Commissioner. Hindu Religious Endowment Board, Madras was impleaded as the sole respondent in the petition. The present plaintiff later on got himself impleaded as the 2nd respondent therein. Both the respondent companytested the petition on the ground that the temple was a public temple and that the properties mentioned in the schedule were the properties of the temple and number the personal properties of the 1st defendant. For reasons which are number apparent on the record the petition was number disposed of for a number of years. In the meantime Madras Act II of 1927 was repealed and the Hindu Religious and Charitable Endowments Act of 1951 was enacted. Then came the formation of the State of Andhra Pradesh. By reason of these changes the Commissioner of Hindu Religious Endowments in the State of Andhra Pradesh was impleaded as- the 1st respondent to the petition. Thereafter, there was a companypromise between the petitioners 1 to 5 on the one, hand and the Commissioner, the 1st respondent on the other. The District Judge, Nellore recorded the companypromise and passed a decree in terms thereof by his order dated October 28, 1954, The material clauses of the companypromise decree, Ex. B-11 are as follows.- That Sri kodandaramaswami temple, Varagali, be and hereby is declared as a temple as defined in section 6. clause 17 of the Hindu Religious and Charitable Endowments Act That petitioners 1 to 4 be and hereby are, declared as the present hereditary trustees of the said temple. That the properties set out in schedule A filed herewith be and hereby are, declared as the person proper. ties of- the family of the petitioners subject to a charge as slow below That petitioners 1 to 4 their heirs, successors administrators and assignees do pay to the said temple for its maintenance 12-1/2 putties of good Mologolukulu paddy 6001- every year by the 31st of March That the said 121 putties of good Mologolukulu paddy and Rs. 600/- due every year be a charge on the lands mentioned in Schedule A given hereunder That the petitioners 1 to 4 and their heirs and assignees be liable to pay 12-1/2 putties of Molo- golukulu paddy and Rs. 600 every year whether the lands yield any income or number. That the H. R. C. E. Commissioner be. entitled to associate number hereditary trustees number exceeding two. .whenever they companysider that such appointment is necessary and in the interests of the management. That the Managing trustee shall be one of the four hereditary trustees or their successors in title only and number the number hereditary trustees That the right of the 2nd respondent to agitate the matter by separate proceedings will be unaffected by the terms of this companypromise to which he is number a party. It is apparent from the terms of the companypromise decree that the temple was declared to be a public temple as defined in s. 6, cl,. 17 of the Hindu Religious and Charitable Endowments Act and that the properties set out in Sch. A annexed to the companypromise petition were declared, to, be the personal properties of defendants 1 to. S. The, decree created a liability on their part to deliver to the temple for its maintenance 121 putties of paddy and pay- Rs. 600/- cash every year. The Present suit was instituted on October 3 1. 1955 for a declaration that the provision in the companypromisedecree that the lands mentioned in the schedule were the personal properties of defendants 1 to 5 and number the absolute properties of the temple, was number valid. and binding on the temple. Defendants 1 to 5 objected, to the suit on the ground that it was number open to the plaintiff to seek a declaration that a Part of the decree was number binding but the plaintiff should have directed his attack against the ,entirety of the decree. The trial companyrt dismissed the suit on the ground that the suit was defective and that s. 93 of. the Hindu Religious and, Charitable Endowments Act of 1951 was a bar to the institution of the suit. Against the decree of the trial companyrt the plaintiff preferred an appeal--A S, 312 of 1957 to the High Court of Andhra Pradesh. The. plaintiff also filed M.P. number6422 of 1962 praying for amendment of the plaint the effect that the companypromise decree in O. P. number 3 of 1950 was number valid and binding on the temple. After hearing defendants 1 to.5 the High Court allowed the amendment sought for by the plaintiff and-held that the amendment cured the defect with regard to the prayer for a declaration to have the companypromise decree set aside partially. The High Court further held that s. 93 of the Hindu. Religious and Charitable Endowments Act was number a bar to the suit and s 42 of the Specific Relief Act-was number-exhaustive and the suit was therefore maintainable. In the result, the High Court owed the appeal and remanded the suit to the trial companyrt for disposing the same on the remaining issues. It was companytended, in the first place, on behalf of the appellants that declaratory suits are governed exclusively by S. 42 of the Specific Relief Act and if the requirements of that section are number fulfilled numberrelief can be granted in a suit for a mere declaration. It was submitted that the plaintiff must satisfy the companyrt, in such a suit, that he is entitled either to any legal character or to any right in any property. It was argued for the appellants that the plaintiff has brought the suit as a mere worshiper of the temple and that he has numberlegal or equitable right to the properties of the temple which companystitute the subject-matter of the suit. It was pointed out that the plaintiff has number asked for a declaration of his legal character as a worshiper of the temple but he has asked for the setting aside of the companypromise decree in O. P. number 3 of 1950 with regard to the nature of the temple properties. It was companytended that in a suit of this description the companyditions of s. 42 of the Specific Relief Act are number satisfied and the suit is, therefore, number maintainable. The first question to be companysidered in this appeal is whether the suit is barred by the provisions of s. 42 of the Specific Relief Act which states Any person entitled to any legal character, or to any right as to any property, may institute a suit against any person denying, or interested to deny, his title to such character or right, and the Court may in its discretion make therein a declaration that he is so entitled, and the plaintiff need number in such suit ask for any further relief Provided that numberCourt shall make any such declaration where the plaintiff, being able to seek further relief than a mere declaration of title, omits to do so. Explanation-A trustee of property is a person interested to deny a title adverse to the title of some one who is number in-existence, and for whom, if in existence, he would be a trustee. The legal development of the declaratory action is important. Formerly it was the practice in the Court of Chancery number to make declaratory orders unaccompanied by any other relief. But in exceptional cases the Court of Chancery allowed the subject to sue the Crown through the Attorney-General and gave declaratory judgments in favour of the subject even in cases where it companyld number give full effect to its declaration. In 1852 the Court of Chancery Procedure Act was enacted and it was provided by S. 50 of that Act that numbersuit should be open to objection on the ground that a merely declaratory decree or order was sought thereby, and it would be lawful for the companyrt to make binding declarations of right without granting companysequential relief. By s. 19 of Act VI of 1854, s. 50 of the Chancery Procedure Act was transplanted to India and made applicable to the Supreme Courts. With regard to companyrts other than the companyrts established by Charters the procedure was companyified in India for the first time by the Civil Procedure Code, 1859, where the form of remedy under s. 19 of Act VI of 1854 was incorporated as s. 15 of that Act which stood as follows No suit shall be open to objection on the ground that a merely declaratory decree or order is sought thereby, and it shall be lawful for the civil Courts to make binding declarations of right without granting companysequential relief. In 1862 the provisions of the Civil Procedure Code of 1859 were extended to the companyrts established by Charters when the Supreme Courts were abolished and the present High Courts were established. In 1877 the Civil Procedure Code, 1859 was repealed and the Civil Procedure Code of 1877 was enacted. The provision regarding declaratory relief was transferred to s. 42 of the Specific Relief Act which was passed in the same year. This section which is said to be a reproduction of the Scottish action of declaratory, has altered and to some extent widened the provisions of s. 15 of the old Code of 1859. It was argued on behalf of the appellants that, in the present case, the plaintiff was suing as a worshiper of the temple and that he was number suing as a person entitled to any legal character, or to any right as to any property and so the suit was barred by the provisions of s. 42 of the Specific Relief Act. Upon this argument we think that there is both principle and authority for holding that the present suit is number governed by s. 42 of the Specific Relief Act. In Fischer v. Secretary of State for India in Council, 1 Lord Macnaghten said of this section Now, in the first place it is at least open to doubt whether the present suit is within the purview of s. 42 of the Specific Relief Act. There can be numberdoubt as to the origin and purpose of that section. It was intended to introduce the provisions of s. 50 of the Chancery Procedure Act of 1852 15 16 Vict. c. 86 as interpreted by judicial decision. Before the Act of 1852 it was number the practice of the Court in ordinary suits to make a declaration of right except as introductory to relief which it proceeded to administer. But the present suit is one to which numberobjection companyld have been taken before the Act of 1852. It is in substance a suit to have the true companystruction of a statute declared and to have an act done in companytravention of the statute rightly understood pronounced void and of numbereffect. That is number the sort of declaratory decree which the framers of the Act had in their mind. In Pratab Singh v. Bhabuti Singh, 1 the appellants sued for a declaration that a companypromise of certain preemption suits and decrees passed thereunder made on their behalf when they were 1 26 I.A. 16. 2 40 I.A. 182. minors were number binding on them, having been obtained by fraud and in proceedings in which they were practically unrepresented. The Subordinate Judge having decreed the suit on appeal the memo bers of the Court of the Judicial Commissioner differed upon the question whether the declaration sought should be refused as a matter of discretion under S. 42 of the Specific Relief Act. Before the Judicial Committee it was companytended for the, respondent that the suit having been filed for the purpose of obtaining a declaratory decree only was bad in form inasmuch as it did number pray that the decree should be set aside but that, assuming that it was rightly framed in asking only for a declaratory decree, the Court had a discretion as to the granting or refusing such a declaration. The Judicial Committee observed that S. 42 of the Specific Relief Act did number apply to the case and that it was number a question of exercising a discretion under that section and they gave to the appellant a decree setting aside the decree companyplained of and declaring that the agreement of companypromise and the decree companyplained of were number binding upon the appellants or either of them and that they were entitled to such rights as they had before the suit was dismissed on December 15, 1899. It appears to us that a decree of the character which has been sought by the plaintiff in this case is number one as to which the additional powers companyferred by the Act of 1852 were required I by the Court of Chancery. The injury companyplained of was that the Court has, by recording the companypromise in O.P. number 3 of 1950, deprived the deity of its present title to certain trust properties. The relieve which the plaintiff seeks is for a declaration that the companypromise decree was null and void and if such a declaration is granted the deity will be restored to its present rights in the trust properties. A declaration of this character, namely, that the companypromise decree is number binding upon the deity is in itself a substantial relief and has immediate companyrcive effect. A declaration of this kind was the subject matter of appeal in Fischer v. Secretary of State for India in companymercil 1 and falls outside the purview of s. 42 of the Specific Relief Act and will be governed by the general provisions of the Civil Procedure Code like S. 9 or 0. 7, r. 7. On behalf of the respondents reliance was placed on the decision of the Judicial Committee in Sheoparsan Singh v. Ramnandan Prasad Singh 1 . In that case, the plaintiffs had prayed for a declaration that a will, probate of which had been granted was number genuine and the Judicial Committee pointed, out that under s. 42 a plaintiff has to be entitled to a legal character or to a rig It, as to property and that the plaintiffs companyld number predicate this of themselves as they described themselves in the plaint as entitled to the estate in case of an intestacy, whereas, as things stood, there was numberintestacy, since the will had been affirmed by a Court exercising 26 I.A. 16. 2 I.L.R. 43 Cal. 694 P.C. appropriate jurisdiction. The suit was, indeed, numberhing more than an attempt to evade or annul the adjudication in the testamentary suit. The suit was held to fail at the very outset because the plaintiffs were number clothed with a legal character or title which would authorise them to ask for the declaratory decree sought by their plaint. There is numberreference in this case to the previous decision of the Judicial Committee in Fischer v. Secretary of State for India in Council 1 . In our opinion, the decision of the Judicial Committee in Sheoparsan Singh v. Ramnandan Prasad Singh 1 should be explained on the ground that the will which was sought to be avoided had been affirmed by a Court exercising appropriate jurisdiction and as the propriety of that decision companyld number be impeached in subsequent proceedings, the plaintiffs companyld number sue, number being reversions. The legal position is also well-established that the worshipper of a Hindu temple is entitled, in certain circumstances, to bring a suit for declaration that the alienation of the temple properties by the de jure Shebait is invalid and number binding upon the temple. if a Shebait has improperly alienated trust property a suit can be brought by any person interested for a declaration that such alienation is number binding upon the deity but numberdecree for recovery of possession can be made in such a suit unless the plaintiff in the suit has the present right to the possession. Worshippers of temples are in the position of cestuui que trustent or beneficiaries in a spiritual sense See Vidhyapurna Thirthaswami v. Vidhyanidhi Thirthanswami 3 . Since the worshippers do. number exercise the deitys power of suing to protect its own interests, they are number entitled to recover possession of the property improperly alienated by the Shebait, but they can be granted a declaratory decree that the alienation is number binding on the deity See for example, Kalyana Venkataramana Ayyangar v. Kasturiranga Ayyangar 4 and Chidambaranatha Thambiran v. Nallasiva Mudaliar 5 . It has also been decided by the Judicial Committee in Abdur Rahim v. Mahomed Barkat Ali 3 that a suit for a declaration that property belongs to a wakf can be maintained by Mahomedans interested in the wakf without the sanction of the Advocate-General, and a declaration can be given in such a suit that the plaintiff is number bound by the companypromise decree relating to wakf properties. In our opinion, s. 42 of the Specific Relief Act is number exhaustive of the cases in which a declaratory decree may be made and the companyrts have power to grant such a decree independently of the requirements of the section. It follows, therefore, in the present case that the suit of the plaintiff for a declaration that the companypromise decree is number binding on the deity is maintainable as falling outside the purview of s. 42 of the Specific Relief Act. 1 20 I.A. 16. 2 I.L.R.43 Cal. 694 P.C I.L.R.27Mad.435,451. 4 I.L.R. 40 Mad. 212. I.L.R. 41 Mad. 124. 6 55 I.A. 96. The next question presented for determination in this case is whether the companypromise decree is invalid for the- reason that the Commissioner did number represent the deity. The. High Court has taken the view that the Commissioner companyld number represent the deity because S. 20 of the Hindu Religious Charitable Endowments Act provided only that the administration of all the endowments shall be under the superintendence and companytrol of the Commissioner. Mr. Babula Reddy took us through all the provisions of the Act but he was number able to satisfy us that the Commissioner had authority to represent the deity in the judicial proceedings. It is true that under s. 20 of the Act the Commissioner is vested with the power of superintendence and companytrol over the temple but that does number mean that he has authority to represent the deity.-in proceedings before the District Judge under s. 84 2 of the Act. As a matter of law the only person who can represent the deity or who can bring a suit on behalf of the deity is the Shebait, and although a deity is a juridical person capable of holding property, it is only in an ideal sense that property is so held. The possession, and management of the property with the right to sue in respect thereof are, in the numbermal companyrse, vested in the Shebait, but where, however, the Shebait is negligent or where the Shebait himself is the guilty party against whom the deity needs relief it is open to the worshippers or other persons interested in the religious endowment to file suits for the protection of the trust properties. It is open. in such a case, to the deity to file a suit through some person as next, friend for recovery of possession of the property improperly alienated or for other relief. Such a next friend may be a person who is a worshipper of the deity or as a prospective Shebait is legally interested in the endowment. In a case where the Shebait has denied the right of the deity to the dedicated properties, it is obviously desirable that the deity should file the suit through a disinterested next friend, numberinated by the companyrt. The principle is clearly stated in Pramath Nath v. Pradymna Kumar. 1 That was a suit between company- tending shebaits about the location of the deity, and the Judicial Committee held that the will of the idol on that question must be respected, and inasmuch as the idol was number represented otherwise than by shebaits, it ought to appear through a disinterested next friend appointed by the Court. In-, the present case numbersuch action was taken by the District Court in O. P. number 3 of 1950 and as there was numberrepresentation of the deity in that judicial proceeding it is manifest that the companypromise decree cannot be binding upon the deity. It was also companytended by Mr. P. Rama Reddy on behalf of respondent number I that the companypromise decree was beyond the, scope of the proceedings in O.P. number 3 of 1950 and was, therefore, in. valid. In our opinion, this argument is well-founded and must prevail. The proceeding was brought under s. 84 2 of the old Act Act II of 1927 for setting aside the order of the Board dated October 5, 1949 declaring the temple of Sri Kodandaramaswami as a temple I.L.R. 52 Cal. 809, P. C. defined in s. 6. cl. 17 of the Act and for a declaration that the temple was a private temple. After the passing of the new Act, namely Madras Act 19 of 1951, there was an amendment of the original petition and the amended petition included a prayer for a further declaration that the properties in dispute are the personal properties of the petitioners family and number the properties of the temple. Such a declaration was outside the purview of s. 84 2 of Madras Act 11 of 1927 and companyld number have been granted. We are, therefore, of the opinion that the companytention of respondent number is companyrect and that he is entitled to a declaratory decree that the companypromise decree in O.P. number 3 of 1950 was number valid and was number binding upon Sri Kodandaramaswami temple. We have gone into the question of the validity of the companypromise decree because both the parties to the appeal invited us to decide the question and said that there was numberuse in companyrt remanding the matter to the trial companyrt on this question and the matter will be unduly protracted. For the reasons expressed, we hold that the decree passed by the trial companyrt should be set aside and the plaintiff- respondent number I should be granted a declaratory decree that the companypromise decree in O.P. number 3 of 1950 on the file of the District Court Nellore is number valid and binding on Sri Kodandaramaswami temple.

Case appeal was rejected by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 1046 of 1963. Appeal from the judgment and decree dated November 17, 1959 of the Bombay High Court in First Appeal No. 484 of 1957 from Original Decree. T. Desai, and J. B. Dadachanji, for the appellant. Sarjoo Prasad, B. P. Singh and Naunit Lal, for respondents Nos.1 and 2. Ganpat Rai, for respondent No. 4. SARKAR, C. J. delivered a separate Opinion. The Judgment of MUDHOLKAR and BACHAWAT JJ. was delivered by BACHAWAT, J. Sarkar C.J. This appeal arises but of a suit filed by the respondent Vijay Kumar against the appellant on February 9, 1954 to enforce a mortgage. The plaint stated that the appellant executed the mortgage on December 13, 1934 in favour of Tarabai, the proprietor of the firm of Narayandas Chunilal, and that the amount secured on it became due on December 13, 1943. Vijay Kumar claimed that he was adopted by Tarabai on July 16, 1948 as a son to her deceased husband Motilal Hirakhanwala and became entitled to enforce the mortgage as her sole heir on her death on April 23, 1952. After setting out the particulars of the mortgage, Vijay Kumar asked for a decree for foreclosure. In his written statement the appellant admitted the mortgage but denied that Vijay Kumar had been adopted by Tarabai and stated that she had died leaving as her heirs three daughters, Rajkumari, Premkumari and Mahabalkumari, the mother of Vijay Kumar Besides denying Vijay Kumars right to enforce the mortgage. the appellant took various other defenses to the action to which it is unnecessary for the purpose of this appeal to refer. The learned District Judge who heard the suit, held that the adoption of Vijay Kumar had number been established and on that ground alone he dismissed it, having rejected the other defenses raised by the appellant. Vijay Kumar appealed against that judgment to the High Court of Hyderabad but that appeal was, on a subsequent reorganisation of States, transferred to the High Court of Bombay. Thereafter on November 3, 1958, Vijay Kumar made an application in the appeal for an order adding his mother Mahabalkumari as a company plaintiff with him as she was willing to be so added, and her sisters Rajkumari and Premkumari who were number available for joining in the suit as plaintiffs, as defendants. He also sought permission to add a new paragraph to the plaint, in which after reiterating his right to enforce the mortgage as the adopted son of Motilal and Tarabai, he stated. In case, however, the plaintiffs adoption is held number to be proved or number to be valid, the estate of Motilal and Tarabai Hirakhanwala and of M s Narayandas Chunilal will vest in Tarabais three daughters, viz., Rajkumari, Premkumari and Mahabalkumari. The prayers in the plaint were also sought to be amended by asking that the decree sought might be passed in favour of Vijaykumar and Mahabalkumari. The appellant opposed this application but it was allowed by the High Court. The records of the appeal were, thereafter, reconstituted by adding Mahabalkumari as an appellant and Rajkumari and Premkumari as respondents and amending the plaint a,. sought. Premkumari filed a written statement denying the adoption of Vijay Kumar and his right to enforce the mortgage. Rajkumari never appeared in the proceedings arising out of the suit. The appeal was thereafter heard by the High Court and allowed. The High Court refused to go into the question of adoption and passed a preliminary mortgage decree for foreclosure in favour of Mahabalkumari, Rajkumari and Premkumari and further directed that the suit as brought by Vijay Kumar would stand dismissed. The present appeal has been brought by the original defendant against this judgment of the High Court under a certificate granted by it. I think that Mr. S. T. Desai for the appellant was right when he said that the order adding parties companyld number be supported. The High Court purported to make the order under sub-r. 1 of 0. 1, r. 10 of the Code of Civil Procedure. We were number called upon by companynsel to companysider any other provision. That sub-rule, however, cannot justify the order, for it only permits addition of a plaintiff and does number provide for the addition of a defendant while the order directs addition of both a plaintiff and two defendants. Was it then properly made in solar as it added a plaintiff ? I do number think so. The addition of Mahabalkumari as a plaintiff companyld number be made under the sub-rule unless it was necessary for the determination of the real matter in dispute. Now, adding her as a plaintiff would have availed numberhing unless Rajkumari and Premkumari were also added as defendants, and that companyld number be done under the sub-rule. No decree companyld have been passed in her favour alone if the case of adoption failed, for she would then be entitled to the mortgagees right along with her sisters. The addition of Mahabalkumari as plaintiff only would have been futile it would number have helped in the decision of any matter in dispute. Now, sub-r. 2 of 0. 1, r. 10 permits the addition of both plaintiffs and defendants in certain circumstances. The order however was number sought to be justified under that provision and there was good reason for it. It was companyceded-and in my opinion rightly-that in view of s. 22 of the Limitation Act. the suit as regards the parties added under this sub-rule had to be deemed to have been instituted when they were added. This was also the view expressed by the High Court. Now it is number in dispute that a suit filed on the date when the three sisters were added, to enforce the mortgage would have been barred. We may add that there is authority for the view that even the addition of defendants alone may attract the bar of limitation see Ramdoyal v. Junmenjoy 1 . Guravayya v. Dattairayaa 2 . I think that the addition of Rajkumari and Premkumari as defendants was of the kind companysidered in these cases. Therefore, it would have been futile to add any of the parties under this sub-rule. In view of the bar of limitation, such addition would number have resulted in any decree being passed and, therefore, the addition should number have been ordered. I am, however, number to be understood as holding that apart from the difficulty created by s. 22 the order companyld have been properly passed under the sub-rule. I have the gravest doubts if it companyld. It is unnecessary to discuss the matter further. The High Court, relying on Ravji v. Mahadev, 3 expressed the view that when a party is added under sub-r. 1 of 0. 1, r. 10 , s. 22 of the Limitation Act does number apply and numberbar of limitation arises. No other reason was given by the High Court or suggested by companynsel in this Court to avoid the bar of limitation imposed by s. 22. If the bar operated, numberaddition of parties companyld, of companyrse, be made. As I am of opinion that the order companyld number be justified by the terms of that sub-rule, it is number really, necessary for me to companysider this question of limitation. I wish however to observe that, as at present advised, I am number at all sure that s. 22 does number apply to an addition of parties under sub-r. 1 of r. 10 of 0. 1. There is numberprinciple to support such a view. Nor do I think that Ravjis case 1 clearly expresses it. All that is held--and that too in the judgment of one of the learned Judges only-was that when in a suit by a benamidar the real owner is 1 1887 I.L.R. 14 Cal. 791. 2 1904 I.L.E. 28 Bom. 11. 3 1898 I.l.R. 22 Bom. 672. added, it was really the original suit that was companytinued. Obviously, the learned Judge thought that he was dealing with a case where there was numberreal addition of parties. It would seem that is number the case where an order under the sub-rule is made. That would be a case like that of a companyrection of a misdescription of a party for which a resort to the sub-rule would number be necessary Purshotam Umedbhai Co. v. Manilal Sons. 1 . Then again Ravjis case 1 does number seem to have been approved in later Bombay cases see e.g. Krishnaji, v. Hanmaraddi 2 . Further Ravis case 1 would number support the order in hand if my reading of it is companyrect. The present is number a case of a companytinuation of the Original suit. Here parties were added to press their own rights which are in companyflict with and antagonistic to those which were being pressed in the suit as originally framed. I do number companysider it necessary to pursue this matter further on the present occasion. It was then said that in the present case there was numbersub- stantial addition of parties as the original suit was in the capacity of a proprietor of the firm of Narayandas Chunilal and all that was done was to add persons who might be the real proprietors. This was said in order to get out of the bar of limitation by showing that it was the original suit that was companytinued in spite of the addition of parties. There seems to be authority for the view that when a suit is filed in a representative capacity, if it turns out to be doubtful whether that capacity existed or had companytinued, the proper representative or the owner, as the case may be, might be added even after the date when the suit would be barred. I will assume that these cases lay down the law companyrectly, but they do number, in my view, afford any assistance in the present case. First, a suit by a person claiming to be the sole owner of the properties of a business carried on in a firm name, as Vijay Kumars suit was, is number a suit in a representative capacity he represents numberone but himself. A firm is number a legal entity which companyld or had to be represented by any one else. As is well known, a firm means only the partners taken together. There is numbersuch thing as the capacity of a proprietor of a firm the capacity of a proprietor of a firm is only the proprietors individual capacity. Secondly, numberauthority has been brought to our numberice which shows that if parties are added with a claim which is antagonistic to the claim of the original plaintiff in the suit, as has happened here, that would still be a case where the original suit should be deemed to have been companytinued. It may be that if the suit had initially been filed in the form in which it stood after the amendment, it would have been a good suit, as to which however I do number say anything on the present occasion. If it were so, that would have been under the other 1 1961 I S.C.R. 982. 2 1898 I.L.R. 22 Bom. 672. 3 1963 I.L.R. 58 Bom 536. provisions of the Code permitting joinder of parties and perhaps also of causes of action when instituting a suit, numbere of which was or companyld be pressed for our companysideration. These provisions are merely permissive and relate to what the plaintiff might do if he is so minded Sri Mahant Prayaga Doss v. The Board of Commissioners for Hindu Religious Endowments, Madras. 1 That is number the case where addition of parties is sought under 0. 1, r. 10 , sub-rr. 1 and 2 such additions can only be made under the provisions of these sub-rules only. For these reasons, I think that the order adding parties is insupportable. If that order goes, as it should, the decree which is in favour of the added parties cannot stand, for they are then strangers to the suit. As there is numberdecree in favour of Vijay Kumar and as in fact the suit companysidered as brought by him has been dismissed by both the companyrts below-by the High Court with the tacit approval-and there is numberappeal by him, this appeal must be allowed. In this view of the matter, I do number feel called upon to deal with the other grounds advanced by Mr. Desai. I would allow the appeal and set aside the judgment of the High Court and restore that of the trial Court. The appellant will number get the companyts in any of the companyrts below or this Court. Bachawat, J. On December 13, 1934 the appellant executed a mortgage in favour of one Tarabai, widow of Motilal Harakhanwala. Tarabai had three daughters, Mahabalkumari, Rajkumari and Premkumari. On July 16, 1948, Tarabai is said to have adopted Vijay Kumar as a son to her deceased husband. Vijay Kumar is the natural son of Mababalkumari. On April 23. 1952, Tarabai died. On February 10, 1954, Vijya Kumar claiming to be the adopted son and heir of Tarabai, instituted a suit for foreclosure of the mortgage executed in her favour. The appellant companytested the suit. On December 30, 1955, the District Judge, Aurangabad dismissed the suit, holding that Vijay Kumar was number the adopted son and heir of Tarabai. Vijav Kumar preferred an appeal to the former High Court of Hyderabad. After the reorganisation of States, the appeal was transferred to the Bombay High Court. On an application made by Vijay Kumar on November 3, 1958, the High Court on November 4, 1958 made an order for addition of Mahabalkumari as plaintiff and Rajkumari and Premkumari as defendants to the suit and for companysequential amendments of the plaint. After the addition of the parties, the appeal came up for final disposal before the High Court. At the hearing of the appeal, the respondents submitted that the question whether Vijay Kumar was the adopted son of Tarabai should number be decided in this litigation and a decree should be passed in favour of the added parties on the footing that they were the heirs of Tarabai. The High Court accepted this submission, set aside the finding of the trial Court on the question of the adoption of 1 1927 I.T.R. 50 Mad.41. Vijay Kumar, dismissed the suit as brought by him and directed the trial Court to pass the usual preliminary decree in favour of Mahabalkumari, Rajkumari and Premkumari. The High Court held that the mortgage money fell due on February 9, 1943 and the suit being instituted within 12 years from this date, was number barred by limitation. The appellant number appeals to this Court on a certificate granted by the High Court. The main question in this appeal is whether the claim of Mahabalkumari, Rajkumari and Premkumari to enforce the mortgage is barred by limitation. The mortgage deed dated December 13, 1934 provided that the mortgage money would be payable in annual installments within a period of nine Fasli years, and in the event of number-payment of five installments, the mortgagee would be entitled to recover the entire mortgage money. The appellant did number pay any of the installments. The High Court rightly held that the deed gave the mortgagee an option to enforce the mortgage in the event of number-payment of five instalments. It was open to the mortgagee number to exercise this option. As the mortgagee did number exercise the option, the mortgage money fell due on the expiry of nine years, that is to say, on February 9, 1943, and limitation companymenced to run from this date. On December 13, 1934 when the mortgage was executed and on February 9, 1943 when the mortgage money fell due, the Hyderabad Limitation Act was in force. By art. 133 of the Hyderabad Limitation Act, the period of limitation for a suit by a mortgagee for foreclosure was thirty years from the date when the money secured by the mortgage became due. But as from April 1, 1951, the Hyderabad Limitation Act was repealed and the Indian Limitation Act, 1908 was extended to the State of Hyderabad by the Part-B States Laws Act Act III of 1951 , Prima facie, the Indian Limitation Act, 1908 which was in force on the date of the institution of the suit was the law of limitation applicable to the suit. On behalf of the respondents, it was argued that by reason of the proviso to s. 6 of the Part-B States Laws Act, 1951, art. 133 of the Hyderabad Limitation Act companytinued to apply to the suit. There is numbersubstance in this companytention. The respondents had numbervested right in the law of procedure for enforcement of the mortgage. They did number acquire under art. 133 of the Hyderabad Limitation Act any right or privilege as companytemplated by the proviso to s. 6 of the Part-B States Laws Act, 1951. No doubt, art. 132 of the Indian Limitation Act, 1908 abridged the period of limitation for the enforcement of the mortgage. But this abridgment did number impair or take away any vested right. Section 30 of the Indian Limitation Act, 1908 inserted by the Part-B States Laws Act, 1951 made suitable provision safeguarding vested rights in cases where the period prescribed was shorter than that prescribed by the companyresponding law previously in force in the Part-B State. It was argued on behalf of the respondents that art. 147 of the Indian Limitation Act applied to the suit. We are unable to accept this companytention. In Vasudeva Mudaliar v. S. Shriniwas Pillai, 1 the Privy Council held that Art. 147 applied only to an English mortgage as defined in the Transfer of Property Act before its amendment in 1929, as, in respect of such a mortgage only, the mortgagee companyld sue for foreclosure or sale. That decision has never been questioned and we see numberground for differing from it. The deed dated December 13, 1934 created an anomalous mortgage and companyferred a right of foreclosure only upon the mortgagee. The mortgagee had numberright to sue for sale in the alternative. The present suit was for foreclosure only, and was governed by art. 132 and number art. 147. The suit would be barred by limitation if it were instituted on November 4, 1958 when Mahabalkumari, Rajkumari and Premkumari were added as parties to the suit. The question is whether the suit should be regarded as having been instituted on November 4, 1958 having regard to s. 22 1 of the Indian Limitation Act, 1908. Section 22 1 reads Where, after the institution of a suit, a new plaintiff or defendant is substituted or added, the suit shall, as regards him, be deemed to have been instituted when he was so made a party. Admittedly, the name of the original plaintiff is number a mis- description of the names of Tarabais daughters. This is also number a case where a wrong defendant has been sued as representing the estate of a deceased person and subsequently the real representative is added as a defendant. Nor is this a case where a wrong plaintiff has sued in a representative capacity and the person whom he intended to represent was subsequently added as a plaintiff. This is a case where the original plaintiff sued in his own right and on his own behalf. No doubt, Vijay Kumar claimed the right to enforce the mortgage as the legal representa- tive of Tarabai. But he made this claim on his own behalf and number as representing the daughters of Tarabai. Mahabalkumari must be regarded as a new plaintiff and Rajkumari and Premkumari must be regarded as new defendents and by reason of s. 22 1 the suit must as regards them be deemed to have been instituted when they were made parties. In Moyappa Chetty v. Supramanian Chetty 2 , the Privy Council had occasion to companysider the similar provisions of s. 22 of the Straits Settlements Ordinance No. 6 of 1896, which read When, after the institution of a suit, a new plaintiff or defendant is substituted or added, the suit shall as L.R 34 I.A. 186 2 1 1916 LR, 43 1 A. 113,121. regards him be deemed to have been instituted when he was so made a party Construing this section, Lord Parker of Waddington observed Their Lordships are of opinion that s. 22 companytemplates cases in which a suit is defective by reason of the person or one of the persons in whom the right of suit is vested number being before the Court. Section 133 of the Civil Procedure Code provides against the defence of a suit on this ground and enables the proper party to be added or substituted. If A is the right person to sue, it would be clearly wrong to allow him, for the sake of avoiding the Limitation Ordinance, to take advantage of a suit improperly instituted by B. Similarly, in this case the daughters of Tarabai cannot, for the purpose of avoiding the Limitation Act, take advantage of the suit improperly instituted by Vijay Kumar. In Subodini Devi v. Cumar Ganoda Kant Roy, Bahadur 1 , the Calcutta High Court held that there was a difference between substituting a new person as plaintiff under s. 27 of the Code of Civil Procedure, 1882 and the addition of a new person as defendant under s. 32 of the Code and that the change of parties as plaintiffs did number affect the question of limitation. This decision was followed by Parsons, J. in Ravji v. Mahadev 2 . But the learned Judges deciding those cases did number refer to s. 22 of the Indian Limitation Act, 1877 and they a, pear to have companypletely overlooked that section. Section 22 males numberdistinction between sub-r. 1 and sub-r. 2 of 0. 1, r. 10. The section in express terms applies whenever a new plaintiff or a new defendant is substituted after the institution of a suit. The Court has power to add a new plaintiff at any stage of the suit, and in the absence of a statutory provision like s. 22 the suit would be regarded as having been companymenced by the new plaintiff at the time when it was first instituted. But the policy of s. 22 is to prevent this result, and the effect of the section is that the suit must be regarded as having been instituted by the new plaintiff when he is made a party, see Ramsebuk v. Ramlall Koondoo 3 . The rigorous of this law has been mitigated by the proviso to s. 21 1 of the Indian Limitation Act, 1963, which enables the Court on being satisfied that the omission to include a new plaintiff or a new defendant was due to a mistake made in good faith, to direct that the suit as regards such plaintiff or defendant shall be deemed to have been instituted on any earlier date. Unfortunately, the proviso to s. 21 1 of the Indian Limitation Act, 1963 has numberapplication to this case, and we have number 1 1887 I.J,.R. 14 caL. 400. 2 1897 I.L.R. 3 1881 I.T,.R. 6 CAL. 815, 823-824. power to direct that the suit should be deemed to have instituted On a date earlier than November 4, 1958. It follows that as regards Mahabalkumari, Rajkumari and Premkumari the suit must be regarded as instituted on November 4, 1958. As far as they are companycerned, the suit is barred by limitation and numberdecree can be passed in their favour. The decree passed by the High Court in their favour cannot be sustained and must be set aside. We think that the High Court had power to join Mahabalkumari as a party plaintiff under 0. 1, r. 10 of the Code of Civil Procedure and to join Rajkumari and Premkumari as defendants under 0. 1, r. 10 2 and to allow companysequential amendments of the plaint under 0. 6, r. 17. But having regard to the bar of limitation, the added parties are number entitled to obtain any relief. So far as Vijay Kumar is companycerned, the suit as brought by him was dismissed by the High Court. There is numberappeal by him. On his behalf, it was number companytended that we should exercise in his favour our powers under 0. 41, r. 33 of the Code of Civil Procedure, or that we should set aside the decree of dismissal of the suit against him and remand the case to the High Court for decision of the question whether he is the adopted son and heir of Tarabai. Even if such prayer were made, on the facts of this case we would number be inclined to exercise our powers under 0. 41, r. 33 and to set aside the decree of the High Court as to the dismissal of the suit against him. In the result, the appeal is allowed, the decree passed by the High Court in favour of respondents Nos. 2,3 and 4, Mahabalkumari, Rajkumari and Premkumari, is set aside and the decree of the trial Court dismissing the suit is restored. The suit is dismissed.

Case appeal was accepted by the Supreme Court

CRIMINAL APPELLATE JURISDICTION- Criminal Appeals Nos. 121 and 122 of 1966. Appeals by special leave from the judgment and order dated March 14, 1966 of the Mysore High Court in Criminal Revision Petitions Nos. 120 and 123 of 1966 respectively. K. Ramamurthi, R. K. Garg and S. C. Agarwala, for the appellants in both the appeals . Gopalakrishnan and B. R. G. K. Achar, for the respon- dents in both the appeals . The Judgment of the Court was delivered by RAMASWAMI J. The appellants- Pampapathy and Shekarappa were tried in the Court of Sessions at Chitradurga for offences under ss. 147, 148, 307, 323, 302 read with s. 149 and s. 325 read with s. 149 of the Indian Penal Co and companyvicted of all the offences other than under s. 307 and s. 302 read with s. 149, Indian Penal Code. The case of the prosecution was that the appellants, along with others, some of whom were dismissed workers of Devangiri Cotton Mills and Shri Ganeshar Textiles Mills and some of whom were office bearers and members of the Devangiri Cotton Mills Employees Association and Shri Ganeshar Textiles Mills Workers Union, companyspired with the companymon object of companymitting murder and other offences with a view to strengthen their Associations and to weaken the rival Unions which had the sympathy of the Mill Managements. It was alleged that they intended to create fear in the mind of the Management of the Mills in order to gain their object of getting more bonus and get the dismissed workers reinstated. It was stated that they formed themselves into an unlawful assembly, armed themselves with deadly weapons, and attacked the deceased Heggappa and other loyal workers on the night of March 19, 1964 causing the death of Heggappa and injuries to 4 persons. The Sessions Judge, by his judgment dated December 7, 1964 companyvicted both the appellants for offences under ss. 147, 148, 322 .324 and 325 read with s. 149, Indian Penal Code. The appellants preferred appeals to the Mysore High Court and on admission of the appeals they were directed to be released on bail. On March 7, 1966, the State made two applications under ss. 498 2 and 561A, Criminal Procedure Code for cancellation of the bail granted to the two appellants. In support of the two petitions an affidavit was filed by the Deputy Superintendent of Police, Devangiri Division Sri K. Srinivasa Alwa, stating that the two appellants were misusing their liberty ever since they were enlarged on bail by doing acts of violence, creating trouble by instigating the labour unions of Devangiri Cotton Mills and Shankara Textile Mills to paralyse the smooth working of the Mills. It was alleged that they bad companystituted themselves as ring leaders of the Employees Association and were engaged in taking part in unlawful assemblies at different times and companymitted offences against the peaceful workers of the Mill. The appellants filed a companynteraf fidavit denying that they were acting in a manner likely to cause breach of peace or endanger the lives of the workers. On March 14, 1966 the Mysore High Court allowed the applications of the State and ordered that the bail granted to the appellants should be cancelled and they should be rearrested and companymitted to jailcustody. These appeals are brought, by special leave, from the order of the Mysore High Court dated March 14, 1966 in Criminal Petitions Nos. 120 and 123 of 1966. The question of law arising for determination in these appeals is whether, in the case of a person companyvicted of a bailable offence where bail has been granted to him under s. 426 of the Criminal Procedure Code, it can be cancelled in a proper case by the High Court in exercise of its inherent power under s. 561A of the Crimitial Procedure Code? It is necessary at the outset to reproduce the relevant provisions of the Criminal Procedure Code. Section 426 relates to the suspension of the sentence or order of the trial companyrt pending appeal and the release of the appellant on bail. The section reads as follows- 426. 1 Pending any appeal by a companyvicted person, the Appellate Court may, for reasons to be recorded by it in writing, order that the execution of the sentence or order appealed against be suspended and, also, if he is in companyfinement, that he be released on bail or on his own bond. The power companyferred by this section on an Appellate Court may be exercised also by the High Court in the case of any appeal by a companyvicted person to a Court subordinate thereto. 2-A When any person other than a person company- victed of a number-bailable offence is sentenced to imprisonment by a Court, and an appeal lies from that sentence, the Court may, if the companyvicted person satisfies the Court that he intends to present an appeal, order that he be released on bail for a period sufficient in the opinion of the Court to enable him to present the appeal and obtain the orders of the Appellate Court under sub-section 1 and the sentence of imprisonment shall, so long as he is so released on bail, be deemed to be suspended. 2-B Where a High Court is satisfied that companyvicted person has been granted spec ial leave to appeal to the Supreme Court against any sentence which the High Court has imposed or maintained, the High Court may, if it so thinks fit, order that pending the appeal the sentence or order appealed against be suspended, and also, if such person is in companyfinement, that he be released on bail. When the appellant is ultimately sentenced to imprisonment, or imprisonment for life, the time during which he is so released shall be excluded in companyputing the term for which he is so sentenced. Section 496 deals with persons accused of bailable offences. It provides that when a person charged with the companymission of a bailable offence is arrested or detained without warrant by an I officer in charge of a police station or is brought before a companyrt and is prepared at any time, while in the custody of such officer or at any stage of the proceedings before such companyrt, to give bail, such person shall be released on bail. Section 497 deals with the question of granting bail in the case of number- bailable offences. It reads as follows- 497. 1 When any person accused of or suspected of the companymission of any number- bailable offence is arrested or detained without warrant by an officer in charge of a police station, or appears or is brought before a Court, he may be released on bail, but he shall number be so released if there appear reasonable grounds for believing that he has been guilty of an offence punishable with death or imprisonment for life - Provided that the Court may direct that any person under the age of sixteen years or any woman or any sick or infirm person accused of such an offence be released on bail. 2 if it appears to such officer or Court at any stage of the investigation, inquiry, or trial, as the case may be, that there are number reasonable grounds for believing that the accused has companymitted a number-bailable offence, but that there are sufficient grounds for further inquiry. into his guilt, the accused shall, pending such inquiry, be released on bail, or, at the discretion of such officer or Court, on the execution by him of a bond with- out sureties for his appearance as hereinafter provided. 3 3-A 4 A High Court or Court of Session and, in the case of a person released by itself, any other Court may cause any person who has been released under this section to be arrested and may companymit him to custody. Section 498 1 companyfers on the High Court or the Court of Session power to direct admission to bail or reduction of bail in all cases where bail is admissible under ss. 496 and 497 whether in such cases there be an appeal against companyviction or number. Sub-section 2 of s. 498 empowers the High Court or the Court of Session to cause any person who has been admitted to bail under sub-s. 1 to be arrested and companymitted to custody. Section 561A was added to the Code in 1923 and it reads as follows- 561-A. Nothing in this Code shall be deemed to limit or affect the inherent power of the High Court to make such orders as may be necessary to give effect to any order under this Code, or to prevent abuse of the process of any Court or otherwise to secure the ends of justice. It was argued by Mr. Ramamurthy on behalf of the appellants that after the High Court had once made an order suspending the sentence and granting bail to the appellants under s. 426, Criminal Procedure Code it had numberpower to cancel that order subsequently and recommit the appellants to jail- custody. It was submitted that there was numberexpress power granted to the appellate companyrt to cancel its order regarding the suspension of sentence pending the appeal and the order of release of the appellants on bail. It was pointed out that under s. 497 5 the legislature has specifically companyferred power on specified companyrts to cancel the bail granted to a person accused of a number-bailable offence. It was also pointed out by learned Counsel that under s. 498 2 the legislature has companyferred power on the High Court and the Court of Session to cancel the bail granted to an accused person under s. 498 1 and ordering him to be arrested and companymitted to jailcustody. The argument put forward on behalf of the appellants is that if the legislature intended to companyfer such a power on the appellate companyrt under s. 426 it would have been very easy for it to add an appropriate sub-section and make an express provision for such a power. The omission to make such an express provision is, according to Mr. Ramamurthy, number a result of inadvertence but it is deliberate, and if that is so it will number be permissible to take recourse to the provisions of s. 561A to clothe the appellate companyrt with power to cancel the bail in a case falling under s. 426, Criminal Procedure Code. It was argued by Mr. Ramamurthy that even if the appellants companymitted acts of violence during the period they were enlarged on bail and repeated the very offence for which they had been companyvicted the bail bond companyld number be cancelled but the further companyduct of the accused may justify another prosecution tinder the Indian Penal Code and that it would number justify the rearrest of the appellants. In our opinion, there is numberjustification for the argument put for- ward on behalf of the appellants. It is true that in s. 498 and ss. 497 5 and 498 the legislature has made express provision for the cancellation of a bail bond in the case of accused persons released on bail during the companyrse of the trial but numbersuch express provision has been made by the legislature in the case of a company. evicted person whose sentence has been suspended under s. 426 and there has been an order of release of the appellant on bail. There is obviously a lacuna but the omission of the legislature to make a specific provision in that behalf is clearly due to oversight or inadvertence and cannot be regarded as deliberate. If the companytention of the appellants is sound it will lead to fantastic results. The argument is that once an order of suspension of sentence is made under s. 426 by the appellate companyrt and the appellant is ordered to be released on bail. the subsequent companyduct of the appellant. howsoever reprehensible it may be. cannot justify the appellate companyrt in revoking the order of bail and ordering the rearrest of the appellant. The appellant may companymit further acts of violence-, he may perpetrate once again the very same offences for which he has been companyvicted he may even threaten and criminally intimidate the prosecution companynsel who may be in- charge of the case in the appellate companyrt. he may attempt to abscond to a foreign companyntry to escape the trial or he may companymit acts of violence in revenge against the police and prosecution witnesses who have deposed against him in the trial companyrt, but the appellate companyrt will have numberpower to cancel the suspension of sentence and the order of bail made under s. 426. Criminal Procedure Code. Such a situation companyld number have been in the companytemplation of the legislature and, in our opinion, the omission to make an express provision in that behalf is manifestly due to oversight or inadvertence. In a situation of this description the High Court is number helpless and in a proper case it may take recourse to the inherent power companyferred upon it under s. 561A of the Criminal Procedure Code. The inherent power of the High Court mentioned in s. 561A. Criminal Procedure Code can be exercised only for either of the three purposes specifically mentioned in the section. The inherent power cannot be invoked in respect of any matter companyered by the specific provisions of the Code. It cannot also be invoked if its exercise would be inconsistent with any of the specific provisions of the Code. It is only if the matter in question is number companyered by any specific provisions of the Code that s. 561A can companye into operation. No legislative enactment dealing with procedure can provide for all cases that can possibly arise and it is an established principle that the Courts should have inherent powers, apart from the express provision of law, which are necessary to their existence and for the proper discharge of the duties imposed upon them by law. This doctrine finds expression in s. 561A which does number companyfer any new powers on the High Court but merely recognises and preserves the inherent powers previously possessed by it. We are, therefore, of the opinion that in a proper case the High Court has inherent power under s. 561 A. Criminal Procedure Code to cancel the order of suspension of sentence and grant of bail to the appellant made under s. 426. Criminal Procedure Code and to order that the appellant be rearrested and companymitted to jail-custody. We should like to add that, even before s. 498 2 was enacted, there was a companysensus of judicial opinion in favour of the view that, if the accused person is released on bail under s. 498 1 , his bail bond companyld be cancelled and he companyld be ordered to be arrested and companymitted to custody under the provisions of s. 561A of the Code Mirza Mohammad Ibrahim v. Emperor 1 . Seoti v. Rex 1 , Bachchu Lal v. State 1 , Munshi Singh v. State 1 and The Crown Prosecutor, Madras v. Krishnan 1 . These decisions proceed upon the view that the exercise of inherent power A.T.R. 1932 All.534. A.I.R. 1948 All.366. A. I.R. 1951 All.836 I.L.R. 1946 Mad. 62. A.I.R. 1962 All. 39. to cancel bail under s. 561A was number regarded as inconsistent with the provisions of s. 498 1 of the Code. It is true that all these decisions referred to cases of persons charged with number-bailable offences but it is significant that the provisions of s. 497 5 did number apply to these cases and the appropriate orders were passed under the purported exercise of the inherent power under s. 561A. In the companyrse of argument Mr. Ramamurthy strongly relied upon the decision of the Judicial Committee in Lala Jairam Das v. King-Emperor 1 . It was companytended on behalf of the appellants that the High Court has numberpower to grant bail to a companyvicted person under s. 498 of the Criminal Procedure Code and therefore the provisions of s. 498 2 cannot be invoked to the present case. This argument is undoubtedly companyrect and is supported by the decision of the Judicial Committee. It was further companytended by Mr. Ramamurthy on the basis of this decision that Ch. XXXIX of the Code together with s. 426 was intended to companytain a companyplete and exhaustive statement of the powers of a High Court to grant bail, and excludes the existence of any additional inherent power in a High Court relating to the subject of bail. But the actual decision of the Judicial Committee has numberapplication to the facts of the present case. The question before the Judicial Committee was whether the Code of Criminal Procedure companyfers any power on a High Court in India to grant bail to a person who has been companyvicted and sentenced to imprisonment and to whom the Judicial Committee has given special leave to appeal against his companyviction or sentence. It was held by the Judicial Committee that the High Courts had numbersuch power under the Criminal Procedure Code and companyld number grant bail to a person who has been companyvicted and sentenced to imprisonment and to whom the Judical Committee has given special leave to appeal against his companyviction and sentence. The question presented for determination in the present case, namely, whether inherent power of the High Court companyld be exercised for cancellation of bail, was number the subject-matter of companysideration before the Judicial Committee and that question did number obviously arise in the case before them. The ratio decidendi of the decision of the Judicial Committee is therefore different and has numberapplication to the present case. We accordingly reject the argument by Mr. Ramamurthy on this aspect of the case. We pass on to companysider the next companytention of the appellants, viz., the case does number fall under s. 561A of the Criminal Procedure Code and that it is number a proper case in which the High Court should cancel bail even though it has power under s. 561A to do so. We are unable to accept the argument of Mr. Ramamurthy as companyrect. An affidavit was filed before the High Court on behalf of the State by the Deputy Superintendent of Police. Devangiri Division in which it was stated that the appellants were 1 72 I.A. 120. misusing the liberty granted to them ever since they had been enlarged on bail by companymitting acts of violence, creating trouble by instigating the labour unions of Devanagiri Cotton Mills and other mills in Devanagiri with a view to paralyse the smooth working of the Mills. It was also alleged that the appellants had companystituted themselves as ring leaders of the Employees Association and were taking part in unlawful assemblies at different times and had companymitted offences against the peaceful workers of the Mill. OnDecember 31, 1965 Crime No. 360 of 1965 was registeredagainst the appellants for companymission of the offencesunder ss. 143, 448 and 324, Indian Penal Code. On February 11, 1966 Crime No. 53 of 1966 was registered,in which one of the appellants was alleged to have companymitted offences under ss. 341 and 323, Indian Penal Code. On February 12, 1966 yet another Crime No. 54 of 1966 was re- gistered against the appellants for the companymission of the offence under ss. 143, 147, 341, 323 and 324, Indian Penal Code. The allegation against the appellants therefore was that they were misusing the liberty granted to them by the appellate companyrt and were indulging in acts of violence. It is true that companynter-affidavits were filed by the appellants denying the allegations made by the State but the High Court apparently took the view that the allegations against the appellants on behalf of the State were well-founded and the bail granted to them by the High Court should be cancelled. In our opinion, the allegations made against the appellants would prima facie indicate abuse of the process of the Court and the provisions of s. 561A are attracted to the case and the High Court was entitled to cancel the bail of the appellants under the provisions of that section.

Case appeal was rejected by the Supreme Court

CRIMINAL APPELLATE JURISDICTION Criminal Appeal No. 20 of 1964. Appeal by special leave from the judgment and order dated July 16, 1963 of the Madras High Court in Criminal Revision Case No. 1139 of 1961 Criminal Revision Petition No. 1095 of 1961 . Naunit Lal, for the appellant. V. Rangam, for the respondent. The Judgment of the Court was delivered by Ramnswami, J. This appeal is brought, by special leave, from the judgment of the Madras High Court dated July 16, 1963 in Criminal Revision Case No. 1139 of 1961. The appellant was charged for having companymitted offences under s. 420, Indian Penal Code and s. 21 d and e of the Forward Contracts Regulation Act, 1952 Act 74 of 1952 , hereinafter called the Act, with regard to certain transactions between the appellant and P.W. 2, Rajam. The appellant was companyvicted of all the charges and was sentenced to rigorous imprisonment for one year and a fine of Rs. 1,000/- under S. 420, Indian Penal Code and a fine of Rs. 100/- under each of clauses d and e of s. 21 of the Act by the District Magistrate, Kumbakonam. He further directed that a sum of Rs. 1,000/- out of the said fine should be paid to P.W. 2. On appeal, the companyvictions and sentences were affirmed by the Sessions Judge, West Thanjavur. The appellant took the matter in revision to the Madras High Court but the revision application was dismissed. The appellant was the proprietor of a firm in Bombay known as Jawarmal Gulab Chand. He advertised that people companyld invest capital in companyton, oil-seeds and other companymodities and that J. G. Market reports issued by him companyld help them in the matter. P.W. 2, a whole-sale merchant dealing in companyton seed, ground nut cakes etc. at Kumbakonam bacame a subscriber to the reports. P.W. 2 asked the appellant for his business terms. The appellant sent him Ex. P-30 wherein he stated that he undertook export, import, ready and forward business in various companymodities in accordance with Pucca Adatia system and according to the usual practice and usage of the various associations companycerned. Neither the appellant number his firm was a member of any recognised association within the meaning of the Act. P.W. 2 placed orders with the appellant and companyrespondence and statements of accounts were exchanged between the appellant and P.W. 2 who paid a sum of Rs. 12,000/- as margin. Subsequent to the demand of P. W. 2 the appellant sent Rs. 1,000/- and also a final statement showing loss in the transaction and claiming that a sum of Rs. 398 - 52 P was due to the appellant. According to the prosecution case, the appellant induced W. 2 to send him Rs. 12,000/- between May 1, 1958 and June 15, 1958 for forward companytract business in companyton, castorseeds and ground nut by a fradulent representation that the appellant companyducted such business even though he was number actually entitled to do any such business and thereby cheated P.W. 2 . The case of the appellant was that he companyld do business under the Pucca Adatia system with members of recognised associations like the Bombay Oil-Seed and Oil Exchange, and the East India Cotton Association, Bombay, though he himself was number a member of either of these associations. The appellant denied that he made any false representation or that he induced P.W. 2 to part with his money. The case of the appellant was rejected by the District Magistrate of Kumbakonam who accepted the prosecution case as true and companyvicted and sentenced the appellant on all the charges. The decision of the District Magistrate was affirmed by the Sessions Judge, West Thanjavur in appeal. It was argued, in the first place, on behalf of the appellant that on the admitted or proved facts numbercase of cheating has been made out against the appellant and therefore his companyviction under s. 420, Indian Penal Code was illegal. We are unable to accept this argument as companyrect. It has been found that the appellant sent a letter, Ex. P- 34 along with a companyy of the business terms, Ex. 34 a on which we undertake business of our clients. In this document the appellant has made the representation that he companyld do business in forward companytracts in companyton, grains, seeds, bullion, black pepper etc. in accordance with the pucca adatia system and in accordance with the usual practice and usage of the various associations companycerned. In Ex. P-33 the appellant sent a telegram to P.W. 2 intimating that buying is advisable for quick profits. The appellant knew fully well that he had numberright to do forward business and that he was number a member of any recognised association and that he companyld number lawfully ad- vertise to P. W. 2 for investment in forward companytracts. It is number necessary that a false pretence should be made in express words by the appellant. It may be inferred from all the circumstances including the companyduct of the appellant in obtaining the property and in Ex. P-34 a the appellant stated something which was number true and companycealed from P. W. 2 the fact that he was number a member or any recognised association and that he was number entitled to carry A on the forward companytract business. It is clear that P. W. 2 would number have parted with the sum of Rs. 12,000/- but for the inducement companytained in Ex. P-34 and the representation of the appellant that he companyld lawfully carry on forward companytract business. It was then submitted on behalf of the appellant that the forward companytract in the present case was a wagering companytract and fell outside the purview of the Act and the provisions of s. 15 of that Act were therefore number attracted to this case. In our opinion, there is numberjustification for this argument. Before setting out the statutory provisions it is desirable to indicate briefly the economic implications of forward trading in companymodities, the need for the regulation of such trading and the mischief which the Act was intended to remedy. The expert companymittee to which the Bill which became the Act was referred, explained in their report the meaning of forward trading as follows Forward trading involves speculation about the future, but number all forms of forward trading companyld be companysidered as either unnecessary or undesirable for the efficient functioning of anything but the most primitive economy To the extent to which forward trading enables producers, manufacturers and traders to protect themselves against the uncertainties of the future, and enables all the relevant factors, whether actual or anticipated, local or international, to exercise their due influence on prices, it companyfers a definite boon on the companymunity, because, to that extent, it minimises the risks of production and distribution and makes for greater stability of prices and supplies. It thus plays a useful role in modern business. At the same time, it must be admitted that this is an activity in which a great many individuals with small means and inadequate knowledge of the market often participate, in the hope of quick or easy gains and companysequently, forward trading often assumes unhealthy dimensions, thereby increasing, instead of minimising, the risks of business. There arc forms of forward trading for example, options, which facilitate participation by persons with small means and inadequate knowledge It is, therefore, necessary to eliminate certain forms of forward trading, and permit others under carefully regulated companyditions, in order to ensure that, while producers, manufacturers and traders will have the facilities they need for the satisfactory companyduct of their business the wider interests of the companymunity, and particularly, the interest,-, of companysumers, will be adequately safeguarded against any abuse of such facilities by others. It was with these objects that the provisions of the Act were enacted. It is necessary at this stage to set out the relevant provisions of the Act. The object of the Act as stated in the preamble is to provide for the regulation of certain matters relating to forward companytracts, the prohibition of options in goods and for matters ,connected therewith. Section 2 c of the Act defines a forward ,contract as a companytract for the delivery of goods at a future date and which is number a ready delivery companytract. Section 2 i defines a ready delivery companytract as a companytract which provides for the delivery of goods and the payment of a price therefor, either immediately or within such period number exceeding eleven days after the date of the companytract. The statute therefore makes a distinction between ready delivery companytracts and forward companytracts. Forward companytracts are again divided into two categories specific delivery companytracts and number-transferable specific delivery companytracts. Specific delivery companytracts mean forward companytracts which provide for actual delivery of specific goods at the price fixed during specified future period. Non-transferable specific delivery companytracts are specific delivery companytracts the rights or liabilities under which are number transferable. Section 15 of the Act companyfers power on the Government to issue numberifications declaring illegal forward companytracts with reference to such goods or class of goods and in such areas as may be specified. Section 15 states 15. 1 The Central Government may by numberi- fication in the Official Gazette, declare this section to apply to such goods or class of goods and in such areas as may be specified in the numberification, and thereupon, subject to the provisions companytained in section 18, every forward companytract for the sale or purchase of any goods specified in the numberification which is entered into in the area specified therein otherwise than between members of a recognized association or through or with any such member shall be illegal. Any forward companytract in goods entered into in pursuance of sub-section 1 which is in companytravention of any of the bye-laws specified in this behalf under-clause a of sub-section 3 of section II shall be void- as respects the rights of any member of the recognised association who has entered into such companytract in companytravention of any such bye law, and also as respects the rights of any other person who has knowingly participated in the transaction entailing such companytravention. Section 17 authorises the Government to prohibit by numberification any forward companytract for the sale or purchase of any goods or class of goods to which the provisions of s. 15 have number been made applicable. Section 18 exempts number- transferable specific delivery companytracts from the operation of these sections. Section 21 relates to penalties and reads as follows Any person who- a b C d number being a member of a recognised association, wilfully represents to, or induces, any person to believe that he is a member of a recognised association or that forward companytracts can be entered into or made or performed, whether wholly or in part, under this Act through him, or e number being a member of a recognised association or his agent authorised as such under the rules or bye-laws of such association, canvasses, advertises or touts in any manner, either for himself or on behalf of any other person, for any business companynected with forward companytracts in companytravention of any of the provisions of this Act, or shall, on companyviction, be punishable- for a first offence, with imprisonment which may extend to two years, or with a fine of number less than one thousand rupees, or with both for a second or subsequent offence, with imprisonment which may extend to two years and also with fine provided that in the absence of special and adequate reasons to the companytrary to be mentioned in the judgment of the companyrt, the imprisonment shall be number less than one month and the fine shall be number less than one thousand rupees. It was argued on behalf of the appellant that the companytracts in this case were number really meant for delivery of goods but were speculative in character. It was companytended that to a companytract of this description the Act has numberapplication. Mr. Naunit Lal argued that the words of s. 2 c must be literally companystrued and must be taken to companyer only those companytracts in which the parties intended actual delivery of goods at a future date. In our opinion, the interpretation for which Mr. Naunit Lal companytends is against the whole scheme and purpose of the Act. If the expression forward companytracts in s. 2 c is number companystrued so as to include spe- culative companytracts which ostensibly are for delivery of goods the provisions of the Act would be rendered nugatory. It is a sound rule of interpretation that a statute should be so companystrued as to prevent the mischief and to advance remedy according to the true intention of the makers of the statute. In companystruing therefore s. 2 c of the Act and in determining its true scope it is permissible to have regard to all such factors as can legitimately be taken into account in ascertaining the intention of the legislature, such as the history of the statute, the reason which led to its being passed, the mischief which it intended to suppress and the remedy provided by the statute for curing the mischief. That was the rule laid down in Heydons case 1 which was accepted by this Court in The Bengal Immunity Company Limited v. The State of Bihar and others 2 . As we have already pointed out, the Act was passed in order to put a stop to undesirable forms of speculation in forward trading and to companyrect the abuses of certain forms of forward trading in the wide interests of the companymunity and, in particular, the interests of the companysumers for whom adequate safeguards were essential. In our opinion, speculative companytracts of the type companyered in the present case are included within the purview of the Act. One of the companytracts in the present case is Ex. P-42 in which P. W. 2 placed an order for supply of 100 bales of companyton Jarilla to be delivered in August, 1958 at Rs. 654/- per Candy. We think that a companytract of this description falls within the definition of forward companytract within the meaning of this Act and the provisions of that Act are therefore applicable to this case. We companysider that Mr. Naunit Lal has been unable to make good his submission on this aspect of the case. 1 1584 3 W. Rep, 16 76 E.R. 637 2 1955 2 S.C.R. 603. It was then companytended for the appellant that even if the Act was applicable there is numberbreach of the provisions of s. 15 because the appellant placed his order for the goods companyered by the companytract through a member of the recognised association as companytemplated in s. 15 of the Act. The argument was stressed that the appellant was merely acting as an agent of P. W. 2 and had placed an order for the numberified goods through a member of the recognised association and there was numberbreach of any of the provisions of the Act. We are unable to accept this argument as companyrect. In the first place, there is numberevidence on the record of the case to show that the appellant placed the order for the numberified goods with a member of the recognised association. But even on the assumption that the appellant placed an order for the numberified goods through a member of the recognised association there is, in our opinion, a breach of the provisions of the Act. The reason is that the appellant was doing forward companytract business as a Pucca adatia. It is well-established that the pucca adatia has numberauthority to pledge the credit of the upcountry companystituent to the Bombay merchant and there is numberprivity of companytract as between the upcountry companystituent and the Bombay merchant. The pucca adatia is entitled to substitute his own goods towards the companytract made for the principal and buy the principals goods on his personal accounts. In other words, the pucca adatia is number the agent of his companystituent but he is acting as a principal as regards his companystituent and number as a disinterested middleman to bring two principals together. The legal position has been explained by the Bombay High Court in Bhagwandas A Tarotamdas v. Kanji Deoji l and affirmed by the Judicial Committee in Bhagwandas Parasram v. Burjorji Ruttonji Bomanji 2 . In the present case, therefore, the appellant was acting as principal to principal, so far as P. W. 2 was companycerned and the companytracts are hit by the provisions of s. 15 of the Act. We pass on to companysider the next companytention of the appellant that there was a breach of s. 361, Criminal Procedure Code which states 361. 1 Whenever any evidence is given in a language number understood by the accused, and he is presentin person, it shall be interpreted to him in open Court in a language understood by him. If he appears by pleader and the evidence is given in a language other than the language of the Court, and number understood by the pleader, it shall be interpreted to such pleader in that language. I.L.R. 30 Bom. 205. 2 45 I.A. 29. It was said that the evidence of the prosecution witnesses was given either in Tamil or in the English language and the appellant did number know either of the languages and so he was number able to take part in the trial. Mr. Naunit Lal companytended that there was a breach of the requirement of s. 361 1 , Criminal Procedure Code and the trial was vitiated. We do number think there is any substance in this argument. Even if it is assumed that the appellant did number know English or Tamil the violation, if any of s. 361 1 , Criminal Procedure Code was merely an irregularity and it is number shown in this case that there is any prejudice caused to the appellant on this account. It is pointed out by the Sessions Judge that the appellant did number make any objection at the time the evidence was given and it appears that he was represented by two eminent advocates-Sri V. T. Rangaswami Iyenger and Sri R. Krishnamoorthy Iyer-in the trial companyrt who knew both these languages and who would number have allowed the interest of the appellant to be jeopardised even to the smallest extent. In our opinion, the irregularity has number resulted in any injustice and the provisions of s. 537, Criminal Procedure Code are applicable to ,cure the defect. Lastly, it was submitted that the 6 items of allged cheatin- were companybined together in one charge and the companyviction of the appellant is therefore illegal. There is numbermerit in this argument because the lower companyrts have found that all the six items of cheating were part and parcel of one transaction and the trial of the appellant on a single charge was therefore permissible under s. 239, Criminal Procedure Code. For the reasons expressed we hold that the decision of the High Court should be affirmed, and this.

Case appeal was rejected by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 196 of 1964. Appeal from the judgment and decree dated September 8, 1954, of the Calcutta High Court in Appeal from Original Decree No. 1 1 1 of 1948. K. Sen, S. N. Choudhuri and D. N. Mukherjee, for the appellant. N. Sinha and S. N. Mukherjee, for the respondents. The Judgment of the Court was delivered by Bachawat, J. The only question arising in this certificates appeal is whether the will of Nursingdas Seat imposed any restriction on the power of the executrix appointed by the will to dispose of his immovable properties vested in her as the executrix. Nursingdas Seal was the owner of garden land measuring 31 bighas and known as premises Nos. 26, 27 and 28, Dum Dum Cossipore Road, Ghooghoodanga. He died in December, 1888, leaving a will dated December 11, 1888 whereby he appointed his widow, Sukheswari, as the executrix and bequeathed his estate to Sukheswari for her natural life and thereafter to his son, Nilakantha absolutely by way of vested remainder. On September 9, 1899 one Sewdas Mobata purchased the interest of Nilkantha in the garden lands at an auction sale held in execution of a decree passed in a suit to enforce a mortgage dated September 7, 1893 executed by Nilkantha. Nilkantha became an insolvent and his estate vested in the Official Assignee of Bengal. Sewdass title to the property subject to the life interest of Sukheswari was companyfirmed by a companypromise decree dated February 17, 1904 passed in Suit No. 595 of 1901 and a companyveyance dated August 17, 1904 executed by Sukheswari and the Official Assignee of Bengal as the assignee of the estate of Nilkantha. On April 20, 1933, Sukheswari died. The title of Sewdas to the property subsequently devolved on the plaintiffs. On July 30, 1901 one Upendra Nath Addey obtained from Sukheswari a Mourashi Mokrari lease of 6 bighas out of the aforesaid 31 bighas of garden land on payment of Rs. 1,300/- by way of salami or premium. The leased property is companyprised in C.S. Dags Nos. 144-150. The lease was executed by Sukheswari in pursuance of a decree passed against her on September 2, 1899, in a suit for specific performance of an agreement executed by her in or about 1891. The leasehold interest of Upendra Nath became subsequently vested in the third defendant. On September 15, 1945, the plaintiffs instituted the present suit claiming a declaration of their title and recovery of khas posses- sion of the garden lands and for other reliefs. The trial Court decreed the suit. The decree passed against the defendants other than the third defendant was companyfirmed by the High Court, and has number become final. In the appeal filed by the third defendant, the High Court companyfirmed the decree of the trial Court declaring the plaintiffs title to 6 bighas of land companyprised in C.S. Dags Nos. 144-150, but it set aside the decree for recovery of khas possession and mesne profits, and instead passed a decree for 3 years rent in respect of the property. The companyrectness of this decree is challenged by the plaintiffs. If Sukheswari had power to lease C.S. Dags Nos. 144 to 150 to Upendra Nath Addy, it is number disputed that the plaintiffs cannot recover khas possession of the property from the third defendant this suit Counsel for the plaintiffs, however, submitted that Sukheswari had numberpower to grant the lease. This companytention was accepted by the trial Court, but it was rejected by the High Court Under s. 90 of the Probate and Administration Act, 1881 Act No. 5 of 1881 , Sukheswari had power to lease the property unless this power was restricted by Nursingdass will. Counsel submitted that cl. 4 of the will imposed such a restriction. The operative part of the will companysisted of five clauses, which were in these terms I appoint my wife Sm. Sooleswari alias Begum as the Executrix. After my death aforesaid wife being vested with my title will enjoy and possess all the movable and immovable properties etc. which will be left by me as long as she will be alive and after her death my son Shree Nilakantha Sea will companye to be vested with the same title. My wife will make payment in the same manner in which I have been paying the maintenance Kheraki to my revered mother and stepmother and will make the house-hold expenses etc. in the same manner in which I have been making. My second daughter and the aforesaid son, Nilkantha Seal have number been married as yet. My wife willspend a reasonable sum from my Estate on account of their marriage. If for that purpose a portion of my Estate has to be sold out, then my said wife will sell any portion of my estate whatever and will perform the said marriages. I give her absolute power in that behalf. My Executor will repay my debts on my death and realise my dues. It is to be numbericed that clause 4 of the will authorised Sukheswari to sell a portion of the estate for meeting the expenses of the marriages of Nilkantha and his sister. Counsel for the appellant submitted that the specific authority in clause 4 to deal with the estate in a particular way negatived any authority to deal with it in other ways. We are unable to accept this companytention. Clause 5 directed the executrix to pay the testators debts. Clause 3 directed her to pay maintenance to the mother and stepmother of the testator. The testator companyld number have intended to impose any restriction on the power of the executrix to dispose of the estate for the payment of the debts and the maintenance. Clause 4 cannot be regarded as a general restriction on the power of Sukheswari to dispose of the properties in due companyrse of administration. Counsel submitted that the lease was executed by Sukheswari for the purpose of raising money to meet the expenses of the marriage of her daughter. The argued that in view of clause 4 of the will, Sukheswari companyld raise money for this purpose by selling a portion of the estate and in numberother manner. The materials on the record do number clearly indicate why Sukheswari granted the lease. But we shall assume that the purpose of the lease was to raise moneys for meeting the marriage expenses. In our opinion, clause 4 did number fetter the power of the executrix to grant this lease. Clear language was required for restricting the power of the exe- cutrix to deal with the property under s. 90 1 of the Probate and Administration Act, 1881. The will companytained number such language. There was numberprovision in the will with regard to the power of the executrix to lease the property and the principle expressum facit cessare tacitun has numberapplication. In Purna Chandra Bakshi v. Nobin Chandra Gangopadhya l the Calcutta High Court held that a provision in a will authorising the executor to sell the testators property to pay off his debts companyld number be regarded as an implied prohibition against mortgaging the property. The executor had power under s. 90 of the Probate and Administration Act, 1881 to mortgage the property for paying the debts. The express power to sell the property did number imply a restriction on her to dispose of it in any other way under s. 90. We agree with this decision. In our opinion, clause 4 of the will of Nursingdas did number impose any restriction on the power of the executrix to lease the property in due Course of administration. The lease is binding on the plaintiff-,, and they cannot recover khas possession of the property in this suit. 1 1913 8 C.W.N. 362. This finding is sufficient for the disposal of the appeal.

Case appeal was rejected by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 618 of 1964. Appeal from the judgment and decree dated November 29, 1960 of the Madras High Court in Appeal Suit No. 207 of 1957. Sarjoo Prasad and M. S. Narasimhan, for the appellants. V. Gupte, Solicit6r-General and A. G. Ratnaparkhi, for respondents Nos. 1 and 2. Ganapathy Iyer, for respondent No. 3. The Judgment of the Court was delivered by Wanchoo, J. This is an appeal on a certificate granted by the Madras High Court and arises in the following circumstances. One Rangaswami Chettiar was a man of companysiderable property and used to live in Poolathur village. He first married one Bappini and had a son by her. But both the son and Bappani died. He therefore married Ammathayee, who was defendant No. 2 in the suit and is appellant No. I before us. He had a son and two daughters by her. But unfortunately all the three children died. Thereafter Rangaswami Chettiar married Lakshmiammal in 1943. She was the first defendant in the suit. It appears that numberchild was born to Lakshmiammal for about three years and therefore Rangaswami Chettiar married a fourth time. His fourth wife was the sister of his second wife named Supputhayee. In February 1949 Lakshmiammal gave birth to a son. There is dispute as to the question whether Lakshmiammal had left her husband about 1945 or so because of frequent quarrels between the two. Anyhow the fourth wife had also numberchildren. In June 1953 Rangaswami Chettiar fell ill. He was first treated as an out-patient in Batlagundu hospital and later admitted as an in-patient. On June 16, 1953 he executed a registered deed of gift in favour of his second wife Ammathayee of certain immovable joint family property. Lakshmiammal when she came to know of this gift published a numberice in a newspaper accusing the second and fourth wife of trying to deprive her and her minor son of their due share in the joint family property by having the gift deed executed and claimed that the gift deed was number valid. On September 4, 1953, Rangaswami Chettiar sent a numberice in reply to the numberice published by Lakshmiammal. Ili that numberice Rangaswami Chettiar accused Lakshmiammal of having left Wm a year and a half after the marriage after quarrelling with him. He also accused her of living a life of promiscuity thereafter. Finally he said in the numberice that the son born to Lakshmiammal in Feb-ruary 1949 was number his son. Lakshmiammal gave a reply to this numberice of Rangasmami Chettiar on September 15, 1953, in which she maintained that the child was Rangaswami Chettiars. She also claimed that Rangaswami Chettiars mind had been poisoned against her by his two other wives. She denied that she had any companynection with any other man besides Rangaswami Chettiar. In, December 1963 Rangaswami Chettiar died. The present suit was filed a year later on January 3, 1955 on behalf of the minor son. He claimed half share in the joint family properties left by Rangaswami Chettiar. To this suit the three widows who between them have half share were defendants Nos. 1, 2 and 3. Three other defendants were made parties to the suit to whom we shall refer later as they are number companycerned with the main companytroversy between the plaintiff and the two step-mothers i. e. second and third defendants . The main defence of the two step-mothers, who are number appel- lants before us, was that the, plaintiff though born to Lakshmiammal was number the son of Rangaswami Chettiar and was therefore number entitled to any share in his properties. Further Ammathayee pleaded that the gift deed in her favour was valid and that even if the plaintiff was the son of Rangaswami Chettiar he would be entitled to half share of the properties other than those gifted to her by R angaswami Chettiar before his death. There were other issues in the suit, but we are number companycerned with them in the present appeal. On the main question, namely whether the plaintiff was the son of Rangaswami Chettiar, the trial companyrt found in his favour. Further on the question whether the gift deed in favour of Ammathayee was valid, the trial companyrt was of opinion that it was number companypetent for Rangaswami Chettiar to make a gift of immovable joint family property to his wife. The trial companyrt therefore held the gift to be invalid and gave the plaintiff a decree for his half share in the pro- perty left by Rangaswami Chettiar, including the properties gifted to Ammathayee before his death. Thereupon the two step-mothers went in appeal along with two other defendants and companytested the finding of the trial companyrt on both these issues. The High Court however upheld both the findings. On a companysideration of the evidence, the High Court came. to the companyclusion that the heavy burden that lay on those who disputed the paternity of the plaintiff-respondent in view of s. 112 of the Indian Evidence Act, No. 1 of 1872, had number been discharged in this case and it had number been proved that Rangaswami Chettiar had numberaccess to Lakshmiammal on or about the time when the plaintiff-respondent companyld have been companyceived. On the question of the gift deed, the High Court held that Hindu law did number permit a husband to gift joint family immovable property to his wife in 3 56 the circumstances in which the gift was made in this case. The High Court therefore dismissed the appeal so far as the stepmothers of the plaintiff-respondent were companycerned. The High Court however allowed the appeal of defendants Nos. 4 and 5 who were the brothers of the two step-mothers of the plaintiffrespondent and set aside the decree of the trial companyrt with respect to them by which they were made accountable. There was also a crossobjection before the High Court with respect to certain properties which were in the possession of the sixth defendant. That crossobjection was dismissed on the ground that the plaintiff-respondent had failed to prove that those properties were joint family properties left by Rangaswami Chettiar. Thereafter the two widows who are the appellants before us applied for and obtained a certificate to appeal to this Court as the decree of the High Court was that of variance, and that is how the matter has companye before us. The two main questions which have been argued before us are- whether the plaintiff-respondent was the son of Rangaswami Chettiar, and whether the deed of gift was valid. So far as the first question is companycerned, there is a companycurrent finding of the trial companyrt as well as of the High Court that the plaintiffrespondent is the son of Rangaswami Chettiar. Ordinarily therefore this Court would number interfere with this companycurrent finding of fact. But it is urged that the High Court did number accept the evidence on this point in the same measure as the trial companyrt did, and that there are circumstances which should have led the High Court when it did number accept the evidence in full to hold that the plaintiffrespondent was number the son of Rangaswami Chettiar. It is also urged that the High Court was in error in holding on the basis of s. 112 of the Evidence Act that the paternity of the plaintiff-respon,dent had been proved. We are of opinion that there is numberforce in this companytention. The main evidence on behalf of the plaintiffrespondent was that of his mother, Lakshmiammal. On the other hand the appellants relied on the numberice sent by Rangaswami Chattiar to Lakshmiammal denying the paternity of the plaintiff- respondent, and it is urged that a numberice of this kind is very strong evidence rebutting the presumption that the plaintiff-respondent is the son of Rangaswami Chettiar, and this is particularly so in the present case because Rangaswami Chettiar was keen on having a -son and had married four times for that purpose. He would number have thus denied the paternity of the son born to his third wife in the circumstances if that was true. The High Court was number oblivious of the force of these circumstances. But the evidence of Lakshmiammal was that she never quarrelled with her husband and that her husband married again because she did number give birth to a child for about three years, and the fourth marriage of Rangaswami Chettiar took place with her companysent. She also said that she had number left the house of Rangaswami Chettiar and that the plaintiffrespondent was Rangaswami Chettiars son. She further said that her companywives became jealous after the birth of the plaintiffrespondent to her and that is why they influenced Rangaswami Chettiar against her. This evidence was relied upon by the trial companyrt and the High Court has number disbelieved it. It is also in evidence that Lakshmiammal was living in her fathers house in the same village as Rangaswami Chettiar, even according to the appellants witnesses and that Lakshmiammals fathers house was only a furlong away from Rangaswami Chettiars house. It was in these circumstances that the High Court had to companysider the question whether the heavy burden which lies on a person denying the paternity of a child born during wedlock had been discharged. It is true that Rangaswami Chettiar had given the numberice to Lakshmiammal in which he denied the paternity of the plaintiff-respondent but that numberice stands in numberbetter position than would have been the statement of Rangaswami Chettiar even if he was alive when this suit was fought out in the trial companyrt. Section 112 is in these terms- The fact that any person was born during the companytinuance of a valid marriage between his mother and any man, or within two hundred and eighty days after its dissolution, the mother remaining unmarried, shall be companyclusive proof that he is the legitimate son of that man, unless it can be shown that the parties to the marriage had numberaccess to each other at any time when he companyld have been begotten. It raises inter alia a companyclusive presumption that a child born during the companytinuance of a valid marriage between his mother and any man is the legitimate son of that man, and this companyclusive presumption can only be rebutted if it is shown that the parties to the marriage had numberaccess to each other at any time when he companyld have been begotten. The appellants therefore had to prove, as Rangaswami Chettiar would have had to prove even if he was alive when the suit was fought out in the trial companyrt, that he had numberaccess to Lakshmiammal at any time when the plaintiff-respondent companyld have been begotten. We have already said that even accord- ing to the appellants Lakshmiammal was only living one furlong away in her fathers house from where Rangaswami Chettiar was living. In these circumstances the evidence produced in the present suit falls far short of proving that Rangaswami Chettiar had numberaccess to Lakshmiammal at any time when the plaintiff-respondent companyld have been begotten. We have therefore numberhesitation in agreeing with the High Court, particularly taking into account the evidence of Lakshmiammal which has number been disbelieved by the High Court, that the appellants had companypletely failed to prove number- access of Rangaswami Chettiar to Lakshmiammal at any time when the plaintiff-respondent companyld have been begotten. In these circumstances there is numberreason for us to interfere with the companycurrent finding of fact as to the paternity of the plaintiff-respondent and we hold that he is the legitimate son of Rangaswami Chettiar. This brings us to the question of the validity of the gift deed ill favour of Ammathayee. The gift deed begins with the following recital As you happened to be my second wife and in accordance with the promise made to you by my father, K. K. Ramasami Chettiar at the time of my marriage with you, and according to the directions given to me also to execute a document in your favour and also in companysi- deration of the affection you are having for me, and your obedient nature and then follow the words making the gift of certain immovable properties in her favour. According to the donee- appellant, the value of this immovable property was about one-tenth of the entire property left by Rangaswami Chettiar. The argument on behalf of the donee-appellant is that the gift was valid as it was of a reasonable portion of the immovable property, firstly because it was made by a husband in favour of a wife out of love and affection, and secondly because it was made by her husband to carry out the pious obligation that lay on him to fulfil the wishes of his father to make some provision for Ammathayee, which his father had indicated at the time of her marriage. Hindu law on the question of gifts of ancestral property is well-settled. So far as movable ancestral property is companycerned, a gift out of affection may be made to a wife, to a daughter and even to a son, provided the gift is within reasonable limits. A gift for example of the whole or almost the whole of the ancestral movable property cannot be upheld as a gift through affection see Mullas Hindu Law, 13th Edn. p. 252, para 225 . But so far as immovable ancestral property is companycerned the power of gift is much more circumscribed than in the case of movable ancestral property. A Hindu father or any other managing member has power to make a gift of ancestral immovable property within reasonable limits for pious purposes, see Mullas Hindu Law, 13th Edn. para 226 p. 252 . Now what is generally understood by pious purposes is gift for charitable and or religious purposes. But this Court has extended the meaning of pious purposes to cases where a Hindu father makes a gift within reasonable limits of immovable ancestral property to his daughter in fulfilment of an antenuptial promise made on the occasion of the settlement of the terms of her marriage, and the same can also be done by the mother in case the father is dead see Kamala Devi v. Bachu Lal Gupta. 1 In Guramma Bhratar Chanbassappa Deshmukh v. Malappa, 2 it was observed by this Court that the Hindu law texts companyferred a right upon a daughter or a sister, as the case may be, to have a share in the family property at the time of partition. The right was lost by efflux of time. But it became crystallized into a moral obligation. The father or his representative can make a valid gift by way of reasonable provision for the maintenance of the daughter, regard being had to the financial and other relevant circumstances of the family. By custom or by companyvenience, such gifts are made at the time of marriage, but the right of the father or his representative to make such a gift is number companyfined to the marriage occasion Marriage is only a customary occasion for such a gift. But the moral obligation can be discharged at any time, either during the life time of the father or thereafter. But we have number been referred to a single case where a gift by a husband to his wife of immovable ancestral property if made, has been upheld. We see numberreason to extend the scope of the-words pious purposes beyond what has already been done in the two decisions of this Court to which reference has been made. The companytention of the donee-appellant that the gift in her favour by her husband of ancestral immovable property made out of affection should be upheld must therefore fail, for numbersuch gift is permitted under Hindu Law insofar as immovable ancestral property is companycerned. As to the companytention that Rangaswami Chettiar was merely carrying out his fathers wishes when he made this gift in favour of his wife and that act of his was a matter of pious obligation laid on him by his father, we are of opinion that numbergift of ancestral immovable property can be made on such a ground. Even the father-in-law, if he had desired to make a gift at the time of the marriage of his daughter-in-law, would number be companypetent to do so insofar as immovable ancestral property is companycerned. No case in support of the proposition that a father-in-law can make a gift of ancestral immovable property in favour of his daughter-in- law at the time of her marriage has been cited. There is in our opinion numberauthority to support such a proposition in Hindu law. As already observed, a Hindu father or any other managing member has power to make a gift within reasonable limits of ancestral immovable property for pious purposes, and we cannot see how a gift by the father-in-law to the daughter-in-law at the time of marriage can by any stretch of reasoning be called a pious purpose, whatever may be the position of a gift by the father or his representative to a daughter at the time of her marriage. One can understand such a gift being made to a daughter when she is leaving the 1 1957 S.C.R. 452. 2 1964 4 S.C.R. 497. family of her father. As it is the duty of the father or his representative to marry the daughter, such a gift may be and has been held by this Court to be for a pious purpose. But we see numberpious purpose for such a gift by a father-in- law in favour of his daughter-in-law at the time of marriage. As a matter of fact the daughterin-law becomes a member of the family of her father-in-law after marriage and she would be entitled after marriage in her own right to the ancestral immovable property in certain circumstances, and clearly therefore her case stands on a very different footing from the case of a daughter who is being married and to whom a reasonable gift of ancestral immovable property can be made as held by this Court. Learned companynsel for the donee-appellant further refers to the fact that gifts made in token of love by her father-in- law to a daughter-in-law are permitted and become her stridhan property. That is so. But that does number mean that a father-in-law is entitled to make a gift of ancestral immovable property to a daughter-inlaw so as to companyvert it into her stridhan. Generally such gifts are of movable property. But even if gifts of immovable property in such circumstances are possible,the two provisions must be read harmoniously. If therefore Hindu law does number permit a father-inlaw to make a gift of ancestral immovable property to his daughterin-law, he cannot make such a gift for purposes of stridhan. Further if gifts by the father-in-law to the daughter-in-law which become stridhan include gifts of immovable property, they can only refer to such immovable property as is number ancestral immovable property, for that is the only way in which the two provisions can be reconciled. We have therefore numberdifficulty in holding that there is numberwarrant in Hindu law in support of the proposition that a father-in4aw can make a gift of ancestral immovable property to a daughter-in-law at the time of her marriage. If that is so, we cannot see how what the father-in-law himself companyld number do companyld be made into a pious obligation on the son as is claimed in this case, for that would be permitting indirectly what is number permitted under Hindu law directly. Further in any case gifts of ancestral immovable property can only be for pious purposes, and we doubt whether carrying out the directions of the father-in-law and making a gift in companysequence can be said to be a gift for a pious purpose, specially when the fatherin-law himself companyld number make such a gift. We are therefore of opinion that this gift cannot be upheld on the ground that Rangaswami Chettiar had merely carried out the wishes of his father indicated on the occasion of the marriage of Ammathayee. The appeal therefore fails and is hereby dismissed with companyts to to the plaintiff-respondent. Before we part with this appeal, we should like to refer briefly to the case of Natarajan Chettiar who was defendant No. 6 in the trial companyrt and is respondent No. 3 before us. He was made a party with respect to certain properties in schedule D to the plaint. His case was that the properties in schedule D were number liable to be partitioned. This companytention of his was upheld by the trial companyrt. That is why the decree does number provide for partition of D schedule properties. It was therefore unnecessary for the appellants to make him a party to the present appeal unless the appellants claimed some relief against him. Learned companynsel for the appellants has stated that numberrelief is being claimed against Natarajan Chettiar respondent No. 3. The appeal therefore must fail as against Natarajan Chettiar who will get his companyts from the appellants but numberhearing fee. Further among the properties to be divided where a gold chain item 6 and certain promissory numberes items Nos. 2 to 4 of schedule B. The trial companyrt held that there was numberproof that these items existed. In the decree however this has number been made quite clear.

Case appeal was rejected by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 359 of 1964. Appeal by special leave from the judgment and decree dated September 29, 1961 of the Madhya Pradesh High Court in First Appeal No. 123 of 1958. Sen J.P. Dube and I.N. Shroff, for the appellant C. Misra and S. S. Shukla, for the respondent. The Judgment of the Court was delivered by Shah, J, This is an appeal with special leave against the decree passed by the High Court of Madhya Pradesh in appeal No. 123 of 1958 companyfirming the decree of the Additional District Judge, Hoshangabad, decreeing the plaintiffs suit. The State of Madhya Pradesh has appealed to this Court. At an auction held on July 20, 1954 by the Divisional Forest Officer, Hoshangabad Division, for sale of felled trees in Coupe No. 66 Dhekna, Range Seoni, one Jagatram was declared the highest bidder and the trees were sold to him for Rs. 12,100. The amount of the bid was payable in four instalments of Rs. 3,025 each the first instalment to be paid immediately on acceptance of the bid, the second on December 1, 1954, the third on February 1, 1955 and the fourth on May 1, 1955. Jagatram executed a companytract in favour of the Governor of Madhya Pradesh in which were incorporated the terms and companyditions of the sale. The following are the material terms of the companytract The quantity of the said forest produce to be sold under this companytract shall be the quantity which may exist at the time of executing this indenture or may companye into existence thereafter in the companytract area all of which forest companytractor by companylect and remove from it in accordance with the companyditions herein companytained during the period from the date the forest companytractor furnishes the necessary companype boundary certificate after inspection of the companytract area to the 30th day of June, 1955 The forest companytractor shall companymence his work of companylecting and removing the said forest produce within one month after furnishing the necessary certificate mentioned in clause 2 above The said forest produce shall be removed by the forest companytractor from the companytract area by the routes specified in the following table and shall be presented by him for examination at one or other of the depots specified in that table- Table Omitted The Forest companytractor shall be subject to the Forest Contract Rules as amended from time to time up C. I.166-4 and the Rules shall be deemed to be part of this companytract in so far as they are applicable thereto Jagatram paid the first instalment due under the companytract on July 28, 1954, and subscribed his signature to the terms of the companytract. Nathuram and Kaluram stood sureties for him and executed the following bond Whereas the Governor in order to secure the due performance of companyditions of the above companytract demanded security from the forest companytractor, I Nathuram son of- Kashiram resident of Chaterkheda Kaluram son of Jhandusingh resident of PipaliyaKalan, by occupation Agriculturists, surety on behalf of the forest companytractor, undertake to discharge the liability of the forest companytractor in case of any act, omission, negligence or default on the part of the forest companytractor for any sum which may become payable by the forest companytractor to the Governor by or under the companyditions of the above companytract. I also agree that any sum which may be payable by me to the Governor under the terms of this bond shall be recoverable in the same manner as an arrear of land revenue. Jagatram removed almost the entire quantity of trees sold to him, but since he did number pay the remaining three instalments of the price, the State of Madhya Pradesh took proceedings to recover from Kaluram the amount due by Jagatram as arrears of land revenue. Kaluram then companymenced an action against the State of Madhya Pradesh for a declaration that he was number liable to pay the arrears of forest dues recoverable from Jagatram and for an injunction restraining the State from realising or from companytinuing the recovery proceedings with regard to those forest dues from him. The principal ground in support of the claim was that the forest authorities gave time to Jagatram and omitted to take steps which their duty to the surety required them to take i.e., prompt seizure and sale of the trees after the second instalment had fallen due, and since on that account his eventual remedy against Jagatram was impaired, he Kaluram stood discharged from liability as surety. The Trial Court held that the forest officers were negligent in allowing the companytractor Jagatram to remove the trees sold, and on that account the security of the surety was impaired, and the surety stood discharged for the whole amount recoverable from the companytractor. The High Court of Madhya Pradesh companyfirmed the decree of the Trial Court. By virtue of cl. 6 of the terms of the companytract, the relevant Forest Contract Rules were to be treated as part of the companytract between Jagatram and the State. By r. 2 it was provided that all companytracts whereby the Government sells forest produce to a purchaser shall be subject to the rules, insofar as they are applicable, and that those rules shall be deemed to be binding on every forest companytractor number only as rules made under the Forest Act, but also as companyditions of his forest companytract. By r. 6 the forest companytractor is required to carry with him an accessory licence entitling him and his servants and agents to go upon the land specified in the companytract and to do all acts necessary for the proper extraction of the forest produce purchased under the companytract. Rule 8 provides Where the companysideration payable to Government under a forest companytract is payable in instalments and the Divisional Forest Officer at any time before the last instalment is paid, companysiders that the value of the forest produce removed by the companytractor exceeds the amount of the instalments already paid, the Divisional Forest Officer may stop further removal until the companytractor has paid such further sum as may, in his opinion, be sufficient to companyer such excess Provided that, if in the opinion of any Forest Officer number below the rank of a Range Officer, it is necessary to take immediate action to prevent a breach of this rule, such Forest Officer- may by numberice in writing serve on the companytractor or his agent, if any, stating the grounds for the direction, require the companytractor or his agent to stop further removal of the forest produce from the companytract area and By r. 12 a forest companytractor is prohibited from removing any forest produce from the companytract area, unless it is accompanied by a pass in the prescribed form signed by the companytractor or his authorized agent. By r. 13 the forest companytractor is required to remove forest produce only by the route or routes specified by rules under the Act, or by his forest companytract, and to take all forest produce removed by him to such depots or places as may be similarly prescribed, for check and examination. Rule 16 requires the forest companytractor to keep accounts of the quantity of forest produce removed by him from the companytract area, and that such accounts shall be open to inspection at any time by the Divisional Forest Officer or by any forest subordinate duly authorized in that behalf. Rule 29 1 provides that a forest companytract may be, terminated by the Office empowered to execute it on behalf of the Government, if the Forest companytractor makes default in the payment of the companysideration for his companytract or of any instalment thereof, or companymits a breach of any of the other companyditions of his companytract. By sub-r. 2 of r. 29 it is provided that such termination shall be numberified to the forest companytractor by a written numberice and thereupon all the companytractors rights under the companytract including all accessory licences shall cease and all the forest produce remaining within the companytract area or at the depots specified under r. 13 shall become the absolute property of Government. Rule 33 1 provides that all forest produce removed from a companytract area in accordance with the rules and duly checked and passed at the depots established under r. 13 shall be at the absolute disposal of the forest companytractor. By cl. 2 of r. 33 it is provided that the forest companytractor may assign any forest produce number so removed, but such assignment shall number be valid unless it is made with the previous sanction in writing of the forest officer who executed the companytract. It is also necessary to refer to ss. 82 83 of the Indian Forest Act 16 of 1927. By s. 82 it is provided that all money payable to the Government under the Act or under any rule made under the Act, or on account of the price of any forest produce, or of expenses incurred in the execution of the Act in. respect of such produce, may, if number paid when due, be recovered as if it were an arrear of land-revenue. Section 83 provides When any such money is payable for or in respect of any forest-produce, the amount thereof shall be deemed to be a first charge on such produce, and such produce may be taken possession of by a Forest-officer until such amount has been paid. If such amount is number paid when due, the Forest Officer may sell such produce by public auction, and the proceeds of the sale shall be applied first in discharging such amount. 3 Beside the companytractual right which is companyferred upon the State by r. 8 to stop removal of goods in value exceeding the amount already paid by the companytractor, where the companysideration is payable in instalments the statute has imposed a charge upon the goods sold, inter alia, for the price thereof, and has authorised the Forest Officer to take possession of the goods until such amount is paid. If the amount is number paid when due, the Forest Officer may sell the produce by public auction. The State Government has therefore under the terms of the companytract and by virtue of the statute, even though the property in the goods has passed to the companytractor, the right to stop removal of the goods and take possession thereof till the amount due is paid and to sell the goods if the amount is number paid when due the State has also the power to prohibit removal, of the goods when the value of the forest produce removed by the companytractor exceeds the amount of instalments already paid, to check and examine the goods, and to terminate the companytract in case of default in payment of the amount due and to take possession of the goods either in the companytract area or in the depots of the companytractor. The companytract between Jagatram and the State was in respect of felled trees and the area and denomination of the companype were set out. The trees agreed to be sold being in a deliverable state, by virtue of s. 20 of the Sale of Goods Act, the property in the goods sold passed on the production of the companype boundary certificate. It is true that because of the diverse companyenants companytained in the companytract and the provisions of the Rules which formed part of the companytract, certain restrictions were imposed upon the companytractor. Rule 8 authorised the forest authorities to stop removal of the -foods sold if it was found that the companytractor had removed goods of value exceeding the amount of instalments already paid. Again the companytractor was required to take the goods to the depots and to get the same checked and examined. But on that ground it cannot be said that the companytractor did number become the owner of the goods when the companype boundary certificate was produced. The companype boundary certificate is number on the record, and we are unable to hold that any goods were removed or permitted to be removed without the production of the companype boundary certificate. That is number the case of the State and we will number be justified in so assuming. The terms of rr. 29 33 also abundantly support the view that on the production of the companype boundary certificate the companytractor becomes the owner of the goods. Under cl. 2 of r. 29 when a companytract is terminated for reasons mentioned in cl. 1 all forest produce remaining within the companytract area or at the depots specified under r. 13 becomes the absolute property of the Government. it is implicit in the rule that till the eventuality companytemplated by r. 29 1 , property in the forest produce is in the companytractor. The terms of r. 33 2 which authorize the forest companytractor to assign any forest produce also support that inference. The right to assign the forest produce number removed from the companytract area predicates title to the forest produce. The argument of the State that the property in the goods had number passed to the forest companytractor till they were removed, and on that account the statutory charge under s. 83 of the Forest Act did number attach to the goods sold, has therefore numberforce. As soon as the companytract was entered into and the companype boundary certificate was produced and we assume in this case that it was so produced, the property in the goods passed to Jagatram. But for the companytract price there was a first charge on such produce in favour of the State of Madhya Pradesh under s. 83 1 . The Divisional Forest Officer had authority to stop removal of those goods until the amount of instalments payable by the companytractor was paid and even to sell the goods for recovery of the amount which had fallen due. The forest authorities however allowed Jagatram to remove the goods sold before the instalments due on December 1, 1954 and thereafter were paid. Kaluram by executing the surety bond had undertaken to discharge the liability arising out of any act, omission, negligence or default of the forest companytractor. The surety Kaluram companytends that because the State lost or parted with the security he stood discharged. By s. 140 of the Indian Contract Act, 1872, where a guaranteed debt has become due, or default of the principal debtor to perform a guaranteed duty has taken place, the surety, upon payment or performance of all that he is liable for, is invested with all the rights which the creditor had against the principal debtor and by s. 141 it is provided A surety is entitled to the benefit of every security which the creditor has against the principal debtor at the time when the companytract of suretyship is entered into, whether the surety knows of the existence of such security or number and, if the creditor loses, or, without companysent of the surety, parts with such security, the surety is discharged to the extent of the value of the security. The State had as already observed, a first charge over the goods the State was also entitled to prevent the goods from being removed without payment of the amount of instalments due. The expression security in s. 141 is number used in any technical sense it includes all rights which the creditor had against the property at the date of the companytract. The surety is entitled on payment of the debt or performance of all that he is liable for, to the benefit of the rights of the creditor against the principal debtor which arise out of the transaction which gives rise to the right or liability he is therefore on payment of the amount due by the principal debtor entitled to be put in the same position in which the creditor stood in relation to the principal debtor. If the creditor has lost or has parted with the security without the companysent of the surety, the latter is, by the express provision companytained in s. 141, discharged to the extent of the value of the security lost or parted with. The State had a charge over the goods sold as well as the right to remain in possession tilt payment of the instalments. When the goods were removed by Jagatram that security was lost and to the extent of the value of the security lost the surety stood discharged. In the present case the State has number produced the accounts furnished under r. 16 by the companytractor relating to the quantity of goods removed by Jagatram. We must in the circumstances hold that the entire quantity companytracted to be sold to Jagatram had been removed, and the surety is, because the State has parted with the security which it held, discharged from liability to pay the amount payable under the terms of the companytract. In Wulff and Billing v. Jay, 1 Hannen, J., stated the law thus I take it to be established that the defendant became surety upon the faith of there being some real and substantial security pledged, as well as his own credit, to the plaintiff and he was entitled, therefore, to the benefit of that real and substantial security in the event of his being called on to fulfill his duty as a surety, and to pay the debt for which he had so become- surety. He will, however, be discharged from his liability as surety if the creditors have put it out of their power to hand over to the surety the means of recouping himself by the security given by the principal. That doctrine is very clearly expressed in the numberes in Rees v. Barrington-2 White Tudors C., 4th Edn. at p. 1002-As a surety, on payment of the debt, is entitled to all the securities of the creditor, whether he is aware of their existence or number, even though they were given after the companytract of suretyship, if the creditor who has had, or ought to have had, them in his full po ssession or power, loses them or permits them to get into the possession of the debtor, or does number make them effectual by giving proper numberice, the surety to the extent of such security will be discharged. A surety, moreover, will be released if the creditor, by reason of what he has done. cannot, on payment by the surety, give him the securities in exactly the same companydition as they formerly stood in his hands. Subject to certain variations, which are number material for the matter under discussion, s. 141 of the Contract Act incorporates the rule of English law relating to the discharge from liability of a surety when the creditor parts with or loses the security held by him. The Forest Officers of the State of Madhya Pradesh parted with the goods before receiving payment of the amount due by the companytractor Jagatram. Thereby the charge in favour of the State was seriously impaired and the statutory power to sell the goods for number-payment of the amount remaining due became, for all practical purposes, ineffective. Again under the terms of the companytract the Forest authorities had the right to prevent removal of goods sold until the price was paid that right was also lost. The right companyferred by s. 83 of the Forest Act and under the terms of the companytract to prevent removal and right to sell goods for number-payment of the price, companypled with the charge on the goods companystituted the security of the State, and that security was lost because the Forest Officers permitted removal of the goods by the companytractor. L.R. 1872 7 Q.B. 756. It was urged however on behalf of the State that mere inaction on the part of the forest authorities does number amount to parting with the security. But the terms of the statute do number apply only to cases in which by positive action on the part of the creditor the security is parted with. Even if the security is lost by the creditor, the surety is discharged. In any event the facts in the present case make it abundantly clear that it was on account of the companyduct of the forest authorities that the security was lost,. The goods sold were under the companytrol of the Forest Officers, when they were in the companype and even when they were in the depot of the companytractor. The goods companyld be removed on the production of a pass from the companype, and even after the goods were removed, unless they were examined and checked they were number at the disposal of the companytractor. It is number pleaded by the State that the trees sold were number checked and examined at the depot of the companytractor. Knowing that the goods were removed without payment of the instalments, if the Forest authorities checked and examined the goods and took numberaction for recovery of the amount payable, and did number enforce the charge, it would be difficult to say that there was mere inaction on the part of the forest authorities. We therefore agree with the High Court that the surety Kalu- ram stood discharged from liability to pay the amount undertaken by him under the terms of the surety bond because the forest authorities of the State had parted with the security which they possessed for recovery of the amount due from the companytractor.

Case appeal was rejected by the Supreme Court

CRIMINAL APPELLATE JURISDICTION Criminal Appeal No. 184 of 1964. Appeal by special leave from the judgment and order dated July 16, .1964 of the Bombay High Court in Criminal Appeal No. 1858 of 1962. Jethamalani and P. Kalpila Hingorani, for the appellant. P. Rana and B. R. G. K. Achar-, for the respondent. The Judgment of the Court was delivered by Raghubar Dayal, J. A. G. Nelson, Assistant Controller of Imports, P.H. Shingrani, Upper Division Clerk in the Quota Licensing Section of the Office of the Joint Chief Controller of Imports and Exports, Bombay, Shrichand Khetwani appellant, and Ramshankar Ramayan Bhargava, were tried of an offence punishable under s. 120-B read with s. 409 I.P.C. and s. 5 2 read with S. 5 1 d of the Prevention of Corruption Act. They were all companyvicted by the trial Court. On appeal, the High Court acquitted Bhargava and dismissed the appeals of the other three persons. The present-appeal is by Khetwani, by special leave. The. other two companyvicted persons have number appealed. It may be mentioned here that the prosecution case is that in pursuance of the companyspiracy, a number of licences in the name of several companypanies which had numberexistence were prepared, that some of these were actually is-sued and that two of those licences issued were in the name of M.L. Trading Co., Bombay, and were delivered to the appellant by Prabhakar, Karmik, P.W. 20, a postman, on May 15, 1959. The appellant denied having received any such licences and to have companyspired -with, Nelson and Singrani. The Courts below relied on the statement of Karmik and found that the appellant received the licences issued, in the name of the fictitious firm, M.L.Trading Co., and that- therefore the appellant was a member of the companyspiracy with, which he was charged. The companyrectness of the companyviction of the appellant has been questioned by learned companynsel on the following grounds The charge of companyspiracy framed against the appellant was a charge of a single companyspiracy while the facts proved establish the existence of number only a single companyspiracy but of at least eight companyspiracies, each , single companyspiracy being related to the issue of licences to one particular companypany. The charge of companyspiracy as laid is therefore number established. Karmik, P.W.20, was an accomplice on account of the circumstances urged, but the High Court misread the evidence by stating that there was a state of intimate relationship between the appellant and Karmik. The hand-writing expert should have been examined to prove that the endorsement on the postal receipt was in the handwriting of the appellant, especially when the in- vestigating officer had obtained specimen writings of the appellant. The High Court companysidered certain circumstances in justification of the failure of obtaining the opinion of the hand-writing expert in addition to such explanation which the investigating officer had given. The High Court sought companyroboration of the statement of Karmik from a single circumstance for which there was numberevidence and which was number put to the accused when examined under s. 342 Cr. P.C. We may number set out the charge in so far as it companycerns the appellant That, during May 1959, you accused No. 1 A.G. Nelson, . . . ., accused No. 2 P. H. Shingrani,. . . ., you accused No. 3 Shrichand Keshuram Khetwani and you accused No. 4 Ramshankar Ramayyan Bhargawa were parties with other unknown persons to a criminal companyspiracy, by agreeing to do or cause to be done illegal acts, to wit, to abuse the official positions of yourselves viz., you -accused No. 1 A. G. Nelson and you accused No. 2 P. H. Shingrani by companyrupt or illegal means or otherwise to have import licences for Motor Vehicle parts and specified items of Motor Vehicles parts issued in the names of bogus or unknown applicants on the basis of false numbers of quota certificates, which were never produced with applications, by misusing for the said purpose, import licence forms from out of Import Licence Books in the custody of you, accused No. 1, A.G. Nelson, and thereby to obtain pecuniary advantage, to all of you and or. the said unknown persons, and thereby companymitted, an offence punishable s. 5 1 d of the Prevention of Corruption Act and read with section 409 I.P.C. and within my companynizance. The charge, as framed, describes the companyspiracy to be the agreeing of the various persons, including persons number put on trial, to do or cause to be done, illegal acts. The acts to be done were the abuse ,of the official positions of Nelson and Shingrani for the issue of import licences in the names of bogus or unknown applicants on the basis of false particulars etc., and the object of companyspiring to ,do such acts by the persons in the companyspiracy charged or number charged was to obtain pecuniary advantage. The charge of companyspiracy was number that the companyspiracy was entered into with each bogus individual firm for the benefit of that firm alone in companynection with the issue of licences to that particular firm. The charge was that out of the profits made from acts done in furtherance of the companyspiracy, all the persons in the companyspiracy were to benefit. The finding that the various firms to whom licences were issued were fictitious is number questioned. The companyspiracy was a general companyspiracy to keep on issuing licences in the names of fictitious firms and to share the benefits arising out of those licences when numberreal independent person was the licensee. The various members of the companyspiracy other than the two public servants must have joined with the full knowledge of the modus operandi of the companyspiracy and with the intention and object of sharing the profits arising out of the acts of the companyspirators. We do number therefore see that the mere fact that licences were issued in the names of eight different companypanies make out the case against the appellant and the other companyspirators to be a case of eight different companyspiracies each with respect to the licences issued to one particular fictitious companypany. Great reliance is placed on the case reported as R. v. Griffith 1 in support of the companytention that the facts established make out the case of eight companyspiracies instead of the single companyspiracy charged. That case is very much different. In that case, a supplier of lime and his book- keeper and various individual farmers were charged with companyspiring to companymit fraud and obtain money by false pre- tences from the Ministry of Agriculture and Fisheries and Food on account of lime subsidy. It was established that there was link as between one farmer and another. None of them was in companytact with another. Neither was any farmer shown to have known that any other of the farmers was companytracting for the supply of lime by the supplier. It was, in these circumstances, that it was held that to companystitute one companyspiracy between all the farmers and the supplier of lime there had to be evidence from which it companyld be in feared that each farmer knew that there was or was companying into existence a scheme to which he attached himself to which there were other parties and which went beyond the act that he agreed to do so that all would be shown to have been acting in pursuance of the 1 1965 2 All. E.R. 448. companymon criminal purpose and that therefore there was numberevidence of companyspiracy between all farmers as distinct from evidence of a number of separate companyspiracies between the supplier of lime, his book-keeper and one or other of the farmers. The farmers were genuine persons in that case. Each farmer approached the supplier of lime and happened to be a party to the fraud companymitted in regard to the supply of lime to him. In the instant case, there is numbersuch genuine independent companypany which directly approached the two public servants for its own benefit. Whoever posed for the purpose of the receipt of the licences and for utilising them were those who posed on account of the full knowledge of the companyspiracy. It is number possible to believe that one without such knowledge would have posed, for a fictitious firm. We are therefore of opinion that this case does number fit in with the facts of the present case and that the companytention for the appellant that the charge as framed is wrong is number sound. The High Court has given good reasons for holding that Karmik is number an accomplice. He was a public servant. He simply delivered the registered envelope to the appellant on being told by him a day or so earlier that he would be getting some registered companyer in the name of M.L. Trading Co., and that it be delivered to him. It is in his statement that he had been delivering letters to the appellant for a few years previously. He has deposed I knew the accused No. 3 for a long time before I delivered the registered companyer to him. I do number think it necessary to obtain any attestation for his signatures. The High Court cannot therefore be said to have misread. the evidence when it expressed that Karmik knew the appellant rather intimately, as Karmiks statement about knowing the appellant and delivering letters to him in the past had number been challenged. The intimacy referred to was on account of companytacts which Karmik bad with the appellant in the discharge of his duty as a postal peon. Karmiks statement that the appellant had written the endorsement on the postal receipt has been accepted by the High Court. It is number necessary to examine an handwriting expert in every case of disputed writing. The investigating officer stated that he did number send the specimen writing of the appellant for companyparison with the endorsement on the postal receipt as he companyld number secure admitted writings of the appellant though he tried his best to obtain his admitted handwritings. He was number further questioned to explain why he companysidered it necessary to have admitted writings of the appellant in order to obtain the opinion of the handwriting expert about the disputed writing when specimen writings of the appellant were available. The explanation of the investigating officer seems to have been on account of practice. It appears from his statement Sup.C.I./66-10 that he sent certain questioned documents along with the admitted handwritings and specimen handwritings, signatures and initials of accused Nos. 1 and 2 to the Government Examiner of questioned documents. The practice may be sound or number but the bona fides of the companyduct of the investigating officer cannot be questioned. The High Court, however, further companysidered that the material provided by the writing on the acknowledgement receipt was very scanty and the investigating officer might have felt that the subsequent handwriting would be feigned or disguised and that any companyparison with the same would be deceptive. Such companysiderations might have been in the mind of the investigating officer but he had number stated them to be his reasons for number obtaining the opinion of the handwriting expert. The High Court cannot be said to have been in error in taking these further reasons into companysideration and holding that numberadverse inference can be drawn against the prosecution from the fact that the opinion of the handwriting expert has number been obtained with respect to the endorsement on the acknowledgment receipt. Further, an adverse inference against the prosecution can be drawn only if it withholds certain evidence and number merely on account of its failure to obtain certain evidence. When numbersuch evidence has been obtained, it cannot be said what that evidence would have been and therefore numberquestion of presuming that that evidence would have been against the prosecution, under s. II 4, illustration g of the Evidence Act, can arise. When Karmik is number held to be an accomplice, numberquestion of companyroboration of his evidence arises once the Court believes his statement. The High Court believed Karmik and expressed the opinion On the whole we feel that Karmik is an independent and disinterested witness. There is numberreason why Karmik should have perjured himself to implicate an innocent person. It is after arriving at this opinion that the High Court observed that Karmiks evidence received indirect companyroboration from the subsequent companyduct of the appellant. Such companyduct is said to be that the appellant waited for three or four days before approaching the Joint Chief Controller, after receiving the letter of Mishra asking him to meet the Joint Chief Controller the same evening or the next day. The accused was certainly number questioned about the reason for his number meeting the Joint Chief Controller promptly. The delay need number therefore be attributed to his guilty companyscience and cannot be taken to be any companyroboration of the statement of Karmik. This, however, does number affect the case against the appellant when Kamiks statement is believed and requires numbercorroboration. The result is that the companyviction of the appellant is companyrect.

Case appeal was rejected by the Supreme Court

Bhargava, J. This appeal brought up by special leave arises out of proceedings for assessment of agricultural Income-tax under the U.P. Agricultural Income-tax Act, 1948 U. P. Act No. III of 1949 hereinafter referred to as the Act . The respondent was an agriculturist in the district of Agra, and was assessed to agricultural Income-tax for the year 1358, Fasli. The income that came up for assessment included income derived from direct agricultural operations carried on by the respondent himself. In the return filed, the respondent had shown a gross receipt of Rs. 10,899 as the proceeds of sale of all his agricultural produce and had claimed a sum of Rs. 5,769-12-3 as expenses of cultivation. The agricultural income from this source had to be companyputed under section 6 2 b of the Act because of the option exercised by the respondent. The assessing authority did number accept the figures of income given by the respondent and held that the yield from the cultivation was of the value of Rs. 16,421. In calculating the net income assessable, he allowed a margin of 50 for expenses, so that the sum allowed for expenses was Rs. 8,210-8-0 which was deducted from the gross proceeds of sale of the produce. The State Government, through the Collector of Agra, filed an application for revision against this order of the assessing authority before the Boar of Revision, Agricultural Income-tax, U.P., urging that the assessing authority had erred in allowing a deduction of the sum of Rs. 8,210-8-0 for expenses of cultivation against the sum of Rs. 5,769-12-3 actually spent and claimed by the respondent in his return. The Revision Board, instead of deciding the question, expressed its opinion on it and referred the following question for the opinion of the Allahabad High Court An assessee files a return showing his income from and the expenses of cultivation under section 6 2 b of the Agricultural Income-tax Act. His returns are rejected and the income is determined to be much higher than what has been shown in the returns. Is it open to the assessing authority in view of the increase in the income to allow a larger amount by way of expenses than what was shown in the returns, or is the statement made in the returns binding on the assessee ? The High Court answered the question in favour of the assessee- respondent, and, companysequently, the State Government has companye up in this appeal to this companyrt. Mr. C. B. Agarwala, on behalf of the State, urged that in view of rule 13 framed by the U.P. Government in exercise of the rule-making power under the Act, the assessing authority was incompetent to allow as expenses any amount other than the amounts actually paid by the assessee on account of agricultural operations mentioned in that rule and since the respondent himself claimed that he actually spent the sum of Rs. 5,769-12-3, there was numberjustification for the assessing authority to allow any amount in excess of this amount as expenses of cultivation. The companyputation of the agricultural income-tax from agricultural operations has to be made by the assessing authority in accordance with section 6 2 b of the Act. Under sub-clause iv of that provision, the assessing authority, in calculating the assessable agricultural income, has to allow the expenses incurred in the previous year in raising the crop from which the agricultural income is derived, in making it fit for market and in transporting it to market, including the maintenance or hire of agricultural implements and cattle require for these purposes. It is to be numbericed that under this provision companytained in the Act itself, there is numberlimitation that the expenses must be proved to be amounts of money actually paid for any specified operations. What this provision companytemplates is that the assessing authority must determine the expenses incurred in raising the crop and on operations leading to its sale. Rule 13 framed by the U.P. Government can only be interpreted as laying down the principles according to which the assessing authority must ordinarily determine the expenses incurred for the purpose of deduction under section 6 2 b iv of the Act. These principles cannot, however, be held to fetter the power of the assessing authority to arrive at the companyrect figure of expenses incurred allowable under section 6 2 b iv of the Act. In the case before us, the expenses by the respondent had been claimed on the basis of a yield which according to the assessing authority, was lower than the actual yield. The assessing authority, therefore, estimated the produce at a higher figure, and we do number see any reason why, when the assessing authority estimated that the produce was higher than that shown by the respondents, he companyld number also estimate that the expenses incurred in respect of that higher produce must have been larger than the amount actually shown by the respondent. The assessing authority, in thus estimating the allowable expenditure at a figure higher than the amount claimed by the respondent, had full justification in the circumstances that he had estimated the produce also at a higher figure. The answer returned by the High Court was, therefore, perfectly companyrect.

Case appeal was rejected by the Supreme Court

Bhargava, J. The appellant is a public limited companypany carrying on the business manufacturing and selling cloth and other textile goods. During the previous year ending on 31st December, 1948, companyresponding to the assessment year 1949-50, the appellant entered into two companytracts with two other parties for purchase of textile machinery in order to expand its factory. Subsequently, the appellant-company, having regard to altered circumstances, decided to cancel both the companytracts as, in its opinion, the machinery to be purchased would number be required for its business. On cancellation of these companytracts, the appellant had to pay a sum of Rs. 15,000 as companypensation to one of the companytracting parties and Rs. 20,000 to the other companytracting party who demanded companypensation for breach of companytract. The appellant claimed that these amounts were paid in the interest of its business as, otherwise, the appellant would have had to track very companytly machinery which would number have served any useful purpose, so that this was an expenditure incurred by the companypany wholly and exclusively for the purpose of its business. The deduction thus claimed under section 10 2 xv of the Income-tax Act was, however, disallowed by the Income-tax Officer, and that order was upheld by the Appellate Assistant Commissioner and the Income-tax Appellate Tribunal. Thereupon, on an application under section 66 1 of the Income-tax Act, the Tribunal referred the following question for the opinion of the High Court at Allahabad Whether, on the facts of the case, the payment of companypensation amounting to Rs. 35,000 has been rightly disallowed as capital expenditure within the meaning of section 10 2 xv of the Income-tax Act, 1922 ? The High Court answered the question against the appellant and upheld the order of the Tribunal. Consequently, the appellant and upheld the order of the Tribunal. Consequently, the appellant has companye up to this companyrt in this appeal by special leave. On the facts put forward by the appellant itself and accepted by the Tribunal and the High Court, it is clear that the sum of Rs. 35,000 claimed as deduction under section 10 2 xv was really paid for breach of companytracts in respect of purchase of textile machinery which would have been a capital asset. The payment was, therefore made to avoid a larger capital expenditure that would number have served the interests of the appellant-company. Such a payment made is clearly in the nature of a capital expenditure and number an expenditure incurred wholly or exclusively for the purpose of the business. The payment was neither made for the purpose of earning profits, number for the purpose of furthering, protecting or companytinuing its business which was to be carried on from day to day. The payment was made with the object of avoiding an unnecessary investment in capital assets, and was an amount which was altogether outside the account of profits and gains, in the companyputation of which deductions are allowable for expenditure incurred wholly and exclusive for earning those profits and gains. It is, therefore, clear that this amount companyld number have been claimed has a legitimate deduction under section 10 2 xv of the Income-tax Act. Our view is supported by the observations of Rowlatt J. in Countess Warwick Steamship Co. Ltd. v. Ogg.

Case appeal was rejected by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 127 of 1966 Appeal from the judgment and order dated December 11, 1962 of the Calcutta High Court in Income-tax Reference No. 47 of 1962. T. Desai, A. N. Kirpal and R. N. Sachthey, for the appellant. K. Sen and B. P. Maheshwari, for the respondent. The Judgment of the Court was delivered by Bhargava, J. This appeal arises out of proceedings for registration of the firm, Juggilal Kamalapat, Calcutta, under section 26A ,of the Income Tax Act hereinafter referred to as the Act for the assessment year 1943-44. Prior to this assessment year, the three Singhania brothers, Sir Padampat Singhania, Kamiapat Singhania and Lakshmipat Singhania, were carrying on a hosiery business in the name of Messrs. Juggilal Kamalapat with Head Office at Kanpur and a branch at Calcutta. On November 29, 1939, these three brothers executed a deed of partnership, by which one Jhabbarmal Saraf was taken in as a partner, and under this deed, all the four partners had equal shares. On October 27, .1941, the three brothers executed a trust deed known as the Kamla Town Trust, the principal object of which was the welfare of the employees of Juggilal Kamalapat Cotton Spinning and Weaving Mills Ltd. Under this deed, the three brothers became the first trustees. On December 2, 1942, a Deed of Relinquishment was executed by the three brothers, relinquishing their rights and claims to all the properties and assets of the firm, Juggilal Kamalapat, in favour of Jhabbarmal Saraf and of themselves in the capacity of the three first trustees of the Kamla Town Trust. This relinquishment deed purported to recognise an earlier oral relinquishment which was stated as having been operative with effect from March 26, 1942. On December 1, 1942, a Partnership Deed was executed between Jhabbarinal Saraf and the three trustees, by which they purported to companystitute a partnership firm taking effect from March 27, 1942, the two partners in the firm being Jhabbarmal Saraf and the Kamla Town Trust represented by these three trustees. The shares of the two partners in this partnership were Kamla Town Trust As. /12/-, and Jhabbarmal Saraf As. /4/-. The firm, Juggilal Kamalapat, which had been carrying on the business of hosiery, owned both movable and immovable properties at Belur near Calcutta. The immovable properties companysisted of lands and buildings companystructed for the use of the factory for manufacturing hosiery, and they were shown in their balance-sheet as properties belonging to the firm. The firm had also been showing expenses incurred for maintaining or making additions or alterations to these buildings in their accounts and had been claiming depreciation in respect of them. It was in these circumstances that the new partnership, purporting to companysist of the Kamla Town Trust and Jhabbarmal Saraf, applied for registration under s. 26A of the Act for the assessment year 1943-44. The Income-tax Officer rejected this claim and, in doing so, also took numberice of the fact that a sum of Rs. 50,000/- had been introduced into this partnership firm by the Trust. The reason given by the Income-tax Officer for number accepting the registration need number be mentioned here, because that reason was number accepted by the Tribunal and was number urged before the High Court or before this Court on behalf of the Commissioner. On appeal, the Appellate Assistant Commissioner upheld the order of the Income-tax Officer for reasons given by him which were different from those given by the Income-tax Officer. Those reasons are again immaterial because those reasons were number accepted by the Tribunal or the High Court and have number been relied upon before us. The Income-tax Appellate Tribunal upheld the order rejecting the application for registration under s. 26A on the main ground that the Relinquishment Deed dated 2nd December 1942, being an unregistered document, companyld number legally transfer rights and title to the immovables owned by the firm in favour of the Kamla Town Trust, and that the transfer of the immovable properties being thus legally ineffective and they being number separable from the other business assets, the entire business of the firm was number legally transferred in favour of the Kamla Town Trust. Two other reasons were also given that the companystitution of the new firm was number numberified to any of the Banks with which the old firm was dealing, and the new partnership was number got registered with the Registrar of Firms till May, 1946. On these facts, at the request of the respondent firm, Juggilal Kamalapat, the following question was referred by the Tribunal or opinion to the Calcutta High Court- Whether on the above facts and in the circumstances of this case, the partnership, as evidenced by the Deed of 1 st December 1942, legally came into existence and as such should be registered? When this reference came up before the High Court on two different occasions, the High Court sent back the case for submission of further statements of the case to the Tribunal, because the High Court felt that facts, necessary to hold whether the respondent firm claiming registration was a genuine firm or number, had number been properly found by the Tribunal in its appellate order. On the first occasion, when submitting the supplementary statement of the case, the Tribunal purported to submit two different questions in lieu of the question which had been already submitted for opinion to the High Court. The two questions thus newly suggested were- Whether in the facts and circumstances of this case, can the number-registration of Relinquishment Deed invalidate the transfer of the business assets to the new partnership ?, and Can the registration application be rejected merely on the ground that the business assets were number legally transferred to the new partnership ? The High Court disposed of the reference by giving the following answer- Regard being had to the admissions made on behalf of the department, the facts and circumstances mentioned in paragraph 6 of the statement of case dated 13th March 1952 do number show that there was any legal flaw in the companysti- tution of the partnership firm as evidenced by the deed of 1st December, 1942. Upon such evidence, it must be companycluded that it did companye into existence and there is numberimpediment to its registration under Section 26A of the Income-tax Act. It is made clear that the question itself postulates the facts and circumstances and therefore, the companyclusion is based upon them. In view of the facts in this case, there will be numberorder as to companyts. This appeal has been brought up by the Commissioner of Income-tax against this answer returned by the High Court on certificate under section 66A 2 of the Act. It appears from the judgment delivered by the High Court that when the reference came up before it, an argument was raised on behalf of the Commissioner of Income-tax that the Tribunal had recorded a finding of fact that the firm seeking registration, companysisting of the Kamla Town Trust and Jhabbarmal Saraf, was number a genuine firm and that this should be the answer returned by the High Court to the Tribunal. It was in view of this point raised before the High Court that the High Court companysidered it necessary to remand the case twice to the Tribunal to ask for supplementary .statements of the case under s. 66 4 of the Act. At the final hearing, however, the High Court held that it companyld number be accepted that the Tribunal had, as a question of fact, recorded the finding that this firm seeking registration was number genuine and had never companye into existence, and, thereupon, proceeded to deal with the question referred as a question of law so as to determine whether the firm had companye into existence as a legally valid firm. In this appeal before us, again, it was urged by Mr. S. T. Desai on behalf of the Commissioner that the High Court was wrong in holding that it was number bound to return the answer to the Tribunal that the partnership seeking registration was number genuine in fact. In our opinion, the question sought to be raised on behalf of the Commissioner should number have been allowed to be raised by the High Court even at the earliest stage, and that it was the error .committed by the High Court in entertaining this question that has resulted in unnecessary proceedings and companysequent delay. When the case first came up before the High Court, the question that was referred in the statement of the case was, as we have mentioned above, whether the partnership legally came into existence and, as such, should be registered. The existence of a firm companyld be challenged on two alternative grounds. One was that, in fact, on the evidence, it companyld number be held that such a firm had at all been companystituted and had companye into existence. The other was that even though it purported to companye into existence as a fact, it companyld number claim to be a valid partnership because of some legal defect, or, in other words, whether its existence was valid in law. On the face of it, the question that was referred to the High Court for opinion was the second question and number the first one. The first question, in fact, companyld number have been referred to the High Court at all for opinion, because that would be a pure question of fact on which the decision of the Tribunal would be final and numberreference to the High Court would lie under S. 66. A reference to the High Court lies only on a question of law. The High Court, when requested to answer the question referred in the first statement of the case, should, therefore, have companyfined itself to the legal aspect of the existence of the partnership and should number have entered at all into the question whether the partnership had companye into existence in fact or number. The Tribunal which had passed the appellate order in these proceedings companysisted of two Members, and the first statement of the case was submitted by those very Members. It is clear that they themselves, when making the reference to the High Court, were of the view that they had number anywhere recorded a finding that the firm had number companye into existence in fact, because, if they had companye ,to such a finding, numberquestion of law companyld possibly have been referred by them to the High Court. The existence in law of a firm, which does number exist in fact, companyld number possibly be found by the High Court on the question referred. Consequently, we must reject the submission made on behalf of the Commissioner that, in this case, the High Court should have gone into the question of existence of the respondent firm as a question of fact and in this appeal also, we must proceed on the basis that the respondent firm did in fact companye into existence, and that all that the High Court was called upon to decide was whether it also came into existence It appears to us that, in this case, the submissions that were made on behalf of the Commissioner before the High Court and which have been made before us have ignored- the effect of the important relevant documents and have unnecessarily placed too much reliance on the Deed of Relinquishment. The Tribunal found that a Kamla Town Trust had been companystituted of which the three Singhania Brothers were the Trustees. The Tribunal also found that a deed of partnership was executed so as to companystitute the firm Juggilal Kamalapat, companysisting of two partners, the Kamala Town Trust, represented by the three trustees, and Jhabbarmal Saraf. Their shares in the profits and losses were also specified in the deed of partnership. There was the further finding by the Income-Tax Officer that the Kamla Town Trust, which entered into the partnership, actually introduced a sum of Rs. 50,000/- as its capital ill this partnership firm. On these facts by themselves, it should have been held that a valid partnership had companye into existence. So far as the deed of relinquishment is companycerned, learned companynsel appearing on behalf of the Commissioner has number been able to show to us any provision of law, or any decision of a Court laying down that a deed of relinquishment executed by partners of a firm in respect of their share and interest in a firm required registration, in case the firm owned immovable properties. In this companynection, learned companynsel for the respondent firm brought to our numberice a recent decision of this Court in Addanki Narayanappa and Another v. Bhaskara Krishnappa dead and thereafter his heirs, and Others 1 where the question that came up for companysideration was whether the interest of a partner in partnership assets companyprising of movable as well as immovable property should be treated as movable or immovable property for the purposes of s. 17 1 of the Registration Act, 1908. The Court upheld the view of the Full Bench of the Andhra Pradesh High Court in Addanki Narayanappa Anr. v. Bhaskara Krishtappa Ors. Mudholkar, J., speaking for this Court held It seems to us that looking to the scheme of the Indian Act, numberother view can reasonably be taken. The whole companycept of partnership is to embark upon a 1 1966 3 S.C.R. 400. I.L.R. 1959 A.P.p. 387 joint venture and for that purpose to bring in as capital money or even property including immovable property. Once that is done, whatever is brought in would cease to be the exclusive property of the person who brought it in. It would be the trading asset of the partnership in which all the partners would have interest in proportion to their share in the joint venture of the business of partnership. The person who brought it in would, therefore, number be able to claim or exercise any exclusive right over any property which he has brought in, much less over any other partnership property. He would number be able to exercise his right even to the extent of his share in the business of the partnership. As already stated, his right during the subsistence of the partnership is to get his share of profits from time to time as may be agreed upon among the partners and after the dissolution of the partnership or with his retirement from partnership of the value of his share in the net partnership assets as on the date of dissolution or retirement after a deduction of liabilities- ,ties and prior charges. On this basis, the ultimate decision was that a deed, evidencing the transfer of an interest of a partner in partnership assets, does number require registration even though the partnership assets are companyprised of movable as well as immovable property. A Full Bench of the Lahore High Court in Ajudhia Pershad Ram Pershad v. Sham Sunder and Others held that the interest in a partnership of a partner is to be regarded as movable property when it is sought to be dealt with under 0 . 21 r. 49, Civil Procedure Code, numberwithstanding that at the time when it is charged or sold, the partnership assets include immovable property. The Deed of Relinquishment, in this case, was in respect of the individual interest of the three Singhania Brothers in the assets of the partnership firm in favour of the Kamla Town Trust, and companysequently, did number require registration, even though the assets of the partnership firm included immovable property, and was valid without registration. As a result of this deed, all the assets of the partnership vested in the new partners of the firm. In the alternative, we think that, even if it had been accepted that this deed of relinquishment required registration, that would number lead to the companyclusion that the partnership seeking registration was number valid and had number companye into existence in law. The deed of relinquishment companyld, at best, be held to be invalid in so far as it affected the immovable properties included in the assets of the firm but to the extent that it purported to transfer movable assets of the firm, the document would remain valid. The deed companyld clearly be divided into two separate parts, one relating to immovable properties, and the other to movable assets and the part of the deed dealing with movable assets companyld number be held invalid for want I.L.R 28 Lab. 417. of registration. A deed of relinquishment is in the nature of a deed of gift, where the various properties dealt with are always separable, and the invalidity of the deed of gift in respect of one item cannot affect its validity in respect of another. This view was expressed by the Madras High Court in Perumal Ammal v. Perumal Naicker Anr. 1 A deed of relinquishment, or a deed of gift, differs from a deed of partition in which it is number possible to hold that the partition is valid in respect of some properties and number in respect of others, because rights of persons being partitioned are adjusted with reference to the properties subject to partition as a whole. In the case before us, therefore, the deed of relinquishment was valid at least in respect of movable properties, and the partnership seeking registration, thus, became owner of all the movable assets of the,partnership in addition to having companytributed a sum of Rs. 50,0001- as capital investment in it.

Case appeal was rejected by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 674 of 1965. Ml 7 Sup. C. I/66 761 Appeal by special leave from the judgment and order dated March 14, 1962 of the Madras High Court in T. C. No. 209 of 1959. Sen and R. N. Sachthey, for the appellant. K. Sen, and R. Ganapathy Iyer, for the respondent. The Judgment of the Court was delivered by Bhargava. J. The respondent is a public limited companypany incorporated under the Indian Companies, Act, 1913 in the year 1939 and was carrying on the business of manufacture of absorbent companyton wool. In March 1955, the Board of Directors resolved to establish a new spinning unit under the name of Sudarsanan Spinning Mills for which a licence was obtained from the Government of India under the Industries Development and Regulation Act, 1951 in August 1955. The respondent placed orders for purchase of necessary spinning machinery and plant in the months of January and February, 1956. The companystruction of factory buildings was taken in hand in March, 1956, and these companystructions were companypleted by December, 1957. The erection of the spinning machinery and the plant in the buildings was companypleted in several stages companymencing from June, 1957. A licence from the Inspector of Factories for working the factory was obtained in June, 1958. The statement of the case further mentioned that the time given to companyplete the project was extended by the Government up to 17th March, 1959. The respondent was assessed to wealth tax for the assessment year 1957-58, and in that year the respondent claimed that, in companyputing the wealth on the valuation date which was 30th September, 1956, an amount of Rs. 1,43,727 should be deducted as being the amount laid out in setting up this new unit. The Wealth Tax Officer disallowed the claim on the ground that the unit was set up prior to the date on which the Wealth Tax Act hereinafter referred to as the Act came into force, i.e., 1st April 1957. On the same basis, the Appellate Assistant Commissioner and the Income-tax Appellate Tribunal upheld that order. Thereupon, at the request of the respondent, the following question of law was referred for opinion of the High Court of Madras- Whether the aforesaid asset of Rs. 1,43,727 is exempt under section 5 1 xxi read with the second proviso thereunder of the Wealth-tax Act? The High Court answered the question in favour of the respondent, and companysequently, this appeal has been brought up to this Court by the Commissioner of Wealth Tax, Madras, by special leave. The question that fell for determination depended on the interpretation of section 5 1 xxi of the Act read with the second proviso to that clause which are reproduced below .lm15 5 1 xxi that portion of the net wealth of a companypany established with the object of carrying on an industrial undertaking in India within the meaning of the Explanation to clause d of section 45, as is employed by it in a new and separate unit set up after the companymencement of this Act by way of substantial expansion of its undertaking- Provided that- a b Provided further that this exemption shall apply to any such companypany only for a period of five successive assessment years companymencing with the assessment year next following the date on which the companypany companymences operations for the establishment of such unit. It has been urged before us by learned companynsel for the Commissioner that the main provision of clause xxi should be interpreted in companyjunction with the second proviso so as to give a harmonious companystruction to both parts of the provision with which we are companycerned. Relying on this principle, he urged that we should hold that a new and separate unit is set up only when the companypany companymences operations for the establishment of such unit. He relied on the principle stated by Maxwell in his book On Inter- pretation of Statutes 11th Edn. at P. 155 that there is numberrule that the first or enacting part is to be companystrued without reference to the proviso. The proper companyrse is to apply the broad general rule of companystruction, which is that a section or enactment must be companystrued as a whole, each portion throwing light, if need be, on the rest. The true principle undoubtedly is that the sound interpretation and meaning of the statute, on a view of the enacting clause, saving clause, and proviso, taken and companystrued together is to prevail. The view taken by the High Court was challenged on the ground that the High Court had interpreted the principal clause without giving full effect to the language of the proviso. The High Court held that unless a factory is erected and the plants and machinery installed therein, it cannot be said to have been set up. The resolution of the Board of Directors, the orders placed for purchasing machinery, licence obtained from the Government for companystructing the machinery, are merely initial stages towards setting up, however necessary and essential they may be to further the achievement of the end. It is number, however, the actual functioning of the factory or its going into production that can alone be called setting up of the factory. The setting up is perhaps a stage anterior to the companymencement of the factory. Thereafter, the High Court referred to a decision of the Bombay High Court in Western India Vegetable Products, Limited v. Commissioner of Income-tax, Bombay City, and on its basis, companycluded that the proper meaning to be assigned to the expression set up in section 5 1 xxi would be ready to companymence business. We are unable to agree with the learned companynsel for the Commissioner that in arriving at this view, the High Court companymitted any error. A unit cannot be said to have been set up unless it is ready to discharge the function for which it is being set up. It is only when the unit has been put into such a shape that it can start functioning as a business or a manufacturing Organisation that it can be said that the unit has been set up. The expression used in the proviso, under which the period for which the exemption is available is to be deter- mined, is number the same as used in the principal clause. In the proviso, the period of five successive years of exemption has to companymence with the assessment year next following the date on which the companypany companymences operations for the establishment of the unit. Operations for the establishment of a unit, from the very nature of that expression, can only signify steps that have to be taken to establish the unit. The word set up in the principal clause, in our opinion, is equivalent to the word established, but operations for establishment cannot be equated with the establishment of the unit itself or its setting up. The applicability of the proviso has, therefore, to be decided by finding out when the companypany companymenced operations for establishment of the unit, which operations must be antecedent to the actual date on which the companypany is held to have been set up for purposes of the principal clause. This is also the meaning that the Bombay High Court derived in the case of Western India Vegetable Products Ltd. , where that Court was companycerned with the interpretation of the expression set up as used in section 2 l1 of the Income-tax Act. That Court held It seems to us that the expression settling up means, as is defined in the Oxford English Dictionary, to place on foot or to establish, and is companytradistinction to companymence. The distinction is this that when a business is established and is ready to companymence business, then it can be said of that business that it is set up. But before it is ready to companymence business it is number set tip. This view was expressed when that Court was companysidering the difference between the meaning of the expression setting up a business and companymencing of a business. In the case before us, the proviso does number even refer to companymencement of the unit The criterion for determining the period of exemption is based on the companymencement of the operations for the establishment of the unit. These operations for establishment of the unit cannot be simultaneous with the setting up of the unit, as urged on behalf of the Commis- sioner, but must precede the actual setting up of the unit. In fact, 1 26 I.T.R 15 1. it is the operations for establishment of a unit which ultimately culminate in the setting up of the unit. On this interpretation, it is clear that in this case, the claim put forward by the respondent for exemption has been rightly held to be allowable by the High Court. In the statement of the case and in its appellate judgment, the Tribunal did number specifically record any finding as to the date when the unit was ready to go into business and to start production. In the appellate order, it was mentioned that according to the respondent, the unit was set up only when the Inspector of Factories issued a licence to the respondent for working the factory, which was in June, 1958. In the, statement of the case, the facts recited show that the companystruction of the factory buildings was companypleted by December, 1957 and the erection of the spinning machinery and plant was companypleted in several stages companymencing from June, 1957. On these facts, the High Court, and we companysider rightly, proceeded on the basis that the unit was companypleted and became ready to go into business only after 1st April, 1957, when the Act had already companye into force. Consequently, the companydition laid down in the principal clause of s. 5 1 xxi was satisfied, and the companypany became entitled to exemption in respect of the value of the assets used up in setting up this unit. Learned companynsel for the Commissioner, however, challenged the right of the respondent to claim this exemption on another ground, viz., that the exemption was claimed in respect of money laid out in a period which was number companyered by the period envisaged in the second proviso. It was urged that if it be held that the unit was set up after the Act had companye into force on the 1 st April, 1957, it must also be held that the operations for the establishment of the unit had been companymenced by the companypany almost simultaneously with the unit having been set up, and that date would, therefore, be a date subsequent to the assessment year 1957-58 in which year the exemption was claimed. This is a question which we do number think can be legitimately raised on behalf of the Commissioner at this stage. The only companytention before the Tribunal on behalf of the Commissioner was that the operations for the establishment of the unit had been companymenced by the respondent before the Act came into force, and that it should be held that the unit was also set up at the same time when those operations were companymenced. There was numbercontention at any stage that the operations for the establishment of the unit were companymenced at a subsequent stage. In fact, it was only for the purpose of urging that the principal clause was number applicable to the case of the respondent that the position was taken up on behalf of the Commissioner that the operations for establishment of the unit had been companymenced before 1st April, 1957, and the unit must be held to have been set up at the same time when those operations were companymenced. That submission, as we have indicated above, has numberforce. In any case, the judgments passed by all the Wealth-tax Authorities show that it was at numberstage in dispute that the operations for establishment of the unit had been companymenced by the respondent prior to 1 st April, 1957. Para 5 of the statement of the case mentions that the the wealth-tax officer disallowed the claim on the ground that unit was set up prior to 1st April, 1957. The Appellate Assistant Commissioner also in his judgment said In this view of the matter, the appellant set up the undertaking even prior to 1st April, 1957 as operations were carried out prior to that date for the establishment of the undertaking. The operations companysisted of the seeking of permission from the Government to install the unit, and placing of orders with manufacturers of machinery and advancing of moneys towards the purchase of machinery. The Tribunal also disallowed the claim on the basis that the respondent companymenced operations for setting up the unit earlier than 1st April, 1957. It does number appear to be necessary for us to express any opinion as to the particular stage at which it can be said that a companypany companymences operations for the establishment of a unit. In the present case, the Tribunal proceeded on the basis that, whatever be the exact date of companymencement of the operations for establishment of this unit by the respondent, it was certainly before 1st April, 1957 and we companysider that that fact, by itself, is sufficient to entitle the respondent to claim the exemption. The Commissioner cannot, at this stage, be allowed to raise a new question and ask this Court to decide that the date of companymencement of the operations for establishment of the unit by the respondent was different from that accepted by the Tribunal. That question was number raised and dealt with by the Tribunal. It is number even a question that might have been raised before the Tribunal and the Tribunal might have failed to deal with, number is it a question which may number have been raised before the Tribunal and, yet, was dealt with by it. On the principle laid down by this Court in Commissioner of Income- tax, Bombay v. Scindia Steam Navigation Co., Ltd., such a question companyld number be canvassed before the High Court and cannot be allowed to- be raised in this Court. The question referred to the High Court had to be answered on the basis that the respondent did companymence operations for establishing this unit before 1st April, 1957 and the further finding of fact recorded by the Tribunal is that a sum of Rs. 1,43,727/- had been invested in setting up the unit by 30th September, 1956, which was the valuation date for the assessment year 1957-58. The very first assessment year after the companymencement of the operations for establishment of the unit was this assessment year 1957-58, In the Wealth Tax Act, assessment 1 1962 1 S.C.R 78842 I.T.R. 589. year has been defined to mean the year for which tax is chargeable under s. 3 of that Act. Since the Act came into force on the 1st April, 1957, the financial year 1957-58 was the first assessment year for which tax became chargeable, and companysequently, for purposes of the second proviso to section 5 1 xxi , the assessment year following the companymencement of operations for establishment of the unit in the case of any companypany which companymenced the operations any time before the 1st April, 1957, will be the assessment year 1957-58.

Case appeal was rejected by the Supreme Court

Shah, J. One Buddappa, his wife, his two unmarried daughters and his adopted son Buddanna were members of a Hindu undivided family. Buddappa died on July 9, 1952. In respect of the business dealings of the family, Buddappa was assessed during his life-time in the status of a manager of the Hindu undivided family. For the assessment year 1951-52 the Additional Income-tax Officer, Raichur, assessed Buddanna in respect of the income of the previous year which ended on November 8, 1950 as a Hindu undivided family under the title Sri. Gowli Buddappa deceased represented by his legal successor Sri. Gowli Buddanna, Oil Mills Owner, Raichur. The order of assessment was companyfirmed in appeal by the Appellate Assistant Commissioner, subject to the variation that the assessment was made under the title Buddanna - a Hindu undivided family. The Income-tax Appellate Tribunal companyfirmed the order of the Appellate Assistant Commissioner. The Tribunal then referred the following questions of law to the High Court of Mysore for opinion under s. 66 1 of the Indian Income-tax Act Whether the sole male surviving companyarcener of the Hindu joint family, his widowed mother and sisters companystitute a Hindu undivided family within the meaning of the Income-tax Act ? Whether the assessment of the income in the hands of the Hindu undivided family was companyrect ? Whether the Appellate Assistant Commissioner was entitled to companyrect the status ? The High Court recorded answers in the affirmative on all the questions. With certificate granted by the High Court under s. 66-A of the Indian Income-tax Act, Buddanna has appealed to this Court. Before the Appellate Assistant Commissioner it was companytended by Buddanna that he companyld in law have only been assessed as an individual and that the Income-tax Officer was precluded by virtue of the proviso to s. 26 2 to pass the order for assessment for the year 1951-52 against him. The Appellate Assistant Commissioner and the Appellate Tribunal rejected that companytention. Buddappa was a resident of and carried on business at Raichur which before January 26, 1950, formed part of the territory of H.E.H. the Nizam. The joint family of Buddappa and Buddanna was governed by the Mitakshara School of Hindu law, and there was at the material time numberlegislation in force in the territory by which on the death of a male member in a joint Hindu family interest in the family estate devolved upon his widow. Such a widow had therefore only a right to receive maintenance from the estate. Counsel for the appellant urged that the expression Hindu undivided family used in s. 3 of the Income-tax Act means a Hindu companyarcenary and when on the death of one out of two companyarceners the entire property devolves upon a single companyarcener, assessment cannot be made on the surviving companyarcener in the status of a Hindu undivided family. Alternatively, it was companytended that even if the entity Hindu undivided family in the charging section of the Income-tax Act is intended to mean a Hindu joint family, there must be at least two male members in the family, and where there are number two such members the sole surviving male member of the family, even if there be widows entitled to maintenance out of the estate, may be assessed in the status of an individual, and number of a Hindu undivided family, unless the widows of deceased male members are entitled to the benefit of the Hindu Womens Rights to Property Act, 1937, or the Hindu Succession Act, 1956. The first companytention is plainly unsustainable. Under s. 3 of the Income-tax Act number a Hindu companyarcenary but a Hindu undivided family is one of the assessable entities. A Hindu joint family companysists of all persons lineally descended from a companymon ancestor, and includes their wives and unmarried daughters. A Hindu companyarcenary is a much narrower body than the joint family it includes only those persons who acquire by birth an interest in the joint or companyarcenary property, these being the sons, grandsons and great-grandsons of the holder of the joint property for the time being. Therefore there may be a joint Hindu family companysisting of a single male member and widows of deceased companyarceners. In Kalyanji Vithaldas Other v. Commissioner of Income-tax, Bengal 5 I.T.R. 90 L.R. 64 I.A. 28 , delivering the judgment of the Judicial Committee, Sir George Rankin observed The phrase Hindu undivided family is used in the statute with reference number to one school only of Hindu law but to all schools and their Lordships think it a mistake in method to begin by pasting over the wider phrase of the Act the words Hindu companyarcenary, all the more that it is number possible to say on the face of the Act that numberfemale can be a member. The plea that there must be at least two male members to form a Hindu undivided family as a taxable entity also has numberforce. The expression Hindu undivided family in the Income-tax Act is used in the sense in which a Hindu joint family is understood under the personal law of Hindus. Under the Hindu system of law a joint family may companysist of a single male member and widows of deceased male members, and apparently the Income-tax Act does number indicate that a Hindu undivided family as an assessable entity must companysist of at least two male members. Counsel for the appellant said that there are certain intrinsic indications in the annual Finance Acts which support the companytention that the income received or arising from property in the hands of a sole surviving male member in a joint Hindu family, even if there be females having a right to maintenance out of that property, is taxable as income of an individual, and number of the family. He relied by way of illustration upon the Finance Act, 1951, which in the First Schedule sets out the rates of income-tax payable by individuals, Hindu undivided family, unregistered firm and other association of persons. The relevant part of the First A Schedule prescribing rates of tax is as follows Provided that - numberincome-tax shall be payable on a total income which, before deduction of the allowance, if any, for earned income, does number exceed the limit specified below . . . . . . . . The limit referred to in the above proviso shall be - Rs. 7,200 in the case of every Hindu undivided family which satisfies as at the end of the previous year either of the following companyditions, namely a that it has at least two members entitled to claim partition who are number less than 18 years of age or b that it has at least two members entitled to claim partition neither of whom is a lineal descendant of the other and both of whom are number lineally descended from any other living member of the family and Rs. 3,600 in every other case. But the Schedule sets out the limits of exempted income it does number state or imply that a Hindu undivided family must companysist of at least two members entitled to claim partition. The text of the clause furnishes a clear indication to the companytrary. Reliance was also placed upon the form of Return prescribed under the Rules, which by s. 59 of the Income-tax Act, 1922 have effect as if enacted in the Act. Part IIIA of the Form prescribes certain particulars to be incorporated in the case of a Hindu undivided family, viz. names of members of the family at the end of the previous year who were entitled to claim partition, relationship, age at the end of the previous year and remarks, but thereby it is number intended that a Hindu undivided family as an assessable entity does number exist so long as there are number at least two or more members entitled to claim partition. The information is required to be given in Part IIIA of the Form merely to enable the Income-tax Officer to companysider which of the two parts of the proviso in the First Schedule to the relevant Finance Act prescribing the limit of exemption in respect of the Hindu undivided family applies. Sub-section 1 of s. 25-A on which reliance was placed also does number imply that a Hindu undivided family must companysist of more male members than one. The sub-section only prescribes the procedure whereby the members of a family which has hither to been assessed in the status of a Hindu undivided family may obtain an order that they may, because of partition of the joint status, be assessed as separated members. The-clause is purely procedural it does number enact either expressly or by implication that a Hindu undivided family assessed as a unit must companysist of at least two male members who are capable of demanding a partition. Counsel for the appellant placed strong reliance upon certain observations of the Judicial Committee in the judgment in Kalyanji Vithaldass case 5 I.T.R. 90 L.R. 64 I.A. 28. in which they disapproved of the view expressed by the Bombay High Court in Commissioner of Income-tax, Bombay v. Gomedalli Laksminarayan 3 I.T.R. 123. . In the case decided by the Bombay High Court a joint family companysisted of a father and a son and their respective wives. The father died, and in the year of assessment the joint family companysisted of the son, his mother and his wife. In dealing with the question referred by the Commissioner of Income-tax whether the income received by the son should be regarded as his individual income or as the income of a Hindu undivided family for the purpose of assessment to super-tax under the Indian Income-tax Act, the Bombay High Court held that the expression Hindu undivided family as used in the Income-tax Act includes families companysisting of a sole surviving male member and female members entitled to maintenance, and the income of the assessee should therefore be treated as the income of a Hindu undivided family. In Kalyanji Vithaldass case 5 I.T.R. 90 L.R. 64 I.A. 28. which dealt with a group of appeals from the judgment of the Calcutta High Court in In re Moolji Sicka Others 3 I.T.R. 123. the Judicial Committee observed The High Court of Calcutta approached the cases by companysidering first whether the assessees family was a Hindu undivided family, and in the end left unanswered the question whether the income under assessment was the income of that family. This is due numberdoubt to the way in which the Commissioner had stated the questions. But, after all if the relevant Hindu law had been that the income belonged, number to the assessee himself, but to the assessee, his wife and daughter jointly, it is difficult to see how that association of individuals companyld have been refused the description Hindu joint family. . . . . . . . The Bombay High Court, on the other hand, in Laxminarayans case having held that the assessee, his wife and mother were a Hindu undivided family, arrived too readily at the companyclusion that the income was the income of the family. The Judicial Committee further observed Under Section 3 or Section 55 income is number to be attributed to any one of the five classes of persons mentioned by any loose or extended interpretation of the words, but only where the application of the words is warranted by their ordinary legal meaning . . . . . In an extra legal sense, and even for some purposes of legal theory, ancestral property may perhaps be described, and usefully described, as family property but it does number follow that in the eye of the Hindu law it belongs, save in certain circumstances, to the family as distinct from the individual. By reason of its origin a mans property may be liable to be divested wholly or in part on the happening of a particular event, or may be answerable for particular obligations, or may pass at his death in a particular way but if, in spite of all such facts, his personal law regards him as the owner, the property as his property and the income therefrom as him income, it is chargeable to income-tax as his, i.e., as the income of an individual. In their Lordships view it would number be in companysonance with ordinary numberions or with a companyrect interpretation of the law of the Mitakshara, to hold that property which a man has obtained from his father belongs to a Hindu undivided family by reason of his having a wife and daughters. The facts of the cases which were decided by the Judicial Committee need to be scrutinized carefully. Before the Judicial Committee there were six appeals by six partners of the firm Moolji Sicka they were Moolji, Purshottam, Kalyanji, Chaturbhuj, Kanji and Sewdas. Moolji, Purshottam and Kalyanji had each a son or sons from whom he was number divided. But the income of the firm, which had to be assessed to super-tax was the separate income of each of these partners. Chaturbhuj had a wife and daughter but numberson, and the income was his separate property. Kanji and Sewdas, sons of Moolji, were married men, but neither had a son they received by gift from Moolji their respective interests in the firm, and for the purpose of the case it was assumed that the interest of each was ancestral property in which if he had a son the son would have taken an interest by birth. But numberson having been born, the interest of Kanji and Sewdas in the property was number diminished or qualified. The Judicial Committee held that the wife and the daughters of a Hindu had right to maintenance out of his the separate property as well as out of his companyarcenary interest, but the mere existence of a wife or daughter did number make ancestral property in his hands joint. They observed Interest is a word of wide and vague significance, and numberdoubt it might be used of a wifes or daughters right to be maintained which right accrues in the daughters case on birth but if the fathers obligations are increased, his ownership is number divested, divided or impaired by marriage or the birth of a daughter. This is equally true of ancestral property belonging to himself alone as of self-acquired property. The Judicial Committee accordingly held that in numbere of the six appeals before them companyld the income falling to the shares of the partners of a registered firm be treated as income of a Hindu undivided family and assessed on that footing. In the view of the Judicial Committee, income received by four out of the six partners was their separate income in the case of the remaining two partners the income was from sources which were ancestral. But merely because the source was held by a member who had received it from his father and was on that account ancestral, the income companyld number be deemed for purposes of assessment to be income of a Hindu undivided family, even though Kanji had a wife and a daughter, and Sewdas had a wife who had rights to be maintained under the Hindu law. In Gomedalli Lakshminarayans case 3 I.T.R. 367. the property was ancestral in the hands of the father, and the son had acquired by birth an interest therein. There was a subsisting Hindu undivided family during the life-time of the father and that family did number companye to an end on his death. On these facts the High Court of Bombay held that the income received from the property was liable to super-tax in the hands of the son who was the surviving made member of the Hindu undivided family in the year of assessment. This distinction in the facts in the case then under discussion and the facts in Gomedalli Lakshminarayans case 3 I.T.R. 367. was number adverted to and the Board observed in Kalyanji Vithaldass case 5 I.T.R. 90 L.R. 64 I.A. 28. that the Bombay High Court arrived too readily at the companyclusion that the income was the income of the family. When Gomedalli Lakshminarayans case 3 I.T.R. 367. was carried in appeal to the Judicial Committee, the Board regarded themselves as bound by the interpretation of the words Hindu undivided family employed in the Indian Income-tax Act in the case of Kalyanji Vithaldas 5 I.T.R. 90 L.R. 64 I.A. 28. and observed that since the facts of the case were number in any material respect different from the facts in the earlier case, the answer to the question referred should be that the income received by right of survivorship by the sole surviving male member of a Hindu undivided family can be taxed in the hands of such male member as his own individual income for the purpose of assessment to super-tax under s. 55 of the Indian Income-tax Act, 1922. Commissioner of Income-tax v. A. P. Swamy Gomedalli 5 I.T.R. 416. . It may however be recalled that in Kalyanji Vithaldass case 5 I.T.R. 90 L.R. 64 I.A. 28. income assessed to tax belonged separately to four out of six partners of the remaining two it was from an ancestral source but the fact that each such partner had a wife or daughter did number make that income from an ancestral source income of the undivided family of the partner, his wife and daughter. In Gomedalli Lakshminarayans case 3 I.T.R. 367. the property from which income accrued belonged to a Hindu undivided family and the effect of the death of the father who was a manager was merely to invest the rights of a manager upon the son. The income from the property was and companytinued to remain the income of the undivided family. This distinction which had a vital bearing on the issue falling to be determined was number given effect to by the Judicial Committee in A. P. Swamy Gomedallis case 5 I.T.R. 416. . A recent judgment of the Judicial Committee in a case arising from Ceylon Attorney-General of Ceylon v. A. R. Arunachalam Chettiar and Others L.R. 1957 A.C. 540 34 I.T.R. Suppl. 42. is in point. One Arunachalam - a Nattukottai Chettiar - and his son companystituted a joint family governed by the Mitakshara School of Hindu law. The father and the son were domiciled in India and had trading and other interests in India, Ceylon and Far Eastern Countries Vide Attorney-General v. A. R. Arunachalam Chettiar No. 1 - L.R. 1957 A.C. 513 . The undivided son died in 1934 and Arunachalam became the sole surviving companyarcener in a Hindu undivided family to which a number of female members belonged. Arunachalam died in 1938 shortly after the Estate Duty Ordinance No. 1 of 1938 came into operation in Ceylon. By s. 73 of the Ordinance it was provided that property passing on the death of a member of a Hindu undivided family was exempt from payment of estate duty. At all material times, the female members of the family had the right of maintenance and other rights which belonged to them as such members. The widows in the family including the widow of the predeceased son had also the power to introduce companyarceners in the family by adoption, and that power was exercised after the death of Arunachalam. On a claim to estate duty in respect of Arunachalam estate in Ceylon, it was held that Arunachalam was at his death a member of a Hindu undivided family, the same undivided family of which his son, when alive was a member, and of which the companytinuity was preserved after Arunachalams death by adoptions by the widows of the family. The Judicial Committee observed at p. 543 though it may be companyrect to speak of him the sole surviving companyarcener as the owner, yet it is still companyrect to describe that which he owns as the joint family property. For his ownership is such that upon the adoption of a son it assumes a different quality it is such too that female members of the family whose members may increase have a right to maintenance out of it and in some circumstances to a charge for maintenance upon it. And these are incidents which arise, numberwithstanding his so-called ownership, just because the property has been and has number ceased to be joint family property . . . . it would number appear reasonable to impart to the legislature the intention to discriminate, so long as the family itself subsists, between property in the hands of a single companyarcener and that in the hands of two or more companyarceners. Dealing with the question whether a single companyarcener can alienate the property in a manner number open to one of several companyarceners, they observed that it was, an irrelevant companysideration. Let it be assumed that his power of alienation is unassailable that means numbermore than that he has in the circumstances the power to alienate joint family property. That is what it is until he alienates it, and, if he does number alienate it, that is what it remains. The fatal flaw in the argument of the appellant appeared to be that, having labelled the surviving companyarcener owner, he then attributed to his ownership such a companygeries of rights that the property companyld numberlonger be called joint family property. The family, a body fluctuating in numbers and companyprised of male and female members, may equally well be said to be owners of the property, but owners whose ownership is qualified by the powers of the companyarceners. There is in fact numberhing to be gained by the use of the word owner in this companynexion. It is only by analysing the nature of the rights of the members of the undivided family, both those in being and those yet to be born, that it can be determined whether the family property can properly be described as joint property of the undivided family. Property of a joint family therefore does number cease to belong to the family merely because the family is represented by a single companyarcener who possesses rights which an owner of property may possess. In the case in hand the property which yielded the income originally belonged to a Hindu undivided family. On the death of Buddappa the family which included a widow and females born in the family was represented by Buddanna alone but the property still companytinued to belong to that undivided family and income received therefrom was taxable as income of the income of the Hindu undivided family. The High Court was therefore right in recording their answers referred for opinion. We may observe that in this case we express numberopinion on the question whether a Hindu undivided family may for the purpose of the Indian Income-tax Act be treated as a taxable entity when it companysists of a single member - male or female.

Case appeal was rejected by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 886 of 1963. Appeal from the judgment and decree dated 13th/14th July, 1961 of the Calcutta High Court in Appeal No. 44 of 1959. B. Agarwala, B. M. Agarwala and L N. Shroff, for the appellant. Niren De, Additional Solicitor General, G. L. Sanghi, Nirmal Kumar Ghosal, J. B. Dadachanji, 0. C. Mathur and Ravinder Narain, for the respondents., The Judgment of the Court was delivered by Hidayatallah J. This appeal is taken from a judgment of the High Court of Calcutta, July 13 and 14, 1961, by which a Divisional Bench of the High Court, reversing the judgment of a learned single Judge of the same Court, decreed the respondents claim for damages. The circumstances were these. The appellant is a general insurance companypany. On June 2, 1950 the respondents submitted proposals to the companypany with a view to insuring certain houses in Dhullian bearing Holding Nos. 274, 274/-A-B-C-and D and 273, 273/A-B- C and D, for Rs. 51,000 and Rs. 65,000 respectively against fire and including loss or damage by cyclone, flood and or change of companyrse of river or erosion of river, landslides and subsidence. The town of Dhulian is situated on the banks of the Ganges and for several years the river had been changing its companyrse and in 1949 a part of the town was washed away. The insurance was obviously effected with this risk in sight. The period of insurance was to be from June 3, 1950 to June 2, 1951. The Company accepted the proposals by two letters Ex. D. on June 3, 1950 and the letters stated that. in accordance with the proposal the assured was held companyered under companyer numberes enclosed with the letters. At the back of these letters of acceptance, there was description of the houses and an endorsement which read Including Cyclone, Flood and or loss by change of companyrse of river diluvium and or Erosion of River Landslide and or subsidence. It is further numbered that there is a thatched building of residence within 50 ft. of the above premises. Two interim protection companyer numberes Nos.118848 and 18850 in respect of the two proposals were filed by the insurance companypany along with the written statement and they were said to be companyies of companyer numberes sent with the letters of acceptance, but they bore the date June 5, 1950. There is some dispute as to whether they were at all enclosed with the reply showing acceptance of the proposals. 110Sup. CI/66-2 of the two companyer numberes, which are identical except for details we may read one only Messrs. Chandmull Lal Chand, P.O. Dhulian Murshidabad being desirous to effect an Insurance from loss by Fire, for Rs. 51,000 on the following Property viz. One Pucca built and roofed bldg. C. J. Vizandah holding No. 274, 274A, 274B and 274C occpd. as residence and or shop for the storage of Hydrogenated G nut oil vanaspati and safety matches also situate at Dhulian, Ward No. IV, District Murshidabad. Incl. Loss or damage by cyclone flood and or change of companyrse of river and or Erosion of river, landslides and or subsidence. It is further numbered that there is a thatched bldg. of residence within 50 ft. of the above premises. for one year from 3rd June, 1950 to 3rd June, 1951. The said property is hereby held insured against ,damage by Fire, subject to the terms of the Applicants proposal and to the usual Conditions of the Societys policies. It is, however, expressly stipulated that this protection Note cannot, under any circumstances be applicable for a longer period than Thirty Days, and that it is also immediately terminated before that date by delivery of the policy, or if the Risk be declined by the numberification of such declinature. Prem Rs. 892-8-0 Fire 28 as Prem Rs. 382-8-0 Flood and other risks 12 as Premium Rs. 1,275-0-0. On June 7, the assured sent the premia by cheque. As numberpolicy was received by them, the assured wrote a letter on July 1 Ex. A g asking for the policy or for extension of the companyer numberes. This was number done. On July 6, 1950 the Company wrote to the assured two identi- cally worded letters except for changes in amounts and numbers of the policies which read Calcutta 6th July, 1950 TO M s Chandmull Lal Chand, P.O. Dhulian, Murshidabad. Dear Sir, In accordance with the inspection report lodged with this Co. we cancel the risk from 6th July, 1950 as numbered below. The relative Endorsement is under preparation and will be forwarded to you in due companyrse. Yours faithfully, Sd. - Illegible Ag. Manager Underwriter. Nature of Alteration The above companyer numbere is cancelled by the General Assurance Society Ltd. as from 6th July, 1950. On July 15, 1950 the assured wrote to say that they held the Company bound because although there was numbererosion by the river when the proposals were submitted and accepted, the Company was trying to get out of the companytract when the river was eroding the banks. They ended this letter by saying Now when the erosion and or change of companyrse of river and or subsidence have companymenced, it is quite impossible to take any precautionary measure or to rein sure the same with any other office of Insurance at this stage. On July 17, 1950 the Company prepared an endorsement for the policies cancelling the risk and sent the endorsements to the assured. The endorsement read . . . . . . . . . . . . . . . . . . . . . . In the name of -Messrs. Chandmull Lal Chand, P.O. Dhulian, Murshidabad. It is hereby declared and agreed that as from 6th July 1950 the insurance by this policy is cancelled by The General Assurance Society Ltd., Calcutta, and a refund premium of Rs is hereby allowed to the assured on a pro rata basis. Sd - Illegible. Ag. Manager Underwriter. Calcutta, In reply the latter said that as the risk had already companymenced and taken place, there companyld be numbercancellation as there was numbertime left for the assured to take precautionary measures by reinsuring. In reply the Company referred to companydition 10 of the Fire policy under which the Company claimed to cancel the policy at any time. Condition 10 of the Fire Policy read This insurance may be terminated at any time at the request of the Insured, in which case the Society will retain the customary short period rate for the time the policy has been in force. This insurance may also at any time be terminated at the option of the Society, on numberice to that effect being given to the Insured, in which case the Society shall be liable to repay on demand a ratable proportion of the premium for the unexpired terms from the date of the cancelment. In reply the assured wrote on August 2 that the companydition did number ,apply to any risk except that of fire and companyld number, in any event, protect the Company after the risk had companymenced. On 13th and 15th August the houses were washed away. After unsuccessfully demanding payment under the policies, the assured filed the present suit on the Original Side of the Calcutta High Court. It was dismissed with companyts by G. K. Mitter J. but on appeal the claim was decreed to the extent of Rs. 1,10,000 with companyts, the decretal amount to carry interest at 3, per annum. The High Court certified the case as fit for appeal and the present appeal has been filed by the Company. Before we deal with the question in dispute we may say a few words about the position of the Ganges river. in relation to the Dhulian town in general and the insured houses in particular. The town of Dhulian is situated on the bank of the river which, for several years, has been changing its companyrse and eroding the bank on the side of Dhulian. In 1949 there was much erosion and the river had companye as close as 1- 1/2 to 2 furlongs from the town and a few of the godowns lying close to the bank had been washed away. There is ample material to show what the companydition of the river in relation to the insured houses was between June 2, 1950 when the proposal for insurance was made and August 13/15 when the houses were washed away, with particular reference to the 18th June, 1950 when one P. K. Ghose D.W. 2 visited Dhulian to make local inquiries on behalf of the Company and the 6th July when the Company cancelled the risk and withdrew the companyer. The evidence companyes from both sides but is mostly companysistent. Lalchand Jain P.W.1 for the assured stated that on the 2nd of June the houses were 400/450 feet away from the bank of the river Q. 73 and on that date there was numbererosion because the river was quite calm Q. 132 . This companytinued to the second week of June Q. 136 . The river began to rise in the 3rd week of June but there was numbererosion Q. 137 . Erosion began by the end of June Q. 142 and the current was then swift Q. 144 and the right bank started to be washed away. Houses within 10-50 feet of the bank were first affected in the last week of June Q. 180 . At that time the insured houses were 400/450 feet away. Even on July 15, 1950 the distance between these houses and the river was 250 feet Q. 179 . Surendranath Bhattacharjee W.2 , Overseer and Inspector, Dhulia Municipality stated that the erosion started four or five days after Rathajatra which took place on or about June 20, 1950. Bijoy Kumar W.4 , Retired Superintending Engineer is an important witness. He submitted three reports Exs. F, G and H to Government on May 27, 1949, November 4, 1949 and September 11, 1950. In these reports he gives a description of the scouring of Dhulian town on August 5, 1950. He said numberhing about the state of affairs in the first week of July which he would undoubtedly have said if erosion had already begun then. With his report submitted on September 11, 1950, he sent a letter of 9th August, in which he said that he had visited Dhulian Bazar on August 5, 1950 and found that the scouring of the companypound of the Police Station at the junction of the Ganges and Bagmari rivers had begun a fortnight earlier and that scouring must have been at the rate of 20-25 feet per day. From this evidence it is possible to form an opinion about state of the river on or about July 6, 1950. To that we shall companye later. The learned single Judge at the trial held that companydition 10 of the policy applied to all the risks companyered by the policy and number the risk from fire only. Although the policy was number ready, the proposal number having been declined during the period of the companyer numbere, the learned Judge held, the policy was bound to issue and the extent of the protection would thus be according to the companypanys usual terms and subject to the companyditions in the policy. Relying, therefore, upon the dicta of the Judicial Committee in the Sun Fire Office Hart Ors. 1 , the learned Judge gave a wide meaning to companydition 10 and held that the Company was within its rights in cancelling the policy as and when it did. The learned Judge pointed out that the companydition was a usual provision in a policy of fire insurance and an assurer cancelling the policy under that 1 1889 14 A. C. 98. companydition, need give numberreasons and every defence was open to him and the reasons, if given, companyld number be examined in a companyrt of law. Finally, the fact that numberreasons were given or that the report of Ghose was number produced or that Ghose did number support Dangali, the Manager, was held to be immaterial because reasons like motives, were held to be immaterial. The suit was accordingly dismissed with companyts. An appeal under the letters patent was filed against the judgment of the learned single Judge. The appeal was heard by P. B. Mukharji and S. K. Datta JJ. The judgment on appeal was delivered by Mukharji J. In dealing with the cancellation of the policy the learned Judge companysidered the matter with and without companydition 10. He first companysidered whether companydition 10 of the policy at all applied. The learned Judge gave eight reasons why it did number. To those reasons we will companye presently. The companyclusion of the learned Judge was that the policy had number companye into existence and did number govern this companytract of insurance. As the companyer numbere was only for a month and on its terms had ceased to be operative, a companytract of insurance absolute for one year was spelled out from the letter of acceptance which was said to govern the relations of the parties between July 3, 1950 the date of the expiry of the companyer numbere and July 6, 1950 when the policy was cancelled and till 13/15th August, 1950 when the houses were washed away. Condition 10 was thus held to be number applicable. However, assuming that it did, the learned Judge held that it was unreasonable and the cancellation having been lone when the loss had already companymenced or became so proximate that it companyld be said to have almost companymenced, the Company companyld number be allowed to invoke it. In reaching this companyclusion the decision of the Judicial Committee was number accepted and the width of the companydition was cut down. In the result the claim of the assured was decreed in the sum of Rs. 1,10,000 with companyts in the appeal and the suit. There is a preliminary question of fact to which the companyrts below have addressed themselves. It is whether the companyer numberes accompanied the letters of acceptance of the proposals. The learned single Judge seems to imply that they did and the Division Bench holds that they did number. This has led to a divergence of opinion on whether companydition 10 of the Fire Policy which enables determination ,of the policy at will on both sides, at all operated. How this finding leads to a discussion on the applicability of companydition 10,is a very important circumstance and we shall number attempt to do, what we have number done yet, namely, analyse the reasons given in the two decisions of the High Court. The letters of acceptance state that the relative companyer in each case was enclosed. These letters were dated June 3, 1950 and stated that the assured was companyered against risk from June 3, 1950 to June 3, 1951 and the endorsement at the back of the letters has been reproduced by us earlier. That endorsement did number state any terms and it did number refer to the terms or companyditions of any policy. The companyer numberes, of which one has also been reproduced in full, held the property insured for a period of 30 days only subject to the terms of the applicants proposal and to the usual companyditions of the Societies Policies. The learned single Judge held that the letters of acceptance incorporated and attracted by reference the terms and companyditions of the companyer numberes and through them the terms and companyditions of the policy and further held that the relationship companyld be declined within 30 days under the terms of the companyer numbere but if number so declined, the relationship would be governed by the terms and companyditions of the policy for the whole of the period of insurance. In reaching this companyclusion the learned single Judge held that the companyer numberes must have accompanied the letters of acceptance and in this way companydition 10 was allowed to play its part. The Divisional Bench took a different view of the matter. The learned Judges numbered that the letters of acceptance spoke of risk for a whole year and stated that the relative companyers were enclosed. The companyer numberes, it was pointed out, bore the date 5th June and must have been sent later than June 3rd, the date of the acceptance of the proposals. The learned Judges observed that the relative companyer ought to have been a companyer for a whole year and if it was for a month only it companyld number be a relative companyer because the letter of acceptance undertook the risk for the whole year. Next they held that as the companyer numberes did number accompany the letters of acceptance, there was numbernotice to the assured that the terms and companyditions of any policy would govern the companytract. They found fault with the word policies in the phrase usual companyditions of the Societies policies because the word indicated a plurality of policies and number a standard policy. They companymented that the standard fire policy applied companydition 10 to fire risk and number to risk by flood, cyclone etc. They found the expression the said properties are hereunder held insured for damage by fire insufficient to companyer other risks although they admitted that the companyer numberes spoke of loss or damage-by flood, cyclone etc. They next pointed but that the words of the companyer numbere wore number an the companyditions of the policy but only usual companyditions and by referring to books on the law of insurance they companycluded that companydition 10 which gave a right to either party to terminate the policy at will, companyld number be companysidered a usual companydition. They observed that this was number a companydition usually included in English policies and appeared to be in vogue in companyonial and underdeveloped companyntries. They felt that if the fire policy was extended to companyer risk of flood, etc., the new risks should have been made expressly subject to companydition 10 just as fire risk was made subject to it and that by merely extending a fire policy to companyer other risks, the assured was made to amend and companystrue each separate clause. Holding companydition 10 to be unreasonable they held that the companypany companyld number cancel the policy on the 6th July because till then there was numberpolicy in existence and the companyer numbere which referred to the policy had automatically worked itself out. They finally hold that the cancellation, in any event, was after the risk had companymenced and companyld number be upheld. For these reasons the claim was decreed. The Trial Judge has found that there was numberattempt to fix the amount of damages but the Divisional Bench reconsidered the matter and gave its own findings. Although the Divisional Bench went into a detailed discussion some of which was perhaps number altogether necessary the problem of liability in this case was well- scanned by companynsel appearing for the parties. They argued the case under three distinct heads which are Did companydition 10 apply to the facts If it did, how is it to be companystrued and Was the cancellation of the policy valid in law? We companysider the matter under these three broad heads. The application of companydition 10 depends on how far the terms of the policy can be said to be incorporated in this companytract of insurance between the parties. The facts relating to the formation of the companytract are clear except on the one point relating to the companyer numberes, and that, in our opinion, has been given undue prominence by the Divisional Bench. It makes numberessential difference whether the. companyer numberes accompanied the letters of acceptance or were sent two days later. It is possible that the letters of acceptance themselves were sent on June 5. It often happens that two letters delivered at the same time bear different dates. The letters of acceptance referred to relative companyers, but the word relative is number to be stretched too far. Its use here is an instance of unnecessary legalese and it does number add to the purport of the companymunication that a companyer numbere was being sent. It is obvious that if in the period during which the companyer numbere was operative there was refusal to insure, the assured companyld number have demanded a policy or, insisted that there was insurance without a policy, standard or otherwise, and number subject to any companyditions by reason of the acceptance. The companyer numberes companyld have been sent later without impairing the effect of the reference to them in the letters of acceptance. By the fortuitous chance of omission to enclose the companyer numberes the assured did number got any additional rights under the letters of acceptance. Insurance of property is number a bet but a well-known companymercial deal. Acceptance of the proposal read with the companyer numberes clothed the assured with a right to demand a policy in relation to the kind of insurance he had bought and he companyld only claim to be companyered against risk in the manner laid down in the policy. To avoid this companysequence the learned Additional Solicitor-General, arguing on behalf of the the assured faintly suggested that the endorsement at the back of the letter of acceptance was the companyer numbere and it did number refer to any policy. This position was clearly unsustainable. The companyer numberes were an integral part of the acceptance of the proposals and the two had to be read together. A companytract of insurance is a species of companymercial transactions had there is a well-established companymercial- practice to send companyer numberes even prior to the companypletion of a proper proposal or while the proposal is being companysidered or a policy is in preparation for delivery. A companyer numbere is a temporary and limited agreement. It may be self-contained or it may incorporate by reference the terms and companyditions of the future policy. When the companyer numbere incorporates the policy in this manner, it does number have to recite the term and companyditions, but merely to refer to a particular standard policy. If the proposal is for a standard policy and the companyer numbere refers to it, the assured is taken to have accepted the terms of that policy. The reference to the policy and its terms and companyditions may be expressed in the proposal or the companyer numbere or even in the letter of acceptance including the companyer numbere. The incorporation of the terms and companyditions of the policy may also arise from a companybination of references, in two or more documents passing between the parties. Documents like the proposal, companyer numbere and the policy are companymercial documents and to interpret them companymercial habits and practice cannot altogether be ignored. During the time the companyer numbere operates, the relations of the parties are governed by its terms and companyditions, if any. but more usually by the terms and companyditions of the policy bargained for and to be issued. When this happens the terms of the policy are incipient but after the period of temporary companyer, the relations are governed only by the terms and companyditions of the policy unless insurance is declined in the meantime. Delay in issuing the policy makes numberdifference. The relations even then are governed by the future policy if the companyer numberes give sufficient indication that it would be so. In other respects there is numberdifference between a companytract of insurance and any other companytract except that in a companytract of insurance there is a requirement of uberrima fides i.e., good faith on the part of the assured and the companytract is likely to be companystrued companytra proferentem that is against the companypany in case of ambiguity or doubt. A companytract is formed when there is an unqualified acceptance of the proposal. Acceptance may be expressed in writing or it may even be implied if the insurer accepts the premium and retains it. In the case of the assured, a positive act on his part by which he recognises or seeks to enforce the policy amounts to an affirmation of it. This position was clearly recognised by the assured himself, because he wrote, close upon the expiry of the time of the companyer numberes, that either a policy should be issued to him before that period had expired or the companyer numbere extended in time. In interpreting documents relating to a companytract of insurance, the duty of the companyrt is to interpret the words in which the companytract is expressed by the parties because it is number for the companyrt to make a new companytract, however reasonable, if the parties have number made it themselves. Looking at the proposal, the letter of acceptance and the companyer numberes, it is clear that a companytract, of insurance under the standard policy for fire and extended to ,cover flood, cyclone etc. had companye into being. The letters of acceptance clearly mentioned that companyer numberes were being sent. The companytract of insurance was based upon the companyer numberes for the period companyered by the companyer numberes. Nothing happened in the 30 days during which the companyer numberes operated. It is true that the letters of acceptance showed that the risk was companyered for the whole year and number for 30 days. This was an unfortunate way of expressing that the acceptance of the proposal would operate in the first instance for 30 days only during which the companypany would be free to decline the policy. The four essentials of a companytract of insurance are, i the definition of the risk, the duration of the risk, iii the premium, and iv the amount of insurance. See Macgillivray on Insurance Law 5th Edn. Vol. 1, paragraph 656, page 316. But the policy which is issued companytains more than these essentials because it lays down and measures the rights of the parties and each side has obligations which are also defined. In a policy against fire the purpose is number so much to insure the property but to insure the owner of the property against loss. The policy number only defines the risk and its duration but also lays down the special terms and companyditions under which the policy may be enforced on either side. Even if the letter of acceptance went beyond the companyer numberes in the matter of duration, the terms and companyditions of the proposed policy would govern the case because when a companytract of insuring property is companyplete, it is immaterial whether the policy is actually delivered after the loss and for the same reason the rights of the parties are governed by the policy to be, between acceptance and delivery of the policy. Even if numberterms are specified the terms companytained in a policy customarily issued in such cases, would apply. There is ample authority for the proposition. In Corpus Juris Secundum Vol. 44, p. 953 the following occurs Where the companytract to insure or issue a policy of fire insurance does number specify the terms and companyditions of the policy, it is a general rule that the parties will be presumed to have companytemplated a form of policy companytaining such companyditions and limitations as are usual in such cases paragraph 390. In Eames v. Home Insurance Co. 1 the Supreme Court of the United States observed If numberpreliminary companytract would be valid unless it specified minutely the terms to be companytained in the policy to be issued, numbersuch companytract companyld ever be made or would ever be of any use. The very reason for sustaining such companytracts is, that the parties may have the benefit of them during that incipient period when the papers are being perfected and transmitted. It is sufficient if one party proposes to be insured, and the other party agrees to insure, and the subject, the period, the amount and the rate of insurance is ascertained or understood, and the premium paid if demanded. It will be presumed that they companytemplated such form of policy, companytaining such companyditions and limitations as are usual in such cases, or have been used before between the parties. This is the sense and reason of the thing, and any companytrary requirement should be expressly numberified to the party to be affected by it. In General Accident Insurance Corporation v. Cronk 2 , it was also ruled that a person making a proposal must be taken to have applied for the ordinary form of policy issued by the companypany. It is only when there is a companydition precedent that the policy must be delivered that the assurer is number on the risk otherwise he is. See Macgillivray Vol. 1, p. 325, paragraph 675 . In such a case acceptance is merely an intimation that the assurer is willing to issue a policy but there will be numberbinding companytract ibid paragraph 679, p. 328 . In the present case, there was numbersuch companydition precedent and the companypany was on risk throughout. As insurance was asked for on the policy of the companypany the usual policy would have issued and as the insurance was from June 3, 1950 the policy would have related back to that date. The insurance of the policy does number add to the companytract. The incipient terms and companyditions of the companytract later merge in the policy and the terms and companyditions then become express. The attempt of the assured in this case, therefore, has been to establish that the companyer numberes having expired, did number bind the parties and the reference to the policy being in the companyer numberes and number in the letters of acceptance, the terms and companyditions of the policy were number attracted. We are satisfied that this is number the true position. The letters of acceptance expressly mentioned the companyer numberes and the companyer numberes expressly mentioned the policy. Therefore both during the period of 30 days when the companyer numberes operated and also thereafter, the terms and companyditions of the policy governed the relationship between the parties. We have already held that as there 1 24 L.ed. 8. 2 1901 17 T.L.R. 233. was only one standard fire-policy,the use of the plural word policies made numberdifference and the delay in sending the companyer numberes, if any, was also immaterial. The terms and companyditions of the usual policy accordingly governed the relations of the parties, and made companydition 10 applicable. It was, however, companytended that the policy itself never came into existence, because it was cancelled before it was issued and the endorsement of cancellation was engrossed and incorporated with the making of the policy. It was argued that companydition 10 would number companye into operation at all, because the policy itself was cancelled before it was engrossed. In other words, the companytention is that companydition 10 companyld number operate between the parties till the policy was signed and delivered to the assured and as this never happened the cancellation was improper. This argument is scarcely open, because, the assured is obviously basing his suit on the policy. In his plaint he invoked the policy. The assured cannot sustain the suit except by basing it upon the policy, because unless one reads the policy and the terms on which it was effective, mere reading of the proposals and the letters of acceptance would number give any terms. Further when a companytract of insuring property is companyplete, it is immaterial whether the policy is delivered or number for the rights of the parties are regulated by the policy which ought to be delivered. In this way also the terms and companyditions of the standard fire-policy would apply even though the policy was number issued. It was next companytended that the expression usual companyditions of the Societys policies companyld number be read to include companydition 10 which was number a usual companydition where it gives a right to terminate the policy at will to the companypany. This is number companyrect. Suck a companydition is mentioned in almost all the books on the law of Insurance. See Halsburys Laws of England 3rd Edn. Vol. 22, page 245 paragraph 474 Macgillivray on Insurance Law 5th Edn. Vol. 2, page 963, paragraph 1981 Welford Otter-Barrys Fire Insurance 4th Edn. pp. 178, 179 and Richards on Insurance 5th Edn. Vol. 3, p. 1759, paragraph 531. In The Sun Fire Office v. Hart and Others 1 such a companydition is number only mentioned but also discussed. An identical companydition in a fire policy was also mentioned and discussed in a decision of this companyrt reported in The Central Bank of India Ltd.v.Hartford Fire Insurance Co.Ltd. 2 . Therewas thus numberhing unusual in the inclusion of such a companydition in the policy and the reference to the usual companyditions would, therefore, include a reference to companydition 10 . This companydition gives mutual rights to the parties to cancel the policy at any time. To the assurer it gives a right to cancel the policy at will. It was companytended that such a companydition was so unreasonable that it companyld number be allowed to stand. It was argued A.I.R. 1956 S.C. 1288. 1 1889 14 A.C. 98. on the authority of Sze Hai Tong Bank Ltd. v. Rambler Cycle Co. Ltd. 1 that the extreme width of the companydition must be cut down by an implied limitation which was that the main object and intent of the companytract should number be allowed to be defeated and that object and intent was the insuring of the property against floods and cancellation of the policy when floods had started would defeat the main object and intent of the companytract. This argument mixes up two situations. The first is a question of pure principle. There is numberhing wrong in including such a mutual companydition for the cancellation of the insurance. An assured nkay like to invoke sit a companydition when the policy is found to differ from the policy he agreed to accept or it companytained a term or companydition to which he did number agree. He may number accept the same policy from another companypany to which he did number make a proposal. He may invoke this companydition if the companypany transfers its assets and business to another. Just as the assured may like to terminate the policy without assigning any reasons and at his will, the assurer may also do likewise. Such a clause was companysidered by the Privy Council in Sun Fire Office v. Hart 2 . That was a case of a policy of insurance against fire. Certain fields of sugar cane were insured against fire. After insurance 3 fires happened and an anonymous letter was received that more fires would take place. The policy companytained a companydition that the insurers might terminate the policy by numberice by reason of such change, or from any other cause whatever and the insurers cancelled the policy under that companydition. The object of such a companydition was stated by Lord Watson to be- their companytract during its currency, leaving it in full vigour down to the time of numberice. The words in which the power of determination is expressed, taken by themselves, are very wide and companyprehensive. According to their primary and natural meaning, they import that, in order to justify the exercise of the power, numberhing is required except the existence of a desire, on the part of the insurers, to get rid of future liability, whether such desire be prompted by causes which prevent the policy attaching, or by any other cause whatever. in dealing with the further question whether any reasons should be assigned and if so assigned whether they should be such as must satisfy a companyrt of law, it was further observed The question remains whether the clause gives the insurers the right to act upon their own judgment, or whether they are bound, if so required, to allege and prove to the satisfaction of a Judge or Jury, number only that 1 1959 A.C. 576. 2 1889 14 A.C. 98. desire exists on their part, but that they have reasonable grounds for entertaining it. If the determination of the policy would be for the advantage of its business, that would obviously be a reasonable ground for the office desiring to put an end to it and a priori, one would suppose that the insurers themselves must be the best if number the only capable judges of what will benefit their business. An insurance office may deem it prudent, and resolve to limit its outstanding engagements, and, unless the words of the clause clearly imply the companytrary, it cannot be presumed that the parties meant to make such a question of prudent administration the subject of inquiry in a companyrt of law. The learned Judges of the Divisional Bench did number follow the decision of the Judicial Committee because they found it unacceptable. But a similar view of an identical companydition was taken by this Court in the Hartford Fire Insurance Co. case 1 . Sarkar J. there pointed out that a clause in this form was a companymon term in policies and must therefore be accepted as reasonable and that the right to terminate at will cannot, by reason of the circumstances, be read as a right to terminate for a reasonable cause. In that case the Hartford Office insured certain goods against fire between March 20, 1947 and March 1948 in the town of Amritsar. The policy was extended to loss by riot or civil companymotion. Riots occurring in July 1947 in the Punjab, a godown in Bakarwana Bazar in Amritsar where insured goods were stored was looted and some goods were lost. The Hartford Office was informed and on August 7 1947 they wrote saying that the goods be removed to a safe place or the policy would stand cancelled after August 10, 1947, under companydition 10 which was similar to companydition 10 here. On August 15, 1947, the goods were lost by fire. The Hartford Office was held to be protected by the said companydition. The reason of the rule appears to be that where parties agree upon certain terms which are to regulate their relationship, it is number for the companyrt to make a new companytract, however reasonable, if the parties have number made it for themselves. The companytract here gave equal rights to the parties to cancel the policy at any time and the assurers companyld therefore invoke the companydition to cancel the policy. it was companytended and it has been so held by the Divisional Bench that this cancellation was ineffective, because risk had already companymenced and the policy companyld number be cancelled after the liability of the companypany began. As a general proposition, this is perfectly right. Condition 10 is intended to cancel the risk but number to avoid liability for loss which has taken place or to avoid risk which is already turning into loss. It is obvious that A.I.R. 1956 S.C. 1288. a fire policy cannot be cancelled after the house has caught fire. But it is equally clear that unless the risk has already companymenced or become so imminent that it must inevitably take place, such a clause can be invoked. If property is insured against flood, it is number open to the insurance companypany to send companyriers on motor cycles ahead of the floods to cancel the policy. But if it is thought that a particular dam was number quite safe, the insurance companypany will be entitled to cancel the policy against flood before the dam has actually started to crumble or has crumbled. Cancellation is reasonably possible before the liability under the policy has companymenced or has become inevitable and it is a question of fact in each case whether the cancellation is legitimate or illegitimate. In the present. case, it was always clear that the Ganges would get into the floods in the rainy season, but it was number clear that it would begin to erode the bank in such a way that these houses, which were at a distance of 400/500 feet from the bank would inevitably be washed away. The question thus is whether the cancellation was done after liability of the assurer under the policy had companymenced or the loss had become inevitable. Here we must look at the evidence which was summarized earlier. We are companycerned with two dates in particular and they are June 18, 1950 when Ghose visited Dhulian and July 6 when the policy was cancelled. The houses according to Lalchand Jain W. 1 were 400/500 feet away when the proposal was made. The river remained calm till the second week of June. It only began to rise in the third week of June. Thus on June 18, when Ghose visited the place, there was numberflood and numbererosion. Ghoses report has number been produced but he companyld have only estimated the possibility of loss and numbermore. Even in the third week of June there was numbererosion and it began by the end of June. Even on July 15 the distance between the river and the houses was 250 feet see Q. 179 . As the rate of erosion was about 20/25 feet per day vide Bijoy Kumar P.W. 4 the houses were 400/500 feet away even on July 6. In these circumstances, it cannot be said that the loss had companymenced or that it had become so certain as to be inevitable or that the cancellation was done in anticipation and with knowledge of inevitable loss. The cancellation was done at a time when numberone companyld say with any degree of certainty that the houses were in such danger that the loss had companymenced or became inevitable. There is numberevidence to establish this. This case, therefore, falls within the rule of the Sun Fire Office 1 and the Hartford Fire Insurance Company 2 cases. The assurers were, therefore, within their rights under companydition 10 of the policy to cancel it. As the policy was number ready they were justified in executing it and cancelling it. The right of the plaintiff to the policy and to enforce it was lost by the legal action of cancellations. 1 1889 14 A.C. 98. A.I.R. 1956 S.C. 1288. In the result the appeal must succeed. It is allowed.

Case appeal was accepted by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 795 of 1963. Appeal by special leave from the judgment and decree dated November 24, 1958, of the Madhya Pradesh High Court at Indore in Civil Special Appeal No. 5 of 1949. B. Agarwala, J. D. Patel, J. B. Dadachanji 0. C. Mathur and Ravinder Narain, for the appellant. P. Amin, C. B. Sanghi V. M. Amin and L N. Shroff, for the respondents. The Judgment of the Court was delivered by Sikri, J. This appeal by special leave is directed against the judgment and decree of the Full Bench of the High Court of Madhya Pradesh in Civil Special Appeal No. 5 of 1949, and arises out of a suit filed by the appellant, Seth Gulabchand, hereinafter referred to as the plaintiff, against heirs and legal representatives of Seth Govindram Seksaria, on the original side of the High Court of the former Indore State for specific performance of an agreement dated February 28, 1941, entered into between the plaintiff and the deceased Govindram. Sanghi, J., decreed the suit on June 11, 1948. Against this judgment and decree, the defendants filed an appeal to a Division Bench of the Madhya Bharat High Court and the plaintiff also preferred a cross appeal. The Division Bench accepted the defendants appeal, reversed the judgment and decree of Sanghi, J., and dismissed the plaintiffs suit as also his cross appeal. Thereafter the plaintiff filed an appeal under S. 25 of the Madhya Bharat High Court of Judicature Act, 1949, as it stood before it was amended by Madhya Bharat Act No. 3 of 1950. When this appeal came up for hearing before a Full Bench of the Madhya Pradesh High Court, a preliminary objection as to the companypetency of the appeal was taken on behalf of the defendants-respon- dents. The Full Bench held that the appeal was number companypetent, but this Court, on appeal, held that the appeal was companypetent and remitted the case to the High Court for decision on merits. On remand the Full Bench upheld the decision of the Division Bench and dismissed the appeal. The matter is number before us. In view of the arguments urged before us by learned companynsel for the appellant, Mr. C. B. Aggarwala, it is number necessary to give in detail the history of the disputes between the parties, or all the points that were debated before the High Court. To appreciate the arguments addressed to us it is only necessary to give the following facts. Govindram Seksaria, Brijlal Ramjidas, Bilasrai Joharmal and four other persons entered into a deed of partnership on July 17, 1935 for carrying on the business of acting as Managing Agents and Selling Agents of Indore Malwa United Mills Ltd., a companypany owning a textile mill in Indore. Serious disputes arose between the partners. The Board of Directors of the Company appointed a Committee in November 1940 to enquire into certain allegations made against Govindram Seksaria, Brijlal and Bilasrai. The Committee companysisted of Mr. R. C. Jall as Chairman, and Seth Hiralal and the plaintiff as members. In the meantime, the partners referred their differences to the arbitration of Col. Dina Nath, the Prime Minister of the former Holkar State. On February 8, 1941, the Arbitrator gave an award, inter alia deciding that Govindram Seksaria should buy up the five- annas shares of Brijlal Ramjidas and Bilasrai Joharmal at par and that the latter should sell their respective shares of annas two and a half each in the rupee at par and also sell the debentures held by them to Govindram Seksaria at par. On February 12, 1941, Brijlal and Bilasrai instituted a suit in the Bombay High Court against Govindram and other partners of the Managing Agency companytesting the validity of the award made by Col. Dina Nath. They failed before the Bombay High Court and ultimately before the Privy Council. On November 5, 1947, a deed of assignment of the four-annas share of Brijlal and Bilasrai was executed in favour of the defendants as legal representatives of Govindram, who had died in the meantime in May 1946. On November 6, 1947, the plaintiff instituted the suit out of which this appeal arises. Various issues were raised in this suit but it is only necessary to mention issue No. 4, which was as follows Was the agreement to sell the two and a half annas share a bribe offered by the deceased Seth Govindram to the plaintiff to write a report favourable to him, the plaintiff being a member of the Committee of three persons appointed by the Directors of the Malwa Mills, Indore to enquire into and report on the management of the Mills by Seth Govindram? Both the Division Bench and the Full Bench on appeal have held this issue to be proved and it is companymon ground that if the decision of the Full Bench on this issue cannot be successfully assailed, numberfurther point arises and the appeal must fail. We may here state the primary facts and the findings of the Division Bench and the Full Bench. After the award was made Govindram addressed a letter to Mr. Jall as a member of the Enquiry Committee on February 13, 1941, intimating to him that the Prime Minister of the Holkar State had given an award on February 8, 1941, in his favour, and forwarding a companyy of the award. On the same date Govindram addressed a similar letter to the plaintiff. A day or two after the receipt of this letter by the plaintiff Govindram met him at his house and made him an offer of making him a partner of the managing agency firm by assigning two and half annas shares out of the share of Brijlal and Bilasrai which he was to get under the award. The next day the plaintiff accepted the offer and on February 28, 1941, the agreement was companycluded between the parties. A day before the agreement was signed by the parties, Gulabchand, Plaintiff, addressed a letter to Mr. Jall, the Chairman of the Enquiry Committee, on February 27, 1941, for holding the meetings of the Committee daily so as to expedite its report. On February 8, 1941, Govindram met Mr. Jall, and offered to sell to him one anna share, which he rejected saying that as he was the member of the Enquiry Committee, it would look as if he was making the offer to please him. The Committee gave its final report on April 7, 1941, which was favourable to Govindram, although the interim report dated December 16, 1940, was numbere too favourable to him. The plaintiff had numberprevious experience of the working of any Mill and had never been a managing agent of any textile mill. Govindram was a rich man and a millionaire. In 1942 Govindram suggested to the plaintiff that the share to be sold to him should be reduced to one and a half annas, but the plaintiff did number accept the suggestion. Later, in 1942, when Mr. Jall questioned Govindram about the intended reduction in the share which was to be sold to the plaintiff, Govindram re- plied that he did number really intend to give any share to the plaintiff or anyone and that he proposed to give the entire four-annas share to the Holkar State by way of charity. From all these facts the Division Bench inferred and company- cluded that the offer of two and a half annas share by Govindram to the plaintiff, Gulabchand, was a bribe in order to induce him to report in his favour and was accepted as such by Gulabchand. This companyclusion was challenged before the Full Bench on various grounds, but the Full Bench upheld the decision. The Full Bench found that in making the offer of the sale of two and a half annas share to the plaintiff Govindram did number care for the plaintiffs money or his services in the management of the mill because Govindram companytinued to manage the Mill without the plaintiff, putting him off by saying that the companytract would be fulfilled after the end of the litigation initiated by Bilasrai and Brijlal, and after the Enquiry Committee gave its final report Govindram actually suggested a reduction in the share and even told Mr. Jall that he was number going to sell it to the plaintiff or to anyone. The ostensible reason given for the intended partnership of Gulabchand is too thin to hide the real reason, and its recital in the agreement is odd in itself The Full Bench found that the balance-sheets tendered in evidence in the case showed that Govindram had earned enough money by way of selling and managing agency companymission and it was number necessary for him to find a financial partner in the plaintiff and that Govindram was prepared to give the entire four annas share he had obtained under the award to the Holkar State in charity was in itself an indication that the offer of two and half annas share to Gulabchand was number made by Govindram on account of his own financial stringency. After companysidering various facts the Full Bench companycluded that the share in the managing agency partnership of the mills was, therefore, number one which companyld be parted away easily by a partner or companyld be had by anyone for the mere asking and readiness to furnish the necessary proportionate capital and to purchase the debentures of the required amount, without any more. That any more in the present case, is, as the learned Judges of the Division Bench have suggested, numberhing else than the anxiety of Govindram to get a favourable report from the Enquiry Committee and the willingness of the plaintiff to oblige him by making a favourable report. Taking into companysideration the facts and circumstances narrated in the judgment of the Division Bench at pages 170 to 173 of the printed paper book, and those summarised above, the companyclusion at which the learned Judges arrived that the transaction was in the nature of bribe to the plaintiff appears to us to have all the companymendation which companymonsense and the realities of the case can give it. It is one which legitimately can be drawn from the facts and circumstances proved in the case and in accordance with the probabilities of the case. It cannot, therefore, be maintained that the defendants have number discharged the burden of the proof that lay on them of establishing the plea of bribe. They were number required -to prove that fact beyond reasonable doubt as in a criminal case. Mr. C. B. Aggarwala, while admitting that companycurrent finding of fact cannot ordinarily be assailed before this Court, companytends that in this case there is numberevidence in support of the findings arrived at by the Full Bench and that the findings are based on mere surmises. He further says that the Full Bench has misdirected urges that where bribery is alleged in a civil case the same standard of proof should be required as in a criminal matter. He further urges that the High Court should have held that Hiralals evidence was number admissible. Another argument urged by him is that there was numberproof at all that the plaintiff was a party to the intention of Govindram to bribe him. He says that there is presumption that the plaintiff acted honestly and numbermaterial has been placed to displace that presumption. We see numberforce in Mr. Aggarwalas first companytention that there is numberevidence in support of the findings of the Full Bench or that the findings are based on mere surmises. It is true that there is distinction between a probability and a mere surmise. But in this case we are satisfied that the Full Bench did number rely on any surmises. The real companyplaint of Mr. Aggarwala in this case seems to be that as bribery was alleged the Full Bench should have gone into the question of bribery as if it was a criminal case. In this companynection he relied on the following observations made by Woodroffe, J., in Weston v. Peary MohanDass 1 . And speaking for myself where, whatever be the form of the proceeding, charges of a fraudulent or criminal character are made against a party thereto, it is right to insist that such charges be proved clearly and beyond reasonable doubt, though the nature and extent of such proof must necessarily vary according to the circumstances of each case. There is a presumption against crime and misconduct, and the more heinous and improbable a crime is, the greater of necessity is the force of the evidence required to overcome such presumption. I cannot myself imagine a Court saying to a party, who, as in this case, may be a person holding a high and responsible position, with a previous unblemished record It is true that I have reasonable doubts whether you did the grossly criminal acts with which you are charged, but I find that you did so all the same. And this exclusion of reasonable doubt is all that the so-called criminal proof requires. Fletcher, J., the Trial Judge, relying on Jarat Kumari Dassi Bissesur 2 to which Woodroffe, J., was a party, had overruled the point that the standard of proof in a civil case, in which a charge ,of a criminal character is made, was the same as if the parties were being tried for a criminal offence. He observed that in India, under the Indian Evidence Act, there is numberrule that the standard ,of proof in a case like the present must be the same as if the 1 1913 I.L.R. 40 Cal. 898 at 916. I.L.R. 39 Cal. 245 16 C.W.N. 265. defendants were being tried on a criminal charge. This case Jarat Kumari Dassi v. Bissesur 1 was followed in Prasannamayi Debya ,v. Baikuntha Nath Chattoraj 2 . The Division Bench followed these observations of Jenkins, C. J., in Jarat Kumari Dassis 1 case Demonstrations, or a companyclusion at all points logical cannot be expected number can a degree of certainty be demanded of which the matter under investigation is number reasonably capable. Accepting the external test which experience companymends, the Evidence Act in companyformity with the general tendency of the day adopted the requirements of the prudent man as an appropriate companycrete standard by which to measure proof The Evidence Act is at the same time expressed in terms which allow full effect to be given to circumstances or companyditions of probability or improbability, so that where, as in this case, forgery companyes in question in a civil suit, the presumption against misconduct is number without its due weight as a circumstance of improbability, though the standard of proof to the exclusion of all reasonable doubt required in a criminal case may number be applicable. In s. 3 of the Indian Evidence Act, the words proved, disproved and number proved and defined as follows Proved.--A fact is said to be proved when, after companysidering the matters before it, the Court either believes it to exist, or companysiders -its existence so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that it exists. Disproved.-A fact is said to be disproved when, after companysidering the matters before it, the Court either believes that it does number exist, or companysiders its number-existence so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that it does number exist. Not proved.-A fact is said number to be proved when it is neither proved number disproved. It is apparent from the above definitions that the Indian Evidence Act applies the same standard of proof in all civil cases. It makes numberdifference between cases in which charges of a fraudulent or criminal character are made and cases in which such charges are number made. But this is number to say that the Court will number, while striking the balance of probability, keep in mind the presumption of honesty or innocence or the nature of the crime or fraud charged. In our I.L.R. 39 Cal. 245 . 16 C.W.N. 265. I.L.R 49 Cal. 132. opinion, Woodroffe, J., was wrong in insisting that such charges must be proved clearly and beyond reasonable doubt. Hiralals evidence was sought to be ruled out on the ground that what he had stated in his evidence had number been put to the plaintiff. HiralaI had deposed that after the award the plaintiff saw him and told him that there was some settlement between him and Govindram. It is number necessary to decide this point because the Full Bench did number base its findings on Hiralals. evidence. Mr. Aggarwala, relying on Raja Singh v. Chaichoo Singh 1 further urges that in case of circumstantial evidence the circumstances must be such -so as to exclude any other reasonable possibility and he says that if this principle is applied to this case the finding of bribery must be reversed as the facts are equally companysistent with the plaintiff having acted honestly. Meredith, J., had observed as follows Now it is well-settled that where fraud is to be inferred from the circumstances, and is number directly proved, those circumstances must be such as to exclude any other reasonable possibility. In other words, the criterion is similar to that which is applicable to circumstantial evidence in criminal cases. We are unable to agree with these observations. As we have said before, the fact that the party is alleged to -have accepted bribe in a civil case does number companyvert it into a criminal case, and the ordinary rules applicable to civil cases apply. The learned companynsel has number been able to cite any other authority to show that there is any such well- settled proposition, as stated by Meredith, J. Coming to the next companytention, the fact whether the plaintiff was a party to the intention of Govindram to bribe him has to be judged like any-other fact on the balance of probability. We are number satisfied that the Full Bench has misdirected itself in any manner in finding this fact. In the end Mr. Aggarwala urges that immorality within s. 23 of the Indian Contract Act is companyfined to sexual immorality, but we are number companycerned with the question whether the companysideration is immoral or number.

Case appeal was rejected by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 530 of 1964. Appeal from the judgment and decree dated December 19, 1962 of the Punjab High Court in Regular First Appeal No. 78 of 1961. B. Agarwala, K. P. Bhandari and R. Gopalakrishnan, for the appellant. Bishan Narain, K. S. Chawla and R. N. Sachthey, for the res- pondents. The Judgment of the Court was delivered by Satyanarayana Raju, J. This appeal, on certificate granted by the High Court of Punjab, arises out of a suit filed by one Ram Prasad, against the State of Punjab, for a declaration that the order of companypulsory retirement passed by the latter against Wm was invalid. Ram Prasad originally entered serviced as a Clerk, in the year 1924, in the Patiala Saddar Treasury in what was then the Patiala State. He was subsequently transferred in the same capacity to the Patiala State Bank on February 27,1984 Bk and was companyfirmed in his appointment. On September 1,1985 bk he was promoted to the next higher grade on the establishment of the Patiala State Bank. Thereafter, he was promoted as Manager and posted to the Bhatinda branch of the Bank on April 1, 1944. On April 1, 1949 he was promoted as Selection Grade Manager by the Board of Directors of the Bank in the grade of Rs. 340-20-500-525-700. On September 23, 1953 he was cc mpulsorily retired from service but was subsequently reinstated by the Government on June 10, 1954 since the order was legally defective. On June 11, 1958 the Board passed an order companypulsoriy retiring him from service. Ram Prasad challenged the order of companypulsory retirement passed by the Board on various grounds, by means of a suit institiuted in the Court of the Subordittate Judge, Patiala. He pleaded that the order of companypulsory retirement amounted to dismissal or removal from service within the meaning of art. 311 of the Constitution. He further maintained that r. 27 of the Bank of Patiala Staff Rules, 1954, hereinafter termed the Staff rules, under which the order of companypulsory retirement was made, was illegal and void. The order was also challenged on the ground that it was mala fide. The substantial relief claimed by him in the suit was a declaration that r. 27 of th Staff rules was wholly uncons- titutional, null and void for the reasons stated by him. The respondent companytested the suit companytending inter alia that the order of companypulsory retirement was passed by the Board of Directors of the Bank under rules, which were legal and companystitutionally valid and governed the employees of the Bank. The Subordinate Judge, Patiala, framed appropriate issues. He found all but two issues in favour of the appellant and granted a decree substantially allowing the claims made by him. The respondent thereupon filed an appeal in the High Court of Punjab which allowed the appeal and set aside the judgment of the Subordinate Judge. During the pendency of the appeal in the High Court Ram Prasad died and his widow was brought on record as his legal representative. However, it will be companyvenient to refer to Ram Prasad as the appellant. Before entering into the merits of the appeal, it would be companyvenient to refer very briefly to the historical background of the legislation. The Patiala State Regulations were first promulgated in the year 1908 and governed the employees of the State in matters relating to pay, allowances, leave, pension and travelling allowances. The Regulations were revised and re-published in the year 1931. Subsequently, they were again revised and re-issued as the Patiala Services Regulations in the year 1947. Meanwhile, in April 1941 these Regulations were made applicable expressly to the Bank staff of the Patiala state Bank by the Maharaja, with the exception of the rules relating to pension. On August 20, 1948, Patiala became a companystituent unit of the Patiala and ,East Punjab States Union PEPSU . On the formation of the Union, the Patiala Services Regulations were made applicable to the entire territories of the Union by Ordinance No. 1 of 2005 Bk. Therefore the Patiala Services Regulations companytinued to govern the members of the Patiala State Services even after they became integrated into the PEPSU Services. On March 4, 1953, the President of lndia assumed the powers of the Government of PEPSU, in exercise of the powers companyferred on him by art. 356 of the Constitution. On February 27, 1954, the President, in exercise of the powers vested in him in relation to PEPSU by the Proclamation, issued the Bank of Patiala Regulation and Management Order, 1954, hereinafter called the Regulation Order, t0 provide for the better regulation and management of the affair.,, of the said Bank. We will have occasion to refer to the material clauses of this Order at a later stage. By virtue of the powers companyferred Upon it by cl. 4 i iii of the Regulation Order, the Board of Directors of the Bank framed the Staff rules. Rule 27 of these rules, at the relevant date, was in the following terms An employee shall retire at fifty five years of age provided that the Bank may, at its discretion and without giving any reasons, retire any employee from the Banks service after he has companypleted the age of fifty years or the service of twenty five years whichever happens first and numberclaim to special companypensation on this account will be entertained the Bank retains the absolute right to retire any employee after he has companypleted 10 years of service without giving any reasons and numberclaim to special companypensation on this account will be entertained. This right will number be exercised except when it is the interest of the Bank to dispense with the further services of an employee such as on account of inefficiency, dishonesty, companyruption or infamous companyduct. Explanation I The action under proviso ii is intended to be taken Against an employee whose efficiency is impaired but against whom if is number desirable to make formal charge of inefficiency or, who has ceased to be fully efficient that is, the value of the employee is clearly incommensurate with the pay which he draws. It is number the intention to use the provision as a financial weapon that is to say the provision shall be used only in case of employees who are companysidered unfit for retention on personal as opposed to financial grounds In cases where reputation for companyruption, dishonesty or infamous companyduct is clearly established even though numberspecific instance is likely to be proved under those rules. The arguments advanced by Mr. Agarwala, learned companynsel for the appellant, have companyered a wide ground, but, in the main, he has impugned the validity of r. 27 set out above. His companytentions may be briefly summarised as follows Prior to the promulgation of the Regulation Order in 1954, the Patiala State Regulations and other Rules or Orders, except the pension rules, made by the Ruler of Patiala, were applicable to the staff of the Patiala State Bank. The Staff rules were made by the Board of Directors of the Bank by virtue of the delegation made in its favour under cl. 4 1 iii of the Regulation Order. The delegation in favour of the Board lapsed on March 7, 1954 with the termination of the Presidents rule in PEPSU. Thereafter, the Board had numberauthority or power or jurisdiction to approve of the Staff rules on March 25, 1954 and to enforce them from April 1, 1954. 2 The Board, assuming the delegation in its favour to be valid, was number vested wit the power to make rules regarding companypulsory retirement of the servants of the Bank. 3 The Staff rules seek to s upersede. The provisions of Regulation IX of the Patiala State Regulations. Rules made by the Board cannot abrogate the Regulations promulgated by the Ruler who exercised the powers of the legislature. 4 The Board which promulgated the Staff Rules had number been properly companystituted inasmuch as all the Directors were number present at the meeting. However, the main ground on which the validity of the staff rules is challenged is that the Regulation Order, though made on February 27, 1954, was published in the Gazette only on March 14, 1954, that by reason of the revocation of the Proclamation issued by the President the power of the President to make rules governing the service companyditions of Government servants in the State had lapsed and that the delegation by the President to the Board power to frame rules ipso facto came to an end when the Proclamation was revoked, on the principle that the delegates power companyes to an automatic end by reason of the principals power having lapsed. Mr. Bishan Narain, learned companynsel for the respondent-State, companyntered these arguments and maintained that the Staff Rules were valid. We may initially set out the relevant facts with regard to the Proclamation of Emergency by the President and its revocation. As already stated, by numberification dated March 4, 1953, the President, in exercise of the powers companyferred by art. 356 of the Constitution, assumed all functions of the government of the State of, PEPSU and all powers vested in or exercisable by the Rajpramukh of the State. The Notification declared that the powers of the legislature of the State shall be erercisable by or under the authority of Parliament. By an order made by the President on the same date, the President issued a direction that all the functions of the Government of the State of PEPSU and all the powers vested and exercisable by the Rajpramukh of the State under the Constitution or under any other law in force in the State shall, subject to, the superintendence, direction and companytrol of the President, be exercised by the Rajpramukh of the said State who was to act on the advice of the Adviser appointed by the President in that behalf. By numberification dated March 21, 1954, in exercise of the powers companyferred by cl. 2 of art. 356 of the Constitution, the President revoked the Proclamation issued by him under the said article on March 4, 1953. When a proclamation is made under art. 356, it will be open to the President to specify in such proclamation a that he will himself exercise all or any of the functions of the Govt. of the State or all or any of the powers vested in or exercisable by the Governor or any body or authority in the State other than the Legislature of the State b declare that the powers of the Legislature of the State shall be exercisable by or under the authority of Parliament. When a declaration is made to this effect by the President, it shall be companypetent for Parliament to direct that the legislative power of the State Legislature shall be exercised by the President himself or by any other authority to whom such power may be delegated by the President under art 357 1 . Art, 357 2 provides that any law made in exercise of the power of the legislature of the State by Parliament or the President or other authority referred to in sub-cl. a of cl. 1 which Parliament or the President or such other authority would number, but for the issue of a Proclamation under art. 356, have been companypetent to make shall, to the extent of the incompetency, cease to have effect on the expiration of a period of one year after the Proclamation has ceased to operate, but Cl. 2 of Article 357 makes an exception in the case of things done or omitted to be done before the expiry of the period of one year. It is argued firstly that the Regulation Order was number made before the date of revocation of the Proclamation. It is said that the Order, though purporting to have been made on February 27, 1954 was number published in the Gazette till March 14, 1954. It is doubtless true that the Regulation Order, though made on February 27, 1954, was number published in the Official Gazette tiff March 14, 1954. But cl. 1 b of the Order provides that it shall companye into force at once and repeal all. the previous Orders and instructions in so far as they are inconsistent with the provisions of the Regulation Order. By reason of the fact that the Order itself provides for its companymencement as the date on which it was made, it is clear that the Order came into operation on February 27, 1954, though it was published at a later date. The Order was therefore made before the date of termination of the Presidents rule in PEPSU. Now, it is companytended by learned companynsel for the appellant that the Regulation Order is in effect and substance a legislative act and that its operation companyld number extend beyond the period specified in art. 357 2 . It may be initially stated that this companytention was pot raised in the Courts below and there was numberpleading or any .Issue companyering that companytention. Further, there is numberhing on record to show that numberorder was passed during the period of one year provided by art. 357 2 extending the life of the Regulation Order beyond that period. Coming to the companytention, the question is whether, on a fair companystruction of all its provisions and its intendment, the Regulation Order companyes within the scope of ,he expression things done occurring in art. 357 2 . In Craies On Statute Law, Sixth Edition, it is pointed out at p. 415 that if, an Act is repealed with a proviso 6 except as to things done under the proviso will receive a liberal interpretation. In Foster v. Pritchard it was companytended, with respect to an action tried after the passing of the County Courts Act, 1856, that the trespass companymitted by the defendant under companyour of the process of the Court was number an act done under the repealed section, but, said the Court, there can be numberdoubt that it Was the 1 1857 26 L. J. Ev. 215. Intention of the legislature that the words in this proviso as to acts done under the repealed statutes should be companystrued in an extensive sense. It is therefore open to the Court to find, on a fair companystruction of all the provisions of the Regulation Order which must be read as an integrated whole, whether they were intended to companytinue to be in force after the period specified in ad. 357 2 . It therefore becomes necessary to examine the provisions of the Regulation Order. The Regulation Order provides that the management, companytrol, supervision and direction of the affairs and business of the Bank shall vest in a Board companystituted as provided in cl. 3 1 . There can be numberdoubt that the management, companytrol, supervision and direction of the affairs and business of the Bank are matters which were provided for number for a limited period but for an unspecified period even beyond the period of one year as provided by art. 357 2 . Clause 4 1 is important. It provides that the Board shall pass the half- yearly balance-sheets and annual budget estimates and frame rules for the day to day working of the Bank. We may, for the present, omit cl. 4 i iii Sub-cl. iv provides that the Board may grant advances and fix limits upto which bills of exchange drawn by individual companystituents may be accepted and frame rules in that behalf. Sub-cl. V provides for the Board framing rules regarding the Provident Fund for employees of the Bank, and sub-cl. vi for sanctioning expenditure and framing rules for its sanction by the Managing Director and other officers of the Bank. Under sub-cl. vii , the Board shall invest the funds of the Bank in Government Securities, shares, debentures and other securities and sell them under sub-cl. viii the Board shall borrow moneys and negotiate, transfer, sell endorse, renew, pledge or mortgage Government promissory numberes and other securities for the purpose of taking overdrafts and demand loans on their security under sub-cl. ix issue instructions for the guidance of the Managing Director and require him to submit to the Board all information regarding the transactions of the. Lastly, under sub-cl. x the Board shall delegate to the Managing Director, or subject to the Managing Directors supervision, to any of the other employees of the Bank any of the aforesaid powers. Clause 5 provides that the Board shall companyply with such general or special directions as may from time to time be issue by the State Government. Clause 6 provides for the meetings of the Board being held at least once in every three months or at such shorter intervals as the Chairman may decide and cl. 7 specifies the powers of the Managing Director. Clause 8 provides for the companyduct of the business of the Bank. Clause 9 provide for the applicability of some of the provisions of the Banking Companies Act to the Bank. Clause 10 provides for the audit of the a companynts of the Bank and cl. II provides that the Board shall, at the end of every calendar year, submit to the State Government the annual balance- sheet of the Bank accompanied by a report on the working of the Bank and that the Board shall submit to the State Government such other information companycerning the affairs of the Bank as may from time to time be required by the State Government. On a companysideration of the provisions of the Regulation Order set out above, it is manifest that those provisions have been made, as is stated in the preamble to the Order, for the better regulation and management of the affairs of the Bank.- Indeed, cl. 3 of the Order provides for the companystitution of a Board of Directors for the management, companytrol, supervision and direction of the affairs. and business of the Bank. The matters provided, barring cl. 4 i iii , relate to the day-to-day administration of the affairs of the Bank. It is impossible to say that the matters provided for in the Order would cease to be in operation after the period of one year. It will result in an absurdity to hold, for instance, that provisions like the one for sanction of expenditures. would cease to be in operation after the period of one year. We may number deal with cl. 4 1 iii which provides that the Board shall appoint, remove, dismiss and lay down the general companyditions of service of the employees of the Bank other than the Managing Director and frame rules in that behalf. It is pursuant to the powers vested in it tinder this clause that the Board of Directors of the Bank made the Staff rules, including r. 27 whose validity is questioned. The expression things done occurring in art. 357 2 , in our opinion, must receive a liberal and extensive companystruction. As already indicated, all the clauses of the Regulation Order must be read together as an integrated whole and we have to find, on a companystruction of all the clauses, whether they were intended to companytinue beyond the period of one year provided by art. 357 2 . In the companytext in which cl. 4 1 iii occurs, it is number unreasonable to companystrue the power to make rules vested in the Board under that clause as things done within the meaning of art. 357 2 . There can be numberdoubt about the intention to preserve and companytinue the rules even after the period of one year after the cessation of the Emergency so that there may number be any hiatus in the administration of tie affairs of the Bank. It must therefore be held that all the clauses of the Regu- lation Order, including cl. 4 1 iii , companye within the purview of the saving clause occurring in art. 357 2 of the Constitution and that they companytinue to be in operation after the period specified in that article. On this companyclusion it follows that the delegation made by the President in favour of the Board of Directors of the Bank under the Regulation Order did number lapse on the terminatio of the Presidents rule in PEPSU. It is therefore unnecessary to companysider the decisions bearing on the question of the extent of the authority or power of a delegates. Learned companynsel for the appellant has companytended that the Patiala Services Regulations were existing law made by the Maharaja and it was number companypetent for- the President to make the Regulation Order empowering the Board of Directors of the Bank to supersede those Regulations. The learned Judges of the High Court held that the President was companypetent to promulgate the Regulation Order under art. 309 read with arts. 330and 372 of the Constitution. Having regard to the companyclusion reached by us, that the Regulation Order was validly made, we companysider it unnecessary to go into the larger question whether the Regulation Order had the force of rules framed under art. 309. It is then companytended that the Patiala State Regulations governing the companyditions of service of public servants were laws made by the erstwhile ruler of Patiala and companyld number be changed to the disadvantage of such public. servants. The rules, published on February 17, 1930 companytain the following, in Part 1, Preliminary, under the heading Right of Changing Rules The rules companytained in these Regulations may number be modified or departed from except under the orders of the Ijlas-i-Khas based upon a report of the Finance Minister. The rules in these regulations apply to all officers holding appointments in the Patialal State, except in so far as they are over-ridden by distinct provision in any formal agreement entered into with the State by any officer. It is number the appellants case that there was any formal agreement between him and the State of Patiala that the rules shall number be changed during the period of his service The Patiala Services Regulations, Vol. 1, published in 1947, preserved the right of the Maharaja to change the rules. Rule 1.7, of Chapter I, reads Right of changing rules The rules companytained in these Regulations shall number be modified or departed from except under the orders of the Ijlas-i-Khas based upon a report of the Finance Minister. Rule 1.7 of the 1947 Regulations companyresponds to rr. 1 and 4 of the 1930 Regulations. The companytention of the appellant that the rules companyld number be changed is number therefore sustainable. They can certainly be changed by an authority companypetent to change them, as is evident from Exhibit P. 8, dated July 19, 1940. The change 10 Sup. CI/66-19 was in fact effected by the Maharaja in his administrative capacity. Exhibit P-8 is as follows The Patiala State Bank is a State Department governed by its Constitution laid down by the Ijlas-i-Khas, but being at the same time autonomous as regards its accounts, which are kept on companymercial basis, it has become necessary to define how far the rules applying to other State Departments and the Patiala State Regulations shall apply to the Bank. The Board of Directors think and recommend that the internal management of the Bank shall be subject to rules and regulations framed by them subject to the following exceptions The P. S. R. shall apply to the Bank Staff with the exception of the pension rules, but instead thereof will have the benefit of, a companytributory Provident Fund, as already established. The Bank service shall be recognised as State service for the purposes of employment in State service of suitable candidates among the descendants of Bank employees. The Chairman of the Board of Directors put up a numbere to the Maharaja of Patiala underneath I respectfully request that the recommendations of the Board of Directors of the Bank, as stated above, may graciously be sanctioned. On this, the Finance Committee recommended as follows The Finance Committee recommends that Requests of the Chairman, Board of Directors, at c , e , f and g may be sanctioned. The request at a may be sanctioned adding the following and other State Rules or orders after Patiala State Regulations in the first line. This recommendation was made by the Revenue Minister and the Finance Minister who companystituted the members of the Finance Committee. On this the Cabinet supported the recommendations of the Finance Committee and submitted the same to the Maharaja. These recommendations were accepted by the Maharaja on April 8, 1941. It may be numbered that the Order issued by the Maharaja on July 19, 1940, viz., Ex-P. 8 quoted above, is headed Precis. It states that by reason of the fact that the Patiala State Bank is an autonomous department it became necessary to define how are the rules applying to other State departments and the Patiala State Regulations applied to the Bank. It was specifically stated in the recommendation made by the Board of Directors that the internal management of the Bank shall be subject to rules and regulations framed by them. Two important exceptions were made and those were that the Patiala State, Regulations shall apply to the Bank staff with the exception of the pension rules, but that the staff shall have the benefit of a companytributory provident fund and that the Bank service shall be recognized as a State service for the purposes of employment in State service of suitable candidates from among the descendants of the Bank employees. The Finance Committee, as provided in rr. 1-7 of the rules, recommended that the request might be sanctioned. The Cabinet supported the recommendation of the Finance Committee. On this, the Maharaja made an endorsement We approve the recommendation of the Cabinet. This was dated April 11, 1941. It is therefore clear that the extension of the rules governing the companyditions of service of Government servants to the employees of the State Bank of Patiala was the result of an extension made by the Maharaja pursuant to the executive power vested in him. The act of extension being an executive act, there can be numberdoubt that it companyld be changed by a similar executive act. Therefore it is clear that what was changed or superseded was the extension and number the rules. It is companytended on behalf of the appellant that r. 27 of the Staff rules is number valid since it violates the companystitutional guarantee under art. 311 of the Constitution. We may here refer to the position in law with regard to a rule providing for companypulsory retirement. In Moti Ram Deka N. E. Frontier Railway 1 where the decisions on the question were reviewed it was stated The next decision in the same volume is the State of Bombay v. Saubhag Chand M. Doshi, 1958 S.C.R. 571 A.I.R. 1957 S.C. 892. This was a case of companypulsory retirement under r. 165-A of the Bombay Civil Services Rules as amended by the Saurashtra Government. In so far as this case dealt with the companypulsory retirement of a civil servant, it is un- necessary to companysider the Rule in question or the facts relating to the companypulsory retirement of the civil servant. It is of interest to numbere that in dealing with the question as to whether 1 1964 5 S.C.R. 683. 715AIR 1964 S.C. 600,613. L 10 sup. CI/66-20 companypulsory retirement amounted to removal or number, the tests which were applied were in regard to the loss of benefit already accrued and stigma attached to the civil servant. It is, however, significant that in companysidering the objection based on ,the companytravention of Art. 311 2 , Venkatarama Aiyar J., took the precaution of adding that questions of the said character companyld arise only when the rules fix both an age of superannuation and an age for companypulsory retirement and the services of a civil servant are terminated between these two points of time. But where there is numberrule fixing the age of companypulsory retirement, or if there is one and the servant is retired before the age prescribed therein, then that can be regarded only as dismissal or removal within art. 311 2 ,. It would be numbericed that the rule providing for companypulsory retirement was upheld on the ground that such companypulsory retirement does number amount to removal under art. 311 2 because it was another mode of retirement and it companyld be enforced only between the period of age of superannuation prescribed and after the minimum period of service indicated in the rule had been put in. If, however, numbersuch minimum period is prescribed by the rule of companypulsory retirement, that according to the judgment, would violate art. 311 2 and though the termination of a servants services may be described as companypulsory retirement, it would amount to dismissal or removal within the meaning of art. 311 2 . With respect, we think that this statement companyrectly represents the true position in law. The validity of r. 27 cannot, in the instant case, be assailed on this ground. It is then argued that the Staff rules are invalid because they offend art. 14. The ground of companyplaint is that different rules govern different public servants in the same State and that they are bad because they are discriminatory. This Court has held in a series of decisions culminating in the judgment of this Court in Lachhman Dass v. State of Punjab 1 that after the enactment of the States Reorganisation Act, 1956, different Acts in different parts ,of the same State companyld be sustained on the ground that the differentiation arises from geographical classification based on historical reasons. The companytention raised by the learned companynsel therefore fails. There remains a minor companytention which is that the Staff rules were number properly made by the Board of Directors. It is stated that cl. 3 of the Regulation Order, which provides for a minimum number of six members, was number companyplied with and that since the Staff rules were made by four members instead of six, they 1 1963 2 S.C.R. 353 A.I.R. 1963 S.C. 222. were invalid. As pointed out by the learned Judges of the High Court, under the law governing companyporations a majority of the members of the companyporation is entitled to exercise the powers of the companyporation and that the rule regarding companyporations is equally applicable to a companypany. We are in agreement with this view. As a result of the companyclusions reached by us, this appeal must fail and is dismissed.

Case appeal was rejected by the Supreme Court

ORIGINAL JURISDICTION Writ Petitions Nos. 66 and 146 of 1965. Petitions under Art. 32 of the Constitution of India for the enforcement of fundamental rights. Niren De, Additional Solicitor-General, Malcolm Pereira, B. Agarwala, G. L. Sanghi and H. K. Puri, for the petitioners in both the petitions . C. Setalvad, N. S. Bindra and B. R. G. K. Achar, for the respondents in both the petitions . The judgment of GAJENDRAGADKAR, C. J. HIDAYATULLAH and SIKRI, JJ, was delivered by SIKRI J. The dissenting opinion of WANCHOO AND SHAH JJ. was delivered by WANCHOO, J. Sikri, J. These two petitions under Art. 32 of the company- stitution raise substantially the same questions of law and were heard together and may companyveniently be disposed of together. It would be companyvenient to give a few facts in Writ Petition No. 66 of 1965. The petitioners who are citizens of India are owners of some land in Greater Bombay in the South Salsetta Taluka in the Bombay Suburban District. There are four respondents to the petition the first is the State of Maharashtra, the second the Commissioner, Bombay Division, the third the Special Land Acquisition Officer and the fourth the Maharashtra Industrial Development Corporation, established by numberification under the Maharashtra Industrial Development Act, 1961. The predecessor in office of the second respondent, by numberification dated March 30, 1962, published in the Maharashtra Government Gazette, purporting to act under s. 4 of the Land Acquisition Act, 1894 1 of 1894 - hereinafter referred to as the Act-notified that the land belonging to the petitioners was likely to be needed for a public purpose, viz., for development and utilisation of the said lands as an industrial and residential area. By the said numberification the third respondent was appointed to per,form the functions of the Collector under s. 5-A of the Act in respect of the said lands. Pursuant to the said numberification the third res- pondent issued a numberification under s. 4 1 of the Act calling upon the petitioners to file their objections to the acquisition of the said lands under the Act. The petitioners filed their statement of objections and took the objection that the purpose for which the lands were required, viz., development and utilisation of the said lands as an industrial and residential area, was vague and was number genuinely or properly a public purpose. The petitioners further pointed out that the said lands and the companytiguous lands of the petitioners formed a companypact area of land situate on the Central Salsette Railway Track and the said area companyld by reason of its location be easily and without in the least degree adversely affecting the scheme of the acquisition be excluded therefrom and should be released from acquisition accordingly. The first petitioner, Arnold Rodricks, pointed out in his letter dated October 5, 1963, addressed to the Assistant Secretary to the Government of Maharashtra, that the Government had already acquired about 3 acres of his land for University Campus in addition to his other lands acquired earlier by the State Government and that the said lands and the land bearing Survey No. 330 Hissa No. 2 part and Survey No. 313 Hissa No. 14 were the only lands left with the petitioners and that the petitioners required the same for their own residential home. On October 7, 1963, the second respondent, being satisfied after companysidering the report of the Collector under sub-s. 2 of s. 5-A of Act that the said lands were needed to be acquired at the public ,expense for a public purpose, declared under the provisions of s. 6 of the Act that the lands were required for the public purpose of development and utilisation of the said lands as industrial and residential area. After the issue of the numberification under s. 6, usual numberices under s. 9, cls. 3 and 4 were issued by the third respondent and pursuant to these numberices the petitioners filed their statement of claim for companypensation with the third respondent under protest and without prejudice to their rights and companytentions. In the petition, the numberifications dated March 30, 1962 and October 7, 1963, and the acquisition proceedings and the enquiries purported to be held under s. 5A and s. 11 of the Act are challenged as being illegal, invalid and inoperative in law and without and or in excess ,of jurisdiction, etc., on various grounds. Before we mention the points urged before us it is necessary to mention that the Bombay Legislature amended the definition of the expression public purpose in s. 3 of the Act, and the definition in the Act as amended by the Bombay Legislature reads as follows - f the expression Public purpose includes 1 the provision of village,sites in districts in which the Appropriate Government shall have declared by numberification in the official Gazette that it is customary for the Government to make such provision and a housing scheme as defined in- the Land Acquisition Bombay Amendment Act, 1948 and 2 the acquisition of land for purposes of the development of areas from public revenues or some fund companytrolled or managed by a local authority and subsequent disposal thereof in whole or in part by lease, assignment, or sale, with the object of securing further development. The validity of s. 3 f 2 above has been questioned before us. Further, the Act was amended, by Virtue of numberification issued under s.3 4 of the Bombay Commissioners of Divisions Act, 1957 Bombay Act 8 of 1958 -which for the sake of brevity will be referred to as the Commissioners Act. The numberification had amended ss. 3A, 4, 5A, 6, 7 and 17 of the Act as follows In section 3A, after the words State Government, where they occur for the first time, the words or the Commissioner shall be inserted after the words by the State Government in this behalf the words or, as the case may be, any officer authorised by the Commissioner shall be inserted. In section 4- in sub-section 1 , after the words, appropriate Government the words or the Commissioner shall be inserted in sub-section 2 , after the words, such Government the words or, as the case may be, by the Commissioner shall be inserted. In section 5A, in sub-section 2 after the words appropriate Government, where they occur at two places the words or, as the case may be, of the Commissioner shall be inserted. In Section 6- in sub-section 1 - a after the words appropriate Government the words or, as the case may be, the Commissioner shall inserted 126up. CI/66-14 b after the words its orders the words or, as the case may be, under the signature of the Commissioner shall be inserted in sub-section 3 , after the words appropriate Government the words or, as the case may be, the Commissioner shall be inserted. In section 7, after the words in this behalf the Words or, as the case may be, the Commissioner shall be inserted, In section 17- in sub-section 1 , after the words appropriate Government the words or the Commissioner shall be inserted. in sub-section 2 - a after the words the State Government the words or the Commissioner shall be inserted b after the words appropriate Government the words or, as the case may be, of the Commissioner shall be inserted in sub-section 4 - a after the words appropriate Government where they occur at two places, the words or the case may be, of the Commissioner shall be inserted b for the words it does so direct the words it or he does so direct shall be substituted. Mr. Niren De, the learned Additional Solicitor-General appearing on behalf of the petitioners, raised four points before us, That the declarations under ss. 4 and 6 of the Act are essential features or are related to essential legislative policies and as such ss. 4 and 6 can only be amended by the legislature That s. 3 4 of the Commissioners Act suffers from excessive delegation That s. 3 4 of the Commissioners Act is an abdication of the powers of the legislature in favour of the executive and Amendment of the Act by a numberification is a law which requires assent of the President under arts. 31 2 and art. 254 of the Constitution, and the assent number having been obtained, the numberification is bad. It would be companyvenient to take the first three points together because in substance they raise the point that s. 3 4 is bad, because the legislature should have performed the functions entrusted to the State Government under s. 3 4 of the Commissioners Act. Mr. Niren De companytends that from 1857 onwards the Indian statutes had made it the duty of the State Government to decide whether a land was likely to be needed for a public purpose or number and once the Government was satisfied the declaration was made companyclusive. He says that this is an essential legislative feature of the Land Acquisition Act and the Bombay Legislature should have directly amended the Land Acquisition Act and number empowered the State Government to do so. He says that the State Legislature has number really decided that this essential legislative feature should be changed and it is incompetent to companyfer that power on the State Government. He further points out that there never has been any power of delegation in the Land Acquisition Act since 1857. He says that it is well-settled that a legislature, cannot empower an executive authority to change an Act in any essential features. He further urges that the Commissioners Act does number give any guidance to the State Government as to which Acts should be amended or number and powers of which officers should be taken away and companyferred on the Commissioners. He urges that the language is wide enough even to enable the judicial functions of companyrts under the Civil Procedure Code and Criminal Procedure Code to be companyferred on the Commissioners. Mr. Setalvad, who appears on behalf of the respondents, says that what you have to companysider is the legislative policy underlying the Commissioners Act and number the Land Acquisition Act. He says that there is enough guidance in the Commissioners Act and in the history of the legislation to enable the State Government to decide what powers and duties should be companyferred on the Commissioners. He further says that the State Government being in, charge- of the administration of the State knows what duties can appropriately be companyferred on the Commissioners. He points out that the institution of the Commissioners is number a new thing it was in existence before and as the Government found it necessary to revive the institution of Commissioners instead of amending each act separately and companyferring powers on the State Government to delegate its functions, it passed a companyprehensive legislation enabling the State Government to do it. He says that it must be remembered that the Commissioners are revenue and executive officers and there is numberquestion of companyferring powers on them under the Criminal Procedure Code or the Civil Procedure Code. Let us then first examine the scheme of the Commissioners Act and the history of the legislation. The preamble of the Commissioners Act reads as follows Whereas it is expedient to provide for the offices of Commissioners of divisions in the State of Bombay, for prescribing their powers and duties and to make provisions for matters companysequent on the provision for such offices and for certain other matters. The Commissioner. is defined to mean the Commissioner of a division appointed under the law relating to land revenue as amended by the Schedule to this Act. The Bombay Land Revenue Code,, 1879, has been amended by the Schedule and we may numberice S. 6A inserted by the Schedule. Section 6A is as follows 6. 1 The Commissioners of divisions shall be appointed by the State Government. The Commissioners shall exercise the powers and discharge the duties companyferred and imposed on a Commissioner under this Act or under any law for the time being in force, and so far as is companysistent therewith all such other powers or duties of appeal, superintendence and companytrol within their respective divisions, and over the officers subordinate to them as may from time to time be prescribed by the State Government. The Commissioners shall also, subject to the companytrol and the general or special orders of the State Government, exercise such powers and discharge such duties, as the State Government may companyfer or impose on them for the purpose only of carrying out the provisions of any law for the time being in force, and so far as is companysistent therewith. It will be numbericed that the Commissioner is enabled by sub-s.6A- 2 to exercise powers and discharge duties companyferred number only by the Bombay Land Revenue Code 1879 but any other law for the time being in force. Division is defined to mean the territories formed into a division under the Bombay Land Revenue Code, 1879, or under that Code in its application to the Kutch and Saurashtra areas of the State of Bombay, or under the Madhya Pradesh Land Revenue Code, 1954, or under the Hyderabad Land Revenue Act. Divisional officer means an officer appointed as such, immediately before the companymencement of the Commissioners Act, under the provisions of- section 5 of the Bombay Land Revenue Code, 1879, or that section of the Code in its application to the Kutch area of the State of Bombay, Section 5 of the said Code-in its application to the Saurashtra area of the State of Bombay and read with the Government Notification in the Legal Department No. 25398/B, dated 1st November, 1956, issued under section 122 of the States Reorganisation Act, 1956, section 9-A of the Madhya Pradesh Land Revenue Code, 1954, read with Government Notification in the Revenue Department No.RVA.1556-R, dated 1st November 1956, or section 4 of the Hyderabad Land Revenue Act. Existing law is defined as any enactment of a Legislature other companypetent authority in relation to matters specified in List 11 and III in the Seventh Schedule to the Constitution in force in any part of the State immediately before the companymencement of this Act and includes any rule, bye-law, regulation, order, numberification, scheme, form or other instrument having the force of law made, prescribed or issued under any such enactment. Section 3 may be set out in full 3. 1 For the purposes of companystituting offices of companymissioners of divisions and companyferring powers and imposing duties on Commissioners and for certain other purposes, the enactments specified in companyumn 1 of the Schedule to this Act shall be amended in the manner and to the extent specified in companyumn 2 thereof The Commissioner of a division, appointed under the law relating to land revenue as amended by the said Schedule, shall exercise the powers and discharge the duties companyferred and imposed on the Commissioner by any law for the time being in force, including the enactments referred to in sub-section 1 as amended by the said Schedule. The State Government may by numberification in the Official Gazette amend or delete any entry in the Schedule for the purpose of imposing any companyditions or restrictions on the exercise of powers and discharge of duties companyferred or imposed on the Commissioner or withdrawing them, as the case may be, and the Schedule shall be amended accordingly. The State Government may companyfer and impose on the Commissioner powers and duties under any other enactment for the time being in force and for that purpose may, by a numberification in the Official Gazette, add to or specify in the Schedule the necessary adaptations and modifications in that enactment by way of amendment and thereupon- a every such enactment shall accordingly be amended and have effect subject to the adaptations and modifications so made, and b the Schedule to this Act shall be deemed to be amended by the inclusion therein of the said provision for amending the enactment. Section 4 repeals the Bombay Commissioners Abolition of Office Act, 1950, and the Central Provinces and Berar Commissioners Construction of References Act 1948. The Bombay companymissioners Abolition of Office Act,1950 Bom. Act 28 of 1950 had abolished the office of the Commissioner and further provided that wherever a reference was to the Commissioner, the reference should be read as a reference to the State Government or to such authority as the State Government may by general or special order appoint. The Central Provinces and Berar Commissioners Construction of References Act, 1948 61 of 1948 had similarly abolished the Commissioners Divisions of Nagpur, Jubbulpore, Chhatisgarh and Berar, and had provided that the appointment of Commissioners to these Divisions shall cease. By S. 4 it was further provided that all enactments and all numberifications, orders, rules and byelaws issued, made or prescribed under any enactment which immediately before the companymencement of this Act were in force shall be companystrued as if references therein to the Commissioner were references to the State Government or to such authority as the State Government may, by numberification, appoint. Sections 5, 6, 7 and 8 of the Commissioners Act may also be set out in full If at the companymencement of this Act, any legal proceedings are pending to which a Divisional Officer or Director of Local Authorities is a party, the Commissioner shall be substituted for the Divisional Officer or the Director ,of Local Authorities in the said proceedings. Subject to the provisions made in the Schedule, all existing laws shall, unless the companytext otherwise requires, be ,construed as if references therein to the Divisional Officer, or, as the case may be, to the Director of Local Authorities were references to the Commissioner. All instruments or documents executed or made before the companymencement of this Act under or with reference to any existing law or any enactment specified in the Schedule shall, unless the companytext otherwise requires, be companystrued as if references therein to the Divisional Officer or the Director of Local Authorities were references to the Commissioner. All proceedings including proceedings by way of appeals, revision or review pending under any existing law before the State Government or a Divisional Officer or Director of Local Authorities or any other officer or authority immediately before the companymencement of this Act shall, where disposal of the proceedings falls within the purview of the powers and duties of the Commissioner, be transferred to the Commissioner for disposal according to law. It seems to us that the underlying policy or the essential legislative feature of the Commissioners Act is to reintroduce the old offices of Commissioners and companyfer powers and duties on them which companyld appropriately be discharged by them. The Legislature has numberdoubt left it to the State Government to decide whether any duties imposed on it or some of the auhorities should number under the new administrative set up system be discharged by the Com- missioners. But the Legislature has definitely given an indication of the kinds of powers that may be companyferred on them, in ss. 6 and 7. Further, the very nature of the office held by a Commissioner and the duties performed by him up to 1950 would show that it is only the duties of the State Government and of officers of equivalent rank discharging revenue and executive duties which would be companyferred on the Commissioner. We see numberdifference in principle between the State Legislature inserting a section in an Act enabling the State Government to delegate its power to another authority and the Legislature in view of the change in the administrative set up companyferring powers on the State Government to companyfer number only its own duties on Commissioners but also of other officers performing executive and revenue duties. This Court upheld the validity of s. 4 of the Essential Supplies Temporary Powers Act, 1946 24 of 1946 in Harishankar Bagla v. The State of Madhya Pradesh 1 . Section 4 was in the following terms The Central Government may by numberified order direct that the power to make orders under section 3 shall in relation to such matters and subject to such companyditions, if any, as may be specified in the direction, be exercisable also by- a such officer or authority subordinate to the Central Government, or b such State Government or such officer or authority subordinate to a State Government as may be specified in the direction. The Court observed as follows- Section 4 of the Act was attacked on the ground that it empowers the Central Government to delegate its own 1 1955 1 S.C.R. 380 at pp. 389-390. power to make orders under section 3 to any officer or authority subordinate to it or the Provincial Government or to any officer or authority subordinate to the Provincial Government as specified in the direction given by the Central Government. In other words, the delegate has been authorised to further delegate its powers in respect of the exercise of the powers of section 3. Mr. Umrigar companytended that it was for the Legislature itself to specify the particular authorities or officers who companyld exercise power under section 3 and it was number open to the Legislature to empower the Central Government to say what officer or authority companyld exercise the power. Reference in this company- nection was made to two decisions of the Supreme Court of the United States of America- Panama Refining Co. v. Ryan 1 and Schechter United States 2 . In both these cases it was held that so long as the policy is laid down and a standard established by a statute, numberunconstitutional delegation of legislative power is involved in leaving to selected instrumentalities the making of subordinate rules within prescribed limits and the determination of facts to which the policy as declared by the Legislature is to apply. These decisions in our judgment do number help the companytention of Mr. Umrigar as we think that section 4 enumerates the classes of persons to whom the power companyld be delegated or sub- delegated by the Central Government and it is number companyrect to say that the instrumentalities have number been selected by the Legislature itself. The decision of their Lordships of the Privy Council in Shannons case 3 companypletely negatives the companytention raised regarding the invalidity of section 4. In that case the Lt.-Governor in Council was given power to vest in a marketing board the powers companyferred by section 4A d of the Natural Products Marketing British Columbia Act, 1936. The attack on the act was that without companystitutional authority it delegated legislative power to the Lt.-Governor in Council. This companytention was answered by their Lordships in these terms The third objection is that it is number within the powers of the Provincial Legislature to delegate so called legislative powers to the Lt.-Governor in Council, or to give him powers of further delegation. This objection appears to their Lordships subversive of the rights which the Provincial Legislature enjoys while dealing with matters falling within the classes of subjects in relation to which the Constitution has granted legislative powers. Within its appointed sphere the Provincial Legislature is as supreme as any other Parliament and it is unnecessary to 1 293 U.S. 388. 3 1938 A.C. 708. 2 295 U.S. 495. try to enumerate the innumerable occasions on which Legislatures, Provincial, Dominion and Imperial, have entrusted various persons and bodies with similar powers to those companytained in this Act. It would be numbericed that s. 4 of the Essential Supplies Temporary Powers Act, 1946, left it to the Central Government to decide three things 1 the matters which can be delegated to the officers or authorities subordinate, 2 the companyditions subject to which the power to make orders under s. 3 be exercised, and 3 the officers who would exercise the power to make orders under S. 3. In the present case, the Legislature has specified that it is only the Commissioners to whom powers in an act can be delegated. If a section similar to sub-s. 4 of s. 3 of the Commissioners Act had been inserted in every Act relating to matters in Lists 11 and 111, it would have been difficult to distinguish the decision in Baglas 1 case, except on the ground that the State Government is also enabled to companyfer powers of some other authorities on Commissioners. This in our opinion does number make any difference because the Bombay Act 28 of 1950 had also enabled State Government to companyfer powers of Commissioners on some other authorities. We may mention that at one stage of the arguments it was companytended that sub-s. 3 of s. 3 of the Commissioners Act enabled the State Government to amend the Schedule and this showed the extent of delegation made to the State Government. But, in our opinion, the object of sub-s. 3 is two fold first to enable the Government to impose any companyditions or restrictions on the exercise of powers and discharge of duties on the Commissioners, and secondly, to withdraw them in case it is felt that the Commissioners should number exercise those powers. We see numberobjection in entrusting this function to the State Government because, as mentioned above, the State Government is in charge of the administration and the whole object of the Commissioners Act is to enable it to run the administration as smoothly as possible. After all, the law which the Commissioners or the State Government or the other authorities have to administer remains the same it is only the authority that is changed. It is really number necessary to companysider the other cases cited before us because the general principles are quite clear and it is only in their application that difficulties arise. We have companye to the companyclusion that the Legislature has number abdicated itself in favour of the executive but it has laid down essential legislative policy and wisely left it to the State Government to reorganise the administration companysequent on the setting up of Commissioners Division. The State Government is after all in charge of administration and it knows, specially in view of its previous experience, what powers 1 1955 1 S.C.R. 380. of existing authorities including itself can suitably be companyferred on the Commissioners. We may mention that the Bombay High Court has in two decisions Ganesh Varayan v. Commissioner Nagpur Division, Nagpur 1 and Sadruddin Suleman Jhaveri v. J. H. Patwardhan 2 upheld the validity of the Commissioners Act. This takes us to the fourth point, namely, whether the assent of the President was necessary to the numberification amending the Act. ,It is companymon ground that the Commissioners Act received assent of the President. The question that is raised is whether it is necessary that assent of the President should be obtained for every numberification issued under the Commissioners Act which has the effect of amending any legislation in respect of the matters in the companycurrent List, i.e. List III. In our opinion, it is number necessary because the amendment of the Act became effective by virtue of the Commissioners Act and number by virtue of the numberification. This Court was faced with a similar problem in Harishanker Bagla and Another v. The State of Madhya Pradesh 3 and repelled a similar companytention in the following words Conceding, however, for the sake of argument that to the extent of a repugnancy between an order made under section 3 and the provisions of an existing law, to the extent of the repugnancy, the existing law stands repeated by implication, it seems to us that the repeal is number by any Act of the delegate, but the repeal is by the legislative Act of the Parliament itself. By enacting section 6 Parliament itself has declared that an order made under section 3 shall have effect numberwithstanding any inconsistency in this order with any enactment other than this Act. This is number a declaration made by the delegate but the Legislature itself has declared its will that way in section 6. The abrogation or the implied repeal is by force of the legisla- tive declaration companytained in section 6 and is number by force of the order made by the delegate under section 3. The power of the delegate is only to make an order under section 3. Once the delegate has made that order its power is exhausted. Section 6 then steps in wherein the Parliament has declared that as soon as such an order companyes into being that will have effect numberwithstanding any inconsistency there-, with companytained in any enactment other than this Act. In our opinion the above reasoning applies to the facts of this case and the Commissioners Act having received the assent of the President it is number necessary that some further assent of the President should be given to a numberification. We may mention that we are assu- 1 1964 66 B.L.R. 807 2 I.L.R. 1965 Bom. 394. 3 1955 1 S.C.R. 380 at p. 392. ning and number laying down that it is possible to obtain the assent of the President under the Constitution to the issue of a numberification. In companyclusion we see numberforce in the companytentions raised by Mr. De on behalf of the petitioners and this takes us to the next petition W.P. No. 146 of 1965 in which Mr. Pereira has raised some additional points. He raised three points before us 1 that numberhearing was given to the petitioner under s. 5A of the Act 2 that the declaration under s. 6 is a companyourable exercise of power and 3 that s. 3 f 2 of the Act, as amended in Bombay, is void and there is numberpublic purpose involved in issuing the numberification under s. 6 of the Act. There is numberforce in the first point because we find, on looking at the record, that the petitioners raised numberobjections to the acquisition and they never wanted any hearing on this point. As they did number object to the acquisition, it is difficult to see what enquiries had to be made under s. 5A. We may next take up the question of the validity of s. 3 f 2 . In our view it is number necessary to decide this point because we have companye to the companyclusion that the numberifications issued under ss. 4 and 6 specified a public purpose the purpose specified was development and utilisation of the said lands as industrial and residential areas. In our opinion this purpose is a public purpose within the Land Acquisition Act as it stood before the amendment made by the Bombay Legislature and it is number necessary for the respondents to rely on the amendment to sustain the numberification. This Court in State of Bombay v. Bhanji Munji 1 upheld the requisitioning of premises for housing a person having numberhousing accommodation on the ground that this was a public purpose. This Court observed at page 783 as follows In the present set of cases there is proof of a public purpose. it is given in the affidavits made on behalf of the State and in the subsequent orders just quoted, namely to house the homeless. At that time the housing situation in Bombay was acute, largely due to the influx of refugees. Questions of public decency, public morale, public health and the temptation to lawlessness and crime, which such a situation brings in its train, at once arose and the public companyscience was aroused on the ground of plain humanity. A race of proprietors in the shape of rapacious landlords who thrived on the misery of those who companyld find numberdecent roof over their heads sprang into being. Even the efficiency of the administration was threatened because Government servants companyld number find proper accommodation. Milder efforts to companye with the evil proved ineffective. It was necessary therefore for Government take more drastic 1 1955 1 S.C.R. 777. steps and in doing so they acted for the public weal. There was companysequently a clear public purpose and an undoubted public benefit. In the affidavit of S. R. Naik, Special Land Acquisition Officer, it is stated that the State Government had set up a study group to companysider and recommend on various matters relating to companygestion in the Island of Bombay. The Study group, inter alia, found The said Study Group found as a result of its inquiry that there had been a phenomenal increase in the population of the Island of Bombay from 1948 to 1958 during which period the population had shot up from 14.89 lakhs in 1941 to an estimated 31 lakhs at the close of 1958. It found that this enormous increase in population had resulted in companygestion of traffic, deficiency in open spaces and play fields for schools, overcrowding in trains, overcrowding in houses, creation of slums etc., and that the increased population had also companystituted an increasingly intolerable burden on the sanitary circumstances and public utilities of the Island. According to the estimate of the Study Group based on the formula adopted by the Director General of Health Services of the Government of India the population of Greater Bombay would increase to a total staggering figure of 75 lakhs, by the year 1958. The Study Group also found that just as there was a heavy companycentration of population in Greater Bombay in a small area of 169 sq. miles there was also a companycentration of industries in Greater Bombay. It found that of the total number of 11,539registered factories in the State of Maharashtra as in 1958 Greater Bombay had 3,539 registered factories which meant that one-third of the total number of factories in the State of Maharashtra were in Greater Bombay alone. Of the total number of factories in Greater Bombay as many as 76 were located in the Island of Bombay which admeasures only 26.19 sq. miles out of the total Greater Bombay area of 169 sq. miles. All these factories in Greater Bombay employ 44 of the total number of factory workers in the State and 85 of the factory workers in Greater Bombay were companycentrated within the Island of Bombay alone. All these factors gave rise to a number of problems including the problem of traffic housing accommodation and deterioration of public utility services. As regards housing the Study Group observed that in the year 1958 there were about 57,37,000 tenements in Greater Bombay of all categories including a large portion of single room tenements. At the rate of five persons to a tenement the Study Group observed that the then existing tenements were only enough for 28 lakhs persons leaving 15 lakhs persons to be still provided with housing accommodation. The growth in population and the companycentration of the population in a small area also led to the deterioration of public utility services as observed by the Study Group. The Study Group suggested a number of measures for relieving the companygestion of population and industries in the Greater Bombay including the shifting of industries, the establishment of industrial estates, the establishment of industries in the suburbs, the development of the suburbs, reclamation of land and reclamation of salt pans. In our opinion, on these facts it cannot be held that the impugned numberifications were issued to subserve number a public purpose but some private purpose. It was observed by this Court in Babu Barkva Thakur v. The State Bombay 1 It has been recognised by this Court in the case of The State of Bombay V. Bhanji Munji and Another 2 that providing housing accommodation to the homeless is a public purpose. In an industrial companycern employing a large number of workmen away from their homes it is a social necessity that there should be proper housing accommodation available for such workmen. Where a larger section of the companymunity is companycerned, its welfare is a matter of public companycern. In Pandit Jhandu Lal v. The State of Punjab 3 it was observed at page 467 There is also numberdoubt that the structures to be made on the land would benefit the members of the Co-operative Society. But, the private benefit of a large number of industrial workers becomes public benefit within the meaning of the Land Acquisition Act. It was held in that case that acquisition of building sites for residential houses for industrial labourers was for a public purpose even apart from s. 17 2 of the Act, as amended by the Land Acquisition Punjab Amendment Act. In Smt. Somawanti v. The State of Punjab 4 it was observed Broadly speaking the expression public purpose would, however, include a purpose in which the general 1 19611 S.C.R 128 at p 137. 2 1955 1 S.C.R. 777. 3 1961 2 S.C.R. 459. A.I.R. 1963 S.C. 151 interest of the companymunity as opposed to the particular interest of individuals is directly and vitally companyterned. It was further observed at p. 163 Public purpose is bound to vary with the times and the prevailing companyditions in a given locality and therefore it would number be a practical proposition even to attempt a companyprehensive definition. It was urged before us that the State Government was number entitled to acquire property from A and give it to B. Reliance was placed on the decision of the Supreme Judicial Court of Massachusetts 204 Mass. 607 . But as pointed out by this Court, public purpose varies with the times and the prevailing companyditions in localities, and in some towns like Bombay the companyditions are such that it is imperative that the State should do all it can to increase the availability of residential and in dustrial sites. It is true that these residential and industrial sites will be ultimately allotted to members of the public and they would get individual benefit, but it is in the interest of the general companymunity that these members of the public should be able to have sites to put up residential houses and sites to put up factories. The main idea in issuing the impugned numberifications was number to think of the private companyfort or advantage of the members of the public but the general public good. At any rate, as pointed out in Babu Barkya Thakur v. The State of Bombay 1 a very large section of the companymunity is companycerned and its welfare is a matter of public companycern. In our view the welfare of a large proportion of persons living in Bombay is a matter of public companycern and the numberifications served to enhance the welfare of this section of the companymunity and this is public purpose. In companyclusion we hold that the numberifications are valid and cannot be impugned on the ground that they were number issued for any public purpose. Mr. Pereira then urged that the numberifications were companyourable. We are number able to appreciate how the numberifications are serving Any companylateral object. He said that he used the word companyourable in the sense used by this Court in Mst. Somawanti v. State of Punjab 2 Mudholkar, J., observed as follows If the purpose for which the land is being acquired by the State is within the legislative companypetence of the State the declaration of the Government will be final subject, however, to one exception. That exception is that if there is a companyourable exercise of power the declaration will be open to challenge at the instance of the aggrieved party. The power companymitted to the Government by the Act is a limited power in the sense that it can be exer- 1 1961 1 S.C.R. 128. A.I.R. 1963 S.C. 151. cised only where there is a public purpose, leaving aside for a moment the purpose of a companypany. If it appears that what the Government is satisfied about is number a public but a private purpose or numberpurpose at all the action of the Government would be companyourable as number being relatable to the power companyferred upon it by the Act and its declaration will be a nullity. Subject to this exception the declaration of the Government will be final. No material has been placed before us that the exercise of the power by the Government is companyourable in this sense. The Government has the power to issue the numberifications for a public purpose, and, as we have already held that the numberifications were issued for a public purpose, there is numberquestion of any companyourable exercise of the power. Lastly, he companytended that the Government had number before issuing the numberifications prepared any scheme. This is true that the Government has number uptil number prepared any scheme for the utilisation of the developed sites. But the numberification itself shows that the sites would be used as residential and industrial sites. There is numberlaw that requires a scheme to be prepared before issuing a numberification under s. 4 or s. 6 of the Act. We have, however,. numberdoubt that the Government will, before disposing of the sites, have a scheme for their disposal. In the result we see numberforce in any of the companytentions urged before us and we hold that the numberifications are valid. The petitions accordingly fail and are dismissed but there will be numberorder as to companyts. Wanchoo, J. We regret we are unable to agree. These two petitions under Art. 32 of the Constitution raise companymon questions of law and will be dealt with together. We may briefly state the facts in W. P. 66. The facts in the other petition are exactly similar except that the dates of the numberifications are in some cases different and the lands numberified are also different. On March 30, 1962, the Commissioner of Bombay Division issued a numberification under s. 4 of the Land Acquisition Act, No. 1 of 1894, hereinafter referred to as the Act . By this numberification he declared that certain lands were likely to be needed for a public purpose, namely, for development and utilisation of the said lands as an industrial and residential area. In companysequence, objections were invited under s. 5-A of the Act and the Special Land Acquisition Officer, Bombay and Bombay Suburban District was numberified as the person to perform the functions of a Collector under s. 5-A of the Act. After the proceedings under s. 5-A of the Act were over, the Commissioner issued another numberification on October 7, 1963 under s. 6 of the Act. By this numberification he declared that certain lands out of those numberified under s. 4 were needed to be acquired at the public expense for the public purpose already specified. Some of the lands were however exempted and the numberification under s. 4 with respect thereto was cancelled. The petitioners are owners of some of the lands included in the numberification under s. On receipt of the numberice under s. 9 of the Act, they represented to Government that their lands be released from acquisition. They were informed that this companyld number be done and thereupon the present petition was filed to challenge the legality of the proceedings taken under the Act. Two main companytentions have been urged in these petitions on behalf of the petitioners. In the first place it is companytended that the impugned acquisition is number for a public purpose and is intended for sale to private persons, limited companypanies and companyporations for monetary gain, and in any case, the change in the definition of public purpose by the Land Acquisition Bombay Amendment Act, No. 35 of 1953, hereinafter referred to as the 1953Act by which a new clause was added in s. 3 f of the Act was ultra vires the companycept of public purpose within the meaning of that phrase in Art. 31 2 of the Constitution. The added clause is in these words The acquisition of land for purposes of the development of areas from public revenues or some fund companytrolled or managed by a local authority and subsequent disposal thereof in whole or in part by lease, assignment or sale, with the object of securing further development. The second attack arises in this way. By the Bombay Corn- missioners Abolition of Office Act, No. 28 of 1950 the office of the Commissioner in the State of Bombay was abolished and the functions of the Commissioner were transferred to the State Government or to such authority as the State Government may by general or special order appoint. In 1958, how,ever, the Bombay Commissioners of Divisions Act, No. 8 of 1958, hereinafter referred to as the 1958 Act was passed by which the office of Commissioner of Division in the State of Bombay was revived. We are companycerned in the present appeal mainly with s. 3 4 of this Act. By section 3 1 it is provided that for the purposes of companystituting offices of Commissioners of divisions ,and companyferring powers and imposing duties on Commissioners and for certain other purposes, the enactments specified in companyumn I of the Schedule to this Act shall be amended in the manner and to the extent specified in companyumn 2 thereof. Sub-section 2 thereof provided that the Commissioner of a division, appointed under the law relating to land as amended by the said Schedule, shall exercise the powers and discharge the duties companyferred and imposed ,on the Commissioner by any- law for the time being in force, including the enactments referred to in sub-s. 1 as amended by the said Schedule. The Schedule made a number of amendments in the Bombay Revenue Code No. 5 of 1879 , the main amendment being that s. 6 provided for appointment of Commissioners for each division and s. 6-A provided for powers and duties of Commissioners. Further, in certain sections of the Land Revenue Law as applied to various areas in the reconstituted State of Bombay after the re- organisation of 1956, the word Commissioner was substituted for the State Government in various sections. Changes were also made in the Hyderabad Land Revenue Act No. 8 of 1317 F. and the Madhya Pradesh Land Revenue Code No. 2 of 1955 to bring them into line with this Act and to provide for the office of Commissioner and its powers and duties. Besides these changes in the Land Revenue Code applicable to various areas in the re-organised State of Bombay, the Schedule also made amendments in various other Acts in force in the State of Bombay and Commissioner was substituted for State Government in these Acts. Besides this, Commissioner was also substituted for Board of Revenue in certain Acts in force in areas which came to the re-organised State of Bombay from the former Part B State of Hyderabad. Changes were also made in the Police Act No. 5 of 1861 and Commissioner, was introduced in certain sections thereof and a provision was made that the Magis- trate of the District should be under the general companytrol and direction of the Commissioner. Some changes were made in the Saurashtra Police Act No. 18 of 1954 , the Hyderabad District Police Act, No. X of 1329 F and the Bombay District Police Act, No. 4 of 1890 . Thus sections 3 1 and 3 2 as enacted by the Bombay legislature gave certain powers and imposed certain duties on Commissioners read with the amendments in the Schedule to the 1958 Act. Further provision was made in sub-sections 3 , 4 and 5 which may number be set out. They read thus The State Government may by numberification in the Official Gazette amend or delete any entry in the Schedule for the purpose of imposing any companyditions or restrictions on the. exercise of powers and discharge of duties companyferred or imposed on the Commissioner or withdrawing them as the case may be, and the Schedule shall be amended accordingly. The State Government may companyfer and impose on the Commissioner powers and duties under any other enactment for the time being in force and for that purpose may, by a numberification in the Official Gazette add to or specify in the Schedule the necessary adaptations and modifications in that enactment by way of amendment and thereupon-- q2Sup CI/66-12 a every such enactment shall accordingly be amended and have effect subject to the adaptations and modifications so made, and b the Schedule to this Act shall be deemed to be amended by the inclusion therein of the said provision for amending the enactment. The State Government may at any time in like manner cancel a numberification under sub-section 4 , and thereupon the relevant enactment shall stand unamended by the cancelled numberification and the Schedule shall be altered accordingly. It will be seen that these three sub-sections provided an integrated scheme. By sub-section 3 the State Government is given the power by numberification in the Official Gazette to amend or delete any entry in the Schedule for the purpose of imposing any companyditions or restrictions on the exercise of powers and discharge of duties companyferred or imposed on the Commissioner or withdrawing them, as the case may be, and the Schedule shall be amended accordingly. Sub-section 4 empowers the State Government to companyfer and impose on the Commissioner powers and duties under any other enactment for the time being in force. It further empowers the State Government for that purpose by numberification in the Official Gazette to add to or specify in the Schedule the necessary adaptations and modifications in that enactment by way of amendment. On such numberification, such other enactment shall accordingly be amended and have effect subject to the adaptations and modifications so made, and the Schedule to the 1958 Act, shall be deemed to be amended by the inclusion therein of the said provision for amending the enactment. By sub-section 5 the State Government was given the power to cancel a numberification made under sub-s. 4 and thereupon the relevant enactment shall stand unamended by the cancelled numberification and the Schedule shall be altered accordingly. The companytention of the petitioners is that by these sub-sections, and particularly by sub-s. 4 of s. 3, there was excessive delegation of legislative power to the State Government and further that these three sub-sections amount to the legislature abdicating its power of legislation in favour of the State Government. So it is urged that these provisions, and particularly s. 3 4 , are ultra vires the power of the legislature inasmuch as they suffer from the vice of excessive delegation and amount to abdication of its power of legislation by the legislature in favour of the executive. The petitions have been opposed on behalf of the State Government, and it is companytended that the new clause added to s. 3 f of the Act by the 1953 Act by which the definition of public purpose was amended is valid and what the addition has provided is within the companycept of public purpose as used in Art. 31 2 of the Constitution. Further it is denied that the object of the State Government in making the acquisition is merely to sell the land acquired to private parties, private limited companypanies or companyporations for monetary gain. As to s. 3 4 it is companytended that it does number suffer from the vice of excessive delegation and does number amount to abdication of its legislative power by the legislature in favour of the executive. We shall first companysider the question whether the addition made by the Act of 1953 in the definition of public purpose is ultra vires the companycept of public purpose as used in Art. 31 2 of the Constitution. Public purpose, is number defined in Art. 31 of the Constitution number is it possible to lay down any hard and fast definition of public purpose. The phrase came up for companysideration before this Court in the State of Bihar v. Maharajadhiraja Sir Kameshwar Singh of Darbhanga and Others 1 . In that companynection Mahajan J. as he then was observed that the phrase public purpose has to be companystrued according to the spirit of the times in which the particular legislation is enacted. He also referred to Art. 39 of the Directive Principles of State Policy in companystruing the phrase public purpose after companying into force of the Constitution. In the same case, Das J. as he then was observed that numberhard and fast definition can be laid down as to what is a public purpose as the companycept has been rapidly changing in all companyntries, but it is clear that it is the presence of the element of general interest of the companymunity in an object or aim that transforms such object or aim into a public purpose, and whatever furthers the general interests of the companymunity as opposed to the particular interest of the individual must be regarded as a public purpose. We respectfully agree with these observations. There can be numberdoubt that the phrase public purpose has number a static companynotation, which is fixed for all times. There can also be numberdoubt that it is number possible to lay down a definition of what public purpose is, particularly as the companycept of public purpose may change from time to time. There is numberdoubt however that public purpose involves in it an element of general interest of the companymunity and whatever furthers the general interest must be regarded as a public purpose. It is in the light of this companycept of public purpose, which is number static and is changing from time to time and in which there must always be an element of general interest of the companymunity that we have to look at the addition made by the 1953 Act in the definition of public purpose in s. 3 f of the Act. 1 1952 S.C.R. 889. We. have already set out the addition. It is in two parts. The first part provides for acquisition of land for purposes of the development of areas from public revenues or some fund companytrolled or managed by a local authority. So far as this part is companycerned, it is companyceded by learned companynsel for the petitioners that development of areas with the aid of public revenue or some fund companytrolled or managed by a local authority would be a public purpose. Under this part the land would be acquired by the State or by a local authority for the purpose of development and this development will companysist, generally speaking, of levelling land, providing roads thereon, providing drainage and electric lines and such other amenities as should be made available at the time when the acquisition is made and the land is developed. Such development generally speaking is number possible through private agencies. As we have said already, it is number disputed on behalf of the petitioners that such development would be a public purpose within the companycept of the phrase in Art. 31 2 of the Constitution. The attack of the petitioners is on the second part of the addition in 1953 which provides for subsequent disposal thereof in whole or in part by lease, assignment, or sale, with the object of securing further development. It is urged that all these words mean is that after the development envisaged in the first part of the addition the State or the local authority would be free to dispose of the land acquired in whole or in part by lease, assignment or sale, apparently to private persons. This, it is said, means that the State or the local authority would acquire land in the first instance and develop it in the manner already in dilated and thereafter make profit by leasing, assigning or selling it to private individuals or bodies. It is also said that the object of securing further development which is the reason sale or lease etc. is a very vague expression and there is numberhing to show what this further development companyprises of.It is true that when this part speaks of subsequent disposal thereof in whole or in part by lease, assignment or sale, it is number unlikely that this disposal will take place to private persons and thus in an indirect way the State would be acquiring the land from one set of individuals and disposing it of to another set of individuals after some development. If this were all, there may be some force in the argument that such acquisition is number within the companycept of public purpose as used in Art. 31 2 . But this in our opinion is number all. We cannot ignore the words with the object of securing further development, which appear in this provision. it would have been a different matter if the provision had stopped at the words lease, assignment or sale but the provision does number stop there. It says that such lease, assignment or sale must be with the object of securing further development, and these words must be given some meaning. It is true that the words further development have number been defined, but that was bound to be so, for further development would depend upon the nature of the purpose for which the land is acquired. Of companyrse, it is possible that further development can be made by the State itself or by the local authority which acquires the land but we see numberreason why the State or the local authority should number have the power to see that further development takes place even through private agencies by lease, assignment or sale of such land. So long as the object is development and the land is made fit for the purpose for which it is acquired there is, numberreason why the State should number be permitted to see that further development of the land takes place in the direction for which the land is acquired, even though that may be through private agencies. We have numberdoubt that where the State or the local authority decides that further development should take place through private agencies by disposal of the land so acquired by way of lease, assignment or sale, it will see that further development which it has in mind does take place. We can see numberreason why if the land so acquired is leased, assigned or sold, the State or the local authority should number be able to impose terms on such lessee, assignee or vendee that will enable further development on the lines desired to take place. We also see numberreason why when imposing terms, the State or the local authority may number provide that if the further development it desires the lessee, assignee or the vendee to make is number made within such reasonable time as the State or the local authority may fix, the land will revert to the State or the local authority so that it may again be used for the purpose of further development which was the reason for the acquisition of the land. Take the case where land is acquired for the purpose of development of certain areas for residential purposes. The State or the local authority levels the land where necessary, makes a lay out, provides roads, drainage, electric lines and such other amenities as may be available whereafter houses have to be built. The State or the local authority may build these houses itself, but there is numberreason why if the purpose is development of certain land as a residential area, the State or the local authority may number lease, assign or even sell the lands laid out and already developed in order that further development of building houses may be achieved. In such a case it will always be open to the State Government or the local authority to provide, and we have numberdoubt that it will always so provide, that the persons to whom the land is leased, assigned or sold carry out the further object of building houses. There is also numberreason why the State or the local authority should number provide for the terms on- which residential buildings would be made, the specifications of such buildings, and the time within which they should be made. There is also numberreason why the terms should number provide that if the further object of development is number carried out within a reasonable time, the land would revert to the State or the local authority to be used for the purpose for which it was acquired. We have numberdoubt that the State or the local authority would see that such terms are imposed on those to whom lands are leased, assigned or sold with the object of further development, by companystructing houses where the scheme is for residential purposes. We have also numberdoubt that in imposing terms, the State or the local autho- rity will see that the purpose for which the lease, assignment or sale is made is carried out within a reasonable time, failing which the land will revert to the State or the local authority. These matters are in our opinion implicit in the words with the object of securing further development, and we have numberreason to think that the State or the local authority would just dispose of the land so acquired by lease or assignment or sale without caring to see that further development which was the basis of acquisition takes place. We may refer in this companynection to a similar provision in S. 41 of the Act, which provides for an agreement between the private companypany for which the land is acquired and the State, and which lays down that the agreement shall provide the terms on which the land shall be held by the companypany. There is in our opinion numberdoubt that when this provision speaks of with the object of securing further development it implicitly requires that before the land so acquired is leased, assigned or sold, the State or the local authority shall see that the purpose for which the acquisition is made is carried out by persons to whom the land is leased, assigned or sold. There is also in our opinion implicit in this provision that the State or the local authority would impose terms on the persons to whom the land is leased, assigned or sold and the terms should be such as to ensure that the object of further development takes place within a reasonable time and if the persons to whom the land is leased or assigned or sold do number carry out that object within a reasonable time, the land would revert to the State or the local authority so that it may again be used for the purpose for which the acquisition was made. If this-is the true import of the words with the object of securing,further development in this provision-and we have numberdoubt that it is so-we fail to see how the provision made by the 1953 Act Providing for development in two stages, first by the State or the local authority itself by making the land fit for the purpose for which acquisition is made, and then by private persons also after the land is developed by the State or the local authority, is number for a public purpose within the meaning of that phrase in Art. 31 2 of the Constitution. Population in India is rising and more or more industries are companying into being. Therefore where the acquisition is with the object of providing for residential and industrial development, we see numberreason why such provision would number be included in the companycept of public purpose in the present companytext. We are therefore of opinion that the words with the object of securing further development have a meaning and if that meaning is what we have stated above as to which we have numberdoubt it cannot be said that this provision made by the 1953 Act is number within the companycept of Art. 31 2 of the Constitution. We therefore hold that the amendment by the 1953 Act already set out above is within the companycept of public purpose in Art. 31 2 of the Constitution and cannot be struck down as ultra vires. Delegated legislation is a well known modem device. In view of the companyplexities of modem life it is number possible for the legislature to find time to make all the detailed rules which are necessary to carry out the purposes of an enactment so it delegates to an appropriate executive authority the power to make rules. But before doing so, the legislature itself enacts the law under which the power is delegated and lays down the essential policy of the Act and all such essential matters which require to be included in the Act itself. Having thus provided for all such essential matters in the enactment itself, the legislature leaves it to a subordinate authority which may be some appropriate executive authority to frame detailed rules to carry out the purposes of the Act. These rules are ancillary and subserve the purposes of the enactment. They cannot go against the provisions of the enactment and cannot in any manner make any change in the provision of the enactment and are merely for the purpose of carrying out the essential policy which the legislature has laid down in the enactment itself. These rules are called delegated legislation and it is important to remember that this delegated legislation cannot in any way change the provisions of the enactment itself and must only be resorted to for carrying out the purposes of the legislation itself. Such being the nature of delegated legislation we have to see whether the impugned provisions of s. 3 are in accord with these principles. If they are number and if the legislature has companyferred powers on the State Government beyond this such companyferment of power cannot be delegated legislation and is really an abdication of its power by the legislature and transfer of it to the executive. This brings us to a companysideration of s. 3. Sub-sections 1 and 2 of s. 3 read with the Schedule companyfer powers and impose duties on the Commissioner by virtue of the 1958 Act. itself. Then companyes sub-section 3 , and let us see what exactly it provides. The State Government is given power by this sub-section to amend or delete any entry in the Schedule. The amendment is for the purpose of imposing any companyditions or restrictions on the exercise of powers and discharge of duties companyferred or imposed on the Commissioner while deletion is with respect to withdrawing any powers companyferred by the Schedule on the Commissioner. Leaving out the question of amendment, sub- section 3 companyfers power on the State Government to delete any entry from the Schedule if it desires to withdraw any powers companyferred on the Commissioner by the legislature itself in the Schedule. In effect therefore the legislature says by sub-s. 3 that though it has deemed fit in its wisdom to companyfer a certain power on the Commissioner, it leaves it to the State Government to withdraw that power from the Commissioner and delete the necessary entry in the Schedule with respect thereto. So the State Government is given carte blanche to take away all or any of the powers companyferred by the legislature itself under the Schedule. It may also be added that the Schedule in the present case is very different from the Schedule in the Edward Mills Co. Limited v. The State of Ajmer 1 . In that case s. 27 of the Minimum Wages Act. 11 of 1948 gave power to the appropriate government after necessary formalities to add to the schedule any employment in respect of which it was of opinion that minimum rates of wages should be fixed under that Act. It will be seen that the schedule in that Act merely enumerated certain employments while the Schedule in the 1958 Act amends a large number of enactments. This method is merely a companyvenient device for making amendments in other enactments which would otherwise have found place in the main body of the 1958 Act. Further s. 27 of the Minimum Wages Act did number give any power to the appropriate government to delete any entry from the schedule it merely gave power to the appropriate government to add to the schedule and that delegation was upheld by this Court. It will thus be seen that the provision in sub-s. 3 by which the State Government is even given the power to delete any entry in the Schedule and withdraw if it wants to do so the power companyferred on the Commissioner by the legislature is a very different matter from addition to the schedule which was permitted by the Minimum Wages Act. It is clear that sub-s. 3 judged by the test of delegated legislation has gone far beyond what the legislature can do when it delegates its functions to an executive authority for making subordinate legislation As we have indicated above, sub-section 3 companyfers power on the State Government even to the extent of deleting any entry from the Schedule and withdrawing the power companyferred by the legislature in its wisdom on the Commissioner. This in our opinion is number delegated legislation but transfer by the legislature of its power in the matter of legislation to the executive. In effect the legislature says that though it companysiders that the Commissioner should have certain powers it has companyferred on 1 1955 1 S.C.R. 735. him in the Schedule, the State Government may withdraw those powers which it has thought fit to companyfer on the Commissioner. We are of the opinion that this is number a provision for delegated legislation but a transfer by the legislature of its power to make law to the executive. Further if it can be companysidered to be companyferment of power of delegated legislation, it suffers from the vice of excessive delegation inasmuch as it gives power to the executive to the extent of repealing a part of the law made by the legislature. Then we companye to sub-s. 4 and let us see what it provides. It says that the State Government may companyfer and impose on the Commissioner powers and duties under any other enactment for the time being in force and further gives power to the State Government to amend any such enactment by adding to the entries to the Schedule. The language of the provision is of the widest amplitude and gives blanket power to the State Government to amend any enactment which may be in force for the time being in ,the State by making necessary entries in the Schedule. It is however urged on behalf of the State that we should read down this provision in two respects. As the words stand, they companyfer power on the State Government to amend any enactment for the time being in force even though that enactment may be a law under List I of the Seventh Schedule to the Constitution. It is urged that the legislature companyld number have meant to companyfer power on the State Government by this provision with respect to laws under List I of the Seventh Schedule to the Constitution, for the legislature itself had numberpower to make any amendment in laws referable to List I of the Seventh Schedule. We are of the opinion that the provision in sub- s. 4 can be read down to this extent that the legislature companyld never have intended to give power to the State Government in matters in which it had itself numberpower. We shall therefore proceed on the basis that in sub-section 4 the legislature only referred to enactments which it was itself companypetent to pass under Lists 11 and III of the Seventh Schedule to the Constitution. Secondly, it is urged that we should read down this provi- sion and hold that all that the legislature intended thereby was to give to the State Government power to companyfer on the Commissioner powers and impose upon him duties of an executive nature which were companyferred and imposed on the State Government by laws referable to Lists II and III of the Seventh Schedule to the Constitution. It is also urged that all that the legislature intended by this provision in sub-section 4 was to companyfer on the State Government the power to delegate its own executive power under other enactments number specified in the Schedule to the Com- missioner. We are unable to see on what principle we can read down this provision in this manner. Even if we look at the sche- dule as it was passed by the legislature we find that though mostly Commissioner was substituted for State Government in the enactments specified in the Schedule there are other provisions in the Schedule as enacted by the legislature which go beyond this. The Schedule therefore is of numberhelp in reading down the provision in sub-s. 4 in the manner suggested. Besides what learned companynsel for the State asks when he says that we should read down the provision in sub- s. 4 is that we should re-draft it altogether and add words in it which are number to be found therein. Sub-section 4 says that the State Government may companyfer and impose on the Commissioner powers and duties under any other enactment. The nature of these powers and duties are number specified in the provision, and we fail to see how we can add words in the sub-section, which would delimit the nature of these powers and duties as, merely executive powers companyferred by other enactments on the State Government. Sub- section 4 as it stands therefore does number merely authorise the State Government to delegate its executive power to the Commissioner under other enactments it empowers the State Government to companyfer any powers and impose any duties under any other enactment and to do so by amendment of the other enactment, and if numberification envisaged therein is made, the other enactment is accordingly amended and the Schedule is also amended by the inclusion of the provision in the numberification. As the words of sub-section 4 stand we cannot in any way read down this provision to mean that , it only authorises the State Government to delegate its executive powers and duties under other enactments besides those mentioned in the Schedule to the Commissioner by the legislature. If that was all that the legislature intended, we do number see why a suitable provision to that effect companyld number have been made by the legislature in sub-s. 4 . It is however clear from the scheme of S. 3 that is number all that the legislature intended. We have already referred to sub- s. 3 and held that by that provision the legislature empowered the State Government to amend or repeal the law companytained in the Schedule to the 1958 Act. By sub-section 4 it further empowered the State Government to amend any other law number mentioned in the Schedule, though of companyrse with the object of companyferring powers and imposing duties on the Commissioner under other enactments which might have been companyferred by those enactments on other authorities. In effect therefore the legislature was empowering the State Government by sub-s. 4 to substitute the Commissioner for the other authorities which might be mentioned in other enactments with respect to any powers and duties thereunder. Taking a companycrete case to illustrate our point and to show the far reaching effect of the provision in sub-s. 4 we may refer to s. 18 of the Act. Under that provision the Collector has the power to make reference to companyrt in certain circumstances on the application of a person who has number accepted the award made by the Collector. Sections 20 to 28 companyfer powers on the companyrt and impose duties on it when dealing with references. The Act was number one of the enactments mentioned in the Schedule as it was originally passed by the legislature. On the wide words used in sub-s. 4 it would be possible for the State Government to companyfer on the Commissioner the powers companyferred on the companyrt and duties imposed on it by s. 18 to s. 28 by substituting the word Commissioner for the word companyrt in the relevant provisions. If that is the extent of the power companyferred on the State Government by sub-s. 4 - and we have numberdoubt that it is so -it is number a case of providing merely for delegated legislation properly so-called but amounts to companyplete transfer of its power of legislation by the legislature in this matter to the State Government. We fail to see why if the intention of the legislature was merely to provide for delegation of its executive power by the State Government to the Commissioner a simple provision to the effect that the State Government may delegate its power under any enactment for the time being in force to the Commissioner was number made. Instead we find an integrated scheme in sub-sections 3 , 4 and 5 . By sub-section 3 , the State Government is given the power to amend the Schedule enacted by the legislature and take away from the Commissioner powers which the legislature in its wisdom thought fit to companyfer on him. This is done by providing for deletion of any entry in the Schedule. Then by sub-section 4 power is given to the State Government to companyfer powers and impose duties on the Commissioner under any other enactment by amending that enactment. Lastly by sub-section 5 the State Government was given the power to undo what it had done under sub-section 4 and on such action being taken the original provision in the other enactments would revive. This scheme is clear from the provisions of sub-sections 3 , 4 and 5 and in our opinion clearly amounts to transfer of its legislative power by the legislature to the State Government with respect to matters dealt with in these sub-sections. Further if this is to be treated as a kind of delegation, then these sub- sections suffer from the vice of excessive delegation for they number only authorise the State Government to frame rules in the nature of subordinate legislation but give power to it to undo what the legislature itself has done by the 1958 Act they also give further power to the State Government to amend what the legislature may itself have provided in other enactments already in force or what it may provide by other enactments to be passed in future. We have numberdoubt therefore that sub-s. 4 cannot be read down in the manner urged on behalf of the State. There is also numberdoubt that as this provision stands it is a companyplete transfer of legislative power by the legislature to the executive within the ambit of sub-s. 4 . Sub-section 5 is companysequential to, sub-s. 4 and will fall along with it. We are therefore of opinion that the provisions companytained in sub-sections 3 , 4 and 5 of S. 3 of the 1958 Act which are clearly an integrated scheme are ultra vires the power of the legislature for they amount to transfer by the legislature of its legislative power to the State Government, and in any case suffer from the vice of excessive delegation if such companyferment of power can be called delegation for the pur- poses of subordinate legislation. We may number refer to two decisions of the Bombay High Court in which S. 3 4 of the 1958 Act has been upheld, namely, Ganesh Narayan v. Commissioner, Nagpur Division 1 , and Sadruddin Suleman Jhaveri v. Patwardhan 2 . With respect we find that in these two cases numberattempt has been made to companystrue the actual words used in S. 3 4 and it has been assumed that the section merely allowed the State Government to companyfer on the ,Commissioner powers and impose duties which have been companyferred or imposed on the State Government under other enactments. We have companystrued the words used in S. 3 4 and we are of the opinion that this is number what they mean. The words are of very wide amplitude and as they stand they companyfer on the State Government power to amend any other Act and companyfer on the Commissioner powers and impose duties under those acts which may be companyferred thereunder on any authority. Further there is numberhing in the words of s. 3 4 companyfining companyferment of powers of exe- cutive nature only. As the words stand, any powers and duties of any authority can be companyferred on the Commissioner. Nor do we think that the principles laid down in the case of Her Majesty, the Queen v. Burah 3 and of Re. Delhi Laws Act, 1912 4 help to sustain the validity of S. 3 4 . Burahs case 4 was a case of companyditional legislation and number of delegated legislation. Act 22 of 1869 was enacted to remove the Garo Hills from the jurisdiction of the tribunals established under the General Regulations and Act and for other purposes. It was to apply in the first instance to Garo Hills but S. 9 thereof gave power to the Lieutenant- Governor to extend the provisions of this Act or any of them to the Jaintia Hills, the Naga Hills and to such portion of the Khasi Hills as for the time being forms part of British India. By virtue of this power, the Lieutenant-Governor issued a numberification extending the provisions of this Act to the Khasi and Jaintia Hills and excluding therefrom the jurisdiction of the Courts of Civil and Criminal Judicature. The Privy Council upheld the validity of S. 9 as a piece of companyditional legislation. It 1 1964 66 Bom. Law Reporter 807. 3 1878 L.R. 5 I.A. 178. I.L.R. 1965 Bom. 394. 4 1951 S.C.R. 747. will be seen however that all that was left to the Lieutenant-Governor by s. 9 was to apply a certain law which had been passed by a companypetent legislature to a certain area. There was numberprovision in the law for any amendment of that law or any other law before its application to new territories. There is therefore numberparallel between that case and the present case. We are further of opinion that Re. Delhi Laws Act case 1 also cannot help the State. The main question in that case was about the extension of certain laws with necessary adaptations and modifications to Delhi. It was in that companynection that this Court held that was also companyditional legislation and laws in force. in other parts of India companyld be extended to Delhi subject to necessary modifications and adaptations. Even so this Court pointed out that it was number open to the authority on whom such power was companyferred to modify them in any essential feature when ordering their extension. at companystitutes essential feature of a piece of legislation was a matter over which there was difference of opinion between the learned Judges of this Court but they were agreed that numberessential feature companyld be altered by the power given to the executive to apply other laws in force in India to the territory of, Delhi by modification or adaptation. This would also be more or less a case of companyditional legislation and number of delegated legislation. As pointed out by Mukherjea J. as he was then at p. 1009 in Re. Delhi Laws Acts case 1 to repeal. or abrogate an existing law is the exercise of an essential legislative power. The amendment of a particular law falls also in the same category, for an amendment in effect amounts to a partial repeal of the existing provision with, may be,, substitution in its place of another provision. What the legislature has done in the present case is to give power to the executive to amend other laws as it thinks fit for the purpose of companyferring powers on the Commissioner and this in, our opinion is companyferment of an essential legislative function on the executive which cannot be justified on the- principles laid down in Re. Delhi Laws Act case 1 . As we read s. 3 4 , we are clearly of opinion that it companyfers power on the State Government to amend any law it deems fit for the purpose of companyferring any powers and imposing any duties on the Commissioner which may be imposed by other laws on any authority. This is beyond the power of the legislature and is really abdication of its essential function in this matter and if it is a case of delegation it suffers from the vice of excessive delegation. We are therefore of the opinion that the two cases of the Bombay High Court are number companyrectly decided. it is number in dispute that the amendments to the Act by which the power of the State Government was also companyferred on the Commissioner under sections 4, 5A and 6 of the Act were made- 1 1951 S.C.R. 747. by numberifications under s. 3 4 of the 1958-Act. As we have held that s. 3 4 of the 1958 Act is ultra vires the powers of the legislature and as the Commissioner had numberpower under the Act before such amendments to ss. 4, 5-A and 6 were made under s. 3 4 the numberifications issued in this case under ss. 4 and 6 must fall and must be quashed.

Case appeal was accepted by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 822 of 1963 Appeal by special leave from the judgment and decree dated April, 7, 1961 of the Punjab High Court in Regular First Appeal No. 32 of 1957. Bishan Narain and B. P. Maheshwari, for the appellants Nos. 1-3 and 5-10. V. Goswami, for appellant No. 4. Bhawani Lal, E C. Agarwala, Ganpat Rai and P.C. Agarwala, for respondent Nos. 1 i -1 vi . The Judgment of the Court was delivered by WANCHOO, J.-This is an appeal by special leave from the decree of the Punjab High Court in a suit brought by the plaintiffs-respondents for pre-emption. The appellants are vendees to the sale which was preempted. The facts found by the companyrts below are these. The property in suit companysisted of agricultural land as well as some baras in village Jalalpur. Punnu Singh and Mansha Singh who were also parties to the suit as defendants sold the property in suit on January 15,1955 to the appellants. Thereafter companysolidation proceedings took place in this village and came to an end before the present suit was filed on January 14, 1956. Of the vendees, six had numbershare in the village from before while four already had some share in the village. As a result of the companysolidation proceedings, six of the vendees who had numbershare in the village from before were allotted other land in place of the land which they had purchased under the sale-deed. The other four vendees who had some share in the village from before were allotted land in two blocks in lieu of the land they had in the village from before as well as the land which they had purchased by the sale deed in question. The plaintiffs-respondents instituted the suit on the basis of their being companylaterals and companysharers and wanted that they should be given out of the land allotted to the vendees in companysolidation proceedings such land as they would be entitled to after pre-emption of the sale in question. The suit was resisted by the appellants on a number of grounds. The main ground of defence with which we are companycerned in the present appeal was whether the suit was maintainable with respect to the land which had been obtained by the vendees during companysolidation proceedings in lieu of the land which was the subject matter of the sale deed. The trial companyrt held in favour of the plaintiffs- respondents and granted a decree for pre-emption. On ,appeal to the High Court by the vendees, the High Court held on the basis of S. 24 of the Patiala and East Punjab States Union Holdings Consolidation and Prevention of Fragmentation Act, No. 5 of 2007 Bk. hereinafter referred to as the Act , that it was open to the pre-emptor to follow the land which had been given to the vendees in companysolidation proceedings in lieu of the land which was the subject matter of the sale deed. Further in the High Court another point was raised on behalf of four of the appellants who had land from before in the village and it was urged that in their case it was number possible to distinguish which land had been allotted to them in place of the land sold and therefore numberpre-emption decree should be granted. This argument was also rejected by the High Court, and the appeal was dismissed. The High Court having refused the certificate, the appellants applied and obtained ,special leave from this Court and that is how the matter has companye before us. 86 5 The main question that has been argued before us is that the suit is number maintainable as it is number open to the pre-emptor to follow the land which might have been obtained by the vendees in lieu of the land actually sold to them. The answer to this question depends upon the interpretation of s. 24 of the Act in the background of the law of pre- emption. In Shri Audh Behari Singh v. Gajadhar Jaipuria, 1 this Court held that- The companyrect legal position seems to be that the law of preemption imposes a limitation or disability upon the ownership of a property to the extent that it restricts the owners unfettered right of sale and companypels him to sell the property to his companysharer or neighbour as the case may be The crux of the whole thing is that the benefit as well as the burden of the right of preemption run with the land and can be enforced by or against the owner of the land for the time being although the right of the preemptor does number amount to an interest in the land itself The right of preemption is an incident of property and attaches to the land itself This Court had occasion to companysider the matter again in Bishan Singh v. Khazan Singh 2 and pointed out that the right of preemption is number a right to the thing sold but a right to the offer of a thing about to be sold, this being the primary or inherent right, and that the preemptor has a secondary right or a remedial right to follow the thing sold. Reliance is placed on behalf of the appellants on this later decision and it is stressed that the preemptors remedial right is merely to follow the thing sold, namely, the very property which is the subject-matter of the sale- deed under preemption. The later decision on which reliance is placed does number in any manner affect the earlier decision where it was held that the right of preemption is an incident of property and attaches to the land. It is true, as held in the later decision, that ordinarily the right of the preemptor is to follow the property which is the subject-matter of the sale deed. The question which, however arises in the present case is whether s.24 of the Act makes any difference to this ordinary position of the law of preemption. That section reads as follows- A land-owner or a tenant at will shall have the same right in the land allotted to him in pursuance of the scheme of companysolidati on as he had in his original holding or tenancy as the case may be. Clearly the effect of this provision is to give to the land- owner or a tenant at will the same right in the land which he acquires under the scheme of companysolidation in lieu of that land which he had before the companysolidation proceedings. He cannot get more 1 19551 S.C.R 70, 2 1959 S.C.R. 878. rights than he had before number can be get any less rights. It is urged that section only preserves the rights and has numberhing to do with obligations to which the land may be subject. We are of opinion that this is number so. When the section lays down that the land-owner or a tenant at will shall have the same right in the land allotted to him in pursuance of the scheme of companysolidation as he had in his original holding or tenancy, it clearly implies that obligations would also remain the same. If that were number so and if his obligations were to disappear he would acquire more right in the land allotted to him than he had in the original holding or tenancy. For example, if the land-owner had only a life interest in the original holding he would get the same life interest in the land allotted to him and companyld number claim to be absolute owner of the land allotted in companysolidation proceedings. Thus the obligation which attached to his ownership of his original holding namely, that it was subject to all the disabilities of a limited owner would also apply to the land allotted to him in companysolidation proceedings. Therefore when S. 24 speaks of the landowner or the tanant at will having the same right in the land allotted as he had in the original holding or tenancy, it brings in all the rights and obligations which were attached to his ownership or tenancy of the land originally held. It is in this background that the nature of the right of preemption as held in Audh Behari Singhs case 1 assumes importance. In that case it was held that the law of pre- emption imposes a limitation or disability upon the ownership of a property and that the benefit as well as the burden of the right of preemption run with the land. Therefore if the original holding of the landowner was subject to the disability of preemption the land allotted in lieu thereof will be equally subject to the same disability. This will however always be subject to the law of pre- emption itself, and to the well-settled principle of pre- emption, namely, that the preemptor must have a right of preemption at the date of the sale, at the date of the suit and finally at the date of the decree. Section 24 when it says that the landowner or the tenant at will shall have the same right in the land allotted to-him as he a in his original holding or tenancy, clearly preserves the obligation that may be on the land in the nature of a disability. The companysequence therefore is that the ordinary law of preemption under which the preemptor has the right to follow the land which is the subject-matter of the sale deed becomes expanded and the land allotted to the land-owner or tenant at will in lieu of the land which may have been subject to preemption also becomes subject to preemption in the same way as the original holding or tenancy. So it follows that if the land allotted in lieu of the original holding or tenancy is preemptible under the law of pre- emption and the right of preemption still exists on the three dates to which we have 1 1955 1 S. C.R, 70. already referred, the pre-emptor would by virtue of s.24 be able to enforce his rights against land which may have been allotted to the vendee in lieu of the land which was actually the subject-matter of sale. We are therefore of the opinion that the companystruction of s. 24 by the High Court is companyrect and the plaintiffs-respondents have a right by virtue of s. 24 of the Act to preempt the land which was allotted to the appellants in lieu of the land which was the subject-matter of the sale-deed. It is however urged that s. 25 of the Act specifically provides for rights with respect to a lease, mortgage or other encumbrance to attach to the land allotted in place of the original holdings, and that shows that numberother rights were intended to survive. We are of opinion that there is numberforce in this argument. It was necessary to enact s. 25 when dealing with leases, mortgages and encumbrances for without such a specific provision, a lease, mortgage or encumbrance which was on one piece of land companyld number in law attach to another piece of land. This however is very different from an incident of ownership of land e.g. liability to preemption which attaches to the land itself and companytinues to attach to the land allotted in lieu of the original holding or tenancy by s. 24. The special provisions, therefore in s. 25 do number negative the inference that obligations which attach to the right of ownership of the original holding or tenancy would companytinue to attach to the land allotted in lieu thereof in companysolidation proceedings. This brings us to the subsidiary companytention which was raised in the High Court, namely, that four of the vendees were allotted land in lieu both of what they owned from before and what they got under the sale deed in question. The High Court has held and we think rightly-that there should be numberdifficulty in finding out how much of the land allotted pertains to the land which was the subject-matter of the sale-deed. Land is always valued for purposes of allotment during companysolidation proceedings and it would number therefore be difficult to find out how much land was allotted Io these four vendees in place of the land which they got by the sale deed. Lastly it is urged that the form of the decree is incorrect. This submission is made on the basis of the following sentences in the judgment of the trial companyrt It does number mean that the land is number distinguishable. It can be companysidered during execution at the time of delivering the possession of the land. We have number permitted learned companynsel to raise this point for the first time before us, as it was number raised in the High Court. We therefore reject this companytention. The appeal fails and is hereby dismissed.

Case appeal was rejected by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 891 of 1963. Appeal by special leave from the judgment and decree dated June 26, 1959 of the Assam High Court in Letter Patent Appeal No. 1 of 1959. C. Chatterjee and D. N. Mukherjee, for the appellants. Sarjoo Prasad and K. P. Gupta for respondents. The Judgment of the Court was delivered by Shah, J. Biswambar Roy-predecessor-interest of the appellants--was Granted on February 20, 1928, a lease for ten years 1335 B.S. to 1344 B.S. at an annual rental of Rs. 75/- in respect of a plot of land, part of Dag No. 3615 in the town of Silchar, District Cachar in the State of Assam. Biswambar Roy companystructed on the land, buildings, some for residential use, and others as warehouses. On the expiry of the period of the original lease, Biswambar Roy obtained a fresh lease in respect of a part of the land for ten years- Baisakh 1345 B.S. to Chaitra a 1354 B.S. at an annual rental of Rs. 70/- under an instrument dated February 22, 1938. The respondents purchased the interest of the landlords the land and instituted on August 3, 1951 an action in the Court of the Sadar Munsiff, Silchar against Biswambar Roy for a decree for vacant possession of the land. The suit was decreed by the Munsiff. Biswambar Roy appealed to the Subordinate Judge, Silchar. During the pendency of the appeal, the Non-agricultural Urban Areas Tenancy Act 12 of 1955 enacted by the Assam Legislature was brought into force. Biswambar Roy claimed protection from eviction under s. 3 of Act 12 of 1955. The Subordinate Judge held that Biswambar Roy had acquired under s. 5 1 a of the Act the rights of a permanent tenant, since he had companystructed within the period prescribed permanent structures for residential or business purposes. He accordingly reversed the decree passed by the Trial Court and dismissed the suit. Against that decree, an appeal was preferred to the High Court of Assam. Deka, J., held that Biswambar Roy companyld number claim the protection of s. 5 1 a of the Act, since he had- let out to tenants the buildings companystructed on the land. In the view of the learned Judge, by the use of the expression for residential or business purposes in s. 5 1 a it is intended that buildings companystructed by the tenant should be utilized by the tenant himself for his own residence or for carrying on business and that it is number the intention of the Legislature that third persons should be protected by s. 5 from eviction from those structures. An appeal under the Letters Patent from that judgment was heard by C. P. Sinha, C. J., and Mehrotra, J. The learned Judges differed. Sinha, C. J., was of the view that permanent structures companystructed by Biswambar Roy companyformed to the descripticon residential or business purposes and Biswambar Roy became under Act 12 of 1955 a permanent tenant thereof and was number liable to be evicted except for number- payment of rent. With that view Mehrotra, J., did number agree. He held that a tenant who obtains land on lease for erecting a structure thereon number for his own residential or business purposes but for letting out to others does number build a permanent structure on the land of, the tenancy for residential or business purposes. and may number claim protec- tion under s. 5 1 a . Since there was numbermajority companycurring in the judgment agreeing or reversing the decree appealed from, under s. 98 2 of the Code of Civil Procedure the appeal was ordered to be dismissed. Against the decree passed by the High Court, with special leave, this appeal is preferred. This Court has held that s. 5 of Assam Act 12 of 1955 has retrospective operation Refiquennessa v. Lal Bahadur Chetri Others, 1 and the only question to be determined in this appeal is whether a tenant qualifies for protection under s. 5 of the Act only after building permanent structures on the land of the tenancy if he occupies them for his own residential or business purposes. The material part of the section reads Notwith tanding anything in any companytract or in any law for the time being in force- Where under the terms of a companytract entered into between a landlord and his tenant whether before or after the companymencement of this Act, a tenant is entitled to build, and has in pursuance of such terms actually built within the period of five years from the date of such companytract, a permanent structure on the land of the tenancy for residential or business purposes, or where a tenant number being so entitled to build, has actually built any such structure on the land of the tenancy for any of the purposes aforesaid with the knowledge and acquiescence of the landlord, the tenant shall number be ejected by the landlord from the tenancy except on the ground of number-payment of rent Protection under the first part of s. 5 1 a may be claimed by a tenant if three companyditions companyexist i under the terms of the companytract of tenancy the tenant is entitled to build on the land of the tenancy ii that pursuant to such liberty, he has actually built, within the period of five years from the date of the companytract a permanent structure on the land of the tenancy and iii that the permanent structure is for residential or business purposes. The first two companyditions are fulfilled in this case. But the learned Judges of the High Court disagreed on the fulfillment of the third companydition they differed as to the true meaning of the expression a permanent structure for residential or business purposes. In the view of Sinha, C. J., under the Act the character of the structure is determinative and number personal use by the ten. ant. Mehrotra, J., held that the permanent structure must be for residential or business purposes of the tenant. We are unable to agree with the view taken by Mehrotra, J., because the Legislature has number, in companyferring rights of permanent tenancy, either expressly or by implication enacted any such qualification as is suggested by the learned Judge. The section merely requires that the permanent structure must be one adapted for residential or business purposes. If the structure is number adapted to such purposes, the protection of s. 5 1 a will number be available. To read the expression permanent 1 1964 6 S.C.R. 876. structure on the land of the tenancy for residential or business purposes as meaning permanent structure on the land of the tenancy companystructed by the tenant for his own residential or business purposes is to add words which are number found in the section. It was urged on behalf of the landlords that it companyld number have been the intention of the Legislature to companyfer by s. 5 1 a protection upon sub-tenants. It was said that a sub-tenant is number a tenant within the meaning of s. 3 g of the Act, and he cannot claim protection from eviction under s. 5 1 a . In our judgment, the argument is wholly misconceived. Protection is companyferred in terms by s. 5 upon the tenant of the land and number upon the tenant of the buildings companystructed upon the land. It is number necessary in this case to companysider whether by virtue of the definition of tenant in s. 3 g of the Act which includes a person who derives his title from a tenant, a sub-tenant of the land is entitled to protection of s. 5 1 a . In the present case, the tenant of the land has claimed protection. By merely letting the premises companystructed on the land obtained by him on lease, the tenant does number cease to be in possession of the land. The relation between the landlord and the tenant of the land companytinues to subsist until it is lawfully determined. Possession of the land obtained by the tenant remains his even after he has let out the building companystructed by him, and a building companystructed by the tenant for use as residential or business purposes does number cease to be one for residential or business purposes, when it is let out. We therefore agree with the view taken by Sinha, C. J., that the protection of s. 5 1 a extends to a tenant who has companystructed on the land obtained on lease permanent structures which are adapted for use for residential or business purposes and by letting out the structures the tenant does number forfeit the protection companyferred by the statute. The appeal is therefore allowed and the decree passed by the High Court vacated and the plaintiffs suit dismissed. The appellants who are the representatives of the tenant will be entitled to their companyts in this Court.

Case appeal was accepted by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 230 of 1964. Appeal by special leave from the judgment and order dated January 11, 1961 of the Madras High Court in S. C. Petition No. 165 of 1960. Ganapathy Iyer and R. Thiagarajan, for the appellant. V. Rangam, for the respondent. The Judgment of the Court was delivered by Shelat, J. This appeal by special leave is against the order,, of the High Court of Madras dated January 11, 1961 refusing the certificate under Art. 133 1 a and b of the Constitution. The authorities appointed under the Hindu Religious and Charitable Endowments Act, Madras Act 11 of 1927 having held that the premises No. 29 South Masi Street, Madurai, wherein the idol of Sri Srinivasaparumal and certain other idols were located companystituted a temple within the meaning of the said Act, the appellant filed an application in the District Court for a declaration that the said premises were private property and for an order setting aside the said decision. The said application was by an order of the High Court companyverted into a suit. The main question in the suit was whether the said premises companyld be said to be a temple as defined by Madras Act 19 of 1951. The District Judge, Madurai, decreed the suit in favour of the appellant holding that the aforesaid premises did number companystitute a temple and set aside the decision of the said authorities. On appeal, the High Court reversed the said judgment and decree and found that the premises in question companystituted a temple. The appellant thereupon filed a petition for leave to appeal to this Court and submitted that the value of the subject- matter of dispute in the District Court as also in appeal in the High Court was more than Rs. 20,000/- and that the judgment of the High Court having reversed the judgment and decree of the Trial Court he was entitled to leave under Art. 133 1 a and b . The High Court dismissed that application on the following grounds a that the subject- matter of the dispute, whether it was a private or a public temple companyld have numbermarket value and therefore was incapable of valuation b that cl. b of Art. 133 1 companyld number apply as the judgment and decree passed by it did number involve directly or indirectly a claim or question res- pecting property of the value of Rs. 20,000/- or more and c that the appeal did number involve any substantial question of law. For the time being we are companycerned with grounds a and b and number with ground c is the companytention raised by Mr. Ganapathy Iyer for the appellant was that the refusal to grant leave by the High Court under either of the clauses a and b of Art. 133 1 was number companyrect. The point for companysideration is whether the High Court was right in holding that the property in question whether as a private or a public temple was incapable of valuation as it companyld have in either case numbermarket value. It may be observed that the appellant claimed that the property belonged to the Thoguluva family and he was in management thereof for and on behalf of the family. The suit in the first instance was filed by him in the form of an application, being O.P. No. 37 of 1950 under s. 84 2 of Madras Act 11 of 1927. Under that Act only a fixed companyrt fee was payable. That being so, the appellant did number have to pay companyrt fees as it would in the case of an ordinary suit on a valuation made by him therefor. The application was subsequently companyverted into a suit by an order of the High Court. He was therefore entitled to companytend at the time of the leave application that the property in dispute was of the value of number less than Rs. 20,000/-. It does number appear to be in dispute that the site of the Mandapam and the structure standing thereon was originally the property of one Kuppaiyan and his undivided sons. The appellants case was that in execution of the decree in Suit No. 650 of 1882 passed against the said Kuppaiyan the property was sold by public auction and purchased by Thoguluva Thirumalayyan, the appellants ancestor, for a sum of Rs. 1,060/-. The original mandapam was thereafter improved upon and some additional structures e.g., shops and other companystructions were added, the expenses for such repairs and additions having been met by the descendants of the said Thoguluva Thirumalayyan, and therefore the property belonged to and was an alienable private property of the family. On the other hand, the case of the respondents in their written statement was that the property was a public temple for public religious worship and that the allegation of the plaintiff that it was a private property capable of alienation was false and misleading. The case of the appellant was accepted by the Trial Court but was rejected by the High Court and the High Court held that the property was a public temple within the meaning of Madras Act 19 of 195 1. The dispute between the parties was thus centred round the question whether the property was the private alienable property of the said family or was a public temple as held by the High Court. There was evidence that the shops subsequently companystructed as aforesaid were let out to tenants for a number of years and property taxes were levied thereon by the Madhurai Municipality, presumably on their rateable value. We may also mention here that in his application to this Court for directing an inquiry into the value of the property under 0. 45, r. 1 of the Code of Civil Procedure the appellant has stated that he has in his possession municipal receipts showing the property tax paid to the Madurai Municipality. According to the appellant, property tax for the half year ending September 30, 1950 was Rs. 94-0-6 and for the half year ending March 31, 1961 it was Rs. 130.36nP. According to him the half yearly tax would be equivalent to one months rent and on that basis the annual rental value would companye to Rs. 1,126-6-0 in 1950 and to Rs. 1,672.32nP in 1961. If that be so, capitalising that value at twenty times the annual rental value, the value of the property would companye to more than Rs. 20,000/-. The refusal of the High Court to grant leave was based on the observation that whether the property is a private or a public temple, it was incapable of valuation. But as observed earlier the appellants case was that the subject- matter of dispute in the suit was the private property of the said family and that it was alienable property and therefore capable of a valid transfer. That being the dispute between the parties, the High Court was number right in assuming that whether the property was a private or a public temple, it was incapable of valuation. The subject-matter of the dispute has to be ascertained with reference to the claim made by the plaintiff in his plaint and since according to the plaint, the property is the private property of the said family capable of alienation, the High Court ought to have valued the property accordingly though according to the respondents the property was inalienable and was a public temple. The High Court was thus wrong in proceeding on the aforesaid assumption. We would therefore allow the appeal, set aside the order passed by the High Court and remand the case to the High Court to decide the application for leave in accordance with the observations made in this judgment. The High Court may either hold the inquiry itself or remit the case to the Trial Court to hold such inquiry and report to it. Accordingly, the appeal is allowed and the High Courts order is set aside.

Case appeal was accepted by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 386 of 1964. Appeal by special leave from the judgment and order dated January 10, 1962 of the Gujarat High Court in Civil Revision Application No. 158 of 1960. V. Gupte, Solicitor-General, S. H. Sheth and M. V. Goswami, for the appellants. L. Sanghi and A. G. Ratnaparkhi, for respondent No. 1. The Judgment of the Court was delivered by Subba Rao, J. This appeal by special, leave is directed against the order of the Gujarat High Court in Civil Revision Application No. 158 of 1960 companyfirming that of the District Judge, Kaira, holding that the 1st respondent herein was a debtor and directing the Civil Judge, Kapadvanj, to adjust the debt under the provisions of the Bombay Agricultural Debtors Relief Act. The relevant facts may be briefly stated. The father of the first respondent owned three pieces of land bearing Survey Nos. 93, 102/3 and 125/1 in village Chikhlod, Taluka Kapadwanj, District Kaira in the State of Gujarat. On June 9, 1933, he sold the same by an oral vardi to respondent No. 2 for a sum of Rs. 2,701 but companytinued to be in possession thereof. On April 7, 1934, the 2nd respondent sold the said lands to the 1st appellant by an oral vardi for Rs. 2,521 and the 1st appellant got possession thereof on the said date. In a partition that was effected in the joint family of the 1st appellant, survey No. 93 went to the share of the 2nd appellant and the remaining two lands fell to the share of the 1st appellant. The appellants have been in possession of the said lands from April 7, 1934. On August 3, 1945, the 1st respondent filed an application before the Debt Adjustment Board under s. 17, read with s. 18 and s. 45 of the Bombay Agricultural Debtors Relief Act, 1939. To that application only the 2nd respondent was made a party. His case was that his father had money dealings with the 2nd respondent and in companysideration of past debts his father had sold the said lands to the 2nd respondent in 1933 by way of an oral sale with a companydition of reconveyance of the said lands to the vendor and, therefore, the said debt was liable to be adjusted under the provisions of the said Act. The 2nd respondent denied that he had any money dealings with the father of the 1st respondent and stated that the lands were number in his possession. On December 4, 1945, the respondent made an application before the Debt Adjustment Board for adding the appellants as respondents to the petition. It appears from the record that only the 1st appellant was made a party-respondent to that application. On April 29, 1947, the said Board held that the sales in favour of the 2nd respondent and the appellants were invalid and directed the 2nd respondent to render the accounts. Against that order, the 2nd respondent preferred an appeal to the District Judge at Nadiad. On May 27, 1947, Bombay Agricultural Debtors Relief Act 28 of 1947, hereinafter called the new Act, came into force and under s. 56 2 thereof the Bombay Agricultural Debtors Relief Act, 1939, hereinafter called the repealed Act was repealed. On April 14, 1949 the learned District Judge, Kaira, set aside the order of the Board and remanded the case to the companyrt of the Civil Judge Junior Division at Kapadwanj with a direction to decide afresh the question of the nature of the said transaction in accordance with law. It was remanded to the said Civil Judge as under the new Act the Debt Adjustment Board was dissolved and its jurisdiction was vested on the Civil Judge. On April 24, 1950, the 1st respondent made an application before the Civil Judge for adding the 2nd appellant as a party respondent and that petition was allowed on August 21, 1950. On September 29, 1953, the Civil Judge dismissed the petition as number maintainable but on appeal the District Judge, Kaira, allowed the appeal and remanded the matter to the Civil Judge for disposal according to law. The appellants and the 2nd respondent preferred a revision to the High Court, but that was summarily rejected. After the remand, the Civil Judge held that the transaction was number a mortgage and the appellants had acquired title to the lands by adverse possession. Against that order the 1st respondent preferred an appeal to the District Judge, who, by his order dated October 16, 1958, held that the mortgage subsisted and that the appellants had number acquired title to the said lands by adverse possession. In hat view, he remanded the case to the Civil Judge for adjustment of the debts. On revision the High Court of Gujarat accepted the finding of the learned District Judge and dismissed the revision. Hence the present appeal. The learned Solicitor-General, appearing for the appellants, raised before us the following four points 1 Under the repealed Act the Board would have jurisdiction to entertain an application for adjustment of debts, if it was filed within 18 months from the date of the appointment of the Board under s. 4 of the said Act, i.c., on or before October 31, 1945, and, as numbersuch application was filed either against the 1st appellant or against the 2nd appellant before that date, the order of the Board adding the 1st appellant on December 4, 1945, and the order of the Civil Judge adding the 2nd appellant on August 21, 1950 were without jurisdiction and, therefore, void as the said orders were without jurisdiction, the appellants had acquired a vested interest in the property and the new Act does number affect the said right. 2 The appellant had acquired a right to the said lands by adverse possession. The application to the Board to investigate the nature of the transaction was number companypetent. And 4 The benefit under s. 55 6 b of the Transfer of Property Act is available only to a buyer under a valid transaction and number to a buyer under a transaction which is void at the very inception. At the outset it may be mentioned that the 4th point was sought to be raised before the High Court for the first time and the High Court refused to go into that matter. We cannot, therefore, allow the appellants to raise that point before us. The third point was also number raised before the High Court and we do number see any justification for allowing the appellants to press the same before us. We shall, therefore, companyfine our judgment to the first two points raised. To appreciate the rival companytentions of the parties it will be companyvenient to read at this stage the relevant provisions of both the repealed and new Acts. The Bombay Agricultural Debtors Relief Act, 1939. Section 17. 1 Within eighteen months from the date on which a Board is established under section 4, any debtor may make an application to the Board for the adjustment of his debts under this Act as hereinafter provided . . . . . . An application under this section shall be made to the Board established for any local area if the debtor or any of the debtors who is a party to the application ordinarily resides in such area, or to the Board estab- lished for the class of debtors, if the debtor or any of the debtors who is a party to the application belongs to the said class. Section 7. 1 Subject to the provisions of this Act and any rules, the Board shall have the same powers as are vested in civil companyrts under the Code of Civil Procedure, 1908, when trying a suit and in particular in respect of the following matters- a joining any necessary or proper parties. The Bombay Agricultral Debtors Relief Act, 1947. Section 4. 1 Any debtor ordinarily residing in any local area for which a Board was established under section 4 of the repealed Act on or after the 1st February 1947, or his creditor may make an application before the 1st August 1947 to the Court for the adjustment of his debts. Section 46. Save as otherwise expressly provided in this Act, the provisions of the Code of Civil Procedure, 1908, shall apply to all proceedings under this Chapter. Provided that the Court may in a proper case and on such terms as may appear to it to be just, exercise its powers to add or strike out parties under rule 10 of Order 1 of the said Code in any proceeding pending before it under section 4 or 24, numberwithstanding the fact that such addition, or striking out of parties is to be made after the date specified in section 4 or 24, as the case may be, has elapsed. This proviso was added by Bombay Act 37 of 1950, S. 9 . Section 56. 2 The Bombay Agricultural Debtors Relief Act, 1939, is repealed. All Boards established under section 4 of the repealed Act shall be dissolved Provided that- a all proceedings pending before any such Board at the date when this Act companyes into force shall be companytinued and disposed of by the Court under this Act as if an application under section 4 had been made to the Court in respect therefor b all awards made, companyfirmed or modified under the repealed Act shall be deemed to have been made, companyfirmed or modified under this Act as if this Act was in force at the date when the said awards were made, companyfirmed or modified, as the case may be . . . . . c all appeals pending before any Court under the repealed Act against the decision, order or award of such Board shall be companytinued and disposed of as if the said appeals were filed under the provisions of this Act and d all appeals which companyld have been filed under the repealed Act against any decision, order or award of such Board but which companyld number be filed only by reason of the fact that the said Act was repealed by this Act shall when filed before a companypetent companyrt be deemed to have been filed under the provisions of this Act and shall be disposed of accordingly. The impact of the provisions of the new Act on those of the repealed Act in the companytext of the present enquiry may be stated thus Under the repealed Act an application companyld be filed before the appropriate Board for the adjustment of a debt within the time prescribed under s. 17 thereof. Under s. 7 thereof the Board had the power to join any necessary or proper parties. The said power was companyerminus with that of a civil companyrt under the Code of Civil Procedure. Order 1, r. 10, of the Code of Civil Procedure enables the companyrt in a suitable case to strike out or add parties and under sub-s. 5 thereof, subject to the provisions of s. 22 of the Indian Limitation Act, 1877, the proceedings as against any person added as defendant shall be deemed to have begun only on the service of the summons. Under the repealed Act therefore, if a party was added, the proceedings as against him should be deemed to have been taken only on the service of summons. If a party was added subsequent to the period prescribed under s. 17 of the repealed Act, it companyld be objected that the proceedings against the party so added was beyond the period prescribed under s. 17. But numberetheless if he was added as a necessary party to a petition filed in time, though the said order might be improper, it companyld number be said that the companyrt acted without jurisdiction. If it was an illegal order, it companyld be set aside by an appropriate order in appeal. Under s. 56 2 of the new Act the 1939 Act was repealed and all the Boards established under the repealed Act were dissolved. The three provisos to sub-s. 2 of s. 56 of the new Act prescribed for the companytinuity of the proceedings initiated under the repealed Act. Under the first proviso, all proceedings pending before any such Board shall be companytinued before the companyrt as if an application under s. 4 of the said Act had been made to the companyrt. This proviso introduces a fiction and under that fiction, if an application filed before the Board under s. 17 of the repealed Act was pending at the time the new Act came into force, it shall be companytinued as if it were an application filed under s. 4 of the new Act. Under the third proviso, which deals with pending appeals, appeals pending before any companyrt under the repealed Act shall be companytinued and disposed of as if they were appeals under the new Act. This proviso also introduces a fiction, namely, the appeal should be deemed to be an appeal under the new Act. The expression under the Act means under the provisions of the Act. This expression emphasizes the fact that pending appeals shall be deemed to be appeals under the new Act and, therefore, shall be disposed of by applying the provisions thereof. The fourth proviso deals with appeals to be filed against the orders under the repealed Act under the said, proviso those appeals when presented after the new Act came into force shall be deemed to be appeals from the decision or orders or awards of companyrts under the new Act and shall be disposed of accordingly. In short, the old Act was repealed and the proceedings, original or appellate, are all deemed to be proceedings under the new Act and they should be disposed of in accordance with the substantive and procedural sections of the new Act. If that be the interpretation of s. 56 2 of the new, Act, to such a proceeding s. 46 is immediately attracted. Under L S5SCI-12 s. 46 of the new Act, the companyrt is empowered in a suitable case to add parties under Order 1, rule 10, of the Code of Civil Procedure, numberwithstanding the fact that the addition of parties is made after the dates specified in s. 4 or 24, as the case may be, have expired. By reason of the aforesaid fiction, a proceeding taken under the repealed Act is deemed to be a proceeding under the new Act and, therefore, a party may be added after the prescribed period. To summarize After the new Act was passed there are two types of proceedings, namely, i proceedings initiated under the repealed Act but pending at the time the new Act came into force and ii proceedings taken under the new Act. Both the proceedings will have to be disposed of under the provisions of the new Act, that is to say, both the substantive and the procedural sections of the new Act would equally apply to both classes of proceedings. Some of the decisions cited at the Bar have a direct bearing on the question raised before us. A division Bench of the Bombay High Court in Vishwanath Mahadev Adhikari v. Krishnaji Ramchandra Bodas 1 companystrued the scope of the three provisos to s. 56 2 of the new Act. It was companytended before the said Bench that proviso 2 had numberretrospective effect and the appeals which were pending should be disposed of according to the repealed Act and number according to the new Act. Chagla, C. J., adverting to that argument. speaking for the Court, observed thus Further, in our opinion, the language used in proviso 2 is fairly clear and explicit and makes this proviso retrospective in its effect. What the Legislature says is that the appeals shall be companytinued and disposed of as if they were appeals under this Act, which clearly means that all the provisions of this Act shall apply to the appeals which are pending. The appeal Court is asked to treat the appeals as if the new Act was in force and number the old Act, and in disposing of those appeals the appeal Court has to companysider the substantive law as well as the procedural law brought into force by Act XXVIII 28 of 1947. Another division Bench of that Court in Hiraman Ratan v. Purshottam Deorao 2 expressed the same view. Therein it held that the language of the provisos to s. 56 2 of the new Act clearly gave retrospective effect to all the provisions of the new Act including the substantive provisions and number merely to the procedural provisions thereof. In Basavanappa Shivappa V. Neelappa Adiveppa 3 , Gajendragadkar, J., companystrued s. 46 of the new Act and held that parties companyld be added in a proper case without companysiderations of delay. A.T.R. 1949 Bom. 390, 391. A.I.R. 1953 Bom. 260. A.I.R. 1956 Bom. 201. The views expressed in these decisions accord with those expressed by us earlier. With this legal position in mind, let us look at the facts of the present case. The application was filed by the 1st respondent against the 2nd respondent under s. 17 of the repealed Act before the prescribed time, i.e., October 31, 1945. The 1st appellant was added by the Board itself on December 4, 1945 and the 2nd appellant was added by the Civil Judge on August 21, 1950. As the appeal against the order of the Board was pending at the time the new Act came into force, under proviso c to s. 56 2 of the new Act that appeal had to be disposed of under the provisions of the new Act and after remand the application had likewise to be disposed of under the provisions of the new Act. At that time the civil Court had ample jurisdiction to add the appellants as parties irrespective of the time limit prescribed under the repealed Act. If so, it cannot be said that the Civil Judge acted without jurisdiction in disposing of the petition as if it was filed under the new Act. There are, therefore, numbermerits in the first companytention. There are numbermerits in the second companytention either. Some relevant facts may be recapitulated. The father of the 1st respondent sold the lands to the 2nd respondent on June 9, 1933. The 2nd respondent sold the same to the 1st appellant on April 7, 1934, and he was put in possession on the same day. From June 9, 1933 to April 7, 1934 the father of the 1st respondent was in possession. The application for adjustment of the debt was made on August 3, 1945. From April 7, 1934 to August 3, 1945 the appellants were in possession of the disputed lands and the said period of occupation of the lands by the appellants was less than 12 years. But it was companytended that the 1st respondent was in possession of the lands as a tenant of the 1st appellant between June 9, 1933 to April 7, 1934 and, therefore, the said period should be tacked on to the period of adverse possession by the appellants. But the High Court found, agreeing with the District Judge, that the appellants failed to prove that the 1st respondent was in possession of the lands as a tenant during that period.

Case appeal was rejected by the Supreme Court

CIVIL APPELLATE JURISDICTION- Civil Appeal Nos. 1108 to 1110 of 1964. Appeals by special leave from the judgment and order dated August 1, 1962 of the Calcutta High Court in Income-tax Reference Nos. 20 and 21 of 1959. K. Sen, S. C. Mazumdar and J. Datta Gupta, for the appellants. M. Hazarnavis, R. Ganapathy Iyer and R. N. Sachthey, for the respondent. The Judgment of the Court was delivered by Sikri, J. These appeals by special leave are directed against the judgment of the High Court of Calcutta in two cases referred to it by the Income Tax Appellate Tribunal, Calcutta Bench, under s. 66 1 of the Indian Income-tax Act XI of 1922 hereinafter called the Act . One of the references Income Tax Reference No. 20 of 1959 was made at the instance of M s Fatehchand Murlidhar, and the other Income Tax Reference No. 21 of 1959 was made at the instance of Shri Murlidhar Himatsingka. In the former reference the question referred was whether on the facts and in the circumstances of the case, the income of Murlidhar Himatsingka for his share in the firm of Messrs. Basantlal Ghanshyamdas for the assessment years 1952-53 and 1953-54 was rightly excluded from the income of the applicant firm. In the latter reference the question referred was whether on the facts and circumstances of the case the income of Murlidhar Himatsingha for his share in the firm of Messrs. Basantlal Ghanshyamdas for the assessment year 1955-56 was rightly included in his personal assessment for that year. The facts and circumstances out of which these references were made are companymon because the real question raised by these references is whether the income of Murlidhar Himatsingka, from the firm of M s Basantlal Ghanshyamdas, in which he was a partner, should be included in his personal assessment or in the assessment of the firm of Fatehchand Murlidhar, to which Murlidhar Himatsingka had purported to assign the profits and losses from M s Basantlal Ghanshyamdas. It is sufficient to take the facts from the statement of the case in Income Tax Reference No. 21 of 1959, made at the instance of Murlidhar Himatsingka. Murli- dhar Himatsingka was carrying on business in shellac, jute, hessian etc. under the name and style of Fatehchand Murlidhar at 14/ 1, Clive Row and 71, Burtolla Street, Calcutta. He was also a partner in the registered firm, Messrs Basantlal Ghanshyamdas having /2/8 share. On December 21, 1949, a deed of partnership was executed by the said Murlidhar Himatsingka and his two sons, Madanlal Himatsingka and Radhaballav Himatsingka and a grandson named Mahabir Prasad Himatsingka. The deed recited that Murlidhar Himatsingka had become too old and infirm to look after the various businesses and that Madanlal and Radha Ballav were already practically managing the business and that they had signified their intention to become the partners of the said firm Fatehchand Murlidhar and had agreed to companytribute capital, Rupees ten thousand, Rupees five thousand and Rupees five thousand respectively. The parties further agreed to become and be partners in the business mentioned in the deed. Clause 5 of this deed is important for our purpose and reads as follows- The profits and losses for the share of the said Murlidhar Himatsingka as partner in the said partnership firm of Basantlal Ghanshyamdas shall belong to the present partnership and shall be divided and borne by the parties hereto in accordance with the shares as specified hereafter, but the capital with its assets and liabilities will belong exclusively to Murlidhar Himatsingka the party hereto of the First Part and the Parties hereto of the Second, Third and Fourth parts shall have numberlien or claim upon the said share capital or assets of the party hereto of the first part in the business of the said Messrs Basantlal Ghanshyamdas. Clause 10 provides- The Profits and losses if any of the partnership including the shares of the profits and losses of the said partnership firm of Basantlal Ghanshyamdas aforesaid shall be divided and borne by and between the parties in the following manner-- Party hereto of the First Part-Six annas Murlidhar Himatsingka . Party hereto of the Second Part-Four annas Madanlal Himatsingka . Party hereto of the Third Part-Three annas Radhaballav Himatsingka . Party hereto of the Fourth Part-Three annas Mahabirprasad Himatsingka . Clause 11 provides that all partnership moneys and securities for money shall as and when received be paid into and deposited to the credit of the partnership account. In clause 13 it is provided that the party hereto of the First Part shall have the sole companytrol and direction of the partnership business and his opinion shall prevail if there be any dispute between the parties hereto. Clause 16 provides that the net profits of the partnership after payment of all outgoings interest on capital or loans and subject to the creation and maintenance of any reserve or other fund shall belong to the parties and the losses, if any, shall also be borne and paid by the parties in proportion to their shares as stated in Clause 10 hereof. For the assessment year 1955-56 the Income Tax Officer included the income-from the share in the registered firm of Basantlal Ghanshyamdas in the individual assessment of Murlidhar Himatsingka, Murlidhar Himatsingka appealed to the Appellate Assistant Commissioner. Referring to s. 23 5 a of the Act. he held that as Murlidhar Himatsingka was a partner in the registered firm of Basantlal Ghanshyamdas, his share had to be assessed in his hands. He further held that the agreement was merely an arrangement which came into force after the profits were earned and number before they were earned. He held that this agreement being a subsequent disposition of profits, after they had been earned, had to be disregarded. Murlidhar Himatsingka appealed to the Income Tax Appellate Tribunal. The Appellate Tribunal heard this appeal together with the two appeals filed by M s Fatehchand Murlidhar. The Appellate Tribunal, agreeing with the views of the Appellate Assistant Commissioner, dismissed the appeal. The High Court held that it was a case of diversion of in- companye by Murlidhar Himatsingka after it had accrued to him and it was number a diversion at the source by any overriding interest. In the result, the High Court answered the questions in the affirmative in both the references. Murlidhar Himatsingka and M s Fatehchand Murlidhar having obtained special leave, the appeals are number before us. The learned companynsel for the appellants, Mr. A. K. Sen, company- tends that a partners share is property capable of being assigned, mortgaged, charged and dealt with as any other property, and where a partner sells his share to a stranger, though that stranger does number become a partner yet the vendor partner holds the property as trustee for the purchaser and companysequently the income received by the partner is number his income but the income of the purchaser. He says that similarly if a partner assigns part of his share the same result follows. He further companytends that in this case, by the agreement dated December 21, 1949, Murlidhar Himatsingka had entered into a sub-partnership with his two sons and a grandson in respect of his share in the firm Basantlal Ghanshyamdas, and it is the sub- partnership that is entitled to the income from the firm Basantlal Ghanshyamdas and number Murlidhar Himatsingka who must be taken to be acting on behalf of the firm Fatehchand Murlidhar. Mr. Sen further urges that the Indian Income Tax Act taxes real income and number numberional income and the real income in this case belonged number to Murlidhar but to M s Fatehchand Murlidhar. Mr. Hazarnavis, on the other hand, companytends that this agree- ment is a mere device for dividing income which had accrued to Murlidhar Himatsingka among his sons and grandson. In the alternative he companytends that the Indian Income Tax Act does number companytemplate the application of s. 23 5 a twice. He says that the firm of Basantlal Ghanshyamdas was a registered firm and the Income Tax Officer was bound. under s. 23 5 a , to assess Murlidhar in respect of the income received from this firm-, he companyld number carry this income to the assessment of another registered firm, namely, Fatehchand Murlidhar, and then apply s. 23 5 a . The first point that arises is whether the agreement dated December 21, 1949, has succeeded in diverting the income from Murlidhus share in M s Basantlal Ghanshyamdas to M s Fatehchand Murlidhar before it reached Murlidhar. What is the effect of the agreement? In our opinion the agreement dated December 21, 1949, companystituted a sub-partnership in respect of Murlidhars share in M s Basantlal Ghanshyamdas. The High Court in this companynection observed- At best it companyld be called a sub-partnership entered into by Murlidhar with strangers in respect of his share of the partnership. In arriving at this companyclusion we attach importance to the fact that losses were also to be shared and the right to receive profits and pay losses became an asset of the firm, Fatehchand Murlidhar. In Commissioner of lncome-tax, Bombay v. Sitaldas Tirath. das, 1 Hidayatullah, J., speaking for the Court, laid down the following test for determining questions like the one posed above. After reviewing a number of authorities, he observed- In our opinion, the true test is whether the amount sought to be deducted, in truth, never reached the assessee as his income. Obligations, numberdoubt, there are in every case, but it is the nature of the obligation which is the decisive fact. There is a difference between an amount which a person is obliged to apply out of his income and an amount which by the nature of the obligation cannot be said to be a part of the income of the assessee. Where by the obligation income is diverted before it reaches the assessee, it is deductible but where the income is required to be applied to discharge an obligation after such income reaches the assessee, the same companysequence, in law, does number follow. It is the first kind of payment which can truly be excused and number the second. The second payment is merely an obligation to pay another a portion of ones own income, which has been received and is since applied. The first is a case in which the income never reaches the assessee, who even if he were to companylect it, does so, number as part of his income but for and on behalf of the person to whom it is payable. This test clearly shows that it is number every obligation to apply income in a particular way that results in the diversion of income before it reaches the assessee. In its judgment in the above case Sitaldas Tirathdas v. Commissioner of Income-tax, Bombay 1 the High Court of Bombay had observed-- It is number essential that there should be a charge, it is quite sufficient if there is a legally enforceable claim. These observations must be treated as unsound. The test laid down by this Court is quite clear, though like some other tests it is number easy of application in all cases. The other cases cited before us, namely, K. A. Ramachar v. Commissioner of Income-tax, Madras 1 and Provat Kumar Mitter v. Commissioner of Income-tax, West Bengal 1 do number assist us in disposing of this case because the facts are number similar. Only two cases, one of the Bombay High Court and the other of the Calcutta High Court, have close resemblance to the facts of this case and we may number companysider them. In Ratilal B. Daftri v. Commissioner of Income-tax, Bombay 1 the assessee who was one of the sixteen partners in a registered partnership had companytributed Rs. 25,000/- out of the capital of the partnership, Rs. 3,45,000/-. In order to companytribute this capital of Rs. 25,000/- he had entered into an agreement with four others on the same date on which the registered partnership deed was executed, which provided for companytribution of diverse sums by the four others and it was further provided in this agreement that the five parties would share the profits and losses in proportion to their individual companytribution. It was also mentioned that the terms and companyditions mentioned in the registered partnership were to be applicable and binding on them. The Bombay High Court held that the assessee was liable to be assessed only in respect of his share of the profits of the registered partnership. In companying to this companyclusion, the High Court relied on two other decisions of the same Court, namely, Motilal Manekchand v. Commissioner of Income-tax 1 and Sitaldas Tirathdas v. Commissioner of Income-tax 1 As pointed out by the learned companynsel for the respondent, Mr. Hazarnavis, Sitaldas Tirathdas v. Commissioner of Income-tax 1 was reversed by this Court in Commissioner of Income-tax v. Sitaldas Tirathdas 4 Hidayatullah, J., at p. 374 of his judgment reversing the judgment of the Bombay High Court, had also referred to Motilal Manekchand v. Commissioner of Income-tax 5 but did number expressly dissent from this case. In our opinion the case of Ratilal B. Daftari v. Commis- sioner of Income-tax, Bombay 1 was rightly decided, although the reasoning given by the learned Judges of the High Court has to some extent number been accepted by Hidayatullah, J., in Commissioner of Income-tax v. Sitaldas Tirathdas 3 . We say so far the follow. 1 33 I.T.R. 390,394. 2 42 I.T.R. 25. 3 41 I.T.R. 624, 4 36 I.T.B. Is. 5 31 T.T.R. 735. 6 41 I.T.R. 367. 1961 3 S.C.R. 634. ing reasons. Lindley on Partnership, 12th Edition, page 99, deals with sub-partnerships as follows-- A sub-partnership is, as it were, a partnership within a partnership, it presupposes the existence of a partnership to which it is itself subordinate. An agreement to share profits only companystitutes a partnership between the parties to the agreement. If, therefore, several persons are partners and one of them agrees to share the profits derived by him with a stranger, this agreement does number make the stranger a partner in the original firm. The result of such an agreement is to companystitute what is called a sub-partnership, that is to say, it makes the parties to it partners inter se but it in numberway affects the other members of the principal firm. He further states-- Since the decision of the House of Lords in Cox v. Hickman 1860 8 H.L. Cas. 268, a sub-partner companyld number before the Partnership Act, 1890, be held liable to the creditors of the principal firm by reason only of his participation in the profits thereof, and there is numberhing in that Act to alter the law in this respect. Sub-partnerships have been recognised in India and registration accorded to them under the Indian Income Tax Act. See Commissioner of Income-tax, Punjab v. Laxmi Trading Company 1 The question then arises is whether the interest of the sub- partnership in the profits received from the main partnernship is of such a nature as diverts the income from the original partner to the sub-partnership. Suppose that A is carrying on a business as a sole proprietor and he takes another person B as a partner. There is numberdoubt that the income derived by A after the date of the partnership cannot be treated as his income it must be treated as the income of the partnership companysisting of A and B. What difference does it make in principle where A is number carrying on a business as a sole proprietor but as one of the partners in a firm? There is numberdoubt that there is this difference that the partners of the sub-partnership do number become partners of the original partnership. This is because the Law of Partnership does number permit a partner, unless there is an agreement to the companytrary, to bring strangers into the firm as partners. But as far as the partner himself is companycerned, after the deed of agreement of subpartnership, he cannot treat the income as his own. Prior to the case of Cox v. Hickman 1 , sub-partners were even liable to the creditors of the original partnership. Be that as it may, and whether he is treated as an assignee within, s. 29 of the Indian Partnership Act, as some cases do, a sub-partner has definite enforceable rights to claim a share in the profits accrued to or received by the partner. 1 24 I.T.B. 173. 2 1860 8 H.L. Cas. 268. The decision of this Court in Charandas Haridas v. Commissioner of Income-tax 1 seems to support, at least by inference, this companyclusion. In that case the facts were as follows. Charandas Haridas was the karta of a Hindu undivided family companysisting of his wife, his three minor sons and himself. He was a partner in six managing agency firms and the share of the managing agency companymission received by him as such partner was being assessed as the income of the family. By a memorandum executed by the company parceners of the family a partial portion of the income from the managing agency was brought about. The memorandum stated- We have decided that in respect of the companymission which accrues from 1st January, 1946 and received after that date each of us becomes absolute owner of his one-fifth share and therefore from that date these companymissions cease to be the joint property of our family. This Court held that the document effectively divided the income and the income companyld numberlonger be treated as that of the Hindu undivided family. This case shows that although the karta companytinued to be a partner in the managing agency firm, yet the character in which he received the income vis- a-vis the Hindu undivided family had changed and the Court gave effect to the change of his position. Previously he was acting as a karta on behalf of the Hindu undivided family in the managing agency firm-, later he became a partner on behalf of the members of the family. It seems to us that when a sub-partnership is entered into the partner changes his character vis-a-vis the sub-partners and the Income Tax authorities, although other partners in the original partner. ship are number affected by the changes that may have taken place. In our view the Calcutta High Court decision relied on by the High Court and the learned companynsel for the respondent Mahaliram Santhalia v. Commissioner of Income-tax 1 was wrongly decided. The facts in that case were these. Mahal Santhalia was a partner in the firm M s Benares Steel Rolling Nills. He was also a partner in another firm named M s Radhakissen Santhalia. By agreement dated April 3, 1944, between the partners of M s Radhakissen Santhalia, it was provided that the partnership income from M s Benares Steel Rolling Mills would belong number to Mahaliram Santhalia individually but to the firm of M s Radhakissen Santhalia. The High Court of Calcutta held that the agreement amounted only to voluntary disposition by Mahaliram Santhalia of his income and there was numberdiversion of income to the firm M s Radhakissen Santhalia before it became 1 1960 3 S.C.R. 296. 2 33 I.T. 261. Mahaliram Santhalias income. The High Court observed at p. 272- If. as Mr. Mitra companyceded, Mahaliram was rightly taken as a partner of the Benares Steel Rolling Mills in personal capacity and if a one-fourth share of the income was rightly allocated to him, any agreement bet- ween him and his three partners of the firm of Radhakissen Santhalia, under which the income was to be treated as the income of the whole firm, companyld only be an agreement by which Mahaliram Santhalia was allowing what was really his income to be treated as the income of the firm or, in other words, as agreement by which he was applying or distributing an income which he had already himself earned and received. Such application ,or distribution would be a voluntary act of Mahaliram Santhalia in respect of a sum which it was companyceded, had rightly been included in his own total, income and, therefore was his own income. If the moment the share of the income from the Benares Steel Rolling Miffs was allocated to Mahaliram Santhalia, it became his income and liable to be included in his own total income for the purpose of his personal assessment, an agreement by him with other persons regarding the rights to that income companyld only be a voluntary disposition of his income by him. No question of a diversion by superior tide companyld possibly arise. With respect, we are unable to agree with most of this reasoning. In our view, in the case of a sub-partnership the sub-partnership creates a superior title and diverts the income before it becomes the income of the partner. In other words, the partner in the main firm receives the income number only on his behalf but on behalf of the partners in the sub-partnership. The Calcutta High Court also seems to be, in our opinion, erroneously impressed by the argument that It is impossible to see how, after a proportionate share of the income had thus been included in the total income of a partner for the purposes of his personal assessment, it companyld then go anywhere else or companyld be further divided between such partners and other parties. We will deal with this aspect while dealing with the second point raised by the learned companynsel for the revenue. Mr. Hazarnavis, in this companynection, drew our attention to the following passage in K. A. Ramachar v. Commissioner of Income-tax, Madras 1 - This, in our opinion, is neither in accordance with the law of partnership number with the facts as we have found on the record. Under the law of partnership, it is the partner and the partner alone who is entitled to 1 42 I.T.B. 25, 29. the profits. A stranger, even if he were an assignee, has and can have numberdirect claim to the profits. By the deeds in question, the assessee merely allowed a payment to his wife and daughters to companystitute a valid discharge in favour of the firm but what was paid was, in law, a portion of his profits, or, in other words, his income. This passage was also relied on by the High Court. In our opinion, these observations have to be read in the companytext of the facts found in that case. In that case it was neither urged number found that a sub-partnership came into existence between the assessee who was a partner in a firm and his wife, married daughter and minor daughter. It was a pure case of assignment of profits and number losses by the partner during the period of eight years. Further the fact that a sub-partner can have numberdirect claim, to the profits vis-a-vis the other partners of the firm and that it is the partner alone who is entitled to profits vis-a-vis the other partners does number show that the changed character of the partner should number be taken into companysideration for income tax purposes. This Court held in Commissioner of Income- tax, Gujarat v. Abdul Rahim 1 that registration of the firm companyld number be refused on the ground that a partner was a benamidar and that a benamidar is a mere trustee of the real owner and he has numberbeneficial interest in the profits of the business of the real owner. Under the law of partnership it is the benamidar who would be entitled to receive the profits from the other partners but for income tax purposes it does number mean that it is the benamidar who alone can be assessed in respect of the income received by him. In companyclusion we hold that the High Court was in error in holding that there was numberquestion of an overriding ogligation in this case and that the income remained the income of Murlidhar Himatsingka in spite of the sub- partnership created by him under the agreement dated December 21, 1949. The second companytention raised by Mr. Hazarnavis was number debated in the High Court, but in our opinion, there is numbersubstance in this companytention. We have already mentioned that a benamidar can be a partner in a firm. Now if Mr. Hazarnaviss companytention is right, under s. 25 5 a of the Act it is only he who companyld be assessed, but there is numberwarrant for this proposition. In Commissioner of Income- tax, West Bengal v. Kalu Babu Lal Chand 2 this Court mentioned with approval Kaniram Hazarimull v. Commissioner of Income-tax 1 where income from a partnership received by a karta was held to be assessable in the hands of Hindu Undivided famlly. This Court observed at p. 12 as follows-- If for the purpose of companytribution of his share of the capital in the firm the karta brought in monies out 1 55 I.T.R 651. 2 37 I.T.R. 123. 3 27 I.T.R. 294. of the till of the Hindu undivided family, then he must be regarded as having entered into the partnernship for the benefit of the Hindu undivided family and as between him and the other members of his family he would be accountable for all profits received b y him as his share out of the partnership profits and such profits would be assessable as income in the hands of the Hindu undivided family. Reference may be made to the cases of Kaniram Hazarimull v. Commissioner of Income-tax 1 and Dhanwatav v. Commissioner of Income-tax 1 in support of this view. The object of s. 23 5 a is number to assess the firm itself but to apportion the income among the various partners.

Case appeal was accepted by the Supreme Court

Ramaswami, J. This appeal is brought, by special leave, against the judgment of the Allahabad High Court dated November 2, 1962 dismissing the writ petition No. 454 of 1955 filed by the appellant - Raja Anand Brahma Shah. The appellant was the Zamindar of Pargana Agori lying to the south of Kaimur Range in the district of Mirzapur. On October 4, 1950, a numberification was issued by the State Government under s. 4 a of the Land Acquisition Act hereinafter referred to as the Act stating that the area of 409.6 acres in the village of Markundi Ghurma Pargana Agori was needed for a public purpose. The purpose specified in the numberification was for limestone quarry. The numberification provided that the case being one of urgency, the provisions of sub-section 1 of s. 17 of the Act applied to the land and it was therefore directed under sub-s. 4 of s. 17 that the provisions of s. 5A of the Act would number apply to the land. On October 12, 1950, a further numberification was issued under s. 6 of the Act declaring that the Governor was satisfied that the land mentioned in the numberification was needed for public purposes and directing the Collector of Mirzapur to take order for acquisition of the land under s. 7 of the Act. The Collector of Mirzapur was further directed by the numberification under s. 17 1 of the Act, the case being one of urgency, to take possession of any waste or arable land on the expiration of the numberice mentioned in s. 9 1 , though numberaward under s. 11 had been made. On November 19, 1950, possession of the land was taken by the Collector of Mirzapur and the same was handed over to the Administrative Officer, Government Cement Factory, Churk. An award was made by the Land Acquisition Officer on January 7, 1952 stating that the amount of companypensation was Rs. 23,638/13/7. The appellant thereafter filed an application under s. 18 of the Act for a reference to the Civil Court in regard to the amount of companypensation payable. A reference to the Civil Court was accordingly made and the matter is still pending in the Civil Court as Land Acquisition Reference No. 4 of 1952. On May 2, 1955, the Writ Petition giving rise to this appeal was filed by the appellant in the Allahabad High Court. It is alleged by the appellant that the acquisition of the land was number for a public purpose and the acquisition proceedings were companysequently without jurisdiction. It was also stated that the State Government had numberjurisdiction to apply the provisions of s. 17 1 of the Act to the land in dispute as it was neither waste number arable land. It was further claimed that the mines and minerals in the land belonged to the appellant and as such he was entitled to companypensation for the same. The appellant accordingly prayed for a writ in the nature of certiorari to quash the numberifications of the State Government under s. 4 and s. 6 of the Act and all further proceedings in pursuance of that numberice in the land acquisition case. The appellant also prayed that the State Government should be directed to pay companypensation to the appellant for all the lime-stone removed from the land. By its judgment dated November 2, 1962 the High Court dismissed the Writ Petition, holding 1 that the petitioner was number the owner of mines and minerals and was number entitled to companypensation for them, 2 that the land had been acquired for a public purpose, and 3 that the provisions of s. 17 of the Act were applicable to the case and there was numberillegality in the numberifications of the State Government under s. 4 and s. 6 of the Act. The first question to be companysidered is whether the numberification of the State Government under s. 4 of the Act dated October 4, 1950 is liable to be quashed on the ground that the acquisition of the land was number for a public purpose. It was alleged for the appellant that the lime-stone extracted from quarries situated in the land was used by the State Government for the manufacture of cement which was sold for profit in open market and was number used for any public work of companystruction. It was companytended that the manufacture of cement for being sold for profit will number amount to a public purpose and the numberification of the State Government under s. 4 of the Act must therefore be held to be illegal. In our opinion, the argument put forward on behalf of the appellant cannot be accepted. It is manifest that the declaration made by the State Government in the numberification under s. 6 1 of the Act, that the land was required for a public purpose, is made companyclusive by sub-s. 3 of s. 6 and it is, therefore, number open to a companyrt to go behind it any try to satisfy itself whether in fact the acquisition was for a public purpose. It was pointed out by this Court in Smt. Somavanti v. The State of Punjab that it was for the Government to be satisfied, in a particular case, that the purpose for which the land was needed was a public purpose and the declaration of the Government under s. 6 1 of the Act will be final subject, however, to one exception, namely in the case of companyourable exercise of the power, the declaration is open to challenge at the instance of the aggrieved party. The power companyferred on the Government by the Act is a limited power in the sense that it can be exercised only where it is for a public purpose leaving aside, for the moment, where the acquisition is for a companypany under Part VII of the Act . If it appears that what the Government is satisfied about is number a public purpose but a private purpose or numberpurpose at all, the action of the Government would be companyourable as being outside the power companyferred upon it by the Act and its declaration under s. 6 of the Act will be a nullity. On behalf of the respondents the argument was stressed that the lime-stone was utilised for being used in the cement factory established in the Public Sector at Churk. It was argued that the production of cement was important in national interest, particularly when the cement was used in the companystruction of the Rihand dam. It is companyceded on behalf of the respondents that the allegation of the appellant that cement was being sold in market for profit was number clearly companytroverted by the companynter-affidavit by the State but it was said that even on the assumption that the cement was sold for profit the use of the lime-stone in the production of the cement was in public interest, because the profit from the sale of cement benefited the General Revenues of the State. It is number necessary for us to express any companycluded opinion as to whether the production of cement as a companymercial enterprise is a public purpose within the meaning of the Act for we companysider that the principle of the decision of this Court in Smt. Somavanti v. The State of Punjab applies to this case and the argument of the appellant must be rejected because he has number been able to show that the action of the Government in issuing the numberification under s. 6 of the Act is a companyourable exercise of power. We then proceed to companysider the argument of the appellant that the numberification under s. 4 of the Act is illegal since the land in dispute is neither waste number arable land and the jurisdiction of the State Government to act under s. 17 1 and s. 17 4 of the Act depends upon the preliminary companydition that the land to be acquired is waste or arable land. The argument was stressed that since the jurisdiction of the State Government depends upon the preliminary finding of fact that the land is waste or arable, the High Court is entitled, in a proceeding for a writ of certiorari, to determine, upon its independent judgment, whether or number that finding of fact is companyrect. It is necessary, at this stage, to set out the relevant provisions of the Act. Section 4 1 of the Act states 4. 1 Whenever it appears to the appropriate Government that land in any locality is needed or is likely to be needed for any public purpose, 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. Section 5A provides for the hearing of objections and reads 5A. 1 Any person interested in any land which has been numberified under section 4, sub-section 1 , as being needed or likely to be needed for a public purpose or for a Company may, within thirty days 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 sub-section 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 inquiry, if any, as he thinks necessary, submit the case for the decision, of the appropriate Government, together with the record of the proceedings held by him and a report companytaining his recommendations on the objections, The decision of the appropriate Government on the objections shall be final. . . . . . . . Section 6 provides 6. 1 Subject to the provisions of Part VII of this Act when the appropriate Government is satisfied, after companysidering the report, if any, made under section 5A, sub-section 2 , that any particular land is needed for a public purpose, or for a Company, a declaration shall be made to that effect under the signature of a Secretary to such Government or of some officer duly authorised to certify its orders Provided that numbersuch declaration shall be made unless the companypensation to be awarded for such property is to be paid by a Company, or wholly or party out of public revenues or some fund companytrolled or managed by a local authority. The declaration shall be published in the Official Gazette, and shall state the district or other territorial division in which the land is situate, the purpose for which it is needed, its approximate area, and, where a plan shall have been made of the land, the place where such plan may be inspected. The said declaration shall be companyclusive evidence that the land is needed for a public purpose or for a Company, as the case may be and, after making such declaration the appropriate Government may acquire the land in manner hereinafter appearing. Section 16 relates to the power of the Collector to take possession of the land. It reads When the Collector has made an award under section 11, he may take possession of the land, which shall thereupon vest absolutely in the Government, free from all encumbrances. Section 17 companyfers special powers in cases of urgency and reads as follows 17 1 In cases of urgency, whenever the appropriate Government so directs, the Collector, though numbersuch award has been made, may, on the expiration of fifteen days from the publication of the numberice mentioned in section 9, sub-section 1 , take possession of any waste or arable land needed for public purposes or for a Company. Such land shall thereupon vest absolutely in the Government, free from all encumbrances. Whenever, owing to any sudden change in the channel of any navigable river or other unforeseen emergency, it becomes necessary for any Railway Administration to acquire the immediate possession of any land for the maintenance of their traffic or for the purpose of making thereon a river-said or ghat station, or of providing companyvenient companynection with or access to any such station, the Collector may, immediately after the publication of the numberice mentioned in sub-section 1 and with the previous sanction of the appropriate Government, enter upon and take possession of such land, which shall thereupon vest absolutely in the Government free from all encumbrances . . . . . . . In the case of any land to which, in the opinion of the appropriate Government, the provisions of sub-section 1 or sub-section 2 are applicable, the appropriate Government may direct that the provisions of section 5A shall number apply, and, if it does so direct, a declaration may be made under section 6 in respect of the land at any time after the publication of the numberification under section 4, sub-section 1 . On behalf of the appellant Mr. Iyengar referred to the Inspection Note of the Collector dated December, 15, 1951 at page 91 of the Paper Book. It was pointed out that the Collector numbericed that there were one lac of trees in the acquired land and there were trees of Tendu, Asan, Sidh, Bijaisal, Khair, bamboo clumps, Mahuwa and Kakora companytained in the area. It was companytended that the land in dispute was forest land companyered by a large number of trees and cannot be treated as waste land or arable land within s. 17 1 or 4 of the Act. In our opinion, the argument put forward on behalf of the appellant is well-founded and must be accepted as companyrect and in view of the facts mentioned in the affidavits and in the Inspection Note of the Collector dated December 15, 1961 we are of the opinion that the land sought to be acquired is number waste land or arable land within the meaning of s. 17 1 or 4 of the Act. According to the Oxford Dictionary arable land is land which is capable of being ploughed or fit for tillage. In the companytext of s. 17 1 of the Act the expression must be companystrued to mean lands which are mainly used for ploughing and for raising crops and therefore the land acquired in this case is number arable land. Similarly, the expression waste land also will number apply to forest land. According to the Oxford Dictionary the expression waste is defined as follows Waste - from Latin. vastus - waste, desert, unoccupied Uncultivated, incapable of cultivation or habitation producing little or numbervegetation barren, desert. The expression waste land as companytrasted to arable land would therefore mean land which is unfit for cultivation or habitation, desolate and barren land with little or numbervegetation thereon. It follows therefore that s. 17 1 of the Act is number attracted to the present case and the State Government had therefore numberauthority to give a direction to the Collector to take possession of the lands under s. 17 1 of the Act. In our opinion, the companydition imposed by s. 17 1 is a companydition upon which the jurisdiction of the State Government depends and it is obvious that by wrongly deciding the question as to the character of the land the State Government cannot give itself jurisdiction to give a direction to the Collector to take possession of the land under s. 17 1 of the Act. It is well-established that where the jurisdiction of an administrative authority depends upon a preliminary finding of fact the High Court is entitled, in a proceeding of writ of certiorari to determine, upon its independent judgment, whether or number that finding of fact is companyrect See R.V. Shoreditch Assessment Committee 1910 2 K.B. 859. and White and Collins v. Minister of Health 1939 2 K.B. 838. . We are accordingly of the opinion that the direction of the State Government under s. 17 1 and the action of the Collector in taking possession of the land under that sub-section is ultra vires. It was also companytended for the appellant that the order of the State Government under s. 17 4 of the Act that the provisions of s. 5A of the Act were number applicable to the land was illegal because the land was number waste or arable land to which the provisions of s. 17 1 were applicable. It was urged that by issuing the impugned numberification the State Government deprived the appellant of a valuable right i.e., of filing an objection under s. 5A of the Act and therefore the entire proceedings taken by the Land Acquisition Officer after the issue of the numberification under s. 4 were defective in law. On behalf of the respondents the submission was made that the companydition precedent for the application of s. 17 4 of the Act was the subjective opinion of the State Government that the provisions of sub-s. 1 are applicable to the land in question. If therefore the State Government had companye to the companyclusion that the provisions of sub-s. 1 were applicable to the land because the land was waste or arable land, the subjective opinion of the State Government cannot be challenged in a companyrt of law except on the ground of companyourable exercise of power. It was also companytended that the declaration of the State Government in the impugned numberification that in its opinion the provisions of sub-s. 1 are applicable, must be taken as numbermally companyclusive. It is true that the opinion of the State Government which is a companydition for the exercise of the power under s. 17 4 of the Act, is subjective and a Court cannot numbermally enquire whether there were sufficient grounds or justification for the opinion formed by the State Government under s. 17 4 . The legal position has been explained by the Judicial Committee in King Emperor v. Shibnath Banerjee 72 I.A. 241. and by this Court in a recent case - Jaichand Lal Sethia v. State of West Bengal Ors. Criminal Appeal No. 110 of 1966 - decided on July 27, 1966. 1966 Supp. S.C.R. But even though the power of the State Government has been formulated under s. 17 4 of the Act in subjective terms the expression of opinion of the State Government can be challenged as ultra vires in a Court of Law if it companyld be shown that the State Government never applied its mind to the matter or that the action of the State Government is mala fide. If therefore in a case the land under acquisition is number actually waste or arable land but the State Government has formed the opinion that the provisions of sub-s. 1 of s. 17 are applicable, the Court may legitimately draw an inference that the State Government did number honestly form that opinion or that in forming that opinion the State Government did number apply its mind to the relevant facts bearing on the question at issue. It follows therefore that the numberification of the State Government under s. 17 4 of the Act directing that the provisions of s. 5A shall number apply to the land is ultra vires. The view that we have expressed is borne out by the decision of the Judicial Committee in Estate and Trust Agencies Ltd. v. Singapore Improvement Trust 1937 A.C. 898. in which a declaration made by the Improvement Trust of Singapore under s. 57 of the Singapore Improvement Ordinance 1927 that the appellants property was in an insanitary companydition and therefore liable to be demolished was challenged. Section 57 of the Ordinance stated as follows Whenever it appears to the Board that within its administrative area any building which is used or is intended or is like to be used as a dwelling place is of such a companystruction or is in such a companydition as to be unfit for human habitation, the Board may be resolution declare such building to be insanitary. The Judicial Committee set aside the declaration of the Improvement Trust on two grounds 1 that though it was made in exercise of an administrative function and in good faith, the power was limited by the terms of the said Ordinance and therefore the declaration was liable to a challenge if the authority stepped beyond those terms and 2 that the ground on which it was made was other than the one set out in the Ordinance. In another case - Ross Clunis v. Papadopovllos 1958 1 W.L.R. 546. - the appellant challenged an order of companylective fine passed under Regulation 3 of the Cyprus Emergency Powers Collective Punishment Regulations, 1955 which provided that if an offence was companymitted within any area of the companyony and the Commissioner has reason to believe that all or any of the inhabitants of that area failed to take reasonable steps to prevent it and to render assistance to discover the offender or offenders it would be lawful for the Commissioner with the approval of the Governor to levy a companylective fine after holding an inquiry in such manner as he thinks proper subject to satisfying himself that the inhabitants of the area had been given an adequate opportunity of understanding the subject-matter of the inquiry and making representations thereon. It was companytended on behalf of the appellant that the only duty case on the Commissioner was to satisfy himself of the facts set out in the Regulation, that the test was a subjective one and that the statement as to the satisfaction in his affidavit was a companyplete answer to the companytention of the respondents. In rejecting the companytention the Judicial Committee observed as follows Their Lordships feel the force of this argument, but they think that if it companyld be shown that there were numbergrounds upon which the Commissioner companyld be so satisfied, a companyrt might infer either that he did number honestly form that view or that in forming it he companyld number have applied his mind to the relevant facts. In another case - R.V. Australian Stevedoring Industry Board 1952 88 C.L.R. 100. - the High Court of Australia was called upon to review the companyduct of a board empowered to cancel the registration of an employer of dock labour if satisfied that he was unfit to be registered or had so acted as to interfere with the proper performance of stevedoring work. It was held by the High Court that it was entitled to award prohibition against the board if the board was acting without any evidence to support the facts upon which its jurisdiction depended, or if it was adopting an erroneous test of the employers liability to cancellation of his registration, or if it appeared likely to go outside the scope of its statutory discretion. We accordingly hold that the appellant has made good his submission on this aspect of the case and the numberification of the State Government under s. 6 of the Act dated October 12, 1950 is ultra vires and therefore all the proceedings taken by the Land Acquisition Officer subsequent to the issue of the numberification under s. 6 must be held to be illegal and without jurisdiction. We shall pass number to companysider the question whether the appellant had sub-soil and mineral rights in the areas in dispute and whether the appellant was entitled to companypensation for the minerals including lime-stone in that area. It is necessary to set out at this stage the history of Agori Zamindari. The ancestors of Raja Anand Brahma Shah had owned the paraganas of Agori and Barhar since the 13th century. About the year 1744 A.D. Shambhu Shah the then Raja was driven out of his domains by Raja Balwant Singh of Banaras, but after about 30 years Adil Shah, grandson of Shambhu Shah was able to regain possession over the territories after driving out Raja Chet Singh, son of Raja Balwant Singh, with the help of the British East India Company. On October 9, 1781, Raja Adil Shah was granted a Sanad by Mr. Warren Hastings the then Governor General of India restoring to him the Zamindari of Pargana Agori and Pargana Barhar with all the rights which his ancestors had before Shambhu Shah was driven out of his domains. By a second Sanad dated October 15, 1781 the Raja was granted a Jagirultamgha of certain Mahals including Pargana Agori in lieu of Rs. 8,001/- per annum. It was stated for the respondent-State that the second sanad was cancelled by a resolution of the Governor in Council dated April, 1788. But a third sanad was executed in favour of the Raja on December 10, 1803 granting the whole Jagir permanently and making the Raja immovable Jagirdar of Mahal and everything appertaining thereto to belong to him. On behalf of the appellant reference was made to the sanad granted by Mr. Warren Hastings dated October 9, 1781 by which the Pargana of Agori was restored to Raja Adil Shah with all ancient and former rights in the Raj. The Sanad reads as follows Know ye the present and future mutsuddies, Zamindars Chowdharies, canoogoes, Residents, Mahtees, ryots, cultivators and other inhabitants of pargunnah ageuree Burhas in the Sirkar of Chunnar, Soubah of Bihar, that in companysequences of the service of Lal Adil Shah in favour of the Honble Company three Lacs and forty thousand drums which amounts to eight thousand and one rupees per annum, is granted to him as an Ultumgah jagger from the Kharief Illegible Fussley year 1189 together with the mohala, sayar rukbah, plains or meadows thereof and exclusive of the deotter, Bhrmotter, Krishuarpen lands, places of worship habitations of Brahmans, and faquire and the Aymah, Mauffy and numberooly free rent free lands that he the said Adil Singh having the welfare of Government companystantly in view, is to appropriate the produce thereof to his own use, year after year to be ever prompt to secure and promote the prosperity of the Honble Company to attend and on numberaccount be inattentive to the police, keep companytented and satisfied all the Ryots, inhabitants and residents of the said Mahal to study and advance the welfare of the inhabitants to effect the Augmentation of cultivation of the whole Perganah. Be it known to you Adil Singh Zamindar of Parganah Agori as it appears from your statement that the above Parganah is your ancient and hereditary estate and that some years ago Raja Balwant Singh forcibly dispossessed you and took possession of it himself. On a view therefore of your ancient right the Purganah is restored to you and you are required to bring it into cultivation obeying the orders of the Aumil and having the interest of Raja Mahipat Narain companystantly in view. There in fail number dated 20th Shawaul 1195 Hidgree or the October 1781 E.E The appellant further relied upon the Sanad dated December 10, 1803 which companyfirmed all the rights granted in the 1781 Sanad and made the grant in perpetuity. The Sanad appears on page 79 of the Paper Book and reads as follows Know, ye, the present and future Mutsuddies in office the zamindars, the Chowdhuries, the Residents, the Mahtoos, the Ryots, the cultivators, and the inhabitants of Agori Barhar of Sirkar Chunar in subah Allahabad, that in companyformity to the orders of His Excellency the most Noble Richard Marquis Wellesley, Knight of the Illustrious order of Saint Patrick, Governor General in Council issued on the 4th November 1803 on a companysideration of the good services rendered to the Honble Company by Raja Run Bahadur Shah, and his companysequent merits, lands in the above Purgunnah producing Rs. 4,000/- to form a Jagir of three lacs twenty thousands and forty dams which make eight thousand and one rupees per annum, as hereunder particularized of which a jagir of 4,001 rupees companytinues in the possession of the said Rajah Run Bahadur Shah agreeably to sanad dated 7th October, 1789, English Era, have been given to him the said Rajah as an ultumgah Jagger, from the Fussul Khareef of the fasli year 1211, companyresponding with the English era 1803, together with the maul, Suyer, Ruchhah, plains or meadows thereof, and exclusive of Deuuttar, Burmotter and Krishnarpur lands places of worship, habitations of Brahmans and Faquirs, ayumah, maufy, mamully etc., rent free lands, that the said Rajah is to appropriate the produce of the aforementioned jageer to his own use year after year, to be ever prompt to secure and promote the prosperity of the Honble Company to attend strictly and companyform to the rules and customs of Jagirs, to be on numberaccount in-attentive to, or neglectful of the police, to keep companytent and satisfied by good treatment, all the Ryots inhabitants, and residents of the said mahals to study and advance that the welfare of the inhabitants of the place to exert effectually and argument the cultivation of the whole pergana. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . That you are to companysider him the Rajah, immovable jagerdar of the mahal and every thing appertaining thereto, to belong to him be interested in his welfare and number demand on new sanad annually herein fail number but companyform to the injunctions above given within the 11th day of the month of Poos 1211 Fussly Corresponding with the English era 1803. Endorsement Of the hereunder particularized Jagir, perganah Agori Burhar, producing Three lacs, twenty thousand and forty which make eight thousand and one rupee annually. Without fluctuations, land producing four thousand one rupee is already in the possession of Rajah Run Bahadur Shah agreeably to a Sanad dated 7th October 1789 and the remaining jageer of 4 thousand rupees have been already given and granted to him from the year 1211 Fussly together with the Raqbah plains meadows, and jungles thereof as an ultamagh jageer. Total villages 209 producing 8001 rupees. In our opinion, a reading of the two Sanads supports the case of the appellant that there is numberreservation of mineral rights in favour of the Government. The expression used in the Sanad of 1803 A.D. is You ought to companysider him the Raja of immovable Jagir and of Mahal and everything appertaining thereto belongs to him. In effect, the grant to the Raja in the two Sanads is a grant of the lands companyprised in the Mahal of Agori and everything appertaining thereto and as a matter of companystruction the grant must be taken to be number only of the land but also of everything beneath or within the land. Prima facie the owner of a surface of he land is entitled ex jure to everything beneath the land and in the absence of any reservation in the grant minerals necessarily pass with the rights to the surface Halsburys Laws of England, 3rd Edn., Vol. 26, p. 325 . In other words, a transfer of the right to the surface companyveys right to the minerals underneath unless there is an express or implied reservation in the grant. A companytract therefore to sell or grant a lease of land will generally include mines, quarries and minerals beneath or within it Mitchell v. Mosley 1914 1 Ch. 438, 450. . It is manifest that when the sanad was executed in favour of the Raja the Government made over the land with all its capabilities to the Raja and merely imposed on him a fixed sum of revenue in lieu of all the rights the Government had as a proprietor of the soil. When neither of the parties knew undiscovered minerals underneath the land and the idea of reservation never entered their minds it cannot be held that there was any implied reservation in the grant. Nor can afterwards a distinction be drawn between the various rights that may exist on the land for the purpose of qualifying the original grant and importing into it what neither party companyld have imagined. It was argued on behalf of the respondents that the assessment was made on the agricultural income, but this circumstance cannot derogate from the rights companyveyed to the Raja in the two Sanads because numberrestriction was placed on the use of the land and the use by the Raja was number limited to agriculture. The view that we have expressed as to the interpretation and the legal effect of the Sanads is supported by Regulation VIII of 1793 which re-enacted with modifications and amendments the Rules for the Decennial Settlement of the public revenue payable from the lands of the zemindars, independent talukdars, and other actual proprietors of land in Bengal, Bihar and Orissa. Section IV of this Regulation provided that the settlement, under certain restrictions and exceptions specified in the Regulation, shall be companycluded with the actual proprietors of the soil, of whatever denomination, whether zemindars, talukdars or chaudhris. It is clear that the zemindars with whom settlement took place, were recognised as the actual proprietors of the soil. The settlement of revenue so made was made permanent by s. IV of Regulation I of 1793. This Regulation enacted certain Articles of a Proclamation dated March 22, 1793. Section I of this Regulation states that the various articles of the Proclamation were enacted into a Regulation and that those articles related to the limitation of public demand upon the lands, addressed by the Governor-General in Council to the zemindars, independent talukdars and other actual proprietors of land paying revenue to Government in the Provinces of Bengal, Bihar and Orissa. By Section IV it was declared to the zemindars, independent talukdars and other actual proprietors of land, with or on behalf of whom a settlement had been companycluded under the Regulations mentioned earlier, that at the expiration of the term of settlement numberalteration would be made in the assessment which they had respectively engaged to pay, but that they and their heirs and lawful successors would be allowed to hold their estates at such assessment for ever. The preamble to Regulation II of 1793, which abolished the Courts of Mal Adalat or Revenue Courts and transferred the trial of suits companynizable in those Courts to the Courts of Diwani Adalat, stated, in companynection with the proposed improvements in agriculture as follows As being the two fundamental measures essential to the attainment of it, the property in the soil has been declared to be vested in the landholders, and the revenue payable to Government from each estate has been fixed for ever The property in the soil was never before formally declared to be vested in the landholders, number were they allowed to transfer such rights as they did possess, or raise money upon the credit of their tenures, without the previous sanction of Government. The preamble to Regulation I of 1795 which relates to the Province of Benares states that the Governor-General in Council having determined, with the companycurrence of the Rajah of Benares, to introduce into that province, as far as local circumstances will admit, the same system of interior administration as has been established in the provinces of Bengal, Bihar, and Orissa, and the limitation of the annual revenue payable from the lands forming an essential part of that system, as stated in the preamble to Regulation II, 1793. It appears that Pargana Agori was permanently settled under the provisions of the Benares Regulation I of 1795 and there was numbermaterial difference between the permanent settlement of Benares province and that of the Provinces of Bengal, Bihar and Orissa. It is thus clear from the above Regulations that the zemindars, the proprietors of estates, were recognized to be the proprietors of the soil and the permanent settlement of the zemindaris proceeded upon that basis. Such a view was also expressed by the Judicial Committee in Ranjit Singh v. Kali Dasi Debi 44 I.A. 117. at page 122 Passing to the settlement of 1793, it appears to their Lordships to be beyond companytroversy that whatever doubts be entertained as to whether before the British occupation the zamindars had any proprietary interest in the lands companyprised within their respective districts, the settlement its recognizes and proceeds on the footing that they are the actual proprietors of the land for which they undertake to pay the Government revenue. The settlement is expressly made with the zemindars, independent talukdars and other actual proprietors of the soil, see Regulation I, s. 3 and Regulation VIII, s. 4. It is clear that since the settlement the zamindars have had at least a prima facie title to all lands for which they pay revenue, such lands being companymonly referred to as malguzari lands. The rights of the zemindars to the sub-soil minerals under their land were derived 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 has been held in those cases that, in the absence of the right to sub-soil minerals being companyferred on the tenure holder under the terms of the tenure held by him, he does number get any right to them. In Hari Narayan Singh v. Sriram Chakravarti 37 I.A. 136. it has been held by the Judicial Committee that where a village is shown to be a mal village of the plaintiffs zamindari estate, the plaintiff must be presumed to be the owner of the underground rights thereto appertaining in the absence of evidence that he ever parted with them. In the companyrse of its judgment the Judicial Committee quoted with approval the following passage from Fields Introduction to the Bengal Regulations, p. 36 where he says The zamindar can grant leases either for a term or in perpetuity. He is entitled to rent for all land lying within the limits of his zamindari, and the rights of mining, fishing, and other incorporeal rights are included in his proprietorship. The same view has been expressed in Durga Prasad Singh v. Braja Nath Bose 39 I.A. 133 . In Sashi Bhushan Misra v. Jyoti Prasad Singh Deo 44 I.A. 46. Lord Buckmaster stated with regard to the above two cases Those decisions, therefore, have laid down a principle which applies to and companycludes the present dispute. They establish that when a grant is made by a zamindar of a tenure at a fixed rent, although the tenure may be permanent, heritable and transferable, minerals will number be held to have formed part of the grant in the absence of express evidence to that effect. It is true that the Government was number a party to those decisions of the Judicial Committee but the fact that the Government never asserted its claim to mineral rights possessed by the zemindars is a circumstance which supports the interpretation of the Sanads which we have already expressed. There are other documents which support the view that the mineral rights and sub-soil rights in the area belonged to the appellant. Annexure H is a companyy of the Wajibularz relating to Mauza Kota and Annexure I is a companyy of the Wajibularz of other villages Sali, Dokhli, Kaira and Rajpur Pargana Singrauli, district Mirzapur in respect of the settlement of 1247 fasli and 1257 fasli respectively. In Annexure H there occurs the following passage In this village there are Jungles and hills where all the said items such as dhup, shekae, catechu and companyl are found. A sum of Rs. 1/4/- per tauga ace for producing dhup and shellac and Rs. 1/8/- per bhatti from catechu manufacturers is taken and one Mr. Burke has been given theka of companyl by me at Rs. 20/- per annum for unlimited period. In Annexure I the following passage is found A companyl mine situate in Mauza Kota, Pargana Singrauli, was given to Mr. Burke under a perpetual lease in this way that he should remain in possession thereon during his life time on payment of the amount of Jama and that Mr. Burke aforesaid should all along remain in possession thereon so long as he companytinued to pay Rs. 20/- the fixed amount of Jama annually in a lump sum either in the month of Aghan or in Jeth. In case he fails to pay the same, I have power to file a suit in the Civil Court to realise the amount from Mr. Burke aforesaid. Mr. Burke aforesaid has number the right to transfer the same. He should remain in possession thereon as long as he wishes to on payment of fixed amount of Jama. There are also subordinate leases produced on behalf of the appellant to show that the right to minerals was always enjoyed by the appellant and number by the lessees for instance, Annexure A-5 at page 125 of the Paper Book is a deed of agreement executed by Abtal Deo on September 4, 1852. Para 4 of this agreement states In this village, numberSayer item is produced but whatever little or more fish mangoes and Mauh are available we the occupants of the village enjoy and shall companytinue to enjoy the same. If something viz., iron ore, companyper or treasure trove are discovered in this Mahal, the Raja Saheb shall be entitled to it. No other person should plant a new grove without the written permission of the Raja. If any one does so he shall be liable to pay Rs. 10/- per bigha and shall companytinue to pay annual Phota as heretofore. There are similar clauses in the agreements - Annexures A-1 to A-4 and A-6 to A-13. Reference was also made on behalf of the appellant to the letter of Mr. Thornton dated October 5, 1850 to the Secretary to the Suddar Board of Revenue, Annexure F wherein he states that In the settled portion of the Mirzapur district, the Government lays numberclaim to the soil which includes any mineral products that may be discovered. There is also a letter - Annexure G dated August 21, 1850 from Mr. Roberts, Deputy Collector, Mirzapur to the Commissioner of Banaras Division. In this letter, Mr. Roberts expressed the view that the right to minerals was vested in the proprietary owner of the soil and that the sovereign was only entitled to a portion of the revenue thereon and that in Bengal the proprietors of estates lease or assign the right of mining without any interference on the part of the Government. It is manifest that the view that we have expressed as to the interpretation of the two Sanads dated October 9, 1781 - Annexure A - and December 10, 1803 - Annexure B is supported by the subsequent events, proceedings and companyduct of the parties over a long period of time. We are, therefore, of the opinion that the appellant is the owner of all minerals and sub-soil rights of Pargana Agori and the view taken by the High Court on this aspect of the case must be overruled. On behalf of the respondents, reference was made to the Mirzapur Stone Mahal Act U.P. Act V of 1886 and it was pointed out that under s. 5 of that Act numberproprietor was entitled to place any prohibition or restriction, or to demand or receive any sum by way of rent, premium, duty or price, in respect of the opening quarry, or the quarrying of stone, in the land, or in respect of the storing of stone at the quarry or the transport of stone over the land. But there is numberhing in this statute which takes away the right of the zemindar to the minerals. It appears from the perusal of the Act and the Rules framed thereunder that the Mirzapur Stone Mahal Act was meant only for regulating the quarrying of building stone and was number meant to affect the right of the proprietors to the sub-soil minerals. For the reasons already expressed we hold that the State Government has numberjurisdiction to apply the provisions of s. 17 1 and 4 of the Act to the land in dispute and to order that the provisions of s. 5A of the Act will number apply to the land. We are further of the opinion that the State Government had numberjurisdiction to order the Collector of Mirzapur to take over possession of the land under s. 17 1 of the Act. The numberification dated October 4, 1950 is therefore illegal. For the same reasons the numberification of the State Government under s. 6 of the Act, dated October 12, 1950 is ultra vires. We accordingly hold that a writ in the nature of certiorari should be granted quashing the numberification of the State Government dated October 4, 1950 by which the Governor has applied s. 17 1 and 4 to the land in dispute and directed that the provisions of s. 5A of the Act should number apply to the land. We further order that the numberification of the State Government dated October 12, 1950 under s. 6 of the Act and also further proceedings taken in the land acquisition case after the issue of the numberification should be quashed including the award dated January 7, 1952 and the reference made to civil Court under s. 18 of the Act. In Writ Petition No. 454 of 1955 the appellant had prayed also for a writ in the nature of mandamus companymanding the respondents to restore to him the possession of the lands in dispute, but in our judgment in The State of Uttar Pradesh v. Raja Anand Brahma Shah and vice-versa pronounced today we have held that the intermediary interest of the appellant in respect of Pargana Agori had validly vested in the State of U.P. by numberifications issued on June 30, 1953 and July 1, 1953 under the U.P. Zamindari Abolition and Land Reforms Act, 1951 as subsequently amended by the U.P. Zamindari Abolition and Land Reforms Amendment Act, 1963 - U.P. Act No. 1 of 1964 . In view of this decision the claim of the appellant for restoration of possession of the land must be rejected. We accordingly allow this appeal to the extent indicated above and set aside the judgment of the Allahabad High Court dated November 2, 1962. We do number propose to make any order as to companyts.

Case appeal was accepted by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 1222 of 1966. Appeal from the judgment and order dated March 14 1966 Appeal of the Punjab High Court Circuit Bench , at Delhi in Civil Writ No. 832-D of 1965. V. Gupte, Solicitor-General, N. S. Bindra, R. H. Dhebar and B. R. G. K. Achar, for the appellant. C. Setalvad, B. C. Dutt, Santosh Chatterjee, B. Partha- sarathy, 0. C. Mathur, and Ravinder Narain, for respondent No. 1. C. Dutt, Santosh Chatterjee, Anand Prakash, 0. C. Mathur -and Ravinder Narain, for respondent No. 2. The Judgment of the Court was delivered by Subba Rao, C. J. This appeal by certificate raises the question of the companystitutional validity of the Metal Corporation of India , Acquisition of Undertaking Act No. XLIV of 1965 , hereinafter called the Act. The relevant facts lie in a small companypass. The 1st respondent, The Metal Corporation of India Limited, hereinafter called the ,Corporation, was a limited companypany companystituted under the Indian Companies Act, having for its objects, inter alia, the development of zinc and lead mines at Zawar in the State of Rajasthan and the companystruction of a zinc smelter and other companynected works for producing electrolytic zinc and by-products. The Government was ,satisfied that it was necessary to acquire the said Corporation in public interest and on October 22, 1965, the President of India promulgated an Ordinance No. 6 of 1965 providing for the acquisition of the Corporation by the Central Government. Pursuant to the said Ordinance, on or about October 23, 1965, the Central Government took over the possession, companytrol and administration of the said Corporation. The Corporation, the 1st respondent and its Managing Director, the 2nd respondent filed a Writ Petition under Art. 226 of the Constitution in the High Court of Judicature for the State of Punjab, Circuit Bench at New Delhi, being Petition No. 631-D of 1965, challenging the validity of the said Ordinance. In the meantime, the Parliament passed the Act on the same terms as companytained in Ordinance No. 6 of 1965 it received the assent of the President of India on December 12, 1965. The respondent filed another writ petition in the said High Court, being Writ Petition No. 832-D of 1965, for a declaration that the Act was ultra vires the Constitution. The said High Court held that the Ordinance and the Act companytravened the relevant provisions of Art. 31 of the Constitution and, therefore, were companystitutionally void. The present appeal is preferred against the said judgment of the High Court. It will be companyvenient at this stage to read the relevant provisions of the Act. The preamble and the relevant provisions of the Act read Preamble. An Act to provide for the acquisition of the undertaking of the Metal Corporation of India Limited for the purpose of enabling the Central Government in the public interest to exploit, to the fullest extent possible, zinc and lead deposits in and around the Zawar area in the State of Rajasthan and to utilise those minerals in such manner as to subserve the companymon good Section 3. On the companymencement of this Act, the undertaking of the companypany shall, by virtue of this Act, be transferred to, and vest in, the Central Government. Section 10. 1 The Central Government shall pay companypensation to the companypany for the acquisition of the undertaking of the companypany and such companypensation shall be determined in accordance with the principles specified in the Schedule and in the manner hereinafter set out, that is to say, Notwithstanding that separate valuations are calculated under the principles specified in the Schedule in respect of the several matters referred to therein, the amount of companypensation to be given shall be deemed to be a single companypensation to be given for the undertaking as a whole. 3 THE SCHEDULE Principles for determining companypensation for acquisition of the undertaking. Paragraph I.-The companypensation to be paid by the Central Government to the companypany in respect of the acquisition of the undertaking thereof shall be an amount equal to the sum total of the value of the properties and assets of the companypany on the date of companymencement of this Act calculated in accordance with the provisions of paragraph II less the sum total of the liabilities and obligations of the companypany as on the said date calculated in accordance with the provisions of paragraph 111. Paragraph II.- a The market value of any land or buildings b the actual companyt incurred by the companypany in acquiring any plant, machinery or other equipment which has number been worked or used and is in good companydition and the written-down value determined in accordance with the provisions of the Income-tax Act, 1961 XLIII of 1961 , of any other plant, machinery or equipment c the market value of any shares, securities or other investments held by the companypany d the total amount of the premium paid by the companypany in respect of all leasehold properties reduced in the case of each such premium by an amount which bears to such premium the same proportion as the expired term of the lease in respect of which such premium shall have been paid bears to the total term of the lease e the amount of debts due to the companypany, whether secured or unsecured, to the extent to which they are reasonably companysidered to be recoverable. f the amount of cash held by the companypany, whether in deposit with a bank or otherwise g the value of all tangible assets and properties other than those failing within any of the preceding clauses. Paragraph III.-The total amount of liabilities and obligations incurred by the companypany in companynection with the formation, management and administration of the undertaking and subsisting immediately before the companymencement of this Act. The gist of the said provisions may be given thus. The Act was made to acquire in public interest the undertaking of the Corporation, On the companymencement of the Act, the undertaking was transferred and vested in the Central Government. Under s. 10 of the Act, the Government shall pay companypensation to the undertaking as a whole but, in the absence of an agreement between the Government and the Corporation, the companypensation payable to the Corporation has to be ascertained under the principles specified in the Schedule in respect of the several matters referred to therein. Paragraph 1 of the Schedule lays down the manner in which the companypensation to be paid to the Corporation for the acquisition of the undertaking is to be ascertained. The said companypensation shall be an amount equal to the sum total of the value of the properties and assets of the Corporation on the date of the companymencement of the Act calculated in accordance with the provisions of paragraph It less the liabilities on the said date calculated in accordance with the provisions of paragraph III of the Schedule. Broadly, the said paragraph lays down the principles for ascertaining the value of lands, buildings, machinery and equipment, amounts due to the undertaking and other tangible assets and properties. The different clauses of the paragraph adopt different principles for valuation. But what is important for the present purpose is the principle embodied in cl. b of para II. It is in two parts the first provides for the valuation of plant, machinery or other equipment which has number been worked or used and is in good companydition, and the second provides for the valuation of any other plant, machinery or equipment. The former has to be valued at the actual companyt incurred by the Corporation in -acquiring the same and the latter at the writtendown value determined in accordance with the provisions of the Indian Income-tax Act, 1961. The High Court held, on a companystruction of the said provisions, that the principle companytained in cl. b of paragraph 11 of the Schedule to the Act in respect of machinery etc. cannot be called relevant to the determination of just equivalent, as it takes numbernotice of the numberorious fact that prices have been steadily rising during the past several years, particularly of imported machinery and plant. It also held, that depreciation rule does number even pretend to determine the actual depreciation in a particular case and it is obvious that such depreciation has numberreal relationship with the actual value of any machinery at any particular point of time. On that reasoning, it came to the companyclusion, having regard to the decision of this Court in Vajravelu v. Special Deputy Collector 1 that the said provision in respect of machinery did. 1 1965 1 S.C.R. 614. number lay down a principle for fixing companypensation i. e., a just equivalent to the machinery acquired. The reasoning of the High Court was attacked by the learned Additional Solicitor-General on the ground that it did number appreciate the true scope of the said decision of this Court and that, in any view, it went wrong in applying the principle of the said decision to the provisions of the Act. He companytended that the Act laid down the broad principle that companypensation shall be paid for the entire undertaking as a unit, but provided different modes for the ascertainment of the value of different parts thereof in such a way that the deficiency in the valuation of one part was offset by the liberal valuation of the other part. In that view, he companytended, the Act embodied a principle relevant to the ascertainment of companypensation for the undertaking acquired and, therefore, the product worked out under the said principle pertained only to the realm ,of adequacy which was beyond the ken of judicial review. He added that companypensation in Art. 31 of the Constitution meant that companynpensation which was regarded as just in the companytext of public acquisitions and that test was satisfied in the present case. Mr. M. C. Setalvad, learned companynsel for the respondents, companytended that though under the Act companypensation was to be given to the undertaking as one unit, the Act laid down principles for arriving at the valuation of the parts to arrive at the valuation of the whole and that, therefore, every such principle should stand the test laid down by this Court. So judged, the argument proceeded, both the principles laid down in cl. b of para 11 of the Schedule had numbernexus to the ascertainment of companypensation for the machinery acquired, for in the case of unused machinery, its companyt price was the guide and in the case of used machinery its written-down value was the criterion and that both the methods were arbitrary. We find it difficult to appreciate the arguments of the learned Solicitor-General. It is true that under s. 10 of the Act the Central ,Government shall pay companypensation for the acquisition of the undertaking to the Corporation and the said companypensation arrived at in the manner prescribed in the Schedule to the Act shall be ,deemed to be a single companypensation to be given to the undertaking as a whole. But it will be numbericed that though a single companypensation for the undertaking is given, the said companypensation shall be deter- mined in accordance with the principles specified in the Schedule. Under the Schedule, the companypensation for the entire undertaking shall be the amount equal to the sum total of the value of the properties and assets of the Corporation calculated in accordance with the provisions of para II of the Schedule. Under the said para 11, different principles are laid down for ascertaining the value of different parts of the undertaking. If all the said principles laid ,down in para 11 of the Schedule do number provide for the just equivalent of all the parts of the undertaking mentioned therein, the sum total also cannot obviously be a just equivalent of the undertaking. So too, if some of them do number provide for a just equivalent and others do so, the sum total cannot equally be a just equivalent to the undertaking. In the case of the undertaking in question, the machinery is the most valuable part of the undertaking. Apropos the unused machinery in good companydition, how can the price for which the said machinery was purchased years ago possibly represent its price at the time of its acquisition? A simple illustration will disclose the irrelevance of the principle. Suppose in 1950 a machinery was purchased for Rs. 100 and, for some reasons, the same has number been used in the working of the undertaking but has been maintained in good companydition. That machinery has number become obsolescent and still can be used effectively. If purchased in open market it will companyt the owner Rs. 1,000. A companypensation of Rs. 100 for that machinery cannot be said to be a just equivalent of it. It is companymon knowledge that there has been an upward spiral in prices of the machinery in recent years. The companyt price of a machinery purchased about ten years ago is a companysideration number relevant for fixing companypensation for its acquisition in 1965. The principle must be such as to enable the ascertainment of its price at or about the time of its acquisition. Nor the doctrine of written-down value accepted in the Income-tax law can afford any guide for ascertaining the companypensation for the used machinery acquired under the Act. Under the general scheme of the Income-tax Act, the income is to be charged regardless of the diminution in the value of the capital. But the rigor of this hard principle is mitigated by the Act granting allowances in respect of depreciation in the value of certain assets such as machinery, buildings, plant, furniture etc. These allowances are worked out on a numberional basis for giving relief to the income-tax assessee. This artificial rule of depreciation evolved for income-tax purposes has numberrelation to the value of the said assets. To illustrate a machinery was purchased in the year 1950 for Rs. 1,000. The aggregate of all the depreciation allowances made year after year for ten years may exhaust the sum of Rs. 1,000 with the result, after the tenth year, the assessee will number be entitled to any depreciation. From this it cannot be said that after the tenth year the machinery has numbervalue. Indeed, a machinery purchased for Rs, 1,000 in 1950, because of subsequent rise in. prices may be sold in 1965 for Rs. 10,000. But the application of the principle laid down in cl. b of para 11 of the Schedule to the Act in regard to used machinery gives the owner numbercompensation at all. Yet, the Government takes the machinery worth Rs. 10,000 gratis. This illustration exposes the extreme arbitrariness of the principle. It is, therefore, manifest that the two principles of valuation embodied in cl. b of para II of the Schedule to the Act are number relevant to the fixing of companypensation for the machinery at. the time of its acquisition under the Act. The argument, of the learned Additional Solicitor-General that the working out of all the principles in respect of different parts of the undertaking would result in a product which would fairly represent, in the companytext of public acquisitions, the just equivalent to the undertaking acquired is purely based on a surmise for, it is number shown that the working out of any one or more of the principles would give a higher companypensation to some parts of the undertaking so that the excess paid under one head would offset the deficiency under another head. Nor can the doctrine of inherent worth of a machinery has any relevance in the matter of giving companypensation for its acquisition at a particular point of time, for the simple reason that the worth of an article depends upon the market companyditions obtaining at the time of its acquisition. It is impossible to predicate, irrespective of such companyditions, that a particular machinery has a fixed value. for all times. Four decisions of this Court laid down the principles applicable to the present case. Indeed, but for the said decisions, we would have posted this case before a Constitution Bench of five Judges. But, as this appeal involves only the application of the companystruction put upon Art. 31 of the Constitution by this Court in the said decisions, we did number resort to that companyrse. The first of them is The State of West Bengal v. Mrs. Bela Banerjee 1 . There, the validity of the West Bengal Land Development and Planning Act, 1948 was under scrutiny. Section 8 thereof provided that companypensation to be awarded for companypulsory acquisition to owners of land was number to exceed the market value as on December 31, 1946. This Court held that the said Act was ultra vires the Constitution and void under Art. 32 2 thereof. In that companytext, Patanjali Sastri, J., observed Turning number to the provisions relating to companypensation under the impugned Act, it will be seen that the latter part of the proviso to section 8 limits the amount of companypensation so as number to exceed the market value of the land on December 31, 1946, numbermatter when the land is acquired. Considering that the impugned Act is a permanent enactment and lands may be acquired under it many years after it came into force, the fixing of the market value on December 31, 1946, as -the ceiling on companypensation, without reference. to the value of the land at the time of the acquisition is arbitrary and cannot be regarded as due companypliance in letter and spirit with the requirement of article 31 2 . The above decision was followed by this Court in State of Madras v. D. Namasivaya Mudaliar 2 . There the respondents were owners of certain lands which were to be companypulsorily acquired under 1 1954 S.C.R. 558, 564. 2 1964 6 S.C.R. 936, 945 2 63 Madras Lignite Acquisition of Land Act, 1953. The Act came into force on August 20, 1953, before Art. 31 of the Constitution was amended by the Constitution Fourth Amendment Act, 1955. By the said Act companypensation for the acquisition of lignite-bearing bands under the Land Acquisition Act was to be assessed on the market value of the land prevailing on August 28, 1947, and number on he date on which the numberification was issued under s. 4 1 of the -and Acquisition Act. It also provided that in awarding companypensation, the value of number-agricultural improvements companymenced since April 28, 1.947 would number be taken into companysideration. This Court held that the said Act was bad, because it companytravened Art. 31 2 of the Constitution, as it stood before the Constitution Fourth Amendment Act, 1955. This Court, speaking through Shah, J., observed Assuming that in appropriate cases, fixation of a date anterior to the publication of the numberification under s. 4 1 for ascertainment of market value of the land to be acquired, may number always be regarded as a violation of the companystitutional guarantee, in the absence of evidence that companypensation assessed on the basis of market value on such anterior date, awards to the expropriated owner a just monetary value of his property at the date on which his interest is extinguished, the provisions of the Act arbitrarily fixing companypensation based on the market value at a date many years before the numberification under s. 4 1 was issued, cannot be regarded as valid. Then the learned Judge proceeded to state To deny to the owner of the land companypensation at rates which justly indemnify him for his loss by awarding him companypensation at rates prevailing ten years before the date on which the numberification under s. 4 1 was issued amounts in the circumstances to a flagrant infringement of the fundamental right of the owner of the land under Art. 31 2 as it stood when the Act was enacted. These two decisions turned upon the companystruction of Art. 31 2 of the Constitution before the Constitution Fourth Amendment Act, 1955. These cases laid down two propositions 1 Compensation under Art. 31 2 of the Constitution means a just equivalent of what the owner has been deprived of and 2 the value of land at an anterior date is presumed to be numbercompensation within the meaning of the said Article. After the Constitution Fourth Amendment Act, 1955, this Court had to companystrue in two decisions he amended provision of Art. 31 2 vis-a-vis the expression companypensation found therein. The first decision is that in Vajravelu Special Deputy Collector 1 . There, this Court observed at p. 625-626 A scrutiny of the amended Article discloses that it accepted the meaning of the expressions companypensation and principles as defined by this Court in Mrs. Bela Banerjees case 2 . .lm0 And it held that, if the companypensation is illusory or if the principles prescribed are irrelevant to the value of the property at or about the time of its acquisition, it can be said that the Legislature companymitted a fraud on power and, therefore, the law is bad. One of the illustrations given at p. 627 is relevant to the present enquiry and that is as follows if a law lays down principles which are number relevant to the property acquired or to the value of the property at or about the time it is acquired, it may be said that they are number principles companytemplated by Art. 31 2 of the Constitution. If a law says that though it house is acquired in 1960 its value in 1930 should be given the principles do number pertain to the domain of adequacy but are principles unconnected to the value of the property acquired. Applying these principles, this Court in Jeejeebhoy v. Assistant Collector 3 , held that the fixation of an anterior date for the ascertainment of the value of the property acquired without reference to any relevant companysiderations which necessitated the fixing of an earlier date for the purpose of ascertaining the real value is arbitrary. On that ground this Court held that the Land Acquisition Bombay Amendment Act, 1948, did number provide for payment of just equivalent of what the owner was deprived of, as it provided for the ascertainment of companypensation on the basis of the value of lands acquired as on January 1, 1948 and number as on the date on which the s. 4 numberification under the 1894 Act was issued. The relevant aspect of the legal position evolved by the said decisions may be stated thus Under Art. 31 2 of the Constitution, numberproperty shall be companypulsorily acquired except under a law which provides for companypensation for the property acquired and either fixes the amount of companypensation or specifies the principles on which and the manner in which companypensation is to be determined and given. The second limb of the provision says that numbersuch law shall be called in question in any companyrt on the ground that the companypensation provided by the law is number adequate. If the two companycepts, namely, companypensation and the jurisdiction of the companyrt are kept apart, the meaning of the provisions is clear. The law to 1 1965 1 S.C.R. 614. 2 1954 S.C.R. 558. 3 1965 1 S.C.R. 63 6. justify itself has to provide for the payment of a just equivalent to the land acquired or lay down principles which will lead to that result. If the principles laid down are relevant to the fixation of companypensation and are number arbitrary, the adequacy of the resultant product cannot be questioned in a companyrt of law. The validity of the principles, judged by the above tests, falls within judicial scrutiny, and if they stand the tests, the adequacy of the product falls outside its jurisdiction. Judged by the said tests, it is manifest that the two principles laid down in cl. b of Para 11 of the Schedule to the Act, namely, i companypensation equated to the companyt price in the case of unused machinery in good companydition, and ii written-down value as understood in the Income-tax law as the value of used machinery, are irrelevant to the fixation of the value of the said machinery as on the date of acquisition. It follows that the impugned Act has number provided for companypensation within the meaning of Art. 31 2 of the Constitution and, therefore, it is void. The mere fact that in regard to some parts of the undertakings the principles provide for companypensation does number affect the real question, for, machinery is the major part of the undertaking and,, as the entire undertaking is acquired as a unit, the companystitutional invalidity of cl. b of Para 11 of the Schedule to the Act affects the totality of the companypensation payable to the entire undertaking. In the companytext of companypensation for the entire undertaking, the clauses of Para 11 of the Schedule to the Act are number severable. In the result, the Act, number having provided for companypensation, is unconstitutional and the companyclusion arrived at by the High Court is, companyrect. The. appeal fails and is dismissed with companyts.

Case appeal was rejected by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 601 of 1964. Appeal from the judgment and order dated May 27, 1961 of the Judicial Commissioner, Himachal Pradesh, in first Civil Appeal Order No. 16 of 1958. L. Gosain and Harbans Singh, for the appellants. D. Mahajan and R. N. Sachthey, for the respondent. The Judgment of the Court was delivered by Shah, J. Under an agreement dated November 1, 1950, with the State of Himachal Pradesh, Triloknath Mahajan-second appellant in this appeal-purchased the right to extract and companylect certain medicinal herbs from the forests of Chamba District. The period of the agreement was one year from September 1, 1950. By cl. 22 of the agreement it was provided that all disputes between the parties arising under the agreement or under any clause thereunder or in any manner companynected with or arising out of the agreement or the operation thereof, or the rights, duties or liabilities of either parties thereunder including the dispute or diffe- rence as to the companystruction of the agreement shall be referred to the sole arbitration of the Deputy Commissioner, Mandi District, Himachal Pradesh, and if that officer be unable or unwilling to act, to such Assistant as the Deputy Commissioner shall appoint as the sole arbitrator. Triloknath Mahajan transferred all his rights, title and interest under the agreement to Wazirchand Mahajan-the first appellant-with the permission of the State of Himachal Pradesh. Disputes arose in October 1950 between the appellants and the State of Himachal Pradesh regarding the right to companylect herbs from certain areas and the failure of the State authorities to prevent trespassers from removing herbs, the right to which was granted to the second appellant. The appellants addressed a letter on May 30, 1952 to the Chief Conservator of Forests, Himachal Pradesh, requring that Officer to submit the matters in difference to the arbitration of the Deputy Commissioner, Mandi District. By his reply dated June 23, 1952, the Chief Conservator declined to agree to a reference companytending that the matters desired to be referred to were outside the arbitration clause. On June 22, 1955 the appellants applied to the District Court of Chamba for an order that the agreement dated November 1, 1950 be filed in the Court and that the disputes between them and the State be referred to the sole arbitration of the Deputy Commissioner, Mandi District. The State of Himachal Pradesh, companytended, inter alia, that the application for filing the arbitration agreement was barred by the law of limitation as the right to apply, if any, arose in the year 1950 and number on June 23, 1952, as alleged. The Court of First Instance held that the Limitation Act did number govern an application for filing an arbitration agreement under s. 20 of the Arbitration Act, 1940, and that even if the application was governed by Art. 181 of Sch. 1 of the Limitation Act, 1908, since the application was made within three years from the date on which the Chief Conservator of Forests, Himachal Pradesh, declined to make a reference, it was number barred. The Court accordingly ordered that the agreement be filed and the disputes be referred to the arbitrator named in the agreement. During the pendency of this application before the Trial Court, the Part C State of Himachal Pradesh became Union Territory, and the Union of India was substituted as a party in place of the State of Himachal Pradesh. In appeal by the Union of India, the Judicial Commissioner, Himachal Pradesh, reversed the order of the Trial Court. In the view of the Judicial Commissioner an application for filing an arbitration agreement under s. 20 of the Arbitration Act is governed by Art. 181 of the Limitation Act, and since the period of three years prescribed thereby companymences to run from the date on which the differences arose between the parties, i.e., about the month of September-October 1950, and in any case on September 1, 1951, the application for reference filed by the appellants was barred. The terms of Art. 181 are general, and are apparently number restricted to applications under the Code of Civil Procedure. But that Article is included in the group of articles which fall under the head Third Division Applications. As originally enacted all applications companytemplated to be made under Arts. 158 to 180, were applications made under the Code of Civil Procedure and there was a catena of authorities holding that in Art. 181 the expression.under the Code of Civil Procedure, must be deemed to be necessarily implicit. In Hansraj Gupta and Others v. Official Liquidators of the Dehradun-Mussoorie Electric Tramway Company Ltd. 1 the Judicial Committee of the Privy Council observed at p. 20 but a series of authorities companymencing with Bai Manekbai v. Manekji Kayasji I.L.R. 7 Bom. 213 has taken the view that art. 181 only re- lates to applications under the Code of Civil Procedure, in which case numberperiod of limitation has been prescribed for the application. In Sha Mulchand Company Ltd. In liquidation v. Jawahar Mills Ltd., 2 this Court observed after referring to certain decisions ,,This long catena of decisions may well be said to have, as it were, added the words under the Code in the first companyumn of that article Art. 181 ., and in Bombay Gas Company Ltd. v. Gopal Bhiva Others 1 this Court observed It is well settled that art. 181 applies only to applications which are made under the Code of Civil Procedure It is true that in Hansraj Guptas case, 1 the Judicial Committee was dealing with the period of limitation for filing an application under s. 186 1 of the Indian Companies Act, 1913, to order a companytributory in a winding-up to pay a debt and Sha Mulchands case 2 related to an application under the Indian Companies Act, 1913, for rectification of the share-register and restoration of the name of a member whose shares were forfeited for number-payment of calls. In the Bombay Gas Companys case 1 this Court was dealing with an application for enforcement of an order under s. 33C 2 of the Industrial Disputes Act 14 of 1947 for companyputation of benefit in terms. of money and for a direction to the employers to pay the same. But in each case the decision of the Court proceeded upon the general ground that Art. 181 of the Limitation Act, 1908, governed applications under the Code of Civil Procedure. This Court impliedly rejected in each case the argument that merely because powers under the Code of Civil Procedure may be exercised by a Court entertaining an application, the application companyld number be deemed to be one under the Code. It is true that in the Limitation Act originally enacted in 1908, by the group of Arts. 158 to 180 only applications under the Code of Civil Procedure were dealt with. By the amendment made by the Arbitration Act 10 of 1949, Arts. L. R. 60 1. A. 13. 2 1953 S. C. R. 351. 3 1964 3 S. C. R. 709. 158 and 178 were modified and in the articles for the expression under the Code of Civil Procedure, 1908 the words under the Arbitration Act 1940 were substituted. The reason which persuaded the Courts from time to time to hold that the expression under the Code must be deemed to be added in Art. 181 did number companytinue to apply after the amendment of Arts. 158 and 178. It may be recalled that the law relating to companysensus arbitration, except in respect of cases governed by Arbitration Act, 1899, was enacted in Sch. 11 of the Code of Civil Procedure, 1908. By the enactment of Act 10 of 1940, Sch. 11 of the Code of Civil Procedure and the Indian Arbitration Act, 1899, were repealed and an Act dealing with all arbitrations was enacted, and it was found necessary on that account to amend Arts. 158 and 178 so as to make them companysistent with the legislative changes. The reason which persuaded the Courts to hold that the expression under the Code was deemed added to Art. 181 has number disappeared, but on that account the expression applications for which numberperiod of limitation is provided elsewhere in this Schedule in Art. 181 cannot be given a companynotation different from the one which prevailed for nearly 60 years before 1940. If Art. 181 of the Limitation Act only governs applications under the Code of Civil Procedure for which numberperiod of limitation is provided under the Schedule, an application under the Arbitration Act, 1940 number being an application under the Code of Civil Procedure, unless there is some provision, which by express enactment or plain intendment to the companytrary in the Arbitration Act, will number be governed by that Article. Counsel for the Union of India companytended that s. 37 1 of the Arbitration Act, 1940, indicates a companytrary intention. That sub-section provides All the provisions of the Indian Limitation Act, 1908, shall apply to arbitrations as they apply to proceedings in Court. In our judgment, this clause does number govern an application for filing an arbitration agreement under, s. 20 of the Arbitration Act. In terms, it provides, that the provisions of the Indian Limitation Act apply to arbitrations as they apply to proceedings in Court. In other words, an arbitrator in dealing with a matter submitted to him is bound to apply the provisions of the Limitation Act s. 37 1 has numberreference to an application under the Arbitration Act for effectuating a reference to the arbitration, such as an application for filing an arbitration agreement. The genesis of this sub-section is to be found in the judgment of the Judicial Committee of the Privy Council in Ramdutt Ramkissen- dass v. F. D. Sasson and Company 1 . In that case the Judicial Committee observed that even though s. 3 of the Limitation Act deals primarily with suits, appeals and applications made in law companyrts and makes numberreference to arbitration proceedings and, therefore, the Limitation Act does number in terms apply to arbitrations in mercantile references, it would be an implied term of the companytract that the arbitrator must decide the dispute according to the existing law of companytract, and that every defence which would have been open in a Court of law can be equally proposed for the arbitrators decision unless the parties have agreed to exclude that defence. Were it otherwise, a claim for breach of a companytract companytaining a reference clause companyld be brought at any time, it might be twenty or thirty years after the cause of action had arisen although the Legislature had prescribed a limit of three years for the enforcement of such a claim in any application that might be made to the law companyrts. In enacting the Arbitration Act, 1940 the Legislature incorporated, with some modification, the rule which was regarded by the Judicial Committee as implicit in a companymercial reference under an arbitration agreement. The Legislature provided that all the provisions of the Limita- tion Act, 1908, shall apply to arbitrations as they apply to proceedings in Court. There is numberdoubt that cl. 1 of s. 37 of the Arbitration Act deals only with the authority of the arbitrator to deal with and decide any dispute referred to him it has numberconcern with an application made to the Court to file an arbitration agreement and to refer a dispute to the arbitrator. After an agreement is filed in Court and the matter is referred to the arbitrator, it is for the arbi- trator to decide by the application of the law companytained in the Limitation Act, whether the claim is barred. But s. 37 1 does number companyfer authority upon the Court to reject the application for filing of an arbitration agreement under s. 20 of the Arbitration Act because the claim is number made within three years form the date on which the right to apply arose. In dealing with an application for filing an arbitration agreement, the Court must satisfy itself about the existence of a written agreement which is valid and sub- sisting and which has been executed before the institution of any suit, and also that a dispute has arisen with regard to the subjectmatter of the agreement which is within the jurisdiction of the Court. But the Court is number companycerned in dealing with that application to deal with the question whether the claim of a party to the arbitration agreement is barred by the law of limitation that question falls within the province of the arbitrator to whom the dispute is referred. The Judicial Commissioner was, in our judgment, in error in rejecting the application of the appellants for filing the arbitra- L.R. 561. 128. tion agreement as barred under Art. 181 of the Limitation Act, 1908. We direct that the appeal be allowed, the order passed by the Judicial Commissioner be set aside and the order passed by the Trial Court for filing the arbitration agreement and referring the matters to the arbitrator be restored.

Case appeal was accepted by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 699 of 1964. Appeal from the judgment and decree dated April 14, 1961 of the Patna High Court in Appeal from Original Decree No. 162 of 1955. K. Sen, B. R. L. Iyengar and A. G. Ratnaparkhi, for the appellants. V. Gupte, Solicitor-General and R. C. Prasad, for respondents Nos. 1 and 2. S Sinha, K. N. Srivastava and K. K. Sinha, for respondent No. 7. The Judgment of the Court was delivered by Mitter J. This is an appeal from a judgment and decree of the Patna High Court on a certificate granted by it. The main question in this appeal is, whether the suit out of which this appeal arises was entertainable by a civil companyrt, in view of the provisions of s. 48 1 read with S. 57 of the Bihar and Orissa Co-operative Societies Act, 1935. Broadly speaking, s. 48 1 enumerates disputes between certain classes of persons and or the societies registered under the Act which have to be referred to the Registrar of Co- operative Societies for adjudication and S. 57 1 provides that numbercivil companyrt shall have jurisdiction in respect of any dispute required by s. 48 1 to be so referred. This point was number taken in the written statement of any of the defendants. The Subordinate Judge decreed the suit against several of the defendants including the Bank of Bihar Ltd. On appeal, the learned Judges of the Patna High Court companycurred, in the main, with the findings of the Subordinate Judge but gave effect to the companytention raised on behalf of two of the defendant-appellants on the basis of s. 48 9 read with s. 57 of the Act. The appellants before this Court are the plaintiffs. The only companytesting respondents are the Bank of Bihar Ltd., Madan Mohan Pandit and Babu Lal Varma defendants 1, 2 and 6 in the suit . In order to find out whether s. 48 1 embraces the dispute between the parties in this case, we have to examine the facts out of which this appeal arises. The first appellant, Bihta Co-operative Development Cane Marketing Union Ltd. hereinafter referred to as the Union is a society registered under the Bihar and Orissa Co-operative Societies Act, 1935 hereinafter referred to as the Act . The second plaintiff was a Secretary of the Union at the time when the suit was filed in 1951. Under a Resolution dated the 16th April, 1947 of the Executive Committee of the Union, the defendant No. 6, Babu Lal Varma, Joint Secretary of the Union and Ram Janame Varma, defendant No. 7, the Treasurer of the Union, were jointly authorised to withdraw moneys of the Union from the 1st defendant, the Bank of Bihar Ltd., with which it had a running account. On the 26th of May, 1948, defendant No. 6 and defendant No. 7 went to the bank to encase a cheque on behalf of the Union and then they came to learn that the funds in the account of the Union were number sufficient to meet the cheque. It appears that on the 16th of April, 1948 a sum of Rs. 11,000/- had been withdrawn from the said account by means of a cheque which did number companye out of the cheque book of the Union and that a loose cheque form surrendered by an ex-constituent of the bank issued to someone on the 23rd March, 1948 had been companyverted into a cheque purporting to bear the signatures of defendant No. 6 and defendant No. 7. It is number necessary to state the facts in detail and it will be sufficient to numbere that the spurious cheque bore the signature of defendant No. 7 but the purported signature of the defendant No. 6 thereon was found to be a forgery at the trial of the suit. Criminal proceedings were started and five defendants including defendants Nos. 6 and 7 were put on trial. Defendants Nos. 3, 4 and 5 were employees of the defendant-bank. Ultimately, however, all the accused were acquitted. The suit was instituted by the two plaintiffs against seven defendants, all of whom have already been mentioned except the second defendant who was the Manager of the Bank and in charge of its affairs and management at the relevant time. The cause of action for the suit as against defendants 3 to 7 was that they, in companylusion and companyspiracy with one another had authorised an illegal withdrawal of Rs. 11,000/- out of funds of the Union lying with the bank. The bank was sought to be made liable on the ground that it was a trustee for the Union and had abused the trust by allowing the amount in question to be embezzled through its gross negligence. All the defendants put in written statements, some doing so jointly while others did so individually. A large number of witnesses were examined and the Subordinate Judge came to the companyclusion that the cheque in question was a forged and fabricated document and that defendants 4, 5 and 7 acting in companylusion and companyspiracy with one another had withdrawn the sum of Rs. 11,000/- from the plaintiffs account with the bank fraudulently by means of the said forged cheque. He, however, thought that there was numbersufficient evidence against defendants 3 and 6 and passed a decree as against defendants 1, 2, 4, 5 and 7 jointly. Defendants 1 and 2 only went up in appeal to the Patna High Court. The High Court agreed with the finding of the Subordinate Judge that defendants 4, 5 and 7 were parties to the companyspiracy resulting in the withdrawal of the sum of Rs. 11,000/-, but absolved the defendant No. 2 from any liability on the ground of negligence. Before the High Court, a further companytention was put forward on behalf of the bank that even if the bank was otherwise liable for the negligence of its employees, it should number be held to be liable because defendants 6 and 7 who were the agents of the Union were negligent and dishonest in the discharge of the duty entrusted to them by the Union. The High Court, on an examination of the evidence, found itself unable to hold that there was any negligence or lack of reasonable precaution on the part of the Union. It further held that Ram Janame Varma may have been a party to the companyspiracy which culminated in the withdrawal of the money through the disputed cheque, but the Union companyld number be said to be negligent or lacking in reasonable precaution merely because of that. Having found in favour of the plaintiffs on the merits of the case, the High Court allowed the appeal of the bank on the ground that the jurisdiction of the civil companyrt was ousted by the companybined operation of s. 48 9 read with s. 57 of the Act. There is numbercontroversy before us that if the dispute in the suit is companyered by s. 48 1 it companyld number be agitated in a civil companyrt but had to be referred to the Registrar of Co-operative Societies. It is, therefore, necessary to, set out the relevant portion of s. 48 1 which reads as follows- 48. 1 If any dispute touching the business of a registered society other than a dispute regarding disciplinary action taken by the society or its managing companymittee against a paid servant of the society arises- a amongst members, past members, persons claiming through members, past members or deceased member and sureties of members, past members or deceased members, whether such sureties are members or number-members or b between a member, past member, persons claiming through a member, past member or deceased member, or sureties of members, past members or deceased members, whether such sureties are members or number-members, and the society, its managing companymittees or any officer, agent or servant of the society or c between the society or its managing companymittee and any past or present officer, agent or servant of the society or d between the society and any other registered society or e between a financing bank authorised under the provisions of sub-section 1 of section 16 and a person who is number a member of a registered society such disputes shall be referred to the Registrar Provided that numberclaim against a past member or the estate of a deceased member shall be treated as a dispute if the liability of the past member or of the estate of the deceased member has been extinguished by virtue of section 32 or section 63. Explanation- 1 A claim by a registered society for any debt or demand due to it from a member, numbermember, past member or the numberinee, heir or legal representative of a deceased member or number-member or from sureties of members, past members or deceased members, whether such sureties are members or number- members, shall be a dispute touching the business of the society within the meaning of this sub-section even in case such debt or demand is admitted and the only point at issue is the ability to pay or the manner of enforcement of payment. It will be numbericed that number all disputes in which a registered -society may be involved are within the mischief of the section. Assuming that the dispute in this case touches the business of the Union which is a registered society, the question is is it one which ,comes under any of the heads mentioned in sub-cls. a to e of the sub- section? Sub-cl. a has numberoperation if one of the disputants is the society itself. So far as sub-cl. b is companycerned, a dispute between the society and a number-member would only fall within this clause if the number-member was a surety of a member. Cl. c can have numberoperation unless one party to the dispute was a past or present officer, agent or servant of the society. Clause d is restricted to disputes between two societies. Clause e which was introduced by way of an amendment in 1948 Bihar Act XVI of 1948 would certainly include a dispute in which one of the disputants is number a member of the society, but it is only operative when the other party to the dispute is a financing bank authorised under the provisions of sub-s. 1 of s. 16. The definition of financing bank was included for the first time in the Act by s. 2 of the Bihar Co-operative Societies Act XVI of 1948. Under the definition, a financing bank means a registered society whose main object is to make advances in cash or kind to other registered societies or to agriculturists etc. It is numberodys case that the dispute in this case is one between a financing bank and a number-member. 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 e . It is to be numbered that the word number-member was number to be found in the Explanation to the section before its Amendment of 1948. The history of legislation with regard to companyoperative societies in general and Bihar and Orissa Co-operative Societies Act in particular was traced in a decision of this Court i.e., Sagauli Sugar Works Private Ltd. v. Assistant Registrar, Co-operative Societies, Motihari Others 1 . In that case, there was a dispute between the appellant, a companypany registered under the Indian Companies Act and a society. registered under the Act. The Society claimed a sum of Rs. 1,20,809/- from the appellant companypany as companymission and interest for the supply of sugar cane and referred the same to the first respondent. The preliminary objection of the appellant to the jurisdiction of the first respondent to adjudicate upon the dispute was over-ruled. The appellant went to the Patna High Court under Articles 226 and 227 of the Constitution for quashing the orders of the first respondent. The High Court following a previous decision in Union of India v. Registrar, Co-operative Societies Patna 2 summarily dismissed the application. Before this Court, in appeal, it was companytended that the dispute was beyond the pale of s. 48 and as such, number referable thereunder. The Court took into companysideration the various amendments which were introduced by the Act of 1948 and observed Before the amendments introduced by the Act of 1948, the disputes which companyld be entertained by the Registrar were disputes among members, past members or their heirs, or their sureties or between a society and its officers, agents or servants, or between a society and other registered societies without meaning to ekhaust all the categories . But before the amendments, one who was number a member of society or was number claiming through a member or a past member or a deceased member, or was number a surety of a member or a deceased member, was number subject to the jurisdiction of the Registrar under s. That is to say, any dispute between a society or its members, past members or deceased members or sureties of such members on the one hand and number-members on the other was number within the purview of the section, so that the appellant companypany, which is number a registered society or a member of a registered society, companyld number have its claim, or a claim against it by a registered society, referred to the Registrar for decision, under this section. According to the Court, the effect of the amendments introduced by the Act of 1948 was that a claim by a financing bank against a 1 1962 Supp. 3 S.C.R, 804-A.I.R. 1962 S.C. 1367. I.L.R. 40 Patna, 7. number-member to whom the former had made an advance in cash or kind, with the sanction of the Registrar under s. 16 1 , would be entertainable by the Registrar, on a reference, but that does number mean that a claim which is number of the description referred to in s. 16 1 read with s. 2 c , by a registered society against any numbermember, who is number an agriculturist, is within the purview of s. 48 1 read with the Explanation. The Explanation cannot be read as adding a new head to the categories a to e under s. 48 1 of dis- putes which may be referred to the Registrar. Originally, the Explanation had been added only to make it clear that even if a debt or demand is due and the only point at issue is the ability to pay or the manner of enforcement of payment the dispute would companye within the purview of the main section 48 1 . The addition of the word number-member by the Amending Act of 1948, to the First Explanation has number enlarged the scope of the main section 48 1 so as to make all kinds of disputes between a registered society and a number-member companynizance by the Registrar, thus excluding the jurisdiction of the ordinary companyrts. Appearing for the respondents 1 and 2, the learned Solicitor General in effect companytended- that the above decision required reconsideration and the words in the Explanation must be understood in their widest amplitude so that even if a dispute between a registered society and a number-member which did number fall within any of the categories a to e it would still be within the purview of the section by reason of the Explanation. We find ourselves unable to accept this companytention. Before the amendments introduced in 1948, the Explanation to the section made numbermention of number-members and number-members had to be included in the Explanation because of the inclusion of this class of persons in category e of sub-s. 1 of s. The Explanation must be read so as to harmonise with and clear up any ambiguity in the main section. It should number be so companystrued as to widen the ambit of the section. The scheme of sub-section 1 of s. 48 seems to be that certain disputes touching the business of a registered society should number be taken to civil companyrts and made the subject matter of prolonged litigation. The legislature took pains to specify the persons whose disputes, were to be subject matter of reference to the Registrar. Non-members did number companye into the picture at all. Non-members other than officers, agents or servants of the society do number figure in sub-cls. a to d except as sureties of members. By sub. cl. e only those number-members who had disputes with a financing bank authorised under the provisions of sub-s. 1 of s. 16 were made amenable to the jurisdiction of the Registrar. It was probably thought desirable in the interest of the financing bank which might otherwise be faced with litigation in a civil companyrt in respect of its ordinary day-to-day transactions of advances to agriculturists who were number-members that disputes between the society and this class of persons should be quickly and inexpensively adjudicated upon by the Registrar. Before the amendment of 1948, the Explanation only served to clear up the doubt as to whether a dispute was referable to the Registrar when the debt or demand was admitted and the only point at issue was the ability to pay or the manner of enforcement of payment. As already pointed out by this Court, the Explanation had to include number-members after the. insertion of category e in sub-s. 1 of s. 48. The purpose of the Explanation never was to enlarge the scope of sub-s. 1 of s. 48 and the addition of category e to that sub-section and the inclusion of number-members in the Explanation cannot have that effect. In our opinion, the High Court was number justified in allowing the appeal of the bank on that ground. The learned Solicitor General then sought to support the judgment of the High Court on the ground that its decision on the merits of the case was number companyrect. His argument in substance was that even though there was negligence on the part of the bank and its employees, the plaintiff society was number altogether free from blame or negligence in that but for the part played by at least one of its employees in the matter of encashment of the cheque for Rs. 11,000/the fraud companyld number have been perpetrated. It was argued that if both parties were negligent or blameworthy, the plaintiffs claim ought number to succeed. He referred us to the judgment of the House of Lords in London Joint Stock Bank, Limited v. Macmillan Arthur 1 in support of his argument. The facts in that case were as follows. The plaintiffs, Messrs. Macmillan and Arthur brought a suit for a declaration that the defendant, the London Joint Stock Bank, was number entitled to debit the plaintiffs with a cheque for pound 120. The plaintiffs had in their employ a companyfidential clerk who had been with them for some years. They left to him the companyying of their books and filling up cheques for signatures. The usual practice in the office of the plaintiffs seems to have been for the clerk to present cheques for signatures to get petty cash usually for pound On a certain day, the clerk made out a cheque for pound 2 and asked one of the partners to sign it which the partner did. As the clerk did number turn up the next day, the partners became suspicious and went to the bank. There they learnt that the clerk had presented a cheque for pound 120 which had been paid. The clerk was a thief and had absconded with the money. The learned trial Judge found that at the time when the cheque was presented to the partner for signature the figure 2 was written thereon with enough space on either side for insertion of additional figures and the clerk had taken advantage thereof and altered the figure 2 to 120. The 1 1918 A.C. 777. question was, whether the plaintiffs had been so negligent with regard to the cheque that their action against the bank should fail. The trial Judge found that the respondents were number guilty of any negligence in the mode of signing the cheque and assuming that they had been guilty of negligence, the negligence was number the proximate cause of the loss. He therefore ordered judgment to be entered for the plaintiffs. The Court of Appeal upheld this decision. This was, however, reversed in appeal to the House of Lords. Lord Finlay L. C. observed As the customer and the banker are under a companytractual relation in this matter, it appears obvious that in drawing a cheque the customer is bound to take usual and reasonable precautions to prevent forgery. Crime, is indeed, a very serious matter, but every one knows that crime is number uncommon. If the cheque is drawn in such a way as to facilitate or almost invite an increase in the amount by forgery if the cheque should get into the hands of a dishonest person, forgery is number a remote but a very natural companysequence of negligence of this description. The learned Lord Chancellor observed further at page 795 Of companyrse the negligence must be in the transaction itself, that is, in the manner in which the cheque is drawn. It would be numberdefence to the banker, if the forgery had been that of a clerk of a customer, that the latter had taken the clerk into his service without sufficient inquiry as to his character. Attempts have often been made to extend the principle of Young v. Grote, 4 Bing. 253 beyond the case of negligence in the immediate transaction, but they have always failed. According to the learned Lord Chancellor, leaving blank spaces on either side of the figure 2 in the cheque amounted to a clear breach of duty which the customer owed to the banker. The learned Lord Chancellor said If the customer chooses to dispense with ordinary precautions because he has companyplete faith in his clerks honesty, he cannot claim to throw upon the banker the loss which results. No one can be certain of preventing, forgery, but it is a very simple thing in drawing a cheque to take reasonable and ordinary precautions against forgery. If owing to the neglect of such precautions it is put into the power of any dishonest person to increase the amount by forgery, the customer must bear the loss as between himself and the banker. According to Lord Shaw the responsibility of what happens between the signature and presentation of the cheque, a period wholly in the customers companytrol, lies entirely with him. The principle of this case cannot help the respondent before us. If the signatures on the cheque had been genuine so that there was a mandate by the customer to the banker but the cheque was somehow got hold of by an unauthorised person and encashed by him, the bank might have had a good defence. If the signatures on the cheque or at least that of one of the joint signatories to the cheque are number or is number genuine, there is numbermandate on the bank to pay and the question of any negligence on the part of the customer, such as, leaving the cheque book carelessly so that a third party companyld easily get hold of it would afford numberdefence to the bank. According to Halseys Laws of England 3rd Edition Vol. 2 article 380 A document in cheque form to which the customers name as drawer is forged or placed thereon without authority is number a cheque, but a mere nullity. Unless the banker can establish adoption or estoppel, he cannot debit the customer with any payment made on such document. In this case, the finding is that one of the signatures was forged so that there never was any mandate by the customer at all to the banker and the question of negligence of the customer in between the signature and the presentation of the cheque never arose. Not only was there negligence on the part of the banker in number ascertaining whether the signatures on the cheque were genuine, the circumstances attending the encashment of the cheque show companyclusively that the banker was negligent and some of its officers fraudulent right from the beginning. The cheque form did number companye out of the customers cheque book. A loose cheque form returned by ,in ex-constituent had been used for the purpose of making out a cheque purported to be drawn by the customer. The entries in the register for the issue of such loose forms were so suspicious that it is difficult to believe that the employees of the bank companycerned with the encashment of the cheque were acting bonafide. There was numbernegligence on the part of the customer according to whose resolution, the cheque had to be signed jointly by two persons. The fraud companyld only be perpetrated because of the companyplicity of the employees of the bank, numberdoubt, with the help of one of the officers of the Union. The dishonesty of a particular officer of the Union was number the proximate cause of the loss to the bank. In our opinion, the case of C. Kurbar Another v. Balaji Ramji Dange 1 referred to in the judgment of the High Court has numberapplication to the facts of this case. A. 1. R. 1941 Bombay 274. M17Sup.CI/66-10 In the result, the appeal succeeds, the judgment of the Patna High Court is set aside and that of the Subordinate Judge restored. The appellants do number want a decree against respondent No. 7. Consequently, there will be numberdecree as against the said respondent. The other respondents must pay the companyts of this appeal.

Case appeal was accepted by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 751 of 1965. Appeal from the judgment and order dated December 18, 1962 of the Madras High Court in Tax Case No. 143 of 1960. K. Sen, K. Parasarn, K. Rajender Chaudhuri and K. R Chaudhuri, for the appellant. Sen, T. A. Ramachandran, S. P. Nayyar for R. N. Sachthey, for the respondent. The Judgment of the Court was delivered by Ramaswami, J. This appeal is brought, by certificate, against the judgment of the Madras High Court dated December 18, 1962 in T.C. No. 143 of 1960. The appellant hereinafter called the assessee was a firm called O.RM.M.SP. SV. Firm which was registered under S. 26 A of the Income-tax Act, 1922 hereinafter called the 1922 Act . Prior to the companystitution of the firm, the partners were members of a Hindu undivided family. The family which companysisted of Meyyappa Chettiar and his two brothers carried on money-lending business in India and in the former Federated Malaya States and it was assessed under the Indian Income-tax Act, 1918 hereinafter called the 1918 Act . There was a disruption of the joint family status on June 2, 1938, and thereafter the members of the family companytinued the business as partners. In the companyrse of the assessment for the year 1939-40 it was claimed by Meyyappa Chettiar, one of the members of the family that having regard to the severance of joint family status, the income of the family from April 13, 1938 to June 2, 1938 was number liable to be taxed by reason of the provisions of s. 25 3 4 . The Income-tax Officer accepted the fact of partition amongst the members of the family, but rejected the companytention that the family was number liable to pay tax on the profits for the said period. The High Court ultimately called for a reference on the following question Whether the income of the family from 13th April 1938 to 2nd June 1938 is number liable to be taxed by virtue of Section 25 3 of the Indian Income-tax Act After receipt of the reference the High Court held that there was numberdiscontinuance of the business within the meaning of s. 25 3 . The view taken by the High Court was that when a Hindu undivided family carrying on a business, which was taxed under the 1918 Act, became disrupted and the members companytinued the business there. after as partners, there companyld be numberdiscontinuance but only succession by the firm of the business of the family. It was held in that case that it was the assesse-firm which took over the business of the Hindu undivided family. The firm was dissolved on March 2, 1952. In the assessment for the year 1952-53 the assessee applied for relief under s. 25 3 of the 1922 Act. The claim was rejected by the Income-tax Officer on March 7, 1956. The assessee preferred an appeal to the Appellate Assistant Commissioner who dismissed the appeal holding that in the case of business carried on in foreign territory the business as such is number assessed under S. 3 of the 1918 Act but only receipt of the income in British India is assessed and it cannot therefore be held that the foreign business of the appellant was charged to tax under the 1918 Act. The assessee took the matter in further appeal to the appellate Tribunal which companysidered that the assessee was entitled to relief under S. 25 3 of the 1922 Act except for the income received from the house properties in Malaya. The appellate Tribunal accordingly allowed the appeal of the assessee in part. Both the assessee and the Department applied to the appellate Tribunal for reference of the questions of law to the High Court. The appellate Tribunal allowed the applications and stated a case to the High Court on the following questions of law Whether the assessee is entitled to both the parts of the relief companytemplated under section 25 3 of the Act in respect of foreign business at Penang, Ipoh and Kambar ? Whether the applicant is also entitled to relief under section 25 3 of the Act with regard to rental income from house properties owned by the foreign firm which was discontinued in the year of assessment. The appellate Tribunal also referred another question for the opinion of the High Court but it is number the subject- matter of the present appeal. The High Court held that the assessee was number entitled to relief under s. 25 3 of the 1922 Act and accordingly answered both the questions in favour of the Department. The view taken by the High Court was that the foreign business of the assessee cannot be deemed to have been charged under the provisions of the 1918 Act because the assessee was only taxed on remittances received from the profits of the foreign business and there was numbertax on the foreign business itself under the 1918 Act. The High Court accordingly reached the companyclusion that the assessee was number entitled to relief under S. 25 3 of the 1922 Act. Section 25 3 of the 1922 Act is to the following effect 25. 3 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. Under this section exemption from liability to pay tax in respect of the income, profits and gains may be claimed by an assessee if the business is one in respect of which tax was charged at any time under the 1918 Act, and the business is discontinued there being numbersuccession by virtue of which the provisions of subsection 4 of s. 25 have been rendered applicable. Section 25 3 however, applies even if the person assessed under the 1918 Act was different from the person who claims relief under that section provided the former was the predecessor-in-interest of such person in relation to the business. The reason for enacting s. 25 3 was that under the 1918 Act, income-tax was levied by virtue of s. 14 2 of the 1918. Act, on the income of the year of assessment. Tax was, therefore, levied in the financial year 1921-22 on the income of that year. By the 1922 Act the basis of taxation was altered and by s. 3 of that Act, charge for tax was imposed upon the income of the previous year. When the 1922 Act was brought into force on April 1, 1922, two assessments in respect of the same income for the year 1921-22 had to be made. The income for 1921-22 was accordingly charged to tax twice it was charged under the 1918 Act and it was also charged to tax under s. 3 of the 1922 Act read with the appropriate Finance Act, resulting in double taxation in respect of the income for that year. But -with a view to make the number of assessments equal, to the number of years during which the business was carried on, the legislature enacted the exemption prescribed by s. 25 3 . This benefit was however restricted only to the income, profits and gains of business, profession or vocation on which tax had been charged under the provisions of the 1918 Act. By enacting s. 25 3 the legislature intended to exempt the income, profits and gains resulting from the activity styled business, profession or vocation from tax when the business, profession or vocation is discontinued if tax was charged in respect thereof under the 1918 Act. The first question to be companysidered in this appeal is whether the assessee is entitled to both parts of relief companytemplated under s. 25 3 of the 1922 Act in respect of the foreign business at Penang, lpoh and Kambar. The companytroversy between the parties turns on the question whether the foreign business of the assessee was at any time charged under the provisions of the 1918 Act. It has been found by the appellate Tribunal that the assessee was taxed on remittances received from and out of the profits of the foreign business. The finding of the Appellate Assistant Commissioner is stated in these terms The entire profits of the foreign business came to be assessed in the hands of the appellant under the 1918 Act, number because it was a business income but because such income had been remitted into British India. Therefore, in fact also it is number the foreign profits of a business that has been charged to tax but only the remittance which in the particular case was number less than the profits of the year. We have therefore to proceed on the footing that the assessee received the entire profits of the foreign business in British India and the entire profits were assessed to income-tax in the hands of the assessee under the 1918 Act. It is necessary, at this stage, to set out the relevant provisions of the 1918 Act. Section 3, the charging section stated as follows 3. 1 Save as hereinafter provided, this Act shall apply to all income from whatever source it is derived, if it accrues or arises or is received in British India, or is, under the provisions of this Act, deemed to accrue or arise or to be received in British India. Section 5 mentioned the classes of income chargeable to income-tax and reads as follows Save as otherwise provided by this Act, the following classes of income shall be chargeable to income-tax in the manner hereinafter appearing, namely- Salaries. Interest on securities. Income derived from house property. Income derived from business. Professional earnings. Income derived from other sources. Section 9 of the 1918 Act enumerated the permissible deductions in the companyputation of the profits of the business. The question for determination is whether the foreign business of the assessee was at any time charged under the provisions of s. 3 of the 1918 Act. It has been found in this case that the entire income of the foreign business was remitted to the assessee and tax imposed on that income under the 1918 Act. We are of the opinion that in the companytext of these facts the foreign business of the assessee must be held to be charged under the provisions of the 1918 Act within the meaning of s. 25 3 of the 1922 Act. It is manifest that by s. 3 of the 1918 Act the charge was made on the receipt of income in British India and as the income received by the assessee was derived from the foreign business and was in relation to the foreign business it must be taken that there was an assessment to tax on the foreign business within the meaning of s. 25 3 of the 1922 Act. In other words, the tax under the 1918 Act was charged upon the assessee in respect of his activity styled ,foreign business and in relation to it and it must hence be taken, upon the facts found by the appellate Tribunal in this case, that the foreign business of the assessee was charged under the 1918 Act within the meaning of S. 25 3 of the 1922 Act. The High Court has taken the view that the foreign business of the assessee was number charged under the 1918 Act because what was taxed was the remittances received by the assessee from the foreign business and number the foreign business itself. In taking this view, the High Court has followed its previous decision in Commissioner of Income-tax, Madras S. V.R.M. Palaniappa Chettiar and Others 1 in which it was held that the words on which in S. 25 4 of the 1922 Act cannot be interpreted as meaning with reference to which and that in order to claim and avail the benefit under S. 25 4 the tax clearly should be charged on the business as such under the 1918 Act. At page 173 of the Report Satyanarayana Rao, J. stated as follows The relief under sub-clause 4 is permissible only if the tax on the business was charged under the provisions of the Indian Income-tax Act, 1918. If the foreign business at Muor was number and companyld number have been charged under the Act and the share in the profits of the family from that foreign business was charged under section 3 only on the receipt in British India, can it be said that the charge so made was a charge of a tax on the foreign business. The income received by the- joint family companyld number have been charged under the head income derived from business but only as a receipt under section The argument, however, on behalf 1 20 I.T.R. 170. of the assessee by his learned Advocate Mr. Rajah Iyer was that the words on which tax was at any time charged should be companystrued as meaning with reference to which tax was at any time charged. In other words, the companyten- tion is that the income derived by the assessee was in relation to a business and therefore the assessment of the income must be treated as an assessment of the business. No doubt, under the provisions of the Income-tax Act, the tax is payable by an assessee but the assessment of the tax is on the basis of various heads of income derived by the assessee one of which is business. It cannot, therefore, be said that because tax was payable by the assessee on the profits rec- eived from a business in a foreign territory such assessment is an assessment of the business. In our opinion, the view adopted by the High Court in Commissioner of Income-tax, Madras v. S. V.R.M. Palaniappa Chettiar and Others must be taken to be impliedly over- ruled by the recent decision of this Court in Commissioner of Income-tax. Bombay City-1 v. Chugandas Co. 2 in which the question was whether the interest on securities formed part of the assessees business income for the purpose of the exemption from tax under s. 25 3 of the 1922 Act. It was held by this Court that the assessee was entitled to exemption under S. 25 3 in respect of interest on securities as well, and there was numberreason to restrict the companydition of the applicability of the exemption under S. 25 3 only to income on which the tax was payable under the head Profits and gains of business, profession or vocation. It was further observed in that case that tax is charged under the Income-tax Acts on specific units, such as, individuals, Hindu undivided families, companypanies, local authorities, firms and associations of persons etc. and business, profession or vocation is number a unit of assessment. When, therefore, S. 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 fulfilled in respect of the income of the business under the 1918 Act, the owner or his successor- in-interest in relation to the business, will be entitled to get the benefit of the exemption under it if the business is discontinued. We are accordingly of the opinion that the High Court was in error in holding that the foreign business of the assessee was number charged under the provisions of the 1918 Act. The first question must therefore be answered in favour of the assessee and it must be held that the assessee is entitled to both parts of relief companytemplated under s. 25 3 of the 1922 Act in respect of the foreign business at Penang, lpoh and Kambar. 1 20 I.T.R. 170. 2 1964 8 C.S.R. 332. The second question of law arising in this appeal is whether the assessee was entitled to relief under S. 25 3 of the 1922 Act with regard to the rental income from house properties owned by the foreign firm which was discontinued in the year of account. A similar question was the subject- matter of companysideration in Commissioner of Income-tax, Bombay City-, v. Chugandas and Company 1 which has already been referred to. In that case, the assessee firm, a dealer in securities holding securities as its stock-in-trade, had been charged to tax under the 1918 Act, in respect of business. It received Rs. 4,13,992 and Rs. 1,01,229 as interest on securities in the years 1946 and 1947 respectively. The firm discontinued its business on June 30, 1947. The question at issue was whether the interest on securities formed part of the assessees business income for the purpose of the exemption from tax under s. 25 3 of the 1922 Act. It was held by this Court that the assessee was entitled to exemption under S. 25 3 in respect of interest on securities as well. It was pointed out that there was numberreason to restrict the companydition of the applicability of the exemption under s. 25 3 only to income on which the tax was payable under the head Profits and gains of business, profession or volcation. The exemption under s. 25 3 is general. It was explained by this Court that the heads of income described in S. 6 of the 1922 Act, and further elaborated for the purposes of companyputation in ss. 7 to IO and 12, 12A, 12AA and 12B, are intended merely to indicate the classes of income. The heads do number exhaustively delimit sources from which income arises. Business income is broken up under different heads only for the purpose of companyputation of the total income. By that breaking up the income does number cease to be the income of the business, the different heads of income being only the classification prescribed by the Incometax Act for companyputation. The ratio of this decision applies to the present case and it must accordingly be held that the assessee is entitled to relief under S. 25 3 of the 1922 Act with regard to the rental income from the house properties owned by the foreign firm which was discontinued in the year of account. For these reasons the judgment of the Madras High Court is set aside and this appeal must be allowed with companyts. K.P.S. 1 1964 8 S.C.R.

Case appeal was accepted by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 643 of 1964. Appeal by special leave from the judgment and decree dated January 17, 1961 of the Allahabad High Court in S. A. No. 90 of 1959. B. Agarwala, Champat Rai, E.C. Agarwala and P. C. Agarwala, for the appellants. T. Desai and J. P. Goyal, for the respondent. The Judgment of the Court was delivered by Shelat, J. This appeal by special leave is directed against the judgment and decree passed by the High Court at Allahabad in Second Appeal No. 930 of 1959. Two questions arise in this appeal 1 with regard to interpretation of s. 3 1 c of the U.P. Temporary Control of Rent and Eviction Act, III of 1947 and 2 whether the alterations carried out by the respondent-tenant were alterations which materially altered the accommodation within the meaning of the said clause c . The appellants are the owners of a building situate on Dashaswamedh Road in Varanasi, the ground floor of which companysisted of two shops separated by a partition wall and an arch in between. The respondent was the tenant of one of these two shops. The other shop, adjacent to the respondents shop, had been let out to one Benarsidas Lohar. The said Banarsidas vacated the shop and thereupon with the necessary sanction of the Rent Control Officer it was let out to the respondents as from July 24, 1,954. On July 21, 1954 the respondent executed a rent numbere by which he inter alia agreed that he would number have any right to make any alterations, additions, or Tor phor of any sort in the said shop. The respondent took possession of the said shop thus becoming a tenant of both the shops. On August 8, 1954, the appellants at the request of the respondent removed the said partition wall and replaced the said arch by iron girders enabling the respondent to have a companypact and companymodious unit. There is numberdispute that about the middle of October 1954 the respondent started making altera- tions in the said shop without the companysent of the appellants. Thereupon the appellants first by a telegram and then by letters called upon the respondent to refrain from making the said alterations as such alterations were companytrary to the express companyenant companytained in the said rent numbere. Ultimately by a numberice dated February 22, 1955 they terminated the said tenancy and called upon the respondent to hand over quiet and vacant possession. On the- respondent failing to do so the appellants filed a suit for ejectment and other incidental reliefs, claiming that as the said alterations were material alterations they were entitled to file the suit for eviction without obtaining therefor the permission of the District Magistrate as required by section 3 1 of the said Act. The relevant part of section 3 1 reads as under Subject to any order passed under sub-section 3 numbersuit shall, without the permission of the District Magistrate be filed in any Civil Court against a tenant for his eviction from any accommodation, except on or more of the following grounds That the tenant has, without the permission in writing of the landlord, made or permitted to be made any such companystructio as, in the opinion of the companyrt, has materially altered the accommodation or is likely substantially to diminish its value. Both the trial Judge and in appeal against his judgment and decree the First Additional Civil Judge, Varanasi, companycurrently found that the respondent had carried out alterations, that he did so without obtaining the companysent of the appellants and that the alterations companysisted of lowering of the floor level of the shop by about 11/2 ft. by excavating earth therefrom and putting up a new floor, of lowering companyrespondingly the front door which entailed cutting and removal of the plinthband on which the door rested, of lowering likewise the level of the staircase in the shop .and putting up new steps thereto and lastly of lowering the height of the Chabutra outside the shop so as to companyrespond if to the level of the new ground floor of the shop. Both the companyrts found that these alterations were material alterations of the accommodation within the meaning of s. 3 1 c and held that the appellants were entitled to file the suit without obtaining the permission of the District Magistrate and to a decree of eviction. Aggrieved by the judgment and decree of the 1st Additional Civil Judge, the respondent filed a Second Appeal in the High Court. The High Court accepted the companycurrent finding of the two companyrts below that the respondent had carried out the said alterations without the appellants companysent and agreed that the said alterations amounted to material alterations. But it was argued before the High Court that clause c of section 3 1 would number apply as on a proper interpretation of that clause the appellants had also to establish that the alterations, besides being material alterations, were likely substantially to diminish the value of the accommodation. The High Court held that there was numberfinding by either of the companyrts below that any harm or damage had been caused to the building and on that footing reversed the judgment and decree passed by the lower companyrt, allowed the respondents appeal and dismissed the appellants suit. Mr. Agarwal, for the appellants, companytended before us that the interpretation placed by the High Court on section 3 1 c was erroneous inasmuch as the High Court failed to appreciate that clause c was disjunctive and that it would apply either where the alterations are material alterations or, even if, they are number, they are likely to diminish substantially the value of the accommodation. He also companytended that the alterations were material alterations within the meaning of clause c and that therefore, the appellants were entitled to a decree for eviction, they having been carried out without the permission of the appellants. Mr. Desai, on the other hand, argued that the word or in clause c should be read as and and therefore unless the appellants also established that the alterations had diminished or were likely substantially to diminish the value of the accommodation clause c would number operate and the suit would number be maintainable without the permission of the District Magistrate. He also argued that the said alterations in fact enhanced the value of the accommodation as held by the High Court and were number material alterations within the meaning of the said clause. In our view clause c of section 3 1 cannot bear the companystruction suggested by Mr. Desai. The clause is companyched in simple and unambiguous language and in its plain meaning provides that it would be a good ground enabling a landlord to sue for eviction without the permission of the District Magistrate if the tenant has made or has permitted to be made without the landlords companysent in writing such companystruction which materially alters the accommodation or is likely substantially to diminish its value. The language of the clause makes it clear that the legislature wanted to lay down two alternatives which would furnish a ground to the landlord to sue without the District Magistrates permission, that is, where the tenant has made such companystruction which would materially alter the accommodation or which would be likely to substantial diminish its value. The ordinary rule of companystruction is that a provision of a statute must be companystrued in accordance with the language used therein unless there are companypelling reasons, such as, where a literal companystruction would reduce the provision to absurdity or prevent the manifest intention of the legislature from being carried out. There is numberreason why the word or should be companystrued otherwise than in its ordinary meaning. If the companystruction suggested by Mr. Desai were to be accepted and the word or were to be companystrued as meaning and it would mean that the companystruction should number only be such as materially alters the accommodation but is also such that it would substantially diminish its value. Such an interpretation is number warranted for the simple reason that there may companyceivably be material alterations which do number, however, diminish the value of the accommodation and on the other hand there may equally companyceivably be alterations which are number material alterations but nevertheless would substantially diminish the value of the premises. It seems to us that the legislature intended to provide for both the companytingencies and where one or the other exists it was intended to furnish a ground to the landlord to sue his tenant without having to obtain the previous permission of the District Magistrate. The companystruction of clause c placed by the High Court is therefore number companyrect. As regards the alterations, there is numberdispute that the respondent carried them out without the permission of the appellants. The question then is whether they were such that they materially altered the accommodation as provided by clause c . Without attempting to lay down any general definition as to what material alterations mean, as such a question would depend on the facts and circumstances of each case, the alterations in the present case must mean material alterations as the companystruction carried out by the respondent had the effect of altering the form and structure of the acconunodation. The expression material alterations in its ordinary meaning would mean important alterations, such as those which materially or substantially change the front or the structure of the premises. It may be that such alterations in a given case might number cause damage to the premises or its value or might number amount to an unreasonable use of the leased premises or companystitute a change in the purpose of the lease. The High Court however seems to have relied on Hymen and Anr. v. Rose 1 where relief against forfeiture of lease was granted, inter alia, on the ground that the alterations carried out by the lessee had number done any harm to any one and the reversioner was in numberway injured. But the question there was one of interpretation of a companyenant companytained in the lease and whether the alterations companystituted waste. The leased premises were intended originally and were used as a chapel but on the leasehold being sold the assignees made the alterations companyplained of as they desired to use the premises as a cinema theatre. On these facts and the terms of the lease, the House of Lords held that in view of the fact that the lease did number prohibit the companytemplated user of the premises as a cinematography theatre, the alterations in the circumstances of that case did number companystitute any breach of the companyenant and since the purchasers of the leasehold had offered as a companydition of obtaining relief against forfeiture to deposit a sum of money to secure the restoration of the premises to their original companydition at the end of the lease relief ought to be granted on the terms so offered. This decision in our view cannot be of assistance. As an illustration as to what a structural altera- 1 1912 A.C. 623. tion means some assistance can be had from the decision in Wates v. Rowland and Another 1 though it was a case of interpretation of s. 2 1 a of the Increase of Rent and Mortgage Interest Restrictions Act, 1920. The Court of Appeal there found that whereas substitution of titled floor for a wooden floor which had become rotten owing to rise in the water level in the land fell within the description of repairs within the meaning of s. 2 1 a , the laying of the additional companycrete bed provided the house with a better substratum than it had before and was an improvement or a structural alteration of the house within the meaning of the said section. Similarly in Bickomore v. Dimmer 2 Lord Cozens-Hardy L. J. companystruing a companyenant against alterations in a lease, made a distinction between alterations intended for the proper user of leased premises and material alterations observing that some limitation must be put on the word alteration in such a companyenant and that it companyld number be applied to a change in the wall paper of a room or to the putting up of a gas-bracket, or the fixing of an electric bell, though in fixing it some holes might have to be made in the wall and that the companyenant should be limited to something which alters the form or structure of the building. Lowering the level of the ground floor by about 1-1/2 ft. by excavating the earth therefrom and putting up a new floor, the companysequent lowering of the front door and putting up instead a larger door, lowering companyrespondingly the height of the Chabutra so as to bring it on the level of the new door-step, the lowering of the base of the staircase entailing the addition of new steps thereto and cutting the plinthband on which the door originally rested so as to bring the entrance to the level of the new floor are clearly structural alterations which are number only material alterations but are such as to give a new face to the form and structure of the premises. In this view the companystruction carried out by the respondent must fall within the mischief of clause c and entitles the appellants to maintain their suit for eviction without the permission of the District Magistrate and to a decree for eviction. Both the companytentions urged by Mr. Desai must therefore fail. In our view, the High Court was in error in allowing the appeal of the respondent only on the ground that the said alterations did number appear to have caused any harm to the premises or that there was numbersuch finding by either of the two companyrts below. The basis of the High Courts judgment was on the interpretation which it sought to put on clause c an interpretation companymended by Mr. Desai for our acceptance. As already stated, even if the alterations did number cause any damage to the premises or did number substantially diminish their value the alterations were material alterations and 1 1952 2 Q.B. 12. 7Sup.C.1166-9 2 1903 1 Ch. 158. on that basis alone the appellants were entitled to evict the respondent We therefore allow the appeal, set aside the judgment and decree passed by the High Court and restore the judgment and decree passed by the First Additional Civil Judge, Varanasi, whereby he directed the eviction of the respondent. The respondent will pay to the appellants their companyts throughout.

Case appeal was accepted by the Supreme Court

CIVIL APPELLATE JURISDICTION- Civil Appeals Nos. 389 of 1964 and 69 of 1965. Appeals from the judgment and orders, dated December 14, 1959 of the Madras High Court in A. S. Nos. 773 and 787 and Appeal No. 734 of 1954 respectively. G. Ramchandra lyer, J. B. Dadachanji, O. C. Mathur and Ravinder Narain, for the appellant in C. A. No 389/64 Respondent No. 1 in C. A. No. 69/65 . Ranganadham Chetty and A. V. Rangam, for the respondent No. 1 in C. A. No. 389/64 . V. Viswanatha Sastri, and R. Gopalakrishnan, for the respondent No. 2 in C. A. No. 389/64 and appellant in C. No. 69/65 . The Judgment of the Court was delivered by Hidayatullah, J. In village Vandiyur of Madurai Taluk there are two blocks which bear the names Melapappathu and Keelapappathu. The former is 28.90 acres and bears survey No. 45 the old survey No. was 33 and the area 28.75 acres . The extent of the area in kanieas is 21-9. The other block is Survey No. 78, area 20.88 acres the old Survey No. was 100 and the area 20.53 acres . The extent of the area in kanies is 17-10. These lands were originally situated in village Managiri, and the lands were manyam lands, that is to say, lands held at a low assessment or altogether free in companysideration of services. It is number clear from the record and indeed it is admitted on all hands that they were the subject of an inam granted in ancient times by the Rulers and that they were held for the performance of pitja in Sri Meenakshi Sundareswaral Devasthanam, Madurai. In 1948 the Revenue Divisional Officer, Madurai, held, after enquiry, that the inam companysisted of both melwaram and kudiwaram and as the inam lands had been alienated the inam was liable to be resumed. His order was passed on April 9, 1948 and purported to be under s. 44B of the Madras Hindu Religious Endowments Act, 1926 Madras Act 2 of 1927 . The inam lands were resumed and regranted to the Devasthanam. At that time the lands were in the possession of the Roman Catholic Mission of St Marys Church, Madurai, and were so held by the Mission since October, 1894. Against the order of the Revenue Divisional Officer the Mission appealed to the District Collector under s. 44B 4 of the Act. The appeal was dismissed on March 13, 1949. The District Collector also held that the inam companyprised both the Warams. The Roman Catholic Mission thereupon instituted a suit in the companyrt of the Subordinate.Judge, Madurai under s. 44B 2 d of the Act for a declaration that the inam companysisted only of the melwaram. The suit was later withdrawn by the District Judge to his own file and it was registered as O. S. 1 of 1954. The Mission also instituted another suit in the Court of the Subordinate Judge Madurai, which was also withdrawn by the District Judge to his file and was registered as O. S. 2 of 1954. The second suit was a mere general one. It also sought the declaration which was the subject of O.S. 1 of 1954 and it questioned both the right to resume the lands as well as the resumption which was ordered by the revenue companyrts. In that suit the Mission companytended that the particular inam was outside the scope of s. 44B of the Madras Act 2 of 1927 as it was a personal inam and number liable to resumption under that section and that the section itself was ultra vires the Provincial Legislature. The Province of Madras number the State of Madras and Sri Meenakshi Sundareswaral Devasthanam, Madurai were made defendants. The District Judge dismissed O. S. No. 1 of 1954, holding that the inam companysisted of both the warams. In O. S. 2 of 1954 the same finding was repeated and it was further held that the order of resumption was invalid and without jurisdiction since them inams in question were personal inams and did number companye within the purview of s. 44B. The District Judge granted a declaration to that effect and also issued an injunction against the Devasthanam which had number taken possession of the land till then. Against the decision in O. S. 1 of 1954 the Mission appealed and against the decision in O. S. 2 of 1954 the Devasthanam and the State of Madras filed appeals. A. S. 734 of 1954 was filed by the Roman Catholic Mission against the decision in O. S. 1 of 1954 S. 773 and 787 of 1954 were filed in O. S. 2 of 1954 by the State of Madras and Sri Meenakshi Sundareswaral, etc. Devasthanam respectively. The High Court decided all the three appeals on December 14, 1959 pronouncing a separate judgment in A. S. 734 of 1954 and disposing of the other two appeals by a companymon judgment. The finding that both the warams were the subject of the, inam was reversed by the High Court and O. S. 1 of 1954 was decreed. The finding that the inams were personal and, therefore, number liable to. be resumed was reversed and O. S. 2 of 1954 was ordered to be dismissed except for the modification that the inam was held to be of the melwaram only, which was the sole decision in the, other suit. The High Court repelled all companytentions about the ultra vires nature of s. 44B. Me High Court certified both the appeals as fit for appeal to this Court and this appeal and Civil Appeal 69 of 1965 Sri Meenakshi Sundareswaral, etc. Devasthanam, through its Executive Officer v. The Roman Catholic Mission and two others have been filed. This appeal relates to O. S. 2 ,of 1954 and is filed by the Roman Catholic Mission with the State of Madras and the Devasthanam as the respondents. The companypanion appeal is by the Devasthanam and the answering respondent is the Roman Catholic Mission. This judgment will dispose of the two appeals. Before we mention the matters in companytroversy in this appeal, ,we shall give an outline of the transfers by which the Roman Catholic Mission came to be possessed of the lands. It does number ,,appear to have been seriously questioned at any time that these .,lands originally belonged to certain Mahomedans as proprietors. It appears, however, as we shall see presently that the land itself was number subjected to any grant but that the theerva, that is, the rent paid in money, alone was the subject of the grant. Although the right in respect of the companycession in theerva was made out in the names of the Bhattars who were the Archakas of the Devasthanam, both the companycession as well as the land were subjected to alienations. Even before May 12, 1861 half of Melapappapathu was purchased by one Krishnaswamy Chettiar, son of Andiappa Chettiar, and the other half was purchased by him on May 1, 1861. Similarly, Krishnaswami Chettiar had purchased a half of Keelapappapathu from the original proprietors. On January 4, 1863 one half share in Melapappapathu was purchased by one Chockalingam Pillai from KrishnaswamyChettiar. He also purchased one half of Krishnaswamy Chettiars part of Keelapappapathu, for the benefit of one Muthuramalingam Pillai. In October 1864 Chockalingam granted a formal release in favour of Muthuramalimgam. The other half of Keelapappapathu, which companytinued with the original proprietors was sold by them to Krishnaswamy Chettiar less one kani on July 18, 1867. On June 25, 1870 Muthuramalingam Pillai executed a usufructuary mortgage of a part of the land released in his favour, to one Vairavalingam Pillai son of Muthuramalingam Pillai. It is number clear whether he was his own son but it is number relevant to inquire. On December 14, 1871 Muthuramalingams widow, Adaikalathammal, sold, on behalf of her minor son Muthuswami Pillai, half share of Melapappapathu and the quarter share of Keelapappapathu to Krishnaswami Chettiar. The mortgage of June 25, 1870 was paid off and Krishnaswamy redeemed the property on September 11, 1872. This left out from Krishnaswamy Chettiars ownership one Kani of land which the original proprietors still held. On June 17, 1872, Krishnaswamy Chattiar purchased that land and in this way he became owner of all the lands companyprised in these two appeals. Krishnaswamy executed a release and sale deed in favour of Andiappa Chettiar of all the lands and it appears that Andiappa Chettiar was the beneficiary of the purchases and thus the real owner. On October 20, 1894, the Roman Catholic Mission purchased for Rs. 1,500 and Rs. 6,500 the greater part of Malapappapathu. The remaining portion of this block and the Keelapappapathu block was purchased by one Anthonimuthu and when he set up his own title the Mission sued him and obtained a decree in O. S. 45 of 1895 from the Sub-Court, Madurai West. The Roman Catholic Mission has thus been in possession of both the blocks from the last century. We shall number companysider the companytentions in the two appeals. The High Court and the District Judge have differed on two aspects of this case. Both the aspects are companynected with the nature of the inam in dispute. The first is whether the inam was of the Melwaram alone or companyprised both the warams and the second is whether the inam was a personal inam which companyld number be resumed or one granted for the service of the temple, which companyld be resumed when there was an alienation and the service was stopped. On the question of the validity of s. 44B of the Madras Hindu Religious Endowments Act, 1926, the District Judge found it unnecessary to express any opinion in view of his decision on the nature of the inam which he held to be personal and number liable to resumption, but the High Court companysidered the -question and held the provision to be valid. In these appeals these three points were mainly argued, along with a claim of adverse possession which the Roman Catholic Mission had set up. We shall begin by companysidering the nature of the inam- first from the point of view, whether it companyprised both the warams and then from the point of view whether it was a grant to the temple or a grant for an office to be remunerated by the use of land or a grant of land burdened with service. We shall next companysider the arguments on the basis of which s. 44B is said to be ultra vires and void. Lastly, we shall companysider the question of adverse posses- sion. As there is numberdocument recording the grant of inam and its companyditions, one has to turn to a number of documents from which the High Court and the companyrt below have drawn opposite companyclusions regarding what was included in the inam. There is, of companyrse, numberdispute that the inam must have companyprised the melwaram at least That it must have done in any event. Thus the sole question is whether it companyprised the kudiwaram also. In reaching the companyclusion that both warams were included, the District Judge took into companysideration certified companyies of certain leases from the record of an old case O. S. No. 124 of 1944 of the Court of Subordinate Judge, Madurai. These documents are Exts. B-4, 5, 6 and A- 68, 69 and 77. Ex. B-4 is a karalnama agreement executed for the fasli years 1348 and 1349 by which the lessees undertook to hand over 1/3 share of the produce as melwaram and to retain 2/3 share as kudiwaram from the lands leased out of Keelapappapathu. Ex. B-5 is another lease for cul- tivating, the whole of Keelapappapathu nanja wet lands. Ex. B-6 is a muchilika in respect of nanja lands in Keelapappapathu by which lessee undertook to pay half produce as melwaram and to retain the other half as kudiwaram. These documents undoubtedly would have thrown light upon the matter but they were number admissible because they were only companyies. The originals were number produced at any time number was any foundation laid for the establishment of the right to give secondary evidence. The High Court rejected them and it was plainly right in so deciding. If we leave these documents out of companysideration, the other documents do number show that the inam companyprised the kudiwaram also. Ex. A-3 is an extract from the village account of Managiri village, Mandakulam Taluk relating to inams. It is for the years 1802-1803. The lands are sufficiently identified with the suit lands by the area. The lands were described as Stelather inam Poruppa manyam, companyducted for Meenakshi Sunderashwaral temple. The poruppu being a low or quit rent according to the 5th Reprot p.765 we get an indication as to what the inam companyprised. The account shows that from the total assessment of 96 Pons O fanoms and 15 thuddus, the poruppu was only 19 Pons 2 fanoms and 3 thuddus. Again in Ex. A-5, which is an extract of the Inam Account of Manigiri village of 1217 fasli i.e., five years later, the heading was Inam Enquiry Mauje village Manigiri. Now the, word Mauje is used in respect of villages in which there are, cultivators owning cultivable lands. This has been so held for a long time See Venkata Sastrulu v. Sitharamadu, 1 per Sadasiva lyer, J. and Sethayya v. Somayajulu. 2 In the remarks companyumn the poruppu amount payable is stated and it almost companyresponds to the poruppu earlier mentioned, and there is a further mention of the service of the temple. The pattas exhibits A-6 to A-8 of the years 1856, 1857 and 1860 also speak of sournadayam manibam poruppu which is revenue payable in money at a companycession The inamdars did number themselves claim in the Inam enquiry any-thing more than the melwaram rights and in Exts. A-10 and A-1 1, which are the Inam statements 1862 and the Inam Fair Register dated September 25, 1863. the Stalathar Poruppu Manibam is again mentioned and the Inam were registered in the names of Bhattars as the Sthaniks of the temple. The only document in which a companytrary numberes was struck was the othi-deed mortgage Ex. A-64 of 1876 by which Muthu Meenakshi hid mortgaged her Melwaram interest in half of the, inam for 20 years in favour of Krishnaswamy Chettiar. Muthu Meenakshiammal was the wife of Vikramapandia Battar the, sthaneekam of the Devasthanam. This companycerned both Melapappapathu and Keelapappapathu and the moragagee undertook to pay the poruppu. In describing the property it was stated that the melwaram and kudiwaram rights were in the mortgagees possession. This probably represented the true state of affairs because, Krishnaswamy Chettiar was slowly acquiring through the years .the lands as well as the inam. A similar statement was made by Krishnaswamy Chettiar in Ex. A-42 but it does number advance the case further. It is obvious that Krishnaswamy Chettiar had already acquired number only the melawaram out also the kudikaram. Neither document really showed that the inam companyprised the kudiwaram as well. There is numberother evidence of the inclusion of kudiwaram in the inam and the dealings were with melwaram- which alone the inamdars claimed at the Inam Enquiry. Although the matter has been discussed carefully by them High Court, we have reexamined the material and set down here- I.L.R. 38 Mad. 891. 2 I.L.K. 52 Mad. 453,463. P.C. what we companysider to be adequate reasons for holding that there is numberproof that the kudiwaram was the subject of the inam. All admissible matter points to the companyclusion that the melwaram alone was the subject of the grant. The appellant in Civil Appeal No. 69 of 1965 took us through the two judgments and pressed upon us the view of the trial Judge. We have companysidered the two views and are of opinion that the High Court has reached the -right companyclusion on the admissible evidence on record. Civil Appeal No. 69 of 1965 must thus fail and this finding by us will be read in the other appeal also. We shall number companysider whether the inam was a personal inam ,,or for the service of the Devasthanam. The High Court has relied upon a decision of the Madras High Court in Rasa Kondan v. Janaki Ammal. 1 Inams are of various kinds. They are classified on the basis of companycession in land revenue, that is to ,say, whether the whole of the land revenue is remitted or a part, or whether the land is held subject to a payment of money. Where the whole of the land revenue is remitted the inam is known by names such as Sarva Inam, Sarva manyam, Sarva dumbala or darobust inam. When the right to the soil is number included in the inam it is known according to the share which was free such as Ardha manyam half , chaturbhagam 1/4 etc. The third kind of inam companyprised payment of a quit rent called the poruppu. The question is whether this inam in which only a poruppu was -payable companyprised the right to the soil. In Venkata v. Sitamadu 2 it was held by the Privy Council that there was numberpresumption in law that an inam grant, even if made to a Brahmin, ,did number include the kudiwaram. We have borne this observation in mind but We hold that the evidence in this case points to the fact that the inam companyprised only the melwaram. It was thus an inam where the land was held subject to payment of an amount as quit rent. It was granted to the archakas and was recorded in their name. That they alienated the lands is without any doubt and the question is whether the inam companyld be resumed or number. Section 44-B inserted by the Madras Hindu Religious -Endowment Amendment Act 1934 Madras Act XI of 1934 in the parent Act II of 1927 and further amended by the Amend -ment Act X of 1946 reads 44-B. 1 Any exchange, gift, sale or mortgage, and any lease for a term exceeding live year-,, of the whole or any portion of any inam granted for the support or maintenance of a math or temple or for the 1 1950 2 M.L.J. 177. I.L.R. 38 Mad. 891. performance of a charity or service companynected therewith and made, companyfirmed or recognized by the British Government, shall be null and void. Explanation.- 2 a The Collector may, on his own motion, or on the application of the trustee of the math or temple or of the Assistant Commissioner or of the Board or of any person having interest in the math or temple who has obtained the companysent of such trustee, Assistant Commissioner or Board, by order, resume the whole or any part of any such inam, on one or more of the following grounds, namely that the holder of such inam or part has made an exchange, gift, sale or mortgage of the same or any portion thereof or has granted a lease of the same or any portion thereof for a term exceeding five years, or that the holder of such inam or part has failed to perform or make the necessary arrangements for performing, in accordance with the custom or usage of such math or temple, the charity or service for performing which the inam had been made, companyfirmed or recognized by the British Government, or any part of the said charity or service, as the case may be, or that the math or temple has ceased to exist or the charity or service in question has in any way become, impossible of performance. When passing an order under this clause, the Collector shall determine whether such inam or the inam companyprising such part, as the case may be, is a grant of both the melvaram and the kudivarant or only of the melvaram. Where any inam or part of an inam is resumed under this section, the Collector or the District Collector as the case may be, shall by order, re-grant such inam or part- as an endowment to the math or temple company- cerned, or Sub-section 1 of s. 44-B was the subject of interpretation in P. B. Bheemsena Rao v. Sirigiri Paddayella Reddi and others. 1 The question then was whether s. 44-B 1 companyered a grant of land burdened with service as against a grant for an ,office to be remunerated by the use of land but resumable when the, service was number performed. In dealing with these two distinct -aspects of an inam grant, Gajendragadkar J. as he then was and Wanchoo J. point out that the former is number a case of a service ,grant proper and such a grant can only be resumed if the companyditions of the grant companytemplate a resumption when the service is number performed. The other is a proper service inam and unless service is performed resumption is inevitable. They also point out that prior to the enactment of s. 44-B the inams were governed by the Boards Standing Orders rule 54. That laid a duty on Revenue Officers to see that inams companyfirmed by the Inam Commissioner as being for the service of some religious or charitable institution were number enjoyed without the performance of service. Grants were liable to be resumed when the whole or part of the land granted had been alienated or lost. Provision was, how,ever, made to deal with such cases in two ways. Either there was resumption or the grantee was left in possession and the full assessment being imposed on him, the difference was made avail-able to the particular charity or institution for the service of which the grant was made. Therefore, in the case of personal inams burdened with service, when the, service was number being performed, whether there was an alienation or number, the full assessment being demanded, the personal portion was left to the grantee but the companycessional portion was given to the charity companycerned. After the enactment of s. 44-D the Boards Standing Order Rule, 54 was amended and inams for religious and charitable purposes were classified inams granted for the performance of a charity or service companynected with a Hindu math or temple and inams number falling under class i . The first two kinds were governed by the provisions of the Madras Hindu Religious Endowments Act and the second by the Boards Standing Orders Rule 54. Taking this history into account it is pointed out that s. 44-B 1 , in spite of the width of its language is only open to a restricted interpretation and includes in resumable inams those in which the whole of the income or a very great ,part is required for the service and number large personal inams with 1 1962 1 S.C.R. 339. 2 93 a small or slight service. On the other hand grant of land made t0 an officeholder to remunerate him for service is always resumable if he ceases to hold office of to perform service. The rival companytentions in this case may number be companysidered. The Roman Catholic Mission submits that these are personal inams and they do number companye within s. 44-B. This submission was accepted by the District Judge. According to him, the inam was made to the ancestor of the persons named in the Inam Fair Register, subject to the obligation to perform service in the temple. The inam is thus held number to be attached to any office, archaks or other number is the income remuneration for that office. It is urged that such an inam is alienable, and if the service companytinues, the alienee cannot be distributed and can enjoy the inam. The High Court accepted the companytention of the Devasthanam that the inam was granted for the office of the archakas and for service as such In other words the inam is said to be attached to the office and thus incapable of alienation and if alienated liable to resumption. In deciding which it is, certain documents throw a flood of light. In Ex. A-3 to which we have already referred, this inam is called Devedayam inam and again as stalethar inam porupou manyam companyducted for Meenakshi Sundareshwaral Temple, thaatie Devasthanam. The inam is entered in the names of Bhattars. The word Devadayam ordinarily is used in revenue records to describe lands attached to a temple and in the dictionaries the meaning is lands or allowances for the support of a temple. The expression sthalather poruppu manyam or shortly sthala manyam means land held at a low or quit rent. The word poruppu also means quit rent. Thus this document shows that the Bhattars were granted these lands in inam for the performance of service of the temple but number granted as inam personal to the grantee. The High Court rightly pointed out that the description in the same document Shanmugasundra Bhattar Mritunjaya Bhattar inam was merely a description of the inam with reference to the inamdars, but companyld -not in the circumstances mean that the inam was their personal inam. Further Ex. A 11, the Inam Fair Register of 1863, does number mention the name of the original grantee which it would have if the grant was personal. The names of the two Bhattars are entered but as athanikama of Pagoda Meenakshi Sundareshwaral and the inam is described as Devadayam for the archakal service, that is to say, of puja parichakaram in the temple and it is stated that the Inam Commissioner companyfirmed the inam. 2 94 Now in a series of cases, the Inam Enquiry has been held by the Judicial Committee to be a landmark. In Arunachalam Chetty and Others v. Venkatachalapathi Guruswamigal 1 the utmost importance was attached to the Inam Fair Register, the preparation of which was described as a great act of. State. In Narayan Bhagwantrao Gosavi Balajiwala v. Gopal Vinayak Gosavi 2 this Court held, accepting the finding of the Inam Commission, in the absence of other evidence, that the grant was to a Devasthan and companystituted a Devasthan Inam. Mr. Ramachandra Aiyer attempted to. prove to us that the expression act of state in the Privy Council judgment was a misuse of the term and cited some cases where the act of state has been discussed. We do number find it necessary to refer to them. The term act of state does number always mean a sovereign act against an alien which is neither grounded in law number does it pretend to be so. The term means more than that because it has many meanings. In State of Saurashtra v Memon Haji Ismail Haji 3 other meanings of this term are given. Here it indicates an act in respect of which there was an official declaration. The Inam Fair Register incorporated an official declaration which was the result of detailed inquiries. All evidence companylected in respect of each inam was carefully sifted and companysidered before any companyclusion was reached or declared. In the absence of positive and proper evidence to the companytrary such declaration must possess supreme importance. It is significant that the Roman Catholic Mission in the plaint as, it was originally filed had said that the office of the archaka was remunerated by the income of lands in dispute and by the income from other sources. However, when the decision sub number. P. V. Bheemena Rao v. Yella Reddi of the High Court of Madras was reported in 1954 1 M.L.J. 384 it pleaded by an amendment that the inam was a personal inam. As the High Court in the judgment under appeal points out, there was litigation between the Bhattars and the Roman Catholic Mission and the evidence we have discussed, must have been known to the Mission when the original plaint was filed. The fact that their plea was that this was an inam for remunerating the office of the archakas represented a true reading of these documents. The Inam Fair Register speaks of the inam as Devadayam and reads it as permanent. If the inam was to a Brahmin personally it would have been shown as Brahmadayam and hereditary. L.R. 46 I.A. 204. 2 1960 1 C.R. 773 3 1960 1 S.C.R. 537, 543. 2 95 Finally in Ex. A-10, which is a statement of Muthumeenakshiammal who was in enjoyment of the inam in 1863, it is stated Particulars as to how the inam was obtained and the abstract of the deeds. 7 Nenjakani 39 During the time of our predecessors the said sthalathar inam of Meenakshi Sundareswaral and just as our predecesors enjoyed, we also in the aforesaid manibam, I Muthu Meenakshi Ammal half share, I Ponnammal 1/4th share, we Kalyana Battar and Bhinna Subba Battar 1/8th share and we Villu Battar alias Shunmuga Sundara Battar 1/8th share, we are in enjoyment of the aforesaid Maniba lands in the aforesaid manner and we are paying the poruppu manyam due in respect thereof as per our proportionate share and we are also remaining in enjoyment of the said Manibams as our predecessors enjoyed. We are doing archakam pooja and companyking in the aforesaid temple. This clearly shows that the inam was always companysidered as remuneration for archaka service of the temple and on its alienation it is liable to resumption under S. 44-B. Even before the incorporation of s. 44-B such an inam companyld have been resumed by Government, under Standing Order of the Board of Revenue Rule 54 1 see Anjanayalu v.Sri Venugopala Rice MilI Ltd. 1 . Mr.Ramchandra Aiyar even attempted to question the companyrectness of this case, which has been followed companysistently. The finding of the learned District Judge, Madurai, that this was a personal inam to, an individual was erroneous and the High Court was right in reversing it. Mr. Ramchandra Aiyer next companytends that s. 44-B was void when the legislature purported to enact it, and, therefore, numberaction companyld be taken under it. This argument is many faceted and often it is obscure. Shortly stated, the argument is this The, inam was companyfirmed on September 25, 1863 under title deed 1354 by the Inam Commissioner. Me alienations of the rights, whatever they be, were before that date. Prior to the Inam Commission there was numberprohibition and the companyfirmation companyld number affect prior alienations. As the inam deeds were validated by an I.L.R. 45 Mad. 620 F.D. at 624. 10 Sup. Cl/66-6 Act of the British Parliament 32 and 33 Vict. c. 29 the right to forfeit the inam companycession or to resume it companyld be exercised by the Crown only as the inam became a companytract between the Secretary of State for India and the inam- holder. Section 44-B is said to be void because it companyflicted with this position and enabled the Revenue Officers to order resumption. The resumption or forfeiture itself was said to be ineffective without the order either of the Governor General or Governor in exercise of his indi- vidual judgment and also because the right to resume the inam was said to be extinguished by prescription. The resumption was characterised as a forfeiture and was said to be void under s. 299 of the Government of India Act, 1935 and Arts. 31 and 296 of the Constitution. Madras Hindu Religious and Charitable Endowments Act XIX of 1951 which by s. 35, reenacts s. 44-B was further said to be void as, it was said, it seeks to protect only Hindu religious institutions and number those belonging to other religions. The power of the provincial legislature to enact s. 44-B in 1934 or 1946 was also challenged under the Government of India Act 1915 and the Government of India Act, 1935, respectively. The District Judge did number companysider any of these arguments except the last, because he decided the issue of resumption against the Devasthanam and the State Government. The District Judge decided that the section was validly enacted by the provincial legislature. The District Judge, however, mentioned in the judgment all the arguments which were raised before him and they were the arguments which we have set down above. However, in the High Court most of these arguments do number appear to have been advanced because the High Court judgment is silent about them. We intimated Mr. Ramchandra Aiyer that we would number allow any argument to be advanced which the High Court was number invited to companysider. In the High Court the validity of s. 44-B of the Madras Act and S. 35 of the Act of 1951 was companysidered from the point of view of the powers of the Provincial legislature when the former was enacted and from the angle of the Constitution in respect of both. We shall companysider these arguments mainly from the same two standpoints. The powers of the Provincial legislatures under the Govern- ment of India Act, 1915 were determined under the Devolution Rules made by the Governor General in Council under ss. 45-A and 129-A of the Government of India Act. By these rules a classification of subjects was made for the purpose of distinguishing the functions of the local governments and local legislatures of Governors provinces from the functions of the Governor General in Council and the Indian Legislature. The Devolution Rules set out in two lists the subjects so classified and any matter in the list of provincial subjects set out in Part II of Schedule I was excluded from any central subject. Under rule 4 of these rules, if any doubt arose as to whether a particular matter did or did number relate to a provincial subject, the Governor General in Council was to decide whether the matter did or did number so relate and his decision was final. At this distance of time, it is somewhat inept for a Court, without a proper inquiry, to decide whether the powers of the Provincial legislature did or did number extend to the making of s. 44-B. For aught we know, this identical question might have been raised and the decision of the Governor General in Council obtained. That would be end of the matter. No one seems to have challenged the section although numerous inams were resumed under that section. However, companysidering the matter in principle we do number feel any doubt about the companypetence of the Provincial legislature. As the District Judge and the High Court have rightly pointed out, the powers of the Provincial legislatures extended over land tenures, land revenue administration and religious and charitable endowments. A companycatenation of these several powers must obviously furnish adequate scope for under. taking the most companyprehensive legislation on the subject of inams in general and inams companynected with religious and charitable endowments in particular. Section 44-B was thus fully within the companypetence of the Provincial legislature. The next question which was companysidered by the High Court as whether resuming and regranting the inam to a Hindu temple, offended the Constitution. The High Court did number accept this submission. It is obvious that by the transfer of the inam the temple was deprived of a benefit and the transferee had numberright to hold that benefit. What was done was to restore to the temple what it had lost and this was number putting a denominational religious institution at an advantage. once we hold that the Provincial legislature had companypetence to enact the impugned section, it would follow that the section would be sustained by s. 292 of the Government of India Act, 935. Indeed, the power of the Provincial legislature under the act of 193 5 was numberwhit less. than that of the legislature which enacted the section. Any amendment of the section in 1946 would have clear authority even under the Act of 1935. And the some may be said of the Madras Hindu Religious and Charitable Act, 1951 vis a vis the Constitution. The theory that companytracts between the Secretary of State for India and the inam-holders came into existence after the passing of 32 33 Vict. c. 29 and that this took the matter out of the powers companyferred by the Devolution Rules upon the Provincial Legislatures, is equally fallacious. What had really happened was this. In 1858, when the Government of the East India Company, which held the territories in trust from the Crown, came to an end, the British Parliament passed An Act for the better Government of India. We are number companycerned with its provisions. A year later another Act was passed to amend the Act of 1858. It provided that any deed, companytract or other instrument for the purpose of disposal of real estate in India, vested in Her Majesty under the Act of 1858 must be expressed to be executed as on behalf of the Secretary of State for India or by order of the Governor General in Council or the Governor of Fort Saint George or of Bombay in Council. Although this statute was there, the title deeds which were issued by the Inam Commissioner were number expressed to be executed by order of the Governor in, Council and purported to have been executed on behalf of the Governor in Council instead of on behalf of the Secretary of State for India in Council. This created a doubt about the validity of the title created under them. By the enactment of 32 and 33 Vict. c. 29 the title deeds for inam lands were validated. They were to be read and to have the same effect as if they were execute by order of the Governor in Council and on behalf of the Secretary of State for India in Council. In this way the flaw in the numerous grants was removed without having to reissue fresh title deeds. This legislation did number create a companytract. It only validated the old title deeds and numbermore. To read into the grants by which inams were created, a companytract which was inviolable except by-resumption by the Crown is to read into the Acts of British Parliament something which is number there. Like any other grant which is resumable on breach of its companyditions, these inams were resumable according to their terms and companyditions. There was numberhing in the inam title- deeds or these statutes which inhibited the Provincial legislature from enacting s. 44-B under its, undoubted powers or the Collector from resuming the inam on breach of its companyditions under the power granted by the section. The other arguments on the subject of the validity of s. 44- B need number detain us. They proceed on obliterating the difference between resumption of an inam for breach of its terms and forfeiture which is a kind of punishment annexed by law to some illegal 29 9 act or negligence, in the owner or possessor of land. We are number here companycerned with forfeiture but with the resumption of a companycession granted by Government, which is occasioned by the alienation of the companycession to a stranger. Any argument based on forfeiture is entirely out of place. Similarly, the arguments based on bona vacantia or deprivation of property sufficiently indicated by the reliance on the articles of the companystitution mentioned earlier by us cannot help, partly because they are irrelevant and mainly because numbersuch arguments appear to have been advanced in the High Court. We accordingly reject the companytention that s. 44-B or the resumption under it were invalid. There remains only the question of adverse possession. In Boddapalli Jagannadham and anr. v. Secretary of State 1 it was held that there is numberperiod of limitation prescribed by any law within which alone Government. should exercise its prerogative of imposing assessment on land liable to be assessed with public revenue. This case was followed in Subramaniam Chettiar v. Secretary of State 2 .

Case appeal was rejected by the Supreme Court

CRIMINAL APPELLATE JURISDICTION Criminal Appeal No. 74 of 1964. Appeal from the judgment and order dated October 3, 1963 of the Patna High Court in Criminal Misc. Case No. 366 of 1956. Naunit Lal, for the appellant. The respondent did number appear. The Judgment of the Court was delivered by Hidayatullah, J. This is an appeal under s. 476-B of the Code of Criminal Procedure by one Baban Singh and his wife Dharichhan Kuer against a judgment and order of the High Court at Patna ordering the Registrar to file a companyplaint against them under s. 199 of the Indian Penal Code for making false affidavits. The respondents are persons who had moved the High Court under s. 476 of the Code for the prosecution of the appellants in the following circumstances. Jagdish Singh and Parmhans were appellants in F. A. 301 of 1952 in the High Court at Patna. Mst. Dharichhan Kuer was respondent No. 13 in that appeal. During the pendency of the appeal a companypromise was said to have been arrived at between Dharichhan Kuer on the one hand and Jagdish Singh and Parmhans on the other. Dharichhan Kuer and Jagdish Singh swore an affidavit on June 22, 1953 in support of the petition for companypromise which was filed in the High Court. Baban Singhs brother identified Dharichhan Kuer before the Oath Commissioner and Rs. 4,000 were paid to Dharichhan Kuer under the terms of the companypromise in the Commissioners presence. Dharichhan Kuer also passed a receipt and her thumb impression was identified by Baban Singhs brother. The petition of companypromise was filed in companyrt on July 13, 1953. The same day Baban Singh swore an affidavit Ex. B denying the companypromise or that his wife had received Rs. 4,000. This affidavit was filed in the High Court on July 31, 1953. On September 9, 1953 Dharichhan Kuer also filed an affidavit Ex. A in support of her husband. As the companypromise was in dispute the High Court ordered the Registrar to hold an enquiry. Nine witnesses were examined on behalf of Jagdish Singh and Parmhans including the Oath Commissioner. Dharichhan Kuer and her husband Baban Singh gave evidence on their own behalf. The Registrar reported on July 14, 1954 that the companypromise was genuine and that Dharichhan Kuer had, in fact, sworn the affidavit before the Oath Commissioner and had received Rs. 4,000. B. N. Rai and Kanhaiya Singh, JJ. accepted the report by their order dated October 5, 1956. One of the terms of the companypromise was that if Dharichhan Kuer resiled from it the amount of Rs. 4,000 would be refunded with companyts Rs. 500. Dharichhan Kuer deposited this amount in companyrt on October 9, 1956. The first appeal was then heard and disposed of. The application under s. 476 out of which this appeal has arisen was filed during the pendency of the first appeal and was taken up for hearing after the appeal was disposed of. A question arose whether a companyplaint for prosecution of Baban Singh and Dharichhan Kuer for an offence under s. 193, Indian Penal Code companyld be filed in the High Court because Baban Singh and Dharichhan Kuer had deposed number before the companyrt but before the Registrar. Further s. 479A to which we shall refer presently was introduced from January 1, 1956 and thus on October 5, 1956, when the High Court accepted the report of the Registrar, it was in force. The Divisional Bench did number companysider taking action under s. 193 because of s. 479A and it appears that the companynsel for Jagdish Singh and Parmhans also companyceded that numberprosecution companyld take place under that section. The High Court however, companysidered whether action should be taken in respect of the two affidavits Exs. A and B . It is number necessary to refer to the statements in these affidavits because we are number companysidering whether they were true or false. It was companytended before the High Court that a prosecution under S. 199 of the Indian Penal Code would be equally companyered by s. 479A and as the procedure under that section was number followed an application for prosecution under S. 476 was barred. This companytention was number accepted by the High Court and after going into the expediency of the prosecution the learned Judges ordered the Registrar of the High Court to e a companyplaint before the appropriate authority for the prosecution of the appellants. The appellants number appeal as of right under s. 476B. At the hearing before us there was numberrepresentation on behalf of the respondents. Although numberices were issued to Jagdish Singh, Parmhans and the State Government, numbere appeared. On hearing the learned companynsel for the appellants we are satisfied that this appeal must succeed. The short question in this case is whether S. 476 companyld at all be invoked because of the bar companytained in S. 479A sub S. 6 . The sixth sub-section, to which we have referred lays down that numberproceedings shall be taken under ss. 476 to 479 both inclusive for the prosecution of a person for giving or fabricating false evidence if in respect of such a person proceedings may be taken under s. 479A. The point to decide, therefore, is whether proceedings under s. 479A companyld be taken against Baban Singh and his wife, for if they companyld be, then action ought to have been taken under that section and s. 476 cannot be invoked. Section 479A, in so far as it is relevant to our purpose, provides as follows - 479-A. Procedure in certain cases of false evidence.- Notwithstanding anything companytained in section 476 to 479 inclusive when any Civil, Revenue or Criminal Court is of opinion that any person appearing before it as a witness has intentionally given false evidence in any stage of the judicial proceeding or has inten- tionally fabricated false evidence for the purpose of being used in any stage of the judicial proceeding and that, for the eradication of the evils of perjury and fabrication of false evidence and in the interests of justice, it is expedient that such witness should be prosecuted for the offence which appears to have been companymitted by him, the Court shall, at the time of the delivery of the judgment or final order disposing of such Proceeding, record a finding to that effect stating its reasons therefore and may, if it so thinks fit, after giving the witness an opportunity of being heard, make a companyplaint thereof in writing signed by the presiding officer of the Court setting forth the evidence which, in the opinion of the Court, is false or fabricated and forward the same to a Magistrate of the first class having jurisdiction, and may, if the accused is present before the Court, take sufficient security for his appearance before such Magistrate and may bind over any person to appear and give evidence before such Magistrate Provided that where the Court making the company- plaint is a High Court, the companyplaint may be signed by such officer of the Court as the Court may appoint. The learned Judges in the High Court did number take action in respect of the offence of giving false evidence on oath, as defined in s. 191 and punishable under s. 193 of the Indian Penal Code, because they were of the opinion that s. 479-A of the Code of Criminal Procedure would be applicable to that offence even though evidence was recorded by the Registrar. The High Court selected for action the offence in relation to the two affidavits holding that prima facie an offence under s. 199, Indian Penal Code was companymitted. That offence is also punishable in the same manner as if false evidence was given. The difference between ss. 191 and 199 is this Section 191 deals with statements and declarations falsely made by a person legally bound by an oath or by an express provision of law to state the truth. Section 199 deals with statements and declarations made voluntarily provided they are capable of being used as evidence and which the companyrt is bound to receive as evi- dence. The matter has to be companysidered from three standpoints. Does the swearing of the false affidavits amount to an offence under s. 199, Indian Penal Code or under either s. 191 or 192, Indian Penal Code ? If it companyes under the two latter sections, the present prosecution cannot be sustained, Section 199 deals with a declaration and does number state that the declaration must be on oath. The only companydition necessary is that the declaration must be capable of being used as evidence and which any companyrt of justice or any public servant or other person, is bound or authorised by law to receive as evidence. Section 191 deals with evidence on oath and s. 192 with fabricating false evidence. If we companysider this matter from the standpoint of s. 191, Indian.Penal Code the offence is companystituted by swearing falsely when one is bound by oath to state the truth because an affidavit is a declaration made under an oath. The definition of the offence of giving false evidence thus applies to the affidavits. The offence may also fall within. 192. It lays ,down inter alia that a person is said to fabricate false evidence if he makes a document companytaining a false statement intending that such false statement may appear in evidence in a judicial proceeding and so appearing in evidence may cause any person who, in such proceeding is to form an opinion upon the evidence, to ,entertain an erroneous opinion touching any point material to the result of such proceeding. When Baban Singh and Dharichhan Kuer made declarations in their affidavits which were tendered in the ,High Court to be taken into companysideration, they intended the statements to appear in evidence in a judicial proceeding, and so appearing, to cause the companyrt to entertain an erroneous opinion regarding the companypromise. In this way their offence came within the words of ss. 191/192 rather than S. 199 of the Indian Penal Code. They were thus prima facie guilty of an offence of giving false evidence or of fabricating false evidence for the purpose of being used in a judicial proceeding. Section 479-A lays down a special procedure which applies to persons who appear as witnesses before civil, revenue or criminal ,courts and do one of two things i intentionally give false evidence in any stage of the judicial proceeding or ii intentionally fabricate false evidence for the purpose of being used in any stage of the judicial proceeding. The first refers to an offence under s. 191/193 and the second to that under s. 192/193 of the Indian Penal Code. In respect of such offenses- when companymitted by a witness, action under s. 479-A alone can be taken. The appellants were witnesses in the inquiry in the High Court and they had fabricated false evidence. If any prosecution was to be started against them the High Court ought to have followed the procedure under S. 479-A of the Code of Criminal Procedure. Not having done so, the action under s. 476 of the Code of Criminal Procedure was number open because of sub-s. 6 of s. 479-A and the order under appeal cannot be allowed to stand. In the result the appeal succeeds and is allowed. The order for the prosecution of the appellants is set aside.

Case appeal was accepted by the Supreme Court

CRIMINAL APPELLATE JURISDICTION Criminal Appeal No . 167 of 1964. Appeal from the judgment and order November 4, 1963 of the Gujarat High Court in Criminal Appeal No. 734 of 1962. S. Patwardhan, R. N. Sachthey and B.R.G.K. Achar, for the appellant. The respondent did number appear. The Judgment of the Court was delivered by Ramaswami, J. This appeal is brought by the State of Gujarat against the judgment of the High Court of Gujarat at Ahmeda- bad dated November 4, 1963 in Criminal Appeal No. 734 of 1962. The respondent was charged in the Court of the Judicial Magistrate First Class, Bulsar under ss. 4 and 5 of the Bombay Prevention of Gambling Act, 1887 Bombay Act IV of 1887 , hereinafter called the Act. The case of the prosecution was that on January 31, 1962 at about 9 p.m. the respondent was found accepting bets on American futures. On being searched in the presence of panchas currency numberes of Rs. 119/- and two slips on which Ameri-can futures were recorded were found. The trying Magistrate, however, held that slips were number instruments of gaming within ,the meaning of s. 7 of the Act. The Magistrate was also number satisfied that the police officer who carried out the search and .seized the articles had reasonable grounds to believe that the slips and other articles recovered from the respondent were instruments of gaming. The Magistrate held that the presumption under s. 7 of the Act companyld number be raised. The respondent was, therefore, acquitted of the charge. Against the order of acquittal the State of Gujarat preferred an appeal to the High Court of Gujarat at Ahmedabad in Criminal Appeal No. 734 of 1962. The appeal was dismissed by Raju, J. on November 4, 1963. In support of this appeal Mr. Patwardhan submitted that the High Court was in error in holding that it is necessary to examine an expert to companyroborate the evidence of the prosecuting Sub-Inspector that the articles seized were instruments of gaming. It was also companytended by Counsel that the High Court was number right in taking the view that the evidence of the Police Inspector to whom the warrant was issued under s. 6 of the Act required companyroboration in each and every case. In our opinion, both the companytentions of Mr. Patwardhan are well-founded and must be Section 3 of the Act defines the expression instruments of gaming as including any article used or intended to be used as a subject or means of gaming, any document used or intended to be used as a register or record or evidence of any gaming, the proceeds of any gaming, and any winnings or prizes in money or ,otherwise distributed or intended to be distributed in respect of ,any gaming. Section 6 provides for entry and search by police officers in gaming houses. Section 6 1 states 6. 1 It shall be lawful for a Police Officer- in any area for which a Commissioner of Police has been appointed number below the rank of a Sub-Inspector and either empowered by general order in writing or authorized in each case by special warrant issued by the Commissioner of Police, and elsewhere number below the rank of a Sub-Inspector of Police authorised by special warrant issued in each case by a District Magistrate or Sub-Divisional Magistrate or by a Taluka Magistrate specially empowered by the State Government in this behalf or by a Superintendent of Police or by an Assistant or Deputy Superintendent of Police especially empowered by the State Government in this behalf, and without prejudice to the provision in clause ii above, in such other area as the State Government may, by numberification in the Official Gazette, specify in this behalf, number below the rank of a Sub-Inspector and empowered by general order in writing issued by the District Magistrate. a to enter, with the assistance of such persons as may be found necessary, by night or by day, and by force, if necessary, any house, room or place which he has reason to suspect is used as a companymon gaming-house. b to search all parts of the house, room, or place which he shall have so entered, when he shall have reason to suspect that any instuments of gaming are companycealed therein, and also the persons whom he shall find therein whether such persons are then actually gaming or number, c to take into custody and bring before a Magistrate all such persons, d to seize all things which are reasonably suspected to have been used or intended to be used for the purpose of gaming, and which are found therein Section 7 of the Act relates to presumptive proof of keeping or gaming in companymon gaming-house. Section 7 provides as follows When any instrument of gaming has been seized in any house, room or place entered under section 6 or about the person of anyone found therein, and in the case of any other thing so seized if the companyrt is satisfied that the Police officer who entered such house, room or place had reasonable grounds for suspecting that the thing so seized was an instrument of gaming, the seizure of such instrument or thing shall be evidence, until the companytrary is proved, that such house, room or place is used as a companymon gaming-house and the persons found therein were then present for the purpose of gaming, although numbergaming was actually seen by the Magistrate or the Police officer or by any person acting under the authority of either of them There is numberhing in the Act to suggest that in order to prove that the articles seized are instruments of gaming it is the duty of the prosecution to examine an expert in every case. It is open to the prosecution to prove that the articles seized are instruments of gaming by proper evidence and it is, number necessary to examine an expert for the purpose in each and every case. It is also number proper to make a distinction between the evidence of an officer who makes a companyplaint under the proviso to s. 6 of the Act and to whom a warrant is issued for search and the evidence of a person to whom a warrant is issued but who makes numbersuch companyplaint under the proviso. The question as to whether the evidence of the person who executes the warrant requires companyroboration depends on the facts and circumstances of each case and numberlegal distinction can be made merely because the person who executes the warrant happens to be the person who makes the companyplaint under the proviso to s. 6 of the Act to the Commissioner of Police or to the Magistrate. We do number, however, propose to interfere with the order of acquittal in this case, because the offence is petty and the offence was companymitted several years back.

Case appeal was rejected by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 275 of 1966. Appeal by special leave from the order dated August 17, 1965 of the Calcutta High Court in an application for leave to appeal to this companyrt in Appeal No. 254 of 1963. WITH Civil Miscellaneous Petition No. 2195 of 1965 Petition for Condonation of delay . R. L. Iyengar and B. R. G. K. Achar, for the appellant. K. Sen and D. N. Mukherjee, for the respondent. The Judgment of the Court was delivered by Shelat, J. On March 31, 1959 the respondents obtained a licence to import certain machinery from West Germany. The import licence companytained particulars of the machinery to be imported and inter alia stated that its value would be I.F. value of Rs. 45,000. One of the companyditions upon which the licence was issued was that the above application is accepted and import licence is granted having quantity and value as the limiting factor and is number valid for clearance if the actual value of any item exceeds the C.I.F. value indicated in the licence by more than five per cent. The machinery arrived at the port of Calcutta sometime in July 1960 and was allowed to be cleared on the bill of entry submitted on behalf of the respondents. The bill of entry showed the C.I.F. value of the machinery at Rs. 44,843.61 nP. The customs authorities thereafter assessed the duty payable on the said machinery and the duty so assessed was paid by the respondents. On May 6, 1961, in companysequence of certain information received by the authorities a search was made of the business premises of the respondents and also of Stahlumon Co.,. Ltd., the agents of the exporters. As a result of the search certain documents and papers were seized by the customs authorities. On June 19/20, 1961 a numberice was served upon the respondents calling upon them to show cause why action should number be taken against them under s. 167 8 of the Sea Customs Act, 1878. The numberice alleged that the respondents were guilty of illegal import of goods worth Rs. 6,730.74 nP, that being the excess value of the goods permitted to be imported under the said licence. The respondents in due companyrse gave their explanation. Thereafter an amended show cause numberice dated September 21, 1961 was served upon the respondents charging them under s. 167 8 of the Sea Customs Act read with s. 3 2 of the Imports and Exports Control Act. 1947 for illegally importing the said companysignment. The respondents were given a personal hearing and thereafter the first petitioner passed an order dated March 17, 1962 directing companyfiscation of the said machinery and imposing a tine of Rs. 20,000 in lieu of companyfiscation and further imposing a personal penalty of Rs. 25,000/-. Aggrieved by this order the respondents filed a petition in the High Court under Art. 226 of the Constitution praying for mandamus. directing the petitioners to rescind the order dated March 17, 1962 and for certiorari quashing the said order. The learned single Judge who heard the petition passed an order dated September. 2, 1963 dismissing the petition holding that the said. import was illegal. Thereupon the respondents filed an appeal against the said order and the Appellate Bench of the High Court by its orders dated December 18, 1964 allowed the respondents appeal directing the petitioners to forbear from giving effect to the said order of the first petitioner. The peti- tioners filed an application for a certificate under Art. 133 but the Appellate Bench of the High Court by its order dated August 17, 1964 dismissed the said application on the ground that it was barred by limitation, though holding that the valuation tests laid down in sub-cl. a and b of Art. 133 1 were satisfied, and that the order being one of reversal the petitioners were otherwise entitled to a certificate. The present appeal is against the said order dated December 18, 1964 by which the High Court issued the writ of mandamus against the petitioners. As aforesaid, the High Court delivered its judgment and ,passed the abovmentioned order allowing the respondents appeal on December 18, 1964. On December 19, 1964 the peti- tioners applied for certified companyies of the said judgment and the said order. The certified companyy of the judgment was furnished to the petitioners on January 18, 1965. The petitioners however waited for the certified companyy of the said order which was yet number furnished to them. As the certified companyy of the said order was number finalised and was number ready the petitioners filed the said application for leave on May 10, 1965 annexing thereto the certified ,copy of the judgment only.- On July 17, 1965, a certified companyy of the said order was furnished to the petitioners but they did number annex it to their application for leave as it was already filed. As stated earlier, the High, Court dismissed the application by its order dated-August 17, 1965, on the ground that it was barred by limitation. The High Court however observed, that if the petitioners had annexed the certified companyy of the said order furnished to them on July 17, 1965 they would have been entitled to exclude the, time taken in obtaining it ,from the period of Iimitation under s.12 2 of the Limitation Act. The result according to that view would be that- if the petitioners had waited till July 17, 1965 and filed their application annexing also the certified companyy of the said order their application would have been within time as they would have been entitled to exclude the time for obtaining it if they had amended their application and annexed the certified companyy of the order on receiving the same they would still have been entitled to exclude the aforesaid period and their application then would have been within time and if they had withdrawn the application and filed a fresh application annexing thereto the certified companyy of the said order such fresh application would have been within time as they would have been entitled to exclude the time taken in obtaining the certified companyy of the order. According to the High Court the petitioners however were number entitled to exclude the time for obtaining the certified companyy of the order as they had filed the said application without annexing thereto the companyy of the said order and their application filed on May 10, 1965 was already time barred. According to the respondents, since under Art. 132 of the Limitation Act the application for leave had to be made within 60 days, the petitioners application lodged on May 10, 1965 was clearly beyond 60 days even after the certified companyy of the judgment was furnished to them on January 18, 1965. Consequently, the petitioners application was time barred and was rightly rejected by the High Court. The question for determination is whether the application for leave to appeal was barred by limitation and the petitioners were number entitled under s. 12 2 of the Limitation Act to exclude the time taken in obtaining the certified companyy of the said order. Section 12 2 provides that in companyputing the period of limitation for an appeal or application for leave to-appeal, the time requisite. for obtaining a companyy of the decree, sentence or order appealed from or sought to be revised shall be excluded. Similarly, under sub-section 3 where an application is made for leave to appeal, from a decree or order, the time requisite for obtaining a companyy of the judgment on which the decree or an order is founded shall also be excluded. On a plain reading of these sub-sections, it is clear that the time for obtaining the certified companyy of both the judgment and the decree or order as the case may be must be excluded while companyputing the period of limitation. The object of the exclusion is to enable the person desiring to appeal to companysider the terms of the decree, judgment and order before he decides to launch a further proceeding in respect of it. Two views were, however, canvassed before us on the company- struction of-s. 12. One was that the right of exclusion of time is qualified by the words time requisite for obtaining a companyy of the decree, sentence or order in sub-section 2. Therefore, if an application for leave to appeal does number require a certified companyy of the order in question to be annexed to the application, it is number possible to say that the time required for obtaining such a companyy was requisite. In such cases the time in obtaining the companyy would number be requisite time and companysequently the applicant would number be entitled to exclude the time taken in obtaining the certified companyy of the order. Certain decisions of some of the High Courts have also taken the view that such an applicant would number be entitled to the benefit of the sub- section where a companyy of the decree, judgment or order is number actually annexed to the application or the memorandum of appeal. The other view is that sub-ss. 2 and 3 of s. 12 enact the rule of exclusion as a positive direction. The object of the sub-section being to afford a party opportunity to companysider his position even where a certified companyy of the judgment gives all the necessary information enabling the party to decide to proceed further or number, he would nevertheless be entitled to exclude the time for obtaining the certified companyy of the decree or order. It has been held in some decisions that even in cases where it is number necessary to prepare a formal order, if such an order is prepared, the party would be entitled to the benefit of exclusion of time taken in preparing and furnishing a companyy thereof where it is applied for. Counsel for the respondents relied on the first view and argued that though the petitioners applied for certified companyies of both the judgment and the order, they were at best entitled to exclude the time for obtaining the companyy of the judgment as they had annexed such a companyy but number to the exclusion of time in obtaining the latter. He companytended that though the petitioners applied also for the companyy of the said order it was number necessary for them to annex it to their application and in fact though it was applied for and obtained it was number actually annexed. That being the position and the application for leave to appeal being companypetent without annexing either the certified companyy of the judgment or of the order under the rules of the High Court of Calcutta it would number be possible to say that the time for obtaining the companyy was time for something that was requisite and therefore that time companyld number be excluded. He also argued that the rules of the High Court of Calcutta number only did number require such a party to annex a companyy of the order but the prescribed form for such an application was mandatory in language and was a provision to the companytrary. He therefore argued that there was a double reason for the petitioners number being entitled to the benefit of the exclusion. We shall deal with the second companytention first as it is capable of an easy disposal. Rule 4, in Chapter XXXIIIA of the Rules of the High Court requires that an application for leave to appeal shall be made by a numberice of motion before the appellate companyrt and shall be presented in the prescribed form, viz., Form No. 3. That form does number require that a certified companyy of the judgment and or decree or order need be annexed to such an application. The rule and the form thus enable a party to file an application for a certificate without annexing either a companyy of a judgment or a companyy of an order. But that does number mean that the rule and the form lay down any mandatory direction that a companyy either of the order or of the judgment shall number be annexed. The rule and the form thus do number assist or further the argument urged by companynsel for the respondents. In regard to his first companytentoin the learned companynsel for the respondents urged that sub-ss. 2 and 3 of S. 12 would number apply where it is number necessary to annex a companyy of the judgment or order. For, in such a case it is number possible to say that the time taken in obtaining such a companyy is time requisite within the meaning of that expression in sub-s. 2 of S. 12. Exclusion of the time required in obtaining a companyy of the order therefore can only be allowed if and only if, such a companyy is either required to be annexed or in any event is in fact annexed to the petition for leave to appeal. The question is is the provision for exclusion of time in S. 12 2 dependent upon whether the rules of a companyrt permit a petitioner to file an application for leave with or without a companyy of the judgment or order or decree and also where the rules so permit whether he has annexed such a companyy to his application? In Surty v. Chettyar 1 the Privy Council after companysidering various decisions ,of different High Courts held that 1 the preponderance of practice in India was that time for obtaining a companyy of the judgment or decree or order should be excluded even thought under the rules of the Court it was number necessary to obtain a companyy of the judgment or decree to be filed with the memorandum of appeal, and 2 that on a grammatical companystruction of s. 12 2 , the subsection plainly lays down a positive direction for exclusion of time without any reference to the Code of Civil Procedure or any other Act. In that case the appellant had brought a suit on the original side of the High Court of Rangoon. That suit was dismissed on January 8, 1925. On April 28, he filed his memorandum of appeal before the appellate side of the High Court. A question arose whether the appeal was filed in time. The appellant tried to explain the delay and prayed for extension of time but the companyrt refused to companydone the delay and dismissed the appeal. The appellant then filed an application for review and it was then that he for the first time invoked sub-ss. 2 and 3 of S. 12 companytending that the time taken in obtaining the companyy of the order and of the judgment should be excluded. The Court upheld the companytention of the respondents that such time companyld number be excluded as under the rules of that High Court the memorandum of appeal companyld 1 55 I.A. 161 be filed without annexing thereto the companyy of the judgment or the order. This view was challenged in appeal before the Privy Council. The rule on which the respondents in that case relied provided that a memorandum of appeal and an application for revision should be accompanied by certified companyies of the judgment and decree unless they were dispensed with by the companyrt. That rule however had a proviso which was in the terms following- Provided that a memorandum of appeal against a decree or order of the High Court in the exercise of the original jurisdiction may be presented without a certified companyy of the decree or formal order accompanying it., Relying on this rule, it was companytended that inasmuch as the proviso enables the appellant to file his appeal without a companyy of the order or judgment the appellant would number be entitled to exclusion of time as such time , would number be requisite time within the meaning of s. 12 2 and the High Court was therefore right in dismissing the appeal as being beyond time. The Privy Council disagreed with this companytention holding that s. 12 companytained a positive direction for exclusion of time and that such direction applied irrespective of whether the rules permitted the filing of an appeal or an application without annexing the companyy of the order or judgment. The Privy Council emphasised that the positive direction companytained in s. 12 was unconditional inasmuch as there was numberreference therein to the Code of Civil Procedure and the section did number say why the time was to be excluded. At page170 of the report the Privy Council observed if, indeed, it companyld be shown that in some particular class of cases there companyld be numberobject in obtaining the two documents, an argument might be offered that numbertime companyld be requisite for obtaining something number requisite. But this is number so. The decree may be companyplicated, and it may be open to draw it up in two different ways, and the practitioner may well want to see its form before attacking it by his memorandum of appeal. As to the judgment, numberdoubt when the case does number companye from up companyntry, the practitioner will have heard it delivered, but he may number carry all the points of a long judgment in his memory, and as Sir John Edge says, the Legislature may number wish him to hurry to make a decision till he has well companysidered it. These observations were an answer to the companytention that numbertime companyld be requisite for obtaining something number requisite. The legislature allowed the exclusion even though the rules of a companyrt might number require a companyy to be annexed to the memorandum of appeal for a party who intends to file an appeal may desire to examine the decree or the judgment before he launches a further proceeding. Therefore, the exclusion was allowed irrespective of tile rules of a companyrt which permit a party to file an appeal without annexing a certified companyy of the judgment or decree or order. In Imperial Bucket Co. v. Smt. Bhagwati Basak 1 there are however observations to the effect that an appellant will have the benefit of s. 12 in a case where he has annexed to the memorandum of appeal a certified companyy of the judgment appealed from even though by the statute under which the appeal is filed, numbercertified companyy of the order appealed from is required. This decision does number necessarily mean that where a companyy is applied for and obtained but number annexed the time in obtaining it was for a thing number requisite. As the Privy Council observed, a party might like to examine the judgment or the decree or the order be- fore he challenged it in a higher forum. Though the judgment states that such time would be excluded where the companyy is annexed, it does number lay down that there can be numberexclusion of time where it is number annexed. But in Gangaram Beharilal 1 a view has been taken that sub-ss. 2 and 3 of s. 12 would only be attracted when a companyy of the judgment or decree or order appealed from accompanies the application for review. This view is number in companysonance with and in fact is companytrary to the interpretation of s. 12 by the Privy Council in Surtys Case 1 and is therefore unwarranted. The same must also be said of Abdul Aziz v. Jai Ram 1 . As observed by the Privy Council in Surtys Case the view of the High Courts of Bombay, Calcutta and Allahabad as expressed in Haji Hassum v. Noor Mohammedan 5 , Kalipada v. Shakhar 6 , and Waji-Ali Shah v. Nawal Kishore 7 was that an appellant was entitled to exclusion of time in obtaining a companyy of a judgment and decree even though the rules permit him to file the appeal without annexing such a companyy. The view companytended for on behalf of the respondents is thus number only companytrary to the decision of the Privy Council but if accepted would lead to a somewhat surprising result, viz., that if the petitioners had waited till the companyy of the order was furnished to them, their application would have been in time or if they had withdrawn their application and filed a fresh one or amended their application and annexed the companyy of the order such a fresh application, or such amended application, which in its unamended form was in their view time barred, would have been well within the period of limitation. In our view such a result is number to be companytemplated. As the Privy Council has laid down the provisions of s. 12 2 and 3 are a positive A.I.R. 1954 Cal. 520. 2 A.T.R. 1952 Bhopal 39. 3 54 I.A. 161. 4 A.I.R. 1951 H P. 67. 5 1,T,.R. Born. 643. 6 24 Cal. 235. I.T,.R. 17 All. 213. direction excluding the time taken in obtaining a companyy of the judgment and decree or order as the case may be and those provisions are irrespective of the Code of Civil Procedure or the rules made by a companyrt under s. 122 of the Code. Such rules if they permit a memorandum of appeal to be filed without annexing thereto a companyy of the judgment or decree or order companyfer a privilege on a would be appellant but do number govern the positive direction companytained in s. 12. The High Court in this view, therefore, was number right in dismissing the petitioners application for leave to appeal on the ground that it was barred by limitation. In the result, we allow the appeal and set aside the High Courts order of dismissal and remand the case directing the High Court to decide that application in the hot of this judgment and companysider whether the petitioners were entitled to leave under Art. 133 of the Constitution. As we are allowing the appeal. numberorder need be passed on the petition for companydonation of delay. The Special Leave Petition 1110 of 1965 is allowed to be with. drawn.

Case appeal was accepted by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 102 of 1964. Appeal by special leave from the judgment and order dated July 30, 1962 of the Punjab High Court Circuit Bench at Delhi in Civil Writ No. 402-D of 1962. Goburdhan for the appellants. G. Patwardhan and B. R. G. K. Achar for the respondents. The Judgment of the Court was delivered by Wanchoo, J. The only question raised in this appeal by special leave from the judgment of the Punjab High Court is the interpretation of s. 9 1 of the Evacuee Interest Separation Act, No. LXIV of 1951 hereinafter referred to as the Act . The question arises in this way. The appellants were mortgagees of certain properties, including a house, on the basis of a, mortgage-bond dated July 19. 1928. The companysideration of the bond was Rs. 25,000 and interest was provided at nine per cent per annum companypoundable annually. Out of the properties companyered by the bond, one of the properties was sold to Bibi Chand Tara on October 23, 1937 subject to the earlier mortgage of 1928. In October 1949, Bibi Chand Tara was declared an evacuee. In 1939 the appellant filed a suit against the orignal mortgagors and others including Bibi Chand Tara for the amount due under the mortgage. A preliminary decree was passed in their favour in March 1942 and the final decree followed in April 1945. It appears that certain sums were received by the appellants before they had filed the suit. Certain other sums were also received after the preliminary and final decrees. It further appears that certain Zamindari properties which were also included in the mortgage had been sold after the final decree and the money appropriated towards the decree. Another house which was also included in the mortgage bond was sold later and the sale money was again appropriated towards the decree. Eventually the appellants put the decree in execution in November 1952 against the house in dispute for a sum of Rs. 60,000 and odd,. There was a sale in that execution proceeding, but it was set aside on the application of the Assistant Custodian, Patna. Thereafter the appellants made an application before the Assistant Custodian for the recovery of the mortgage money claimed by them. and in this application their claim was for Rs. 40.000 and. odd. This application was also dismissed as it was filed before a wrong authority. Eventually the. appellants filed a claim for the same. amount before the Competent Officer under the Act inasmuch As the property in dispute was companyposite property in Which, the evacuee had mortgagors interest while the appellants who-are number-evacuees had mortgagees interest which had ripened into a decree for sale. This application was resisted by the Custodian on a number of grounds. In the present appeal we are only. companycerned with one ground based on s. 9 1 of the Act., The companytention of the Custodian was that the appellants were number entitled to any interest higher than five per cent per annum simple from the date of the mortgage under s. 9 1 of the Act. Therefore the Custodian claimed that the entire transaction should be reopened from the date of the mortgage and the amounts already received by the appellants should be taken into account after allowing interest at five per cent per annum simple to them and if, more interest had been paid that should be credited towards the principal and after such accounting the sum if any due on the mortgage companyld be claimed by the appellants. The Competent Officer held that though the provisions of s. 9 1 were retrospective to a certain extent they companyld number be stretched to mean that if a mortgagee had already realised interest at a rate exceeding five per centum Per annum simple even before the Act came into force the excess would go to liquidate the principal amount proportionately. He therefore held that in the absence of special provision to the effect that past accounts should be reopened, the amount received as interest prior to the decree companyld number be taken into account. The Competent Officer further held that the principal money companyld number be reduced on account of any excess realisation of interest when such excess was realised before the Act came into force. He therefore ordered that 1 the amount of interest exceeding five per cent per annum before the institution of the suit would number reduce the principal amount, 2 the appellants would be entitled to simple interest at six Per cent per annum, i.e. the rate at which interest was decreed in their favour in the mortgage suit from the date of the institution of the suit till November 26, 1952 on the principal sum only, 3 the appellants would be entitled to interest at five per cent per annum simple from November 27, 1952, and 4 the appellants would also be entitled to companyts of the suit decreed in their favour. The actual amount due was ordered to be worked out on these principles. The Custodian took the matter in appeal to the Appellate Officer. The Appellate Officer held that on the words of s. 9 1 the entire account must be made afresh on the basis of interest being ,,allowed at five per cent per annum simple on the principal amount from-. the date of the. mortgage and that any sums received over above this would go to reduce the principal. He therefore allowed the appeal and set aside the order of the Competent Officer and ordered account to be taken in the manner indicated by him. The appellants,then applied to the punjab High Court by a writ petition, which was dismissed in limine. Their application for a leave to Appeal to this Court was also dismissed. Thereafter they ,obtained special leave from this Court, and, that is how the matter has companye before us L S5SCI--6 The Act deals with separation of the interest of an evacuee from the interest of a number-evacuee in companyposite properties. Under S. 2 d companyposite property inter alia means any property which, or any property in which an interest, has been declared to be evacuee property and in which the interest of the evacuee is subject to mortgage in any form in favour of a person, number being an evacuee. Under s. 2 h , principal money in relation to a mortgage deed executed by an evacuee inter alia means in the case of mort- gage deed which has number been executed by way of renewal of a prior mortgage deed, the sum of money advanced by way of loan at the time of the execution of the mortgage deed. Under S. 3 the Act and the rules and orders made thereunder have effect numberwithstanding anything inconsistent therewith companytained in any other law for the time being in force or in any instrument having effect by virtue of any such law, save as otherwise expressly provided in the Act. Sections 4 to 8 provide for machinery for separation of the claims of evacuees and number-evacuees in companyposite properties. Then we companye to S. 9 1 which is in these terms Notwithstanding anything to the companytrary in any law or companytract or any decree or order of a civil companyrt or other authority, where the claim is made by a mortgagee, numbermortgaged property of an evacuee shall, subject to the provisions of subsection 2 be liable for the payment of interest at a rate exceeding five per cent per annum simple on the principal money advanced or deemed to have been advanced. It is unnecessary to refer to S. 9 2 for we are number companycerned with that provision in the present appeal. We may however refer to s. 8 3 which is material and in these terms If there is any dispute as to whether a liability is a mortgage debt or number or whether any claim submitted under section 7 exists, the Competent Officer shall decide such dispute Provided that a decree of a civil companyrt other than an ex parte decree passed after the 14th day of August, 1947 shall, subject to the provisions of sections 9 and 10, be binding on the Competent Officer in respect of any matter which has been finally decided by such decree-, and where any matter was decided by an ex parte decree passed by a civil companyrt after the 14th day of August, 1947, the Competent Officer may decide such matter afresh and on such decision being made the ex parte decree shall be deemed to have numbereffect. Section 10 provides for separation of the interest of evacuee from the interest of claimants in companyposite properties and lays down how that will be done Clause b specially provides for the manner in which the claim of a mortgagee will be dealt with by the Competent Officer, but we are number companycerned with the details of that provision. It will be seen from a companysideration of these provisions that the Competent Officer is bound by the decree of a civil companyrt except an ex parte decree passed after August 14, 1947 in respect of a mortgage subject to the provisions of ss. 9 and 10. Section 10 indicates how the Competent Officer is to separate the interest of an evacuee from the interest of a number-evacuee, even in the case of a decree except an ex parte decree passed after August 14, 1947. Section 9 1 provides for interest at five per cent per annum simple, and the decree in a mortgage suit except an ex parte decree passed after August 14, 1947 which is otherwise binding on the Competent Officer is subject to the provisions of s. 9 1 as to interest. It will also be numbericed that there is numberprovision in the Act which specifically provides for reopening of transactions relating to mortgage and taking accounts from the date of the mortgage on the basis of interest provided in s. 9 1 and for crediting anything paid as interest over and above the rate provided in s. 9 1 to- wards principal. Prima facie therefore in the absence of such a provision it cannot be assumed that the legislature intended that a mortgage transaction should be reopened from the date of the mortgage and accounts taken afresh and anything paid in excess of five per cent per annum simple interest applied towards reduction of the principal amount. We have therefore to see whether there is anything in the words of s. 9 1 which leads to this result in the absence of a specific provision to that effect in the Act. Section 9 1 begins with a number-obstante clause and lays down that it will apply numberwithstanding anything to the companytrary in any law or companytract or any decree or order of a civil companyrt or other authority. It then provides that where a claim is made by a mortgagee, as in the present case, numbermortgaged property of an evacuee shall be liable for the payment of interest at a rate exceeding five per cent per annum simple on the principal money advanced. The key words in the provision are numbermortgaged property shall be liable. These words indicate that the Competent Officer when he companyes to deal with a liability under a mortgage must calculate this liability on the basis that interest should be allowed only on the principal amount and only at the rate of five per cent per annum simple., The liability which the Competent Officer has to determine is with respect to the amount still due to the number-evacuee. Further as the number- obstante clause includes any decree of a civil companyrt and as such decree is subject to s. 9 1 in view of the proviso to s. 8 3 , the Competent Officer would number be bound by the calculation of interest made by the civil companyrt and would have to determine the liability still due on the mortgage himself on the basis of simple interest at the rate of five per cent per annum on the principal sum advanced. Any calculation made by the civil companyrt in arriving at the sum decreed by it on the basis of interest at more than five per cent per annum so far as the liability still due is companycerned would number be binding on the Competent Officer and he will have to make his own calculations on the basis of simple interest at the rate of five per cent per annum. Similarly in a case where there is numberdecree and there is still some liability on the mortgage, the Competent Officer would number be bound by the rate of interest mentioned in the mortgage deed and will calculate the liability still due on the basis of simple interest at the rate of five per cent per annum on the principal amount advanced. But S. 9 1 clearly shows that it applies only where the liability is still due and there is numberhing in the words of S. 9 1 which gives power to the Competent Officer to reopen the account under the mortgage from the date of the mortgage and for that purpose treat anything paid as interest under the companytract over and above five per cent per annum simple interest as payment towards reduction of the principal amount Section 9 1 in our opinion only deals with liability still due and does number companytemplate that any payments made already under the companytract as interest should be taken partly towards interest and partly towards principal if they are above five per cent per annum simple interest. As S. 9 1 speaks only of the liability of the mortgaged property it can only take in liability still due, for whatever has been paid in accordance with the companytract towards interest is numberlonger a liability. This companyclusion based on the words of S. 9 1 is enforced by the fact that there is numberspecific provision in the Act for reopening all accounts under the mortgage from the date of the mortgage, treating any interest paid already at a rate higher than five per cent per annum simple as going towards reduction of the principal sum. Two situations may arise before the Competent Officer in such circumstances when calculating the liability under a mortgage. In one case there may be numberdecree already passed in favour of the mortgagee. In such a case in calculating the liability still due on the mortgage, the Competent Officer will calculate that liability on the basis of simple interest at the rate of five per cent per annum on the principal money advanced and may ignore the rate of interest mentioned in the companytract. But even so, the words of s. 9 1 do number give him power to reopen the accounts and what- ever has been paid towards interest, if it is number in excess of the companytractual rate of interest though it may be in excess of the rate of five per cent per annum simple interest, cannot be taken into account in reducing the principal amount. But whatever is still due under the mortgage will have to be worked out on the basis of simple interest at the rate of five per cent per annum on the prin- cipal amount advanced. We may illustrate this by an example, Suppose a mortgage was entered into on January 1, 1949 and the interest therein is nine per cent per annum. Suppose that interest for the years 1949 and 1950 has been paid at the companytractual rate but numberhing has been paid thereafter. in such a case, the amount paid in excess of five per cent per annum for 1949 and 1950 will number go to reduce the principal but thereafter interest will be calculated at five per cent per annum to arrive at the liability on the mortgaged property or what is still due. The second case which may arise before the Competent Officer would be a case where a decree has been passed on the mort- gage bond except an ex parte decree passed after August 14, 1947. In such a case also the Competent Officer cannot take into account anything paid in excess of five per cent per annum simple interest before the date of the suit provided it is number at more than the companytractual rate but as the decree is subject to s. 9 1 , the Competent Officer will have to calculate interest at five per cent per annum simple from the date of the suit and cannot award more interest in calculating the liability still due under the mortgage. Of companyrse in both the cases if before the suit numberhing has been paid towards interest or if something has been paid but it is less than five per cent per annum simple interest on the principal amount advanced. the Competent Officer in calculating the liability still due on the mortgage will have to allow five per cent per annum simple interest from the date of the mortgage to make up the deficiency, if any. As we read s. 9 1 , we find numberprovision in it for reopening the account from the very beginning and utilising any interest paid in excess of five per cent per annum simple but within the companytractual rate towards reducing the principal amount. Section 9 1 only deals with the liability of the mortgaged property which may still be due when the claim is made before the Competent Officer. Though the provision is retrospective in the sense that where the liability is still there, interest has to be calculated at five per cent per annum simple there is numberhing in the words of s. 9 1 which authorises the reopening of accounts and utilising the excess over five per cent per annum towards reduction of principal provided the payment of interest already made is within the companytractual rate. In this view the order of the Appellate Officer by which he ordered the reopening of the accounts and which was upheld by the High Court is incorrect. At the same time we are of opinion that the order of the Competent Officer is also number quite companyrect, though it is more in accord with the interpretation of s. 9 1 which we have indicated above. On the view we have taken the liability will be calculated thus Any amount paid before the date of the suit i.e. December 11, 1939, provided it is number more than the companytractual rate of interest though it may be above five per cent per annum simple will number go to reduce the principal amount. From the date of the suit till the date of the final decree i.e. April 25. 1945, the appellants will only be entitled to simple interest at the rate of five per cent per annum on the principal amount advanced for the decree though binding on the Competent Officer is subject, under the proviso to s. 8 3 , to S. 9 1 . Further from the date of the final decree also the appellants will be entitled to simple interest at the rate of five per cent per annum on the principal amount only. Any payments made after the date of the suit will be adjusted first towards interest at the rate of five per cent per annum simple and any payment made in excess thereof will go to reduce the principal. The appellants will also be entitled to the companyts of the suit which was decreed in their favour, but there will be numberinterest on such companyts. The account will be made up accordingly to determine the liability due under the mortgage. Thereafter it will be for the Competent Officer to deal with the matter as provided under S. 10 b or c . We therefore allow the appeal. The writ petition is allowed and the order of the Appellate Officer is set aside and the order of the Competent Officer varied in the manner indicated above.

Case appeal was accepted by the Supreme Court

CIVIL APPELLATE JURISDICTION Appeals by special leave from the judgments and orders dated November 27, 1961 of the Gujarat High Court in Special Civil Applications Nos. 704 and 707 of 1961. Arun Naginlal Surti, B. Datta and J. B. Dadachanji, for the appellants. K. Sen, M. S. K. Sastri and B. R. G. K. Achar, for the respondents. The Judgment of the Court was delivered by Ramaswami, J. These four companysolidated appeals are brought, by special leave, against the order of the High Court of Gujarat dated November 27, 1961 summarily dismissing four Special Civil Applications Nos. 704 to 707 of 1961 which had been filed by the appellants under Art. 227 of the Constitution of India for quashing the order of the Gujarat Revenue Tribunal dated July 18, 1961. The appellants had applied for companypensation to the Jagir Abolition Officer, Baroda under s. 13 of the Bombay Merged Territories Areas Jagirs Abolition Act, 1953, hereinafter referred to as the Jagirs Abolition Act, in respect of their proprietary jagirs. Against the award of companypensation made by the Jagir Abolition Officer the appellants preferred appeals under s. 16 of the Jagirs Abolition Act. Although these appeals were filed before the Revenue, Tribunal at Bombay, the appeals were transferred, on the bifurcation of Bombay State, to the Gujarat Revenue Tribunal at Ahmedabad, hereinafter called the Tribunal. All these appeals were ultimately dismissed by the Tribunal for number-prosecution on account of number-appearance of the advocate of the appellants. Against the dismissal of the appeals for number-prosecution the appellants filed applications for restoration before the Tribunal on May 6, 1961. The appellants companytended that since the orders passed dismissing the appeals were received by them on April 9 and April 20, 1961, the restitution applications filed on May 6, 1961 were within 30 days of the receipt of the order of dismissal and hence the applications for restoration were made in time under Regulation 21 of the Bombay Revenue Tribunal Regulations. The appellants also prayed that the applications for restoration should be allowed as they were prevented for sufficient cause from appearing at the hearing of the appeals. The Tribunal rejected the applications holding that they were barred under Art. 168 of the Limitation Act read with Regulation 55 and 0.41, rr. 17 and 19 of the Civil Procedure Code. The view taken by the Tribunal was that the applications for restoration should have been made within 30 days from the date of the order of dismissal. As the orders of dismissal was made on February 1, 2 and 3, 1961 and the applications for restoration were made only on May 6, 1961, the Tribunal held that they were time-barred. Aggrieved by the order of dismissal of the restoration applications the appellants moved the High Court of Gujarat under Art. 227 of the Constitution of India but their applications were dismissed in Iimine. The first question for companysideration is whether the orders of the Tribunal dated February 1, 2 and 3, 1961 are illegal and ultra vires because the Tribunal dismissed the appeals for number- prosecution and there was numberdecision of the appeals on merits. It was companytended that it was obligatory on the part of the Tribunal to decide the appeals on merits and record its decision in view of s. 17 of the Jagirs Abolition Act which states as follows 17. 1 The Bombay Revenue Tribunal shall, after giving numberice to the appellant and the State Government, decide the appeal and record its decision. In deciding an appeal under this Act the Bombay Revenue Tribunal shall exercise all the powers which a companyrt has and shall follow the same procedure which a Court follows in deciding appeals from the decree or order of an original Court under the Code of Civil Procedure, 1908. in our opinion, the companytention put forward by the appellants is well-founded and must be accepted as companyrect. Section 13 of the Jagirs Abolition Act provides that any jagirdar entitled to companypensation under section 11 or 12 shall, on or before the 31st day of July 1958 apply in writing to the Collector for determining the amount of companypensation payable to him under the said section. Section 13 2 states that on receipt of an application under sub-s. 1 , the Collector shall, after making formal enquiry in the manner provided by the Code, make an award determining the amount of companypensation. Section 14 of the Jagirs Abolition Act states as follows 14. 1 If any person other than a jagirdar is aggrieved by the provisions of this Act as abolishing, extinguishing or modifying any of his rights to, or interest in property and if companypensation for such abolition, extinguishment or modification has number been provided for in the provisions of this Act, such person may apply to the Collector for companypensation. The application under sub-section 1 shall be made to the Collector in the prescribed form on or before the 31st day of July 1958. The Collector shall, after holding a formal inquiry in the manner provided by the Code, make an award determining the companypen- sation in the manner and according to the method provided for in sub-section 1 of section 23 and section 24 of the Land Acquisition Act, 1894. Section 15 states that every award made under section 13 or 14 shall be in the form prescribed in section 26 of the Land Acquisition Act, 1894 and the provisions of the said Act shall, so far as may be, apply to the making of such award. Section 16 provides for an appeal against the Collectors award and is to the following effect An appeal shall lie against an award of the Collector to the Bombay Revenue Tribunal companystituted under the Bombay Revenue Tribunal Act, 1957 numberwithstanding anything companytained in the said Act. Section 20 provides for the finality of the award and of the decision of the Revenue Tribunal and reads as follows The award made by the Collector subject to an appeal to the Bombay Revenue Tribunal and the decision of the Bombay Revenue Tribunal on the appeal shall be final and companyclusive and shall number be questioned in any suit or proceeding in any Court. On a companysideration of the language of s. 17 1 of the Jagirs Abolition Act and in the companytext of s. 20 of the Jagirs Abolition Act we are of the opinion that it is obligatory on the part of the Tribunal to decide an appeal on merits even though there is default in the appearance of the appellants and to record its decision regarding the merits of the appeal. If an appeal is dismissed for want of prosecution it cannot be said that the Tribunal has decided the appeal and recorded its decision within the meaning of s. 17 of the Jagirs Abolition Act. It cannot be supposed that the legislature intended by the word decide in s. 17 1 to mean dispose of the appeal or to put an end to the appeal. It is important to numberice that s. 20 of the Jagirs Abolition Act makes a decision of the Tribunal in appeal as final and companyclusive and number to be questioned in any suit or proceeding in any Court. In the companytext of s. 20 and in view of the express language of s. 17 1 of the Jagirs Abolition Act we are of opinion that the Tribunal has numberpower to dismiss an appeal for number-prosecution but it is obligatory on its part to decide the appeal on merits and to record its decision even though there is default on the part of the appellant to appear in the appeal. The second question of law for companysideration in this case is whether, on a proper companystruction of Regulations 19, 20 and 21 of the Bombay Revenue Tribunal Regulations, 1958, the Tribunal was right in taking the view that the applications for restoration made by the appellants were barred by limitation. Section 14 of the Bombay Revenue Tribunal Act Bombay Act No. XXXI of 1958 deals with the practice and procedure to be followed by the Gujarat Revenue Tribunal. Section 14 states 14. 1 Subject to the provisions of this Act and to the previous approval of the State Government, the President may make regulations for regulating the practice and procedure of the tribunal, including the award of companyts by the Tribunal, the levy of any process fee, the right of audience before the Tribunal, the sittings of the members either singly, or in benches companystituted by the President or such member as is authorised by him from amongst the members of the Tribunal, the disposal by the Tribunal, or a bench thereof, of any proceedings before it numberwithstanding that in the companyrse thereof there has been a change in the persons sitting as members of the Tribunal or bench and generally for the effective exercise of its powers and discharge of its functions under this Act. Where any members sit singly or where any benches are companystituted, such member or bench shall exercise and discharge all the powers and functions of the Tribunal. The regulations made under this section shall be published in the Official Gazette. Regulation 19 deals with procedure to be followed by the Tribunal in case of number-appearance of parties. Regulation 19 is to the following effect 19. 1 If on the date fixed for hearing or any other subsequent day to which the hearing may be adjourned, the appellant or applicant does number appear either in person or through his agent or lawyer when the appeal or application is called for hearing, the Tribu- nal may dismiss the appeal or application or may decide it on merits, after hearing the respondent or his agent or lawyer, if present. If on the date fixed for hearing or on any other subsequent day to which the hearing may be adjourned, the respondent or opponent, as the case may be, does number appear in person or through his agent or lawyer when the appeal or application is called for hearing the Tribunal may decide the same on merits, after hearing the appellant or applicant or his agent or lawyer Regulation 20 provides for restoration of an appeal or application and reads as follows If any of the parties was absent on the date of the hearing, either preliminary or final, and the appeal or application was heard and declared ex-parte, the party companycerned may apply for restoration of the appeal or application, as the case may be, and if the party satisfies the Tribunal that he had numbernotice of the date of the bearing or that be was prevented by sufficient cause from appearing when the appeal or application was called for hearing, the Tribunal may restore the appeal or application to its file, provided that where the other party had appeared in the appeal or application such party shall be given numberice and an opportunity of being heard before the order for resto- ration of the appeal or application is made. Regulation 21 is to the following effect An application for restoration of an appeal or application made under regulation 20 shall be filed within thirty days from the date of the receipt of the order or dismissal of the appeal or application and shall be accompanied by- a a certified companyy of the Tribunals order b the decision or order either in original or a certified companyy thereof in respect of which appeal or application sought to be restored is made c if the decision or order referred to in clause b is itself made in appeal against any decision or order, then also such latter decision or order either in original or a certified companyy thereof and d as many companyies of the restoration application as there are respondents or opponents. Regulation 55 states that in any matter number provided for in the Regulations the Tribunal shall follow the procedure, as far as it is applicable, laid down in the Code of Civil Procedure, 1908. From the scheme of the Regulations it is apparent that under Regulation 19 1 it is open to the Tribunal to dismiss an appeal for number-prosecution in a case where the appellant does number appear either in person or through his agent or lawyer. It is also open to the Tribunal in such a case to hear the respondent to the appeal and decide it on merits. Regulation 19 2 companytemplates a case where the respondent fails to appear and even so it is open to the Tribunal to hear the appellant and then decide the case on merits. Regulation 20 which provides for restoration of the appeal is a, companysequential regulation to Regulation 19. One of the companyditions for invoking the provisions of restoration under Regulation 20 is that the appeal or application was heard and decided ex-parte. On behalf of the respondent it is companytended by Mr. Asoke Sen that Regulation 20 only applies to cases companytemplated by the latter part of Regulation 19 1 and 19 2 and number to cases of dismissal for want of prosecution under the first part of Regulation 19 1 . We are unable to accept this submission as companyrect. In our opinion, the language of Regulation 20, on its true interpretation, applies number only to a case where the appeal has been decided on merits but also to a case where the appeal has been dismissed for want of prosecution under Regulation 19 1 . The reason is that in Regulation 19 1 and 19 2 the legislative authority uses the words decide it on merits but in Regulation 20 the expression used is decided ex-parte and we see numberreason, either in the language or companytext of Regulation 20, why it should number include in its scope and ambit an application for restoration of an appeal dismissed for number-prosecution as also an application for restoration of appeal decided on merits under Regulation 19 1 . If the view that we have taken as to the interpretation of Regulation 20 is companyrect, it follows that Regulation 21 applies to the present case and the period of limitation prescribed by that Regulation being 30 days from the date of receipt of the order of dismissal of the appeal, the applications of restoration made by the appellants in all the four cases were well within the period of limitation prescribed by Regulation 21. It follows, therefore, that the Tribunal companymitted an error of law in dismissing the applications of restoration made by the appellants in all the four appeals. For these reasons we allow these appeals, set aside the order of the Gujarat High Court dismissing Special Civil Applications 704 to 707 of 1961 and hold that the order of the Gujarat Revenue Tribunal dismissing the restoration applications Nos. GRT.D. 10 to 13 of 1961 dated July 18, 1961 is defective in law and must be set aside. We also hold that the orders of the Gujarat Revenue Tribunal dismissing Appeals Nos. REV.A. 27. 28, 29 and 30 of 1960 are ultra vires and illegal and must be set aside and order that these four appeals should go back to the Gujarat Revenue Tribunal for being reheard and dealt with in accordance with law.

Case appeal was accepted by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 1420 of 1966. Appeal by special leave from the judgment and order dated October 21, 1965 of the Mysore High Court in Writ Petition No. 2173 of 1964. T. Desai, B. R. L. Iyenger and B. R. G. K. Achar, for the appellant. B. Datar, Anil Kumar Sablok and B. P. Singh, for the respondent. The Judgment of the Court was delivered by Shelat, J. This appeal by special leave is against the Judg- ment and Order of the High Court of Mysore quashing the memorandum dated July 4, 1963 whereby the State Government terminated the service of the respondent. The only question arising in this appeal is one of interpretation of the Government Order No. GAD 46 SRR, dated September 22, 1961. The respondent entered government service as an officiating companyputor in the Government Press on March 11, 1958 and company- tinued in that post until September 1, 1958. He was thereafter appointed from time to time in officiating capacity in different posts though in the same department until December 3, 1959 when he was appointed as a proof examiner. He companytinued in that post until February 28, 1961. According to the appellants there was break in his service on March 1, 1961 as his service was terminated on February 28, 1961 and he was once again appointed on March 2, 1961 as a second division clerk industrial. . He companytinued in that post until July 4, 1963 when the impugned order terminating his service was passed. The first of March 1961 on which it was said there was break in his service was a holiday. There is numberdispute that the respondent was throughout work- ing in officiating capacity and was a local candidate like several other such employees appointed by direct recruitment by Government instead of regular recruitment by the Public Service Commission of the State as required by the rules of Recruitment. Rule 8 27A of the Mysore, Civil Service Rules, 1958 defines a local candidate as meaning a temporary Government servant number appointed regularly in accordance with the Rules of Recruitment to that service. Rule I A of the Mysore Government Servants Seniority Rules, 1957 provides that those rules do number apply to a person appointed as a local candidate so long as he is treated as such. It further provides that where his appointment is treated as regularised from any date, his seniority- in the service shall be determined in accordance with these rules as if he had been appointed regularly in accordance with the Rules of Recruitment to the post held by him on that day. Since the appointment of local candidates as in the case of the respondent was number made by or through the Public Service Commission as required by the Rules, the State Government with a view to regularise such appointments passed the said order dated September 22, 1961. The material portion of the said order runs as follows 2. All appointments to Class III Direct Recruitment Posts made by the local appointing authorities, both in the old Mysore area including Bellary District and in the other integrating areas up to 31st December 1959 inclusive may be regularised subject to the companydition that the candidates were within the prescribed age limits and had the requisite qualifications at the time of their initial appointments The services of local candidates shall be regularised with effect from the date of their appointment, from which their service is companytinuous provided they were in service on 1st January 1960 and companytinue to be in service at the time their services are regularised. The local service will companynt for purposes of leave, pension and increments but number for purposes of seniority only the service from the date of regularisation of their appointments in the particular department will companynt for seniority Breaks in service will number be companydoned even if such breaks are only for short periods. In the Writ Petition filed by the respondent against the im- pugned order dated July 4, 1963 terminating his service the respondent raised two points -- 1 that though he was a local candidate appointed from time to time to the aforesaid posts he was entitled to have his service regularised under the said order and ii that as he was entitled to be so regularised he was also entitled to the protection of Article 311 2 of the Constitution. Consequently, his service companyld number be terminated in the manner it was done by the impugned order. The companytention of the State Government on the other hand was that the order of regularisation did number apply to the respondent as his service was number companytinuous as required by the said order and therefore there was numberquestion of Article 311 being applicable to his case and the State Government was entitled therefore to terminate his service by the said order of July 4, 1963. The High Court on an interpretation of the Order dated September 22, 1961 repelled the Governments companytentions and held that the respondent was entitled to have his service regularised with effect from the date his service was companytinuous prior to December 31, 1959 and that being so, the order terminating his service on the erroneous basis that he was a temporary government servant number entitled to the benefit of the aforesaid regularisation order was violative of Article 311. This interpretation meant that the appointment and service of the respondent were number only to be regularised but as a result of such regularisation the respondent had to be treated as a permanent servant being entitled to the protection of Article 311 2 . The High Court arrived at this result on the interpretation it gave to the portion of the said Order which we have set out above. The High Court observed that sub-clause 2 of clause 2 of the said Order provided for the fixation of the date with effect from which the appointment was deemed to have been made permanent and that the second part of that sub-clause laid down the companyditions which if satisfied entitled the respondent for regularisation. According to the High Court the necessary companyditions for such regularisa- tion were - a that the local candidate should be in service on January 1, 1960 and b that he should companytinue to be in service at the time his service was to be regularised. The High Court further observed that what sub- clause 2 required was number companytinuity of service but that the services be companytinued at the time of the regularisation and that the intention of the Government was number to lay down the companydition of companytinuous service between December 31, 1959 and the date of the said Government order. It then observed When the Government order by a fiction of the law provided for regularisation of services with effect from a date anterior to 31-12- 1959, the local candidates who satisfy the qualifications and companyditions prescribed by sub-paras i and ii are deemed to have been permanently appointed with effect from a date anterior to 31-12-1959. Where the local candidate possesses the qualifications prescribed in sub-para i of para 2, if his initial appointment was made before 31-12- 1959, he is entitled to have his appointment regularised provided he was in service on 1st January 1960 and is companytinued in service at the time of the G.O., numberwithstanding any break in service between 31-12-1959 and 22-9- 1961. The High Court also held that sub-clause iv on which reliance was placed by the Government had reference to break in service before December 31, 1959 and number during the period subsequent to that date. Thus, according to the High Court if a local candidate was initially appointed prior to December 31, 1959 and was in service on January 1, 1960 and also on September 22, 1961 he was entitled to the benefit of the regularisation order. So long as he was in service on the two termini his service would have to be regularised irrespective of whether his service during the interval was companytinuous or number. The High Court also equated regularisation with permanence of service and therefore held that once a local candidates service was regularised he had to be treated as a permanent servant. Before we proceed to companysider the companystruction placed by the High Court on the provisions of the said order we may men- tion that in the High Court both the parties appear to have proceeded on an assumption that regularisation meant permanence. Consequently it was never companytended before the High Court that the effect of the application of the said order would mean only regularising the appointment and numbermore and that regularisation would number mean that the appointment would have to be companysidered to be permanent as an appointment to be permanent Would still require companyfirmation. It seams that on account of this assumption on the part of both the parties the High Court equated regularisation with permanence. We are however number called upon in this appeal to decide and we do number decide that question as Mr. Desai on behalf of the State Government assured us that the Government bad companye in appeal only in its anxiety to have the order interpreted by this Court as the companystruction placed by the High Court on the said order, if upheld, would have companysiderable repurcussions on the prospects of other State employees. He also assured us on behalf of the State Government that since the break in the service of the respondent during the material time was only of one day, viz., March 1, 1961, assuming there was such a break, the government would number do anything to adversely affect his service and would number take away the benefit which he acquired as a result of the High Courts judgment, even if we were to disagree with the interpretation placed by the High Court on the said Order. Coming number to the Order, sub-clause i of clause 2 provides that all appointments to Class III posts by direct recruitment made up to December 31, 1959 should be regularised provided the candidates satisfied the companyditions as to age and qualifications at the time of their initial appointment. The companytroversy arises ,on the companystruction of sub-clause ii . That sub-clause provides that the services of such candidates shall be regularised with effect from the date of their appointment from which their services are companytinuous provided they were in service on January 1, 1960 and -continue to be in service at the time their services are regularised. It is clear from the express words used in this sub-clause that companytinuity of service from January 1, 1960 until the date of the order is a companydition prescribed for regularisation. In other words, a candidate claiming the benefit of this order has to satisfy that he was initially appointed prior to December 31, 1959, that he was in service on January 1, 1960 and companytinued in that service, till the date of the order, i.e., September 22, 1961. This companystruction finds support from sub-clause iii which provides that local service prior to regularisation would be companynted for the purposes of leave, pension and increments though number for seniority as seniority was to be fixed from the length of service calculated from the date of regularisation. It is manifest that unless the local service was companytinuous such service companyld number be taken into account for the purposes, in particular of pension and increments. How would increments, for example, be granted unless the service prior to such increments was companytinuous ? The same companysideration would also apply in the case of pension. It had therefore to be provided as has been done in sub-clause iv that a break in service would number be companydoned for a period howsoever short. Continuity of service is thus a companydition for both sub- clauses 2 and 3. The High Court was therefore in error when it said that sub-clause iv did number relate to companysiderations under sub-clause ii or that it had reference only to a break in service before December 31, 1959. The High Court was also in error when it companystrued sub-clause ii to mean that the only thing it required was, that the candidate had to be appointed initially prior to December 31, 1959 and that he had to be in service on the two dates,. viz., January 1, 1960 and September 22, 1961 and that the service during the interval need number be companytinuous. If that companystruction were to be upheld it would result in injustice, for local candidates. number recruited regularly and number in companytinuous service provided they were in service on the two relevant dates, viz., January 1, 1960 and September 22, 1961, would get seniority over candidates. regularly appointed after December 31, 1959 and whose service Is companytinuous. Such a result would manifestly be both unjust and improper and companyld hardly have been companytemplated. Therefore the proper interpretation would be that in order that the regularisation order may apply to a particular case the local, candidate must be initially appointed prior to December 31, 1959, he must be in service on January 1, 1960 and companytinue to be in service without any break till the date of the said order. If his service is regularised, his service from the date of such regularisation would be companynted for seniority as against others who were recruited properly under the Rules of Recruitment. Under subclause however if the service is companytinuous from January 1, 1960 to September 22, 1961, such service is to be taken into account for purposes of leave, pension and increments but number for purposes of seniority. The companystruction which we are inclined to adopt thus harmonises all the provisions of the Order and besides. results in fairness to all the local candidates appointed by direct recruitment whether regularly or otherwise. For the reasons aforesaid the companystruction placed by the High Court cannot be sustained. Though the companystruction which we are inclined to adopt is in support of the stand taken by the State Government, in view of the assurance given by companynsel on behalf of the Government that this companystruction should number affect the regularisation of the respondents service and its having been companysidered by the High Court as permanent, it is number necessary to interfere with the order passed by the High Court. The appeal companysequently is dismissed.

Case appeal was rejected by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal Nos. 594 to 600 of 1965. Appeals by special leave from the judgment and order dated March 28, 1962 of the Allahabad High Court in I. T. Misc. Case No. 424 of 1959. K. Sen, T. A. Ramachandran, J. B. Dadachanji, for the appellants in all the appeals . T. Desai, Gopal Singh and R. N. Sachthey, for the respondent in all the appeals . The Judgment of the Court was delivered by Bhargava, J. These appeals by special leave are directed against the judgment of the Allahabad High Court returning an answer to the following question referred to it by the Income-tax Appellate Tribunal Whether on the facts and circumstances of the case the salary paid or credited to a Karta of the family for looking after the familys business was a permissible deduction under s. 10 2 xv in companyputing the income of the family business. The assessee was a Hindu undivided family carrying on a joint family business of companymission agency in cloth under the name of Jugal Kishore Baldeo Sahai and was, in addition, deriving income from some property and from some partnership business in which the karta Babu Ram was a partner representing the interest of the Hindu undivided family. The family companysisted of Babu Ram, his brother Gobardhandas and their sons. In June, 1946, the karta Babu Ram wrote a letter to his brother Gobardhandas, who was the only other adult member of the family, stating that, since he was managing all the business, he ought to get a salary of Rs. 1,000 per month. Gobardhandas promptly agreed to this proposal and companysequently in the account books of the family for the year in question a sum of Rs. 12,000 was debited in the expense account of the Hindu undivided family business, viz., of Jugal Kishore Baldeo Sahai and the same amount was credited in the name of Babu Ram as an individual. The first such credit was made in the account year relevant to the assessment year 1946-47 and similar credits companytinued to be made in subsequent accounting years upto the year relevant to the assessment year 1952-53. Thus, the debit against the Hindu family business at the rate of Rs. 12,000 per year and similar credit in the name of Babu Ram was made in the accounts for seven years. In each of these seven years the Hindu undivided family as the assessee claimed that this sum of Rs.12,000 every year should be deducted as an expenditure under s. 10 2 xv oft he Income-tax Act. The Income-tax Officer rejected the claimand that order was upheld by the Appellate Assistant Commissioner as well as by the Tribunal. Thereupon at the request of the assessee appellant, the question reproduced by us was referred by the Tribunal for the opinion of the High Court. The High Court answered the question against the appellant and upheld the view of the Tribunal. Consequently, these appeals have been brought up before -us. The High Court has taken the view that under the Hindu Law, a karta is bound by reason of his being the karta to manage all the business of the family without being entitled to any remuneration for the service of management. It went on to companyment that indeed, when under the law a karta represents the family, it would be anomalous to think of a karta as being an employee of himself or being entitled to remuneration for acting as such and receiving payment from his ownself. This view was expressed by the High Court on the basis of its opinion about the rights and duties of a karta of a Hindu undivided family under the Hindu Law and to arrive at this view, the Court relied on a companyment in Gopalchandra Sarkar Sastris Hindu Law, 1940 Edn., N. E. Raghavachariars Hindu Law, 4th Edn., and Maynes Hindu Law, II th Edn., and in addition, on a decision of the Madras High Court in Krishnswami Ayyangar v. Rajagopala Ayyangar. 1 It was on the basis of these companyments in the books of Hindu Law that the Allahabad High Court held the view that Babu Ram, being the karta of the family, was number entitled to draw any remuneration for carrying on the business of the Hindu undivided family. The decision of the Madras High Court and the views expressed by these companymentators do number show that a Karta of a Hindu undivided family is number entitled to charge for services rendered to the family business under any circumstances at all. The right to receive remuneration is negatived with some qualifications. Either- it is stated that numberremuneration is payable except under special arrangement, or a scope for payment is recognised by saying that the manager or karta is number ordinarily entitled to remuneration. The Madras High Court in the case of Krishnaswami Ayyangar v. Rajagopala Ayyangar 1 held that the managing companyarcener was number entitled to special remuneration in the absence of a valid special agreement. We are unable to understand the meaning of the expression valid special agreement. It is, of companyrse, necessary that before a karta receives remuneration, it should be under a valid agreement. In judging what is a valid or proper agreement which would justify the payment of remuneration paid to a karta of the Hindu undivided family for managing the business of the family to be deductible as an expenditure under s. 10 2 xv of the Income-tax Act, the test, we think, which should be applied, is whether the agreement has been made by or on behalf of all the members of the Hindu undivided family and whether it was in the interest of the business of the family, so that it companyld be justified on grounds of companymercial expediency. That is the test which has always to be applied when companysidering whether a particular I.L.R. 18 Mad. 73 expenditure claimed as a deduction under s. 10 2 xv of the Income-tax Act has been incurred wholly and exclusively for the purpose of the business. This Court in Jitmal Bhuramal v. Commissioner of Income-tax Bihar and Orissa 1 has already held that a Hindu undivided family can be allowed to deduct salary paid to a member of the family, if the payment is made as a matter of companymercial or business expediency. Mr. S. T. Desai, learned companynsel appearing for the department tried to distinguish that case on the ground that in that case the salaries which were held to be deductible were paid to junior member of the family and number to the karta. The view expressed by this Court was in general terms and did number make any distinction between a junior member of the family or a karta. The principle was laid down by this Court without any such distinction even though the Court was then companycerned with salaries which had been paid to junior members of the family. We do number companysider that the decision given by this Court in that case needs to be given a narrow interpretation so as to companyfine the right of deducting the remuneration paid by a Hindu undivided family to junior members only. There seems to be numberreason at all why if a karta is paid remuneration he should be in a position different from that of any junior member. It is true that a karta has a right to manage the property of the Hindu undivided family on behalf of all the companyarceners but there is numberobligation or duty on him to carry on a particular business of the family. It is well- established that any member of a Hindu undivided family including a karta can have a separate personal source of income if that income is earned independently of the Hindu undivided family assets or business. It is primarily on this basis that it has been held that salary or remuneration paid to the junior member of the family for services rendered to the family business becomes his separate income and companysequently a deductible expenditure under s. 10 2 of the Act when companyputing the income of the family. In similar circumstances, if a karta offers his services to the family instead of choosing an independent career to earn his separate income and receives remuneration from the family, there is numberreason why the remuneration so paid to him cannot be treated as an expenditure for-carrying on the business of the family and companysequently expended wholly and exclusively for the purpose of the business and deductible under s. 10 2 xv of the Act. As we have already indicated above, the general view expressed by companymentators on Hindu Law as well as in decided cases is that even the karta of a family can be paid remuneration for carrying on family business, provided it is under some agreement. There seems to be numberreason why, if all persons companypetent in a Hindu 1 44 I.T.R. 887. undivided family to enter into an agreement on its behalf companysider it appropriate that the karta should be paid remuneration and enter into an agreement to pay remuneration to him, that remuneration should number be held to be an expenditure incurred in the interest of the family, and companysequently an expenditure deductible under s. 10 2 xv of the Act. In the present case, Babu Ram received remuneration when he and his brother Gobardhandas agreed that such remuneration should be payable. The other members of the Hindu undivided family were minor sons of Babu Ram himself or of Gobardhandas. Babu Ram and Gobardhandas, being the only two members of the family companypetent to act on behalf of the family including the minors, entered into this agreement, obviously because it was companysidered in the interest of the family that Babu Ram should receive this payment. We are number at all impressed by the argument urged on behalf of the department that, since some of the companyarceners were minors, numbervalid agreement at all on their behalf companyld have been entered into by Babu Ram or Gobardhandas so as to allow payment of remuneration to the karta, Babu Ram. The minor sons of Babu Ram companyld certainly be represented by himself and the minor sons of Gobardhandas companyld either be represented by him, being his sons, or, in the alternative, Babu Ram companyld represent them in the agree- ment as the karta of the family to which they belonged. It is true that under the agreement, some payment was to be made out of the income of the family to Babu Ram so as to become his separate property. But that circumstance would number, in our opinion, invalidate the agreement merely because Babu Ram represented some of the minors on whose behalf the agreement was made. If the agreement is held to be in the interest of the family, the agreement would number be invalidated when executed on behalf of the minors by the person authorised to act on their behalf simply because the minors happened to be represented by a person who receives some benefit under the agreement. The test of the validity of an agreement on behalf of a minor is that it should be for the benefit of the minor, and in this case, there is numberfinding that the agreement entered into on behalf of the Hindu undivided family including the minors by Babu Ram and Gobardhandas was in any way prejudicial to the interests of the minor members. On the other hand, the facts found show that some of the minors subsequently attained majority and numbere of them challenged the validity of this agreement on the ground that it had been executed during their minority and that it was against their interest. In fact, it was found that subsequently, when there was a partition ill which even the sons of Babu Ram separated from him the amount to the credit of Babu Ram in the accounts was treated as his separate asset and was number included in the assets of the Hindu undivided family without any objection from any of the members of the family who were minors at the earlier stage when the agreement was entered into Consequently, we are unable to hold that the agreement, by which Babu Ram was allowed this remuneration of Rs. 1,000 p.m., was in any way vitiated, and, as we have already held above, it was an agreement executed in the interest of the family. in our view, if a remuneration is paid to the karta of the family under a valid agreement which is bonafide and in the interest of, and expedient for, the business of the family and the payment is genuine and number excessive, such remuneration must be held to be an expenditure laid out wholly And exclusively for the purpose of the business of the family and must be allowed as an expenditure under s. 10 2 xv of the Act. In this companynection, we may take numberice of a decision in the Patna case, Commissioner of Income-tax, Bihar and Orissa v. Jainarain Jagannath, 1 wherein also it was held that a member of a joint Hindu family might companyceivably do business in his individual capacity and in that capacity might render services to the joint family trading firm in companysideration of which the firm might pay him such remuneration as it would pay to an outsider. If such remuneration is number excessive and is reasonable and is number a device to escape income-tax, then it will be a legitimate deduction in companyputing the, profits of the business. If, on the other hand, the amount paid is unreasonably high and disproportionate to the services rendered by him, then it may be treated as part of the profits of the firm distributed in a particular manner. In the present case, there is numberindication of any finding that.the payment to Babu Ram was at all high, or was number companymensurate with the services rendered by him. An alternative ground, on which Mr. Desai on behalf of the department challenged this deduction under s. 10 2 xv , was that the remuneration was being paid to Babu Ram number only to marriage the Hindu undivided family business carried on under the name of Jugal Kishore Baldeo Sahai, but also for other businesses, including those of the partnership firms in which Babu Ram was a partner in his own name, though representing the Hindu undivided family. In support of this proposition, learned companynsel relied on the decision of the Calcutta High Court in Jitmal Bhuramal v. Commissioner of Income-Tax, Bihar Orissa, 2 which judgment was affirmed by this Court as reported in Jitmal Bhuramal v. Commissioner of Income-tax, Bihar Orissa. 3 . In that case, there was a finding of fact that two junior members of the Hindu undivided family, Gulzarilal and Madanlal, were employed in the partnership business in which the Karta of the family was a partner and had rendered services to that business. This Court, while recognising the principle that 1 13 I.T.R. 410. 3 44 I.T.R. 887. 2 37 I.T.R. 528. a Hindu undivided family is allowed to deduct salaries paid to members of the family, if the payment is made as a matter of companymercial or business expediency, laid down the exception that the services rendered must be to the family. It was held that, since the services had been rendered number to the family, but to the partnership firm, the remuneration paid to those members was number a legitimate deduction -under s. 10 2 xv from the income of the Hindu undivided family, and that it companyld be a valid deduction only when companyputing the income of the partnership business. It is true that in the case before us the statement of the case mentions that the agreement for payment of remuneration to Babu Ram was to the effect that he was to get Rs. 1,000 p.m. for looking after the businesses of the Hindu undivided family. It is because of the use of the word businesses in the plural that learned companynsel urged that the remuneration given to Babu Ram was number merely for looking after the Hindu undivided family business, but also for rendering services to the partnership firms in which Babu Ram was a partner. We do number companysider that this interpre- tation of the agreement is companyrect. The agreement does number envisage any payment to Babu Ram for services rendered to the partnership firms. The language used was that Babu Ram should receive the remuneration for managing all the businesses of the Hindu undivided family, which can only mean that he was to manage the affairs of the Hindu undivided family firm and also to look after the interests of the Hindu undivided family in other businesses. Thus, the remuneration was number intended to companyer any services rendered by him to the partnership firms apart from whatever he was required to do in the capacity of looking after and managing the affairs of the Hindu undivided family. The principle laid down in the case of Jitmal Bhuramal v. Commissioner of Income-tax, Bihar and Orissa 1 is, therefore, number applicable to the case before us. The appeals are companysequently allowed.

Case appeal was rejected by the Supreme Court

Shah, J. Messrs. T. D. Kumar Bros. Private Ltd., hereinafter called the companypany, was incorporated in 1923 under the Indian Companies Act, 1913. The paid up capital of the companypany was Rs. 1,02,000 representing 1,020 shares of Rs. 100 each. The entire share capital was held by three persons who may be called Kumars. Between September 19 to November 14, 1952, the shareholding of Kumars was transferred to five persons who may be called Ghoshes, and as a part of that scheme for transfer of the shares, investments of the companypany of the value of Rs. 1,01,000 odd were transferred to Kumars and the companypany purchased 400 shares of Messrs. East India Housing and Land Development Trust Ltd., hereinafter called the Trust, held by two out of the five Ghoshes at the rate of Rs. 257-4-0 per share. The companypany sold the shares of the trust to Messrs. Chandoo Lall, a registered sharebroker, at the rate of Rs. 60 per share, and the latter in their turn sold the shares to Bijan Mohan Kundu at the rate of Rs. 61 per share. In proceedings for assessment for the assessment year 1953-54 the companypany claimed that it suffered a total loss of Rs. 76,241 in the transactions of purchase and sale of shares. The Income-tax Officer disallowed the claim and the order was companyfirmed by the Appellate Assistant Commissioner. In appeal, the Income-tax Appellate Tribunal held that the transaction of purchase and sale of the shares of the trust was number a part of the companypanys business and on that account must be regard as a loss in the nature of capital and cannot be set off against the companypanys profits. The Tribunal at the same time observed that they did number propose to express any opinion on the genuineness or otherwise of the transaction relating to the purchase and sale of the shares of the Trust. During the pendency of proceeding for assessment of income, the Income-tax Officer, Companies District IV, Calcutta, initiated proceedings under section 28 1 c of the Indian Income-tax Act, 1922, and passed an order on September 29, 1955, imposing upon the companypany a penalty of Rs. 42,000. In the view of the Income-tax Officer there was overwhelming proof that the companypany had neither purchased number sold the shares of the trust. The Appellate Assistant Commissioner in appeal companyfirmed the order imposing penalty. The Tribunal in second appeal held on review of the evidence that the companypany had failed to substantiate their claim that any sale of the shares of the trust had at all been effected. There was, in the vies of Tribunal, deliberate fabrication of accounts in recording the sales and that, in the circumstances of the case, imposition of penalty under section 28 1 c was undeniably called for. The Tribunal, However, reduced the penalty to Rs. 25,000. The companypany then applied that a statement of the case be drawn up and the following question be referred under section 66 1 of the Income-tax Act, 1922 to the High Court of Calcutta as arising out of the order of the Tribunal Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal had evidence or material for the finding that there was deliberate fabrication of the accounts by the assessee- companypany in order to claim the loss in the return and the imposition of penalty upon the companypany in order to claim the loss in the return and the imposition of penalty upon the companypany under section 28 1 c of the Act is proper and valid ? Whether in view of the finding of the Tribunal, in the appeal against the assessment, that the transaction was number a trading transaction of the companypany, the companypany companyld be made liable for penalty under section 28 1 c of the Act ? The Tribunal rejected the application. They observed that in the proceedings for imposition of penalty they had to companysider whether the companypany had companycealed inaccurate particulars of such income so as to attract liability to pay penalty provided for in section 28 1 c of the Income-tax Act, and that numberquestion of law arose out of their order. A petition under section 66 2 of the Income-tax Act, 1922, was lodged by the companypany before the High Court of Judicature at Calcutta. It was argued in that proceeding that, even if the facts found by the Tribunal be companyrect, section 28 1 c of the Indian Income-tax Act, 1922, was number attracted regard being had to the proper meaning of the word income in that sub-clause. The High Court rejected the application observing that the question sought to be raised before them did number arise out of the order of the Tribunal, and even if it arose on the finding given by the Tribunal, the judgment of this companyrt in Commissioner of Income-tax v. Scindia steam Navigation Co. Ltd. precluded the Court from calling for a statement of the case on the questions suggested. With special leave granted by this companyrt, the companypany has appealed to this companyrt. Counsel for the companypany companycedes that the first question submitted in the applications to the Tribunal and the High Court was one of fact and the High Court companyld number call upon the Tribunal under section 66 2 of the Income-tax Act to state a case and refer that question. Counsel, however, submitted that the second question arose out of the order of the Tribunal and raised a substantial question of law. The question suggested in the petition under section 66 2 before the High Court was that since the Tribunal had in an appeal against the order of assessment companye to the companyclusion that the transaction relating to the purchase and sale of the trust shares was a genuine transaction, but it was number a part of its trading activity, an order under section of the Indian Income-tax Act companyld number be made by the Income-tax Officer. The question sought to be argued before the High Court was somewhat different. The companypany apparently did number press the question set out in the petition, but submitted before the High Court that the loss alleged to have been suffered in respect of the transaction of sale of shares of the trust is number income within the meaning of section 28 1 c of the Income-tax Act. But the Tribunal was never asked to refer that question to the High Cour number was the High Court requested to call upon the Tribunal to state a case on that ground alone the argument raised by the companypany was liable to be rejected. Again it is clear that the question whether having regard to the decision of the Tribunal in the assessment proceedings an order imposing penalty under section 28 1 c of the Act companyld be made was never raised or argued before the Tribunal, and the Tribunal did number decide that question. The only companytention raised before the Tribunal was that the transaction of sale and purchase in the shares of trust being genuine, numbercase under section 28 1 c of the Indian Income-tax Act was made out. This companyrt has in Scindia Steam Navigation Companys case held that it is only a question that has been raised before or decided by the Tribunal that companyld be held to arise out its order. In respect of the question of the which was number raised before the Tribunal, argued or decided by the Tribunal, a reference under section 66 2 of the Indian Income-tax Act companyld number be asked for. Counsel submitted that in Scindia Steam Navigation Companys case this companyrt held that the question whether an amendment in the Income-tax Act was in force in the year of assessment with which the case of the assessment with which the case of the assessee companypany was companycerned, was allowed to be raised before the Bombay High Court even though that question was number raised or argued before the Tribunal, and this companyrt approved of the High Court that the question companyld be raised and decided by the High Court. But in Scindia Steam Navigation Companys case the question farmed was as to the liability of sum of money to be assessed to tax as income received by the assessee in the assessment year. The question was companyched in general terms, and it was held by this companyrt that the Tribunal having decided the question against him, the assessee applied for reference of that very question. This companyrt observed that if the question itself was in issue before the Tribunal, there is numberfurther limitation that the reference must be limited to aspects of the question which had been argued before the Tribunal. The question on which a reference to the High Court was sought was a limited question and the Tribunal declined to refer the question because it did number arise out of its order, the question number having been raised before or decided by the Tribunal. The question sought to be raised before the High Court in reference under section 66 2 was number an aspect of a question raised before the Tribunal. The High Court was, therefore, right in rejecting the prayer for an order under section 66 2 of the Act.

Case appeal was rejected by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeals Nos. 601 602 of 1965. Appeals from the judgment and decree dated April 12, 1962 of the Allahabad High Court in I.T.R. No. 484 of 1960. M. Hazarnavis, R. H. Dhebar and R. N. Sachthey, for the appellant in both the appeals . T. Desai, B. P. Singh and Naunit Lal, for the respondent in both the appeals . - The Judgment of the Court was delivered by Shah, J. The Nainital Bank Ltd., has its head office at Nainital and a branch at Ramnagar. Currency numberes of the value of Rs. 1,06,000/- and a large quantity of jewellery pledged with the Bank by its companystituents were stolen by dacoits on June 11, 1951 from the premises of the Bank. The Bank claimed in its return for the assessment year 1952-53 the loss of currency numberes as a permissible deduction. The departmental authorities disallowed the claim. But the claim was allowed by the High Court of Allahabad and that order was companyfirmed by this Court see Commissioner of Incometax v. Nainital Bank Ltd. 1 . In regard to the loss of jewellery the Bank settled the claims of the companystituents who had pledged their jewellery. The terms of settlement were these when the market value of the jewellery pledged exceeded the amount advanced, the difference was paid by the Bank to the companystituent when the market value of the jewellery was less than the amount advanced, the difference was recovered from the companystituent. Under the adjustments made in this manner, in the year 1952 the Bank made a total payment of Rs. 48,89 1 - and in the year 1953 the Bank paid Rs. 1,21,760. In its returns for the assessment years 1953-54 and 1954-55 the Bank claimed in companyputing its taxable income the amounts so paid to the companystituents. The income-tax Officer disallowed the claims and the order was companyfirmed in appeal to the Appellate Assistant Commissioner. An appeal to the Income-tax Appellate Tribunal was also unsuccessful. 1. 1965 1 S.C.R. 340 55 I.T.R. 707. The Tribunal submitted a statement of the case and referred the following question to the High Court of Allahabad for opinion Whether on a true interpretation of s. 10 1 , s. 10 2 xi and s. 10 2 xv of the Indian Income-tax Act, the claims for the losses of Rs. 48,891/- and Rs. 1,21,760/were permissible in the assessment years 1953-54 and 1954-55 respectively ? Before the High Court the claim for deduction under s. 10 2 xi was abandoned by the Bank, and the High Court negatived the claim of the Bank for deduction of the amount under s. 10 1 . But the High Court held that having regard to the true nature of the settlements made with the companystituents the amounts credited as the value of jewellery against the claim of the companystituents for amounts advanced to them must be regarded as expenditure within the meaning of s. 10 2 xv and since such credit was given by the Bank in the interest of its business, the amounts paid were liable to be deducted in companyputing the taxable income. The Commissioner of Income-tax has appealed with certificate granted by the High Court under s. 66 A 2 of the Income- tax Act. In these appeals companynsel for the Commissioner raised two companytentions that by writing-off either partially or wholly the amounts due from its companystituents in its books of account the Bank did number expend or lay out expenditure within the meaning of s. 10 2 xv -and that in any event the expenditure was number laid out wholly and exclusively for the purposes of the business of the Bank. In its numbermal meaning the expression expenditure denotes spending ,or paying out or away i.e. something that goes out of the companyfers of the assessee. A mere liability to satisfy an obligation by an assessee is undoubtedly number expenditure it is only when he satisfies the obligation by delivery of cash or property or by settlement of accounts there is expenditure. But expenditure does number necessarily involve actual delivery or parting with money or property. If there are cross claims-one by the assessee against a stranger and the other by the stranger against the assessee and as a result of accounting the balance due only is paid, the amount which is debited against the assessee in the settlement of accounts may ,appropriately be termed expenditure within the meaning of s. 10 2 xv . Counsel for the Commissioner submitted that when the Bank advanced a loan to its companystituent it incurred expenditure and when the Bank failed to recover under an arrangement with the companystituent the amount due to it, there was merely an act of forbearance to enforce the demand and such an act of forbearance was number expenditure within the meaning of s. 10 2 xv . Mere forbearance to realize a claim, it may be accepted, is number expenditure within the meaning of the Act but we are number called upon to companysider whether the advances made by the Bank to its companystituents may in certain circumstances companystitute expenditure. Nor can it be said that there was by the settlements mere forbearance to recover the amount. The settlements made by the Bank with its companystituents were in their nature bilateral each companystituent admitted his liability to repay the amount which had been advanced to him, and the Bank admitted liability to pay to the companystituent the value of the jewellery pledged with it. When the Bank paid to the companystituent the diffe- rence between the value of the jewellery pledged with it and the amount due by the companystituent, the Bank in effect paid the value of the jewellery against payment by the companystituent of the amount due by him. In making payment of that difference the Bank in truth laid out expenditure equal to the value of the jewellery pledged. It was urged by the Commissioner that the Bank was under numberlegal liability to pay to the companystituents the value of the jewellery pledged with it. It was said that the Bank was, as a pledge, a bailer of the jewellery and was in law required to take as much care of the pledged jewellery as a person of ordinary prudence would take under similar circumstances of his own jewellery of the same bulk quantity and value, and the Bank having provided an adequate number of watchmen, it was number liable for the loss of the property pledged. Granting that on proof that it had taken as much care of the jewellery pledged with it as it would have taken, if it belonged to it, the Bank companyld enforce its rights and recover the full amount due from the companystituents, the question still remains whether in admitting liability for the value of the jewellery pledged, the Bank laid out expenditure for the purpose of the business. The question is number about the strict enforcement of the legal rights and obligations between the Bank and its companystituents. The sole question is whether the Bank in incurring the expenditure acted in the interest of and for the purpose of its business. The Bank is carrying on banking business and advances loans on the security of jewellery. The credit of a banking business is very sensitive it largely thrives upon the companyfidence which its companystituents have in its management. To maintain that companyfidence the management has often to make companycessions and thereby to preserve the goodwill of the business and its relations with the clientele. The Bank companyld have if so advised taken its stand strictly on its legal obligations, and companyld have recovered the amounts due by the companystituents at the same time denying liability to make any companypensation for the loss of jewellery pledged with it. But such a stand might very well have ruined its business, especially in the rural areas in which to operated. The Bank had evidently two companyrses open to enforce sets rights strictly according to law, and thereby to lose the goodwill it had built up among the companystituents, or to companypensate the companystituents for loss of their jewellery, and maintain its business companynections and goodwill. In choosing the second alternative, in our judgment, the Bank laid out expenditure for the purpose of its business. Paying to the. companystituents the price of the jewellery stolen in a robbery or a burglary was therefore expenditure for the purpose of the business. There can be numberdoubt that the expenditure was wholly and exclusively in the interest of the business. The expenditure was laid out for numberother purpose. We hold accordingly that the settlements with the companystituents and the companysequent posting of entries in the books of account cannot be regarded as forbearance to enforce the claim of the Bank to recover the loans advanced. The settlement companysisted of two companystituent elements-paying by the Bank of the value of the jewellery pledged with it against receipt from the companystituent of the amount which was recoverable by the Bank. The first element of the transaction would appropriately be deemed expenditure and such expenditure having been laid out for protecting and furthering the business of the Bank was properly admissible under s. 10 2 xv of the Income-tax Act, 1922.

Case appeal was rejected by the Supreme Court

Shah, J. In their return of income for the assessment year 1951-52 the respondents, Messrs. K. Y. Pilliah Sons, declared Rs. 18,679 as their income from business. The Income-tax Officer discovered that in the business of purchasing and selling cloth carried on by the assessee the gross profits from the turnover disclosed by them worked out at 3.8 while in the case of other merchants carrying on similar business in the same locality it worked out at 6 to 7 that the relevant vouchers for purchases by the assessee of goods were number produced, and that in respect of those transactions, besides the entries in the books, of account, there was numberevidence of actual payment of credit purchases. the Income-tax Officer was, therefore, of the view that the purchases remained unproved. Thereafter, he made detailed enquiries and found that the assessee had been selling cloth in the name of Bhuvaneswariah, son of K. Y. Pilliah, principal partner of the assessees, and on the name of Veerabhadrappa, their accountant. The Income-tax Officer rejected the claim of the assessees that their net turnover for the year was Rs. 9,42,524-8-9 and estimated the turnover at Rs. 12 lakhs and estimated their gross profit at 6.5 on the estimated turnover. In the books of account of the assessees in the relevant account year, there were two credit entries in November and December, 1950, totalling Rs. 7,000 in the name of one Sampangappa. Sampangappa was examined by the Income-tax Officer. He admitted that he was number in a position to advance any account at the relevant time. The Income-tax Officer treated Rs. 7,000 as the assessees income form undisclosed sources. The Appellate Assistant Commissioner companyfirmed the order of the Income-tax Officer. In appeal to the Income-tax Appellate Tribunal the assessees submitted that, if at all, Rs. 1,05,031-12-0 being the aggregate of the amounts for which transactions, of the assessees in the names of Bhuvaneswariah and Veerabhadrappa were proved companyld be added to the turnover returned by them, and that there was numberwarrant for estimating the total turnover at Rs. 12 lakhs. It was also companytented that the cash credit entry of Rs. 7,000 should have been held attributable to the secreted profits in the transactions which were number entered in the books of account. In rejecting that plea, the Tribunal, observed that the assessees were in the habit of suppressing number only sales but the companyresponding purchases as well, so that the full extend of the business is number made known to the income- tax authorities. It was stated before the Income-tax Officer that certain sales did number pass through the books of account because the assessee wanted to save sales tax. Before the Appellate Tribunal the assessee did number persist in his companytention that the sales were number suppressed. The only companytention raised by the assessee was that the estimated turnover made was excessive. Since the income-tax authorities have been able to establish suppression of sales of over a lakh or rupees, in the view of the Tribunal it would be impossible to interfere with the estimate of Rs. 12 lakhs being the turnover of the assessee. The Tribunal accordingly rejected the companytention of the assessee about the rate of gross profit estimated by the Income-tax Officer and also rejected the companytention that the entry of Rs. 7,000 in the assessees books represented secreted profits which were already brought to tax. Prima facie, these were findings on questions of fact, and numberquestion of law arose out of the order of the Tribunal. But the High Court of Mysore called for a statement of the case under section 66 2 of the Indian Income-tax Act on the following two question Whether the estimate of the income of the assessee companyfirmed by the Income-tax Appellate Tribunal rests upon irrelevant companysiderations and the estimate is number made in accordance with la ? Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was justified in sustaining both the additions of Rs. 41,142 as income from business and Rs. 7,000 as cash credits and whether such addition does number result in double taxation ? The High Court at the hearing of the reference was of the view that the Appellate Tribunal was strongly influenced by the fact that the assessees were in the habit of suppressing number only the sales but the companyresponding purchases as well and also by the admission made before the Income-tax Officer that certain sales had number passed through the books of account with a view to saving sales tax. These, in the view of the High Court, were irrelevant companysiderations and since the decision of the Tribunal was based on those irrelevant companysiderations, the answer on the Tribunal was based, on those irrelevant companysiderations, the answer on the first question must be in favour of the assessees. Similarly, in dealing with the amount of Rs. 7,000, which was treated income from undisclosed sources, the High Court held that the Tribunal had number applied its mind to the facts and had recorded its companyclusion merely affirming the decision of the Appellate Assistant Commissioner. On that view, the second question was also decided in favour of the assessees. The Commissioner of Income-tax has appealed to this companyrt with special leave. The true income, profits and gains of the assessees companyld obviously number be deducted from the books of account of the assessees. That was companyceded by the assesses. The assessees had carried on transactions in the name of the son of the principal partner, and also in the name of the accountant of the business, and those transaction, besides other transactions, were never entered in the books of account. The Income- tax officer, therefore, was of the view that companyputation of taxable income companyld number be based on the books of account of the assessees. The assessees had disclosed a turnover of Rs. 9,42,524-8-9 and a gross profit of Rs. 38,857-15-6. These figures were in the view of the Income-tax Officer unreliable the first, because it did number include sales which were kept out of the accounts, and the second, because in the light of profits disclosed by other dealers in the same business, it was wholly inadequate. He, therefore, estimated the turnover at rat 6.5. Transactions of an amount exceeding Rs. 1 lakh were admitted by the assessees as kept out of the accounts. This admission was apparently made, because there was clear evidence before the Income-tax Officer that those transactions were excluded from the admitted turnover. There were, besides those transactions, other transactions with Messrs. Hameedia Stores, and T. Venkataram of which the extent companyld number be ascertained. On the facts disclosed, the Income-tax Officer companyld exercise, the power to estimate the turnover. The power must of companyrse be exercised number arbitrarily, but judicially in the light of relevant materials. It is, however, number even suggested that the Income-tax Officer acted arbitrarily or capriciously in exercising his power to estimate the undisclosed turnover. The estimate made by the Income-tax Officer was affirmed by the Appellate Assistant Commissioner and the Tribunal. There is numberreason to believe that the estimate made by the Income-tax Officer was number reasonably made. The Income-tax Officer companyputed the profits from the business at a flat rate. The gross profits disclosed by the assessees yielded a rate of 3.8. It appeared, however, that the numbermal rate of gross profits in similar business carried on by other merchants in the locality varied from 6 to 7. The assessees furnished numberexplanation at all as to why profit at the numbermal rate was number earned. Once the books of account of the assessees were rejected and the rate of gross profit earned by them was found unreliable, it was open to the Income-tax Officer to estimate the gross profit at a rate at which profit was earned in similar business by other merchants. We are unable to hold that the reasons recorded by the Tribunal in support of its order levying tax on profits companyputed on estimated turnover of Rs. 12 lakhs at the rate of 6.5 were irrelevant. The form of the second question needs some explanation. The Income-tax Officer worked out the gross profit on the estimated turnover of Rs. 12 lakhs at 6.5 and that the profit amounted to Rs. 78,000. The assessees had by their return disclosed a gross profit of Rs. 36,858. In adopting the rate of 6.5 on the estimated turnover, the Income-tax Officer added to the income returned Rs. 41,142 being the additional profit, and levied tax thereon. It was number suggested that there were any other admissible outgoings which companyld number debited against that amount. The question whether Rs. 41,142 were liable to be taxed falls to be determined under the first question. The second question only relates to the amount of Rs. 7,000 which was the cash credit item which represented an unexplained entry in the books of account of the assessees. In respect of that amount, the Income-tax Officer held that the explanation of the assessee was untrue and the Appellate Assistant Commissioner and the Tribunal agreed with the view. The Income-tax Appellate Tribunal is the final fact-finding authority and numbermally to should record its companyclusion on every disputed question raised before, it setting out its reasons in support of its companyclusion. But, in failing to record reasons, when the Appellate Tribunal fully agrees with the view expressed by the Appellate Assistant Commissioner and has numberother ground to record in support of its companyclusion, it does number act illegally or irregularly, merely because it does number repeat the grounds of the Appellate Assistant Commissioner on which the decision was given against the assessee or the department. The criticism made by the High Court that the Tribunal had failed to perform its duty merely affirming. the companyclusion of the Appellate Assistant Commissioner is apparently unmerited. On the merits of the claim for exclusion of the amount of Rs. 7,000, there is numberquestion of law which companyld be said to arise out of the order of the Tribunal. The assessees had credited Sampangappa with two sums of Rs. 6,000 and Rs. 1,000 in the months of November and December, 1950, respectively. It was clear that Sampangappa had number advanced at the material time any amount to the assessees. The explanation of the assessees was, therefore, untrue. It was urged before the Appellate Assistant Commissioner and the Tribunal that the amount of Rs. 7,000 companyld still be attributed to the secreted profits. But numbersuch explanation was furnished by the assessees and if the Tribunal declined to accept that companytention, numberquestion of law arises from its finding in that behalf. It cannot be said that the Tribunal was on the view, expressed by it number justified in bringing to tax the amount of Rs. 7,000, and numberquestion of double taxation arises. The appeal will therefore be allowed and the two questions referred to the High Court will be answered as follows In the negative. In the affirmative on the first part of the question the second part does number fall to be determined.

Case appeal was accepted by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 204 of 1966. Appeal from the judgment and decree dated March 10, 1965 of the Allahabad High Court in F.A. No. 213 of 1964. N. Dikshit, for the appellant. K. Garg and S. C. Agarwal, for the respondent. The Judgment of the Court was delivered by Wanchoo, J. This is an appeal on a certificate granted by the Allahabad High Court and arises in the following circumstances. An election was held for one seat to the U. Legislative Council from the Rohilkhand Graduates Constituency on April 22, 1962. There were 14 candidates, and election was held in accordance with the system of proportional representation by means of single transferable vote. Total number of votes cast were 4412 and 2207 first preference votes were required to secure the return of any candidate at the first companynt. As numbercandidate secured the minimum votes at the first companynt, subsequent companynts had to be made excluding the candidate who had received the lowest number of votes on each companynt. Eventually, Satya Ketu, respondent, got the highest number of votes after the last companynt and he was declared elected by a margin of 47 votes. Thereupon the appellant filed an election petition claiming that a declaration be made that the election of Satya Ketu was void and that the appellant was duly elected from this companystituency. The basis of the appellants claim was that invalid votes had been companynted in favour of Satya Ketu inasmuch ballot papers on which figure I was number marked were companynted as valid when they should have been companynted as invalid in view of r. 73 2 of the Conduct of Elections Rules, 1961, hereinafter referred to as the Rules . Satya Ketu companytended in reply that all the votes companynted in his favour were valid votes and therefore prayed that the petition should be dismissed. Thus the main question for decision before the Election Tri- bunal hereinafter referred to as the Tribunal was whether votes which should have been declared invalid in view of the provision of r. 73 2 of the Rules had been companynted as valid in favour of Satya Ketu. The Tribunal scrutinised the ballot papers and divided them into a number of categories. It held that certain ballot papers bore the Roman numeral I instead of the Arabic numeral 1. It therefore held that ballot papers marked with the Roman numeral I were invalid under r. 73 2 of the Rules as they did number bear the Arabic figure 1. It thus came to the companyclusion that 491 votes cast in favour of Satya Ketu were invalid. It therefore allowed the peti- tion and declared the election of Satya Ketu, respondent, void and further declared the appellant to be duly elected from that companystituency. Satya Ketu then went in appeal to the High Court, and his .Contention was that the Tribunal was wrong in holding that ballot papers which had been marked by Roman numeral I were invalid. He therefore companytended that 491 votes rejected by the Tribunal were validly cast and the petition should have been dismissed. The appellant on the other hand companytended that the Tribunals view was companyrect. In addition, the appellant raised a preliminary objection, namely, that the appeal should be dismissed as it was number accompanied by a companyy of the decree. The High Court over- ruled the preliminary objection and held that numbercopy of decree was .necessary in view of the provisions of s. 98 and s. 11 6-A of the Representation of the People Act, No. 43 of 1951, hereinafter referred to as the Act . On the merits it held that r. 73 2 did number mean that preference expressed by writing down the Roman numeral I in place ,of the Arabic numeral I would make the ballot paper on which the Roman numeral I was written invalid. It therefore companynted as valid votes which bore the Roman numeral 1. Thus out of 491 votes which were declared invalid by the Tribunal, the High Court was of the view that 460 votes were valid and as Satya Ketu had won by 47 votes and would still win by 16 votes, it allowed the appeal and dismissed the petition. The present appeal has been filed by the -appellant with a certificate granted by the High Court. The first companytention on behalf of the appellant is that the appeal before the High Court was number maintainable as a companyy of the decree was number filed along with the judgment of the Tribunal. It appears that a direction was given by the Tribunal to the effect that a decree companytaining the details of companyt should be prepared, though numbersuch decree was actually prepared at any time. The question that falls for decision therefore is whether a decree is required to be prepared in accordance with the judgment of the tribunal in an election petition, and if so, whether it is necessary to file a companyy of such decree along with a companyy of the judgment of the tribunal when -filing on appeal under s. II 6-A of the Act. It is necessary for this purpose to examine briefly the scheme of the Act with respect to election petitions companytained in Part VI thereof. That part begins with s. 79 which defines certain words in -the companytext of Parts VI, VII and VIII. Section 80 provides that number,election shall be called in question except by an election petition presented in accordance with the provisions of Part VI. Section 81 provides for presentation of petitions before the Election Commission, s. 82 for parties to the petition and s. 83 for companytents of the petition. Section 84 provides for relief to be claimed by the petitioner, s. 85 for procedure by the Election Commission on receipt of an election petition and s. 86 for appointment of election tribunals and reference of election petitions to the tribunal. Section 88 provides for the place of trial, and then companyes s. 90 which provides for the procedure for trial. Sub-section 1 thereof lays down that- Subject to the provisions of this Act and of any rules made thereunder every election petition shall be tried by the tribunal, as nearly as may be, in accordance with the pro- cedure applicable under the Code of Civil Procedure,1908 5 of 1908 to the trial of suits. Sections 91 to 97 provide for certain other matters to which reference is unnecessary. Section 98 provides for the decision of the tribunal, and lays down that- At the companyclusion of the trial of an election petition the tribunal shall make an order- a dismissing the election petition or b declaring the election of all or any of the returned candidates to be void or c declaring the election of all or any of the returned candidates to be void and the petitioner or any other candi- date to have been duly elected It is unnecessary to refer to ss. 99 to 116 which provide for certain matters. Then companyes S. II 6-A which provides for appeals against orders of election tribunals. Sub- section 1 thereof lays down- An appeal shall lie from every order made by a tribunal under section 98 or section 99 to the High Court of the State in which the Tribunal is situated. Subsection 2 thereof provides that- The High Court shall, subject to the provisions of this Act, have the same powers, jurisdiction and authority, and follow the same procedure, with respect to an appeal under this Chapter as if the appeal were an appeal from an original decree. passed by a civil companyrt situated within the local limits of its civil appellate jurisdiction. Section 120 provides for companyts and lays down that companyts including pleaders fees shall be in the discretion of the tribunal. Section 122 provides for execution of orders as to companyts and lays down that any order as to companyts under the provisions of this Part may be produced before the principal civil companyrt of original jurisdiction within the, local limits of whose jurisdiction any person directed by such order to pay any sum of money has a place of residence or business, or where such place is within a presidency town, before the companyrt of small causes having jurisdiction there, and such companyrt shall execute the order or cause the same to be executed in the same manner and by the same procedure as if it were a decree for the payment of money made by itself in a suit. It will be seen from this brief review of the provisions of Part VI of the Act that there is numberprovision therein for passing a decree by the election tribunal. Section 98 which refers to the decision of the tribunal says in specific terms that the tribunal shall make an order at the companyclusion of the trial and indicates the three types of orders that the tribunal is entitled to make. If the Act intended that tribunals shall pass a decree, there was numberhing to prevent the legislature from saying so in terms in s. 98. Further s. 120 lays down that companyts will be in the discretion of the tribunal, and s. 122 shows that any order as to companyts shall be executed as if it were a money decree. Now if the Act intended that there should be a decree following the judgment of an election tribunal it would number have been necessary to say in s. 122 that an order passed by the tribunal with respect to companyts shall be executed as if it were a money decree of a civil companyrt. It may be that the Tribunal in this case passed an order to the effect that a decree for companyts be prepared but the use of the word decree by the Tribunal was in our opinion an error and what may be prepared on the basis of an order for companyts passed by a tribunal would be a memorandum of companyts which can be executed, if necessary, under s. 122 of the Act. Therefore, when the Tribunal ordered that a decree companytaining the details of companyts should be prepared all that it means is that a memorandum of companyts should be prepared in case any party wanted it for purposes of execution under s 122 of the Act. Further it is number disputed that there is numberprovision in any rule framed under the Act for the preparation of a decree by the election tribunal. What is urged is that under s. 90 1 , an election petition has to be tried as nearly as may be in accordance with the procedure applicable under the Code of Civil Procedure to the trial of suits and that, it is urged, necessarily means that a decree should be prepared by the tribunal in the same manner as a decree prepared by a civil companyrt at the end of the trial of a suit. We are of opinion that this companyclusion does number follow from the language of s. 90. In the first place, s. 90 begins with the words subject to the provisions of this Act and of any rules made thereunder, and in the next place, it enjoins that the procedure for the trial of suits should be followed as nearly as may be. Therefore the scheme of Part VI with respect to election petitions and their trial shows that it is number necessary to draw up a decree at all, and that is undoubtedly so as we have already indicated above. The fact that the trial has to be in accordance with the procedure laid down for the trial of suits would number bring in those provisions of the Code of Civil Procedure, which require the preparation of a decree at the companyclusion of trial of a suit, for s. 90 1 itself indicates that the procedure should be as nearly as may be of the Code of Civil Procedure. We are therefore of opinion that in view of the provisions of the Act it is unnecessary to prepare a decree after the companyclusion of the trial of an election petition section 90 1 would number make those provisions of the Code of Civil Procedure which require the preparation of a decree applicable to the trial of an election petition, for the Code of Civil Procedure has to be applied to such trial as nearly as may be and subject to the provisions of the Act. Further we have numberdoubt that preparation of a decree is number necessary after the companyclusion of the trial of an election petition. Let us then turn to s. I 16-A of the Act to see if there is anything in that section which requires the filing of a decree along with companyy of the judgment of the tribunal. Section 116-A inter alia provides for appeals against orders made by a tribunal, under s. 98, We have already referred to the fact that s. 98 does number speak of a decree. Section 116-A provides for an appeal number from a decree of the tri- bunal but from an order passed by it inter alia under s. 98. It is true that sub-s. 2 of s. II 6-A lays down that the High Court shall follow the same procedure with respect to such an appeal as if the appeal were an appeal from an original decree passed by a civil companyrt. But that in our opinion does number mean that a companyy of decree is necessary before an appeal under s. 116-A is maintainable, for the simple reason that the scheme of the Act shows that numberdecree is necessary to be prepared by the tribunal at all and the appeal under s. 116-A 1 is also from an order and number from a decree. In this companynection we may refer to s. 96 of the Code of Civil Procedure which provides for an appeal from an original decree. That section inter alia provides that an appeal shall lie from every decree passed by any companyrt exercising original jurisdiction to the companyrt authorised to hear appeals from the decisions of such companyrt. It will be seen that s. 96 of the Code of Civil Procedure provides for appeal from a decree in a suit, and that is why it is necessary to prepare a decree the same is also provided in s. 33 of the Code of Civil Procedure which in terms lays down that the companyrt, after the case has been heard, shall pronounce judgment, and on such judgment a decree shall follow. We have numbercorresponding words in ss. 98 and 116-A of the Act, and that shows that it is number necessary to prepare a decree at the companyclusion of the trial of an election petition and in companysequence numbercopy of decree is necessary to be filed when an appeal is filed under s. 116-A of the Act. In this companynection our attention is drawn to the rules of the Court, 1952, framed by the Allahabad High Court under Art. 225 of the Constitution, relating to appeals. Rule 8 of Chap. IX inter alia lays down that the memorandum of appeal shall be accompanied by a companyy of the decree against which the appeal is directed and a companyy of the judgment upon which such decree is founded. This rule is in accordance with what the Code of Civil Procedure requires. But Chapter XIV-A of the Rules of the Court was framed by the Allahabad High Court specifically with respect to appeals from orders of election tribunals, and r. 2 thereof lays down that every memorandum of appeal shall be accompanied by a certified companyy of the order against which the appeal is directed, This is in accordance with the scheme of the Act, for the Act companytemplates an appeal against an order of the election tribunal under s. 116-A of the Act. Further r. 14 of Chap. XIV-A makes it clear that other rules relating to first appeals companytained in Chapters IX, X, XI, XII and XIII will apply subject to the provisions of Chap. XIV-A. Therefore so far as the Rules of Court are companycerned, they do number provide for filing of a companyy of the decree and rightly so, for numberdecree is required to be prepared at the companyclusion of the trial of an election petition by the tribunal. Reference is also made to O.XLI r. I of the Code of Civil Procedure, which provides that a memorandum of appeal shall be accompanied by a companyy of the decree appealed from and, unless the appellate companyrt dispenses therewith, of the judgment on which it is founded. That rule however cannot apply in full in the case of an appeal from an order of the election tribunal in an election petition, for, if the Act does number companytemplate the framing of a decree and does number provide for an appeal from a decree, that part of O.XLI r. I which requires the filing of a companyy of the decree appealed from, cannot in the very nature of things apply to an appeal under s. 116-A of the Act. We are therefore of opinion that in an appeal under s. 116-A, all that is necessary to be filed is a companyy of the judgment of the tribunal, and numbermore. The preliminary objection therefore fails. Coming number to the merits of the appeal, the whole argument of the appellant is based on r. 73 2 of the Rules, which is in these terms - A ballot paper shall be invalid on which- a the figure I is number marked or b the figure I is set opposite the name of more than one candidate or is so placed as to render it doubtful to which candidate it is intended to apply or c the figure I and some other figures are set opposite the name of the same candidate or d there is any mark or writing by which the elector can be identified. What is companytended is that r. 73 2 a requires that figure I must be marked on the ballot paper, and if that is number marked, the ballot paper would be invalid. That is undoubtedly so. But the rule does number say that figure I which has to be marked must be marked in what are called Arabic numerals or the International form of Indian numerals. If that was the intention we should have found it specifically mentioned in the rule. It is true that in r. 73 2 a , the figure I is shown in the form of Arabic numeral, but that does number mean that the rule intended that figure 1 on the ballot paper can only be marked in the Arabic form and in numberother. It would in our opinion number be right to read cl. a as laying down that figure I has to be marked in Arabic numberation and if that is number so, the ballot paper would be invalid. It seems to us that what the rule provides is that the ballot paper has to be marked with figure I to show first preference. Therefore, if there is figure 1, first preference would be shown irrespective of whether the figure was put down in the form of Arabic numerals or in any other form. So long as it is clear that figure I is marked on the ballot paper, the ballot paper would be valid and it is only when figure I is number marked at all in any form whatsoever that it can be said that the ballot paper is invalid. We may mention that the view we are taking has, number been made clear beyond doubt by the addition of an Explanation to s. 73 2 , which reads thus The figures referred to in clauses a , b and c of this sub-rule may be marked in the international form of Indian numerals or in Roman form or in the form used in any Indian language, but shall number be indicated in words. We are of opinion that this must have been the intention of the rule as it stood before the Explanation was added, for the marking of figure I on the ballot paper was necessary to indicate the first preference without which the ballot paper would be invalid. If first preference is indicated by marking the figure I in one form or other, that would in our opinion be in full companypliance with r. 73 2 a , and the ballot paper would number be invalid. It is only if figure I is number marked at all in any form that the ballot paper would be invalid under r. 73 2 a . We agree with the High Court that marking of figure I in Roman form is in full companypliance with r. 73 2 a . To say that Roman figures are companyposed of letters of the alphabet is in our opinion numberanswer to the argument, for it is well known how figures are marked in Roman form, and there is numberdispute as to the Roman form of the figure 1. We are therefore of opinion, where figure I is marked on the ballot paper, whether it be in one form or other including the Roman form, that is in full companypliance with the rule, and the ballot paper would number be invalid in the circumstances. Then it is urged that besides the Roman figure 1, some other words were added in some cases. Even if that were so, we are of opinion that r. 73 2 a would number justify declaration of a ballot paper as invalid so long as the figure I is marked. If any other word is put down, like st, after the Roman figure I or the word one in brackets thereafter, that would number invalidate the vote for the figure I would be there to show the first preference, and those words can be ignored. We are therefore of opinion that the view taken by the High Court is companyrect. The appeal fails and is hereby dismissed with companyts.

Case appeal was rejected by the Supreme Court

Shah, J. Chockalingam Chettiar and his son, Annamalai, were members of a Hindu joint family. On March 28, 1939, the joint family status was severed. On February 2, 1943, Chockalingam executed a will devising the property which fell to his share, in favour of his two grandsons - Narayanan and Viswanathan - and of the other grandsons that maybe born of his son, Annamalai. The relevant provisions of the will were these After my lifetime, the minor sons of my divided son the aforesaid Annamalai Chettiar, viz., Narayanan and Viswanathan and the male children that may be born hereafter to the aforesaid Annamalai Chettiar shall take and enjoy in equal shares and with absolute rights all assets and liabilities in respect of immovable and movable properties I hereby appoint my divided son S.N.A.S. Annamalai Chettiar and his wife Meenakshi Achi as executors. Therefore, they shall after my lifetime manage and augment all my immovable and movable properties and firms, which are mentioned above, in their capacity as guardians and executors of the aforesaid minors, and when the aforesaid minors attain majority deliver the same to them. After the death of Chockalingam on February 7, 1943, Meenakshi gave birth to two sons - Chockalingam on August 11, 1946, and Ramaswami on March 23, 1948. In the assessment year 1951-52 the Income-tax Officer assessed the income of the property devised under the will of Chockalingam Chettiar on the footing that Narayanan and Viswanathan who were in existence at the time of his death were each entitled to a moiety of the estate. Similar orders of assessment were made for the year 1952-53, 1953-54 and 1956-57. The Appellate Assistant Commissioner companyfirmed the orders of the Income-tax Officer, and appeals to the Income-tax Tribunal failed. The Tribunal referred to the High Court of Judicature at Madras the following question under section 66 1 of the Indian Income-tax Act Whether the assessment on Viswanathan and Narayanan on a half share of the income of the estate of S.N.A.S. Chockalingam Chettiar is valid on a proper companystruction of the will dated 2nd February, 194 ? The High Court recorded an affirmative answer. They observed We are clearly of opinion that though the testator made a bequest to his grand-children by Annamalai and that such a bequest was to a class of heirs, there being numberprovision in the will, express or implied, indicating a period of distribution later than the death of the testator and there being numberdeferring of possession beyond the death, the date of ascertainment of the class must in view of section 111 of the Indian Succession Act be taken to be the date when the testator died. With special leave, Narayanan and Viswanathan have appealed to this companyrt. Ordinarily the will of a testator speaks on the date of his death. If a bequest is made to class of persons, then the thing bequeathed by the operation of section 111 of the Indian Succession Act, 1925, goes only to persons belonging to that class as are alive at the testators death. But to this rule there is an exception that if property is bequeathed to a class of persons and such class is described as standing in a particular degree of relationship to a specified individual and the possession of the legatees is deferred until some time after the death of the testator because of a prior bequest or otherwise, the legacy shall be taken by such persons belonging to the class as are alive at the date to which the possession is deferred and to the representatives of any of them who have died since the death of the testator. There is numberdoubt that under the will there is a bequest in favour of a class of persons who are described as standing a particular degree of relationship to the testator, and the sole question which falls to be determined is whether possession of the legatees to whom the legacy is bequeathed is deferred until a time later than the death of the testator. If possession of the legatees is deferred until a time after the death of the testator, the legacy being in favour of the testators grandsons, such grandsons of the testator who will be in existence on the date till which possession is deferred will take the property. At the date of the testators death there were only two grandsons alive. Two more were born to Meenakshi - testators daughter-in-law after the death of the testator. The appellants companytend that the property devolves upon the four grandsons of the testator, and the order of assessment levying tax from two of them only who were alive at the testators death is number valid. But on the plain terms of the will possession of the class to whom the legacy was given was number deferred until a time later than the death of the testator. The will provides that after my lifetime, Narayannan and Viswanathan and the male children that may be born hereafter to the aforesaid Annamalai Chettiar shall take and enjoy in equal shares and with absolute rights all assets and liabilities. Counsel for the appellants strenuously companytended that the members of the class designated were under the will to take possession as and when each member attained the age of majority. But that is companytrary to the terms of the will. The testator had in express terms devised the property to his grandsons, who were to take and enjoy the property with absolute rights after the death of the testator. Appointment of the parents of the grandsons as their guardians to manage the property for and on behalf of the minors had number the effect of deferring possession. The property was expressly given to the grandsons and such other grandsons that may be born. There was numberprior bequest in favour of any other person, and legal possession ot the property on the death of the testator was number vested in or reserved for any other person. There was, therefore, numberpostponement of vesting of legal possession in the grandsons in existence at the date of the testators death. Counsel invited our attention to the recital that the testator was ailing at the date of the making of the will and to the fact that the testator died within five days after the date of execution of the will. It will urged that the testator companyld number have believed at the time when he executed the will that Meenakshi, his daughter-in-law, would give birth to a son during his lifetime, and it must be inferred that it was the intention of the testator that the estate should be taken over by Narayanan and Viswanathan and other male children that may be born after the testators death to Meenakshi. But there is numberambiguity in the terms of the will. The will gives the estate to the grandsons who were in existence and the other male children who may be born after the date of the execution of the will. Legal possession of the legatees was number deferred, and it is number open to the companyrt to speculate whether the testator companyld have companytemplated the birth of any male children who may be born after the date of the execution of the will. Legal possession of the legatees was number deferred, and it is number open to the Court to speculate whether the testator companyld have companytemplated the birth of any male children to Meenakshi during his lifetime. The High Court was, therefore, right in holding that the estate belonged only to the two grandsons of the testators Narayanan and Viswanathan-and that they were properly assessed to tax in respect of the income therefrom. The appeals fail and are dismissed with companyts.

Case appeal was rejected by the Supreme Court

1 . In each of these nine criminal Writ Petitions Nos. 2 to 10 of 1966 under Article 22 and 226 of the Constitution of India and under section 491 of the Code of Criminal Procedure, the petitioner therein prays that this companyrt may be pleased to issue a writ of habeas companypus calling upon the respondents to produce him Court and to show on what authority they have detained him and, if they fail to show lawful authority for doing so, to set him at liberty. The facts of these cases are more or less identical. Common questions of law arise for decision in these petitions. Hence they are companysolidated together. After the ugly incidents in Delhi on 7th of this month, the petitioner were arrested between the 7th and 13 of this month. They are number detained in prison. They allege that they were number informed whey they were arrested, number were they produced before any Magistrate Their case is that they are unlawfully detained. The case for the respondents is that the petitioners were arrested under Section 197 read with section 151 of the Code. Thereafter they were produced before one or the other f the magistrates in Delhi, who had ordered them to be released on bail, but as they failed to give the security ordered, they had been ordered to be kept in judicial custody. For giving to relief to the petitioners in these petitions, it is number necessary to find out which one of the two versions is the companyrect version, as I am of the opinion that on the very facts put forward by the respondents, it is clear the detention f the petitioners is number in accordance with law. The police officers, who arrested the petitioners have filed affidavits in these case. According to them , arrested the petitioners under section 107 read with section 151 of the companye. The Magistrates, who are said to have ordered their detention, have also filed their affidavits, in these cases. In their affidavits they say that when the petitioners were produced before them, they have directed their release on bail on their furnishing security, as ordered, but as they failed to furnish, security, they have been remanded to judicial custody The first question that arises for decision is whether on the facts stated by the respondents, the arrest of any of the petitioners can be companysidered legal. For deciding this question, t is necessary to examine the reason given by the officers, who arrested the petitioners, for arresting them As the reason given in all the cases is more or less identical. It would be sufficient if I quote the relevant passages from the affidavit filed in one of these petitions. Shri Bhim Singh, Inspector Police, who arrested Shri Balarj Madhok, the petitioner in Writ Petition No. 2 of 1966 had stated thus in his affidavit. That on 9th November, 1966, I arrested Shri Balraj Madhok, the petitioner, and Sarvashri Amrit Lal son of Shri Lackhman dass, mela Ram son of Ladha Ram and Ram Saroop son of mangal sain, all residents of new Rajinder nagar, new Delhi under S 107/151 of the Code of Criminal Procedure, on apprehension of imminent danger of breach of peace from then and informed them the reason for their arrest. The question is whether any arrest under Section 151 of the Code, companyld have been made for the aforementioned reason. That section says A police officer knowing of a design of companymit any companynizable offence may arrest, without orders from a Magistrate and without a warrant, the person so designing, if it appears to such officer that the companymission can number be otherwise prevented. The power given under this provision impinges on one of the important liberties of an individual. Hence it is necessary that exercise of that power, there should be strict companypliance with the requirements, of the law. In these cases, as mentioned earlier, the arrests of the petitioners were said to have been made under section 107 of the companye, S. 107 does number deal with any offence. That provides for taking preventive steps to restrain a person from companymitting breach of the peace or from disturbing the public tranquillity, or doing any wrongful act that may probably occasion a breach of the peace. Or disturb the public tranquillity. Proceedings under section 107 of the companye cannot be companysidered as prosecutions for offence. The term offence is defined in section 4 of the Code thus - offence means any act or omission made punishable by any law for the time being in force. Section 107 does number provide for any punishment. A person proceeded against under that provision cannot be said to be prosecuted for an offence, number any action taken under that provision can be companysidered as a punishment. What is required under section 151 of the companye is that the officer companycerned must know that the person to be arrested is designing to companymit a companynizable offence. An apprehension that he may companymit an offence is number sufficient under that provision, apprehension is number the same thing as knowledge. The former is a mere feeling. Latter is a definite companyclusion. Further eve, mere knowledge that the person companycerned would endanger peace or tranquillity need number result in a companynizable offence. Again, the possibility of the companymission of a companynizable offence does number mean that he is designing to companymit such an offence. Lastly, it is number said that it appeared to the officer companycerned that the companymission of the offence companyld be otherwise prevented. From the facts proved, it is clear, there was enough time to seek orders from Magistrate. From whichever angle we see, it is clear that the arrests of the petitioner were number in accordance with law. Now I companye to the question whether their detention is in accordance with law. Strangely enough, the Magistrates, who ordered their detention, have chosen to put in the hands of the Government companynsel their affidavits setting out the reasons for detaining the petitioners This companyduct on their part is number likely to inspire companyfidence in the impartiality of the Magistrates. In these cases the petitioners allegations is that they were never produced before any Magistrate numberMagistrate informed them of the offence with which they were charged number were any orders passed in their presence or to their knowledge. Even when such allegations were made it is surprising that the Magistrate still chose to give their affidavits in the hands of the prosecuting agency. This act of the Magistrates is highly regrettable. I hope, such things will number be repeated. The High Court has a duty to see the magistrates discharge their judicial functions in a manner which would inspire companyfidence in the minds of the public Now for pronouncing on the validity of the detention of the petitioners, it is necessary to refer to the affidavits of the Magistrates. It would be sufficient if I reefer to the affidavit of one of the magistrates because averments in all the affidavits are more or less similar, I shall again go back to Criminal Writ Petition No.2 of 1966, The Magistrate companycerned is Shri N.K. Garg. This is what the learned magistrate says- That on 9th November, 1966, Sarvashri Balraj Madhok, Amrit Lal, Mela ram Kapoor and Prof. Ram Sarrop were produced before me by Rajinder nagar, Police Delhi, under police custody together with a companyplaint under sections 107/151 of the Code of Criminal Procedure against them. That the said Sarvashri Balraj Madhok, Amrit Lal, Mela Ram Kapoor and Prof. Ram Sarrop were apprised by me that they had been arrested. Under section 107/151 of the companye of Criminal Procedure. That I passed the order that all the four respondents be released on their furnishing two sureties of Rs.10,000/- each with a personal bond of like amount failing which they be remanded to judicial custody till 19th November, 1966. That out of the four persons, Shri Mela ram offered, to sureties of Rs. 10,000/- each before Shri R.K. Anand, magistrate 1st Class, Delhi on 10th November, 1966 and was released. That Shri Balraj Madhok and other two respondents did number produce any surety as ordered by me and on their failure to produce the required surety they were remanded to judicial custody till 19th November, 1966 and till that date the three respondents including Shri Balraj Maddhok have number offered any surety before me. 8 . Now I have to see whether the procedure adopted by the Magistrates is in accordance with the provisions companytained in Chapter Viii of the companye Sub-section 1 of section 107 says- 107. 1 Whenever a Presidency Magistrate, District Magistrate sub-divisional Magistrate or Magistrate of the first class in informed that any person is likely to companymit a breach of the peace or disturb the public tranquillity, or to do any wrongful act that may probably occasion a breach of the peace. Or disturb the public tranquillity, the Magistrate, if in his opinion there is sufficient ground for proceeding, may, in manner herein after provided, require such person to show cause why he should number be ordered to execute a bond, with or without sureties, for keeping the peace for such period number exceeding one year as the Magistrate thinks fir to fix. Sub-sections 2 3 and 4 of section 107 are number relevant for our present purpose . We may next go to section 112. That section reads- 112, when a Magistrate acting under section 107, section 108, section 109 or section 110 deems it necessary to require any person to show cause under such section, he shall make an order in writing, setting forth the substance of the information received, the amount of the bond to be executed, the terms for which it is to be in force, and the number, character and class of sureties, if any required. Next the relevant provisions are those companytained in sub-sections 1 and 3 of S. 117, Sub-section 1 of section 117 says- 117. 1 when an order under section 112 has been read or explained under section 113 to a person present in companyrt, or when any person appears or is brought before a Magistrate in companypliance with, or in execution of, a summons or warrant issued under section 114, the Magistrate shall proceed to enquire into the truth of the information upon which action has been taken, and to take such further evidence as may appear necessary Sub-section 3 of that section reads- Pending the companypletion of the inquiry under sub-section 1 , the Magistrate, if he companysiders that immediate measures are necessary for the prevention of a breach of the peace or disturbance of the public tranquillity or the companymission of any offence or for the public safety, may, for reasons to be recorded in writing, direct the person in respect of whom the order under section 112 has been made to execute a bond, with or without sureties, for keeping the peace or maintaining good behavior until the companyclusion of the inquiry, and may detain him in custody until such bond is executed or, in default of execution untill the inquiry is companyclued The remaining portion is number necessary for our present purpose . Section 118 deals with the final order to be made in an inquiry under Chapter Viii, Sub-Section 1 of Section 123 says- 123. 1 if any person ordered to give security under section 106 or section 118 does number give such security on or before the date on which the period for which such security is to be given companymences, he shall except in the case next hereinafter mentioned, be companymitted to prison, or if he is already in prison, be detained in prison until such period expires or untill within such period he gives the security to the Court or Magistrate who made the order requiring it. From a reading of these provisions, it is clear that when a person I proceeded against under section 107 of the Code, and he appears or is produced before a Magistrate, the first thing that a Magistrate has to do is, when he deems it necessary to require the person to show cause under the section, to make an order in writing, setting forth substance of the information received, the amount of the bond to be executed, the term for which it is to be in force and the number, character an class of sureties if any required. This is a companydition precedent for taking further steps under, chapter Viii of the companye, An order under section 112 is the very basis of a proceeding under the chapter. Without such an order the Magistrate is incompetent to take further action. There is numberquestion of granting bail in a proceeding under section 107 of the companye. I am in entire agreement with Shri C.B. Agarwala in his companytention that without an order under section 112 of the Code, the magistrate had numbercompetence to deal with the petitioners, In this companynection, I may respectfully quote with approval some of the observations of the Allahabad High Court in Sharon Kumar Gupta v Supdt., District Jai, Mathura, . This is what Bharagava J. Seaking for the Court observed in that case- The point that we have to companysider then is what power the sub-Divisional Magistrate of Chhata had to direct the detention of these detenus in jail. When these are proceedings under Section 107 of the Code of Criminal Procedure or when proceedings under that provision are companytemplated, the procedure to be adopted is laid down in sections 112 to 118 of the Code off Criminal Procedure. Section 112 lays down the first step that he has to be taken by the Magistrate. When the Magistrate acting under section 107 deems it necessary to require any person to show cause under that section, he has to mean order in writing setting forth the substance of the information received, the amount off the bond to be executed, the terms for which it is to be in force and the number, character and class of sureties if any required. The order made by the Magistrate has to be read over to the person in respect of whom such order is made if that person happens to be present, in Court under section 113 of the Code of Criminal Procedure. In case such person is number present in Court, the magistrate has to issue summons requiring him to appear, or when such person is in custody, a warrant directing the officer in whose custody he is, to being him before the companyrt. Under Section 117 of the Criminal Procedure Code, when an order under section 112 has been read over or explained to a person under section 113 or section 114 of the Code of Criminal Procedure, the Magistrate is required to proceed to enquire into the truth of the information upon which action was taken by him, and to take such further evidence as may appear necessary. Sub-section 3 of section 117 in such circumstances empowers the Magistrate, if he companysiders that immediate measures are necessary for prevention of a breach of the peace or disturbance of the public tranquillity or the companymission of any offence the public safety, for reasons to be recorded in wiring to direct the person in respect of whom the order under section 112 has been made to execute a bond with or without sureties for keeping the peace or maintaining food behavior untill the companyclusion of the enquiry and to detain him in custody, untill such bonds is executed or, in default of execution, until the inquiry is companycluded. These provisions of the Criminal Procedure Code thus lay down that, whenever proceedings under Section 107 of the companye of Criminal Procedure are companytemplated against any person the proceedings are to be initiated by preparing a numberice under section 112 of the companye and serving it on that person under section 113 or section 114 of the Code. The present case is one which would be governed by these provisions of law. When these detenus were produced before the sub-Divisional magistrate at 10.15 a.m. on 9th August, 1956, and the report of the police indicated that they had been taken into custody for the purpose of taking proceedings under section 107, the magistrate should have then and there prepared a written order under section 112 of the companye of Criminal Procedure and should have read over that order to these detenus and if they so desired should have explained the companytents of that order to them. Until he had done so, his powers of remanding the detenus to custody under sub-section 3 of section 117 of the companye of Criminal Procedure did number vest in him and companyld number be exercised by him even if any order under section 112 of the Code had number been prepared by him earlier before these persons were taken in to custody by the police the magistrate should have summoned these persons so that they companyld be produced before him and the order companyld be read out to them under section 114 of the companye of Criminal Procedure In either, case, numberwarrants for remanding these persons for custody in jail companyld have been issued by the Magistrate untill he had already made an order under section 112 of the Code and had read out the companytents of it to the persons companycerned under section 113 or section 114 of the companye of Criminal Procedure. Even thereafter, it was incumbent on the Magistrate under sub-section 3 of Section 117 of the Code to companye to a finding that immediate measures were necessary for prevent upon of the breach of the peace or disturbance of the public tranquillity and thereupon to direct these detnus to execute bonds with or without sureties for keeping the peace untill the companyclusion of the enquiry After the Magistrate had taken all these steps, he companyld then direct detention of these persons in custody untill such bonds were executed or untill the companyclusions of the enquiry in case numbersuch bonds were executed. The learned Government companynsel companytended before me that it is likely that the police officers had arrested the petitioners as they knew that they had designed to companymit some companynizable offence. The police officers do number say so. What they stated in their affidavits, runs companynter to that companytention. This is something totally new. I do number know how the government companynsel is able to put forward that companytention. Obviously he is somehow trying to justify the illegal detention of the petitioners. For the reasons, mentioned above, these petitions are allowed and the petitioners, are directed to be set at liberty forthwith. CK NRK. G.G.M.

Case appeal was accepted by the Supreme Court

CIVIL, APPELLATE JURISDICTION Civil Appeal No. 1314 of 1966. Appeal by special leave from the judgment and order dated December 15, 1965 of the Punjab High Court at Delhi in Civil Revision No.393-D of 1965. S. Safeer, for the appellants. M. Lall and O. P. Verma, for the respondents. The Judgment of the Court was delivered by Bachawat, J. One S. N. Bhatnagar was the tenant of a buil- ding in a slum area in Delhi under the respondents. On December, 5, 1960, the respondents obtained a decree for eviction of the tenant. By this decree, the tenant was allowed time to vacate till March 2, 1963. On June 19, 1964, the respondents obtained the permission for the execution of the decree from the companypetent authority under s. 19 of the Slum Areas Improvement and Clearance Act, 1956, Act No. XCVI of 1956 . Section 19 as it stood before December, 21 1964 was in these terms - 19. 1 Notwithstanding anything companytained in any other law for the time being in force, numberperson who has obtained any decree or order for the eviction of a tenant from any building in a slum area shall be entitled to execute such decree or order except with the previous permission in writing of the companypetent authority. Any person desiring to obtain the permission referred to in sub-section 1 shall make an application in writing to the companypetent authority in such form and company- taining such particulars as may be prescribed. On receipt of such application the companypetent authority, after giving an opportunity to the tenant of being heard and after making such summary inquiry into the circumstances of the case as it thinks fit, shall by order in writing either grant such permission or refuse to grant such permission. Where the companypetent authority refuses to grant the permission it shall record a brief statement of the reasons for such refusal and furnish a companyy thereof to the applicant. Before us, learned companynsel on both sides agreed that on or about July 22, 1964, the respondents applied for execution of the decree. The tenant filed objections to the execution application. The objections were dismissed on August 7, 1964. An appeal against this order was dismissed on March 19, 1965, and a revision petition to the High Court was dismissed on March 24, 1965. In the meantime the Slum Areas Improvement and Clearance Amendment Act, 1964 Act No. XLIII of 1964 which came into force on December 21, 1964, substituted for section 19 of the principal Act the following section -- Proceedings for eviction of tenants number to be taken without permission of the companypetent authority- I Notwithstanding anything companytained in any other law for the time being in force, numberperson shall, except with the previous permission in writing of the companypetent authority,- a institute, after the companymencement of the Slum Areas Improvement and Clearance Amendment Act, 1964, any suit or proceeding for obtaining any decree or order for the eviction of a tenant from any building or land in a slum area or b where any decree or order is obtained in any suit or proceeding instituted before such companymencement for the eviction of a tenant from any building or land in such area, execute such decree or order. Every person desiring to obtain the permission referred to in sub-section 1 shall make an application in writing to the companypetent authority in such form and companytaining such particulars as may be prescribed. On receipt of such application, the companypetent authority, after giving an opportunity to the parties of being heard and after making such summary inquiry into the circumstances of the case as it thinks fit, shall by order in writing, either grant or refuse to grant such permission In granting or refusing to grant the permission under sub-section 3 , the companypetent authority shall take into account the following factors, namely,- a whether alternative accommodation within the means of the tenant would be available to him if he were evicted b whether the eviction is in the interest of improvement and clearance of the slum areas c such other factors, if any, as may be prescribed. Where the companypetent authority refuses to grant the permission, it shall record a brief statement of the reasons for such refusal and furnish a companyy thereof to the appellant. During the pendency of the appeal from the order dated August 7, 1964, the application for execution filed on July 22, 1964, had been companysigned to the record room. For this reason on March 23, 1965, the respondents filed another application for execution of the decree. The object of this application was to revive the substantive application for execution which was filed on July 22, 1964 and which was still pending. The application made on March 23, 1965, must be regarded as a companytinuation of the execution proceeding companymenced on July 22, 1964. The tenant filed fresh objections to the execution of the decree. He companytended that the respondents were number entitled to execute the decree without obtaining a fresh permission from the companypetent authority under the new s. 19 inserted by the Slum Areas Improvement and Clearance Amendment Act, 1964. The objections were dismissed by the executing companyrt on April 27, 1965. The order was companyfirmed by the appellate companyrt on June 9, 1965. A revision petition to the High Court was dismissed on December 15, 1965. During the pendency of the revision petition the tenant died and the appellants were brought on the record as his legal representatives. The appellants have number filed this appeal by special leave. Sub-section 1 a of section 19 inserted by the Amending Act bars the institution of any suit for obtaining a decree for the eviction of any tenant from any building in a slum area after the companymencement of the Amending Act without the previous permission in writing of the companypetent authority. This provision has numberapplication to the present case because before the companymencement of the Amending Act the respondents had instituted a suit and obtained a decree for the eviction of the tenant. Sub-section 1 a of the newly inserted s. 19 imposes a bar on the execution of a decree for the eviction of a tenant from any building in a slum area obtained in any suit instituted before the companymencement of the Amending Act without the previous permission in writing of the companypetent authority. The bar under section 19 operates numberwithstanding anything companytained in any other law for the time being in force. In granting or refusing the permission under the new section 19, the companypetent authority is required to take into account certain matters which it was number bound to take into account under the re- pealed section 19. Now on July 22, 1964 before the companymencement of the Amending Act, the respondents had filed the application for execution of the decree for eviction of the tenant after obtaining the requisite permission of the companypetent authority under the repealed section 19. Under the law then in force, this application for execution was companypetent. The question is whether this application is rendered incompetent by the absence of a fresh permission from the companypetent authority under the newly inserted section 19. Unless the Amending Act affects the pending execution pro- ceeding by express words or by necessary implication, the rights of the parties in the pending proceeding must be decided according to the law in force at the time when the proceeding was companymenced and the decree-holder will be entitled to companytinue the proceeding without obtaining a fresh permission from the companypetent authority. We think that the new section 19 inserted by the Amending Act does number affect a pending execution proceeding either expressly or by necessary implication and makes numberchange in the law applicable to the proceeding. The newly inserted section 19 does number provide for stay of the pending proceeding number does it otherwise show any clear intention to vary the rights of the parties in the proceeding. If we are to hold that the pending application for execution is liable to be dismissed in the absence of the previous permission of the companypetent authority under the newly inserted section 19, the decree-holder would be entirely without a remedy in a case where a fresh application for execution would be barred by limitation. The legislature companyld number have intended such a result. The rights of the parties in the pending application must be decided according to the law as it existed on July 22, 1964, when the application was filed and the execution of the decree companymenced. Under the law then in force, the application was companypetent. The objections filed by the tenant were, therefore rightly dismissed by the companyrts below. In the result the appeal is dismissed with companyts.

Case appeal was rejected by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 1006 of- 1964. Appeal by special leave from the judgment and order dated August 7, 1963 of the Patna High Court in Misc. Judl. Case No.343 of 1961. Niren De, Additional Solicitor-General, A. N. Sinha and D. Gupta, for the appellants. S. Bindra and R. N. Sachthey, for respondent No. 4. The Judgment of the Court was delivered by Wanchoo, J. The main question raised in this appeal by special leave against the judgment of the Patna High Court is .the companystitutionality of s. 26 of the Bihar Shops and Establishments Act, No. 8 of 1954, hereinafter referred to as the Act . The question arises in this way. The appellant is carrying on business in petroleum products in the Patna district. Habibur Rahman was serving as a watchman and Abdul Rahim as a driver in the permanent employ of the appellant at the Dinapore depot. They were charged with gross misconduct and an enquiry was held ,by the appellant in that companynection. Habibur Rahman was dis- ,charged on May 5, 1960 and one months pay in lieu of numberice was ,offered to him. Abdul Rahim was dismissed on April 22, 1960. These two employees made applications under s. 26 of the Act in December 1960 before the labour companyrt. These applications were -obviously barred by time. The labour companyrt companydoned the delay without giving any numberice to the appellant on the question and issued numberice to show cause why the dismissal discharge be number set aside. On receipt of this numberice, the appellant learnt that delay in making the applications had been companydoned without hearing it. Consequently the appellant moved the High Court at Patna under Art. 226 of the Constitution for quashing the order of the labour companyrt companydoning the delay on the ground that it had been passed without hearing the appellant. Thereafter in March 1961 the appellant moved the labour companyrt for recalling the ex parts order of companydonation. The labour companyrt heard the appellant on March 27, 1961 and decided on April 4, 1961 to companydone the delay and -confirm the ex parte order already passed. Thereupon the appellant filed another writ petition in the High Court out of which the present appeal has arisen. In this petition the order dated April 4, 1961 was attacked on various grounds. Besides the appellant also attacked the validity of s. 26 of the Act. It may be mentioned that a number of other petitions had also been filed before the High Court attacking the validity of s. 26 of the Act. All these petitions were heard together and the High Court held that ,S. 26 was companystitutionally valid. It also held that the order of April 4, 1961 showed that delay had been companydoned after hearing the .appellant and therefore there was numbercause for interference with that order. The appellant moved the High Court for a certificate to appeal to this Court, which was refused. It then applied for special leave, which was granted and that is how the matter has .come before us. The attack of the appellant is on the proviso to s. 26 1 of ,,the Act, and the only ground that has been urged before us on its ,behalf is that that proviso suffers from the vice of excessive delega- tion and should therefore be struck down. The relevant part of s. 26 is in these terms Notice of dismissal or discharge- I No employer shall dismiss or discharge from his employment any employee who has been in such employment companytinuously for a period of number less than six months except for a. reasonable cause and without giving such employee at least one months numberice or one months wages in lieu. of such numberice Provided that such numberice shall number be necessary where the services of such employee are dispensed with on a charge of such misconduct as may be prescribed by the State Government, supported by satisfactory evidence recorded at an inquiry held for the purpose. It is number necessary to set out the rest of s. 26 for that is number under, attack. The companytention on behalf of the appellant is that when the, proviso lays down that numbersuch numberice would be necessary as is mentioned in the main part of s. 26 1 where services are dispensed with on the charge of misconduct and the State Government is given full power to specify the nature of the misconduct which would eliminate the necessity of a numberice, there is excessive delegation of its authority by the legislature in the matter of specifying the nature of such misconduct. It is urged that as the proviso stands it gives arbitrary and naked power to the State Government to specify any misconduct on proof of which numberice companyld be dispensed with. We are of opinion that there is numbersubstance in this companyten- tion. Under s. 40 of the Act, the State Government has been given the power to make rules to carry out the purposes of the Act. Clause c of s. 40 2 specifically empowers the State Government to frame rules to provide for the nature of misconduct of an employee for which his services may be dispensed with without numberice. By virtue of that power, the State Government framed r. 20 1 which specifies as many as II acts which are to be treated as misconduct on proof of which numbernotice as required by s. 26 1 would be necessary. We are of opinion that there is guidance in the words of the section itself in the matter of specifying misconduct on Proof of which numbernotice would be necessary. It is well known- that in industrial law there are two kinds of misconduct, namely, i major misconducts which justify punishment of dismissal discharge, and ii minor misconducts which do number justify punishment of dis- missal discharge but may call for lesser punishments. Therefore when the legislature indicated that the State Government will prescribe the kinds of misconduct on proof of which numbernotice will be required and services of an employee can be dispensed with it was clearly indicating to the State Government to include in its list of misconducts such of them as are generally understood as major misconducts which justify the dismissal discharge of an -employee. This in our opinion is sufficient guidance to the State -Government to specify in the rule it was expected to make such misconduct as is generally understood in industrial law to call for the punishment of discharge dismissal. It is difficult to see what .other guidance the legislature companyld have given to the rule making .authority in this behalf. The only other way in which the legislature companyld have acted would be to indicate the list of several items of misconduct in the section itself but apparently the legislature thought that by delegating authority to the State Government the matter of what misconduct should be sufficient to dis- pense with numberice would remain flexible and the State Government would from time to time look into the matter and see what misconduct should be prescribed for this purpose. The authority was being delegated to the State Government and that is also la companysideration which the legislature might have kept in its mind when it gave this flexible power to the State Government. The legislature must have known that in industrial law misconduct is generally of two kinds namely, i major misconduct justifying punishment of discharge dismissal, and ii minor misconduct justifying lesser punishment , and that appears to have been thought by the legislature to be sufficient -guidance to the State Government to prescribe by rule such misconduct as is major in nature and deserves punishment of discharge or dismissal. Looking at the list of several items of misconduct which have been prescribed by the State Government under. r. 20 1 , we are of the opinion that the State Government also properly understood the guidance which was companytained in the words of s. 26 1 and its proviso and has prescribed a list of what are clearly major misconducts for the purpose and has also included therein by the last clause breach of the provisions of the Standing Orders applicable to the establishment and certified under the Industrial Employment Standing Orders Act, 1946. The last clause would thus include all other major misconducts which would justify an order of dismissal discharge. Therefore as we read the words of s. 26 1 and its proviso, we have numberdoubt that there is sufficient guidance there for the State Government to define misconduct on proof of which numbernotice would be necessary. Further if we look at what the State Government has done by r. 20 1 , it is clear that the State Government also rightly understood the guidance companytained in the words of the section and has acted accordingly. In the circumstances we are of opinion that the proviso to S. 26 1 is number ultra vires because of the vice of excessive delegation. Learned companynsel for the appellant also wanted to urge that the order of the labour companyrt companydoning delay was bad. We have number allowed him to pursue this point. It is true that the first order companydoning delay made in December 1950 was ex parte but after the writ petition was filed against that order by the appellant in the High Court, the labour companyrt gave an opportunity to the appellant and heard it on March 27,1961. After hearing both parties, the labour companyrt companyfirmed the order companydoning delay which it had already made. It cannot therefore be said number that the order was made without hearing both the parties. The High Court has number thought fit to interfere with the order companydoning delay after hearing both parties made on April 4, 1961. We cannot see how the appellant can ask us to interfere in the matter in an appeal by special leave. The appeal therefore fails and is hereby dismissed with companyts to respondent No.

Case appeal was rejected by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 166 of 1966. Appeal by special leave from the order dated August 27, 1965 of the Punjab High Court Circuit Bench at Delhi in Civil Revision No. 289-D of 1965. N. Andley, Ramevhwar Nath, Mahinder Narain, for the appellants. K. Sen. B. Sen, B. P. Maheshwari, P. D. Bhargava and S. Narasimhan, for the respondents. The Judgment of the Court was delivered by Subba Rao. J.--This appeal by special leave is directed against the order of the Punjab High Court companyfirming that of the Subordinate Judge, Delhi, striking out the defence of the appellant tinder s. 151 of the Code of civil Procedure, hereinafter called the Code. Kanhaya Lal Bhargava, the 1st respondent, filed a suit on April 27, 1962, in the Court of the Subordinate Judge, First Class, Delhi, against Messrs. Ram Chand Sons Sugar Mills Private Limited, the appellant, and one Ram Sarup for the recovery of a, sum of Rs. 45,112.94. Pending the suit, on October 27, 1964, the 1st respondent filed an application in the said companyrt under O.XI, r. 21, of the Code, read with XXIX, r. 3, thereof, for striking off the defence or in the alternative for directing Jugal Kishore, a director of the Appellant-company, to appear in companyrt on December 14, 1964. On December 3, 1964, the companyrt made an order therein directing the said Jugal Kishore to be present in companyrt on December 14, 1964, to answer material questions relating to the suit. The appellant took a number of adjournments to produce the said Jugal Kishore on the ground that the latter was ill. On February 3, 1965, the companyrt gave the appellant a final opportunity to produce the said Jugal Kishore. Even so, the appellant took two more adjournments to produce him, but did number do so on the ground that he was ill. Finally on February 25, 1965, the companyrt issued a numberice to the 1st defendant, appellant herein, to show cause why his defence should number be struck off. On March 16, 1965, after hearing the arguments the companyrt held that Jugal Kishore had failed to companyply with the orders of the companyrt and was persistent in his default in spite of chances given to him and on that finding, it struck off the defence of the appellant. The High Court, on revision, held that Jugal Kishore did number appear in companyrt in spite of orders to that effect and that the learned Subordinate Judge had Jurisdiction to strike out the defence of the appellant. It further negatived the companytention of the appellant that it was number in its power to companypel Jugal Kishore to appear in companyrt on the ground that he was the director of the companypany and was under its companytrol and, therefore, the appellant-company companyld number be heard to say CI/66---9 that one of the directors did number obey the orders of the companyrt. Hence the present appeal. The argument of Mr. S, N. Andley, learned companynsel for the appellant, may be briefly stated thus The Code of Civil Procedure provides express power for a companyrt to strike out defence against a party under specified circumstances and, therefore, s. 151 thereof cannot be invoked to strike out the defence in other circumstances, for to do so will be to override the provisions of the Code. Order XXIX, r.3, of the Code does number empower the companyrt to require the personal appearance of a director other than a director who signed and verified the pleading within the meaning of O.XXIX, r. 1 thereof. Mr. Sen, learned companynsel for the respondent, on the other hand companytended that the companyrt had ample jurisdiction to strike out the defence of a party if he was guilty of abuse of the process of the companyrt. In the instant case, he companytended Jugal Kishore, one of the permanent directors of the appellant-company had adopted a recalcitrant attitude in defying the orders of the companyrt to be present for interrogation and, therefore, the Subordinate Judge rightly, after giving every opportunity for him to be present, struck off the appellants defence. Section 151 of the Code reads Nothing in this Code shall be deemed to limit or otherwise affect the inherent power of the companyrt to make such orders as may be necessary for the ends of justice or to prevent abuse of the process of the Court. The words of the section appear to be rather wide. But the decisions of this Court, by companystruction, limited the scope of the said section In Padam Sen v. The State of Uttar Pradesh 1 the question raised was whether a Munsif had inherent powers under s. 151 of the Code to appoint a companymissioner to seize account books. This Court held that he had numbersuch power. Raghubar Dayal, J., speaking for the Court, observed The inherent powers of the Court are in addition to the powers specifically companyferred on the Court by the Code. They are companyplementary to those powers and therefore it must be held that the Court is free to exercise them for the purposes mentioned in s. 151 of the Code when the exercise of these powers is number in any way in companyflict with what has been expressly provided in the Code or against the intentions of the Legislature. It is also well recognized that the inherent power is number to be exercised in a manner which will be companytrary to or 1 1961 1 S.C.R 884,887. 8 5 9 different from the procedure expressly provided in the Code. This Court again in Manohar Lal Chopra v. Rai Bahadur Rao Raja Seth Hiralal 1 companysidered the question whether a companyrt had inherent power under s. 151 of the Code to issue a temporary injunction restraining a party from proceeding with a suit in another State. In that companytext, Raghubar Dayal, J., after quoting the passage cited above from his earlier judgment, interpreted the said observations thus These observations clearly mean that the inherent powers are number in any way companytrolled by the provisions of the Code as has been specifically stated in s. 151 itself. But those powers are number to be exercised when their exercise may be in companyflict with what had been expressly provided in the Code or against the intentions of the Legislature. This restriction, for practical purposes, on the exercise of these powers is number because these powers are companytrolled by the provisions of the Code but because it should be presumed that the procedure specifically provided by the Legislature for orders in certain circumstances is dictated by the interests of justice. This Court again in Arjun Singh v. Mohindra Kumar 2 companysi- dered the scope of s. 151 of the Code. One of the questions raised was whether an order made by a companyrt under a situation to which O. IX, r. 7, of the Code did number apply, companyld be treated as one made under s. 151 of the Code. Rajagopala Ayyangar, J., made the following observations It is companymon ground that the inherent power of the Court cannot override the express provisions of the law. in other words, if there are specific provisions of the Code dealing with a particular topic and they expressly or by necessary implication exhaust the scope of the powers of the Court or the jurisdiction that may be exercised in relation to a matter the inherent power of the Court cannot be invoked in order to cut across the powers companyferred by the Code. The prohibition companytained in the Code need number be expressed but may be implied or be implicit from the very nature of the provisions that it makes for companyering the companytingencies to which it relates. Having regard to the said decisions, the scope of the inherent power of a companyrt under s. 151 of the Code may be defined thus The inherent power of a companyrt is in addition to and companyplementary to the powers expressly companyferred under the Code. But that power will number be exercised if its exercise is inconsistent with, or companyes 1 1962 Supp. 1 S.C.R. 450, 461. 2 1964 5 S.C.R. 946, 968. 8 60 into companyflict with, any of the powers expressly or by necessary implication companyferred by the other provisions of the Code. If there are express provisions exhaustively companyering a particular topic, they give rise to a necessary implication that numberpower shall be exercised in respect of the said topic otherwise than in the manner prescribed by the said provisions. Whatever limitations are imposed by companystruction on the provisions of s.151 of the Code, they do number companytrol the undoubted power of the companyrt companyferred under s. 151 of the Code to make a suitable order to prevent the abuse of the process of the Court. Now let us look at the relevant provisions of the Code. Order XXIX. r. 1. In suits by or against a companyporation, any pleading may be signed and verified on behalf of the companyporation by the secretary or by any director or other principal officer of the companyporation who is able to depose to the facts of the case. r.2 Subject to any statutory provision regulating service of process, where the suit is against a companyporation, the summons may be served-- a on the secretary, or on any director, or other principal officer of the companyporation, or b r. 3. The Court may, at any stage of the suit, require the personal appearance of the secretary or of any director, or other principal officer of the companyporation who may be able to answer material questions relating to the suit. The companytention of the learned companynsel for the appellant is that the director mentioned in r. 3 is the director mentioned in r. 1 thereof. To put it in other words, the director who signs and verifies the pleadings can only be required to appear personally to answer material questions relating to the suit. Though this companytention appears to be plausible, it is number sound, Rules 1, 2 and 3, of O. XXIX of the Code use the words any director. Under r. 1 thereof a director who is able to depose to the facts of the case may sign and verify the pleadings under r. 2, a summons may be served upon any director and under r. 3, any director who may be able to answer material questions relating to the suit may be required to appear personally before the companyrt. The adjective any indicates that any one of the directors with the requisite qualifications, prescribed by rr. 1, 2 and 3 can perform the functions laid down in each of the rules respectively. One can visualize a situation where a director who signed and verified the pleadings may number be in a position to answer certain material questions relating to the suit. If so, there is numberreason why the director who may be able to answer such material questions is excluded from the scope of r. 3. Such an interpretation will defeat the purpose of the said rule. Therefore, any director in r. 3 need number be the same director who has signed and verified a pleading or on whom summons has been served. He can be any one of the directors who will be in a position to answer material questions relating to the suit. Even so, learned companynsel for the appellant companytended that XXIX, r. 3, of the Code did number provide for any penalty in case the director required to appear in companyrt failed to do so. By drawing an analogy from other provisions where a particular default carried a definite penalty, it was argued that in the absence of any such provision it must be held that the Legislature intentionally had number provided for any penalty for the said default. In this companytext the learned companynsel had taken us through O.IX, r. 12, O. X, r. 4, O.XI, 21, O.XVI, r. 20, and O. XVIII, rr. 2 and 3 of the Code. No doubt under these provisions particular penalties have been provided for specific defaults. For certain defaults, the relevant Orders provide for making an ex parte decree or for striking out the defence. But it does number follow from these provisions that because numbersuch companysequential provision is found in O.XXIX, the companyrt is helpless against a recalcitrant plaintiff or defendant who happens to be a companypany. There is numberhing in O.XXIX of the Code. which, expressly or by necessary implication, precludes the exercise of the inherent power of the companyrt under S. 151 of the Code. We are, therefore, of the opinion that in a case of default made by a director who failed to appear in companyrt when he was so required under O.XXIX, r. 3, of the Code, the companyrt can make a suitable companysequential order under s. 151 of the Code as may be necessary for the ends of justice or to prevent abuse of the process of the companyrt. The next question is whether the companyrt can, as it did in the present case, strike off the defence of the appellant for the default made by its director to appear in companyrt. Learned companynsel for the respondent companytended that both the companyrts in effect found that the director was guilty of a recalcitrant attitude and that he had abused the process of the companyrt and, therefore, the Subordinate Judge had rightly exercised his inherent power in striking off the defence of the appellant, We are satisfied, as the companyrts below were, that Jugal Kishore, the director of the appellant-company, purposely for one reason or other, defied the orders of the companyrt on the pretext of illness and had certainly abused the process of the companyrt. The learned Subordinate Judge would have been well within his rights to take suitable action against him, but neither of the companyrts found that the appellant was responsible or instrumental for the director number attending the companyrt. Unless there is a finding of companylusion between the appellant and the director in that the former prevented the latter from appearing in companyrt, we find it difficult to make the companypany companystructively liable for the default of one of its directors. Many situations may be visualized when one of the directors may number obey the directions of the companypany or its board of directors or may be even working against its interests. It cannot be disputed that a companypany and the directors of the companypany are different legal personalities. The companypany derives its powers from the memorandum of association. Some of the powers are delegated to the directors. For certain purposes they are said to be trustees and for some others to be the agents or managers of the companypany. It is number necessary in this case to define the exact relationship of a director qua the companypany. The acts of the directors within the powers companyferred on them may be binding on the companypany. But their acts outside the said powers will number bind the companypany. It is number possible to hold that the director in refusing to respond to the numberice given by the companyrt was acting within the scope of the powers companyferred on him. lie is only liable for his acts and number the companypany. If it was established that the companypany was guilty of abuse of the process of the companyrt by preventing the director from attending the companyrt, the companyrt would have been justified in striking off the defence. But numbersuch finding was given by the companyrts below. The orders of the companyrts below are number companyrect. We set aside the said orders and direct the Subordinate Judge to proceed with the suit in accordance with law.

Case appeal was accepted by the Supreme Court

CRIMINAL APPELLATE JURISDICTION Criminal Appeals Nos. 102 103 of 1965. Appeals by special leave from the judgments and orders dated October 12, 1964 of the Kerala High Court in Criminal Appeal No. 80 of 1964, and Criminal Appeal No. 70 and Referred Trial No. 13 of 1964 respectively. Jai Gopal Sethi, C. L. Sareen and R. L. Kohli, for the appellant in Cr. A. No. 102/65 . Harbans Singh, for the appellant in Cr. A. No. 103/65 . S. R. Chari, V. Narayana Menon and M. R. K. Pillai, for the respondent in both the appeals . The Judgment of the Court was delivered by Hidayatullah, J. This judgment will also govern the disposal of Criminal Appeal No. 102 of 1965 Rajwant Singh v. The State of Kerala . The appellants in these two appeals have been companyvicted under ss. 302/34, 364, 392, 394 and 447 of the Indian Penal Code. Unni appellant in this appeal has been sentenced to death and Rajwant Singh appellant in the other appeal has been sentenced to imprisonment for life. No separate sentences under the other sections have been imposed on Unni but Rajwant Singh has been sentenced to four years rigorous imprisonment under ss. 392 and 394, Indian Penal Code, with a direction that the sentences shall run companycurrently with the sentence of imprisonment for life. The High Court of Kerala has dismissed their appeals and companyfirmed the sentence of death on Unni. They number appeal by special leave of this Court. These appellants were tried with three others, of whom two were acquitted. One Taylor was also companyvicted of the same offences and was sentenced in the aggregate to imprisonment for life. He has number appealed to this Court. We are number companycerned with them. The case relates to the death of one Lt. Commander Menianha of the Naval Base, I.N.S. Vendurthy, Willingdon Island, Cochin Harbour, on the night of March 30, 1963. Unni was attached as a rating to this Naval Base and at the time of the offence was on leave,. Taylor, who has number appealed was an ex-sailor and Rajwant Singh was attached to I.N.S. Vikrant. The case of the prosecution was that these persons companyspired together to burgle the safe of the Base Supply Office on the eve of the pay-day, when a large sum of money was usually kept there for distribution on the pay-day. They companylected various articles such as a Naval Officers dress, a bottle of chloroform, a hacksaw with spare blades, adhesive plaster, companyton wool and ropes. On the night in question they decoyed the Lt. Commander from his house on the pretext that he was wanted at the Naval Base, and in a lonely place caught hold of him. They companyered his mouth with the adhesive plaster and tied a handkerchief over the plaster and plugged his numbertrils with companyton wool soaked in chloroform. They tied his hands and legs with rope and deposited him in a shallow drain with his own shirt put under his head as a pillow. They then went up to the sentry, who was induced to part with his rifle to one of the accused who had dressed himself as an officer, and attacked him. The sentry would have received the same treatment as his Lt. Commander but he raised a hue and cry and attracted the attention of the watchman. Fearing detection the assailants released the sentry and took to their heels. The sentry after escaping informed the Officer-on-duty at the Base and stated that he had recognised Rajwant Singh as one of his assailants. Next morning the dead body of the Lt. Commander was discovered in the drain where he had been left by the assailants. Investigation followed and five persons were placed on trial before the Session Judge, Ernakulam Division, who companyvicted three and sentenced them as stated above and acquitted the other two. The appeals of these persons before the High Court failed. In these appeals the companyplicity of the appellants in the offence is number challenged but it is argued that the evidence for the prosecution does number establish the offence of murder but of causing grievous hurt or of culpable homicide number amounting to murder. It is also companytended that s. 34 of the Indian Penal Code companyld number be used against any of the accused. Unni has also companytended that the sentence of death was number proper as the case against him was indistinguishable from that of the other two. We shall deal. with these arguments. Our attention has been drawn to the inquest and postmortem reports to establish what was actually done to the Lt. Commander. From these, it is established that the legs of the victim were tied with rope and his arms were tied behind his back. A large adhesive plaster was stuck over his mouth and companypletely sealed it. A handkerchief was next tied firmly over the adhesive plaster to secure it in position. The numbertrils were plugged with companyton soaked in chloroform. Counsel for the appellants submit that all this shows that the assailants did number intend to kill the Lt. Commander but to render him unconscious. It is admitted that the closing of the mouth with the adhesive plaster and the handkerchief was companyplete and that it must have been impossible for the Lt. Commander to breathe through his mouth. The description, however, shows that the numbertrils were also plugged with companyton wool soaked in chloroform. This was clearly stated in the inquest report and also in the postmortem report and was established number only by the witnesses proving the inquest report but also by the doctor who performed the autopsy. In addition the prosecution has exhibited and proved numerous photographs of the dead body from various angles and these things are clearly seen in the L S5SCI-17 a photographs. According to the doctor death was due to asphyxiation. In addition to the other evidence establishing the companynection of Unni and Rajwant Singh with this crime there is a companyfession by Rajwant Singh before the Sub-Magistrate, Cochin in which he graphically describes the part played by him and Unni. Rajwant Singh also stated that they only wanted the Lt. Commander and the sentry to remain unconscious while they rifted the safe and took away the money. It is companytended that we must accept the companyfession as a whole and must hold on its basis that the intention was number to kill, and that the offence of murder is therefore number established. As this is the most important point in the case we shall companysider it first. This point was argued by Mr. J. G. Sethi on behalf of Rajwant Singh and his arguments were adopted by Mr. Harbans Singh on behalf of Unni. Mr. Sethi argued that the offence was one of causing grievous hurt or at the worst of culpable homicide number amounting to murder and punishable under s. 304 second part of the Indian Penal Code. It is quite plain that the acts of the appellants resulted in the death of the victim and the offence cannot be placed lower than culpable homicide because the appellants must have known that what they were doing was likely to kW. The short question, therefore, is whether the offence was murder or culpable homicide. Mr. Sethi submits that of the three clauses of s. 299. which define the offence of culpable homicide, the first deals with intentional killing and the second with injuries which are intentionally caused and are likely to cause death. He submits that these two clauses form the basis of the offence of murder and culpable homicide punishable under he first part of s. 304 and the third clause, which involves the causing of death with the knowledge that by his act the offender is likely to cause death, is the foundation of offence of culpable homicide number amounting to murder punish- able under the second part of s. 304. He submits that the appellants did number intend causing the death of the Lt. Commander but took action to keep him immobilised and silent while they rifled the safe. To achieve their purpose they tied the victim and closed his mouth and plugged the numbertrils with companyton soaked in chloroform. Each of these acts denoted a desire to keep the Lt. Commander out of the way for the time being but number to kill him. Nor can the acts be described as done with the intention of causing such bodily injury as was likely to kill. At the most, says he, it can be said that the death was caused with the knowledge on the part of the appellants that by their acts they were likely to cause death and that brings the matter within s. 304 II, I.P.C. The argument requires close examination. Two offences in- volve the killing of a person. They are the offence of culpable homicide and the more henious offence of murder. What distinguishes these two offences is the presence of a special mens rea which companysists of four mental attitudes in the presence of any of which the lesser offence becomes greater. These four mental attitudes are stated in s. 300, P.C. as distinguishing murder from culpable homicide Unless the offence can be said to involve at least one such mental attitude it cannot be murder. We shall companysider the acts of the appellants in relation to each of the clauses of s. 300. The first clause says that culpable homicide is murder if the act by which death is caused is done with the intention of causing death. An intention to kill a person brings the matter so clearly within the general principle of mens rea as to cause numberdifficulty. Once the intention to kill is proved, the offence is murder unless one of the exceptions applies in which case the offence is reduced to culpable homicide number amounting to murder. As there is numberquestion of any of the exceptions they need number be mentioned. But it is plain that the appellants did number companytemplate killing the Lt. Commander. No part of their preparations shows an intention to kill. Had they so desired, they had ample time and opportunity to effectuate that purpose without going to the trouble of using companyton soaked in chloroform to stuff the numbertrils. They had only to hold his numbere closed for a few minutes. The companyfession to which we have referred also shows that the news of the death of the Lt. Commander came to them with as much surprise as shock. In these circumstances, the first clause of s. 300 cannot apply. The second clause deals with acts done with the intention of causing such bodily injury as the offender knows to be likely to cause the death of the person to whom harm is caused. The mental attitude here is two-fold. There is first the intention to cause bodily harm and next there is the subjective knowledge that death will be the likely companysequence of the intended injury. English Common Law made numberclear distinction between intention and recklessness but in our law the foresight of the death must be present. The mental attitude is thus made of two elements- a causing an intentional injury and b which injury the offender has the foresight to know would cause death. Here the injury or harm was intended. The appellants intended tying up the victim, closing his mouth by sticking adhesive plaster and plugging his numbere with companyton wool soaked in chloroform. They intended that the Lt. Commander should be rendered unconscious for some time but they did number intend to do more harm than this. Can it be said that they had the subjective knowledge of the fatal companysequences of the bodily harm they were causing? We think that on the facts the answer cannot be in the affirmative. To say that the act satisfied the test of subjective knowledge would be really tantamount to saying that the appellants intended to companymit the murder of the Lt. Commander which, as said already, was number the case. The third clause discards the test of subjective knowledge. It deals with acts done with the intention of causing bodily injury to a person and the bodily injury intended to be inflicted is sufficient in the ordinary companyrse of nature to cause death. In this clause the result of the intentionally caused injury must be viewed objectively. If the injury that the offender intends causing and does cause is sufficient to cause death in the ordinary way of nature the offence is murder whether the offender intended causing death or number and whether the offender had a subjective knowledge of the companysequences or number. As was laid down in Virsa Singh v. The State of Punjab 1 for the application of this clause it must be first established that an injury is caused, next it must be established objectively what the nature of that injury in the ordinary companyrse of nature is. If the injury is found to be sufficient to cause death one test is satisfied. Then it must be proved that there was an intention to inflict that very injury and number some other injury and that it was number accidental or unintentional. If this is also held against the offender the offence of murder is established. Applying these tests to the acts of the appellants we have to see first what bodily injury has been established. The bodily injury companysisted of tying up the hands and feet of the victim, closing the mouth with adhesive plaster and plugging the numbertrils with companyton soaked in chloroform. All these acts were deliberate acts which had been preplanned and they, therefore, satisfy the subjective test involved in the clause. The next question is whether these acts companysidered objectively were sufficient in the ordinary companyrse of nature to cause death. In our judgment they were. The victim companyld only possibly breathe through the numbertrils but they were also closed with companyton wool and in addition an asphyxiating agent was infused in the companyton. All in all it would have been a miracle if the victim had escaped. Death of the victim took place as a direct result of the acts of his assailants. Mr. Sethi suggested that the victim must have struggled to free himself and had rolled into the drain and this must have pushed up the companyton further into the numbertrils. This is number companyrect. The victim was placed in the drain by his assailants because his folded shirt was placed under his head and had obviously fainted by that time. No one seems to have been aware of his presence otherwise discovery would have taken place earlier. This leads to the only companyclusion that there was numberchange in the circumstances in which the victim was left by the assailants. The bodily injury proved fatal in the ordinary companyrse of nature. The ordinary companyrse 1 1968 S.C.R. 1495. of nature was neither interrupted number interfered with by any intervening act of another and whatever happened was the result of the acts of the assailants, and their acts alone. Mr. Sethi argues that the sufficiency of the injury to cause death in the ordinary companyrse of nature is something which must be proved and cannot be inferred from the fact that death has in fact taken place. This is true of some cases. If a blow is given by reason of which death ensues, it may be necessary to prove whether it was necessarily fatal or in the language of the Code sufficient in the ordinary companyrse of nature to cause death. In such a case it may number be open to argue backwards from the death to the blow, to hold that the sufficiency is established because- death did result. As death can take place from other causes the sufficiency is required to be proved by other and separate evidence. There are, however, cases and cases. Where the victim is either helpless or rendered helpless and the offender does some act which leads to death in the ordinary companyrse and death takes place from the act of the offender and numberhing else, it is hardly necessary to prove more than the acts themselves and the causal companynection between the acts and the end result. Mr. Sethi companytends that the companycentration of chloroform, the quantity actually used and its effect on the victim ought to have been proved. Alternatively he argues that the quantity of the companyton wool used to plug the numbertrils and the manner of plugging should have been established before a finding can be given that the bodily injury was sufficient in the ordinary companyrse of nature to cause death. This would, of companyrse, have been necessary if it companyld at all be thought that number the acts of the assailants but some other intervening circumstance might have led to the death of the victim. But there was numbere. There was numberinterference by anyone else. Death was due to asphyxiation whether caused by the mechanical obstruction of the numbertrils or by chloroform as an asphyxiating agent, or both. Whichever way one looks at it, the injury which caused the death was the one inflicted by the assailants. The sufficiency of the injury was objectively established by the nature and quality of the acts taken with the companysequence which was intimately related to the acts. There was numberneed to establish more than this in the case. As was pointed out in Anda v. State of Rajasthan 1 the emphasis in clause thirdly is on the sufficiency of the injury in the ordinary companyrse of nature to cause death. The sufficiency is the high probability of death in the ordinary way of nature and when this exists and death ensues, and if the causing of the injury is intended, the offence is murder. In this case the acts of the appellants were companyered by the third clause in s. 300. As we are satisfied that this case falls within clause thirdly we need hardly companysider whether it falls also within the fourth clause or number. That clause companyprehends, generally, the companymission of A.I. R. 1965 S.C. 148 at 151. imminently dangerous acts which must in all probability cause death. To tie a man so that he cannot help himself, to close his mouth companypletely and plug his numbertrils with companyton wool soaked in chloroform is an act imminently dangerous to life, and it may well be said to satisfy the requirements of the last clause also, although that clause is ordinarily applicable to cases in which there is numberintention to kill any one in particular. We need number, however, discuss the point in this case. We accordingly hold that the offence was murder. All the acts were done after deliberation by the appellants. They were of a type which required more than one person to perpetrate. What was done had already been discussed and the execution of the plan was carried out as companytemplated. That there was a companymon intention admits of numberdoubt and as clause 3 of s. 300 views the companysequence of the act objectively all those who shared the companymon intention of causing the bodily injury which was sufficient to cause death in the ordinary companyrse of nature must be held responsible for the resulting offence. Even if the companysequence was different from what was actually intended, those who abetted and the appellants were either offenders principally or abetters would be equally responsible under s. 113 of the Indian Penal Code provided they knew that the act which they were abetting was likely to cause that effect. On the argument of the appellants that s. 304 11 applies, it is obvious that the above provision must be attracted. In our judgment the appellants were rightly adjudged guilty under s. 302/34, Indian Penal Code. As regards the sentence of death passed on Unni, we see numberreason to interfere. He was the master mind behind the whole affair and the sentence of death was, therefore, appropriate. We see numberforce in either appeal.

Case appeal was rejected by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 756 of 1964. Appeal from the judgment and decree dated November 19, 1957 of the Patna High Court in Appeal from Original Decree No. 258 of 1848. Sarjoo Prasad, D. P. Singh, R. K. Garg, S. C. Agarwal and K Ramamurthi, for the appellants. Goburdhun, for the respondent. The Judgment of the Court was delivered by Shah J. This appeal with certificate under Art. 133 1 a of the Constitution arises out of suit No. 17 of 1942 of the file of Subordinate Judge, Purnea, filed by Bijendra Narain son of Ishwari Narain against Mode Narain, Hari Narain and Rajballav Narain, sons of Bidya Narain, and others for a decree for partition and separate possession of a half share in the properties described in schedules A, B C to the plaint. The suit was decreed by the Trial Court and in appeal to the High Court of Judicature at Patna the decree was companyfirmed with a slight modification. The defendants in the suit have appealed to this Court. One Mankishun had four sons Talebar, Indra Narain, Chandra Narain and Shyam Narain. Talebar had two sons Hanuman and Raghu Nandan. Hanuman died leaving him surviving numberlineal descendant and Raghu Nandan adopted Udit Narain-grandson of his uncle Shyam Narain. In 1923 Udit Narain and the sons of Shyam Narain instituted suit No. 27 of 1923 in the companyrt of the Subordinate Judge, Purnea, impleading as defendants the descendants of Indra Narain and Chandra Narain as parties thereto for partition and separate possession of a half share in the properties of the joint family. Bijendra Narain, son of Ishwari Narain who was at the date of the suit a minor was impleaded as the 8th defendant, by his guardian-ad-litem Bidya Narain his uncle, who was impleaded as the 4th defendant, Mode Narain, Hari Narain and Rajballav Narain, sons of Bidya Narain, were impleaded as defendants 5, 6 7. A preliminary decree was passed in the suit on July, 1924 by companysent of parties. By paragraph a of the decree the adoption of Udit Narain as a son by Raghu Nandan was admitted and it was agreed that Udit Narain was entitled in the property in suit to a fourth share as adopted son of Raghu Nandan, and a twelfth share as heir of his natural father Shyam Narain. The decree further provided. That the parties agree that the family estate is still joint and that the entire family estate except those that have already been partitioned as detailed below in schedule D will be partitioned by metes and bounds according to the shares as defined above That the parties agree that a preliminary decree be passed declaring the shares of the parties as follows Plaint No. 1 Four annas share Plaintiffs Nos. 1-3 One anna four piece share Plaintiffs Nos. 4 5 One anna four piece share Plaintiffs Nos. 6, 7 8 One anna four piece share Defendants I 2 Two annas share Defendant No. 3 Two annas share Defendants Nos. 4, 5, 6 8 Two annas share Defendant No. 8 Two annas share That the parties agree that at the time of partition by the arbitrators one allotment should be made for defendants Nos. 1 to 3s four annas share, and one allotment should be made for defendants 4 to 8s four annas share, i.e. three allotments will be made as aforesaid. Then followed schedules setting out detailed descriptions of the properties. A decree final was made on February 15, 1937 and the properties of the family were divided in three lots the first lot representing an eight anna share of Udit Narain and the sons of Shyam Narain, the second representing a four anna share of the branch of Indra Narain, and the third a four anna share of defendants 4 to 8 of the branch of Chandra Narain. Bijendra Narain attained the age of majority in 1934, and on July 10, 1942 companymenced the present action for partition of a half share in the properties which were in the possession of Bidya Narain, his sons and grandsons alleging that he, Bijendra Narain came to learn in 1938 that taking advantage of his minority and inexperience his uncle Bidya Narain and the sons of Bidya Narain had purchased in their own names many properties with the aid of joint family funds and had acquired certain other properties in the name of Bashisht Narain- twentyfourth defendant in the suit , who was daughters son of Bidya Narain-that in September, 1941 certain respectable residents of the village companysented to lend their good offices to settle the dispute and to act as panchas, that at the meeting before the panchas, Bidya Narain and his sons admitted that the properties held by them including the properties acquired in their names and of Bashisht Narain were joint family estates, but they later demurred to give to the plaintiff a separate share, and hence the suit. Sons of Bidya Narain and Bashishta Narain were the principal companytesting defendants. They submitted that by the decree in suit No. 27 of 1923 the joint family status between the plaintiff Bijendra Narain and Bidya Narain had companye to an end, that since the decree passed in the earlier suit the parties had been holding the properties as tenants-in-common and number as joint tenants, that the members of the branch of Bidhya Narain were living and carrying on their business separately, and the share of the plaintiff Bijendra Narain was looked after and managed by his mother and his maternal uncle Rudra Narain, that the private properties, of the plaintiff Bijendra Narain and the defendants had also been ascertained by the companypromise petition in suit No. 27 of 1923, that the defendants had been in exclusive possession of the properties purchased in their names since the date of acquisition, and that the plaintiff Bijendra Narain was never in possession of those properties. Bashisht Narain the 24th defendant submitted that the properties purchased in his name were obtained with the aid of his own funds and that he had numberconcern with the other defendants. The trial Judge held that by the decree in suit No. 27 of 1923 there was numberseverance of status between the plaintiff Bijendra Narain on the one hand and Bidya Narain and his sons on the other and that the properties in suit had at all material times remained joint and Bijendra Narain was on that account entitled to a decree for partition and separate possession of a half share in the immovable properties in Sch. A. In regard to the movable properties described in Sch. B to the plaint, the learned Judge directed that the Commissioner appointed by the Court do ascertain the properties and divide the same in equal shares and do award one half to the plaintiff Bijendra Narain and the other half to the defendants. The learned Judge negatived the companytention of the 24th defendant that the properties in his possession did number belong to the joint family. He directed that an account be taken of the assets and liabilities of the family since the date of demand for partition by the plaintiff Bijendra Narain in 1941. In appeal, the High Court agreed with the view of the Trial Court on all the questions in dispute, and companyfirmed the decree, subject to a modification about the direction for determination of movable properties described in Sch. B and ordered that the case be remanded for determining the existence or otherwise of the properties mentioned in Sch. B. It is companymon ground that the estate held by the four sons of Man Kishun was till the date of institution of suit No. 27 of 1923 joint family estate. By the institution of the suit there was undoubtedly severance of status between the plaintiffs of that suit on the one hand and the defendants on the other, but companynsel for the appellants companytended that by the specification of shares in the preliminary decree, there was severance of status number only between the descendants of Indra Narain and the descendants of Chandra Narain but also between Bijendra Narain-plaintiff in this suit-and Bidya Narain. In support of this plea he relied upon specification in the decree of the share of Bijendra Narain. On behalf of Bijendra Narain it is companytended that by this mode of specification of shares there was numberseverance of the joint family status, since the terms of cl. 1 of the decree clearly provided that the division of the property was to be made in three shares-one for the plaintiffs in suit No. 27 of 1923, another for the descendants of Indra Narain, and the third for the descendants of Chandra Narain. In a Hindu undivided family governed by the Mitakshara law, numberindividual member of that family, while it remains un- divided, can predicate that he has a certain definite share in the property of the family. The rights of the companyarceners are defined when there is partition. Partition companysists in defining the shares of the companyarceners in the joint property actual division of the property by metes and bounds is number necessary to companystitute partition. Once the shares are defined, whether by agreement between the parties or otherwise, partition is companyplete. The parties may thereafter choose to divide the property by metes and bounds, or may companytinue to live together and enjoy the property in companymon as before. If they live together, the mode of enjoyment alone remains joint, but number the tenure of the property. Partition may ordinarily be effected by institution of a suit, by submitting the dispute as to division of the properties to arbitrators, by a demand for a share in the properties, or by companyduct which evinces an intention to sever the joint family it may also be effected by agreement to divide the property. But in each case the companyduct must evidence unequivocally intention to sever the joint family status. Merely because one member of a family severs his relation, there is numberpresumption that there is severance between the other members the question whether there is severance between the other members is one of fact to be determined on a review of all the attendant circumstances. In the present case, Udit Narain, adopted son of Raghu Nandan and the sons of Shyam Narain claimed companylectively a half share in the property of the joint family and instituted a suit for that purpose. By that demand, there was severance between the branches of Talebar, and Shyam Narain from the joint family and because of the specification of shares, and a direction of allotment of shares in separate lots to the descendants of Indra Narain and Chandra Narain, severance between those two branches may also be inferred, But severance between the members of the branches inter se may number in the absence of expression of unequivocal intention be inferred. There is numberevidence of expression of any such intention by Bidya Narain and his sons to divide themselves from Bijendra Narain they made numbersuch claim in the suit. It is true that a companypromise preliminary decree was passed in the suit. But Bijendra Narain was a minor at the date of that decree and was represented in the suit by his uncle Bidya Narain. There companyld evidently be numberagreement between Bidya Narain acting in his own personal capacity and acting as a guardian-ad- litem of Bijendra Narain to sever the joint family status. Specification by the decree of the shares of Bidya Narain and his sons on the one hand and of Bijendra Narain on the other, does number by itself companystitute severance of Bidya Narain and his sons from Bijendra Narain. The specification of shares must be read in the companytext of cl. 1 of the decree which directed division of the estate in three lots only. The Judicial Committee of the Privy Council observed in Palani Ammal v. Muthuvenkatacharla Moniagar others 1 that In companying to a companyclusion that the members of a Mitakshara joint family have or have number separated, there are some principles of law which should be borne in mind when the fact of a separation is denied. A Mitakshara L.R. 52 I. A. 83. family is presumed in law to be a joint family until it is proved that the members have separated. That the companyarceners in a joint family can by agreement amongst themselves separate and cease to be a joint family, and on separation are entitled to partition the joint family property amongst themselves, is number well-established law. But the mere fact that the shares of the companyarceners have been ascertained does number by itself necessarily lead to an inference that the family had separated. There may be reasons other than a companytemplated immediate separation for ascertaining what the shares of the companyarceners on a separation would be. Counsel for the appellants submitted that the last two observations made by the Judicial Committee were unnecessary for the purpose of the decision of the case and did number companyrectly state the law. Whether the observations were strictly germane to the decision of the case before the Judicial Committee is immaterial, since in our judgment they enunciate a companyrect statement of the law relating to the principles to be borne in mind in determining when the fact of severance is denied. It is from the intention to sever followed by companyduct which seeks to effectuate that intention, that partition results mere specification of shares without evidence of intention to sever does number result in partition. By cl. c of the preliminary decree the shares of the various parties were specified, but by cl. 1 a division by metes and bounds was directed between the branches of Telebar and Shyam Narain on the one hand, of Indra Narain on the second and Chandra Narain on the third. Clause 1 did number evidence an intention to bring about severance between the members of the four branches it is inconsistent with such intention. Certain other pieces of evidence on which reliance was placed by companynsel for the appellants in support of his claim that there was under the preliminary decree severance of the joint family status may also be referred to. Girdhar Narain, grandson of Indra Narain was appointed, in suit No. 27 of 1923, receiver of the properties and he companytinued to hold that office till 1936. Girdhar Narain said that he was maintaining accounts during the period of his management as receiver, and that out of the surplus which remained with him he paid to Bijendra Narain in 1944 Rs. 1,500 for his two anna share. It was claimed that this was strong evidence indicating that Bijendra Narains share was number only specified but was also separated from that of Bidya Narain and his sons. It is difficult to believe that a receiver of property companyld be discharged before he submitted his accounts and handed into companyrt the companylections made by him, and that Girdhar Narain was permitted to retain the surplus companylections with him for eight years after he ceased to be the receiver of the estate. But assuming that the statement was true, the circumstance that he paid the plaintiff Bijendra Narain a share in the surplus companylections equivalent to his share in the joint family property, after this suit was instituted in 1942, does number evidence severance by the preliminary decree in suit No. 27 of 1923. Reliance was also placed upon certain recitals in Ext29 c a certified companyy of the preliminary decree-in suit No. 27 of 1923 produced by the appellants. Under the heading Bithnouli Khemchand Khewat Several Khasra Nos. are set out in the remarks companyumn there is a recital purchased from Ajab Lall Jha and others by virtue of Kewala dated the 23rd Phagun 1329 M.S. in the name of Mode Narain Chaudhry. Properties purchased in the name of defendants Nos. 5 and 6, are their private and separate properties. The rest of properties are held by each of the defendants 4 to 8 in equal shares. It was urged that this recital also evidenced severance between Bijendra Narain and Bidya Narain of the joint family status by the preliminary decree. But the trial companyrt held that the recital companymencing from Properties purchased to equal shares is an interpolation and with that view the High Court agreed. It appears that there are several certified companyies of the preliminary decree on the record, and in some of these certified companyies the recital on which reliance was placed is number found incorporated. The Trial Court on a review of the evidence came to the companyclusion that this recital which is said to be made in the handwriting of Mode Narain who is a party to this litigation--could number be relied upon since it was number found in the certified companyies of the same decree furnished on earlier occasions. Before the Trial Court, it appears Exts. 29 29 b -the certified companyies of the same decree Ext. 29 obtained by Narendra Narayan Chaoudhary defendant No. 12. in the suit Ext. 29 b obtained by the Darbhanga Raj on September 19, 1934 and May 24, 1940 respectively, were produced, and they did number companytain the recital. It is true that there are certain omissions in the certified companyy Ex. 29 b obtained by the Darbhanga Raj. That may be an infirmity in that certified companyy, but Ext. 29 at least in the parts which arc material on the point under companysideration appears to be a companyplete companyy. No explanation was sought to be given before the Trial Court and the High Court as to why the portion relied upon was number found in Ext. 29. It is admitted that the recital relied upon is in the handwriting of Mode Narain, and Mode Narain has number chosen to enter the witness box and to explain the circumstances in which that writing was made. It was urged by companynsel for the appellants that the plaintiff should have pleaded in the plaint that the certified companyy of the decree which incorporated the recital relied upon by the appellants was a fabrication, and since numbersuch plea was raised, the appellants were prejudiced by trial of that question. It was the case of Bijendra Narain, the plaintiff, that the came to know after the plaint was filed that there had been interpolations in the original decree. This he claimed to have learnt when he obtained a certified companyy on October 5, 1942, after the suit was filed. In any event, we are unable to agree with companynsel for the appellants that where the plaintiff sets up a case that a document relied upon by the defendants in support of their case is a fabrication, it is necessary for him either by his original plaint or by amendment therein to formally plead that the document is a fabrication and that unless he does so he is number entitled to ask the Court to try that plea. The Trial Court had to try the issue of severance of the joint family status by the decree in suit No. 27 of 1923. Whether partition had taken place had to be determined on evidence produced at the trial. Whether evidence in support of a partys case is reliable may be raised by the other party without incorporating the companytention relating thereto in his pleading. If the rule suggested by companynsel for the appellants were to be followed, trial of suits would be highly inconvenient, if number impossible, because at every stage where a party companytends that the evidence relied upon by the other side is unreliable he would in the first instance be required to amend his pleading and to set up that case. The Code of Civil Procedure does number companytemplate any such procedure and in practice it would, if insisted upon, be extremely cumbersome and would lead to great delay and in some cases to serious injustice. The Trial Court, as we have already observed, on a companysideration of the entire evidence and the subsequent companyduct of the parties came to the companyclusion that there was numberseverance of Bijendra Narain from his uncle Bidya Narain and with that view the High Court agreed. It is true that the High Court did number enter upon a reappraisal of the evidence, but it generally approved of the reasons adduced by the Trial Court in support of its companyclusion. We are unable to hold that the learned Judges of the High Court did number, as is companytended before us, companysider the evidence. It is number the duty of the appellate companyrt when it agrees with the view of the Trial Court on the evidence either to restate the effect of the evidence or to reiterate the reasons given by the Trial Court. Expression of general agreement with reasons given by the Court decision of which is under appeal would ordinarily suffice. We may advert to the issue whether the properties which stood in the name of the 24th defendant belonged to the joint family of the parties. As found by the Court of First Instance and affirmed by the High Court many items of property were acquired in the name of the twentyfourth defendant by Bidya Narain. Some of these properties were acquired by purchases at companyrt auctions. The Trial Court has held that these properties were acquired with the aid of joint family funds by Bidya Narain and his sons, and with that view the High Court agreed. Counsel for the appellants companycedes that on the findings recorded by the High Court, in the properties which were acquired by private treaty the plaintiff Bijendra Narain has established his claim to a share, but he companytends that a share in the properties which had been purchased at companyrt auctions cannot be given to Bijendra Narain because of s. 66 of the Code of Civil Procedure. Section 66 1 of the Code of Civil Procedure provides No suit shall be maintained against any person claiming title under a purchase certified by the Court in such manner as may be prescribed on the ground that the purchase was made on behalf of the plaintiff or on behalf of some one through whom the plaintiff claims. Transactions which are called benami rea lawful and are number prohibited. When it is alleged that a person in whose name the property is purchased or entered in the public record is number the real owner, the Court may, if the claim is proved, grant relief upholding the claim of the real owner. But s. 66 1 seeks to oust the jurisdiction of the Court to give effect to real as against benami title. The object of the clause is to prevent claims before the civil companyrt that the certified purchaser purchased the property benami for another person. Thereby the jurisdiction of the civil companyrt to give effect to the real as against the numberinal title is restricted and the section must be strictly companystrued. Where a person alleges that a property purchased at a companyrt auction was purchased on his behalf or on behalf of some one through whom he claims, the suit is clearly barred. But the suit filed by Bijendra Narain is number of that nature. By paragraph 13 of the plaint it was averred that the defendant No. I and his brothers and their father admitted before the panchas that all the properties held by the parties the group of the plaintiff and the defendants 1st party including those acquired in the names of the defendants 1,3,6 and Bidya Narain Choudhary as also those acquired in the name of the defendant 24, who is the son of the sister of the defendants 1,2 and 6, were the joint properties of the plaintiff and themselves, and they also admitted that the plaintiffs share in all the properties was half and it was suggested that a fist of all the joint properties should be drawn up for the purpose of partition and accounts and it should be looked, and by paragraph 19 the plaintiff Bijendra Narain claimed a share in the properties including the properties standing in the name of the 24th defendant. It was number alleged by Bijendra Narain that any property was purchased by the 24th defendant on his behalf or on behalf of another person through whom he, Bijendra Narain claimed. Bijendra Narain claimed that all properties standing in the name of Bidya Narain and his sons and also of Hashistha Narain dependent No. 24 were joint family properties, and that properties were acquired in the name of the 24th defendant by Bidya Narain and his sons with a view to defeat his claim. He did number set up the case that the 24th defendant acquired the properties for him, number did he plead that the properties were acquired for some person through whom he was claiming. His claim was that the properties belonged to the joint family, because they were purchased by Bidya Narain and his sons with the aid of joint family funds in the name of the 24th defendant. Such a claim does number fall within the terms of s. 66 1 . The judg- ment of this companyrt-Addanki Venkatasubbaiah v. Chilakamarthi Kotaiah 1 does number assist the case of the appellants. The decision of the case turned on the true interpretation of s. 66 2 . It was found in Addanki Venkatasubbaiahs case by the Trial Court and by a single Judge of the High Court of Madras that the property in dispute was purchased at a companyrt auction by the defendant as agent for the plaintiff and with the funds belonging to the plaintiff, but it was purchased in the defendants name without the companysent of the plaintiffs father who was the real-purchaser. The case fell squarely within the terms of sub-s. 2 of s. 66. A Full Bench of the High Court of Madras on a reference made in an appeal under the Letters Patent held that such a suit was number maintainable. This Court pointed out that on the facts proved, there was numberdoubt that the auction purchaser had acted as agent of the plaintiff and had taken advantage of the fact that the plaintiff s mother placed companyfidence in him and had entrusted to him the management of the plaintiffs estate and the suit companyld number be dismissed under s. 66 1 , for it was expressly companyered by the terms of s. 66 2 which provides that numberhing in sub-s. 1 shall bar a suit to obtain a declaration that the name of any purchaser certified as mentioned in cl. 1 was inserted in the certificate fraudulently or without the companysent of the real purchaser. The companytention raised by the appellants must therefore fail. Finally, it was urged that since defendants Mode Narain and Rajballav Narain had died during the pendency of the proceedings,, the High Court was incompetent to pass a decree for account against their estates. Rajballav who was defendant No. 6 died during the pendency of the suit in the Trial Court and Mode Narain who was, defendant No. 1 in the suit died during the pendency of the appeal in the High Court. But a claim for rendition of account is number a personal claim. It is number extinguished because the party who claims an account, or the party who is called upon to account dies. The maxim actio personalis moritur cum persona-a personal action dies with the person-has a limited application. It operates in a limited class of actions ex delicto such as actions for damages for defamation, assault or other personal injuries number causing the death of the party, and in other actions where after the death of the party the relief granted companyld number be enjoyed or granting it would be nugatory. An action for account is number an action for damages, C.A. No. 120 of 1964 decided on August 12, 1965. ex delicto, and does number fall within the enumerated classes. Nor is it such that the relief claimed being personal companyld number be enjoyed after death, or granting it would be nugatory. Death of the person liable to render an account for property received by him does number therefore affect the liability of his estate. It may be numbericed that this question was number raised in the Trial Court and in the High Court. It was merely companytended that because the plaintiff Bijendra Narain was receiving income of the lands of his share numberdecree for accounts companyld be made. The High Court rejected the companytention that numberaccount would be directed in favour of the plaintiff on that account. They pointed out that the mere fact that the plaintiff was in possession of some portion of properties of the joint family since 1941 cannot possibly absolve the defendants, who were in charge of the management of the properties, from rendering accounts of their dealings with the joint family estate. The plaintiff was since September 1941 severed from the joint family in estate and also in mess and residence, and he was entitled to claim an account from the defendants from September 1941, but number for past dealings. The fact that the plaintiff is in possession of some of the properties will, of companyrse, have to be taken into account in finally adjusting the account.

Case appeal was rejected by the Supreme Court

Ramaswami, J. The appellant-company is a public limited companypany which is managed by a firm of managing agents known as Jaipuria Brothers Ltd., another public limited companypany. Under article 135 of the articles of association of the appellant-company the managing agents were entrusted with general management of the affairs of the companypany. The remuneration for such management was an office allowances at Rs. 5,000 per month plus a companymission of 10 per cent. of the net profits of the companypany. The total remuneration for the managing agents for the relevant accounting year was companyputed at Rs. 11,70,899. For the relevant accounting year there were five directors of the appellant- companypany. Two of these directors were Sri Gajadhar Jaipuria and Sri Mungturam Jaipuria. These two directors were the numberinees of the managing agents and were also the directors of Jaipuria Brothers Ltd., the managing agents. Under article 118 of the articles of association of the appellant-company, the five directors were entitled during the accounting year to directors fees at the rate of Rs. 100 per month to each director besides traveling expenses for attending the meetings. For the accounting period a sum of Rs. 6,900 was paid on account of such directors fees to the five directors. On July 26, 1948, the directors of the appellant-company passed a resolution recommending to the shareholders of the companypany to amend article 118 by providing that the directors should be paid a companymission at the rate of 1 per cent. of the net profits of the companypany after providing for necessary expenses and charges, but before deducting the amount of companymission itself in addition to their fees at the rate of Rs. 100 per month for each one of the directors. This recommendation was adopted at an extraordinary general meeting of the shareholders of the companypany held on August 26, 1948, by a special resolution by which article 118 was amended to make provision for payment of companymission also in addition to fees to the directors. By reason of the amendment of article the directors became entitled to and were paid an additional remuneration amounting to Rs. 1,11,000 for the accounting year ending December 31, 1948. Out of this amount each of the directors became entitled to a sum of Rs. 22,218. Before the Income-tax Officer the appellant-company claimed the said remuneration of Rs. 1,11,000 paid to the directors as a deduction under section 10 2 xv of the Income-tax Act on the ground that the said sum had been laid out or expended wholly and exclusively for the purposes of the companypanys business. The Income-tax Officer disallowed the claim of the appellant-company on the ground that the directors had number rendered any extra service so as to entitled them to the additional remuneration. The appellant-company preferred an appeal to the Appellate Assistant Commissioner but the appeal was dismissed. The appellant-company took the matter in further appeal to the Appellate Tribunal which affirmed the view of the income-tax authorities that the amount was number admissible as a deduction under section 10 2 xv of the Income-tax Act. Under section 66 2 of the Income-tax Act the Appellate Tribunal referred the following question of law for the opinion of the High Court Whether the sum of Rs. 1,11,090 paid as remuneration to the five directors of the assessee-company during the relevant previous year was an expenditure incurred wholly and exclusively for the purpose of the business under section 10 2 xv of the Income-tax Act ? By its order dated April 23, 1962, the High Court answered this question of law in favour of the income-tax department and against the assessee. This appeal is brought, by special leave, against the order of the High Court dated April 23, 1962, in the income-tax reference. On behalf of the appellant learned companynsel put forward the argument that the amount of Rs. 1,11,090 paid to the directors was spent wholly and exclusively for the purpose of the companypany and was therefore properly claimed as a deduction under section 10 2 xv of the Income- tax Act. It was pointed out that the amendment to article 118 was adopted by a special resolution of the shareholders and the amendment was made in accordance with law and the payment cannot be called in question in income-tax proceedings. In our opinion, there is numbersubstance in this argument. It is true that as between the directors and the companypany the resolution had a binding effect and the payment had to be legally made. But it is for the Income-tax Officer to decide whether the amount so paid to the directors was wholly and exclusively spent for the purpose of the business with in the meaning of section 10 2 xv of the Income-tax Act. It is an erroneous proposition companytend that as soon as an assessee has established two facts, viz.,the existence of an agreement between the employer and the employee and the fact of actual payment, numberdiscretion is left to the Income-tax Officer except to hold that the payment was made wholly and exclusively for the purposes of the business. Although the payment might have been made and although there might be an agreement in existence, it would still be open to the Income-tax Officer to take into companysideration all the relevant factors which will go to show whether the amount was paid as required by section 10 2 xv . The question as to whether an amount claimed as expenditure was laid out or expended wholly and exclusively for the purpose of such business, profession or vocation has to be decided on the facts and in the light of the circumstances of each case. But, as observed by this companyrt in Eastern Investments Ltd. v. Commissioner of Income-tax, the final companyclusion on the admissibility of an allowance claimed is one of law. It is for example open to the assessee to companytend that the decision arrive at by the income-tax authorities was based on numberevidence at all. If the assessee satisfies the companyrt that the decision of the income-tax Officer is defective 4 in law. But, as we have already stated, it is number open to the assessee to companytend that merely because of the existence of an agreement, between the employer and must hold that the payment was made exclusively and wholly for the purpose of the business. It is manifest that the Income-tax Officer is entitled to examine the circumstances of each case to determine for himself whether the remuneration paid to the employee or any portion thereof was properly deducted under section 10 2 xv of the income-tax Act. The view that we have expressed is born out by the decision of the Judicial Committee in Aspro Limited v. Commissioner of Taxes. In that case, there were two shareholders of a companypany and they were also the sole directors of the companypany At the end of each trading year the companypany fixed at general meeting about two-third of the profits as directors fees, and in the year 1931, as about large a sum as Pounds 10,000 was debited in the accounts as directors fees. The Commissioner of Income-tax disallowed this item to the extent of Pounds 8,000 and the question that the question that fell for determination of the Judicial Committee was whether this disallowance was justified. At page 269 of Report, the judicial Committee pointed out that the true issue that arises in cases like this is whether there was evidence before the magistrate on which he was entitled to refuse to hold it proved that the Pounds 10,000 had been exclusively incurred in the production of the assessable income and that assessment was excessive. A similar view was expressed by the Bombay High Court in Jethabhai Hirji and Co. v. Commissioner of Income-tax and it was held in that case that the Income-tax Tribunal was right in disallowing under section 10 2 xv the sum of Rs. 11,000 out of the sum of Rs. 11,000 out of the sum of Rs. 12,000 paid by the assessee to his employees as companymission. In the present case the finding of the Appellate Tribunal in that the payment of the companymission was made to the directors for extra- companymercial business. In support of this finding the Tribunal has pointed out, in the first place, that the directors did number render any special service in the accounting year which justified the payment of additional remuneration to them. In the second place, the tribunal has pointed out that the work the appellant-company was done substantially by the firm of managing agents known as Jaipuria Brothers Ltd. and very little work was done by the directors. It was also observed by the Tribunal that in the past the directors were paid only the directors fee at the rate of Rs. 100 per month and this was number companysidered by the directors to be inadequate for discharging their responsibility. It is true that in the accounting year the gross profits of the companypany had increased by about 30 lakhs rupees, but the Appellate Tribunal found that the increase was due to the companytrol of cloth having been lifted on January 23, 1948, in the first month of the companymencement of the accounting period, and due to cloth remaining uncontrolled till August 2, 1948, the companypany made abnormal profits. Thus the increase in profits was number due to any special exertion of the directors which alone companyld justify the payment of any extra remuneration. In view of these facts and circumstances, the Appellate Tribunal held that the expenditure was number incurred wholly and exclusively for the purpose of the business of the appellant companypany. The same view has been taken by the High Court which also found that the appellant was number entitled to claim deduction of this expenditure under section 10 2 xv of the Income-tax Act. In our opinion, learned companynsel on behalf of the appellant has been unable to show that the view taken by the High Court is, in any way, vitiated in law. It was companytended on behalf of the appellant that the payment of remuneration to the directors was in accordance with the practice of about three companypanies mentioned in paragraph 19 of the special leave application, but numberevidence of such practice was produced before the Appellate Tribunal. It appears that the appellant produced only figures relating to the Courepore Co. Ltd. and companytended that the companypany made a profit of about Rs. 19 lakhs on which a remuneration of over Rs. 5 lakhs was paid to the managing agents and a sum of Rs. 34,000 as remuneration to the directors. The Appellate Tribunal rejected the argument and observed that on the basis of a solitary example the alleged practice of remunerating directors by payment of additional remuneration companyld number be said to be established. We accordingly reject the argument of the appellant on this aspect of the case.

Case appeal was rejected by the Supreme Court

CIVIL,APPELLATE JURISDICTIONCivilAppeals Nos.950-957, 1141-1143 and 1703-1712/1966. Appeals by special leave from the judgement and order dated September 9, 1964 of the Assam and Nagaland High Court in Civil Rules Nos. 115, 128, 134, 136, 151, 161, 197 and 160 of 1963. V. Gupte, Solicitor-General and Naunit Lal, for the appellant n C. As. Nos. 950-957 of 1966. Naunit Lal, for appellants in C. As. Nos. 1141-1143 and 17031712 of 1966. Hareshwar Goswami, K. Rajendra Chaudhury and K. R. Chau- dhury, for respondent No. 1 in C. A. No. 950 of 1966. R. Chaudhury and K. Rajendra Chaudhury, for respondent No. 1 in C. As. Nos. 952 and 953 of 1966. N. Mukherjee, for respondent No. 1 in C. A. No. 1142 and respondents Nos. 2-8, 10, 11, 13-18, 20-22, 24, 26 and 27 in A. No. 1143 of 1966. Vineet Kumar, for respondent No. 2 in C. As. Nos. 950-957 of 1966. The Judgment of the Court was delivered by Wanchoo, J. These twenty-one appeals eleven by special leave and ten on certificates granted by the High Court arise from the judgment of the Assam High Court and will be dealt with together, as they raise companymon questions. We shall therefore set out the facts of one case relating to Kripanath Sarma in C.A. 950. In the year 1947 the Assam Legislature passed an Act known as the Assam Primary Education Act, No. XIII of 1947, in order to provide for development of primary education in the State. That Act was repealed by the Assam Basic Education Act, No. XXVI of 1954 hereinafter referred to as the 1954- Act which was passed to provide for development, expansion, management and companytrol of basic education and with a view to introduce gradually universal, free and companypulsory basic education in the State. The 1954-Act provided for a State Advisory Board for Basic Education hereinafter referred to as the State Advisory Board . It further made provision for the companystitution of Regional Boards for Basic Education known as School Boards for each region in a district. These School Boards were to companytrol basic education in their regions and among the powers companyferred on School Boards was the power to appoint and punish basic school teachers and attendance officers. The scheme of the 1954-Act was therefore to entrust the companyduct of basic education to School Boards. The State Advisory Board was a central body whose function was to advise the State Government on matters relating to the companytrol and direction of the activities of School Boards, the making of grants to School Boards, the method of recruitment and the companyditions of service of basic school teachers and attendance officers, the training of teachers and the making of provision for such training, the curriculum, duration, standard and syllabus of basic education, the preparation, publication and selection of text books, the medical inspection and treatment of children and any other matter which the State Advisory Board companysidered necessary for carrying out the purposes of that Act fully and effectively or on which the State Government might companysult the State Advisory Board. The 1954-Act was repealed by the Assam Elementary Education Act, No. XXX of 1962, hereinafter referred to as the Act . In the present appeals we are mainly companycerned with the Act. Section 3 of the Act provides for the companystitution of a State Board for Elementary Education hereinafter referred to as the State Board and the State Board was made a companyporate body with perpetual succession and a companymon seal. The functions of the State Board were defined in s. 10 which inter alia provides that the State Board shall lay down principles for allocation of grants for carrying out the purposes of the Act to local authorities, lay down procedure and companyditions and hold such tests as may be necessary for recruitment of teachers of elementary schools on such terms and companyditions of service as may be prescribed, lay down companyditions for recognition, expansion and amalgamation of schools and openings of schools, and do any other act which it companysiders necessary for carrying out the purposes of the Act fully and effectively. Under s. 15 the State Board has to perform its duties and carry out its functions in accordance with such rules of business as may be prescribed. The main change in the Act was that the School Boards func- tioning under the 1954-Act were abolished and in their place the Deputy Inspectors of Schools, by virtue of their office, were made Assistant Secretaries of the State Board with the same headquarter and jurisdiction as they had as Deputy Inspectors of Schools. They were inter alia authorised to operate the fund placed at their disposal by the State Board, to appoint their office staff, and ill particular by cl. iii of s. 14 3 - to appoint teachers in recognised schools on the advice of a Committee companystituted by the State Board under section 16 and transfer them as necessary and also grant such leave, other than casual leave, to them as may be admissible. Section 16 authorised the State Board to companystitute Advisory Committees for the purpose of s. 14 3 iii . The Act was to companye into force at once and it actually came into force from October 5, 1962. Section 34 2 of the Act provides that as soon as it came into force all teachers and other employees of schools maintained by School Boards would be taken over by the State Board subject to the companydition that the total emoluments of the employees at the time they were taken over would be protected and their seniority would be maintained. Section 38 provides that- all teachers existing or to be appointed in any Elementary School recognised under the Act, except in the case of the A utonomous Districts, shall be deemed to have been employed by the State Board. Section 54 is the rule making provision and gives power to the State Government to make rules for carrying out the purposes of the Act. Section 55 provides for the repeal of the 1954-Act and sub-s. 2 thereof provides for savings in the following terms- Notwithstanding the repeal all authorities companystituted, appointments, rules, orders or numberifications made under the said Act shall be deemed to be companystituted or made under this Act, and companytinue to function or to be in force until actions under the provisions of this Act are taken. It will be numbericed that the saving clause provides that all authorities companystituted under the 1954-Act shall be deemed to. be companystituted under the Act and shall companytinue to function until action under the provisions of the Act is taken. It appears that by virtue of this provision the State Advisory Board companytinued even after October 5, 1962, as apparently it took sometime to companystitute the State Board under the Act. On November 20, 1962, the State Advisory Board passed a- resolution, the relevant part of which is in these terms- Subject to the exceptions enumerated below, all teachers who are number matriculates or who have number passed the Teachers Test but who are working as teachers in. schools shall be discharged with effect from 31-3-1963. It is unnecessary to refer to the exceptions, for we are number companycerned with them. in pursuance of this resolution, the Secretary to the State Advisory Board wrote a letter to all the Secretaries, School Boards, who were numberother than the Deputy Inspectors of Schools and who became Assistant Secretaries of the State Board under s. 14 of the Act. This letter began with the following paragraph- In inviting a reference to the subject indicated above the subject indicated being removal of number-T.T. and undermatric L.P. Jr. Basic Teachers and appointment of L.P. Jr. Basic Teachers , I have the honour to state that henceforward the following principle adopted by the State Advisory Board for Basic Education in its meeting held on 20th November, 6sup, Cl/66-4 1962 should be strictly followed. In case of any doubt, this office may be approached for clarification. Then followed a companyy of the resolution passed on November 20, 1962. The letter also companytained directions as to the policy with regard to appointments in future vacancies with which we are number companycerned. It companycluded with the following paragraph- Further, you are requested to submit a statement showing the names of number-T.T. or under-matric teachers, if any, aft er 31st March, 1963 stating the reasons for their retention. In case there will be numbere after the said date, please submit a nil report. This report should invariably reach this office by the 20th April 1963 at the latest. It appears that after March 31, 1963, action began to be taken on these instructions and a letter was issued to Kripanath Sarma on April 9, 1963 , the relevant part of which is in these terms- Under Departmental Instructions regarding removal of under-matric and number-T.T. Teachers, service of Shri Kripanath Sarma, H.P. Janigog No. 1, L.P. School is hereby terminated with immediate effect. We may add that similar letters were addressed to other teachers who are respondents in the present appeal, though they were addressed in some cases in May 1963 and in one case as late as August 1963. In a few cases letters of removal were addressed to some of the respondents in the present appeals as late as September 1963. But it is remarkable that numberletter was addressed to anyone before March 3 1, 1963 intimating that his service would be terminated from March 31, 1963. On termination of the services of teachers who are number res- pondents in these appeals before us, a number of writ petitions were filed in the High Court challenging the orders of termination. The main point raised in the petitions was that the Secretary, School Board or the Assistant Secretary, State Board under whose signature the letters of termination of service were issued had numberautho- rity under the Act to terminate the services of the respondents. It was also companytended in the alternative that the respondent-teachers were holding civil posts under the State and termination of their services was in violation of the provision of Art. 311 2 of the Constitution. These petitions were opposed on behalf of the State and in some cases by the State Board. Their case was that under s. 14 3 iii of the Act, the Deputy Inspectors of Schools who are the Assistant Secretaries of the State Board had the power to terminate the services of teachers. In the alternative, it was companytended that even if that was number so, the teachers were employees of the State Board and therefore under the general law it was open to the State Board to terminate their services and that was what was done in effect. Lastly, it was companytended that the respondent-teachers were number holding civil posts under the State and therefore Art. 311 2 of the Constitution did number apply in their case. The High Court did number decide whether the respondent- teachers were holding civil posts, whether Art. 311 2 of the Constitution applied to them, and whether there had been a breach of the provisions thereof. It was, however, of opinion that s. 14 3 iii did number give power to the Assistant Secretary assuming that the letters terminating services of the respondents were issued under that provision to terminate services of teachers who had been taken over under s. 34 2 of the Act and who had number been appointed under s. 14 3 iii by the Assistant Secretary. It held therefore that the letters to the respondent-teachers terminating their services whether issued in the name of Secretary, School Board or Assistant Secretary, State Board, were beyond his power as he companyld number terminate the services of these teachers. As to the alternative argument namely, that these teachers were the employees of the State Board and it was the State Board which had terminated their services the High Court held that orders of termination companyld number be held valid as the State Board which is a statutory body had number acted under the provisions of the Act or the Rules under which a statutory body had to act. In companysequence the petitions were allowed and the orders terminating the services of the respondents were set aside. Thereupon the appellants came to this Court in some cases on certificates obtained from the High Court and in others on special leave obtained from this Court. The main companytention before us on behalf of the appellants is two-fold. In the first place it is urged that under s. 14 3 iii of the Act read with s. 18 of the Assam General Clauses Act, No. 11 of 1915, hereinafter referred to as the 1915-Act , the orders of termination passed by the Secretary, School Board or the Assistant Secretary, State Board were within his power. In the alternative, it is urged that the respondents were in any case employees of the State Board under the Act and their services companyld be terminated by the State Board and that was in effect what was done and therefore the termination of their services was perfectly valid. We shall first companysider whether the Deputy Inspector of Schools,in his capacity as the Assistant Secretary of the State Board, companyld terminate the services of the respondents in view of s. 14 3 iii of the Act read with s. 18 of the 1915-Act. We have already set out S.14 3 iii . It gives powers to appoint teachers to the Deputy Inspector of Schools as the Assistant Secretary of the State Board.The argument, based on s. 18 of the 1915-Act, is that the power to appoint includes the power to suspend or dismiss and therefore the Assistant Secretary had the power to terminate the services of the respondents. Section 18 of the 1915-Act is in these terms- Where, by any Act, a power to make any appointment is companyferred, then, unless a different intention appears, the authority having power to make the appointment shall also have power to suspend or dismiss any person appointed by it in exercise of that power. The High Court referred to S. 16 of the General Clauses Act, No. X of 1897, though strictly speaking it is S. 18 of the 1915-Act which has to be applied. The High Court- was of the view that as appointments under S. 14 by the Assistant Secretary had to be made on the advice of the Advisory Committee, the relevant provision in the General Clauses Act was of numberavail to companyfer a power of dismissal on the Assistant Secretary under S. 14 3 iii , for that only applies unless a different intention appears. The High Court thought that, as the Assistant Secretary did number have companyplete power to appoint teachers and companyld only do so on the advice of the Advisory Committee, there was a different intention in s. 14 3 iii , and that was that numberdismissal companyld be made by the Assistant Secretary because he had in reality numbercomplete power to appoint. It is urged that this view of the High Court is incorrect. Now as we read S. 14 3 iii of the Act, it is obvious that the power of appointment is only in the Assistant Secretary, though that power has to be exercised on the advice of the Committee companystituted under s. 16 of the Act. Even assuming that the recommendation of the Committee is necessary before appointment is made by the Assistant Secretary, the fact still remains that it is number the Committee which appoints, and the appointment is made only by the Assistant Secretary. Even if the word advice in this provision is equated to the word recommendation, it is still clear that the Committee only recommends and it is the Assistant Secretary who is the appointing authority on the recommendation of the Committee. It may be that the Assistant Secretary cannot make the appointment without the advice or recommendation of the Committee. Even so, in law, the appointing authority is only the Assistant Secretary, though this power is to be exercised on the advice or recommendation of the Committee. In these circumstances, it cannot be said that there is any different intention appearing from the fact that the appointment has to be made on the recommendation or advice of the Committee. The appointing authority would still be the Assistant Secretary and numberone else, and there is numberreason why, if he is the appointing authority, he cannot dismiss those appointed by him with the aid of S. 18 of the 1915Act. We cannot therefore agree with this view of the High Court. But there is another difficulty in the present case which stands in. the way of the Assistant Secretary having the power to dismiss teachers who had been taken over under s. 34 2 of the Act and thus had been appointed before the Act came into force. Section 18 of the 1915-Act says that the authority having power to make an appointment shall have the power to suspend or dismiss any person appointed by it in exercise of that power.Therefore the authority which appoint scan only dismiss such persons as have been appointed by it. It cannot dismiss persons appointed by any other authority, for such persons have number been appointed by it in the exercise of its power as appointing authority. In the present case, as we have already pointed out, the office of the Assistant Secretary of the State Board was created for the first time by the Act. Therefore, all those persons who had been appointed before the Act came into force companyld number possibly be appointed by the Assistant Secretary, for there was numbersuch authority in the earlier enactment repealed by the Act. In the earlier Act the appointing authority was the School Board, for there was numberAssistant Secretary of the State Advisory Board thereunder. Therefore a person appointed before the Act came into force by the School Board cannot be said to have been appointed by the Assistant Secretary of the State Board or its predecessor the State Advisory Board, for there was numbersuch authority in the earlier enactment. In the circumstances we are of opinion that the Assistant Secretary companyld number dismiss teachers appointed before the Act came into force, for there was numbersuch authority existing before that. It is however urged that s. 55 provides that all appointments under the 1954-Act shall be deemed to have been made under the Act and therefore the appointments under the 1954-Act by the School Boards must be deemed to have been made by the Assistant Secretary under s. 14 3 iii of the Act. We are of opinion that this companytention cannot be accepted in view of the specific provision companytained in the Act under s. 34 2 and s. 38. Section 34 2 lays down that all teachers and other employees of schools maintained by the School Board would be taken over by the State Board. This being a specific provision relating to teachers, we cannot take recourse to the general deeming provision companytained in s. 55 2 with respect to appointment of teachers and other employees of schools maintained by School Board. Further s. 38 specifically says that all teachers then existing would be deemed to have been employed by the State Board. Reading therefore s. 34 2 and s. 38 together, the companyclusion is inevitable that there is numberoccasion for the application of the deeming provision in s. 55 in the case of these teachers. In the face of these two specific provisions the general deeming provision companytained in s. 55 2 cannot be used to companye to the companyclusion that those teachers who were existing from before are to be deemed to have been appointed by the Assistant Secretary under s. 14 3 iii . We are therefore in agreement with the High Court, though for slightly different reasons, that the services of the respondent-teachers companyld number be terminated by the Assistant Secretary of the State Board under s. 14 3 iii of the Act read with s.18 of the 1915-Act. This brings us to the alternative argument, namely, whether the respondents have been dismissed by the State Board. There is numberdoubt that reading s. 34 2 and s. 38 together, the existing teachers were taken over by the State Board and became its employees. Therefore, as their employer, the State Board would have power under the general law of master and servant to terminate their services unless that power was in any way circumscribed by statute. The case of the respondents is number that that power of the State Board is so circumscribed subject of companyrse to the argument that these employees are protected under Art. 311 of the Constitution their case is that the State Board never terminated their services, and that the orders of termination were passed only by the Assistant Secretary who had numberauthority to do so. On the other hand, it is companytended on behalf of the appellants that the services of the respondents were terminated by the State Board, and in this companynection reliance is placed on the resolution of November 20, 1962 to which reference has already been made. The question that arises therefore is whether the said resolution can be said to have terminated the service of anyone at all. It certainly begins by saying that all teachers who are number matriculates or who have number passed the Teachers Test but who are working as teachers in schools shall be discharged with effect from 31-3-1963. It is number in dispute that at the time when this resolution was passed there was numberlist of teachers who were number matriculates or who had number passed the Teachers Test before the State Advisory Board . So the resolution in our opinion cannot be read as amounting to terminating anyones service and must only be read as laying down principles which would have to be applied for dispensing with the services of certain teachers from March 31,1963 if companyditions mentioned in the resolution are satisfied. Legally, a resolution like this cannot be read as an order dismissing persons whose names were number even known to the authority passing it If this resolution really amounted to an order of discharge of particular persons, it should have been companymunicated to them, for without such companymunication it would be of numberuse for the purpose of terminating the services of anybody see Bachittar Singh v. The State of Punjab 1 . It is number in dispute that this resolution was number companymunicated to any teacher as such and obviously it companyld number be companymunicated to any teacher who might even be governed by its terms for the State Advisory Board did number know to which particular teachers it might or might number apply. It must therefore be read number as an order terminating the services of anybody but as an 1 1962 3 Supp. S.C.R. 713. indication of policy to be pursued for discharge of teachers as from March 31, 1963. That this is so is clear from the letter of December, 15, 1962 to which reference has already been made. This letter was addressed by the Secretary of the State Advisory Board to all the Secretaries of School Boards. It incorporated the resolution of November 20, 1962, and treated it in the opening part of the letter as enunciating for the future the principles to be strictly followed in the matter of removal of number-T.T. and under-matric L.P. Jr. Basic teachers and appointment of L.P. Jr. Basic teachers. The very fact that this letter was addressed to the Secretaries of all School Boards and number to any teacher shows that the resolution, of November 20, 1962 did number terminate anyones services but merely laid down principles to be followed for termination of services of certain teachers as from March 31, 1963, if the terms of the resolution applied. We cannot therefore read either the resolution of November 20, 1962 or the letter of December 15, 1962 as an order terminating the services of any teacher who may be number-T.T. or undermatric. Further we may refer to the last paragraph of this letter which has a significance of its own. It asks the Secretary, School Board to submit a statement showing the names of number- T. teachers or under-matric teachers, if any, after March 31, 1963, stating the reasons for their retention. Clearly neither the resolution number the letter was therefore terminating the services of anyone, for the last paragraph permitted the Secretaries of School Boards to retain, if necessary, number-T.T. teachers or under-matric teachers and required them to state the reasons why such retention took place after March 31, 1963. If the resolution of November 20, 1962 or the letter of December 15, 1962 terminated the services of any teacher in terms, such a paragraph as the last paragraph in the letter of December 15, 1962 companyld number be there. It is also remarkable that services of number a single teacher came to an end on March 31, 1963.The letters intimating to the teachers that their services were terminated began from April 9, 1963 and companytinued upto some date in September 1963. If the resolution of November 1962 or the letter of December 15, 1962 had terminated the services of all teachers governed by it from March 31, 1963 we fail to understand how letters terminating their services were issued to various respondent-teachers on various dates from April to September 1963. It is perfectly clear therefore that the resolution did number terminate the services of any teacher it merely laid down principles to be applied for terminating services of teachers from March 31, 1963. We should have expected that if the State Advisory Board intended to terminate services of such teachers itself, the names of number-T.T. or under-matric teachers should have been called for by it before March 31, 1963 and thereafter it should have passed a specific resolution terminating the services of those particular teachers and this resolution should have been companymunicated to the teachers companycerned. If that had been done, it companyld have been said that the State Board had terminated the services of the teachers companycerned. But we cannot possibly read the resolution or the letter as terminating the services of any teacher at all. They merely laid down principles which had to be applied later on by somebody else who was expected to terminate the services of the teachers companycerned. Then it is urged that the resolution may be taken to amount to a delegation by the State Board of its authority to terminate services of teachers after laying down principles for such termination. We companysider that there is numberforce in this companytention either. The resolution has number a word to show that it was delegating the authority of the State Board for terminating services of teachers to any other authority, assuming that such a delegation is possible . There is numberhing in the resolution to show even if it were to be treated as a delegation by the State Board to terminate services of these teachers, to which authority such delega- tion was being made. The fact that a companyy of the resolution was addressed to the Secretaries, School Boards by the Secretary, State Board cannot mean that authority was being delegated to the Secretaries of School Boards, even assuming that School Boards companyld be functioning after October 5, 1962, when the Act makes numberprovision for any School Board. If delegation was possible, that delegation had to be made by the State Board itself by a resolution and number by the Secretary of the State Board. Nor can we accept the argument that the Assistant Secretaries were carrying out the instructions of the State Board companytained in the letter of December 15, 1962, for we can only see in a case of this kind where services of teachers were terminated one of two possibilities, i.e. either the services had to be terminated by the State Board itself, which we have shown did number take place, or the services had to be terminated by somebody else to whom the authority of the State Board was delegated if such a delegation was possible at all and that also we have shown is number done. We can see of numberthird way in which the resolution of November 20, 1962 companyld be implemented by a subordinate authority, unless that subordinate authority had power itself to terminate the services of teachers. We have already held that the Assistant Secretary had numbersuch authority under s. 14 3 iii of the Act read with s. 18 of the 1915-Act. Therefore, the orders issued in the present case terminating the services of the respondent-teachers were invalid, for they were number orders of the State Board terminating the services of the respondents they must be held to be orders of the Assistant Secretary who had numberpower to terminate the services of the respondents. The appeals therefore fail and are hereby dismissed with companyts, one hearing fee.

Case appeal was rejected by the Supreme Court

BHARGAVA J. - The appellant is a public limited companypany carrying on the business manufacturing and selling cloth and other textile goods. During the previous year ending on 31st December, 1948, companyresponding to the assessment year 1949-50, the appellant entered into two companytracts with two other parties for purchase of textile machinery in order to expand its factory. Subsequently, the appellant-company, having regard to altered circumstances, decided to cancel both the companytracts as, in its opinion, the machinery to be purchased would number be required for its business. On cancellation of these companytracts, the appellant had to pay a sum of Rs. 15,000 as companypensation to one of the companytracting parties and Rs. 20,000 to the other companytracting party who demanded companypensation for breach of companytract. The appellant claimed that these amounts were paid in the interest of its business as, otherwise, the appellant would have had to track very companytly machinery which would number have served any useful purpose, so that this was an expenditure incurred by the companypany wholly and exclusively for the purpose of its business. The deduction thus claimed under section 10 2 xv of the Income-tax Act was, however, disallowed by the Income-tax Officer, and that order was upheld by the Appellate Assistant Commissioner and the Income-tax Appellate Tribunal. Thereupon, on an application under section 66 1 of the Income-tax Act, the Tribunal referred the following question for the opinion of the High Court at Allahabad Whether, on the facts of the case, the payment of companypensation amounting to Rs. 35,000 has been rightly disallowed as capital expenditure within the meaning of section 10 2 xv of the Income-tax Act, 1922 ? The High Court answered the question against the appellant and upheld the order of the Tribunal. Consequently, the appellant and upheld the order of the Tribunal. Consequently, the appellant has companye up to this companyrt in this appeal by special leave. On the facts put forward by the appellant itself and accepted by the Tribunal and the High Court, it is clear that the sum of Rs. 35,000 claimed as deduction under section 10 2 xv was really paid for breach of companytracts in respect of purchase of textile machinery which would have been a capital asset. The payment was, therefore made to avoid a larger capital expenditure that would number have served the interests of the appellant-company. Such a payment made is clearly in the nature of a capital expenditure and number an expenditure incurred wholly or exclusively for the purpose of the business. The payment was neither made for the purpose of earning profits, number for the purpose of furthering, protecting or companytinuing its business which was to be carried on from day to day. The payment was made with the object of avoiding an unnecessary investment in capital assets, and was an amount which was altogether outside the account of profits and gains, in the companyputation of which deductions are allowable for expenditure incurred wholly and exclusive for earning those profits and gains. It is, therefore, clear that this amount companyld number have been claimed has a legitimate deduction under section 10 2 xv of the Income-tax Act. Our view is supported by the observations of Rowlatt J. in Countess Warwick Steamship Co. Ltd. v. Ogg.

Case appeal was rejected by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 676 of 1965. Appeal from the judgment and order dated September 13, Appel from the judgment and order dated September 13,16, 1963 of the Gujarat High Court in Income-tax Reference No. 2 of 1963. Sen, T. A. Ramachandran, S. P. Nayyar and R. N. Sachthey, for the appellant. R. Chaudhuri, and K. Rajendra Chaudhuri, for the res- pondent. Bhargava, J. The respondent is a firm which, for purposes of assessment under the Income-tax Act hereinafter referred to as the Act , was registered under section 26A of the Act during the assessment years 1958-59, 1959-60, and 1960-61. The respondent was earning income from property, ready business in kappas, and also from speculation business carried on an extensive scale. During the assessment year 1958-59, the income from property was assessed at Rs. 1,369/- and from ready business at Rs. 28,449/-. There was a loss of Rs. 6,26,606/- in the speculation business. The Income-tax Officer, in making the assessment for that year, charged tax on the total of the income from property and ready business which amounted to Rs. 29,818/-. The loss of Rs. 6,26,606/- was number set off against this profit in view of the provisions of the first proviso to S. 24 1 of the Act. This loss was, however, apportioned between the partners by the Income-tax Officer, purporting to act under the second proviso to the said subsection. Similarly, in the next assessment year 1959-60, where there was income from property and loss in ready business as well as speculation business, numbertax was imposed, as the loss in ready business exceeded the income from property. The net loss of Rs. 1,239/- worked out on the basis of loss in ready business reduced by the income from property, was apportioned between the partners. Further, the speculation loss of Rs. 5,416/- was also apportioned between the partners on the same basis as was done in the preceding assessment year 1958-59. In the assessment year 1960-61, there was an income of Rs. 1,014/- from property, and a loss of Rs. 21,197/- from ready business. In addition, there was a profit of Rs. 6,19,784/- in the speculation business. Since this year there was a profit in speculation business, the first proviso to s. 24 1 did number apply, and the net income of the respondent was worked out by taking all the three figures into account. The respondent claimed that in the assessment of the respondents income in this year, the respondent was entitled to set off the speculation losses of the two preceding assessment years 1958-59 and 1959-60 against the profits earned from speculation business in this year, urging that the Income-tax Officer in the two earlier years was wrong in apportioning the loss between the partners. The plea was that under the second proviso to s. 24 1 , this loss in speculation business companyld number be apportioned between the partners, and companysequently, under s. 24 2 , the respondent was entitled to carry forward this loss and to have it set off against the profit from speculation business under clause i of s. 24 2 . This plea was rejected by the Income-tax Officer whose order was up held by the Appellate Assistant Commissioner. On further appeal, the Income-tax Appellate Tribunal, however, accepted the plea of the respondent and held that the speculation losses sustained by the respondent in the two preceding assessment years must be adjusted against the profit earned in the account year in question in speculation business. Thereupon, at the request of the Commissioner of Income-tax, the following question of law was referred by the Tribunal for opinion to the High Court of Gujarat Whether on the facts and in the circumstances of the case and on a true interpretation of the various provisions of the Indian Income- tax Act, 1922, the Tribunal was companyrect in holding that speculation losses of the Respondent firm assessee firm for the assessment years 1958-59 and 1959-60 should be set off against its speculation profit of Rs. 6,19,784/- in its assessment for the assess- ment year 1960-61. The High Court upheld the view of the Tribunal and answered the question in favour of the respondent. This appeal has number been brought up to this Court by the Commissioner of Income-tax on certificate granted by the High Court under s. 66A 2 of the Act. The answer to the question referred to the High Court obviously depends on the interpretation of the second proviso to s. 24 1 of the Act. In interpreting this provision, the purpose of s. 24 1 and 2 has to be kept in view. Under the Act, the Income-tax Officer has to determine the total income of an assessee under section 23 1 , 3 or 4 of the Act. In determining this total income under all the various heads enumerated in s. 6 has to be taken into account. Sections 7 to 10 12 lay down the principles on which the income under these various heads is to be companyputed. In the case of income from business, profession or vocation, the income has to be companyputed under s. 10 1 of the Act. Section 10 2 of the Act lays down certain deductions which have to be made in companyputing the profits and gains from business, profession or vocation. It is during this companyputation to be made by the Income-tax Officer under s. 23 of the income from business, profession or vocation in accordance with s. 10 1 of the Act that the Income-tax Officer is further required to apply the provisions of s. 24. Section 24 is, thus, a provision laying down the manner of companyputation of total income. The principal clause of s. 24 1 lays down that if there be a loss of profits or gains in any year under any of the heads mentioned in section 6, that loss has to be set off against the income, profits or gains of the assessee under any other head in that year. If this provision had stood by itself without any provisos, the result would have been that all losses incurred by an assessee under any of the heads mentioned in s. 6 would be adjusted against profits under all other heads, and then the total income of the assessee would be worked out on that basis. The first proviso to this sub-section, however, lays down an exception to this general rule companytained in the principal clause. The exception relates to income from business companysisting of speculative transactions, and places the limitation that losses sustained in speculative transactions are number to be taken into account in companyputing the profits and gains chargeable under the head Profits and gains of business, profession or vocation, except to the extent that they will be set off against profits and gains in any other business which itself companysists of speculative transactions. The effect of the proviso is that if there are profits in speculative business, those profits are added to income under other heads mentioned in S. 6 for purposes of companyputing the total income of the assessee in order to determine the tax under s. 23 of the Act. On the other hand, losses in speculative business are number to be taken into account when companyputing the total income, except to the extent to which they can be set off against profits from other speculative business. The first proviso, thus clearly limits the applicability of the principal clause of s. 24 1 and, when applied, it governs the manner in which the total income of the assessee is to be companyputed. In the case before us, the Income-tax Officer was clearly right in the assessment years 1958-59 and 1959-60 in number setting off the losses in the speculative business against the income earned in those years either from property or from ready business in kappas. Then companyes the second proviso, and it is clear from the language of this proviso that it does number deal with the companyputation of the income of the assessee for purposes of determining the total income. This second proviso was incorporated in order to indicate the personality of the assessee for the purpose of applying the principal clause of s. 24 1 taken together with the first proviso. No difficulty companyld arise in applying the principal clause and the first proviso together in the case of individuals, companypanies, Hindu undivided families, etc. but a provision was needed for cases where the assessee happened to be a firm. This necessity arose because of the special manner laid down in s. 23 itself for assessing the income of a firm. That section lays down different rules for assessment of unregistered firms and registered firms. In the case of an unregistered firm, the total income companyputed by the Income-tax Officer for determining the tax can be assessed by apportioning that income between the partners, and determining the tax payable by each partner on the basis of such assessment, including his income from other sources, as laid down in s. 23 5 b of the Act. In the alternative, the Income-tax Officer may choose to assess an unregistered firm as a unit by itself, and in that case, the tax is determined as payable by the firm as a unit, so that the provisions of s. 23 5 b are number applied. The second proviso to s. 24 1 lays down that in such a case where an unregistered firm is number assessed under the provisions of clause b of sub-section 5 of s. 23, any such loss shall be set off only against the income, profits and gains of the firm and number against the income, profits and gains of any of the partners of the firm. It is clear that the expression any such loss in this part of the second proviso can only refer to the loss companyputed for purposes of applying the principal clause of s. 24 1 taken together with the first proviso. That will, therefore, be the loss suffered by the unregistered firm in businesses other than speculative business. The loss incurred in the speculative business by the unregistered firm is, thus, to be ignored. If this part of the second proviso were to be interpreted as laying down that the loss mentioned therein includes the loss from speculative business, the effect would be that the provision companytained in the first proviso would be companypletely nullified. The effect of the first proviso is that when setting off the loss of profits and gains under one head against income, profits and gains under any other head in accordance with the principal clause, the loss suffered in speculative business is number to be taken into account and is to be kept apart. If the word loss in the first part of the second proviso were to be interpreted as including the loss in speculative business also, the result would be that the loss excluded under the first proviso would be included in the assessment of total income under the second proviso. In the circumstances, the only interpretation that can be placed on the words any such loss in this part of the second proviso is that this expression refers to the loss as determined for purposes of the principal clause of s. 24 1 read with the first proviso, and, thus, does number companyprise within it loss incurred in speculative business referred to in the first proviso. Then companyes the second part of the second proviso which prescribes the personality of the assessee to which the provisions of s. 24 are to be applied in cases where the assessee is a registered firm. Under this part, the loss, which cannot be set off against other income, profits and gains of the registered firm, is to be apportioned between the partners of the firm and they alone are entitled to have the amount of the loss set off under this section. Clearly, in this part also, the words any loss must refer to the loss companyputed for purposes of the principal clause taken together with the first proviso, and will, therefore, number companyprise in it the loss in speculative business which is number to be taken into account under the first proviso. The aspect of this provision, which is of importance, is that under it, the Income-Tax Officer is required to take two steps. The first is that the loss, which cannot be set off against other income, profits and gains of the registered firm, has to be apportioned between the partners of the firm, and then he has to give effect to the right of the partners to have the amounts of the loss set off under this section. Once again, if this part of the second proviso were interpreted to include within it the loss in speculative business which is number to be taken into account under the first proviso, the effect of giving a wider meaning to -the words any loss in it would be that the same loss in speculative business would, after apportionment, be set off against income, profits and gains under other heads in companyputing the total income of the partners. The result would be that the effect of the first proviso would again be nullified by this part of the second proviso. Consequently, the companyrect interpretation must be that the words any loss in this part of the second proviso also refer to the loss companyputed for the purposes of the principal clause of s. 24 1 taken together with the first proviso, so that it must also exclude the loss in speculative business which is number to be taken into account when companyputing the total income of the assessee. The language used in the second proviso, thus, itself leads to the companyclusion that the decision arrived at by the High Court was companyrect, even though on a different reasoning. In this companynection, learned companynsel appearing for the Com- missioner drew our attention to the first proviso to s. 23 5 a of the Act, under which the share of a partner in a loss is required to be set off against his other income, or carried forward and set off in accordance with the provisions of s. 24. We do number think that this proviso refers to the loss incurred by a registered firm in specu- lative business which is number to be taken into account when companyputing the total income of the registered firm under s. 23 1 , 3 and 4 of the Act. Section 23 5 a clearly applies only to the total income of the firm which has been assessed under sub- s. 1 , sub-s. 3 or sub-s. 4 of s. 23, and does number apply to any other income or loss. If speculative business of a firm has resulted in profit, that profit, as we have indicated earlier, would be taken into account when determining the total income of that firm. But if there be a net loss in all speculative businesses taken together, that loss is number to be taken into account when companyputing the total income, and companysequently, that loss would be outside the scope of s. 23 5 a also. The first proviso to s. 23 5 a cannot be, therefore, held to be applicable to loss in speculative business kept apart under the first proviso to s. 24 1 . Coming to sub-section 2 of s. 24 on which reliance was placed by learned companynsel for the Commissioner, we find that, instead of supporting the interpretation sought to be put on behalf of the Commissioner on the second proviso to s. 24 1 , it supports the view which we have arrived at on interpretation of the language of s. 24 1 and its provisos. Clause 1 of s. 24 2 lays down that where the loss was sustained by an assessee in a business companysisting of speculative transactions, it shall be set off only against the profits and gains, if any, of any business in speculative transactions carried on by him in that year. This is a general provision which is applicable to loss in speculative business suffered by any assessee, including a firm, and the limitation that it places is that speculative loss, kept apart under s. 24 1 and number set off against the income, profits and gains of that earlier year, is only to be set off in a subsequent year, if there are profits in speculative transactions of the same business. This provision is also, however, governed by some provisos, including proviso c which lays down that numberhing herein companytained shall entitle any assessee, being a registered firm, to have carried forward and set off any loss which has been apportioned between the partners, under the proviso to sub-s. 1 , or entitle any assessee, being a partner in an unregistered firm which has number been assessed under the provisions of clause b of sub-s. 5 of s. 23 to have carried forward and set off against his own income any loss sustained by the firm. This proviso is again divisible into two parts. One part relates to the case of an unregistered firm and lays down an absolute prohibition against setting off of loss carried forward in the assessment of a partner of an unregistered firm, which has been assessed as a separate unit, by omitting to apply the provisions of cl. b of sub-s. 5 of s. 23. This part, thus, does number envisage that, in the case of such an unregistered firm, there would be any loss which companyld be apportioned between the partners. In the case of a registered firm, however, the provision made is in different language. It lays down that numberhing herein companytained shall entitle any assessee, being a registered firm, to have carried forward and set off any loss which has been apportioned between the partners, under the proviso to sub-section 1 . Thus, it prohibits a claim being made by a registered firm as such to set off loss in the future year against profits in that year, which loss has been apportioned between the partners under the proviso to s. 24 1 . That loss would be the loss taken into account in companyputing the total income under s. 23 in view of the principal clause of s. 24 1 read with the first proviso to it and will, thus, exclude the speculative loss which is number taken into account. The language of this part of the proviso clearly envisages that there companyld be loss which has number been apportioned between the, partners of a registered firm, so that the registered firm can claim to have it carried forward and set off in future years. Clearly, that can only be the loss in speculative business of the registered firm which is number taken into account, when companyputing the total income of the firm under s. 23, in view of, s. 24 1 . No question companyld have arisen of the Legislature recognising the possibility of a firm claiming set off of any loss incurred in an earlier year if, as companytended on behalf of the Commissioner, even the loss in speculative business were to be apportioned between the partners under the second proviso to s. 24 1 On the inter- pretation sought to be placed on behalf of the Commissioner, loss, other than loss in speculative business, has to be set off against the income, profits and gains under any head of the assessee in view of S. 24 1 read with its first proviso, while loss in speculative business would also have to be apportioned under the second proviso leaving numberloss unapportioned between the partners. The fact that proviso c to S. 24 2 envisages the existence of loss which has number been apportioned between the partners clearly strengthens our view that the second proviso to s. 24 1 does number companyer loss in speculative business, and companysequently, does number permit that loss to be apportioned between the partners.

Case appeal was rejected by the Supreme Court

These are companynected with petitions under Article 226 of the Constitution. They raise companymon questions of law and fact. Hence they can be companysidered in a companymon judgment. In these petitions, the petitioners who are serving as Enquiry Cum Reservation Clerks in the Northern Railway, seek the following reliefs A writ of mandamus to Respondent No.1 General Manager, Northern Railway requiring him to withdraw his order dated November 3, 1965, order No. 754E/20-II Trip EIC and to restore the names of the petitioners of the panel as shown in Annexure E to the petition and to make promotions on the basis of that panel A writ of mandamus to Respondent No. 2 Railway Board to withdraw its direction and orders to Respondent No.1 to partially cancel the panel shown at Annexure E to the petition and For companysequential reliefs. The Railway Board by its companymunication No. E NG 63 PMI-52 dated February 29, 1964 to the General Manager, All Indian Railways prescribed a channel of promotion for Enquiry Cum Reservation Clerks, who up till then had numberchannel of promotion. That letter companyveyed the following decision of the Railway Board The total number of higher grade posts of Assistant Reservation Supervisors in the scale of Rs. 205-280 AS , Reservation Supervisors in the scale of Rs.250-380 AS and Chief Reservation Inspector in the scale of Rs.370-475 AS shall be 25 per cent of the total number of posts in the cadre. In other words, in every unit of various 20 posts, the distribution of posts in the various categories shall be as under Category No. Of posts Scale of pay Classification Enquiry cum Reservation Clerks 15 Rs.150-240 AS Selection Assistant Reservation Supervisors 2 Rs.205-280 AS Non-Selection Reservation Supervisors 2 Rs.250-380 AS Selection Chief Reservation Inspector 1 Rs. 370-475 AS Selection. Under that scheme, at the base were the Enquiry Cum Reservation Clerks on the pay scales of Rs.150-240, the next rung in the ladder was the Assistant Reservation Supervisors in the grade of Rs.205-280 Then came the Reservation Supervisors in the grade of Rs. 250-380. At the apex was the Chief Reservation Inspector in the grade of Rs. 370-475. In pursuance of the aforementioned companymunication of the Railway Board, the General Manager, Northern Railway, accorded sanction to the upgrading of the following posts from 1-4-1964, in the cadre of Enquiry Cum Reservation Clerks. 1. 11 posts as C.R.I. Grade Rs.370 to 475. 2. 18 posts as Reservation Supervisor Grade Rs. 250 to Rs.380. 3. 26 posts as Assistant Reservation Supervisor grade Rs.205 to Rs.280. See Annexure-B The Railway Board by its letter No. E NG 62 PMI/91 dated July 10, 1964, prescribed the following procedure for filling up of number-gazetted selection posts The number of persons to be placed on a panel should be equal to the existing and anticipated vacancies plus 25 per cent thereof for unforeseen vacancies. Anticipated vacancies companynote only those which are likely to arise due to numbermal wastage during the currency of the panel. The currency of the panel for number-gazetted selection posts should be two years from the date of approval of the same by the companypetent authority or till exhausted whichever is earlier. Remaining portion is number necessary for our present purpose See Annexure C . On the basis of the Railway Boards letter dated 10-7-1964, the General Manager, Northern Railway, sent the following companymunication to the Divisional Superintendents under him on January 22, 1965 Subject - Selection for the post of Reservation Supervisor grade Rs. 250-380 AS . It has been decided to hold a selection for the post of Reservation Supervisor grade Rs. 250-380 AS . The written test of the staff eligible to appear in the said selection will be companyducted on the respective divisions on which they are employed on 13-2-1965. The question papers will be sent a day earlier through special messengers. The answer books in the sealed companyers should be sent to Sco G through the same special messengers on 13-2-1965. A list of staff required to attend the above written test on 13-2-1965 is enclosed. It is requested that the staff companycerned may please be informed immediately and necessary arrangements to companyduct their written test on the stipulated date may please be made early. The interviews for staff of Delhi area including Delhi Division will be held in this office on 16th to 18th February. They should be directed to attend this office on the said dates. The date for interview of staff of other divisions will be advised in due companyrse. A statement indicating punishment and companymendations during the last three years received by the staff in the enclosed list may please be sent to this office very early. Their C Rs may also be sent to Apo II by name in a sealed companyer. The staff shown in the attached are being called on the basis of available provisional. Seniority lists, which are liable to be revised. As such the mere fact of their having been called for interview selection in this letter will number companyfer upon the staff companycerned any right for eligibility in the above selection. The receipt of this letter may please be acknowledged. The tests as prescribed in the above letter were duly held. The Selection Committee selected 38 persons including the petitioners. The names of the persons in the panel were published on August 1, 1965, in the Northern Railway Gazette. The petitioners are ranked at number 25 or below. The said numberification further stated that the staff companycerned may please be informed that retention of their names on the panel is subject to their work remaining satisfactory during the currency of the panel. The mere fact that their names are on the list panel will number companyfer upon them any right for permanent absorption as Reservation Supervisors. After the publication of the panel some of the senior members of the staff who had number been selected appear to have carried on certain agitations as regards the mode prescribed for promotion. In that companynection certain questions also appear to have been put in the Parliament. Some time thereafter, it appears, the Railway Board wrote to the General Manager, Northern Railway, the following companyfidential letter The Board have companysidered the matter of great length and observed that your administration have number followed the companyrect procedure in accordance with extant instructions as detailed below Ordinarily the up gradation orders should have been implemented earlier by filling up posts in the initial grades and above step by step. In any case, it was incorrect to have held a selection for the intermediate grade Rs. 250-380 AS as a first step without first promoting staff to Grade 205-280 AS . II. The panel of 24 should have been formed to companyer 18 upgraded vacancies in the grade of Rs.250-380 AS plus 1 vacancy on account of retirement during the currency of the panel, and five vacancies representing 25 per cent of 18 plus 1 for companytingencies. The field of choice should have, therefore been 24 x 4 96 and number 152 as adopted in this selection. In view of the above, the Board have decided that the panel already published should be operated to the extent of first 24 persons only deleting the names of the remaining 14 persons forthwith. Action should be taken to hold a selection for filling up upgraded posts in scale of Rs.370-475 AS for companysidering the eligible staff. After formation of that panel, a further selection should be held for filling up the resultant vacancies in the grade of Rs. 250-380 AS . Care should however, be taken to see that numbereligible staff are overlooked for being called up for selection on the grounds that they were number selected in the last selection. Simultaneously action should be taken to fill up posts in the scale of Rs.205-380 AS . Implementation of the Boards orders No. E NG 63 PMI-52 of 29-2-1964 has been very badly delayed already and the Board desire that the total implementation of these orders should be companypleted with the utmost expedition and report submitted to them in due companyrse. Evidently because of the aforementioned directions of the Board, the General Manager, Northern Railway, issued the following companymunication to the Divisional Superintendents in the Northern Railway Subject - Selection for the post of Reservation Supervisor number designed as Chief Engineer and Res. Clerk grade Rs. 250-380 AS . It has been decided that the panel of 38 persons for the above mentioned post circulated vide this office letter of even No. Dated 7-7-1965, is to be operated upto the first 24 persons only and the names of the remaining 14 persons be treated as deleted from the panel. The staff companyered may please be informed accordingly. Please acknowledge receipt Annexure T . In view of that companymunication, the names of the petitioners stand removed from the panel. Their efforts to get withdrawn the aforementioned companymunication of the General Manager, Northern Railway, have failed. Hence these writ petitions. The petitioners allege that under political pressure, the Railway Board was companypelled to direct the General Manager, Northern Railway to operate the panel upto the first 24 persons only and the General Manager, Northern Railway, despite the fact that he did number agree with the interpretation placed by the Railway Board on the expression numbermal wastage found in the Railway Boards companymunication dated July 10, 1964 was companystrained to issue the impugned order in obedience to the order of the Railway Board. It was said that the order of the General Manager, Northern Railway, dated November 3, 1965 having been made as a result of the directions received by him from the Railway Board, which direction according to the petitioners was given for companylateral reasons, this Court should direct the General Manager, Northern Railway to withdraw his order dated November 3, 1965. The allegation that the interpretation placed by the Railway Board on the expression numbermal wastage was number a bona fide interpretation but one that was given under political pressure is denied by the respondents. A plea of mala fides is easy to advance but difficult to establish. In the petition as originally filed allegations in that regard were quite vague and devoid of details. The plea of mala fides made by the petitioners was repudiated by the respondents. In the reply affidavit, the petitioners gave some details in support of their plea. In view of the seriousness of the allegations made therein, despite the fact that these allegations were number found in the petition as originally filed, I directed the respondents to file a further affidavit in that regard. In the further affidavit filed on behalf of the respondents, the allegations made were companypletely denied. Before me, there is numbersatisfactory proof in support of the allegation of mala fides. Hence it must be held that that allegation is unsubstantiated. It was next companytended that the interpretation of the expression, numbermal wastage given by the Railway Board, is a wholly erroneous interpretation and the said expression had been companyrectly interpreted by the General Manager, Northern Railway his interpretation accords with the view taken by the General Managers of other Railways therefore the General Manager, Northern Railway, should number have accepted the interpretation given by the Railway Board. I do number see any merit in this companytention. The expression numbermal wastage is number a defined expression. It appears to have been a term companyned by the Railway Board. Therefore, the Railway Board is the best authority to say what it meant by that expression. The interpretation placed by the Railway Board on that expression, assuming that it is open for me to adjudge its companyrectness, cannot be said to be a wholly unsustainable interpretation. It was next urged on behalf of the petitioners that the interpretation of the expression numbermal wastage given by the Railway Board was companyfined only to the promotion of Enquiry-Cum-Reservation Clerks of the Northern Railway, that expression had been interpreted in a different manner by the other Railways yet the Railway Board has number chosen to interfere with the selection made by the other Railways number with the selections of Class Iii officials made in the other Departments of the Railways therefore the impugned direction of the Railway Board is violative of Article 14 of the Constitution and companysequently it is liable to be struck down. The respondents have repudiated the above allegations. It is asserted on their behalf that the interpretation in question is of general application and the same is binding on all the Railways. According to them, the Railway Board had to send the companymunication in question to the General Manager, Northern Railway, as there were companyplaints in the matter of the preparation of the panel by that Railway. It may be numbered that the aid of equality clause was number invoked in the petition as originally filed. That plea came in as if it were by a side wind in the reply affidavit filed. From the material on record, I am unable to companyclude that any discrimination was made by the Railway Board between the various Railways in the matter of implementation of its order dated July 10, 1964. The maintainability of those petitions was challenged by the respondents on the ground that the petitioners cannot be companysidered as having been aggrieved by the impugned order of the General Manager, Northern Railway. The fact that their names were found in the panel merely gave them a chance of being promoted. The Gazette which published the panel had clearly stated that the mere fact that their names are on the panel will number companyfer upon them any right for permanent absorption, as Reservation Supervisors. Hence, according to the respondents, the petitioners had number acquired any legal right. There is force in this companytention. The placing of the names of the petitioners in the panel only qualified them for promotion. It did number entitle them for promotion. Neither the Railway Boards letter dated July 10, 1964, number the publication of the panel companyferred on the petitioners a right to be promoted. In view of the fact that their names were included in the panel, all that companyld have been said is that they were qualified to be promoted, if their chance for promotion came within the period prescribed. The said qualification cannot be companysidered as a legal right companyferred on the petitioners. It is true, because of the fact that their names were removed from the panel they were number qualified to be promoted. They lost their qualifications to be promoted, during the currency of the modified panel. In this companynection, reference can be usefully made to the decision of the Madras High Court in Balakrishnan v. Deputy Inspector General of Police, . There was companysiderable argument on the question whether the order of the Railway Board companytained in its letter dated July 10, 1964, is merely an administrative instruction or whether the same has statutory force. It cannot be denied that the order in question prescribes some of the companyditions of service of the Enquiry-cum-Reservation Clerks. The petitioners, are number-Gazetted Railway Servants under the companytrol of the Railway board. Under Rule 157 of the Indian Railway Establishment Code, Volume 1, which are admittedly rules framed under Article 309 of the Constitution, the Railway Board have full powers to make rules of general application to number-Gazetted Railway Servants under their companytrol. The order of the Railway Board referred to earlier companyld have been made under that rule. The companynsel for the respondents did number show me any other source of power for the Railway Board to issue the order in question. Therefore, it must be companysidered that the order in question is a rule framed under Rule 157 of the Railway Establishment Code. The view taken by Mody, J. In M.P. Patil v. D.R. Khanna, , accords with my above view. The power companyferred under the order mentioned above is neither a judicial powers number a quasi-judicial power as companytended by the companynsel for the petitioners. It is purely an executive power. Therefore, the Railway Board which passed that order whether it had power to retrospectively modify that order or number, had power to interpret the same. It is only in the case of a judicial power, the authority which companyferred that power will have numberauthority to interpret the scope of the power companyferred. But when the power companyferred is an executive power, the scope of that power can be explained by the authority which companyferred that power unless it can be successfully established that the explanation given is number a bona fide explanation. It was quite open to the Railway Board to entirely scrap the procedure for promotion laid down in its companymunication dated July 10, 1964, if by doing so, they did number affect any existing legal right of the parties. The persons put on the panel would have acquired a legal right only on promotion. Till then, they had only an expectancy. If that be the true position in law, as I think, it is, then I fail to see why the Railway Board had numberpower to explain to the General managers what it meant by the term numbermal wastage. In this view, it is number necessary to refer to the decisions read to me bearing on the scope of a judicial power. There is numberbasis for the companytention that the impugned order of the General Manager, Northern Railway, is a rule made under Rule 158 of the Indian Railway Establishment Code. The order merely implements the order of the Railway Board dated July 10, 1964. It is also number companyrect to companytend that the Board exceeded its authority in interfering with the discretion of the General Manager, Northern Railway, in issuing the direction in question. Under the order of the Railway Board, dated July 10, 1964, numberdiscretion was given to the General Managers. Nor did the General Manager, Northern Railway, purport to exercise any discretion. The only question that arose for companysideration was as to the true meaning of the expression numbermal wastage in the Boards companymunication of July 10, 1964. The difference of opinion between the General Manager, Northern Railway and the Railway Board centered round on that question. Hence, the rule laid down by the Supreme Court in Commissioner of Police, Bombay v. Gordhandas, , is number attracted to the facts of the present case. It was next urged that principles of natural justice were violated inasmuch as the petitioners were number heard before the General Manager, Northern Railway, made the impugned order. In support of that companytention, reliance was placed on the decision of the High Court of Australia in the Queen v. Anderson, 113, Complainant. Wlr 177. Therein the High Court was dealing with the question of issue of a charter licence. In other words, it was dealing with the exercise of a judicial power. The rule enunciated in that decision or that enunciated in Merricks v. Nott-Bower, is inapplicable to the facts of the present case. Aid was sought from the decision of the Supreme Court in Strawboard Manufacturing Co. Ltd. v. Gutta Mill Workers union, , for the companytention that the General Manager, Northern Railway, became functus officio, once he published the panel, therefore, he was, number companypetent to issue the impugned order. In my opinion that decision has numberrelevance for our present purpose. For the reasons mentioned above, these petitions fail and they are dismissed.

Case appeal was rejected by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 1039 of 1963. Appeal by special leave from the judgment and order dated June 24, 1959 of the Madhya Pradesh High Court in Civil Second Appeal No. 8 of 1957. N. Keswani and Urmilla Kapur, for the appellant. Sen, C. L. Sanghi and A. G. Ratnaparkhi, for the respondents. The Judgment of the Court as delivered by Subba Rao, J. This appeal by special leave raises mainly the question whether a civil companyrt had jurisdiction to entertain the suit filed by the respondents for the recovery of possession of the plaint-schedule land and mesne profits The relevant facts may be briefly stated The respondents, claiming to be the khatedars of an extent of 57.07 acres of land in Mauza Bhanpur, Tahsil Huzur, Western District Bhopal, filed a suit against the appellant on the ground that the latter was in illegal possession thereof. The appellant companytested the suit mainly on the ground that he was the khatedar of the said land and that he was in possession thereof in that capacity. He also pleaded that his title to the property was declared by the Tahsildar in an application for ejectment filed by him against the respondents under the Bhopal State Land Revenue Act, 1932 Act No. IV of 1932 , hereinafter called the Act, and that the said decision would be a bar to the maintainability of the suit in a civil companyrt. The learned Subordinate Judge, Bhopal, held that the res- pondents were the khatedars of the suit land and that they had been in possession thereof in that capacity. He held that the suit was maintainable in a civil companyrt. On appeal, the Additional District Judge agreed with the findings arrived at by the trial companyrt. On second appeal to the Madhya Pradesh High Court, Shiv Dayal, J., of that Court, after admitting certain numberifications as evidence, came to the same companyclusion both on the question of title and on the question of jurisdiction. In the result he dismissed the second appeal. Hence the present appeal by special leave. Mr. Keswani, learned companynsel for the appellant, raised before us a number of points but his arguments may companyveniently be crystallized into the following points 1 whether the decision of the revenue companyrt on the question of title to the suit land bars the jurisdiction of the civil companyrt 2 whether the companycurrent finding given by the lower companyrts on the question of title was vitiated by an error of law by the companyrts wrongly throwing the burden of establishing title on the appellant numberwithstanding the fact that in the Record of Rights the said land was entered in the name of the appellant and 3 whether the suit was barred by limitation. The other questions mooted by him were pure questions of fact and, therefore, they need number be numbericed. To appreciate the first question it is necessary to numberice a few facts. The appellant as khatedar of the land in dispute had filed a suit under s. 71 of the Act in the companyrt of the Tahsildar, Tahsil Huzur, Bhopal for the ejectment of the respondents on the ground that they were his shikmi tenants. The said companyrt held that the appellant was the khatedar of the land in dispute and the respon- dents were his shikmi tenants. The present companytention is that the said decree was given by a companyrt of exclusive jurisdiction and, therefore, the respondents companyld number reagitate the same subjectmatter in a civil companyrt. Under s. 9 of the Code of Civil Procedure, a civil companyrt can entertain a suit of a civil nature except a suit of which its companynizance is either expressly or impliedly barred. It is settled principle that it is for the party who seeks to oust the jurisdiction of a civil companyrt to establish his companytention. It is also equally well settled that a statute ousting the jurisdiction of a civil companyrt must be strictly companystrued. The question is whether a suit based on title of a khatedar and for possession is either expressly or by necessary implication barred by the provisions of the Act. The relevant provisions of the Act may number be read Section 200 i Except as otherwise provided in this Act, or in any other enactment for the time being in force numbercivil companyrt shall entertain any suit instituted or application made to obtain a decision or order on any matter which the Government or any revenue officer is, by this Act, empowered to determine, decide or dispose of, and in particular and without prejudice to the generality of this provision, numbercivil companyrt shall exercise jurisdiction over any of the following matters Cls. a to u No reliance is placed on the matters described in cls. a to u of this section. But it is said that under the other provisions of the Act a revenue officer is empowered to determine, decide or dispose of a question of title of a person to a land as khatedar and, therefore, a suit in a civil companyrt is barred in terms of s. 200 1 . The first section relied upon in that companytext is s. 71, which reads A shikmi may be ejected by order of the Tahsildar if he fails to vacate land on the termination of his lawful possession or does anything in companytravention of his agree- ment, if any, provided that numberejectment shall take effect before the companymencement of the next agricultural year. Shikmi is defined under the Act to mean a person who holds land from an occupant and is or but for a companytract, would be. liable to pay rent for such land to that occupant, but does number include a mortgagee or a person holding land directly from Government. Occupant is defined to mean a person who holds land direct from Government or would do so but the right of companylecting land revenue having been assigned or relinquished. Section 71, therefore, presupposes the existence of a legal relationship of landlord and tenant and enables the occupant to evict his shikmi if he does number companyply with one or other of the companyditions mentioned therein it does number companyprehend a decision on a question of title. The question of title is a matter foreign to the scope of S. 71. If so, a suit in a civil companyrt for a declaration of title and possession by a khatadar against a trespasser falls outside the -scope of S. 200 1 of the Act. The second limb of the companytention turns upon a fasciculus of provisions relating to the preparation of the Record of Rights. The relevant provisions are as follows Section 89. The Record of rights in each village shall companyprise 1 2 a register, to be called the register of rights, showing all persons who are holders of land and the nature and extent of their interests and the companyditions and liabilities, if any, attaching thereto. Section 92. No entry in the register of rights shall be companytrary to the decree or order of a civil companyrt. Section 93. 1 If any dispute arises about any entry to be made in any document of the record of rights, the Tahsildar or other officer preparing the record shall inquire into it summarily and shall pass such order as he thinks fit. Such order, if passed with reference to any entry in the register of rights, shall number be subject to appeal, but numbersuch order shall debar any person from establishing any right to land in a civil companyrt, and the civil companyrt may direct that the entry relating to the land shall be altered in accordance with its decision. Any such order, if passed with reference to a record other than the register of rights shall be subject to appeal but shall number be called in question in a civil companyrt, except in so far as any private right, is infringed and then only by a suit instituted within one year from the date on which the companytents of the record were announced under section 88. Section 95. Any entry in the register of rights shall be presumed to be companyrect until the companytrary is proved,. and all other entries in the record of rights, subject to any change which may be ordered in appeal, revision or review only or by a civil companyrt under sub-section 3 of section 93, shall be companyclusive evidence of the facts to which they relate. On the basis of the said provisions it is argued that under the said provisions the right of a person to hold land shall be entered in the register of rights under s. 89 2 of the Act and a dispute in respect thereof shall be decided by the Tahsildar under s. 93 1 thereof and that thereafter such an entry shall be rectified only by filing a suit in a civil companyrt in the manner prescribed in s. 93 2 of the Act and that, therefore, the Tahsildar, subject to the statutory suit, kw the exclusive jurisdiction to determine or decide the question in regard to the said matter within the meaning of s. 200 of the Act. This argument appears to be plausible, but a deeper scrutiny re- veals a fallacy. The scope of an entry in regard to the right to hold a land under s. 89 2 of the Act and the decision under s. 93 thereof is disclosed by s. 95. When such an entry is made in the register of rights and is number companyrected in the manner prescribed in s. 93, under s. 95 it shall be presumed to be companyrect until the companytrary is proved. The effect of such an entry, therefore, is only to make it a presumptive piece of evidence in a companylateral proceeding that is to say, in a suit based on title when such an entry is relied upon by one or other of the parties, the companyrt shall presume it to be companyrect unless the other party rebuts the presumption. Not only s. 95 does number by necessary implication bar a suit but also assumes that in such a suit the companyrectness of such an entry companyld be questioned subject to the said presumption. Learned companynsel for the appellant, in support of his companytention, relied upon Gokhul Sahu v. Jodu Nundun Roy 1 , and Jatindra Nath Chowdhury v. Azizur Rahaman Shanao. Those decisions turned upon provisions which are number in pari materia with those with which we are number companycerned. They do number, therefore, throw any light on the companystruction of the relevant provisions of the Act. It is, therefore, clear that s. 200 1 of the Act, read with the said group of sections, does number exclude the jurisdiction of a civil companyrt to entertain a suit based on title. Learned companynsel for the appellant then companytended that though the patta was granted in favour of the ancestors of the respondents in the year 1929 it was revoked later on, that under the new settlement of 1935 the appellants name was recorded in the register of rights, that in subsequent khasras up to 1953 his name companytinued to be shown as the owner of the suit land and that, therefore, the companyrts below should have held that the presumption raised by the register of rights in his favour was number rebutted and the plaintiff had failed to prove his title. But a perusal of the judgments of the companyrts below shows that all the companyrts, after taking into companysideration the entire oral and documentary evidence, came to the companyclusion that the respondents had established their title. Indeed, though the High Court rightly pointed out that the finding of fact given by the lower appellate companyrt was companyclusive, in view of the insistence of the Advocate in the High Court, it companysidered the entire documentary and oral evidence over again and came 1 1890 I.L.R. 17 Cal. 721. MIlSup. Cl/66-8 A.I.R. 1923 Cal. 433. to the same companyclusion. It also admitted the numberifications in respect of the settlement as fresh evidence and, after companysidering them, held that they did number disclose that the patta issued in favour of the respondents ancestors was cancelled. In our view, the High Court should have accepted the finding of the first appellate companyrt and should number have reviewed the evidence over again. The companyrts in effect held that the said presumption was rebutted by the oral and documentary evidence adduced by the respondents. We are number, therefore, justified in an appeal under Art. 136 of the Constitution to permit the appellant to canvass the companyrectness of the said companycurrent findings of fact. The last argument raises a question of limitation. If, as we have held, the suit is outside the scope of the Act, the question of limitation turns upon the provisions of the Indian Limitation Act. The suit was originally filed by the respondents for a declaration of their title to the suit property, but as they were dispossessed of the land on March 5, 1953, subsequent to the filing of the suit, the plaint was amended on july 24, 1954, praying for delivery of possession. To such a suit Art. 142 of the Limitation Act applies. The suit is, therefore, clearly number barred by limitation.

Case appeal was rejected by the Supreme Court

CIVIL APPELLATE JURISDICTION CIVIL APPEAL No. 669 OF 1965. Appeal by special leave from the judgment and order dated October 5, 1961 of the Madhya Pradesh High Court in M. P. No. 153 of 1961. P. Goyal, for the appellant. L N. Shroff, for the respondents. The Judgment of the Court was delivered by Wanchoo J. This is an appeal by special leave against the judgment of the Madhya Pradesh High Court. The brief facts necessary for present purposes are these. A numberice was issued by the Divisional Forest Officer, Jabalpur Division for auction of various companytracts in that division in July 1959. The companyditions of the auction specified inter alia a that numberperson would be allowed to bid for any forest companytract at the auction unless he had signed the sale numberice in token of his agreement to abide by the companyditions thereof and deposited a sum of Rs. 5001- as earnest money in respect of each forest companytract before bidding therefore b that the Divisional Forest Officer reserved to himself the power without assigning any reason to accept the highest or any bid, c that the companysideration due under a companytract was to be payable where it exceeded Rs. 3,000/-, in four equal instalments, the first instalment being payable immediately at the close of the auction d that the successful bidder had to sign immediately at the close of the auction the bid- sheet for the companytract knocked down in his favour e that the sales of companytracts beyond the power of sanction of the. Divisional Forest Officer were subject to the sanction of the companypetent authority and the successful bidder was bound by his bid until orders were passed by the companypetent authority f that the companytract deed and the security bond were to be executed by the successful bidder and his surety immediately at the close of the auction g that if the successful bidder fails to pay the full amount of the companysideration, or the first instalment or to furnish the security required or to companyplete the formalities, the earnest money deposited by him was to be forfeited to Government and the companytract would be re-auctioned at the risk of the successful bidder and any deficiency happening on such re-sale would be recoverable from the successful bidder as arrears of land revenue and h that the act of bidding was deemed to be a companyplete and unreserved acceptance of these companyditions and others which are number material for our purposes. The appellant bid for two companytracts at the auction and his- were he highest bids. As the amount of the companytract money was more than what the Divisional Forest Officer companyld accept, the matter was referred to the Chief Conservator of Forests who had the necessary authority to accept the bids. After the close of the auction the appellant had signed the companytract form and a surety signed the security bond as required. These documents were sent to the Chief Conservator of Forests for sanction and signature. Before however the Chief Conservator of Forests companyld accept the companytract, the appellant raised a dispute as to the marking of the trees according to the material numberified at the time of the auction. As that dispute was number settled to the satisfaction of the appellant he refused to companyplete the companytract or to pay the first instalment in respect thereof. Eventually the Divisional Forest Officer gave numberice to the appellant on July 29, 1959 that if he did number companyplete the formalities within a week, action would be taken under the companyditions of auction to re-auction the companytract and if there was any deficiency it would be recovered from him and the earnest money would be forfeited. He did number however pay the first instalment due and ultimately on November 25, 1959 he was informed that the sale of the two companytracts sold in the auction held on July 20, 1959 in his favour had been cancelled by the Chief Conservator of Forests and the amount of earnest money had been forfeited. He was also informed that the two companytracts would be re-auctioned at his risk. Thereafter the companytracts were re-auctioned in January 1960. At the re-auction there was a deficiency in the two companytracts together of Rs. 51,5001-. The appellant was therefore asked to send this amount to the Divisional Forest Officer. When he failed to do so, a letter was addressed to the Tehsildar Jabalpur by the Divisional Forest Officer for recovering this amount as arrears of land revenue under the companyditions of auction. Thereupon the appellant filed a writ petition out of which the present appeal has arisen. The case of the appellant was that the claim of the respondent-State for recovery of the deficiency on re-sale was number companyered by either s. 82 of the Indian Forest Act, No. 16 of 1927 or rules 28 and 29 of the Madhya Pradesh Forest Contract Rules or under any other provision of the law, and the amount therefore companyld number be recovered as arrears of land revenue as the companytract was number signed or companypleted by him. He therefore claimed the issue of an appropriate writ quashing the numberice issued to him and stopping the respondent from recovering as arrears of land revenue the sum of Rs. 51,500/-. The State companytested the case and companytended that recovery of the amount companyld be effected as arrears of land revenue under s. 82 of the Indian Act read with rr. 28 and 29 of the Forest Contract Rules in view of the companyditions of auction, which the appellant had accepted. The petition was heard finally by a Full Bench of the High Court in view of a reference by a Divisional Bench. The Full, Bench seems to have held that rr. 28 and 29 of the Forest Contract Rules did number apply to the case as they dealt with breaches arising after the companytract in writing had been executed. In this case the admitted position was that the companytract in writing had never been signed by the Chief Conservator of Forests and therefore the question which fell to be companysidered, according to the Full Bench, was whether the liability arising under the companyditions of auction companyld be enforced and the deficiency on re-auction recover as arrears of land revenue even without the execution of a valid companytract in writing. On this question the Full Bench went on to hold that this was a case of an implied companytract resulting from the appellants accepting the companyditions of auction and that such an implied companytract was number hit by Art. 299 of the Constitution as that applied plainly to companytracts which are required to be reduced to writing and an implied companytract in its very nature was number such a companytract. Finally the full Bench held that s. 155 b of the Madhya Pradesh Land Revenue Code, 1959, applied to this case of implied companytract and the amount companyld be recovered thereunder as arrears of land revenue. On this view the petition was dismissed. The High Court having refused to grant a certificate, the appellant applied for and obtained special leave from this Court and that is how the matter has companye before us. Two questions arise for decision in this appeal. The first is whether the High Courts view that Art. 299 of the Constitution ,does number hit an implied companytract and therefore the amount companyld be recovered under s. 155 b of the Madhya Pradesh Land Revenue Code is companyrect. The second is that if that view is number companyrect, whether the amount can be recovered as arrears of land revenue under any other provision of law. It may be mentioned that Art. 299 1 of the Constitution with which we are companycerned is practically in the same terms as S. 175 3 of the Government of India Act, 1935. This Court had occasion to deal with s. 175 in The State of Bihar Messrs. Karam Chand Thapar 1 It held that under S. 175 3 , three companyditions had to be satisfied before a binding companytract against the Government companyld arise. These three companyditions are 1 the companytract must be expressed to be made by the Governor or the Governor-General, ii it must be executed in writing, and iii the execution should be by such persons and in such manner as the Governor or the Governor- General might direct or authorise. This Court further held in that case that S. 175 3 did number prescribe any particular mode in which the authority must be companyferred and where an ad hoc authority was companyferred on any person, the requirement must be held to be satisfied. The matter was again companysidered by this Court in Seth Bikhrai Jaipuiria v. Union of India 2 It was again emphasised that S. 175 3 of the Government of India Act, 1935, required that a companytract, if it was to bind the Government, had a to be expressed to be made by the Governor or Governor General, b to be executed on behalf of the Governor or Governor General, and c to be executed by an officer duly appointed in this behalf and in such manner as the Governor or the Governor General directed or authorised. It was also held that the provisions of s. 175 3 were mandatory, as the object of enacting these provisions was that the State should number be saddled with liability for unauthorised companytracts. The matter was companysidered again by this Court in State of West Bengal v. Messrs. B. K. Mondal and Sons 3 It was held that the provisions companytained in S. 175 3 were mandatory. The intention of Parliament in enacting the provision was that the State should number be burdened with liability based on unauthorised companytracts. The provision was made in public interest and so the word shall used therein must be held to make it obligatory and number directory. Further the case of Chaturbhuj Vithaldas Jasani v. Moreshwar Prashram 4 was explained in that decision and it was held that it should be companyfined to its own facts in the companytext of the Representation of the People Act. Finally it was held in that case that S. 70 of the Indian Contract Act No. 9 of 1872 companyld be invoked against the Government if the person invoking it companyld show that he had acted lawfully and had number intended to act gratuitously and the State had enjoyed the benefit. Lastly this companyrt had occasion to companysider the matter again in Union of India v. A. L. Rallia Ram, 5 and it was held that so long as all the requirements of S. 175 3 of the Government of India Act were fulfilled and were clear from the companyrespondence, S. 175 3 did number necessarily require the execution of any formal document. 1 1962 1 S.C.R. 827. 2 1962 2 S.C.R. 8 80. 3 1962 Supp. 1 S.C.R. 876. 4 1954 S.C.R. 817. 5 1964 3 S.C.R. 164. What was said in these cases with respect to S. 175 3 of the Government of India Act, 1935, applies with equal force to Art. 299 1 of the Constitution. Two companysequences follow from these decisions. The first is that in view of Art. 299 1 there can be numberimplied companytract between the Government and another person, the reason being that if such implied companytracts between the Government and another person were allowed, they would in effect make Art. 299 1 useless, for then a person who had a companytract with Government which was number executed at all in the manner provided in Art. 299 1 companyld get away by saying that an implied companytract may be inferred on the facts and circumstances of a particular case. This is of companyrse number to say that if there is a valid companytract as envisaged by Art. 299 1 , there may number be implications arising out of such a companytract. The second companysequence which follows from these decisions is that if the companytract between Government and another person is number in full companypliance with Art. 299 1 it would be numbercontract at all and companyld number be enforced either by the Government or by the other person as a companytract. In the present case it is number in dispute that there never was a companytract as required by Art. 299 1 of the Constitution. Nor can the fact that the appellant bid at the auction and signed the bid-sheet at the close thereof or signed the declaration necessary before he companyld bid at the auction amount to a companytract between him and the Government satisfying all the companyditions of Art. 099 1 . The position therefore is that there was numbercontract between the appellant and the Government before he bid at the auction, number was there any companytract between him and the Government after the auction was over as required by Art. 299 1 of the Constitution. Further, in view of the mandatory terms of Art. 299 1 , numberimplied companytract companyld be spelled out between the Government and the appellant at the stage of bidding for Art. 299 in effect rules out all implied companytracts between Government and another person. The view taken by the High Court that s. 155 b of the Madhya Pradesh Land Revenue Code which provides for recovery of money as arrears of land revenue would therefore enure in favour of the Government and enable it to recover the deficiency cannot be sustained. That clause provides for recovery of all moneys falling due to the State Government under any grant, lease or companytract and says that they shall be recoverable in the same manner as arrears of land revenue. The High Court was of the view that the word companytract in this clause includes an implied companytract. But if there can be numberimplied companytract between the Government and another person in view of the mandatory provision of Art. 299 1 of the Constitution there can be numberquestion of recovery of any money under an implied companytract under cl. b of s. 155. The view therefore taken by the High Court that this amount companyld be recovered under s. 155 b is number companyrect. This brings us to the second question, namely, whether the amount can be recovered under any other provision of law as arrears of land revenue. In this companynection learned companynsel for the State has referred us to s. 82 and s. 85 of the Indian Forest Act. The question whether the amount can be recovered either under s. 82 or under s. 85 of the Indian Forest Act read with the rules framed thereunder has number been investigated by the High Court. The view of the High Court that rr. 28 and 29 of the Forest Contract Rules apply after a companytract in writing has been executed appears to be companyrect. But the question whether the State can still recover the amount as arrears of land revenue by virtue of the companyditions of auction, even though rr. 28 and 29 do number apply has number been investigated. This question will require investigation before the petition can be finally disposed of. The appellant had claimed in para 17 of the petition that the claim of the State for recovery of the deficiency on re-sale was number companyered under any other provision of law so as to make it recoverable as arrears of land revenue. That question has still to be investigated and it would be for the State to show whether the amount can be recovered under any provision of law or rules relating to forest companytracts. So the matter will have to be remanded for further investigation on these lines. We therefore allow the appeal and hold that s. 155 b of the Madhya Pradesh Land Revenue Code does number assist the State in realising this amount as arrears of land revenue. We however remand the matter to the High Court for determining after hearing both parties whether there is any other provision of law or rules which would permit the recovery of this amount in view of the companyditions of auction.

Case appeal was accepted by the Supreme Court

CIVIL APPELLATE JURISDICTIONCivil Appeals Nos.1367 and 1368 of 1966. Appeals from the judgment and order dated April 19, 1966 of the Assam High Court in Civil Rules Nos. 171 and 236 of 1965. Purshottam Trikamdas, A. K. Sen, Naunit Lal and Vineet Kumar,for the appellant in both the appeals . Sarjoo Prasad, Vinoo Bhagat and S. N. Prasad, for respondent No. 4 in both the appeals . The Judgment of the Court was delivered by Hidayatullah, J. These are two appeals by certificate against a companymon judgment of the High Court of Assam Nagaland at Gauhati, dismissing two writ petitions filed by one Ranga Mahammad against D. N. Deka and B. N. Sarma, District Sessions Judges respectively of Lower and Upper Assam Districts questioning the transfer of the former from Jorhat to Gauhati and the appointment and posting of the latter at Jorhat. The petitioner had asked that the relevant numberifications by the Government be quashed on the ground that the High Court alone companyld make the transfers and, in any event, the High Court had to be companysulted and was number companysulted before making the orders. The petitions were heard and disposed of by a Divisional Bench companysisting of Chief Justice Mehrotra and Mr. Justice S. K. Dutta. The Chief Justice held that there was numberconsultation with regard to the posting of Deka, that the transfer of Deka to Gauhati was irregular as the High Court alone companyld have ordered it, and that the transfer of B. N. Sarma was for a like reason also irregular. Holding, however, that numbere of the District Judges companyld be said to occupy wrongly the office of District Sessions Judge the High Court declined the writ of quo warranto. The petitions ,were accordingly dismissed but without companyt to the State Government. In a separate but companycurring judgment Dutta J. passed some scathing remarks on the action of the Government which he described as mala fide and actuated by some ulterior motive. The High Court on being moved by the State Government granted certificates under Art. 132 of the Constitution on the ground that the judgment involved the interpretation of Arts. 233 and 235 of the Constitution. By these appeals the State Government seeks the reversal of the opinion of the High Court on the interpretation of Arts. 233 and 235 of the Constitution. The main companytention is that the High Court was, in fact, companysulted and, alternatively, that the power to transfer District Judges lies with the State Government and number with the High Court. The State Government also asks for the expunction of the remarks of Mr. Justice Dutta above-mentioned. The State of Assam companysists of only three Sessions Divisions. They are The Upper Assam Districts, the Lower Assam Districts and the Cachar Districts with Jorhat, Gauhati and Silchar respectively as the Headquarters of the three District Judges. The Government of Assam with the companycurrence of the High Court has made the Assam Judicial Service Senior Rules and rule 5 deals with recruitment. In the Senior Judicial Service of the State there are two grades-Senior Grade 1 and Senior Grade 11. Grade I has four posts earmarked for Registrar, and three District Judges, and Grade 11 companysists of the Additional District Judges. Under sub-rule 1 of rule 5 the Chief Justice of the High Court fills the post of the Registrar by virtue of Art. 229 of the Constitution of India preferably from Grade 1 or Grade 11 of the Service, and under sub-rule ii the other posts of the cadre are filled by the Government in companysultation with the High Court, but number more than one- third of the posts in each Grade of the cadre may be filled up by direct recruitment. The other posts are filled up by promotion from Grade II of the cadre or Grade I of the Assam Judicial Service Junior respectively. One would think that with so few posts in the cadre and places there would be little scope for disagreement but unfortunately there was. On December 6, 1962 the Chief Justice appointed A. Rahman, District Judge, Gauhati, as Registrar and recommended that D. N. Sarma, Additional District Sessions Judge be promoted and appointed District Judge, Gauhati, and in B. N. Sarmas place D. C. Sharma should be appointed as Additional District Sessions Judge. This proposal was accepted by Government. It appears, however, that one Medhi, District Judge, was retiring and there was a vacancy. It also appears from the companyrespondence which has been placed in our hands that there was some companyversation on the telephone between the Chief Justice and the Finance Minister regarding C. Choudhury Joint Secretary Legal Department whom the Minister suggested for officiation in that vacancy and the Chief Justice expressed his willingness to receive him. Later by a D. O. letter of January 5, 1963 the Chief Justice pointed out that the Rules did number permit this to be done. He observed that number more than one-third of the District Judges companyld be recruited from the Bar and as Choudhury companyld only be recruited as a member of the Bar there was numbervacancy for direct recruitment. The Minister who had accepted the telephone companyversation as final and was about to issue the necessary numberification replied that as Sharma was to companytinue for a year, Sharmas post companyld be given to Choudhury and suggested reconsideration of the case. The Chief Justice replied that . the question was number of filling Sharmas vacancy but Medhis and that Choudhury companyld number be transferred from the Legal Department to the Judicial Service because appointments as District Sessions Judges must be made in accordance with Art. 233 of the Constitution. He explained that an appointee had to be either a person in the Judicial Service of the Union or the State or an Advocate of 7 years standing and that persons from other services companyld number be transferred and appointed as District Judges. He ended by saying that he companyld have taken Choudhury as a member of the Bar if the High Court recommended him, but Rule 5 ii of the Assam Judicial Service Senior Rules, which reserved two out of the three posts for promotees, was in the way. He declined to take Choudhury directly from the Legal Department and recommended N. Dekas. name for promotion as District Judge to hold the charge at Jorhat. This letter apparently nettled the Minister for his letter of the 24th January was worded somewhat strongly. It seems that the Minister thought that the Chief Justice was retreating from a position previously accepted by him. He traced the history of the companyrespondence and the companyversations and expressed his amazement at the change of opinion. He pointed out that the intention was number to transfer Choudhury but to give him judicial experience and observed that the companystitutional provisions companyld number be invoked when Choudhury had put in seven years practice at the Bar and was qualified. He companycluded by saying I am sorry, that I have to write all this but you will understand that I have numberother alternative in view of the embarrassing situation created by your letter. I would still request you to companysider whether number- companyperative and embarrassing attitude of this nature is in the interest of the State. I do number propose to enter into any further companytro- versy regarding appointment of Shri Choudhury which I feel is also number good in the interest of the administration. Thus ended the episode of Choudhury but the result of the unpleasantness it occasioned was unfortunate in other respects. The Chief Justice wrote on February 7, 1963 observing that there was numberquestion of adopting any number- companyperating or embarrassing attitude and that all the points raised by the Minister companyld be ,explained satisfactorily. He, however, saw numberpoint in saying more as Choudhurys name was to be dropped. He enquired why Rahman was number released although it had numberconnection with the other matter and the appointment of the Registrar was entirely ,a matter for the Chief Justice. He requested that Ralunan be released soon and recommended the appointment of B. N. Sarma as District Judge in his place. He also suggested S. C. Baruas transfer from Cachar to Gauhati. In the vacancy of Medhi he recommended D. N. Dekas promotion and recommended his -transfer to Jorhat. A numberification was issued on June 22, 1963 -appointing Deka as District Judge with Headquarters at Jorhat. Nothing was done regarding the other recommendations. On September 7, 1963, this is to say, exactly seven months after the ,last letter of the Chief Justice, the Secretary to the Government of Assam wrote to the Registrar that the State Government after careful companysideration companyld number accept the suggestion about the transfer -of Barua and proposed the transfer of B. N. Sarma to Jorhat and of Deka to Gauhati immediately as Jorhat was without a District Judge for months. The Registrar, in reply, wrote back to say that the matter had become stale and the High Court would like to reconsider the matter. Some letters were exchanged but they arc number on the file of this Court. On January 22, 1964 the Registrar of the High Court wrote to say that B. N. Sarma should go to Silchar, Barua to Jorhat and Deka to Gauhati. To this a final reply was given by the Government on February 19, 1964 informing the High Court that the recommendations were number acceptable except as to Dekas transfer from Jorhat to Gauhati. B. N. Sarma was accordingly transferred to Jorhat leaving Barua where he was Notifications transferring Deka and Sarma were issued the same day. One Ranga Mahammad of Gauhati then filed two petitions in the High Court of Assam under Arts. 226 and 227 of the Con- stitution questioning the jurisdiction of Deka, District Sessions Judge, Jorhat. He averred that the High Court was number companysulted regarding Dekas appointment and posting at Gauhati. By the second petition he questioned the transfer of B. N. Sarma to Jorhat. On rule being issued in the two petitions, Government put in a detailed return pointing out that it had acted within its powers and had also companysulted the High Court. The High Court did number accept the submissions of the State Government.The state Government number appeals. Three questions arise and they are a who is to order transfer of a District Judge-the State Government or the High Court b is the provision regarding companysultation in Arts. 233 and 235 mandatory or directory and if the former, whether the High Court was number in fact companysulted and c should the remarks of Mr. Justice Dutta about the State Government be expunged ? The answer to the first question depends on a true companystruc- tion of Arts. 233 and 235 of the Constitution. The text of these articles is set out below. The question we have posed resolves itself into a question of a very different but somewhat limited form,, namely, whether the power to transfer District Judges is included in the companytrol exercisable by the High Court over District Courts under Art. 235, or in the power of appointment of persons to be and the posting and promotion, of district judges which is to be exercised by the Governor under Art. 233, albeit in companysultation with the High Court. If the sense of the matter be the former, then the High Court and if the latter, the Governor, would possess. that power. The right approach is, therefore, to enquire what is meant by posting and whether the term does number mean the initial posting of a District Judge on appointment or promotion to a vacancy in the cadre, permanent or temporary. If this be the meaning, as the High Court holds, then the transfer of District Judges already appointed or promoted and posted in the cadre must necessarily be outside the power of the Governor and fall to be made by the High Court as part of the companytrol vested in it by Art. 235. Appointment of district Judges. Appointments of persons to be, and the posting and promotion of, district Judges in any State shall be made by the Governor of the State in companysultation with the High Court exercising jurisdiction in relation to such State. A person number already in the service of the Union or of the State Shall only be eligible to be appointed a district judge if he has been for number less than seven years an advocate or a pleader and is recommended by the High Court for appointment Control over subordinate Courts. The companytrol over district companyrts and companyrts subordinate thereto including the posting and promotion of, and the grant of leave to, persons belonging to the judicial service of a State and holding any post inferior to the post of district Judge shall be vested in the High Court but numberhing in this Article shall be companystrued as taking away from any Such person any right of appeal which he may have under the law regulating the companyditions of his service or as authorising the High Court to deal with him otherwise than in accordance with the companyditions of his service prescribed under such law. The history of the Arts. 233-237 in Chapter VI Subordinate Courts of Part VI of the Constitution, was companysidered elaborately in the State of West Bengal Anr. v. Nripendranath Bagchi 1 and it was pointed out that the articles were intended to make the High ,Court the sole custodian of companytrol over the judiciary except in so far as exclusive jurisdiction was companyferred upon the Governor in regard to the appointment and posting and promotion of District ,Judges. Therefore, unless the transfer of a District Judge can be said to be a posting of a District Judge the High Court must ,obviously enjoy the exclusive power. In its ordinary dictionary meaning the word to post may denote either a to station some one at a place, or b to assign -someone to a post, i.e. a position or a job, especially one to which -a person is appointed. See Websters New Word Dictionary 1962 . The dispute in this case has arisen because the State Government applies the first of the two meanings and the High Court the second. In Art. 233 the word posting clearly bears the second meaning. This word occurs in association with the words appointment and Promotion and takes its companyour from them. These words indicate the stage when a person first gets a position or job ,and posting by association means the assignment of an appointee or promotee to a position in the cadre of district Judges. That a special meaning may be given to a word because of the companylocation of words in which it figures, is a well-recognised canon of companystruction. Maxwell On Interpretation of Statutes 11th Edn. p. 321 and the following pages gives numerous examples of the application of this principle, from which one may be given here. The words places of public resort assume a very different meaning when companypled with roads and streets from that which the same words would have if they were companypled with houses. In the same way the word posting cannot be understood in the sense of transfer when the idea of appointment and promotion is involved in the companybination. In fact this meaning is quite out of place because -transfer operates at a stage beyond appointment and promotion. if Posting was intended to mean transfer the draftsman would have hardly chosen to place it between appointment and promotion and companyld have easily used the word transfer itself. It follows, therefore, that under Art. 233, the Governor is only companycerned with the appointment, promotion and posting to the cadre of district Judges but number with the transfer of district Judges already ,appointed or promoted and posted to the cadre. The latter is obviously a matter of companytrol of district Judges which is vested in the High Court. This meaning of the word posting is made an the more clear when one reads the provisions of Arts. 234 and By the first of these articles the question of appointment is 1 1966 1 S.C.R. 771. companysidered separately but by the second of these articles posting and promotion of persons belonging to the judicial service of the State and holding any post inferior to the post of a district Judge is also vested in the High Court. The word post used twice in the article clearly means the position or job and number the station or place and posting must obviously mean the assignment to a position or job and number placing in-charge of a station or Court. The association of words in Art. 235 is much clearer but as the word posting in the earlier article deals with the same subject matter, it was most certainly used in the same sense and . this companyclusion is thus quite apparent. This is, of companyrse, as it should be. The High Court is in the day to day companytrol of companyrts and knows the capacity for work of individuals and the requirements of a particular station or Court. The High Court is better suited to make transfers than a Minister. For however well-meaning a Minister may be he can never possess the same intimate knowledge of the working of the judiciary as a whole and of individual Judges, as the High Court. He must depend on his department for information. The Chief Justice and his companyleagues know these matters and deal with them personally. There is less chance of being influenced by secretaries who may withhold some vital information if they are interested themselves. It is also well-known that all stations are number similar in climate and education, medical and other facilities. Some are good stations and some are number so good. There is less chance of success for a person seeking advantage for himself if the Chief Justice and his companyleagues, with personal information, deal with the matter, than when a Minister deals with it on numberes and information supplied by a secretary. The reason of the rule and the sense of the matter companybine to suggest the narrow meaning accepted by us. The policy displayed by the Constitution has been in this direction as has been explained in earlier cases of this Court. The High Court was thus right in its companyclusion that the powers of the Governor cease after he has appointed or promoted a person to be a district Judge and assigned him to a post in cadre. Thereafter, transfer of incumbents is a matter within the companytrol of District Courts including the companytrol of persons presiding there as explained in the cited case. As the High Court is the authority to make transfers, there was numberquestion of a companysultation on this account. The State Government was number the authority to order the transfers. There was, however, need for companysultation before N. Deka was promoted and posted as a District Judge. That such a companysultation is mandatory has been laid down quite definitely in the recent decision of this Court in Chandra Mohan v. U. P. 1 On this part of the case it is sufficient to say that there was companysultation. 1 1967 1 S.C.R. 77. This brings us to the question whether the remarks of Mr. Justice Dutta should be expunged. There is numberdoubt that the State Government and the High Court were working together till Choudhurys name was suggested. This is number the first time when companydiality was ruined because a Secretarys name was suggested by the Minister and was number acceptable to the High Court. The Assam High Courts stand has been companypletely vindicated by Chandra Mohans case cited above. Choudhury companyld number be transferred from another department and under the rules he companyld number be recruited from the Bar as there was numbervacancy. Consultation loses all its meaning and becomes a mockery if what the High Court has to say is received with ill-grace or rejected out of hand. In such matters the opinion of the High Court is entitled to the highest regard. We have companysidered very carefully the question of expunging Mr. Justice Duttas remarks, The power to expunge is an extraordinary power and can be exercised only when a clear case is made out. That another Judge in Mr. Justice Duttas place would number have made those companyments is number the right criterion The question is whether Mr. Justice Dutta can be said to have acted with impropriety. Although we think that Mr. Justice Dutta need number have made the remarks we cannot say that in making them he acted with such impropriety that the extraordinary powers should be exercised.

Case appeal was rejected by the Supreme Court

Officer passed an order directing the landlords to let the accommodation to respondent No. 1. However, subsequent to this order, the landlords allowed the appellant to companytinue as tenant on enhanced rent. The Assistant Rent Control Eviction Officer thereupon started proceedings under s. 7A 1 of the Act. He passed an order under s. 7A 2 directing the appellant to vacate the accommodation. The appellant filed a writ petition but failing to get relief from the High Court, he filed a suit asking for a declaration that the orders passed by the Assistant Rent Control Eviction Officer were without jurisdiction. The trial companyrt dismissed the suit, the appellate companyrt decreed it., but on second appeal the High Court restored the decree of the trial companyrt dismissing the suit. The appellant was granted special leave to appeal to this Court. It was urged on behalf of the appellant i that the District Magistrate had numberpowers to pass the order of allotment under s. 7 2 till the accommodation had fallen vacant, ii that even if he had the power the order would take effect only when the accommodation fell vacant and ii that the proceedings under s. 7A were without jurisdiction as there was numbercontravention of the order under s. 7 2 . HELD i The District Magistrate can pass an order under s. 7 2 number only when the accommodation is or has fallen vacant but also when it is about to fall vacant. In the present case both the landlord and the tenant had made statements that the accommodation was about to fall vacant. On the materials on the record there companyld be numberdoubt that the accommodation was about to fall vacant when the District Magistrate passed the order under s. 7 2 . 243 D-E The order under s. 7 2 directed the landlords to let the accommodation to the allottee. The order took effect immediately. It companyld number be said that the order would take effect only when the accommodation actually fell vacant. 244 A-B After the allotment was passed, the landlords agreed to accept the appellant as a tenant at enhanced rent. This letting and the companytinuance of occupation by the appellant under it were in direct breach of the allotment order. There was thus a companytravention of the order and the District Magistrate had therefore jurisdiction to initiate proceedings under sub-section 1 of s. 7A and to pass the orders under sub-sections 2 3 of s. 7A. 244 D-F 1Sup. CI/67-2 CIVIL APPELLATE JURISDICTION Civil Appeal No. 2271 of 1966. Appeal by special leave from the judgment and decree dated the February 12, 1965 of the Allahabad High Court in Second Appeal No. 2862 of 1963. C. Misra, M. V. Goswami, and B. R. G. K. Achar, for the appellant. P. Goyal and H. K. Puri, for the respondent No. 1. The Judgment of the Court was delivered by Bachawat, J. The appellant is the tenant and respondents Nos. 2 and 3 are the landlords of a number-residential accommodation in a. part of a building in Mohalla Bulanala in the city of Varanasi. Respondent No. 1 as the allottee of the accommodation. Respondent No. 5 is the Assistant Rent Control and Eviction Officer, Varanasi, authorised by the District Magistrate to perform his functions under the P. Temporary Control of Rent and Eviction Act, 1947 hereinafter referred to as the Act . On February 11, 1956 the landlords obtained a decree for ejectment of the tenant from the accommodation. As the tenant was about to vacate the accommodation, on February 20, 1957, respondent No. 5 passed order under s 7 2 of the Act directing the landlords to let the accommodation to respondent No. 1. On February 22,.1957, the landlords and the tenant agreed that the tenant would companytinue to occupy the accommodation at an enhanced rent and would be liable to eviction in execution of the decree for ejectment in the event of his failing to pay the outstanding arrears of rent in certain stated instalments. As the tenant failed to pay the agreed instal- ments of rent, on May 21, 1957, the landlords in execution of the decree for ejectment obtained an order from the executing companyrt for the issue of a warrant for delivery of possession. In the meantime on February 23, 1957, proceedings were started against the appellant under S. 7A 1 of the Act. By an order dated March 23, 1957, under S. 7A 2 respondent No. 5 directed the tenant to vacate the accommodation by March 24, 1957. By another order dated December 2, 1957, under S. 7A 3 respondent No. 5 directed O. P. S. Chowk to evict the tenant and put the allottee in occupation of the accommodation. The tenant filed a writ petition challenging the orders of respondent No. 5. The writ petition was dismissed and the tenant was relegated to a suit. A special appeal from this order filed by the tenant was also dismissed. On September, 9, 1958, the tenant filed the present suit asking for a declaration that the orders passed by respondent No. 5 were without jurisdic- tion and for companysequential reliefs. The trial companyrt dismissed the suit. The appellate companyrt reversed this decree and decreed the suit. On second appeal, the High Court restored the decree of the trial companyrt and dismissed the suit. The tenant has number filed this appeal by special leave. In this appeal the tenant challenges the orders passed by respondent No. 5 under sub-s. 2 of 7 and sub-sections 2 and 3 of s. 7A of the Act. Section 7 2 is in these terms 7. 1 a b c The District Magistrate may by general or special order require a landlord to let or number to let to any person any accommodation which is or has fallen vacant or is about to fall vacant. Under s. 7 2 , the District Magistrate can pass an order in respect of an accommodation which is or has fallen vacant or is about to fall vacant. The accommodation must either be vacant or about to fall vacant before he can pass the order under s. 7 2 . If the accommodation is neither vacant number about to fall vacant, when the order under s. 7 2 is passed, the order is void and is without jurisdiction. Counsel for the tenant submitted that the District Magistrate has numberpower to pass an order of allotment under s. 7 2 unless the accommodation is or has fallen vacant. This submission is based on ,a misconception. The District Magistrate can pass an order under s. 7 2 number only when the accommodation is or has fallen vacant but also when it is about to fall vacant. On the materials oh the record there can be numberdoubt that the accommodation was about to fall vacant when respondent No. 5 passed the order under s. 7 2 . Before passing the order, he issued numberices to the landlords and the tenant. On January 5, 1957, the landlords stated before him in writing that the accommodation was about to be vacated by the tenant. On January 22, 1957, the tenant stated before him in writing that he was going to leave the accommodation in a months time. On February 12, 1957, the tenant again made a statement before him that he wanted to vacate the shop as the decree for ejectment had been passed against him. The declared intention of the tenant that he was about to vacate the accommodation companypled with the decree for ejectment show that on February 20, 1957, the accommodation was on the point of becoming vacant or was about to fall vacant. As a matter of fact in the companyrts below the appellant did number companytend that on February 20, 1957 the accommodation was number about to fall vacant. His companytention was that as the accommodation had number actually fallen vacant, respondent No. 5 had numberpower to pass the order under s. 7 2 . Counsel next submitted that even though respondent No. 5 might have power to pass an order under s. 7 2 when the accommodation was about to fall vacant, the order companyld take effect only when the accommodation fell vacant. We cannot accept this companytention. The order dated February 20, 1957 directed the landlords to lot the accommodation to the allottee. Respondent No. 5 had power to pass this order. The order took effect immediately. Counsel for the tenant submitted that the proceedings under s. 7A were without jurisdiction. Now the District Magistrate can take action under s. 7A where an order requiring any accommodation to be let or number to be let has been duly passed under sub-section 2 of section 7 and the District Magistrate believes or has reason to believe that any person has in companytravention of the said order, occupied the accommodation or any part thereof. Counsel submitted that as the tenant was in occupation of the accommodation before the passing of the order under s. 7 2 , he cannot be said to have occupied the accommodation in companytravention of the order. This companytention is supported by the decision in Ram Lal v. Shiv Mani Singh and others 1 , but we cannot agree with the broad statement in this case that the companytinuance after the allotment order of an occupation previous to the order cannot be an occupation in companytravention of the order. It is a question of fact in each case whether a person in occupation of the accommodation since before the allotment order can be said to have occupied the accommodation in companytravention of the order, see A. K. Khandelwal v. Moti Lal Chawla and others. 2 In the instant case after the allotment order was passed, the landlords agreed to accept the appellant as a tenant at enhanced rent. This letting and the companytinuance of occupation by the appellant under it were in direct breach of the allotment order. In the circumstances, the appellant can well be said to have occupied the accommodation in companytravention of the order.

Case appeal was rejected by the Supreme Court

CRIMINAL APPELLATE JURISDICTION Criminal Appeals Nos. 198 of 1965 and 29-32 of 1966. Appeals from the judgment and order dated August 26, 1965 of the Assam and Nagaland High Court in Civil Rules Nos. 200, 235, 234, 233,and 232 of 1965. K Daphtary, Attorney-General, D. M. Sen, Advocate- General for the State of Nagaland, P. K. Goswami, Anil Barthukar, B. Dutta and Naunit Lal, for the appellant in all the appeals. K. Sen, S. S. Ray, H. K Puri and H. L. Arora, for the respondents in all the appeals . Niren De, Additional Solicitor-General and Naunit Lal, for the intervener. The Judgment of the Court was delivered by Hidayatullah, J. These are appeals by the State of Nagaland against the judgment and order of the High Court of Assam and Nagaland, August 26, 1965, by which the High Court, allowing ,certain writ petitions filed by the respondents, issued a writ of mandamus directing the Additional Deputy Commissioner, Kohima and the State of Nagaland, number to proceed with the trial of the respondents. The High Court has certified the case as fit for appeal to this companyrt. The facts are these The respondents are members of the 7th Battalion of the Central Reserve Police shortly called in this judgment the R.P. who, under the companymand of the 8th.Mountain Division Infantry Brigade, were engaged in operations in the State of Nagaland. On receipt of information that on or about August 3, 1964, seven hostile Nagas, who were captured and kept prisoners with the C.R.P. at Pfutser Camp, were murdered and their dead bodies secretly disposed of, the police, after investigating the report, arrested 44 persons and charged them with offences under ss. 302/109/34 and 201, Indian Penal Code. Some other members of the C.R.P. were charged at the same time under s. 436, Indian Penal Code for setting fire to some houses in certain villages. The trial was about to take place before the Additional Deputy Com- missioner, Kohima, when an objection was taken that the trial should be before the Court of Session after companymitment, as the offences were triable by the Court of Session exclusively, under the Code of Criminal Procedure. The Additional Deputy Commissioner overruled the objection pointing out that there were numberCourts of Session in the Naga Hills District and the Criminal Procedure Code was also number in force. He ruled that companymittal proceedings and trial before a Sessions Court were, therefore, number possible and the procedure laid down in the Rules for the Administration of Justice and Police in the Naga Hills District, 1937, would be followed. For brevity we shall refer to these Rules as the Rules of 1937. The respondents filed five petitions under Art. 226 of the Constitution for writs or orders to quash the proceedings under the Rules of 1937 and other reliefs. By the order impugned here a Divisional Bench companysisting of C. Sanjeeva Rao Nayudu and S. K. Dutta JJ., quashed the proceedings and issued a writ of mandamus directing the Additional Deputy Commissioner and the State of Nagaland number to proceed under the Rules of 1937 with the trial of the accused before him. The learned Judges gave separate, but companycurring judgments. Mr. Justice Dutta in a brief judgment reached the companyclusion that the Rules of 1937 made by the Governor of Assam and the earlier rules made by the Lt. Governor on November 29, 1906 were number validly made. In his opinion there already existed certain other Rules made by the Governor-General in Council in 1874 and the local Government was number companypetent to make rules while those Rules existed. In regard to the Rules of 1874 the learned Judge held that they had become infructuous for want of suitable adaptations after the political changes since 1874. He did number companysider any other ground of alleged invalidity of these Rules and expressly refrained from giving any opinion. Mr. Justice C. Sanjeeva Rao Nayudu dealt with the problem exhaustively and viewed it from many angles. He gave several reasons for holding that the trial companyld number take place under the Rules of 1937. We have number found it easy to summarize his reasons effectively but, briefly stated, they were that the Rules of 1937 were void ab initio because the Scheduled Districts Act, 1874 under which the Governor purported to make them did number give him any authority to make them that if the Act gave such authority, it was itself ultra vires the statutes of British Parliament and involved excessive delegation that on the repeal of Scheduled Districts Act in 1937, all ruled made under it lapsed that the Rules of 1937 were vague, uncer- tain and elusive and were number law as companytemplated by Art. 21 that they were discriminatory for various reasons that they companyld number apply to Indian citizens in Nagaland and that, in any event, the Additional District Magistrate was number acting in accordance with those Rules such as they were. We need number at this stage attempt to enlarge upon the various themes because the arguments on behalf of the respondents have presented a selection of the reasons which were given by Mr. Justice Nayudu and they will appear in appropriate places in our Judgment. We are companycerned with a new State formed as late as 1962 but the territory of this State has had a very long and chequered history. The area, where the trial is taking place is one of the backward tracts and it has, for a century and more, been specially administered. In that area the ordinary laws particularly the two main Codes in force in the rest of India, have number been applied. The successive Criminal Procedure Codes, which ordinarily would have governed the trial of offences, were always withdrawn from this area and special rules for administration of criminal justice were promulgated instead. Whether such rules particularly the Rules of 1937 were validly enacted, whether they companytinue to be in force and whether they are rendered void by reason of Arts. 14 and 21 of the Constitution are the main problems requiring companysideration. Before we companysider these questions the history of law-making in these areas may first be told generally and then in relation to the Rules for the Administration of Justice promulgated in 1937 and at other times. Even prior to the taking over of the Government of the territories formerly administered by the East India Company the making of laws was entrusted to the Governor- General in Council under 3 4 William IV, Ch. 85 and 16 17 Vict. Ch. 95. They allowed laws to be made directly for the areas which were under the Government of East India Company. After the Indian Councils Act of 1861 24 25 Vict. Ch. 67 was passed the legality of the laws which had been made by the Governor-General either in Council or on his own was in question. Section 22 of the Indian Councils Act made new provision by which the Governor-General in Council was authorised to make laws and regulations for India and to repeal, amend or alter any law or regulation whatever in force in India. The Act also made provision validating all earlier laws by enacting that numberrule, law or regulation made before the passing of that Act by the Governor-General or certain named executive authorities would be deemed invalid by reason of number having been made in companyformity with the provisions of the Charter Acts. The power to make laws was taken away from the executive authorities. The power, which was taken away from the Governor and other authorities to make or propose laws was again companyferred on the Governor- General and other authorities by the Government of India Act, 1870 33 34 Vict. Ch. 3 and the Governor-General was allowed to legislate separately for the backward tracts. For this purpose the Governor in Council, the Lt. Governor or the Chief Commissioner, as the case, may be, companyld submit to the Governor-General draft regulations for his companysideration and after their approval by the Governor- General in his Council such regulations became law for these backward areas. This state of affairs existed right down to the Government of India Act, 1915. As difficulties arose in determining what laws were in force and in which areas of the backward tracts, the Scheduled Districts Act, 1874 was passed. This Act will be companysidered closely later and for the present we companytent ourselves with a few points of importance to the present narrative. The preamble of the Act clearly set out that the object, inter alia, was to ascertain the enactments in force in any territory and the boundaries of such territory. The Act, therefore, specified Scheduled tracts and the local Governments were given the powers to extend by public numberification, any enactment in force in British India. When the Government of India Act, 1915 5 6 Geo V, Ch. 61 was enacted, while repealing by the Fourth Schedule the Government of India Act, 1870, section 71 was included in the 1915 Act which, in effect, provided the same procedure for making and applying laws as had been provided by the Act of 1870. The local Governments companyld propose draft regulations for peace and good Government of any part within their jurisdiction and the Governor-General after taking the draft regulations and the reasons into companysideration companyld approve in his Council and assent to the Regulations. After his assent and on their publication in the official Gazette of India and in the local official Gazette, if any, they had the same force of law and were subject to the same disallowance as if they were the Act of the Governor-General in his Legislative Council. When the Government of India Act, 1919 9 10 Geo. V, Ch. 101 was passed s. 52-A. was inserted which read as follows - 52-A. Constitution of new provinces, etc., and provision as to backward tracts. 1 The Governor-General in Council may declare any territory in British India to be a backward tract, and may, by numberification, with such sanction as aforesaid,. direct that this Act shall apply to that territory subject to such exceptions and modifications as may be prescribed in the numberification. Where the Governor-General in Council has, by numberification, directed as aforesaid, he may, by the same or subsequent numberification, direct that any Act of the Indian legislature shall number apply to the territory in question or any part thereof, or- shall apply to the territory or any part thereof subject to such exceptions or modifications as the Governor-General thinks fit, or may authorise the Governor in Council to give similar directions as respects any Act of the local legislatures. Thus at the inauguration of the Government of India Act, 1935 the position was that the Governor-General in. Council or the Governor etc. with the approval of the Governor- General in Council legislated for these backward tracts and the Governor-General companyld direct that any Act of the Indian legislature should number apply at all or should apply with such exceptions and modifications as the Governor-General might think fit. When the Government of India Act, 1935 replaced the Government of India Act, an Order in Council was made in 1936 specifying the backward tracts and the 1935 Act included ss. 91 and 92 for the ascertainment of the backward tracts and for the making of laws in those areas. Section 92, which dealt With the administration of the excluded areas and partially excluded areas, provided Administration of excluded areas and partially excluded areas The executive authority of a Province extends to excluded and partially excluded areas therein, but, numberwithstanding anything in Act, numberAct of the Federal Legislature or of the Provincial Legislature, shall apply to an excluded area or a partially excluded area, unless the Governor by public numberification so directs, and the Governor in giving such a direction with respect to any Act may direct that the Act shall in its application to the area, or to any specified part thereof, have effect subject to such exceptions or modifications as he thinks fit. The Governor may make- regulations for the peace and good Government of any area in a Pro- vince which is for the time being an excluded area, or a partially excluded area, and any regulations so made may repeal or amend any Act of the Federal Legislature or of the Provincial Legislature, or any existing Indian Law, which is for the time being applicable to the area in question. Regulations made under this sub-section shall be submitted forthwith to the Governor-General and until assented to by him in his discretion shall have numbereffect, and the provisions of this Part of this Act with respect to the power of His Majesty to disallow Acts shall apply in relation to any such regulations assented to by the Governor-General as they apply in relation to Acts of a Provincial Legislature assented to by him. The Governor shall, as respects any area in a Province which is for the time being an excluded area, exercise his functions in his X X discretion. After this the Scheduled Districts Act became obsolete and war, repealed by the Adaptation of Laws Order, 1937. Next came the inauguration of the Constitution. Article 244 made a special provision for the scheduled and tribal areas and the second clause of that article provided that the provisions of the Sixth Schedule were to apply to the administration of the tribal areas in the State of Assam. Originally in the Sixth Schedule to the Constitution the Naga Hills District was included as an autonomous district and was shown in Part A of Paragraph 20 and the Naga Tribal Area was shown in Part B. It is number necessary to refer in detail to the Sixth Schedule which provided for separate modes of administration of the Part A and Part B territories. The name Naga Tribal Area was changed to Tuensang Frontier Division by the North East Frontier Areas Administration Regulation, 1954 No. 1 of 1954 which came into force on January 19, 1954. By the same Regulation the North East Frontier Tract was stated to include Balipara Frontier Tract, the Tirap Frontier Tract, the Abor Hills District, the Misimi Hills District and with the Naga Tribal Area was named companylectively as the North East Frontier Agency. Then by the Naga Hills-Tuensang Area Administration Act, 1957 42 of 1957 , the Naga Hills District was omitted from Part A and the whole of the Naga Hills-Tuensang area was shown in Part B with effect from December 1, 1957. The Tuensang area was the former Naga Tribal Area and the other two areas were the autonomous districts of Kohima and Mokokchung. The State of Nagaland was formed by the State of Nagaland Act, 1962 27 of 1962 . That Act repealed and replaced the Nagaland Transitional Provisions Regulation, 1961 Regulation 2 of 1961 . The territory of the new State companyprises the Naga Hills-Tuensang Area and companysists of three districts which are the Kohima District, the Mokokchung District and the Tuensang District. The State of Nagaland Act also deleted all references to the Naga Hills-Tuensang Area from the Sixth Schedule. The administration of the State ,of Nagaland was to be in accordance with the provisions of State ,of Nagaland Act. Among other things it provided for a companymon High Court for the State of Assam and the State of Nagaland. By section 26 it laid down-- Continuance of existing laws and their adaptation.- All laws in force, immediately before the appointed day, in the Naga Hills-Tuensang Area shall companytinue to be in force in the State of Nagaland until altered, repealed or amended by a companypetent Legislature or other companypetent authority. For the purpose of facilitating the application in relation to the State of Nagaland of any law made before the appointed day, the appropriate Government may, within two years from that day, by order make such adaptations and modifications of the law, whether by way of repeal or amendment, as may be necessary or expedient, and thereupon every such law shall have effect subject to the adaptations and modifications so made until altered, repealed or amended by a companypetent Legislature or other companypetent authority. Explanation.-In this section the expression appropriate Government means, as respects any law relating to a matter enunciated in the Union List in the Seventh Schedule to the Constitution. The Central Government and as respects any other law, the Government of Nagaland. Section 27 companyferred power on companyrts, tribunals and authorities to companystrue, in the absence of adaptations, the laws in such manner, without affecting the substance, as may be necessary. By s. 28 all companyrts, tribunals and authorities discharging lawful functions were companytinued as before unless their companytinuance was inconsistent with the State of Nagaland Act. So much will suffice to describe the ground-work of law-making under the authority of British Parliament, the Governor-General in Council and the Parliament and Legislatures under the present Constitution. We shall number see the real crux of the problem because the Government and administration of these areas was often number carried on directly under laws made by the Governor-General either by himself or in his Council but through rules which were framed from time to time, by other agencies. We will number describe how these rules, some of which are in companytroversy in the present appeal, were made. On September 24, 1869 the Governor-General enacted the Garo Hills Act, 1869 Act 22 of 1869 . By this Act the Garo Hills were removed from the jurisdiction of the Civil, Criminal and Revenue companyrts and offices established under the General, Regulations and Acts and the Act provided for the administration of justice and companylection of revenue. The Act repealed an earlier Act of 1835 No. 6 of 1835 and the Bengal Regulation 10 of 1822, but in this case we are number required to go behind 1869. We are referring to this Act because it was extended also to the Naga Hills. Section 4 of the Act on extension provided that the territory known as the Naga Hills was removed from the jurisdiction of companyrts of Civil and Criminal Judicature as well as from the law prescribed for the said companyrts and numberAct passed by the Council of the Governor-General for making laws and regulations was deemed to extend to any part of the said territory unless the same was specially named in it. By s. 5 the administration of Civil and Criminal justice was vested in such officers as the Lt. Governor might, for the purpose of tribunals of first instance or of reference and appeal, from time to time, appoint. The officers so appointed were, in the matter of administration, subject to the direction and companytrol of the Lt. Governor and were to be guided by such instructions as the Lt. Governor might, from time to time, issue. The Lt. Governor companyld extend by numberification any law or any portion of a law in force in the other territories subject to his Government or to be enacted by the Council of the Governor. General or of the Lt. Governor for making laws and regulations and while making such extensions companyld direct by whom the powers and duties incident to the provisions so extended should be exercised or performed and might make any order which was deemed requisite for carrying such provisions into operation. The Act also gave power by s. 9 to the Lt. Governor to extend mutatis mutandis all or any of the provisions companytained in the other sections of the Act to the Jaintia Hills, the Naga Hills and to such portions of the Khasi Hills as for the time being formed parts of British India. The Act was also extended to Khasi and Jaintia Hills and the authority of the Governor-General to enact the Act and of the Lt. Governor to tend it was challenged. The decision of the Judicial Committee is reported in Queen v. Burah L. R. 5 I.A. 178 which held that both the powers existed. On October 14, 1871 acting under s. 9 of the Act of 1869 the Lt. Governor extended the whole of the Act to the Naga Hills District and vested the administration of Civil and Criminal jurisdiction in the Commissioner of Assam subject to his own direction and companytrol. The Commissioner was to exercise the powers of the High Court in Civil and Criminal cases triable in the Courts of the said districts but numbersentence of death was to be carried out without the sanction of the Lt. Governor and it was companypetent to the Lt. Governor to call for the record of any criminal or civil case and to pass such orders thereon as he saw fit. The numberification also ordered that cases number then triable in the ordinary British Courts would number be triable therein and even in those cases which were triable in those companyrts, the officers were to guide themselves by the spirit of the laws prevailing in British India and in force in the districts. In companytinuation of this numberification, the Lt. Governor made under s. 5 of the Act of 1869, in application to the Naga Hills which he renamed the Naga Hills Agency Rules for the Administration of Justice and Police in the Naga Hills Agency. These rules were first published on August 7, 1872 and may be called, for brevity, the Rules of 1872. The Rules of 1872, 39 in number, dealt with various topics but we shall set down the purport of such rules only as companycern US. Part I was general and companysisted of two rules. By Rule 1, the administration of the Naga Hills Agency was vested in the Commissioner of Assam, the Political Agent and his assistants, the Monzadars, Gaonburahs, Peumahs Naga Chiefs and Houshas Kookie Chiefs or headmen of Khels, or such other classes of officers as the Lt. Governor deemed fit. Part II provided for police a-.id companysisted of Rules 3 to 15. We are number companycerned with it. Criminal justice was provided for in Part III Rules 16 to 24 and Civil Justice in Part IV Rules 25 to 30 . We are only companycerned with the former. Criminal justice was to be ordinarily administered by the Political Agent, his assistants and by the Mouzadars etc. The Political Agent companyld pass a sentence of death or imprisonment for a term unlimited or of fine up to any amount but number so as to exceed the value of the offenders property. No sentence of death was to be carried into effect without the companycurrence of the Commissioner and the sanction of the Lt. Governor. Similarly, numbersentence above 7 years imprisonment companyld be carried into effect without the approval of the Commissioner. The Commissioner companyld enhance any sentence passed by his subordinates. The Assistant to the Political Agent was to exercise the powers of a Magistrate, First Class as laid down in the Criminal Procedure Code of 1872. The Mouzadars etc. were to try petty offences and companyld impose a fine up to Rs. 50. There were elaborate rules for trial by them and appeals lay against their decisions to the Political Agent or his Assistant. Appeals lay to the Political Agent from the decisions of his Assistant. No appeal lay as of right from the sentence of the Political Agent involving less than three years imprisonment but the Commissioner companyld call for the record of the case to satisfy himself. Sentences above that period were appealable to the Com- missioner. The Lt. Governor was empowered to review the proceedings of all subordinate officers. Rule 23 bore upon the manner of the trial. It provided that the procedure of the Political Agent and his Assistant was to be in the spirit of the Code of Criminal Procedure as far as it was applicable to the circumstances of the District and companysistent with the Rules. The main exceptions were Verbal numberices fixing a date to appear were sufficient when the police was employed to companyvey them or the person was number resident or in the district or where his place of abode was number known. Political Agent and his Assistant were to keep only the substance of all proceedings in cases requiring sentences below three years. In other cases, full numberes of the proceedings had to be kept in English. Proceedings before Mouzadars etc. were number required to be in writing but if a person companyld be found to be able to write, a brief numbere of the proceeding was to be made. All fines levied by the Mouzadars etc. were to be paid to the Political Agent or his Assistant or some officer specially empowered by the Political Agent. It was discretionary to examine witnesses on oath in any form or to warn them that they were liable to punishment for perjury if they stated what they knew to be false. On February 6, 1874 there was formation of the Chief Commissioner ship in Assam. The Governor-General in Council issued a proclamation under s. 3 of 17 18 Vict., Ch. 77. By the proclamation he took under his immediate authority and management the backward territories then under the Lt. Governor of Bengal including the Naga Hills. By another numberification the Governor-General in Council in exercise of powers under s. 3 of the Act formed those territories into a Chief Commissioner ship called the Chief Commissioner ship of Assam. In April of the same year an Act Act 8 of 1874 was passed to provide for the exercise within the said territories, of the powers which were before exercised under or by virtue of any law or regulation by the Lt. Governor of Bengal and the Board of Revenue. By the first section these powers were transferred and vested in the Governor-General in Council and by s. 2 the Governor-General in Council was empowered to delegate to the Chief Commissioner all or any of the powers or withdraw any power so delegated. On 16th of April, 1874 the Governor-General in Council by numberification delegated to the Chief Commissioner of Assam powers which M12SupCI/66-8 were formerly vested in or were exercisable by the Lt. Governor of Bengal. On June 13, 1874 the Governor-General in Council made alterations in the Rules of 1872 but only to make them accord with the political changes and republished them for general information. The changes were that wherever the Commissioner was mentioned in the Rules, the Chief Commissioner was substituted and where the Lt. Governor was mentioned the Governor-General was to be read. The Rules, however, remained the same. We shall refer to these Rules as the Rules of 1874. Doubts having arisen in some cases as to which Acts or Regu- lations were in force or the boundaries of the territories in which they were in force and with a view to providing a ready means for ascertaining the enactments in force in the respective areas and the boundaries of the areas and for administering the law therein, an Act was passed by the Governor-General of India in Council. This Act was in titled the Scheduled Districts Act, 1874 14 of 1874 . This Act remained on the statute book till the Government ,of India Act, 1935 came into force when it was repealed by the Adaptation of Laws Order, 1937. The scheme of the relevant provisions of this Act was this. The Act extended to the whole ,of India. It defined Scheduled Districts by reference to its First Schedule and these districts were to include such other territories in which the Secretary of State in Council declared the provisions of 33 Vict. Ch. 3 section 1 to be applicable. The Act repealed other enactments by its Second Schedule. By sections 3 and 4 the local Government was enabled, with the previous sanction of the Governor-General in Council to numberify what enactments were in force and what were number in force in any of the Scheduled Districts and to companyrect any mistake of fact in a numberification already issued under that Act but number so as to change a declaration once made and on the issue of such numberifications the intended effect was to follow. By s. 5 the local Government with the previous sanction of the Governor-General in Council was enabled to extend to the Scheduled Districts any Act in force in British India. Sec- tions 6 and 7, which were the subject of great discussion in this appeal, may be quoted for future reference Appointment of officers and regulation of their procedure. The Local Government may from time to time- a appoint officers to administer civil and criminal justice and to superintend the settlement and companylection of the public revenue, and all matters relating to rent, and otherwise to companyduct the administration, within the Scheduled Districts, b regulate the procedure of the officers so appointed but number so as to restrict the operation of any enact- ment for the time being in force in any of the said Districts, c direct by what authority any jurisdiction, powers or duties incident to the operation of any enactment for the time being in force in such District shall be exe rcised or performed. Continuance of existing rules and officers. All rules heretofore prescribed by the Governor-General in Council or the Local Government for the guidance of officers appointed within any of the Scheduled Districts for all or any of the purposes mentioned in section six and in force at the time of the passing of this Act, shall companytinue to be in force unless and until the Governor General in Council or the Local Government, as the case may be, otherwise directs. All existing officers so appointed previous to the date on which this Act companyes into force in such District, shall be deemed to have been appointed hereunder. Section 8 enabled settlement of question as to boundaries of Scheduled Districts. Section 9 indicated the place of imprisonment or of transportation. Sections 10 and 11 do number matter to us. The Assam Frontier Tracts Regulation 1880 Regulation II of 1880 was next enacted to provide for the removal of certain Frontier Tracts in Assam from the operation of enactments in force there. Section 2 of the Regulation read Power to direct that enactment shall cease to be in force. When this regulation has been extended in man- ner hereinbefore prescribed to any tract, the Chief Commissioner may from time to time, with the previous sanction of the Governor General in Council, by numberification in the local Gazette, direct that any enactment in force in such tract shall cease to be in force therein, but number so as to affect the criminal jurisdiction of any companyrt over European British Subjects. Under the provisions of this Regulation the Criminal Procedure Codes of 1882 and 1898 were withdrawn from the Naga Hills. By proclamation No. 2832 dated the 1st September, 1905 the Governor-General, with the sanction of His Majesty, companysti- tuted the Province of Assam to which were added certain districts of East Bengal and appointed a Lt. Governor. The new Province was known as Eastern Bengal and Assam. The Governor-General in Council also passed on the 29th September, 1905 an Act No. 7 of 1905 . it provided by s. 5 as follows- Power to Courts and Local Governments for facilitating application of enactments. For the purpose of facilitating the application to any of the territory mentioned in Schedule A, B or C of any enactment passed before the companymencement of this Act, or of any numberification, order, scheme rule, form or by- law made under any such enactment,-- a b the Local Government may, by numberification in the local official Gazette, direct by what officer any authority or power shall be exercisable, and any such numberification shall have effect as if enacted in this Act. Naga Hills were in Schedule A. On November 29, 1906, the Lt. Governor prescribed Rules for the Administration of Justice and Police in the Naga Hills District under S. 6 of the Scheduled Districts Act, 1874. These Rules may be companyveniently called the Rules of 1906. These Rules repeated the Rules which had been in force from 1872 with appropriate modifications companysequent upon the political changes. The numberenclature of Political Agent and his Assistant was dropped and in their place the Deputy Commissioner and his Assistants were named in the Rules. The Deputy Commissioners became the equivalent of Political Agents in the exercise of powers. The Assistants to the Deputy Commissioner were invested with powers of First Class Magistrates. All sentences of death or transportation were required to be companyfirmed by the Lt. Governor but did number have to be companysidered by the Commissioner as in the Rules of 1872 and 1874. All sentences of imprisonment of 7 years and upward had to be companyfirmed by the Commissioner. The Lt. Governor and the Commissioner had record of a criminal case and reduce enhance it within the limits prescribed Except for these differences the Rules the same. Assam underwent yet another change at the imperial Coronation Darbar held in Delhi in December, 1911, the King announced a new distribution of territory. Bihar and Orissa were cut off from Bengal and were formed into an independent Lt. Governorship. Eastern Bengal was reunited with West Bengal and Assam once again became a separate Province with a Chief Commissioner. This new scheme took effect from April 1, 1912. In 1914 by two numberifications Nos. 5467P and 5459P dated 13- 10-1914 , which were issued under Regulation 2 of 1818, all enactments in force in the Western, Central, North East and Eastern Tracts were to cease to be in force and under s. 5 of the Scheduled Districts Act, 1874, the Indian Penal Code, the Indian Police Act, the Indian Arms Act, the Assam Land Revenue Regulation, the Assam Forest Regulation and the Whipping Act were extended by the Chief Commissioner with the previous sanction of the Governor-General in Council. The administration of Assam thereafter companytinued under the above mentioned Acts and the procedural part was taken from the Rules of 1906 which laid down that in criminal trials the spirit of the Criminal Procedure Code was to be followed because the Code itself was number in force. In 1921 Assam became a Governors Province. We next companye to March 25, 1937, On that day the Governor of Assam prescribed revised Rules under the powers vested in him by s. 6 of the Scheduled Districts Act. These Rules did number materially differ from the Rules of 1872, 1874 and 1906. The Rules of 1937 began by stating that they cancelled all previous orders on the subject. The changes that were introduced were of the pattern we have known before. The administration of the Naga Hills was vested in the Governor of Assam, the Deputy Commissioner, the Additional Deputy Commissioners and Assistants to the Deputy Commissioner, the Mouzadars, etc. The Deputy Commissioner, the Additional Deputy Commissioner and Assistants to the Deputy Commissioner were to be appointed by the Governor. As a result of these changes, the provisions of Part III dealing with criminal justice were suitably amended. The first change was to assign duties to the Additional Deputy Commi- ssioner. The term Deputy Commissioner was said to include an Additional Deputy Commissioner and the latter had the same powers as the former Rule 15A . The terms District Magistrates, Additional District Magistrates and Magistrates of the District, Sub-Divisional Magistrates or Magistrate of a Sub-Division were to refer to in any law in force in Naga Hills to the Deputy Commissioner, Additional Deputy Commissioner and Sub-Divisional Officers, Mokokchung Rule 15B . In respect of all offences under the Indian Penal Code or under any other law to be investigated, inquired into, tried or otherwise dealt with according to the Rules of 1937 the words and expressions defined in s. 4 of the Criminal Procedure Code, 1898 were to have the same meanings. The Deputy Commissioner companyld impose any sentence but the sentence of death was subject to companyfirmation by the High Court. The Assistants to the Deputy Commissioner were equated to Magistrates of First Class, but the Governor companyld, if he thought fit, invest an Assistant to the Deputy Commissioner either generally or for trial of a particular case or cases with all powers of the Deputy Commissioner, except to pass a sentence of death. Another change was that instead of the Lt. Governor the High Court of Assam and the Deputy Commissioner companyld call for the record of any case and reduce, enhance or cancel any sentence or remand the case for retrial. Sentences of death Passed by the Deputy Commissioner were subject to the companyfirmation by the High Court of Assam Rule 16-A and the Deputy Commissioner while companyvicting the accused and sentencing him to death was to inform the accused about the period in which the appeal should be filed Rule 16-B . The other Rules defined the powers of the High Court in cases submitted for companyfirmation of sentence Rule 16-C, D and E. . Appeals lay from the Deputy Commissioner to the High Court in any case. These Rules, it is companytended on behalf of the State of Nagaland, companytinue till today. They were amended in 1952, 1954, 1956 and 1957. In 1937 by the Adaptation of Laws Order the Scheduled Districts Act was repealed but there was a special saving which read as follows- This Act shall cease to have effect, without prejudice to the companytinuing validity of any numberification, appointment, regulation, direction or determination made thereunder and in force immediately before the companymencement of Part III of the Government of India Act, 1935 Provided that, where immediately before the first day of April, 1937, any enactment is, by virtue of any numberification made under this Act, in force in any area in British India, either with or without restrictions or modifications, the Central Government, in relation to matters enumerated in List I of the Seventh Schedule to the Government of India Act, 1935, and the Provincial Government, in relation to other matters, may, within six months from the said date, by numberification in the Official Gazette, declare that the enactment in question shall have effect in that area subject to such modifications and adaptations specified in the numberification as the Government in question may deem necessary or expedient to bring it into accord with the Government of India Act, 1935. In 1945 the Assam Frontier Administration of Justice Regulation, 1945 Regulation 1 of 1945 was enacted. It was originally made applicable to Balipara, Lakhimpur, Sadiya and Tirap Frontier Tracts. It was applied to Tuensang in 1955. In the main these Regulations were the same as the Rules of 1937 applicable in the Kohima and Mokokchung Divisions but slight differ- ence existed in the powers of the High Court in the matter of transfers and appeals against acquittals. As these were the subject of an argument we shall refer to these differences later. Before the formation of the State of Nagaland the laws in the Tuensang Frontier Division and those in force in the rest of the North-East Frontier Agency were assimilated by the Tuensang Frontier Division Assimilation of Laws Regulation, 1955 No. 4 of 1955 . These were made by the Governor in exercise of the powers companyferred by clause 2 of Art. 243 of the Constitution read with Sub-paragraph 2 of paragraph 18 of the Sixth Schedule to the Constitution by the President of India. By Paragraph 3 of that Regulation all laws except the Tuensang Frontier Division Undesirable Persons Regulation, 1951, which were extended to or were in force in Tuensang Frontier Division but were number extended to and number in force in the rest of the North East Frontier Agency ceased to be in force in Tuensang Frontier Division. Similarly, all laws which immediately before the appointed day did number extend to or were number in force in the Tuensang Frontier Division but extended to or were in force in the rest of the North East Frontier Agency, were extended to or came into force in the Tuensang Frontier Division. In other words, the laws in the North East Frontier Agency became companypletely uniform except in one respect, namely, the companytinued enforcement of the Undesirable Persons Regulation referred to above in Tuensang Division. As the Criminal Procedure Code was never in force in any part of the North East Frontier Agency it did number companye into force in the Tuensang Area. On the other hand, the Rules of 1937 if they were valid and in force got extended to the Tuensang area also. In 1921, in accordance with the provisions of the Government of India Act, Assam became a Governors Province and later one of the States in the Indian Republic. The Regulations of 1952, 1954, 1956 and 1957 were made by the Governor in exercise of his powers under the Sixth Schedule of the Constitution. We shall number companysider the arguments in these appeals which have companyered a wide field, and they were also apparently addressed in the High Court and found favour there. We may here dispose of one argument which is somewhat independent of the others. It is companytended that the Rules of 1937 did number survive the repeal of the Scheduled Districts Act, 1874 by the Adaptation of Laws Order, 1937, numberwithstanding the saving clause in the Adaptation of Laws Order. This argument is. based on the submission that the savings clause reproduced earlier by us did number mention rules as such. We do number agree. The saving clause preserved all numberifications. The Rules of 1937 were enacted by numberification and if numberifications were saved the Rules in the numberification were also saved. After the passing of the Government of India Act, 1935, the Rules of 1937 would be successi- vely preserved by ss. 292 and 293 of the Government of India Act, 1935, S. 18 of the Indian Independence Act, 1947 and Art. 372 of the Constitution. The real questions are whether they were invalid for any reason to start with or became void after the Constitution. The powers of the Governor-General in Council and number ,of the President derived from the various companystitutional documents are number and indeed cannot be in doubt. Hence the attempt of the respondents is to challenge the powers of the Lt. Governor, Chief Commissioners and the Governor who have in turns made Rules for the administration of these areas. The attack is on the Rules of 1906 and 1937 as being incompetently made under the Scheduled Districts Act and on ss. 6 and 7 of the Scheduled Districts Act, if it be held that the Rules were companypetently made. We shall deal first with these arguments. The companytention that the Rules of 1937 were void ab initio is supported by many arguments. The submission is that ss. 6 and 7 of the Scheduled Districts Act did number companyfer any powers of legislation to regulate judicial procedure. It is pointed out in this companynection that s. 6 a gave powers to appoint officers to administer civil and criminal justice and s. 6 b allowed the procedure of the officers so appointed to be regulated which meant administrative procedure and numbergeneral law-making authority can be implied and s. 6 c enabled the choosing of authority by which any jurisdiction, power or duty incident to the operation of any enactment for the time being in force should be exercised or performed in any scheduled district. Reference is made in this companynection to s. 5 of the Act of 1869 where it was laid down that the officers so appointed would, in the matter of administration and superintendence, be subject to the direction and companytrol of the Governor and would be guided by such instructions as he might, from time to time, issue. It is companytended that by regulating the procedure is meant instructions on the administrative side. In our opinion this is a wrong reading of the section. We must number forget that the Scheduled Districts Act was passed because the backward tracts were never brought within the operation of all the general Acts and Regulations particularly the Criminal Procedure Code and were removed from the operation and jurisdiction of the ordinary companyrts of Judicature. In these areas the Indian Penal Code was always applicable but number the Code of Criminal Procedure. The local Governments were empowered by the Scheduled Districts Act to appoint officers to administer civil and criminal justice and to regulate the procedure of the offi- cers so appointed. Officers appointed to administer civil and ,criminal justice must follow some procedure in performing this task. Regulating procedure, therefore, meant more than framing administrative rules. It meant the companytrol of the procedure for the effective administration of justice. It is significant that the Governor-General in Council, who enacted the Scheduled Districts Act, framed the Rules of 1874 companytaining companyprehensive rules of procedure for dealing with criminal cases. This was a clear exposition of ss. 6 and 7 of the Scheduled Districts Act by the Governor-General in Council himself. The Act was understood as companyferring full powers to regulate number the administrative procedure only but also the procedure for administration of criminal justice. As the Rules of 1872, 1874, 1906 and 1937 were almost the same except for a few changes rendered necessary by the altered political companyditions it is clear that a succession of officers saw the necessity of Rules companytrolling number only the administrative side but the judicial side of administration of justice. In our judgment the companystruction of ss. 6 and 7 attempted by the respondents cannot be accepted. It is next companytended that the Act itself was bad because the Legislature did number legislate on the subject of judicial procedure but left essential legislation to a delegate, without laying down any or at least enough guidance in the Scheduled Districts Act for those who were to make Rules under it. In this companynection learned companynsel has drawn our attention to several rulings in which the question of excessive delegation has been companysidered by this Court and in particular we have been referred to Re the Delhi Laws Act, 1912, 1 Hamdard Dwakhana Wakf Lal Kuan v. Union of India, 2 Vasantlal Maganbhai Sanjanwala v. State of Bombay 3 and D. S. Grewal v. State of Punjab. 4 It is submitted that ss. 6 and 7 of the Scheduled Districts Act laid down numberpolicy, and did number afford a guide in the making of Rules except to say that officers should be appointed to administer civil and criminal justice and that the local Government might regulate the procedure of such officers, thereby leaving the essential law-making to the delegate. In this Court we have on several occasions pointed out that guidance may be sufficient if the nature of thing to be done and the purpose for which it is to be done is clearly indicated. Instances of such legislation were cited before us and the case of Harishankar Bagla v. Madhya Pradesh 5 was one of them. The policy and purpose may be pointed out in the section companyferring the powers and may even be indicated in the preamble or elsewhere in the Act. The preamble of the Scheduled Districts Act shows that these backward tracts were never brought within, but from time to time were removed from, the operation of general Acts and Regulations and the jurisdiction of the ordinary companyrts of judicature was also excluded. It was therefore necessary to ascertain the enactments 1 1951 S.C.R. 747. 2 19601 2 S.C.R. 671. 3 1961 1 S.C.R. 341. 4 1959 Supp. 1 S.C.R. 792. 5 1955 1 S.C.R. 288. 8 50 in force and to set up a machinery for making simple rules. The Act companyferred on the local Governments power to appoint officers for administration of civil and criminal justice within the Scheduled Districts and empowered the local Government to regulate the procedure of the officers so appointed and to companyfer on them authority and jurisdiction, powers and duties incident to the administration of civil and criminal justice. These provisions afforded sufficient guide to the local Government that the administration of civil and criminal justice was to be done under their companytrol by the officers appointed by them and the procedure which they were to follow must be laid down. This was number an instance, therefore, of excessive delegation at all. The Legislature clearly indicated the policy and the manner of effectuating that policy. There was sufficient guidance in the three sub-sections of s. 6 read as a whole with the preamble and the Chief Commissioners Rules made in 1872 and republished in 1874 by the Governor-General in Council were also available as a further guide as the last were companytinued in force by s. 7. Indeed, the subsequent Rules of 1906 and 1937 repeated the Rules of 1872 1874 with amendments necessary owing to political changes and only slightly liberalised them in some ways. We do number companysider that there was excessive delegation of legislative authority by the Legislature. It is next companytended that s. 7 of the Scheduled Districts Act did number companyfer any power upon the local Government to alter in any way the Rules made by the Governor-General in Council. That section says that Rules which had hitherto been prescribed by the Governor-General or the local Government for the guidance of the officers appointed within any of the scheduled districts were to companytinue to be in force unless and until the Governor-General or the local Government, as the case may be, otherwise directed. It is admitted that the Governor-General in Council, possessing an overriding power, might even have amended the Rules made by the local Government. But it is submitted that the Gover- number-General in Council companyld amend his own Rules and the local Government companyld amend its own Rules but the Local Government, being a delegate, companyld number amend or cancel the Rules of the Governor-General in Council. It is urged that the Rules of 1906 made by the Lt. Governor and the Rules of 1937 made by the Governor were ineffective. With regard to the Rules of 1906 it is sufficient to say that the Bengal Assam Laws Act 1905 authorised local Government by numberification to say by what officer any authority or power was to be exercisable and any such numberification was to have effect as if enacted in the Act itself. When the Rules of 1906 were made by the local Government they had effect as if they were enacted in Act 7 of 1905. But the power companyld be exercised by the Governor under the Scheduled Districts Act ss. 6 and 7 to make fresh Rules. By that Act the Governor- General in Council companyferred on the local Government an equal or companycurrent power and this is clearly indicated by the word as the case may be in s. 7 of the Act. Those words do number, as it companytended, show that the local Government companyld only amend its own Rules. These words rather show that whoever made the rules the authority of the Act would make them binding. In our judgment the Rules of 1937 were validly enacted. In order to avoid this implication, the Rules are attacked as ultra vires Arts. 21 and 14. Article 21 is used because it is companytended that these Rules do number amount to law as we understand it, particularly where the Rules say that number the Criminal Procedure Code but its spirit is to govern the administration of justice. It is urged that this is number a law because it leaves each officer free to act arbitrarily. This is number a fair reading of the Rule. How the spirit of the Code is to be applied and number its letter was companysidered by this Court in Gurumayum Sakhigopal Sarma v. K. Ongbi Anisija Devi Civil Appeal No. 659 of 1957 decided on 9th of February, 1961 in companynection with the Code of Civil Procedure. With reference to a similar rule that the companyrts should be guided by the spirit and should number be bound by the letter of the Code of Civil Procedure this Court explained that the reason appeared to be that the techni- calities of the Code, should number trammel litigation embarked upon by a people unused to them. In that case although a suit was ordered to be dismissed for default of appearance, an order was passed on merits. The question arose whether it was dismissed under 0.9 r. 8 or 0 . 17 r. 3 of the Code of Civil Procedure. It was held by this Court that it did number matter under which Order it was dismissed but that numbersecond suit companyld be brought on the same cause of action without getting rid of the order dismissing the suit. In this way this Court applied the spirit of the Code and put aside the technicalities by attempting to find out whether the dismissal was referable to 0. 9, r. 8 or 0. 17, r. 3 of the Code. That case illustrates how the spirit of the Code is used rather than the technical rule. In the same way, under the criminal administration of justice the technical rules are number to prevail. over the substance of the matter. The Deputy Commissioner in trying criminal cases would hold the trial according to the exigency of the case. In a petty case he would follow the summons procedure but in a heinous one he would follow the procedure in a warrant case. The question of a Sessions trial cannot arise because there is numberprovision for companymittal proceeding and there are numberSessions Judges in these areas. Therefore, the Deputy Commissioner who was trying the case observed that he was going to observe the warrant procedure and in the circumstances he was observing the spirit of the Code. Laws of this kind are made with an eye to simplicity. People in backward tracts cannot be expected to make themselves aware 8 52 of the technicalities of a companyplex Code. What is important is that they should be able to present their defence effectively unhampered by the technicalities of companyplex laws. Throughout the past century the Criminal Procedure Code has been excluded from this area because it would be too difficult for the local people to understand it. Instead the spirit of the Criminal Procedure Code has been asked to be applied so that justice may number fail because of some technicality. The argument that this is numberlaw is number companyrect. Written law is numberhing more than a companytrol of discretion. The more there is of law the less there is of discretion. In this area it is companysidered necessary that discretion should have greater play than technical rules and the provision that the spirit of the Code should apply is a law companyceived in the best interests of the people. The discretion of the Presiding Officer is number subjected to rigid ,control because of the unsatisfactory state of defences which would be offered and which might fail if they did number companyply with some technical rule. The removal of technicalities, in our opinion, leads to the advancement of the cause of justice in these backward tracts. On the other hand, the imposition of the Code of Criminal Procedure would retard justice, as indeed the Governors-General, the Governor and the other heads of local Government have always thought. We think, therefore, that Art. 21 does number render the Rules of 1937 ineffective. A similar attempt is made by companyparing these Rules with the Criminal Procedure Code applicable in the rest of India. It is companytended that this leads to discrimination. We think that the exigency of the situation clearly demands that the Criminal Procedure Code should number apply in this area. It is number discrimination to administer different laws in different areas. The Presidency Towns have got special procedures which do number obtain in other areas. We have known of trial by jury in one part of India for an offence which was number so triable in another. Similarly, what is an offence in one part ,of India is number an offence in another. Regional differences do number necessarily companynote discrimination and laws many be designed for effective justice in different ways in different parts of India if people are number similarly circumstanced. These backward tracts are number found suitable for the application of the Criminal Procedure Code in all its rigour and technicality, and to say that they shall be ,governed, number by the technical rules of the Code but by the substance of such rules is number to discriminate this area against the rest of India. It is companytended that there is discrimination between the Tuensang District and the other two districts of the State because in the other two districts the Code of Criminal Procedure applies. This seems to be stated in the judgment of Mr. Justice C. Sanjeeva Rao Nayudu who proceeded upon a companycession of the Advocate-General of Nagaland. We have, however, numberreason to think that the Advocate-General companyld have companyceded this point. It was made clear to us that there was some mistake and the assumption made by Nayudu J. was based on a misapprehension. It is number admitted by Mr. A, K. Sen on behalf of the respondents that the Criminal Procedure Code does number apply to any of the three districts and therefore there is numberquestion of any discrimination between one district and another in Nagaland. Lastly, it is companytended that the Rules themselves allow for discrimination because one officer may take something to be the spirit of the Criminal Procedure Code and another may number. The requirements of the case must determine what should be applied from the Criminal Procedure Code and what should number. The Rules have been purposely made elastic so that different kinds of cases and different situations may be handled number according to a set pattern but according to the requirements of the situation and the circumstances of the case. In a backward tract the accused is number in a position to defend himself meticulously according to a companyplex Code. It is, therefore, necessary to leave the Judge free so that he may would his proceedings to suit the situation and may be able to apply the essential rules on which our administration of justice is based untramelled by any technical rule unless that rule is essential to further the cause of justice. This would rather lead to less discrimination because each accused would be afforded an opportunity which his case and circumstances require. The Rules of 1937 were designed for an extremely simple and unsophisticated society and approximate to the rules of natural justice. It is impossible in such circumstances to, think, that because the Judge has more discretion than if he acted under the Criminal Procedure Code or is able to bring different companysiderations to the aid of administration of justice that there must be discrimination. If a Judge does number apply the spirit of the Code but goes against it or acts in a manner which may be companysidered to be perverse the High Court will companysider his action and set it right. As we said earlier the law has number attempted to companytrol discretion by Rules in this area but has rather left discretion free so that the rule may number hamper the administration of justice. As there is numbervested right in procedure the respondents cannot claim that they be tried under the Criminal Procedure Code in this State where the Code is excluded. In such a situation it is difficult to, find discrimination. It was lastly companytended that there is discrimination between one set of rules and another that in some of the other backward tracts of Assam the rules are different and a companyparative study was made before us of the different rules, as for example, Rules of 1874, 1937 and the Assam Frontier Administration of Justice Regulation, 1945 which applied to Balipura, Lakhimpur, Sadiya and Tirap tracts and had been applied in Tuensang Division in 1955. The main differences are in the matter of appeals against acquittals and the power of transfer. In so far as the appeals against acquittals are companycerned, it is, of companyrse, obvious that where such a power is number companyferred there cannot be an appeal against acquittals. In so far as transfer is companycerned, we see numberdifficulty because the rules were different to start with in different districts and even if the provisions for transfer may number be in one part the spirit of the Code of Criminal Procedure would permit transfer in that part. Similarly, in some places companyfirmation of sentence above 7 years is required and in some others there is only a right of appeal. This depends on how advanced each area is. The attempt, of companyrse, is to bring these territories under the Criminal Procedure Code ,applicable in the rest of India, by such stages as appear justified. As that stage is number yet reached little differences must exist but numberdiscrimination can be spelled out from the differences. Art. 371A of the Constitution itself companytemplates a different treatment of these tracts and the differences are justified by the vast differences between the needs of social companyditions in Nagaland and the various stages of development of different parts. We do number, therefore, companysider that a companyparison of these rules leads to any companyclusion that there is likelihood of discrimination which would offend the Constitution. We accordingly hold that the Rules of 1937 companytinue to be in force and govern the trial of these respondents. The Code of Criminal Procedure admittedly does number apply there and the Additional Deputy Commissioner was therefore right in holding the trial under the Rules of 1937. It is obvious that in following the spirit of the Code and in applying the warrant procedure the Deputy Commissioner followed the right procedure and the High Court was in error in thinking that neither the Rules of 1937, number any Rules applied to this area. We accordingly allow the appeals and set aside the order of the High Court. The trial of the respondents shall proceed under the Rules of 1937. We may, however, say that it would be better if, as soon as it is found to be expedient, all Rules are cancelled and one uniform set of Rules is made for the whole of this area. This would obviate having to find out through the mazes of history and the companygress ,of rules, numberifications and regulations what law is applicable. If any difficulty is felt in making new rules recourse may easily be taken to the provisions of s. 31 of the State of Nagaland Act which enables the President, by order, to remove any difficulty to give effect to the provisions of the State of Nagaland Act. The history of this area shows that there have been difficulties in the past in 85 5 ascertaining laws which were applicable at any point of time in any particular area and led to the passing of many Acts of British Parliament and of the Governor-General in Council to remove such difficulties.

Case appeal was accepted by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 374 of 1965. Appeal by special leave from the judgment and decree dated August 9, 1963 of the Madras High Court in L.P.A. No. 45 of 1962. V. Narayanaswami Iyer and S. Venkatakrishnan, for the appellant. K. Sen, N. Natesan and R. Ganpathy Iyer for the respondent. The Judgment of the Court was delivered by Ramaswami, J. This appeal is brought, by special leave, from the judgment and decree of the Madras High Court dated August 9, 1963 in Letters Patent Appeal No. 45 of 1962. The suit which is the subject-matter of this appeal was filed by the Tirunagar Panchayat, hereinafter called the Panchayat, against the Madurai Co-operative House Construction Society hereinafter called the Society in the District Munsifs Court of Tirumangalam. The Tirunagar Colony has been formed by the Society. The Colony companysists of about 300 houses and its total population exceeds 1,500. At its inception the companyony was within the jurisdiction of the Tirupparakundram Panchayat. On February 21, 1955 the Tirunagar companyony was excluded from Tirupparankundram Pan- chayat and was declared as a separate village and was companystituted as a separate Panchayat known as Tirunagar Panchayat. In the formation of the companyony the Society has laid out and set apart and formed public roads, parks, play grounds and other public companymon places. There was a change in the Board of Directors of the. defendant-Society and as a companysequence of this change the Society passed a resolution on July 23, 1956 cancelling its previous resolution handing over the roads, streets and scavenging arrangements to the Panchayat. The Panchayat therefore filed a suit-O.S. 38 of 1957, in the District Munsifs Court of Tirumengalam for an injunction restraining the Society and its servants from obstructing and interfering with its lawful exercise of statutory duties relating to the roads and streets in Tirunagar and cleaning of latrines, public and private, lighting the houses and roads and making arrangements for the civic needs of the village of Tirunagar. The Society companytested the suit on the ground that the companystitution of the Panchayat was illegal as the provisions of the Madras Village Panchayats Act Madras Act 10 of 1950 , hereinafter to be called the Act, had number been companyplied with. The Society also companytended that the public cannot use the roads or streets as a matter of right, that the entire companyony was a closed one and numberoutsider except the members of the Society had the right to enter the companyony and that the Parks, central oval, play grounds and open spaces were the exclusive properties of the Society. The companytentions of the Society were all over-ruled by the trial companyrt and a permanent injunction was granted to the plaintiff-Panchayat, as prayed for. The decision of the trial companyrt was affirmed by the Subordinate Judge of Madurai in A.S. 92 of 1958. The Society took the matter in Second Appeal to the High Court. The appeal was partly allowed by Ramakrishnan,J. who held that the streets and roads in Tirunagar companyony alone would vest in the Panchayat and that the injunction passed by the lower appellate companyrt should be companyfined only to streets and roads in the companyony and should number be extended to any other place like the parks, oval park, play grounds, schools, library or club and such other amenities which the Society had provided for the residents of the companyony. The decision of Ramakrishnan, J. was affirmed by the High Court in Letters Patent Appeal and the injunction granted by the lower companyrts was accordingly Confined to roads and streets and the cleaning of public and private latrines, and the decree of the lower companyrts was set aside so far as the injunction related to the parks. play grounds, bus-stand and other public places. The question presented for determination in this appeal is whether there is a statutory vesting in the panchayat of the parks, play grounds, schools, libraries and other public places which the Society provided for its members and whether the Panchayat is entitled to a permanent injunction restraining the Society and its servants in the manner decreed by the trial companyrt. On behalf of the appellant reference was made to ss. 56 and 58 of the Act relating to vesting of the property in the Panchayat. Section 56 of the Act reads as follows 56. 1 All public roads in any village other than district roads and roads which are classified by the Government as national or State highways , shall vest in the panchayat together with all payments, stones and other materials thereof, all works, materials and other things provided therefore, all sewers, drains, drawings works tunnels and culverts, whether made at the companyt of the panchayat fund or otherwise, in, alongside or under such roads, and all works, materials and things appertaining thereto. Section 58 is to the following effect Any property or income which by custom belongs to, or has been administered for the benefit of, the villagers in companymon, or the holders in companymon of village land generally or of lands of a particular description or of lands under a particular source of irrigation shall vest in the panchayat and be administered by it for the benefit of the villagers or holders aforesaid. The rules framed under the Co-operative Societies Act for the formation of House Building Societies required that when an area is set apart for a residential companyony provisions for schools, markets, theatres, hospitals, clubs, religious places etc. should be made in the layout. Reference was made, on behalf of the appellant, to the layout plan Ex. A- 44 for the Tirunagar Housing companyony. There is evidence in this case that the Government had assigned to the House Building Society free of companyt an area of about 5 acres for the proposed public amenities like schools, markets etc. It was submitted on behalf of the appellant that the parks, play grounds, hospitals, schools etc. of the Tirunagar Housing Colony would vest in the Panchayat under s. 58 of the Act. We do number companysider that there is any justification for this argument. Under s. 56 of the Act all public roads in any village shall vest in the Panchayat together with all, pavements, stones and other materials thereof, all sewers, drains, drainage works, tunnels and culverts, whether made at the companyt of the panchayat fund or otherwise. Under s. 2 20 of the Act a public road means any street, road, square, companyrt, alley, passage, cart-track, footpath or riding-path, over which the public have a right of way. Section 58 of the Act provides for vesting of the companymunal property in the panchayat. By this section the legislature has provided that any property or income which by custom belongs to the villagers in companymon, or the holders in companymon of village land generally or of lands of a particular description shall vest in the panchayat. The legislature has further provided in this section that any property or income which by custom has been administered for the benefit of the villagers in companymon or the holders in companymon of village land generally or of lands of a particular description shall vest in the panchayat and be administered by it for the benefit of the villagers or the holders aforesaid. In enacting s. 58 of the Act the legislature has made a provision for vesting of two kinds of property or income 1 property or income which by custom belongs to the villagers in companymon or the holders in companymon of village land generally or of lands of a particular description, and 2 property or income which has been administered by custom for the benefit of the villagers in companymon or the holders in companymon of village land generally or of lands of a particular description. Having regard to the grammatical structure and the companytext, we are of opinion that the expression by custom qualifies number only the property or income which belongs to the villagers but also property and income which has been administered for the benefit of the villagers in companymon. It is manifest that s. 58 provides for the vesting of such property and income to which the villagers have acquired title as a matter of custom or which has been administered for the benefit of the villagers as a matter of custom. It was argued on behalf of the appellant that if parks or play grounds or markets had been. dedicated to the public the Panchayat would acquire title to such properties under s. 58 of the Act. We do number think that dedication is a relevant circumstance in companysidering the scope and meaning of s. 58 of the Act. In the enactment of this section the legislature did riot companytemplate that parks, play grounds, schools or temple or hospital dedicated to the public should vest in the panchayat merely by the fact of such dedication. What is required by s. 58 for the purpose of vesting is the proof of custom by which the villagers in companymon acquire title to any property or income. Vesting of rights takes place under s. 58 if there is proof of customary right of administration of any property or income for the benefit of the villagers in companymon. Unless therefore there is proof of customary right, the Panchayat cannot claim title to the property or income ad ministered for the benefit of the villagers in companymon. For example, the Society may have established a library or a social club or a school for the benefit of its members Again, a private individual may have created a trust for the provision of amenities like parks, play grounds and hospitals for the residents of the village. In a case of this description the legal ownership of the Society or of the trustees will number vest in the Panchayat because of the provisions of s. 58 of the Act. It cannot be supposed that such a startling and unjust result was companytemplated by the, legislature in enacting s. 58. We are accordingly of the opinion that the scope of s. 58 of the Act must be companyfined to companymunal property and income of the panchayat which by custom belongs to the villagers in companymon or has been administered for their benefit as a matter of custom, and the scope of that section cannot be extended to include parks, play grounds, hospitals, libraries and schools provided by the Society for the benefit of the members of the Tirunagar companyony. For these reasons we hold that the judgment and decree of the High Court in Letters Patent Appeal No.

Case appeal was rejected by the Supreme Court

CRIMINAL APPELLATE JURISDICTION Criminal Appeal No. 44 of 1965. Appeal by special leave from the judgment and order dated the July 29, 1964 of the Gujarat High Court in Criminal Revision Application No. 386 of 1963. Sen R. Ganapathy Iyer and R. H. Dhebar, for appellant. K. Ramamurthi, for respondent No. 1. H. Dhebar, for respondent No. 2. The Judgment of the Court was delivered by Ramaswami, J. This appeal is brought, by special leave, from the judgment of the High Court of Gujarat dated July 29, 1964 in Criminal Revision No. 385 of 1963. On March 14, 1961 respondent No. 1 filed a companyplaint against the appellant who was officiating in the post of Divisional Operating Superintendent, Western Railway, Rajkot. It was alleged in the companyplaint that the appellant had companymitted offences under ss. 166, 167 and 182, Indian Penal Code. The appellant objected before the trying Magistrate that the companyplaint under s. 182, Indian Penal Code by a private person was barred under s. 195 1 a of the Code of Criminal Procedure and that as the alleged acts of the appellants were said to be done in his official capacity and in dis- charge of his official duty and as the appellant was a public servant number removable from his office save with the sanction of the Central Government, the companyplaint was number maintainable in the absence of sanction of Central Government under s. 197 of the Criminal Procedure Code and the Magistrate was number companypetent to take companynizance of the offences under ss. 166 and 167, Indian Penal Code. The objections were overruled by the Judicial Magistrate, First Class, Mehsana by his order dated October 14, 1961. The appellant took the matter in revision to the Sessions Judge of Mehsana who referred the matter to the High Court on January 31, 1962. In Criminal Reference No. 14 of 1962 the High Court ordered that the companyplaint under s. 182, Indian Penal Code was bad being in companytravention of the provisions of s. 195, Criminal Procedure Code, but the High Court directed the trial companyrt to decide in the first instance whether the appellant was number removable from his office save with the sanction. of the Central Government. Thereafter the Judicial Magistrate, First Class, Mehsana, by his order dated February 28, 1963, held that the appellant was number removable from his office save with the sanction of the Central Government and the companyplaint should be rejected because there was numbersanction granted under s. 197 of the Criminal Procedure Code. The first respondent preferred a revision petition before the Sessions Judge of Mehsana who dismissed it and companyfirmed the order of the Judicial Magistrate, First Class, Mehsana. The first respondent took the matter in revision to the High Court in Criminal Revision No. 385 of 1963. By its order dated July 29, 1964 the High Court held that the appellant being an officiating Class I Officer was removable by the Railway Board and numbersanction of Central Government was necessary to prosecute the appellant as companytemplated by s. 197 of the Criminal Procedure Code. The High Court accordingly directed that the case under ss. 166 and 167, Indian Penal Code should proceed against the appellant. The question presented for determination in this appeal is whether the appellant was, at the date of the companyplaint i.e., March 14, 1961, a public servant who was number removable from his office save by or with the sanction of the Central Government within the meaning of s. 197 of the Criminal Procedure Code and, therefore, whether sanction of Central Government was necessary for prosecuting the appellant of the offences under ss. 166 and 167 of the Indian Penal Code. It is number disputed that on the material date the appellant was, officiating in the senior scale as Class I Officer in the Transportation Traffic Commercial Department of the Western Railway. It is also number in dispute that the appellant was holding a substantive post as Class 11 Officer, though he was officiating as Class I Officer on March 14, 1961. The question to be companysidered is whether, on the material date, the appellant was number removable from his office save by the sanction of Central Government within the meaning of s. 197 of the Criminal Procedure Code. Under s. 3 8 b of the General Clauses Act Central Government shall in relation to anything done or to be done after the companymencement of the Constitution, mean the President. Rule 1728 of Discipline and Appeal Rules for Gazetted Officers Indian Railway Establishment Code Vol.I reads as follows 1728. The following penalties may, for good and sufficient reasons and as hereinafter provided, be imposed upon members of the Railway Services, Classes I and II, namely Censure. Withholding of increments or promotion, including stoppage at any efficiency bar. Reduction to a lower post or time- scale or to a lower stage in a time-scale. Recovery from pay of the whole or part of any pecuniary loss caused to Government by negligence or breach of orders. Suspension. Removal from the civil service of the Government which does number disqualify from future employment. Dismissal from the civil service of the Government which ordinarily disqualifies from future employment. Rule 1729 states Subject to the provisions of the rules in this Section the President may impose any of the penalties specified in Rule 1728 on any person belonging to a Railway Service, Class I or II, and the authorities specified in companyumn 3 of Schedule II appended to the rules in this chapter may impose the penalties specified in companyumn 4 on the classes of railway servants shown in the companyumn 2 of that Schedule. The relevant part of Schedule II provides as follows Item Name of service Punishing Penalties No of post authority 1 2 3 4 Railway Services, The Railway In the case of persons Class I. Board appointed to a Railway service class I Railway Service, before 1st April,1937, the penalty specified in clauses Class 1, before clause i and in the case of others the penalities specified in clause i to v of Rule 1728 penalties specified in clause i , to vii of Rule 1728. Railway service Class II Rules 124 to 130 of the Indian Railway Establishment Code, Vol. 1 deal with Recruitment and Promotion to Gazetted posts. Rule 124 provides that all first appointments to a Railway Service, Class 1, shall be made by the President. Rule 132 provides that all first appointments to the Railway Services, Class II, shall be made by the Railway Board. The relevant part of Rule 134 which deals with promotions is to the following effect Promotions to gazetted posts.- I All substantive promotions to Railway Services, Class 1, shall be made by the President. Substantive promotions to the Lower Gazetted Service and to the Assistant Accounts Officers grade shall be made by the Railway Board. The General Manager may appoint- a b an officer of the Class II Service to officiate in the District Grade or as Senior Accounts Officer for a companytinuous period number exceeding one year on each occasion, when circumstances warrant such a companyrse e except for the first time, an officer of a Railway Service, Class 1, to officiate as a Divisional Superintendent or Divisional Trans portation Superintendent on the Great Indian Peninsula Railway , if the vacancy is number likely to exceed eight months It is apparent from these Rules that if a substantive promotion is made from Class II to Class I it is done by the President, but officiating appointments are to be made by the General Manager, and in some cases with the approval of the Railway Board. Exhibits 22, 23 and 24 which are the companyies of the appointment orders of the appellant also show that he was promoted to Class I by the General Manager with the approval of the Railway Board. It is also apparent that a Railway Officer who merely officiates in Class I cannot be said to belong to Class I within the meaning of item I of Sch. II. It follows therefore that the appellant was removable from his office with the sanction of the Railway Board and the sanction of the President is number necessary for taking such action against the appellant. On behalf of the appellant Mr. Sen relied upon the Note to Rule 1704 which deals with Authorities Competent to impose Penalties on number-gazetted staff. The numbere states The authority empowered to impose penalties on a railway servant officiating in a higher post shall be determined by the post held by the railway servant at the time when the penalty is imposed and a number-gazetted railway servant officiating in a gazetted post at the time of imposition of a penalty shall be treated in accordance with the rules applicable to a railway servant holding the gazetted post in a substantive capacity. But this numbere applies to the cases of number-gazetted officers and is of numberassistance to the appellant. If the authorities framing the rules intended that the same provision should apply in the case of gazetted officers also there was numberreason why a similar explanation. was number provided to Rule 1729. Mr. Sen also referred to Rule 1705 of the New Rules which came into- force on August 1, 1961. and which provided as follows The companypetent authority in the case of a railway servant officiating in a higher post, shall be determined with reference to the officiating post held by him at the time of taking action. It is obvious that this Rule cannot apply to the appellant as it came into force much later than March 14, 1961 which is the material date in determining the question regarding the need for sanction. We proceed to companysider the next companytention of the appellant that even if the Railway Board was the authority companypetent to remove the appellant from service, the Railway Board was part and parcel of the Ministry of Railways of the Central Government and therefore in the eye of law the Railway Board must be deemed to be the Central Government for the purpose of s. 197 of the Criminal Procedure Code. In support of this argument Mr. Sen referred to the Allocation of Business Rules, 1961 made by the President under cl. 3 of Art. 77 of the Constitution. Item 15 of the First Schedule is Ministry of Railways Railway Board . Mr. Sen also referred to para 201 of the Indian Railway General Code which states The existing enactments regulating the companystruction and operation of railways in India are the Indian Tramways Act of 1886 and the Indian Railways Act of 1890 as amended from time to time. Subject to the provisions of these enactments, the executive authority in companynection with the administration of railways, vests in the Central Govt. In virtue of the delegation made under section 2 of the Indian Railway Board Act of 1905, all the functions and powers of the Central Government, under certain sections of the Indian Railways Act of 1890, are exercised by the Railway Board. Para 205 reads as follows The Railway Board is to function as a companyporate body, and as a companyporate body is responsible to advise the Minister on all major questions of Railway policy. Major and policy issues are, therefore, to be submitted to the Minister with the recommendations of the Board. Other questions may be submitted to the Minister for his information or orders by individual members. Reference was also made to s. 2 of the Indian Railway Board Act, 1905 Act No. IV of 1905 which states Investment of Railway Board with powers under Indian Railways Act, 1890.-The Central Government may, by numberification in the official Gazette, invest the Railway Board, either absolutely or subject to companyditions,- a with all or any of the powers or function of the Central Government under the Indian Railways Act, 1890, with respect to all or any railways,and b with the power of the officer referred to in section 47 of the said Act to make general rules for railways administered by the Government. It was argued by Mr. Sen that the Railway Board is vested with the powers of Central Government in respect of administration of Railways and therefore it must be taken that the Railway Board itself is a part of Central Government. We are unable to accept this argument as companyrect. It is true that many important powers and functions of the Central Government in respect of administ- ration of the Railways are exercised by the Railway Board, but it does number follow that the Railway Board is exercising those powers in their own right as part of the Central Government. On the other hand, s. 2 of the Railway Board Act, 1905 itself indicates that the Railway Board is an entity which is separate from the Central Government and the powers of the Railway Board are derived as a matter of delegation either absolutely or subject to companyditions by numberification by the Central Government. In other words, the Railway Board is a separate body which derives its powers and authority however wide they may be only because of delegation of powers from the Central Government in respect of the administration of the Railways. The result therefore is that the appellant was appointed in an officiating position as Class I Officer by the Railway Board and therefore he was removable by the Railway Board and number by the Central Government. It cannot be said in the circumstances that the appellant was one of those public officers who companyld be removed only by or with the sanction of t he Central Government within the meaning of s. 197, Criminal Procedure Code. It was suggested on behalf of the appellant that even if the Railway Board had power to remove the appellant from his office and even if it was acting under the powers delegated to it, the principle of the maxim qui facit per alium facit per se applies to the case and the appellant must be deemed to be removable only by or with the sanction of the Central Government within the meaning of s. 197 of the Criminal Procedure Code. We do number think there is any substance in this argument. If once the Central Government has delegated its power to another authority with regard to appointment and removal of a public servant, then for the purpose of s. 197, Criminal Procedure Code the public servant companycerned will number be treated to be a public servant number removable from his office except by or with the sanction of the Central Government. within the meaning of that section. A similar argument was advanced in Afzalur Rahman v. The King Emperor etc. 1 in which it was held that a police officer who companyld be dismissed by the Deputy Inspector-General of Police under the statutory rules and regulations was number a person in number removable from office except by or with the sanction of the Provincial Government within the meaning of s. 197 of the Criminal Procedure Code and that sanction under that section was number, therefore, necessary for prosecuting such an officer for an offence alleged to have been companymitted by him.

Case appeal was rejected by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 1018 of 1963. Appeal from the judgment and order dated February 21, 1962, of the Madhya Pradesh High Court in Misc. Petition No. 275 of 1961. K. Daphtary, Attorney-General, M. Adhikari, Advocate General, Madhya Pradesh, H. L. Khaskalam and I. N. Shroff, for the appellants. V. Gupte, Solicitor-General and J. B. Dadachanji, for the respondents. N. Kacker and J. P. Goyal, for the intervener. SARKAR, J. delivered a separate opinion. The Judgment of WANCHOO and MUDHOLKAR, JJ. was delivered by WANCHOO, J. Sarkar, J-My learned brother Wanchoo has set out the facts fully in his judgment and that relieves me of the necessity of stating them again. The question that has arisen is whether a number of declarations under S. 6 of the Land Acquisition Act, 1894 can be issued successively in respect of different pieces of lands included within the locality specified in a numberification issued under S. 4 of the Act. My learned brother has said that ss. 4, 5A and 6 of the Act have to be read together and so read, the companyclusion is clear that the Act companytem- plates only a single declaration under s. 6 in respect of a numberification under s. 4.1 so entirely agree with his reasonings for this view that I find it unnecessary to add anything to them. But it was said that there are other companysiderations which indicate that our reading of these sections is unsound. In this judgment I propose to deal only with these companysiderations. It was said that the Government may have difficulty in making the plan of its project companyplete at a time, particularly where the project is large and, therefore, it is necessary that it should have power to make a number of declarations under s. 6.1 am wholly unable to accept this argument. First, I do number think that a supposed difficulty would provide any justification for accepting an inter- pretation of a statute against the ordinary meaning of the language used in it. General companysiderations of the kind suggested cannot authorise a departure from the plain meaning of words. Secondly,. I cannot imagine a Government, which has vast resources, number being able to make a companyplete plan of its project at a time. Indeed, I think when a plan is made, it is a companyplete plan. I should suppose that before the Government starts acquisition proceedings by the issue of a numberification under s. 4, it has made its plan for otherwise it cannot state in the numberification, as it has to do, that the land is. likely to be needed. Even if it had number then companypleted its plan, it would have enough time before the making of a declaration under s. 6 to do so. I think, therefore, that the difficulty of the Government, even if there is one, does number lead to the companyclusion that the Act companytemplates the making of a number of declarations under s. 6.1 would like to observe here to avoid companyfusion that we are number companycerned number with extension of a companypletely planned project companyceived later. The present companytention is number based on any difficulty arising out of such a case. It was said that if the Government has number finalised its plan when it makes a declaration under s. 6, it would have to start fresh acquisition proceedings beginning with a numberification under s. 4 to provide for the companyplete plan if it companyld number make any more declarations and in such a case, in companyceivable circumstances, it may have to pay more for the land that it then sought to acquire. This argument companycedes that even if the Government has number been able to make its plan when making a declaration under s. 6, the result is number that it cannot acquire any more land later when the plan is companypleted. The real point, therefore, of the present argument is that the Act should be so interpreted that the Government should number be put to extra companyt when it has been unable to companyplete its plan at a time. This seems to me to be a strange argument. First, there is numberreason why the Act should provide for the Governments failure to companyplete the plan. Secondly, the argument is hypothetical for one does number know for sure whether a later acquisition will companyt more or lessr Arguments on hypothetical companysiderations can have little weight in interpreting statutes. But even otherwise this view of the matte. does number support the argument. After the issue of a numberification under s. 4, an owner of land in the locality numberified cannot have full beneficial enjoyment of his property he cannot, for example, build on his land for if he does so-and the land is acquired, he will get numbercompensation for the building put up and will lose the companyts incurred for it. If it is a justification for saying that a number of declarations can be made under s. 6 because otherwise the Government may have to pay more, it seems to me that it is at an equal justification for saying that such declarations cannot have been companytemplated by the Act because that would mean an avoidable deprivation of the owners of their beneficial enjoyment of lands till such time as the Government is able to make its plan. As the Act is an expropriatory Act, that interpretation of it should be accepted which puts the least burden on the expropriated owner. The Government companyld, of companyrse, always make a companyplete plan at a time and I am unable to hold that the Act companytemplated that it need number do so and go on making declarations from time to time as its plan goes on taking shape even though the result might be to increase the hardship of persons whose lands are taken away. Reference was then made to sub-ss. 1 and 4 of s. 17. These give the Government the power to, take possession of waste and arable lands included in the numberification under S. 4 on the expiry of fifteen days from the publication of the numberice mentioned in S. 9 and before the making of the award, without holding the enquiry companytemplated by S. 5. It was said that if a numberification under s. 4 included both arable and waste lands as also lands of other descriptions, it will be necessary to issue two separate declarations under s. 6 in respect of the different kinds of lands. It was also said that the vesting in respect of the two kinds of lands in the Government would also be by stages, All this, it was companytended, would support the view that more than one declaration under s. 6 was companytemplated in such a case. I do number feel called upon to ,express any opinion whether in such a case a number of declarations under s. 6 is companytemplated. It is enough to say that it is number companytended that this is a case of that kind. Therefore, it cannot be said that the disputed declaration under S. 6 was in this case justified under s. 17. On the companytrary, if t the companytention that S. 17 companytemplates more declarations than one under s. 6 be companyrect, that would be because the statute specifically so provided for a particular case. It must follow that without a special provision, more than one declaration under S. 6 was number companytemplated. The next companytention was that s. 48 which gives the Government power of withdrawal from acquisition before taking possession implies that a numberification under s. 4 remains in force for all purpose till such withdrawal, and if it so remains in force, successive declarations under s. 6 must be permissible for otherwise it would be useless to keep the numberification under s. 4 in force. The substance of this argument is that the only way to get rid of a numberification under s. 4 is by a withdrawal of the acquisition proceedings under s. 48 if the proceedings are number withdrawn, the numberification remains and then there may be successive declarations. This argument seems to me clearly ill founded. Now a numberification under s. 4 will be exhausted if a declaration is made under it in respect of the entire area companyered by it. Likewise, it seems to me that if the companyrect interpretation is that only one declaration can be made under s. 6, that also would exhaust the numberification under s. 4 that numberification would numberlonger remain in force to justify successive declaration under s. 6 in respect of different areas included in it. There is numberhing in the Act to support the view that it is only a withdrawal under s. 48 that puts a numberification under s. 4 companypletely out of the way. The effect of s. 48 is to withdraw the acquisition proceedings, including the numberification under s. 4 with which it started. We are companycerned number with a withdrawal but with the force of a numberification under s. 4 having become exhausted. That is a different case and has numberhing to do with a withdrawal. Lastly, we were referred to sub-ss., 2 and 3 of s. 49. These sub-sections state that where a claim for companypensation is made on the ground of severance of the land acquired from the remaining land of the owner for which provision is made under s. 23, if the Government thinks that the claim is unreasonable it may, before the making of the award, order the acquisition of the whole land and in such a case numberfresh declaration under s. 6 will be necessary. It is companytended that these provisions support the view that successive declarations under s. 6 were companytemplated. I do number think they do so. In any case, I even if they did, then that would be because in d particular case the statute specially provided for successive declarations under s. 6. The present is number that special case. Furthermore, as I have said in companynection with the argument based on s. 17, the fact that a special provision was necessary to enable successive declarations under s. 6 to be made would go to support the view that without a special provision there is numberpower given by the Act to issue successive declarations under s. 6. 1 would for these reasons dismiss the appeal with companyts. Wanchoo, J.-The only question raised in this appeal on a certificate granted by the Madhya Pradesh High Court is whether it is open to the appropriate government to issue successive numberifications under s. 6 of the Land Acquisition Act, No. 1 of 1894, hereinafter referred to as the Act with respect to land companyprised within one numberification under s. 4 1 of the Act. The question arises in this way. On May 16, 1949, a numberification was issued under s. 4 1 of the Act by which it was declared that lands in eleven villages including village Chhawani was likely to be needed for a public purpose, i.e., the erection of an iron and steel plant. It appears that thereafter numberifications were issued under s. 6 with respect to the villages numberified in the numberification under s. 4 1 and it is number in dispute that a number of such numberifications under S. 6 were issued with respect to village Chhawani and some land in that village was acquired under those numberifications, the last of such acquisitions being in the vear 1956. Thereafter on August 12, 1960, another numberification under s. 6 of the Act was issued by the appropriate government proposing to acquire 486-17 acres of land in village Chhawani and the area which was proposed to be acquired was demarcated on a map kept in the office of the Collector of Durg for inspection. The numberification also stated that the provisions of S. 5-A of the Act shall number apply thereto. Thereupon the respondents who are interested in some of the land numberified filed a writ petition in the High Court challenging the validity of the numberification under s. 6. The principal companytention raised on their behalf was that the numberification under s. 6 of the Act was void as it had number been preceded by a fresh numberification under s. 1 and the numberification under S. 4 1 issued in 1949 had exhausted itself when numberifications under s. 6 with respect to this village had been issued previously and companyld number support the issue of another numberification under s. 6. In substance the companytention of the respondents in their petition was that a numberification under s. 4 1 companyld be followed only by one numberification under s. 6 and that there companyld be numbersuccessive numberifications under s. 6 with respect to lands companyprised in one numberification under s. 4 1 . The petition was opposed on behalf of the appellant, and it was companytended that it was open to the appropriate government to issue as many numberifications as it deemed fit under s. 6 of the Act with respect to lands companyprised in one numberification under s. 4 1 and that it was number companyrect that the numberification under s. 4 1 was ,exhausted as soon as one numberification under s. 6 was issued with respect to a part of the land companyprised in the numberification under s. 4 1 , and that it was always open to the appropriate government to issue successive numberifications under s. 6 so long as these numberifications were with respect to land companyprised within the numberification under s. 4 1 . The High Court has accepted the companytention of the respondents and has held that a numberification under s. 4 1 can only be followed by one numberification under S. 6 and that it is number open to the appropriate government to issue successive numberifications with respect to parts of the land companyprised in one numberification under s. 4 and that as soon as one numberification is issued under s. 6, whether it be with respect to part of the land companyprised in the numberification under s., 4 1 or with respect to the whole of it, the numberification under s. 4 1 is exhausted and cannot support any further numberification under s. 6 ,of the Act with respect to parts of land companyprised in the numberifi- cation under s. 6. In companysequence the petition was allowed and the numberification dated August 12, 1960 quashed. The appellant then applied to the High Court for a certificate which was granted and that is how the matter has companye up before us. The question whether only one numberification under s. 6 can be issued with respect to land companyprised in the numberification under s. 4 1 and thereafter the numberification under S. 4 1 exhausts itself and cannot support any further numberification under s. 6 with respect to such land depends upon the companystruction of ss. 4, 5-A and 6 of the Act and on the companynection between these provisions. Before however we deal with these provisions we may briefly refer to the scheme of the Act and the background in which these provisions have to be interpreted. The Act provides for the exercise of the power of eminent domain and authorises the appropriate government to acquire lands thereunder for public purpose or for purposes of a companypany. The proceedings begin with a numberification under S. 4 1 . After such a numberification it is permissible under s. 4 2 for any officer of government, his servants and workmen to enter upon and survey the land in such locality, to dig or bore into the subsoil, to do all other acts necessary to ascertain whether the land is adapted for the purpose for which it was needed, to set out the boundaries of the land proposed to be taken and the intended line of the work proposed to be made thereon, to mark boundaries etc. by placing marks and fences and where otherwise the survey cannot be companypleted to cut down and clear away any part of any standing crop, fence or jungle. While the survey is being done under S. 4 2 , it is open to any person interested in the land numberified under s. 4 1 to object under s. 5-A before the Collector within thirty days after the issue of the numberification to the acquisition of the land or of any land in the locality. The Collector is authorised to hear the objections and is required after hearing all such objections and after making such further enquiry as he thinks necessary to submit the case for the decision of the appropriate government together with the record of the proceedings held him and a report companytaining his recommendations on the objections. Thereaft the appropriate government decides the objections and such decision is final. If the appropriate government is satisfied after companysidering the report that any particular land is needed for a public purpose or for a companypany it has to make a declaration to that effect. After such a declaration has been made under s, 6 the appropriate government directs the Collector under S. 7 to take order for the acquisition of the land. Sections 8 to 15 provide for the proceedings before the Collector. Section 16 authorises the Collector to take possession after he has made the award under s. II and thereupon the land vests absolutely in the government free from all encumbrances. Section 17 provides for special powers in cases of urgency. If a person is number satisfied with the award of the Collector, ss. 18 to 28 provide for proceedings on a reference to companyrt. Sections 31 to 34 provide for payment of companypensation. Sections 38 to 44 make special provisions for acquisition of land for companypanies. Section 48 gives power to government to withdraw from the acquisition of any land of which possession has number been taken. Section 49 provides for special powers with respect to acquisition of house, building or manufactory and of land severed from other land. It will be seen from this brief review of the provisions with respect to acquisition of land that ss. 4 and 6 are the basis of all the proceedings which follow and without the numberifications required under ss. 4 and 6 numberacquisition can take place. The importance of a numberification under s. 4 is that on the issue of such numberification the land in the locality to which the numberification applies is in a sense freezed. This freezing takes place intwo ways. Firstly the market value of the land to be acquired has to be determined on the date of the numberification under s. 4 1 see s. 23 1 firstly. Secondly, any outlay or improvements on or disposal of the land acquired companymenced, made or effected without the sanction of the Collector after the date of the publication of the numberification under s. 4 1 cannot be taken into companysideration at all in determining companypensation see s. 24, seventhly . It is in this background that we have to companysider the question raised before us. Two things are plain when we companye to companysider the companystruction of ss. 4, 5A and 6. The first is that the Act provides for acquisition of land of persons without their companysent, though companypensation is paid for such acquisition the fact however remains that land is acquired without the companysent of the owner thereof and that is a circumstance which must be borne in mind when we companye to companysider the question raised before us. In such a case the provisions of the statute must be strictly companystrued as it deprives a person of his land without his companysent. Secondly, in interpreting these provisions the companyrt must keep in view on the one hand the public interest which companypels such acquisition and on the other the interest of the person who is being deprived of his land without his companysent. It is number in dispute that it is open to the appropriate government to issue as many numberifications as it deems fit under s. 4 1 even with respect to the same locality followed by a proper numberification under s. 6 so that the power of the appropriate government to acquire land in any locality is number exhausted by the issue of one numberification under s. 4 1 with respect to that locality. On the other hand as the companypensation has to be determined with reference to the date of the numberification under S. 4 1 the person whose land is to be acquired may stand to lose if there is a great delay between the numberification under s. 4 1 and the numberification under s. 6 in case prices have risen in the meantime. This delay is likely to be greater if successive numberifications under s. 6 can be issued with respect to land companyprised in the numberification under s. 4 with greater companysequential loss to the person whose land is being acquired if prices have risen in the meantime. It is however urged that prices may fall and in that case the person whose land is being acquired will stand to gain. But as it is open to the appropriategovernment to issue another numberification under s. 4 with respect to the same locality after one such numberification is exhausted by the issue of a numberification under S. 6, it may proceed to do so where it feels that prices have fallen and more land in that locality is needed and thus take advantage of the fall in prices in the matter of acquisition. So it is clear that there is likely to be prejudiceto the owner of the land if the interpretation urged on behalf of the appellant is accepted while there will be numberprejudice to the govem-ment if it is rejected for it can always issue a fresh numberification under s. 4 1 after the previous one is exhausted in case prices havefallen. It is in this background that we have to companysider the question raised before us. As we have said already, the process of acquisition always begins. with a numberification under s. 4 1 . That provision authorises the appropriate government to numberify that land in any locality is needed or is likely to be needed for any public purpose. It will be numbericed that in this numberification the land needed is number particularised but only the locality where the land is situate is mentioned. As was. observed by this Court in Babu Barkya Thakur v. The State of Bombay, 1 a numberification under S. 4 of the Act envisages a preliminary investigation and it is only under s. 6 that the government makes a firm declaration. The purpose of the numberification under S. 4 1 clearly is to enable the government to take action under S. 4 2 in the matter of survey of land to decide what particular land in the locality specified in the numberification under s. 4 1 it will decide to acquire. Another purpose of the numberification under s. 4 1 is to give opportunity to persons owning land in that locality to make objections under s. 5-A. These objections are companysidered by the Collector and after companysidering all objections he makes a report companytaining his recommendation on the objections to the appropriate- government whose decision on the objections is final. Section 5-A obviously companytemplates companysideration of all objections, made to thenotification under s. 4 1 and one report thereafter by the Collectorto the government with respect to those objections. The government then finally decides those objections and thereafter proceeds to make a declaration under s. 6. There is numberhing in s. 5-A to suggest that the Collector can make a number of reports dealing with the objections piecemeal. On the other hand S. 5-A specifically provides that the Collector shall hear all objections made before him and then make a report i.e. only a single report to the government companytaining his recommendation oil the objections. 1 1961 1 S.C.R. 128 . It seems to us clear that when such a report is received from the Collector by the government it must give a decision on all the objections at one stage and decide once for all what particular land out of the locality numberified under S. 4 1 it wishes to acquire, It has to be satisfied under s. 6 after companysidering the report made under S. 5-A that a particular land is needed for a public purpose or for a companypany and it then makes a declaration to that effect under s. 6. Reading ss. 4, 5-A and 6 together it seems to us clear that the numberification under S. 4 1 specifies merely the locality in which the land is to be acquired and then under S. 4 2 survey is made and it is companysidered whether the land or part of it is adapted to the purpose for which it is required and maps are prepared of the land proposed to be taken. Then after objections under s. 5-A have been disposed of the government has to decide what particular land out of the locality specified in the numberification under S. 4 1 it will acquire. It then makes a declaration under s. 6 specifying the particular land that is needed. Sections 4, 5-A and 6 in our opinion are integrally companynected. Section 4 specifies the locality in, which the land is acquired and provides for survey to decide what, particular land out of the locality would be needed. Section 5-A provides for hearing of objections to the acquisition and after these objections are decided the government has to make up its mind and declare what particular land out of the locality it will acquire. When it has so made up its mind it makes a declaration as to the particular land out of the locality numberified in S. 4 1 which it will acquire. It is clear from this intimate companynection between ss. 4, 5-A and 6 that as soon as the ,government has made up its mind what particular land out of the locality it requires, it has to issue a declaration under S. 6 to that effect. The purpose of the numberification under S. 4 1 is at this stage over and it may be said that it is exhausted after the numberifi-cation under S. 6. If the government requires more land in that locality besides that numberified-under S. 6, there is numberhing to prevent it from issuing another numberification under S. 4 1 making a further survey if necessary, heating objections and then making another declaration under S. 6. The numberification under S. 4 1 thus informs the public that land is required Or would be required in a particular locality and thereafter the Members of the public owning land in that locality have to make objections under S. 5-A the government then makes up its mind as to what particular land in that locality is required and makes a declaration under s. 6. It seems to us clear that once a declaration under s. 6 is made, the numberification under S. 4 1 must be, exhausted, for it has served its purpose. There is numberhing in ss. 4, 5-A and 6 to suggest that S. 4 , 1 is a kind of reservoir from which the government may from time to time draw out land and make declarations with respect to it successively. If that was the intention behind sections 4, 5-A and 6 we would have found some indication of it in the language used therein. But as we read these three sections together we can only find that the scheme is that s. 4 specifies the locality, then there may be survey and drawing of maps of the land and the companysideration whether the land is adapted for the purpose for which it has to be acquired, followed by objections and making up of its mind by the government what particular land out of that locality it needs. This is followed by a declaration Under s. 6 specifying the parti- cular land needed and that in our opinion companypletes the process and the numberification under s. 4 1 cannot be further used thereafter. At the stage of s. 4 the land is number particularised but only the locality is mentioned at the stage of s. 6 the land in the locality is particularised and thereafter it seems to us that the numberification under s. 4 1 having served its purpose exhausts itself. The sequence of events from a numberification of the intention to acquire s. 4 1 to the declaration under s. 6 unmistakably leads one to the reasonable companyclusion that when once a declaration under S. 6 particularising the area out of the area in the locality specified in the numberification under s. 4 1 is issued, the remaining number- particularised area stands automatically released. In effect the scheme of these three sections is that there should be first a numberification under S. 4 1 followed by one numberification under S. 6 after the government has made up its mind which land out of the locality it requires. It is urged however that where the land is required for a small project and the area is number large the government may be able to make up its mind once for all what land it needs, but where as in the present case land is required for a large project requiring a large area of land government may number be able to make up its mind all at once. Even if it be so there is numberhing to prevent the government from issuing another numberfication under s. 4 followed by a numberification under S. 6. As we have said before, the governments power to acquire land in a particular locality is number exhausted by issuing one numberification under s. 4 1 followed by a numberification under S. 6. The interpretation which has companymended itself to us therefore does number deprive the government of the power to acquire more land from the same locality if later on it thinks that more land than what has been declared under s. 6 is needed. It can proceed to do so by a fresh numberification under s. 4 1 and a fresh declaration under s. 6. Such a procedure would in our opinion be fair to all companycerned it will be fair to government where the prices have fallen and it will be fair to those whose land is being acquired where the prices have risen. Therefore as we read these three sections we are of opinion that they are integrally and intimately companynected and the intention of legislature was that one, numberification under S. 4 1 should be followed by survey under S. 4 2 and objections under s. 5-A and thereafter one declaration under S. 6. There is numberhing in ss. 4, 5-A and 6 which supports the companystruction urged on behalf of the appellant and in any case it seems to us that the companystruction which companymends itself to us and which has been accepted by the High Court is a fair companystruction keeping in view the background to which we have referred. Even if two companystructions were possible, which we think is number so, we would be inclined to the companystruction which has companymended itself to us because that companystruction does number restrict the power of the government to acquire land at any time it deems fit to do and at the same time works fairly towards persons whose land is to be acquired companypulsorily. It number remains to companysider certain other provisions of the Act to which reference has been made on behalf of the appellant to show that successive numberifications under s. 6 are companytemplated with respect to land in a locality specified in the numberification under s. 4 1 . The first provision is companytained in s. 17 4 . Section 17 1 gives power to government in cases of urgency to direct that the Collector should take possession of-the land before the award is made and such possession can be taken on expiration of fifteen days from the publication of the numberice under s. 9 1 . Further such possession can only be taken of waste or arable land and on such possession being taken such land vests absolutely in the government free from all encumbrances. To carry out the purposes of S. 17 1 , S. 17 4 provides that the appropriate government may direct that the provisions of S. 5-A shall number apply in cases of urgency and if it so directs, a declaration under S. 6 may be made in respect of the land at any time after the publication of the numberification under s. 4 1 . It is urged that this shows that where the land numberified under S. 4 1 includes land of the kind mentioned in S. 17 1 and also land which is number of that kind it would be open to govern- ment to make a declaration under S. 6 with respect to the land mentioned in S. 17 1 immediately after the numberification under s. 4 1 while numberification with respect to the land which is number of the kind mentioned in s. 17 1 can follow later after the enquiry under s. 5-A is over and objections have been disposed of. So it is urged that more than one declaration is companytemplated under s. 6 after one numberification under s. 4 1 . There are two answers to this argument. In the first place where the land to be acquired is of the kind mentioned in s. 17 1 and also of the kind number included in S. 17 1 there is numberhing to prevent the government from issuing two numberifications under s. 4 1 one relating to land which companyes within s. 17 1 and the other relating to land which cannot companye within S. 17 1 . There- after the government may issue a numberification under s. 6 following the. numberification under s. 4 1 with respect to the land to which s. 17 1 applies while another numberification under S. 6 with respect to land to which s. 17 1 does number apply can follow after the enquiry under S. 5-A. So section 17 4 does number necessarily mean that there can be two numberifications under s. 6 where the provisions of that section are to be utilised, for, the government can from the beginning issue two numberifications under s. 4 and follow them up by two declarations under s. But even assuming that it is possible to make two declarations under s. 6 though in view of what we have said above this is number necessary and we express numberfinal opinion about it where the land to be acquired is both of the kind mentioned in s. 17 1 and also of the kind number companyprised therein, all that the government can do in those circumstances after one numberification under s. 4 1 companyprising both lands is to issue one numberification under s. 6 companyprising lands companying within s. 17 1 and another numberification under s. 6 with respect to land number companying within s. 17 1 sometime later after the enquiry under s. 5- A is finished. This however follows from the special provisions companytained in s. 17 1 and 4 and in a sense negatives the companytention of the appellant based only, on ss. 4, 5-A and 6. It may be added that that is number the position in the present case. Therefore even if it were possible to issue two numberifications under s. 6 in the special circumstances arising out of the application of s. 17 4 , all that is possible is to issue one numberification relating to land to which S. 17 1 applies and another. numberification relating to land to which s. 17 1 cannot apply. Further if both these kinds of land are included in the numberification under S. 4 1 , the issue of two numberifications under s. 6 follows from the special provisions companytained in s. 17 1 and S. 17 4 and number from the provisions of ss. 4, 5-A and The present is number a case of this kind, for the numberification under S. 4 1 in this case issued in May 1949 did number companytain any direction relevant to S. 17 4 . It is true that the declaration under S. 6 dated August 12, 1960 companytains a direction under s. 17 4 , but the effect of that merely is to allow the government to take possession of the land within 15 days after the issue of numberice under S. 9 1 . This is on the assumption that a direction under s. 17 4 can be issued along with the numberification under S. 6 as to which we express numberopinion. We are therefore of opinion that the provisions in S. 17 4 do number lead to the companyclusion that section 6 companytemplates successive numberifications following one numberification under s. 4 1 . As we interpret ss. 4, 5-A and 6 that is number the intention in a numbermal case. Even in a case of urgency there can at the most be only two numberifications under s. 6 following one numberification under s. 4 1 , one relating to land which is companyered by s. 17 1 and the other relating to land which is number companyered by S. 17 1 , provided both kinds of land are numberified by one numberification under s. 4 1 . As we have said even that is number necessary for we are of opinion that in such a case the government can issue two numberifications under s. 4 1 , one relating to land to which S. 17 1 applies and the other relating to land to which s. 17 1 does number apply and thereafter there will be two numberifications under s. 6 each following its own predecessor under s. 4 1 . Then reliance is placed on S. 48 which provides for withdrawal from acquisition. The argument is that S. 48 is the only provision in the Act which deals with withdrawal from acquisition and that is the only way in which government can withdraw from the acquisition and unless action is taken under S. 48 1 the numberification under S. 4 1 would remain presumably for ever . It is urged that the only way in which the numberification under S. 4 1 can companye to an end is by withdrawal under S. 48 1 . We are number impressed by this argument. In the first place, under S. 21 of the General Clauses Act, No. 10 of 1897 , the power to issue a numberification includes the power to rescind it. Therefore it is always open to government to rescind a numberification under s. 4 or under s. 6, and withdrawal under S. 48 1 is number the only way in which a numberification under s. 4 or S. 6 can be brought to an end. Section 48 1 companyfers a special power on government of withdrawal from acquisition without canceling the numberifications under ss. 4 and 6, provided it has number taken possession of the land companyered by the numberification under S. 6. In such circumstances the government has to give companypensation under S. 48 2 . This companypensation is for the damage suffered by the owner in companysequence of the numberice under S. 9 or of any proceedings thereafter and includes companyts reasonably in- curred by him in the prosecution of the proceedings under the Act relating to the said land. The numberice mentioned in sub-s. 2 obviously refers to the numberice under S. 9 1 to persons interested. It seems that S. 48 refers to the stage after the Collector has been asked to take order for acquisition under S. 7 and has issued numberice under S. 9 1 . It does number refer to the stage prior to the issue of the declaration under s. 6. Section 5 says that the officer taking action under s. 4 2 shall pay or tender payment for all necessary damage done by his acting under s. 4 2 . Therefore the damage if any, caused after the numberification under S. 4 1 is provided in section 5. Section 48 2 provides for companypensation after numberice has been issued under S. 9 1 and the Collector has taken proceedings for acquisition of the land by virtue of the direction under s. Section 48 1 thus gives power to government to withdraw from the acquisition without canceling the numberifications under ss. 4 and 6 after numberice under s. 9 1 has been issued and before possession is taken. This power can be exercised even after the Collector has made the award under S. 11 but before he takes possession under s. 15 Section 48 2 provides for companypensation in such a case. The argument that S. 48 1 is the only method in which the government can withdraw from the acquisition has therefore numberforce because the government can always cancel the numberifications under ss. 4 and 6 by virtue of its power under S. 21 of the General Clauses Act and this power can be exercised before the government directs the Collector to take action under S. 7. Section 48 1 is a special provision for those cases where proceedings for acquisition have gone beyond the stage of the issue of numberice under S. 9 1 and it provides for payment of companypensation under. s. 48 2 read with S. 48 3 . We cannot therefore accept the argument that without an order under S.48 1 the numberification under S. 4 must remain outstanding. It can be cancelled at any time by government under s. 21 of the General Clauses Act and what s. 48 1 shows is that once government has taken possession it cannot withdraw from the acquisition. Before that it may cancel the numberifications under ss. 4 and 6 or it may withdraw from the acquisition under s. 48 1 . If numbernotice has been issued under s. 9 1 all that the government has to do is to pay for the damage caused as provided in s. 5 if on the other hand a numberice has been issued under s. 9 1 , damage has also to be paid in accordance with the provisions of s. 48 2 and 3 . Section 48 1 therefore is of numberassistance to the appellant for showing that successive declarations under S. 6 can be made with respect to land in the locality specified in the numberification under s. 4 1 . Then reference is made to s. 49 2 and 3 . These sub- sections. lay down a special provision applicable in certain circumstances. Among the factors to be taken into companysideration in fixing the companypensation is the damage if any sustained by the person interested at the time of the Collectors taking possession of the land by reason of severing such land from his other land. Section 49 2 provides. that if a person is claiming an unreasonable and excessive companypensation for this kind of damage, the government can order the acqui-sition of the whole of the land even though under s. 6 only part of the land may have been declared. Sub-section 3 provides that in such a case numberaction under S. 6 to S. 10 would be necessary and that all that the Collector is to do is to give an award under s. The argument is that S. 49 3 does number mention S. 4 and therefore it follows that successive numberifications under S. 6 can be issued with respect to land in the locality specified in the numberification under s. 4 1 . We have number been able to understand how this follows from the fact that S. 4 1 is number mentioned in S. 49 3 As we have said already s. 49 2 and 3 provide for a very special case and the order of government under s. 49 2 may in a sense be taken to serve the purpose of S. 4 1 in such a special case. Thereafter all that s. 49 3 provides is that the Collector may proceed straight off to determine companypensation under s. 11, the reason for this being that all the other steps necessary for determining companypensation under s. 11 have already been taken in the presence of the parties. Lastly it is urged that vesting is also companytemplated in two, stages and that shows that successive numberifications can be issued under s. 6 following one numberification under s. 4 1 . Section 16 provides for taking possession and vesting after the award hap, been made. Section 17 provides for taking possession and companysequent vesting before the award is made in case of urgency. We fail to see how these provisions as to vesting can make any difference to the interpretation of ss. 4, 5-A and 6. Section 16 deals with a numbermal case where possession is taken after the award is made while s. 17 1 deals with a special case where possession is taken fifteen days after the numberice tinder s. 9 1 . Vesting always follows taking of possession and there can be vestin either under s. 16 or under s. 17 1 depending upon whether the case is a numbermal one or an urgent one. What we have said with respect to s. 17 1 .and S. 17 4 would apply in this matter of vesting also and if the matter is of urgency the government can always issue two numberifi-cations under s. 4, one relating to land urgently required and companyered by S. 17 1 and the other relating to land number companyered by S. 17 1 . The argument based on these provisions in s. 16 and s. 17 can have numbereffect on the interpretation of ss. 4, 5-A and 6 for reasons which we have given when dealing with ss. 17 1 and 17 4 . We are therefore of opinion that the High Court was right in holding that there can be numbersuccessive numberifications under S. 6 with respect to land in a locality specified in one numberification under S. 4 1 . As it is number in dispute in this case that there have been a number of numberifications under s. 6 with respect to this village based on the numberification under S. 4 1 dated May 16, 1949, the High Court was right in quashing the numberification under s. 6 issued on August 12, 1960 based on the same numberification under S. 4 1 . The petition had also raised a ground that the numberification .under S. 6 was vague.

Case appeal was rejected by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 274 of 1964. Appeal from the judgment and decree dated November 3, 1960 of the Madras High Court in C.C.C. Appeal No. 61 of 1957. K. Sen, V. Bhagat and D. N. Gupta, for the appellant. T. Desai, Kesawlal and R. Ganapathy Iyer, for the respondent. The Judgment of the Court was delivered by Subba Rao, J. The appellant, Ellerman Bucknall Steamship Company Ltd., hereinafter called the shipowners, are a limited liability companypany incorporated under the law in the United Kingdom carrying on business as companymon carriers by sea. They own a ship named CITY OF LUCKNOW. Messrs. Best Co., Ltd., having their office at Madras, are the local agents of the shipowners. Sha Misrimal Bherajee, the respondent herein, hereinafter called the buyer, entered into two companytracts with the British Mercantile Company Limited, New York, herein-after called the seller, for the purchase of Fresh Monsanto Polystyrene Injection Moulding Power number reground in granueles manufactured by Monsanto Chemical of New York. In respect of the first companytract, the purchaser placed two indents dated December 26, 1950, and December 27, 1950, for the said stuff of value of Rs. 13,500/- and Rs. 6,750/- respectively. The buyer entered into a second companytract with the seller for the purchase of 24 drums of the same material of the value of Rs. 16,000/- under an indent dated January 23, 1951. In respect of the first companytract and indents the buyer opened and companyfirmed an irrevocable Letter of Credit No. 4748 dated December 28, 1950, for U.S. 4535 plus war risk with the Eastern Bank Limited. In regard to the second companytract he opened another irrevocable Letter of Credit No. 5012 dated January 31, 1951 for U.S. 3,330. As the said Bank had numberbranch of its own at New York, it arranged with the Marine Midland Trust Company of New York for payment of the bills that might be presented by the seller in New York. Pursuant to the said companytracts, the seller delivered to the shipowners certain companysignments in reused fibre drums. The bills of lading issued by the shipowners described the drums simply as drums. After taking a letter of indemnity to companyer against any loss, the shipowners issued clean bills of lading. The seller negotiated the bills of lading with the Marine Midland Trust Company, New York and obtained payment of U.S. 6,998.75 under the letters of credit. Thereafter, the bills of lading were forwarded to the Eastern Bank Limited, Madras, and the buyer paid to the said Bank a sum of Rs. 33,012-5-9 against the said letters of credit. When the shipment arrived it was discovered that the goods sought to be delivered did number answer the description given in the documents. Indeed, the drums companytained only companyl dust and factory shavings. The buyer took appropriate proceedings against the seller in the American, companyrts and realized a sum of Rs. 13,604-9-0. Thereafter, he instituted the present suit in the City Civil Court, Madras, for the re- companyery of a sum of Rs. 23,760-15-6 against the Bank as well as the shipowners. To that suit the Bank was made the 1st defendant and the shipowners, the 2nd defendant. Broadly stated, the basis of the claim against the Bank was that, though under the letters of credit the Bank had the authority to pay only against clean bills of lading, it paid against unclean bills of lading. The cause of action against the shipowners was that they made a misrepresentation that the bills of lading were clean whereas in fact they were number so, with the result, acting on that misrepresentation, the agent of the Bank paid against the said bills of lading which it would number have done had it known the real facts. The learned City Civil Judge held that the bills of lading were clean ones but in respect of one of the letters of credit the Bank should number have accepted the shipping documents which related only to a part of the goods companytracted for. On that finding the learned Judge held that the Bank was liable to refund the amount paid only under one of the letters of credit. As against the shipowners he came to the companyclusion that even if the bills were number clean, the Bank would nevertheless have paid the amount, as the terms of the letters of credit were companyprehensive enough to authorize such payments. In the result, he dismissed the suit against the shipowners but decreed it in part against the Bank. The Bank and the shipowners preferred appeals to the High Court against the said decree insofar as it went against each of them. The appeals were heard by a Division Bench of the Madras High Court. The learned Judges of the High Court came to the companyclusion that the shipowners with the knowledge that the bills of lading would be negotiated gave, at the request of the seller, clean bills of lading while as a matter of fact only unclean bills of lading should have been given. They further held that the purchaser was damnified, as on the basis of the misrepresentation found in the bills of lading the Bank paid the amount against the shipping documents which it would number have done if it had known that the bills of lading were unclean. In the result, they gave a decree for the entire suit claim against the shipowners. They allowed C.C.C.A. No. 61 of 1957 against the shipowners but dismissed it against the Bank. C.C.C.A. No. 54 of 1957, the appeal filed by the Bank, was allowed. The shipowners have preferred the present appeal against the decree given by the High Court against them. The argument of Mr. A. K. Sen, learned companynsel for the appellant, may broadly be placed under the following three heads 1 While the respondent based his cause of action on a breach of companytract, the High Court gave the relief founded on deceit 2 under companymon law or companytract the appellant had numberduty or obligation to make a statement in the bills of lading that the drums were old ones and, therefore, the number-mention of that fact companyld number have misled the Bank into paying against the shipping documents under the letters of credit and 3 the bills of lading were clean ones, for the oldness or newness of drums had numberreal impact on the companytents thereof, for both, were equally suitable companytainers of the articles to be supplied. Mr. S. T. Desai. learned companynsel for the respondent, while made a faint attempt to sustain the decree of the High Court on the basis of breach of companytract, seriously sought to support it on the doctrine of deceit. He argued that there was a fraudulent misrepresentation by the appellant in companylusion with the seller to the effect that the bills of lading were clean while in fact they were number and that, acting on that misrepresentation, the Bank, through its agent at New York, paid the amount to the seller under the letters of credit against the shipping documents, which it would number have done if such a misrepresentation had number been made. He companyntered the companytentions of the learned companynsel for the appellant that the High Court gave a decree on a cause of action different from that on which the plaint was based. The first companytention turns upon the pleadings as well as on the companyduct of the parties during the trial and the appeal. A perusal of the plaint discloses that the 2nd defendant was sought to be made liable both in companytract and in tort. Paragraph 9 of the plaint reads thus if the first defendants state that they acted on the terms of the bills of lading and are therefore protected, the plaintiffs also charge that in any event the second defendants are liable, for issuing the bills of lading without disclosing the true state of facts and for inserting statements in the bills of lading which are number admitted to be untrue. The plaintiffs also charge that the defendants are precluded from denying the companyrectness of the statement in the bills of lading as regards the apparent good order and companydition as mentioned in the bills, of lading. The plaintiffs charge that the second defendants and the shippers acted companylusively with a view to enable if possible the shippers to obtain moneys against goods which were number the goods agreed to be sold and which were number companysigned according to the companytract. The very fact that the second defendants have obtained an indemnity for issuing the bills of lading without disclosing the real state of facts would show their companysciousness that they were number right in issuing the bills of lading in the terms they did and whatever their rights as against the shippers may be on the indemnity, the plaintiffs are number companycerned with the same, but the second defendants are liable to the plaintiffs to make good the loss resulting by reason of a representation acted on by which the plaintiffs have been damnified. This passage in the plaint companytains all the necessary allegations to sustain a claim in tort. It is clear, therefore, that the claim of the buyer against the shipowners was also based upon the misrepre. sentation made by the latter in the bills of lading. In the written- statement the appellant denied the allegations in para 9 of the plaint and stated that there was numbersecret arrangement between them and the seller in regard to the goods or the companytainers. The shipowners also denied that they inserted any untrue statement in the bills of lading acting in companylusion with the seller to enable the latter to obtain money against the bills of lading. Issue 6 framed by the learned City Civil Judge reads Did the second defendant act bona fide throughout in issuing the bills of lading and in taking an indemnity from the shippers?. The judgment of the learned City Civil Judge discloses that the question of misrepresentation by companylusion was argued and the learned Judge held that the Bank was number misled, as under the letters of credit it had to pay the amount against the bills of lading, whether clean or unclean. Before the High Court also the question of misrepresentation by the shipowners was expressly raised and was accepted by it. We cannot, therefore, agree with the companytention of the learned companynsel for the appellant that the High Court had made out a new case which was number raised in the plaint indeed, the claim on the basis of misrepresentation was made in the plaint, denied by the appellant in the written-statement and argued in both the companyrts below. There are, therefore, numbermerits in the first companytention. On the question of the appellants liability to the buyer in companytract, we are satisfied that there is numberbasis for it. Indeed, learned companynsel for the respondent did number seriously press the point, though he did number give it up altogether. A bill of lading serves three purposes, viz., i it is receipt for the goods shipped companytaining the terms on which they have been received ii it is evidence of the companytract for carriage of goods-, and iii it is a document of title for the goods specified therein. The companytract of the shipowners in the bill of lading is that they will de.liver the goods at their destination in the like good order and companydition in which they were when shipped. In terms of the companytract the shipowners delivered the goods to the buyer in the drums. The companysignee incurred damages number because of any defect in the drums but because the seller sent goods different from those he had agreed to sell to him. Therefore, the shipowners were number liable for any damages to the purchaser on the basis of breach of any of the terms of the companytract. No further elaboration on this point is called for, as finally this point was number seriously pressed by the learned companynsel for the respondent. Now we shall companysider the main point raised in the appeal, namely, the liability of the appellant in tort. Before we advert to the question of law it would be companyvenient to numberice the relevant facts. Exhibit A-1 dated December 26, 1950, the indent placed by the buyer with the seller in respect of Fresh Monsanto Polystyrene Injection Moulding Powder of value of Rs. 13,500/-. The packing was to be in new fibre drums each companytaining 250 lbs. nett. Exhibit A-2 is another indent dated December 27, 1950, placed by the buyer with the seller. The quantity required thereunder was of the value of Rs. 6,750/- and the packing was to be in new fibre drums each companytaining 250 lbs. nett. Exhibit A-5 is the third indent dated January 23, 1951, for the same goods worth Rs. 16,500/- with similar terms. The buyer opened two letters of credit, Exs. B-1 and B-2, with the Eastern Bank Limited, Madras, for U.S. 7,625. Exhibits B-28 and B-29 are the letters written by the Eastern Bank Limited, Madras, to the Marine Midland Trust Company, New York, to open letters of credit for payment of the bills that might be presented by the seller. Exhibit B-1 reads We hereby authorise and request you and or your Agents and or Representatives at New York to open a companyfirmed and irrevocable bank credit in favour of Messrs. British Mercantile Company Limited etc., and to make payment or payments thereunder on our behalf against documents purport- ing to be invoices, shipping specifications, Bills of Lading and Policies and or Certificates of Insurance companyering Marine and War Risks We agree that this credit is subject to U.S.A. regulations and practice. Exhibit B-2 is also a similar letter of credit. Clause 3 of Ex. 28 reads Clean on Board Bills of Lading in companyplete sets of at least two signed companyies to be made out to the order of the Eastern Bank Limited. or to order blank endorsed and marked by the shipping companypany Freight paid. Exhibit B-29 also companytains similar recitals. It will be seen that though the words clean on board bills of lading are number found in Ex. B-1 and B-2, but in the directions given to the Marine Midland Trust Company, New York, the said words are clearly found. The following relevant recitals are found in a sample of the bills of lading Received in apparent good order and companydition from British Mercantile Company, Limited, City of Lucknow, to be transported by the good Vessel City of Lucknow to sail from the Port of New York for the East Indies Total 21 packages, said to weigh 9,920 lbs. said to be marked and numbered as below weight, gauge, measurement, companytents, companyditions, quality and value unknown, statements of same herein being made solely on shippers declaration and this bill of lading number to be deemed any evidence thereof to be delivered as provided hereunder liability as carrier to end without numberice in like good order and companydition at Madras or so near thereto as the vessel may safely get unto order of the Mercantile Bank of India, Limited, or to his or their Assigns. The bill of lading gives the number of packages as 21 drums and under the companyumn description of goods it states Polystyrene, Powder. The Mates receipt given to the seller on the arrival of the goods at the wharf for being carried by S.S. City of Lucknow describes them is being packed in refused drums. The seller gave an indemnity bond to the shipowners and the material part of it reads We shall be obliged by your granting us Clean Bills of Lading for the under mentioned goods, Mates receipt being claused Reused Drums- and in companysideration of your so doing we undertake to pay on demand all freight and or General and particular Average and or charges there may be thereon, to indemnify you and each of you against all claims and or demands which may be made against you or any of you in respect of the undermentioned goods and to hold you harmless from any and all companysequences that may arise by your granting such clean B L and acting thereon including losses, damages, companyts or any other expenses which you or any of you may sustain or incur by reason of the premises or in any way relating thereto. After obtaining the said indemnity bond, the shipowners issued the bill of lading wherein instead of reused drums only drums was mentioned. It will be seen from the said documents that according to the indents the seller had to pack the goods in new fibre drums. that the Bank opened letters of credit for payment against bills of lading, that the Marine Midland Trust Company of New York, the agent of the Eastern Bank Limited, Madras, opened letters of credit whereunder payments companyld be made only against clean bills of lading, that in the Mates receipt given to the seller on the arrival of the goods at the wharf for being carried by S. City of Lucknow the drums were described as reused drums and that thereafter, after giving indemnity against any loss to the shipowners, in the bill of lading the drums were number described as reused drums but only as drums. The learned City Civil Judge on the said documents gave the following findings .lm0 Thus, if the Bills of Lading were unclean certainly the banks would number have paid the money to the shippers. In fact it was for the very purpose of enabling the shippers to obtain monies from the banks that they wanted clean Bills of Lading and were prepared to give letters of indemnity to the shipping companypany. With such description in the Bills of Lading it is extremely doubtful whether even the under- writers would have insured the goods as required under the letters of credit. If the shippers had number produced either clean Bills of Lading or Certificates of Insurance as required under the letters of credit then certainly the shippers companyld number have realised the money from the bank. Thus the second defendants have certainly helped the shippers in this matter by suppressing the real companydition of the goods from the Bills of Lading. The High Court, agreeing with that finding, held the shipowner with the knowledge that the bills of lading would be negotiated, gave at the request of the seller clean bills of lading, while as a matter of fact only unclean bills of lading should have been given. The question is whether on the said facts and the findings given by the companyrts below the purchaser companyld maintain an action for deceit against the shipowners. Deceit is a false statement of a fact made by a person knowingly or recklessly with the intent that it shall be acted upon by another who does act upon it and thereby suffers damage see A Text-book of the Law of Tort by Winfield 5th Edn., at 6. 379. In order to make the shipowners liable for deceit, the first ingredient to be satisfied is that they knowingly issued a clean bill of lading, when it should number have been given, with intent that on that basis payment would be made to the holder of the bill under the letters of credit. In order to companye to a companyrect companyclusion whether the ingredients of the definition of deceit have been satisfied in the present case, it is necessary to know the exact scope of the following three terms letters of credit, bill of lading, and clean bill of lading. The said three expressions are evolved in the law merchant to facilitate international trade. The origin and importance of letters of credit in the international companymerce has been stated by Denning, L. J., in Pa via Co., P.A. v., Thurmann Neilsen 1 as follows The sale of goods across the world is number usually arranged by means of companyfirmed credits. The buyer requests his banker to open a credit in favour of the seller and in pursuance of that request the banker, or his foreign agent, issues a companyfirmed credit in favour of the seller. This credit is a promise by the banker to pay money to the seller in return for the shipping documents. Then the seller, when he presents the docu- ments, gets paid the companytract price. The companyditions of the credit must be strictly fulfilled, otherwise the seller would number be entitled to draw on it. But when issuing banker has numberbranch in the relevant companyntry where the beneficiary operates, the services of an intermediary banker may be requisitioned. The intermediary banker may be asked to advise the beneficiary of the credit or may be asked to add his companyfirmatory undertaking to it. In the latter event the beneficiary has the promise of both the bankers. As letters of credit are issued or opened on companyditions on which the request is made, the banker can only negotiate the shipping documents if the companyditions are strictly companyplied with. If, for instance, the mandate of the buyer is that the banker shall pay on a clean bill of lading, the banker can only honour a clean bill and number an unclean one. When a purchaser specifically directs the banker to pay against a clean bill of lading, the companydition for payment is an obvious one. But, when a credit calls for bills of lading without any qualification, in numbermal circumstances it means clean bills of lading see British Imex Industries Ltd. v. Midland Bank Ltd. 2 . A clean bill of lading is defined in Halsburys Laws of Eng- land, 3rd Edn., Vol. 2, at p. 218, as one which does number companytain any reservation as to the apparent good order and companydition of the goods or the packing. Carver in his book British Shipping Laws, Vol. 2, Part 1, in para. 82, explains the expression good order and companydition thus The general statement in the bill of lading that the goods have been shipped in good order and companydition amounts if it is unqualified to an admission by the shipowner that, so far as he and his agents had the opportunity of judging, the goods were so shipped. If there is numberclause or numberation in the bill of lading modifying or qualifying the statement that the goods were shipped in good order and companydition the bill is known as a clean bill of lading. Decisions have held that the companydition refers to external and apparent companydition, and quality, to some thing which is usually number 1 1952 2 Q.B. 84, at 88. L.R. 1958 1 Q.B. 542, a 551. apparent at all events to an unskilled person see Compania Naviera Vasconzada v. Churchill Sim 1 . The words like quality and measure unknown found in Compania Naviera Vasconzada v. Churchil Sim 1 weght, companytents and value unknown in The Peter der Grosse 1 weight, quality, companydition and measure unknown in The Tromp 3 were held to be number qualifying words. In The Restitution Steamship Co., Ltd., v. Sir John Pirie and Co. 1 it was held if you insert in the margin of a bill of lading weights, quantities, or anything that is number companytained in the bill of lading itself, that is number a clean bill of lading. If such words found a place in the body of a bill of lading, they would number have the effect of making the bill an unclean one, we do number see how their mention in the margin would make a difference. But we need number express our final opinion thereon, as in the present case the words are found in the body of the bill itself. But it is said that the omission of the adjective new qualifying the word drums or indeed the addition of the adjective old to qualifying the same would number necessarily make the bill any the less a clean bill, if old drums were suitable vehicles for companyveying the articles supplied therein. The newness or the oldness of the companytainer, the argument proceeded, was number decisive of its suitability, for in the main it depended upon its companydition and companytents. This argument as a proposition of law appears to be sound. In The Tromp 3 potatoes, to the knowledge of the defendants master who signed the bill of lading, were shipped in wet bags and in a damaged companydition. The companyrt held that as in the bill of lading the potatoes were described as shipped in good order and companydition, which rep- resented the external companydition of the bags, the defendants were estopped from denying that the bags were dry when shipped. But it would be numbericed that the packing in that case was defective and that was the main cause for the rotting of the potatoes and, therefore, the bill of lading was number a clean one. In Silver v. Ocean Steamship Co., Ltd. 1 , damage was caused to frozen eggs as the can wherein they were packed were gashed, perforated or punctured and the eggs were insufficiently packed. So the companyrt held that having given a clean bill of lading the shipowner was estopped from proving that the cans were number in apparent good order and companydition. In Brown Jenkinson Co., Ltd. v. Percy Dalton London Ltd. 1 orange juice was shipped in barrels. Some of the barrels were old and frail and some were leaking. Yet the shipowners gave a clean bill of lading. They were estopped from denying that the barrels were in apparent good order and companydition. These decisions establish that good order and companydition of packages depends upon the suitability of the packages for the L.R. 1906 1 K.B. 237. 2 L.R.1876lp.414. L.R. 1921 p. 337. 4 L.R. 1889 5 T.L.R. 641. L.R.19301 K.B.416. 6 L.R. 1957 2 Q.B. 621. particular goods or articles packed therein and other relevant circumstances of each case. What is the real scope and legal effect of the statement in the bill of lading that the goods were shipped in good order and companydition? We have already numbericed that a bill of lading with such a statement, which does number companytain any further reservation or qualification, is known as a clean bill of lading. The said words are affirmation of a fact. It is an admission creating an estoppel as between the shipowners and an endorsee, who on the faith of that admission has become endorsee for value of the bill of lading. The shipowners are estopped from denying that the goods and the packages were number in good order and companydition. The estoppel applies only where the bad companydition is discernible on a reasonable examination of the companytainers, having regard to their companytents. Any qualification of the said affirmation must only refer to the external and apparent companydition of the companytainers see The Skarp 1 , Silver v. Ocean Steamship Co., Ltd. Companies Naviera Nazconzada v. Churchill Sim 1 , and The Tromp 4 . It is number necessary to companysider the said decisions in detail as the principle is well settled. Now let us look at the relevant facts of the present case. It was one of the terms of the companytract between the seller and the buyer that the goods should be packed in new fibre drums. The standard of good order and companydition of the packages was agreed upon by the parties to the companytract. The shipowners knew that companydition as the Mates receipt disclosed the same. If the drums had been mentioned as old in the bill of lading, the said bill would number have been a clean bill. Though the apparent companydition of the drums was old, the shipowners made an assertion that they were number old drums, i.e., they gave a clean bill. This representation was obviously intended, in companylusion with the seller, to enable him to operate upon the credit with the Bank. This companylusion is also apparent from the indemnity bond they took from the seller to guard themselves against the companysequences of the said representation. All the elements of deceit are present. The decision in Brown Jenkinson Co., Ltd. v. Percy Dalton London Ltd. 1 is apposite. There, the defendants had a quantity of orange juice which they wish to ship to Hamburg. The plaintiffs, as agents of the owners of the vessel on which the orange juice was to be shipped, informed the defendants that the barrels companytaining the orange juice were old and frail and that some of them were leaking and that a claused bill of lading should be granted. The defendants required a clean bill of lading, and the shipowners, at the defendants request and on a promise that the defendants would give to them an indemnity, signed bills of lading L.R.1935134. 2 L.R. 1930 1 K.B. 416. L.R. 1906 1 K.B. 237. 4 L.R. 1921 P. 337. L.R. 1957 2 Q.B. 621. stating that the barrels were shipped in apparent good order and companydition. The defendants, pursuant to their promise, entered into an indemnity whereby they undertook unconditionally to indemnify the master and the owners of the vessel against all losses which might arise from the issue of clean bills of lading in respect of the goods. The barrels when delivered at Hamburg, were leaking and the shipowners had to make good the loss. The plaintiffs sued the defendants under the indemnity, the benefit of which had been assigned to them. The defendants refused to pay, alleging that the companytract of indemnity was illegal, because it had as its object the making by the shipowners of a fraudulent misrepresentation. The companyrt held that the shipowners by making in the bill of lading a representation of fact that they knew to be false with intent that it should be acted upon were companymitting the tort of deceit, and that the defendants promise to indemnify the shipowners against loss resulting from the making of that representation was accordingly unenforceable. The only difference on facts between that case and the present one is that in that case the barrels were number only old and frail but also some of them were leaking. But there, as here, the shipowners made a representation of fact which they knew to be false with intent that it should be acted upon. If so, it follows that the High Court was right in holding that the appellant was liable in damages for the loss incurred by the respondent. Learned companynsel for the appellant sought to raise three fur- ther points, namely, i the shipowners were number bound by the representation made by the ships mate ii the bill of lading was governed by the American law and number by companymon law and iii the plaintiff-buyer, having obtained a decree against the seller in the American companyrt, companyld number maintain the present suit for damages. The first point was number raised till number and, therefore, we can. number permit the learned companynsel to raise it for the first time before us. The second point, namely, what is the American law? is a question of fact. We have number got sufficient material on the record to know what the American law on the subject is. We cannot, therefore, permit the appellant to raise this point either. The third point is also one number pressed in the companyrts below and, therefore, does number call for our decision.

Case appeal was rejected by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 327 of 1965. Appeal from the judgment and order, dated July 4, 1962 of the Bombay High Court in Income-tax Reference No. 46 of 1960. V. Viswanatha Sastri, N. D. Karkhanis, R. H. Dhebar and N. Sachthey, for the appellant. Bishan Narain, B. R. L. lyengar, S. K. Mehta and K. L. Mehta, for the respondent. The Judgment of the Court was delivered by Shah, J. In the account year ending November 6, 1953 Murlidhar Jhawar, Pannalal Lahoti and Govindbai carried on business in groundnut, companyton and companyton-seed. In the year of assessment 1954-55 the Income-tax Officer, Nanded, brought to tax a third share in Rs. 51,280 companyputed as profits from the business in the hands of each of the three parties, and thereafter he called upon Murlidhar to submit a return of the income of the joint venture on the footing that the parties thereto companystituted an unregistered firm. Murlidhar companyplied with the requisition and submitted in November 1957 a return, but later applied to withdraw it by application dated December 18, 1957. The Income-tax Officer rejected the application for withdrawal of return and companypleted the assessment of the three parties to the joint venture under S. 23 3 of the Income-tax Act, 1922 in the status of an unregistered firm and companyputed the income of the joint venture at Rs. 80,925. In appeal to the Appellate Assistant Commissioner the order passed by the Income-tax Officer was companyfirmed. In second appeal, the Income-tax Appellate Tribunal set aside the order of the Appellate Assistant Commissioner. The Tribunal held that the Income- tax Officer had the option to assess the individual parties to the joint venture, and he having exercised that option it was number open to him thereafter to reassess the same income- companylectively in the hands of the three parties to the joint venture in the status of an unregistered firm. But on a companycession made by companynsel for the three parties, the Tribunal directed that the assessment be rectified so as to restore the status quo ante. The Tribunal submitted a statement of the case and referred the following question to the High Court of Judicature at Bombay Whether on the facts and in the circumstances of the case the assessment of the unregistered firm was proper and legal, the two partners of this partnership having been assessed in respect of their shares of income from this partnership business ? The High Court recorded an answer in the negative. With certificate granted by the High Court, this appeal has been preferred. Under s. 3 of the Indian Income-tax Act, income-tax is charged in respect of the total income of the previous year of every individual, Hindu undivided family, companypany and local authority, and of every firm and other association of persons or the partners of the firm or the members of the association individually. This Court in Commissioner of Income-tax, U.P. v. Kanpur Coal Syndicate 1 observed at p. 228 The section s. 3 expressly treats an association of persons and the individual members of an association as two distinct and different assessable entities. On the terms of the section the tax can be levied on either of the said two entities according to the provisions of the Act. The same principle would apply to the cases of assessment of partners individually of an unregistered firm. The partners may be assessed individually or they may be assessed companylectively in the status of an unregistered firm the Income-tax Officer cannot however seek to assess the one income twice-once in the hands of the partners and again in the hands of the unregistered firm. Mr. Viswanatha Sastri for the Department companytends that the Income-tax Officer making the first assessment of the three parties to the joint venture was number informed that the three parties companystituted an unregistered firm and therefore the Income-tax Officer was in law companypetent to assess the entity which was in truth liable to be assessed to tax, and in making the earlier order of assessment he cannot be deemed to have exercised an option which precluded him from assessing the income of the three parties as an unregistered firm. It is true as pointed out by this Court in a recent judgment Income-tax Officer, Award, Lucknow v. Bachulal Kapoor 2 that in dealing with a claim made by the Income- tax Officer to assess income into the hands of a Hindu undivided family, after assessing it in the hands of the members on the footing that the family was severed, the exercise of the option to do one or other of the two alternatives open to an officer assumes knowledge on his part of the existence of two alternatives. But on the materials before the Court we are unable 1 53 I.T.R. 225 1964 8 S.C.R 85. 2 1966 3 S.C.R. 68. to accept the plea that the Income-tax Officer was number in possession of information relying on which, if he desired, he companyld have assessed the three parties companylectively as an unregistered firm. There is numberwarrant for the assumption which companynsel for the Department asks us to make, that information about the true state of affairs was number with the Income-tax Officer when the first assessment was made by him. The transactions in various companymodities were carried on by Pannalal and Govindbai who were partners of Messrs. Purna Ginning Pressing Factory and by Murlidhar. The Income-tax Officer had assessed the income of the three parties separately and added to the individual income of each party his or her share in the profits of the joint venture. The Income-tax Officer had information that the three parties, two of whom were members of a registered trading firm had effected transactions in groundnut, companyton and companyton-seed. Apparently returns in respect of these trading transactions were separately made and a third share was included in the individual assessment of each of the three parties. Apart from an association of individuals or a firm, the Income-tax Act does number recognize a companylection of individuals as an entity capable of being assessed to tax. The three parties were number a registered firm, and they companyld be assessed to tax companylectively as an association of individuals or as an unregistered firm if the relation between them was of partners. When the Income-tax Officer assessed the three parties separately he unquestionably exercised an option knowing that they had entered into a trading transaction in which they were jointly interested. The departmental authorities have number chosen to place before the Court the returns made by the three parties, and even the orders of assessment individually made against the three parties by the Incomes Officer are number before this Court. Only the final order of the Income-tax Officer which directs Add Joint venture income with Messrs. Puma Ginning and Pressing Factory taken provisionally subject to rectification after the assessment of the joint venture is incorporated in the order of the Appellate Assistant Commissioner. It is companymon ground that the assessment made by the Income- tax Officer was number a provisional assessment within the meaning of s. 23B. It would be reasonable to hold that the income of the three parties was assessed under s. 23 3 of the Income-tax Act, for the income was earned in companymercial transactions in different companymodities. The Income-tax Officer in assessing the income of the joint venture, companyld number have proceeded without scrutinizing the accounts and other relevant documentary evidence and without determining the skares of the three parties to the joint venture. In determining the shares of the three parties, he had also to determine the companytractual relation which gave rise to the right to a share in the profit. Again the order of the Income-tax Officer clearly indicates that he was companynizant of the fact that the income of the joint venture was taxable companylectively, but he thought that he companyld in law in the first instance make an assessment provisionally of the three parties separately and then rectify the assessments later.

Case appeal was rejected by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 756 of 1965. Appeal by special leave from the judgment and order dated April 9, 1965 of the Mysore High Court in Civil Revision Petition No. 1044 of 1962. K. Venkatarangaiengar G. L. Sanghi, J. B. Dadachanji C. Mathur and Ravinder Narain, for the appellant. Mirle N. Lakshminaraynappa O. P. Malhotra, S. S. Khanduja Ganpat Rai, for the respondent. The Judgment of the Court was delivered by Sikri, J. This appeal by special leave is directed against the judgment of the High Court of Mysore in Civil Revision Petition No. 1044 of 1962, filed under s. 17 of the Mysore House Rent and Accommodation Control Act, 1951 Mysore Act 30 of 1951 hereinafter referred to as the Act-whereby the High Court set aside the order passed by the III Additional District Judge, Bangalore. The III Additional Judge had set aside the order of the First Munsiff, Bangalore, who had directed the eviction of the tenant from the premises in dispute. The appellant before us, Padmanabha Setty, hereinafter referred to as the tenant, was the tenant of a number- residential premises No. 281, Old Tharagupet, Bangalore City. be tenant had installed some machinery in the premises. The respondent, K. P. Papiah Setty, is the landlord. He had purchased the premises for his own use and occupation, namely, for the purpose of shifting his business which hewas carrying on in a rented building to the premises in dispute. The landlord tiled an application under s.8 3 a ii of theAct for the eviction of the tenant on the ground that he required the premises in dispute for his own use and occupation. It is number necessary to give the other allegations made in the application as both the First Munsiff, Bangalore, and the III Additional District Judge, Bangalore, have found that the landlord required the premises for his bonafide use and occupation, namely, for shifting his business from the rented premises to the premises in dispute. The III Additional District Judge, however, held that under s. 8 3 a ii the landlord was number entitled to possession of the premises in dispute unless and until he was prepared to vacate the shops in which he was trading at the time. This finding of the learned Additional Judge was companytrary to the decision of the Mysore High Court in S. G. Narayanappa and Bros. v. A. N. Narasimhiah 1 . The landlord then filed a revision petition under s. 17 of the Act, and the High Court, following the decision in S. G. Naravanappa and Bros. v. A. N. Narasimhiah 1 set aside the order of the Additional District Judge. The tenant having obtained special leave, the matter is number before us. Two points are raised before us 1 that the companystruction put upon s. 8 3 a ii of the Act by the Mysore High Court is erroneous and the companystruction put upon a similar provision by the Madras High Court in V. Thanappa Chetty v. Arcot Govindaswami Naicker 2 is companyrect and 2 that the High Court was number right in setting aside the order of the Additional District Judge in a revision under s. 1 7 of the Act. 1 1962 Mys. L. J. 76 . A.I.R, 1952 Mad. 553. The Act was passed to regulate the letting of residential and number-residential houses and to companytrol the rents of such houses and to prevent unreasonable eviction of tenants therefrom in the State of Mysore. The word tenant is defined as follows in sub-s. 9 of S. 2 of the Act tenant means any person by whom or on whose account rent is payable for a house and includes the surviving spouse or any son or daughter of a deceased tenant who had been living with the tenant in the house as a member of the tenants family up to the death of the tenant and a person companytinuing in possession after the termination of the tenancy in his favour, but does number include a person placed in occupation of a house by its tenant or a person to whom the companylection of rents or fees in a public market, cart-stand or slaughter-house or of rents for shops has been farmed out or leased by a local authority. There is numberdoubt that the definition of the word tenant is wider than the ordinary meaning of the word and includes a person ,continuing in possession after the termination of the tenancy in his favour. Section 4 deals with the determination of fair rent and s. 5 with lawful increase of or addition to or reduction in fair rent. Section 6 prohibits the landlord from claiming or receiving anything in excess of fair rent or agreed rent. Section 7 deals with issue of receipts for rent. Sections 7A and 7-B deal with the right of tenant to deposit rent in certain cases and time for deposit and savings. Section 7-C deals with eviction of tenant in occupation of a house under an allotment order. Section 8 deals with eviction of tenants and provides that ,a tenant shall number be evicted whether in execution of a decree or otherwise except in accordance with the provisions of s.7-C or of this section. Sub-section 2 provides the circumstances in which a landlord would be entitled to seek eviction of a tenant in possession. For instance, a landlord is entitled to evict a tenant if the tenant has number tendered or paid the rent due by him in respect of the premises within the time fixed in the agreement of tenancy with the landlord on in the absence of any such agreement, by the last day of the month next following that for which the rent is payable if he has transferred his right under the lease or sublet the entire premises or any portion thereof or used the premises for the purpose other than that for which they were leased or if the tenant has companymitted such acts of waste as are likely to impair materially the value or utility of the house or if the tenant has without the landlords companysent in writing erected on the house or any portion thereof any permanent structure or if the tenant or any person residing with the tenant has been guilty of such acts and companyduct as amounts to nuisance or annoyance to the adjoining or neighbouring occupiers or has been using the house or allowing the house to be used for immoral or illegal purposes or that the house is reasonably and bona fide required by the landlord for carrying out repairs or reconstruction which cannot be carried out without the house being vacated or that the house has number been used without reasonable cause for the purpose for which it was let for a companytinuous period of three months immediately preceding the date of application or that the tenant, after the companymencement of the Act, has built, acquired vacant possession of or been allotted a suitable house. We have set out these companyditions in detail because it would be relevant to companysider whether in view of these companyditions a tenant can be said to have a right to possession of the premises of which he is a tenant. Then we companye to sub-s. 3 a which reads as follows 3 a A landlord may, subject to the provisions of clause d apply to the companyrt for an order directing the tenant to put the landlord in possession of the house- in case it is a residential building, if the landlord requires it for his own occupation or for the occupation of a member of his family and if he or such member, as the case may be, is number occupying a residential building of his own in the city, town or village companycerned in case it is a number-residential building, if the landlord requires it for a business which he or a member of his family is carrying on and if for the purposes of the said business is number in occupation of a number- residential building which is owned by or to the possession of which the landlord or such member, as the case may be, is entitled whether under this Act or otherwise. It is number necessary to set out the Explanation or the first proviso but the second proviso is relevant and runs thus Provided further that where a landlord has obtained possession of a house for his own use or occupation or for the use or occupation of a member of his family under this clause he shall number be entitled to apply again under this clause- for possession of another number- residential building of his own, for himself or for the same member of his family, in case he has obtained possession of a numberresidential building. The Madras High Court held in V. Thannappa Chetty v. Arcot Govindaswami Naicker 1 that the tenant under the Madras A.I.R. 1952 Mad. 553 at p. 554-555. Buildings Lease and Rent Control Act Madras Act 15 of 1946 had a right to possession unless and until he was evicted under the provisions of the Madras Act, and, therefore, the landlord would number be entitled to possession of a number-residential building if he was in possession of another number-residential building as a tenant, for in such a case he would be entitled to possession of those premises. The reasoning of Subba Rao, J., then a Judge of the High Court of Madras, was as follows It will, therefore, be seen that the relationship between the landlord and tenant even in cases in which such relationship terminated under the provisions of the Transfer of Property Act, companytinues su bject to the provisions of the Act. The rights of the tenants as well as the landlord are defined. The tenant tinder the Act has a right to possession unless and until he is evicted under the provisions of the Act. Under the provisions of the Act, a landlord will number be entitled to the possession of his number- residential buildings, if he obtains an order for eviction against another tenant in respect of another number-residential building, or if he is in possession of another number-residential building as a tenant for in either case he is entitled to possession of that premises. The words used in the section, viz., to the possession of which he is entitled are wide and I do number see any reason why the latter category should be excluded from the express words used which in their ordinary meaning take in that class. It was argued that a statutory immunity is different from a right to possession. But in my view a statutory immunity is number inconsistent with a right to possession. The statutory immunity itself creates a right in him to companytinue in possession till he is evicted under the provisions of the Act. The Mysore High Court dissented from this decision of the Madras High Court, and the reasoning of Ahmed Ali Khan, J., in S. G. Narayanappa and Bros. v. A. N. Narasimhiah 1 is as under After a careful companysideration of the arguments advanced before me, I am of the opinion that the provision of the Act on the strength of which a tenant may resist the landlords claim to evict him cannot be described as a right to possession, but only as a statutory immunity from eviction, as observed by the Federal Court in the case Kai Khushrao v. Bai Jerbai 2 . It appears that his Lordship in the Madras case distinguished the said observations in the said case of the Federa Court by stating that a statutory immunity is number inconsistent with the right to posses- 1 1962 Mys.L.J.76 A. I. R. 1949 F. C. 124 128 . sion and that such immunity may itself create a right. The right to immunity from eviction involves a negative element in it. In other words it restricts the right of possession of the landlord. Hence, it cannot be companystrued to have an effect of creating a right of possession to a tenant. Though the statutory immunity from eviction may number be companysistent with the right to possession, the fact remains in view of the inherent element involved in both the rights, that the immuni ty from eviction cannot be equated to the right to possession. Therefore, with great respect, I am of the view that we will number be justified in adopting the strict view while interpreting the words which occur in s. 8 3 a ii of the Mysore House Rent and Accommodation Control Act, as taken in the Madras ruling cited above. In our opinion, with great respect to Subba Rao, J., Ahmed Ali Khan, J., arrived at the companyrect companyclusion. A tenant who can be evicted under the companyditions prescribed in s. 8 2 of the Act cannot be said, in our view, to be entitled to the possession of the premises of which he is a tenant. No doubt he cannot be evicted till one or more of the companyditions prescribed by the section are fulfilled, but it is difficult to equate his right to stay in the premises till he is evicted to an entitlement of the possession of the premises. Section 8 3 a ii deals with two types of cases first where the landlord is in occupation of a number- residential building which is owned by him, and secondly, a number-residential building of which he is in occupation number as a landlord but otherwise. The object of the Act is to prevent unreasonable evictions of tenants. Can it be said that the Legislature is companysidering it to be unreasonable for a landlord to shift to his own premises while he is in occupation of tenanted premises over which he has number an absolute right of possession but only a right to remain in possession till one of the companyditions in s. 8 2 is satisfied, and over one of which he has numbercontrol. For instance, the landlord may require the premises for repairs or reconstruction or the neighbours may companyplain that the tenant is guilty of nuisance or annoyance, or the landlord may think that the tenant has companymitted some acts of waste as are likely to impair materially the value or utility of the house. If any of these companyditions is proved, he is liable to be evicted. In our view, in the companytext the words entitled to possession have a more positive companytent and are more akin to the right of possession which an owner has in respect of the building owned and occupied by him. In companyclusion we are of the view that the High Court was right in holding that the Additional District Judge erred in number following the decision of the Mysore High Court in S. G. Narayanappa and Bros. v. A. N. Narasimhiah. 1 1 1962 Mys. L.J. 760. M12Sup.C.I.166-10 There is numberforce in the second point raised by the learned companynsel of the tenant. It is true that the jurisdiction of a High Court under provisions similar to S. 1 7 of the Act is limited, but we cannot say that the High Court was wrong in holding that the Additional District Judge acted with material irregularity in number following the decision of the Mysore High Court when that decision had been rendered in a case arising from an earlier order of the same Additional District Judge. It may be that this decision was number pointed out to the Additional District Judge but we cannot, in exercise of our jurisdiction under Art. 136 of the Constitution, say that the High Court should number have set aside the order of the Additional District Judge on this ground. In the result the appeal fails and is dismissed with companyts.

Case appeal was rejected by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 1141 of 1965. Appeal from the judgment and decree dated April 17, 1963 of the Allahabad High Court in. First Appeal No. 2 of 1963. Naunit Lal, for the appellants. Veda Vyasa and K. K. Jain, for respondent No. 1. The Judgment of the Court was delivered by Wanchoo, J. This appeal on a certificate granted by the Allahabad High Court raises the question of interpretation of s. 82 b of the Representation of the People Act, No. 43 of 1951, hereinafter referred to as the Act . The facts necessary for present purposes are these. In the election to the U.P. Legislative Assembly from Dehra Dun City companystituency in 1962, Brij Bhushan Saran respondent was one of the candidates and was declared elected. One Raturi Vaid was another candidate at the same election. He however withdrew his candidature within the time fixed for withdrawal. He belonged to the same party as the returned candidate and worked for him. After the election, an election petition was filed by two electors praying that the election of Brij Bhushan Saran be set aside, and one of the grounds with which alone we are companycerned in the present appeal was that Raturi Vaid had threatened an elector after the date of his withdrawal from the candidature that the electors bones would be broken if he did number cast his vote for Brij Bhushan Saran and also did number work for him and persuade others to vote for him. The Election Tribunal held that this amounted to a companyrupt practice within the meaning of s. 123 2 read with the proviso a i thereof. It further held that as this companyrupt practice was companymitted by a candidate, namely, Raturi Vaid, it was necessary to join him as respondent to the petition. As this was number done, the Tribunal dismissed the petition under s. 90 3 of the Act. Thereupon there was an appeal to the High Court, which. upheld the view taken by the Tribunal. The High Court however granted a certificate to appeal to this Court and that is how the matter has companye before us. It is number in dispute number that the allegation made with respect to the companyduct of Raturi Vaid would amount to a companyrupt practice within the meaning of s. 123 2 of the Act. What is however companytended is firstly that there was numberallegation of companyrupt practice against Raturi Vaid, and secondly that even if that was so, Raturt Vaid companyld number companye within the meaning of the words any other candidate used in s. 82 b inasmuch as he withdrew his candidature as provided in s. 37 of the Act. We are of opinion that there is numberforce in the first companytention raised on behalf of the appellants. There is numberdoubt that the allegation was that it was Raturi Vaid who gave the threat, though it was alleged that he did so in furtherance of the election of Brij Bhushan Saran and on his behalf. Whatever may be the effect of such a threat held out by Raturi Vaid on the election of Brij Bhushan Saran, the primary allegation certainly was that it was Raturi Vaid who had companymitted the companyrupt practice, though Brij Bhushan Saran was also alleged to be party to it and therefore liable for the companysequences. In these circumstances it is impossible to accept that the allegation of companyrupt practice was only against Brij Bhushan Saran and number against Raturi Vaid. As we have said already, the primary allegation was against Raturi Vaid, though Brij Bhushan Saran was also made liable for the companyrupt practice alleged to be companymitted by Raturi Vaid on the ground that it was done on his behalf and in furtherance of his election. It must therefore be held that there was an allegation of companyrupt practice against Raturi Vaid in this case. This brings us to the main question raised in the present appeal, namely, whether Raturi Vaid can be said to be any other candidate within the meaning of those words in s. 82 b . In this companynection, the appellants rely on a decision of the Patna High Court in Kapildeo Singh v. Suraj Narayan Singh 1 , which certainly is in their favour. That decision however has number been accepted by the Allahabad High Court which took the view that even though Raturi Vaid might have withdrawn his candidature under s. 37 of the Act, he would certainly be companyered by the words any other candidate in s. 82 b . The word candidate has been specially defined in s. 79 b for the purpose of parts VI, VII and VIII of the Act, and s. 82 b with which we are companycerned is in Part VI. According to this definition, a candidate means a person who has been or claims to have been duly numberinated as a candidate at any election, and any such person shall be deemed to have been a candidate as from the time when, with the election in prospect, he began to hold himself out as a prospective candidate. It cannot be and has number been disputed that Raturi Vaid is companyered by this definition, for he was duly numberinated though he later withdrew his candidature under s. 37 of the Act. What is however companytended is that even though Raturi Vaid might be a candidate within the definition of s. 79 b , this is a case where in the companytext of s. 82 b , the words any other candidate mean a candidate who has number withdrawn under s. 37 of the Act. Part VI provides for disputes regarding election and begins with s. 79, which defines certain words including the word candidate as used in this Part. Section 80 provides for an election petition and s. 81 for presentation of such petition and other matters. Then companyes s. 82 which is in these terms A petitioner shall join as respondents to his petition- a where the petitioner, in addition to claiming a declaration that the election of all or any of A.I.R. 1959 Pat. 250. 34 5 the returned candidates is void, claims a further declaration that he himself or any other candidate has been duly elected, all the companytesting candidates other than the petitioner, and where numbersuch further declaration is claimed, all the returned candidates and b any other candidate against whom allegations of any companyrupt practice are made in the petition. The terms of s. 82 show what persons must be joined as respondents to an election petition. Clause a shows that where a petitioner is only claiming a declaration that the election of all or any of the returned candidates is void, he has to join all the returned candidates to the petition and numbermore. Further, where the petitioner in addition to claiming a declaration that the election of all or any of the returned candidates is void claims a further declaration that he himself or any other candidate has been duly elected, he has to join number only the returned candidates but all the companytesting candidates. So far as the words returned candidates and companytesting candidates are companycerned, there is numberdifficulty as to what they mean. A returned candidate is one who has been elected and a companytesting candidate is one who has number withdrawn his candi- dature under s. 37. It is true that in cl. a of s. 82 where we find the words he himself or any other candidate, any other candidate there means any other companytesting candidate. That is clear from the companytext, for there is numberquestion of declaring a person who has withdrawn his candidature as duly elected. But the same in our opinion cannot be said of the words any other candidate used in cl. b of s. 82. There is numberindication in cl. b to suggest that any other candidate only refers to a candidate who has number withdrawn his candidature under s. 37. The use of the words any other candidate in cl. b is really in companytrast to the candidates who are to be made parties under cl. a . Under cl. a persons who are to be made parties to the petition are- a returned candidates, b companytesting candidates, depending upon the kind of declaration claimed in the petition. Where, for example, there is numberclaim for a further declaration in an election petition, only returned candidates would be made respondents under cl. a . But if there are allegations of companyrupt practice against any candidate other than the returned candidate, he would have to be made a party under cl. b as any other candidate. Similarly where a declaration is asked for in the petition that a particular candidate has been duly elected, all the returned candidates as well as all the companytesting candidates have to be made parties under cl. a . Even in such a case if there is allegation that any other candidate besides the returned candidates and the companytesting candidates has been guilty of companyrupt practice, cl. b requires that he should also be made a respondent. There is in our opinion numberreason for cutting down the meaning of the word ,,candidate as defined in S. 79 b for the purpose of S. 82 b in the manner suggested on behalf of the appellants, namely, that in S. 82 b the candidate is only one who has number withdrawn his candidature und er s. 37. We are of opinion that the companytext does number so require and as a matter of fact it does appear necessary to give the full meaning to the word candidate in s. 82 b as defined in S. 79 b . Take the case of a, candidate like Raturi Vaid who was apparently an alternative candidate of the party to which Brij Bhushan Saran belonged and who withdrew his candidature after Brij Bhushan Sarans numberination was accepted. Suppose that instead of companymitting the alleged companyrupt practice after he withdrew his candida- ture, Raturi Vaid was alleged to have companymitted it before his withdrawal. In such a case it is companyceded on behalf of the appellants that till the withdrawal under s. 37 of the Act, the person withdrawing is- still a candidate for, according to the appellants, it is only after he withdraws that he can numberlonger be called a candidate. So if Raturi Vaid had companymitted the alleged companyrupt practice before the date of his withdrawal under s. 37 he would, even according to the appellants, be a candidate at the time when he is said to have companymitted the companyrupt practice and would be a necessary party under S. 82 b . We however see numberreason why he companyld number be a candidate for the purpose of s. 82 b , simply because he companymitted the alleged companyrupt practice after his withdrawal. Purity of elections is a matter of great importance, and it is for the purpose of maintaining this purity that we have the provisions companytained in S. 123 of the Act. There is also numberdoubt that if a companyering candidate like, Raturi Vaid is number treated as a candidate till the date of his withdrawal, he would be free to companymit all kinds of companyrupt practices defined in s. 123 of the Act, on behalf of the candidate whom he companyers, with impunity. This companyld number be the intention of the Act and that is why learned companynsel for the appellants had to companycede that if the alleged companyrupt practice had been companymitted before the date of withdrawal won necessary to join Raturi Vaid as a respondent under S. 2 b . But the argument is that as the alleged companyrupt practice was companymitted after the date of his withdrawal he would number be a candidate within the meaning of s. 82 b . We are of opinion that if the effect of with- drawal is said to be that a person numberinated can numberlonger be companysidered to be a candidate only after his withdrawal, the date of withdrawal cannot be a dividing line as to the time upto which he can be treated as a candidate and the time after which he can- number be treated as a candidate. If purity of elections has to be maintained a person who is a candidate as defined in s. 79 b of ,the Act will remain a candidate even after he withdraws till the election is over, and if he companymits a companyrupt practice whether before ,or after his withdrawal he would be a necessary party under s. 82 b of the Act. We are therefore of opinion that the view taken by the PatnaHigh Court on which reliance has been placed on behalf of the appellants is number companyrect and the decision of the High Court under appeal is companyrect. We may in this companynection refer to two decisions of this Court. In Mohan Singh v. Bhanwarlal others 1 , it was held that by the definition of the word candidate in s. 79 b , the expression any other candidate in s. 82 b must include a candidate who had withdrawn his candidature.

Case appeal was rejected by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 193 of 1964. Appeal from the judgment and decree dated May 13, 1960 of the Patna High Court in Appeal from Original Decree No. 132 of 1955 and order dated February 15, 1962 in M. J. C. No. 2 of 196 1. Sarjoo Prasad, S. C. Sinha and B. P. Jha, for the appellants. T. Desai and R. C. Prasad, for the respondents. The Judgment of the Court was delivered by Mudholkar, J. This is an appeal by certificate from a judg- ment of the Patna High Court reversing that of the trial companyrt dismissing the plaintiffs suit for partition and separate possession of their half share in a house and for payment of companypensation from May 2, 1947 to September 11, 1951 at the rate of Rs. 200/p.m. with interest and for payment of companypensation at the same rate from the date of suit till the recovery of possession of their, share in the house. The facts which are number disputed before us are these The property in dispute which is situate within the limits of the municipality of Bhagalpur was purchased jointly by five persons, Juri Mal, Gajanand, Ramasahai Sah, Jahuri Sah and Ramgali Sah. The first two of these are father and son and were members of a joint Hindu family . Both of them are dead. Plaintiffs 1 to 4 are the sons and plaintiff 6 is the widow of Gajanand and plaintiff No. 5 is the widow of Jurimal. Jurimal, Gajanand companystituted a joint Hindu family and plaintiffs 1 to 4 companystituted a joint Hindu family. Ramsahai, Jahauri Sah and Ramgali were brothers and were members of a joint Hindu family. Jahuri Sah is defendant No. and Ramgali Sah is defendant No. 2. They, along with the remaining defendants, are members of a joint Hindu family of which Jahauri Sah is the karta. The property in question was purchased by the two joint families, each family having half interest therein. The date of the transaction was June 26, 1942. At the time of the purchase of the property it was in the possession of Mohanlal Marwari as a tenant. He was evicted therefrom by a decree of the companyrt and hereafter it was let out to Government, the companypensation having been settled at Rs. 100/- per mensem. The Government vacated he house after some time whereafter the defendants occupied the 120 a house excepting a portion thereof which was in the occupation of Isri Sah and Shib Charan Sah as tenants paying a monthly rent of Rs. 30 Half of this rent was being realised by each family. According to the plaintiffs when the defendants entered into possession of the property they agreed to pay Rs. 200/- per mensem as companypensation to the plaintiffs family with respect to their half share in the property. They, however, did number pay any companypensation to the plaintiffs despite the agreement. On these allegations the plaintiffs instituted their suit. In the plaint they stated that Gajanand had another son named Shankarlal but he was given in adoption to Sreelal, W. 6 and he was, therefore, number joined as party to the suit. The defendants denied the claim and -stated that the suit was barred by the provisions of the Bihar Buildings Lease, Rent and Eviction Control Act, 1947 Bihar Act 3 of 1947 hereafter referred to as the Act as well as by the rule of estopping. They also raised the plea that under the companytract entered into between the two families Rs. 501- p.m. was payable as companypensation and number Rs. 200/- p.m. as alleged by the plaintiffs. According to them the-suit was barred by the rule of estoppel. They companytended that the claim for companypensation for a period prior to the expiry of 3 years from the date of suit was barred by time. They also raised some other companytentions in the written statement but it is unnecessary to refer to them inasmuch as we must companyfine ourselves to the points urged before us by Mr. Sarjoo Prasad on their behalf. The points are 1 that the suit for partition and separate possession was number maintainable-, and 2 that the companytract under which the plaintiffs claimed companypensation is number enforceable. The, suit is said to be number maintainable because a one of the companyowners of the property was number joined as a party to the suit and, b also because it was barred by the Act. The companytract for payment of companypensation was said to be number. enforceable as there was numberouster of the plaintiffs by the defendants. The trial companyrt held that the provisions of the Act applied and by virtue of those provisions the plaintiffs were number entitled to a decree for eviction of the defendants number were they entitled to a decree for, companypensation and that the adoption of Shankarlal number having been proved the suit as companystituted was number maintainable. On this point, the High Court arrived at different companyclu- sions. The view, taken by the High Court was that the provisions of the Act did number apply to this cage, that the defendants number having specifically denied the fact of adoption and numberissues thereon having been raised the trial companyrt erred in holding that the adoption was number proved and that number-joinder of Shankarlal was number an impediment to the institution of the suit. Further according to the High Court the companytract to pay companypensation at the rate of Rs. 200/- p.m. was duly established and that as it was companypetent to a civil companyrt to enforce the companytract the suit for recovery of arrears of companypensation was maintainable. The High Court accepted the defendants companytention that the claim for arrears must be limited to a period of three years prior to the institution of the suit. It allowed interest on the arrears at 6 p.a. and decreed the claim of the plaintiffs for partition and for arrears of companypensation. The plaintiffs then moved the High Court under s. 151 read with O.XX, r. 18, Code of Civil Procedure for granting them appropriate relief with respect to their claim for companypensation, for use and occupation of the house from the date of suit till delivery of possession of their share after passing the final decree. The High Court allowed this application and directed that the plaintiffs shall also be entitled to companypensation from the date of institution of the suit until recovery of physical possession of their share after partition or until the expiry of three years from the date of its decree, whichever event first occurs. It also made an appropriate order regarding companyts. Aggrieved by this decree of the High Court as amended by its subsequent order upon the plaintiffs application under s. 151 read with O.XX, r. 18, C.P.C. the defendants have companye up to this Court. In our opinion the High Court was right in holding that the Act is inapplicable to this case. The plaintiffs and defendants were admittedly companyowners of the property. As the property had number been partitioned it was open to either or both the parties to occupy it. The defendants occupied the property except a small portion which was in possession of the tenants. The plaintiffs acquiesced in it because of an agreement between the parties that the defendants would pay Rs. 200/- p.m. as companypensation to them. The defendants did number dispute that there was an agreement about payment of companypensation between the parties but their plea was that the amount agreed to was Rs. 501- p.m. and number Rs. 200/- p.m. Their companytention in this behalf was rejected by the High Court which accepted the plaintiffs companytention that the amount was Rs. 200/- p.m. This part of the High Courts judgment is number challenged before us by Mr. Sarjoo Prasad. He, however, challenged the finding of the High Court that the claim to companypensation was enforceable. But before we deal with this matter it would be appropriate to deal with the reasons given by him in support of the companytention that the suit was number maintainable. He reiterated the argument urged before the trial companyrt based upon the number-joinder of Shankarlal as a party to the suit. According to him, as Shankarlals adoption his number been established by the plaintiffs he was also a companyowner of the property and his number-joinder as a party to the suit rendered the suit incompetent. The High Court has pointed out that the plaintiffs have clearly stated in para 1 of the plaint that Shankarlal had been, given in adoption to Sreelal. In neither of the two written statements filed on behalf of the defendants has this assertion of fact by the plaintiffs been specifically denied. Instead, What is stated in both these written statements is that the defendants have numberknowledge of the allegations made in para 1 of the plaint. Bearing in mind that O.VIII, r. 5, C.P.C. provides that every allegation of fact in the plaint, if number denied specifically or by necessary implication or stated to be number admitted in the pleading of the defendant shall be taken to be admitted, to say that a defendant has numberknowledge of a fact pleaded by the plaintiff is number tantamount to a denial of the existence of that fact, number even an implied denial. No specific issue on the question of adoption was, therefore, raised. In the circumstances the High Court was right in saying that there was numberoccasion for the parties to lead any envidence on the point. However, Sreelal who was examined as a witness on behalf of the plaintiffs has spoken about the fact of adoption and his statement can at least be regarded as prima facie evidence of adoption. It is true that he admits the existence of a deed of adoption and of its number-production in the companyrt. This admission, however, would number render oral evidence inadmissible because it is number by virtue of a deed of adoption that a change of status of a person can be effected. A deed of adoption merely records the fact that an adoption had taken place and numberhing more. Such a deed cannot be likened to a document which by its sheer force brings a transaction into existence. It is numbermore than a piece of evidence and the failure of a party to produce such a document in a suit does number render oral evidence in proof of adoption inadmissible. We, therefore, agree with the High Court that the plaintiffs suit for partition of their half share in the property was number incompetent because Shankarlal was number made a party thereto. We will number deal with the other ground urged by Mr. Sarjoo Prasad in support of his companytention that the suit is number maintainable. Under sub-s. 2 of s. II of the Act as it stood on the date of the suit a claim for eviction of a tenant or a claim for recovery of possession of a building and claim for rent thereof had to be made before the Rent Controller alone and companysequently the jurisdiction of the civil companyrt for the enforcement of such claims was ousted. But, for the provisions of this section to apply, the relationship between the plaintiff and the defendant should be that of a landlord and tenant. If they are companyowners of the property and the property is held by them as tenants-in- companymon numberquestion of relationship of landlord and tenant companyes into being as between them. The companymon case of the parties is that they are in fact companyowners of the property and the respective shares of the two families have number been demarcated. They, therefore, companytinue to be tenants in companymon. It is true that the entire property save a small portion which was in possession of tenants is in the actual occupation of the defendants which means that they are in occupation number only of their share in the property but also of the plaintiffs share. That fact, however, would number make them tenants of the plaintiffs. Under the law each tenantin-common is entitled to the possession of the entire property, that is, to every part of it though its right to possession is limited to the extent of the share in the property. The mere fact that the defendants agreed to pay companypensation to the plaintiffs for their occupation of the entire property ignoring the portion in possession of the tenants would number bring into existence a relationship of landlord and tenant. By this agreement, the parties never intended to companystitute a relationship of landlord and tenant between the defendants and their companyowners. The provisions of the Act are, therefore, inapplicable. The second ground urged by Mr. Sarjoo Prasad, therefore, fails. What we have to companysider then is whether the companytract for payment of companypensation is number enforceable. It is numberdoubt true that under the law every companyowner of undivided property is entitled to enjoy the whole of the property and is number liable to pay companypensation to the other companyowners who have number chosen to enjoy the property. It is also true that liability to pay companypensation arises against a companyowner who deliberately excludes the other company.owners from the enjoyment of the property. It does number, however, follow that the liability to pay companypensation arises only in such a case and numberother. Co-owners are legally companypetent to companye to any kind of arrangement for the enjoyment of their un- divided property and are free to lay down any terms companycerning the enjoyment of the property. There is numberprinciple of law which would exclude them from providing in the agreement that those of them as are in actual occupation and enjoyment of the property shall pay to the other company owners companypensation. No authority was cited by learned companynsel in support of his companytention that ouster of a company owner is a sine qua number for enabling him to claim company- pensation from the companyowner who is in occupation and enjoy- ment of companymon property. We, therefore, reject the companytention.

Case appeal was rejected by the Supreme Court

Another 16 S.T.C. 563, referred to. CIVIL APPELLATE JURISDICTION Civil Appeals Nos. 334, 335 and 338 of 1965. Appeals by Special Leave from the judgment and orders dated January 1, 1963, November 7, 1962 and November 4, 1963 of the Madras High Court in Tax Case No. 170 of 1961 Civil Revision Petition No. 105 of 1961 and Tax Case No. 153 of 1963 respectively. Bishan Narain and A. V. Rangam, for the appellants in C.As. Nos. 334 and 335 of 1965 . V. Rangam, for the appellant in C.A. No. 338/1965 . R. Chaudhuri, for the respondent in C. A. No 334/1965 . D. Karkhanis, O.C. Mathur, J.B. Dadachanji and Ravinder Narain,for the respondents in C.As. Nos. 335 and 338/1965 . The Judgment of the Court was delivered by Shah, J. This is a group of appeals filed by the State of Madras against orders passed by the High Court of Judicature at Madras which raises the following companymon question as to applicability of companycessional rate of sales tax to transactions of inter State sale and taxable under the Central Sales Tax Act, 1956 When a purchasing dealer in one State furnishes in Form C prescribed under the Central Sales Tax Registration Turnover Rules, 1957, to the selling dealer in another State a declaration, certifying that the goods ordered, purchased or supplied are companyered by the certificate of registration obtained by the purchasing dealer in Form B prescribed under r. 5 1 of the Central Sales Tax Registration Turnover Rules, 1957, and that the goods are intended for resale, or for use in manufacture of goods for sale, or for use in the execution of companytracts, or for packing of goods for resale, and that, declaration is produced by the selling dealer, is it open to the Sales Tax authority under the Central Sales ax Act to deny to the selling dealer the benefit of companycessional rates under s. 8 1 of the Central Sales Tax Act, 1956. on the view that the certificate in Form C mentions more purposes than one for which the goods are intended to be used, or that the goods are incapable of being used for the purpose for which they are declared to be purchased, or that the goods are applied for some other purpose number mentioned in the certi- ficate in Form C? We may briefly set out the facts which give rise to two out of the appeals Civil Appeals Nos. 334 335 of 1965. Civil Appeal No. 334 of 1965. M s Radio Electricals Ltd., respondents in this appeal on business in the State of Madras in electrical equipment and are registered as dealers under the Central Sales Tax Act. The Bombay State Electricity Board, Saurashtra Division, which is engaged in the production of electric energy purchased transformers and other goods of the total value of Rs. 1,42,020/- from M s. Radio Electricals Ltd. and the latter claimed in proceeding for assessment for Central sales-tax for the year 1957-58 that they were liable to pay tax at the rate of 1 per cent on the turnover under S. 8 1 of the Central Sales Tax Act. The Deputy Commercial Tax Officer rejected the claim on the ground that the Bombay State Electricity Board was number a dealer engaged in selling goods and merely because they held a registration certificate, the goods sold to the Board companyld number be admitted to the companycessional rate of tax under S. 8 1 of the Act. The Appeal late Assistant Commissioner of Commercial Taxes companyfirmed the order on the ground that transformers and other goods purchased by the Electricity Board for use in the production of electrical energy were number intended, to be used in the manufacture of goods for sale within the meaning of S. 8 3 b of the Central Sales Tax, Act, because electricity was number at the material time goods within the meaning of the Act. The order passed by the Appellate Assistant Commissioner was companyfirmed by the Sales Tax Appellate Tribunal, Madras. The High Court, following an earlier judgment in Deputy Commissioner of Commercial Taxes, Madras Division, v. Manohar Brothers 1 modified the order holding that if the selling dealer within the State produces a certificate in Form C setting out one or more of the purposes in S. 8 3 b of the Act, and if the Sales Tax authorities on behalf of the State do number deny that the purchasing dealer is a registered dealer, the selling dealer will number be denied the companycessional rate of tax under the Act, even if it transpires that the purchasing dealer has utilised the goods for purposes other than those mentioned in the certificate of registration. The High Court then held that out of the certificates in Form C produced by the selling dealer, certificates in respect of a turnover of Rs. 42,080/- set out the purpose as manufacture of electrical energy and since this was number one of the purposes mentioned in S. 8 3 b of the Act as it stood at the relevant time, the Sales Tax authority was right in denying the benefit of the rate under S. 8 1 to the assessee, but with regard to a turnover of 1 13 S.T.C. 686. Rs. 47,340/- the Sales Tax authority was bound to accept the certificates in Form C produced by the assessee even though the certificates companytained all the purposes mentioned in the prescribed form, and numberpurpose was struck out. The facts which give rise to Civil Appeal No. 335 are these M s Stanes Motors South India Ltd.-respondents in this appeal are dealers in automobiles, tractors and spare parts. For the year 1957-58 they claimed benefit of companycessional rates under s. 8 1 on a turnover of Rs. 1,38,572/12/- resulting from sale of tractors supplied to certain tea factories in the State of Kerala. The purchasing dealers who were four tea factories registered as dealers under the Act delivered to the respondents certificates in Form C declaring that the tractors purchased by them were in. tended for use in the manufacture of tea for sale. In the view of the Tax Officer benefit of the companycessional rate companyld number be claimed in respect of those sales, since the tractors were number for resale and the tractors were number directly relatable to the manufacturing process. In appeal, the order passed by the Tax Officer was companyfirmed by the Appellate Assistant Commissioner. He held that the tractors which were used for transporting tea leaves from the plantations to the factories cannot be said to be used in the manufacture of goods for sale. In appeal to the Sales Tax Appellate Tribunal, it was held that the respondents were entitled to the companycessional rate in respect of sales to two out of the four factories, which held certificates of registration in Form B specifying machinery as one of the items under s. 8 3 b . The High Court of Madras companyfirmed the order passed by the Tribunal in exercise of its revisional jurisdiction. Counsel for the State of Madras companytends that the Commercial Tax Officer is invested with authority under the Act to scrutinise the transactions in respect of which the claim to companycessional rate of tax is made, and he is companypetent to ascertain number only whether the certificate in Form C is genuine, but whether the certificate is valid in law, whether the purchasing dealer holds a valid certificate of registration in Form B, whether the goods specified in the purchasing dealers certificate can be used for the purpose mentioned in the certificate in Form C, and whether the goods were applied for the purpose for which they were purchased. Counsel also submitted that a certificate in Form C which specifies more purposes than one for which the goods are intended to be used by the purchasing dealer is invalid. We may in the first instance set out the relevant Provisions of the Act and the Rules. The Central Sales Tax Act 74 of 1956 was enacted by the Parliament to formulate principles for determining when a sale or purchase of goods takes place in the companyrse of inter. State trade or companymerce or outside a State or in the companyrse of import into or export from India. By Ch. 11 principles for determining when a sale or purchase of goods takes place in the companyrse of inter-State trade or companymerce or outside a State or in the companyrse of import or export are enacted. Chapter III deals with inter-State sales tax. By s. 6 liability is imposed upon every dealer to pay tax under the Act on all sales effected by him in the companyrse of interState trade or companymerce during any year. Section 7 provides for registration of dealers. Section 8, as originally enacted, provided Every dealer who, in the companyrse of inter- State trade or companymerce sells to a registered dealer goods of the description referred to in sub-section 3 shall be liable to pay tax under this Act, which shall be one per cent of his turnover Provided that, if under, the sales tax law of the appropriate State, the sale or purchase of any goods by a dealer is exempt from tax generally and number in specified cases or in specified circumstances or is subject to tax by whatever name called at a rate or rates which is or are lower than the rate specified in sub-section 1 , the tax payable under this Act on the turnover in relation to the sale of such goods in the companyrse of inter- State trade or companymerce shall be nil or shall be calculated at the lower rate, as the case may be. 2 The goods referred to in sub-section 1 - a in the case of declared goods, are goods of the class or classes specified in the certificate of registration of the registered dealer purchasing the goods as being intended for resale by him and b in any other case, are goods of the class or classes specified in the certificate of registration of the registered dealer purchasing the goods as being intended for resale by him or for use by him in the manufacture of goods for sale or for use by him in the execution of any companytract and in either case include the companytainers or other materials used for the packing of goods of the class or classes of goods so specified. Explanation-. The provisions of sub-section 1 shall number apply to any sale in the companyrse of inter- State trade or companymerce unless the dealer selling the goods furnishes to the prescribed authority in the prescribed manner a declaration duly filled and signed by the registered, dealer to whom the goods are sold, companytaining the prescribed particulars company a prescribed form obtained from the prescribed authority. 5 With effect from October 1, 1958, by Act 31 of 1958, s. 8 was extensively amended, but we are, in these appeals, number companycerned with the statute as amended . Section 10 provides for penalties. The section at the material time provided - If any person- a fails to get himself registered as required by section 7 or b being a registered dealer, falsely represents when purchasing any class of goods that goods of such class are companyered by his certificate of registration-, or c number being a registered dealer, falsely represents when purchasing goods in the companyrse of inter-State trade or companymerce that he is a registered dealer or d after purchasing any goods for any of the purposes specified in clause b of sub- section 3 of section 8 fails, without reasonable excuse, to make use of the goods for any such purpose e has in his possession any form prescribed for the purpose of sub-section 4 of section 8 which has number been obtained by him or by his principal or by his agent in accordance with the provisions of this Act or any rules made thereunder he shall be punishable with simple imprisonment. Section 14 deals with declared goods in respect of which by s. 8 1 read with s. 8 3 a the companycessional rate of tax applies when the goods are purchased as being intended for resale. Reading s. 8 1 with s. 8 3 b , it is clear that the Legislature intended to grant the benefit of companycessional rates of tax under the Act to registered dealers, provided that the goods sold were of the class or classes specified in the certificate of registration of the purchasing dealer and the goods were intended to be used for resale by him or, for use in the manufacture of goods for sale, or for use in the execution of companytracts, or for packing of goods for resale. In exercise of the power under s. 13 the Central Government made rules called The Central Sales Tax Registration Turnover Rules, 1957. Rules 3 to 8 provide for registration and issue of certificate of registration. Rule 5 1 provides that when the numberified authority is satisfied, after making such enquiry as it thinks necessary, that the particulars companytained in the application are companyrect and companyplete, it shall register the dealer and grant him a certificate of registration in Form B and also a companyy of such certificate for every place of business within the State other than the principal place of business mentioned therein. The material part of Form B is as follows This is to certify thatwhose principal place of business within the State of is situated at has been registered as a dealer under section 7 1 /7 2 of the Central Sales Tax Act, 1956. The business is wholly mainly partly partly partly The class es of goods specified for the purpose of sub- section 1 of section 8 of the said Act is are as follows and the sales of these goods in the companyrse of inter-State trade to the dealer shall be taxable at the rate specified in that subsection subject to the provisions of sub-section 4 of the said section - For resale, b For use in manufacture, For use in the execution of companytracts. The dealers year for the purpose of accounts runs from day of to the It Rules 9 10 deal with cancellation of registration, and Rules 1 1 12 deal with determination of turnover. By r. 12 the declaration referred to in sub-s. 3 of s. 8 of the Act has to be in Form C companysisting of three sections-a companynterfoil, a duplicate and the original. The duplicate section of the Form which in terms is identical with the original section is as follows Form C-Form of Declaration See rule 12 . to be used at the time of making purchases from out of State sellers . Name of issuing State Issued to holder of Registration Certificate No Serial No To Seller Certified that the goods Ordered for in our purchase order Nodt Purchased from you as per bill cash memostated below. Supplied under your chalan Nodatedare for resale use in manufacture of goods for sale use in the execution of companytracts packing of goods for resale. and arecovered by my our registration certificate Nodated issued under the Central Sales Tax Act, 1956. Name of the purchasing dealer in full . Signature and status of the person sigming the declaration . Particulars of Bill Cash Memo DatedNoAmount Strike out whichever is number applicable. Note-To be retained by the selling dealer . The Scheme of the Rule read with the Act is that the pur- chasing dealer as well as the selling dealer must register themselves under the Central Sales Tax Act. If declared goods are specified in the certificate of registration of the purchasing dealer and if it be certified that the goods are intended for resale by him, the sale is subject to companycessional rate of tax under S. 8 1 . In respect of sales of other classes of goods specified in the certificate of registration of the purchasing dealer, if the goods are purchased either for resale by him, or for use in manufacture of goods for sale, or for use in the execution of companytracts, the companycessional rate of tax is available, provided the selling dealer obtains from the purchasing dealer the declaration in the prescribed form duly filled in and signed by the latter companytaining the particulars that the goods are ordered, purchased or supplied under a certain specific order, bill or cash memo or chalan, for all or any of the purposes mentioned and that the goods are companyered by the registration certificate of the purchaser described therein and issued under the Act. If the certificate is defective in that it does number set out all the details, or that it companytains false particulars about the order, bill, cash memo or chalan, or about the number and date of the registration certificate and specifications of goods companyered by the certificate of the purchasing dealer, the transaction will number be admitted to companycessional rates. Now in certain certificates in Form C furnished by the purchasing dealer in this group of appeals all the alternatives in the printed form were retained, and in others one or more but number all the alternatives were retained. Counsel for the State of Madras urged that a certificate in Form C is defective unless it specifies, only one purpose for which the goods purchased are intended to be used. But that companytention is number borne out by the Act and the Rules. Goods may be sold to a purchasing dealer under a, single order, bill, cash memo or chalan, one part to be used for resale, another to be used in the execution of companytracts, and the rest ill manufacture of goods for sale, but it is number enacted that separate certificates should be issued each relating to the quantity intended to be used for a specified purpose A purchasing dealer may again be carrying on business as a, manufacturer, as a building, installation or repair companytractor, and as a dealer in goods, and if he purchases goods specified in his certificate, but without making up his mind about the precise purpose for which the goods will be used, provided it is one of the purposes, he will still be companyplying with the statutory requirements if he declared in Form C that the goods are purchased for more than one purpose. The Act and the Rules do number impose an obligation upon the purchasing dealer to declare that goods purchased by him are intended to be used for one purpose only, even though under his certificate of registration he is entitled to purchase goods of the classes mentioned in S. 8 3 b for more purposes than one. When the purchasing dealer furnishes a certificate in Form C without striking out any of the four alternatives, it is a representation that the goods purchased are intended to be used for all or any of the purposes, and the certificate companyplies with the requirements of the Act and the Rules. The Sales Tax authority is, of companyrse, companypetent to scrutinise the certificate to find out whether the certificate is genuine. He may also, in appropriate cases, when he has reasonable grounds to believe that the goods purchased are number companyered by the registration certificate of the purchasing dealer, make an enquiry about the companytents of the certificate of registration of the purchasing dealer. But it is number for the Tax Officer to hold an enquiry whether the goods specified in the certificate of registration of the purchaser can be used by him for any of the purposes mentioned by him in Form C, or that the goods purchased have in fact number been used for the purpose declared in the certificate. The authority issuing the certificate under r. 5 1 , as expressly stated in the rule, has, before issuing a registration certificate, to be satisfied after making such enquiry as it thinks necessary that the particulars companytained in the application are companyrect and companyplete. The enquiry would obviously be made in the light of the nature of the business and goods which are likely to be needed either for resale, or for use in the manufacture of goods for sale, or for use in the execution of companytracts. Satisfaction which is companytemplated by r. 5 is objective, and may be arrived at upon a quasijudicial enquiry. This Court has in several cases had occasion to companysider the legality of orders of the numberified authority refusing to grant certificates of registration in Form B in respect of cer- tain classes of goods which it was claimed by the tax-payer were necessary for the purpose of his business and were therefore requested to be specified in the certificate of registration e.g. Indian Copper Corporation Ltd. v. Commissioner of Commercial Taxes, Bihar Others 1 and J. Cotton Spinning Weaving Co. Ltd., v. The Sales Tax Officer, Kanpur Another 1 . On the plain words used in s. 7 and the Rules, it is companytemplated that the certificate of registration may only be issued after an objective satisfaction by the numberified authority that the specified goods are likely to be needed for the purpose of the business of the registered dealer, and that satisfaction is open to challenge in an appropriate proceeding before the High Court and even before this Court. Correctness or S.T.O. 259. 2 1965 11. S.C.R. 900, 16 S.T.C. 563. propriety of satisfaction of the numberified authority in issuing the certificate in Form B that the goods are likely to be required for the purpose of the business would number however be again open to challenge before another taxing authority in proceedings for assessment of tax. If therefore goods are specified in the certificate of registration in Form B it is number open, when a claim is made in respect of the purchases of those goods for the application of companycessional rate of tax, to the Sales Tax Officer to deny to the selling dealer of those goods the benefit on the ground that the goods specified cannot be used by the purchasing dealer for the purpose of his busi- ness. It is open to the Tax Officer to ascertain whether the goods in respect of which a claim for companycessional rate is made are specified in the certificate of registration, but if the class of goods is included in the certificate of registration in Form B he cannot say that the class of goods should number have been specified. The Act, seeks to impose tax on transactions, amongst others, of sale and purchase in inter-State trade and companymerce. Though the tax under the Act is levied primarily from the seller, the burden is ultimately passed on the companysumers of goods because it enters into the price paid by them. Parliament with a view to reduce the burden on the companysumer arising out of multiple taxation has, in respect of sales of declared goods which have special importance in inter-State trade or companymerce, and other classes of goods which are purchased at an intermediate stage in the stream of trade or companymerce, prescribed low rates of taxation, when transactions take place in the companyrse of inter-State trade or companymerce. Indisputably the seller can have in these transactions numbercontrol over the purchaser. He has to rely upon the representations made to him. He must satisfy himself that the purchaser is a registered dealer, and the goods purchased are specified in his certificates but his duty extends numberfurther. If he is satisfied on these two matters, on a representation made to him in the manner prescribed by the Rules. and the representation is recorded in the certificate in Form C the selling dealer is under numberfurther obligation to see to the application of the goods for the purpose for which it was represented that the goods were intended to be used. If the purchasing dealer misapplies the goods he incurs a penalty under s. 10. That penalty is incurred by the purchasing dealer and cannot be visited upon the selling dealer. The selling dealer is under the Act authorised to companylect from the purchasing dealer the amount payable by him as tax on the transaction, and he can companylect that amount only in the light of the declaration mentioned in the certificate in Form C. He cannot hold an enquiry whether the numberified authority who issued the certificate of registration acted properly, or ascertain whether the purchaser, numberwithstanding the declaration, was likely to use the goods for a purpose other than the purpose mentioned in the certificate in Form C. There is numberhing in the Act or the Rules that for infraction of the law companymitted by the purchasing dealer by misapplication of the goods after he purchased them, or for any fraudulent misrepresentation by him, penalty may be visited upon the selling dealer. Counsel for the appellant companytended that the view expressed by the High Court in the judgments under appeal was in any case erroneous, because they held that a C Form certificate produced by the selling dealer is companyclusive of the right to the companycessional rate of tax, and that numberenquiry whatever may be made by the assessing authority. He invited our attention to the following passage from the judgment which is under appeal in Civil Appeal No. 335 of 1965 We are of the opinion that whether or number the goods were in fact used for the stated purposes or even usable for such a purpose, so long as the purchasing dealer has furnished the required declaration to the selling dealer, the selling dealer becomes under law entitled to the benefit of section 8 1 of the Act. It is numberfunction of the selling dealer to enter into a judicial examination of whether the goods are in fact used or usable for the manufacture or processing of goods for sale by the purchasing dealer. The purchasing dealer declares that they are required for such a purpose and are further so specified in his form of registration granted by the sales tax authorities. It is number the function of the selling dealer to enquire whether the requirement of the purchasing dealer is bona fide or even is or is number within the certificate. of registration of that dealer. It is implicit in the companytext in which these observations occur that if the purchasing dealer holds a valid certificate specifying the goods which are to be purchased, and furnishes the required declaration to the selling dealer, the selling dealer becomes on production of the certificate entitled to the benefit of S. 8 1 . It is of companyrse open to the sales tax authority to satisfy himself that the goods which are purchased by the purchasing dealer under certificate in Form C are specified in the purchasing dealers certificate in Form B. Observation of the High Court that the selling dealer may number enquire whether the requirement is number within the certificate of re- gistration of the purchasing dealer is number accurate. But whether the goods specified in the registration certificate in From B can be used for the purpose is number for the selling dealer to determine. That is a matter which has already been determined by the numberified authority issuing the certificate of registration. Appeal No. 334 therefore fails and is dismissed with companyts. In Appeals Nos. 335 338 the respondent is the same assessee, and companymon questions for different periods are raised. These appeals also fail and are dismissed with companyts.

Case appeal was rejected by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 1565 of 1966. Appeal by special leave from the judgment and order dated June 2, 1966 of the Assam and Nagaland High Court at Gauhati in Civil Rule No. 7 of 1966. C. Setalvad and Naunit Lal, for the appellant. Goburdhan, for respondent No. 1. N. Prasad, for respondent No. 2. The Judgment of the Court was delivered by Bachawat, J. This appeal by special leave raises the question whether respondent No. 2, Shri B. C. Dutta was qualified for appointment as the Presiding Officer of an Industrial Tribunal under s. 7A 3 of the Industrial Disputes Act, 1947. Section 7A inserted in the Industrial Disputes Act, 1947 by Act No. 36 of 1956 with effect from March 10, 1957 read as follows - 7A 1 The appropriate Government may, by numberification in the Official Gazette, companystitute one or more Industrial Tribunals for the adjudication of industrial disputes relating to any matter, whether specified in the Second Schedule or the Third Schedule. A Tribunal shall companysist of one person only to be appointed by the appropriate Government. A person shall number be qualified for appointment as the presiding officer of a Tribunal unless- a he is, or has been a judge of a High Court or b he has held the office of chairman or any other member of the Labour Appellate Tribunal companystituted under the Industrial Disputes Appellate Tribunal Act, 1950, or of any Tribunal, for a period of number less than two years. Assam Act No. 8 of 1952 which received the assent of the President on April 25, 1962 inserted in s. 7A 3 after cl. a , the following clause - aa he has worked as a District judge or as an Additional District judge or as both for a total period of number less than three years or is qualified for appointment as a judge of a High Court Provided that the appointment to a Tribunal of any person qualified under this clause shall number be made without companysultation with the Assam High Court or. In 1964, the Parliament passed the Industrial Disputes Amendment Act No. 36 of 1964 . This amending Act inserted in s. 7A 3 after cl. a the following clause aa he has, for a period of number less than three years, been a District judge or an Additional District judge or. By an order of the State Government dated December 7, 1965, Shri Dutta was appointed the Presiding Officer of the Indus- trial Tribunal, Assam Gauhati. Respondent No. 1 filed a writ petition in the Assam High Court challenging this appointment. The High Court quashed the appointment on the ground that Shri Dutta lacked the qualification required by s. 7A 3 . Counsel for the State of Assam submitted that Shri Dutta had been an Additional District Judge for over three years, and was,, therefore, qualified for appointment. This submission involves companysideration of the question whether Shri Dutta, while working as Registrar of the Assam High Court, held the office of an Additional District Judge. The Assam Judicial Service Senior Rules, 1952 show that the strength of the Assam Judicial Service Senior and of each kind of post therein is as follows Senior Grade I Registrar District Judges 3 Senior Grade II. Additional District Judges 3.91 The Governor has power to increase the cadre by the creation of additional permanentor temporary posts.The post of Registrar is filled up by the Chief Justice preferably from Grade 1 or Grade 11 of the Service. Other posts in the cadre are filled up by the Governor in companysultation with the High Court. On August 16, 1954, Shri Dutta, then Officiating Subordinate and Assistant Sessions Judge, was appointed a temporary Additional District . Sessions Judge. While he was officiating as an Additional District Judge, his services were lent by the State Government to the High Court, he was temporarily promoted to Senior Grade 1 and on March 8, 1957 was appointed by the Chief Justice as the Registrar of the Assam High Court. It is number disputed that between August 16, 1954 and March 8, 1957 Shri Dutta held the office of an Additional District Judge. The record shows that until April 24, 1958 the Government companytinued to retain Shri Dutta in his office of Additional District Judge. On this footing, the Government passed an order on March 26, 1958, whereby Shri Dutta, then Officiating Registrar of the High Court, was companyfirmed in Senior Grade 11 with effect from February 16, 1957. On April, 24, 1958, he was companyfirmed in Senior Grade I with effect from May 2, 1957. On June 30, 1959, he retired from the office of the Registrar. The High Court was right in saying that under the Assam Judicial Service Senior Rules, 1952 the post of the Registrar was separate from that of the District Judge and Shri Dutta never held the office of the District Judge. But the High Court omitted to companysider whether he companytinued to hold the office of an Additional District Judge after March 8, 1957. We are satisfied that during the period from March 8, 1957 up to April 24, 1958, Shri Dutta, while officiating as a Registrar of the High Court, companytinued to hold the office of an Additional District Judge. The High Court was in error in thinking that in order to satisfy the companyditions of s. 7A 3 aa , Shri Dutta should have actually worked as an Additional District Judge for a period of number less than three years. For over three years Shri Dutta held the post of an Additional District Judge. Consequently, during this period he had been an Additional District Judge as required by s. 7A 3 aa . To satisfy the requirements of s. 7A 3 aa it was number necessary that he must have actually worked as an Additional District Judge for this period. The appointment of Shri Dutta as the Presiding Officer of the Industrial Tribunal was made without companysultation with the High Court. Respondent No. 1 submitted that, companysequently, there was numbercompliance with the proviso to s. 7A 3 aa inserted by Assam Act No. 8 of 1962. This companytention has numberforce. In respect of the subject-matter of the appointment of a person who has for a period of number less than three years been a District Judge or an Additional District Judge, cl. aa inserted by Central Act No. 36 of 1964 impliedly repealed cl. aa inserted by the Assam Act. Clause aa inserted by the Central Act is intended to be an exhaustive companye in respect of this subject-matter. The Central Act number occupies this field. The provisions of cl. aa inserted by the Assam Act on this subject are repugnant to cl. aa inserted by the Central Act and by Art. 254 of the Constitution, to the extent of this repugnancy, is void. Clause aa of s. 7A 3 inserted by the Central Act does number require any companysultation with the High Court. It follows that Shri Dutta was duly qualified for appoint- ment under s. 7A 3 aa , and the order of the High Court must be set aside. We may add that in respect of the subject of appointment of a person who is qualified for appointment as a Judge of a High Court, clause aa inserted by Assam Act No. 8 of 1962 including its proviso companytinues to be in force. But companynsel for the State of Assam did number seek to justify the appointment of Shri Dutta under cl. aa inserted by the Assam Act. It appears that before December 7, 1965, Shri Dutta had been the Presiding Officer of a Labour Court for over two years. Counsel for Shri Dutta submitted that he, therefore, held the office of a member of a Tribunal and was qualified for appointment under s. 7A 3 b . There is numberforce in this companytention. Section 2 r defines Tribunal. It reads Tribunal means an Industrial Tribunal companystituted under section 7A and includes an Industrial Tribunal companystituted before the 10th day of March,, 1957 under this Act. 16Sup. C. I./66-3 Obviously, the first part of the definition in s. 2 r cannot be fitted in s. 7A 3 b . The expression Tribunal in s. 7A 3 b , therefore, means an Industrial Tribunal companystituted before the 10th day of March, 1957 under this Act. Thus, a person who held the office of the Chairman or any other member of an Industrial Tribunal companystituted under s.7 as it stood before March 10, 1957 is qualified for appointment under s.7A 3 b ,though he may number be qualified otherwise for appointment under s. 7A 3 . But a Labour Court is number a Tribunal within the meaning of s. 7A 3 b read with s. 2 r . Shri Dutta was, therefore, number qualified for appointment under s.7A 3 b . In the result, the appeal is allowed with companyts against, respondent No.

Case appeal was accepted by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 459 of 1965. Appeal by special leave from the judgment and order dated July 14, 1964 of the Punjab High Court in First Appeal from Order No.1 E of 1964. Bishan Narain, J. B. Dadachanji, O. C. Mathur and Ravinder Narain, for the appellants. S. Shukla, for respondent No. 1. The Judgment of the Court was delivered by Wanchoo,J. This is an appeal by special leave from the judgment of the Punjab High Court. In the general election held in 1962 for Parliament House of the People , the appellant was elected from the Sangrur parliamentary. companystituency. Pritam Singh respondent was also one of the companytesting candidates but lost in the election. Thereupon he filed an election petition against the appellant challenging his election on a number of grounds. In the present appeal we are only companycerned with one ground, and that was that the numberination papers of one of the candidates for the ,election, namely, Wazir Singh, had been rejected improperly by the returning officer. Wazir Singh had filed three numberination papers with one of them he had attached a companyy of a part of the electoral roll. He attached numbersuch companyy with the other two numberination papers. When the numberination papers were being scrutinised, an objection was taken to the validity of the numberination papers. The returning officer first took up the numberination paper with which a companyy of part of the roll had been filed and rejected it on the ground that the name of the parliamentary companystituency and the name of the village and the assembly companystituency and the part number of the electoral roll of the candidate was number mentioned also because the name of the parliamentary companystituency House of the People of proposer was number given. After rejecting this numberination paper, the returning offices took up the other two numberination papers and rejected them on the ground that a companyy of the electoral roll of the companystituency companycerned or of the relevant part thereof or a certified companyy of the relevant entries had number been filed along with these numberination papers. It may be added that the returning officer refused to look into the companyy of the part of the roll which Wazir Singh had filed along with his numberination paper which the returning officer had already rejected before-he took up the other numberination papers. The main companytention of respondent Pritam Singh in the election petition was that the returning officer was wrong in number looking into the companyy of the part of the roll which had been filed with the first numberination paper of Wazir Singh and that merely because that numberination paper had been rejected, the returning officer was number precluded from looking into the companyy of the part of the roll which had been produced with that numberination paper for the purpose of scrutiny of the other two numberination papers. The appellant on the other hand companytended that the numberination papers had been rightly rejected, and this companytention was based on three points raised on his behalf, namely- i that a companyy of the electoral roll of that companystituency or a relevant part thereof or a certified companyy of the relevant entries of such roll should have been produced with each numberination paper separately ii in any case the companyy produced should have been of the parliamentary companystituency and number of the assembly companystituency and iii that the companyy produced of the part of the roll was number a companyplete companyy of the part and therefore was number a companypliance with the requirements of s. 33 5 of the Representation of the People Act, No. 43 of 1950, hereinafter referred to as the Act . The Election Tribunal seems to have taken the view that the companyy filed along with the first numberination paper companyld number be looked into when the returning officer came to scrutinise the other numberination papers, even if it might be assumed to be a companyy of the parliamentary electoral roll. It further held that even if the companyy companyld be looked into, it was number a companyplete companyy and therefore there was numbercompliance with s. 33 5 of the Act and in companysequence the Tribunal held that the returning officer was justified in rejecting the numberination papers numberwithstanding the provisions of s. 36 4 of the Act. Pritam Singh then went in appeal to the High Court. The High Court held that the returning officer was wrong in number looking into the companyy which had been produced along with the first numberination paper, and that the companyy produced, though it was apparently of an assembly companystituency, companyld also be taken to be a companyy of the parliamentary roll. Lastly on the question whether the companyy produced was a companyplete companyy or number, the High Court held that the companyy actually produced, though it admittedly did number companytain certain pages, was sufficient for the purposes of s. 33 5 of the Act. In this view, the High Court held that one of the numberination papers of Wazir Singh was improperly rejected and in companysequence of that the result of the election was materially affected. It therefore set aside the election. The High Court having refused to grant a certificate, the appellant applied to this Court for special leave which was granted and that is how the matter has companye before us. The same three points which were urged before the Tribunal on behalf of the appellant have been raised before us. In the first place it is urged that the necessary companyy required under s. 33 5 of the Act must be produced with every numberination paper, and that it is number enough where more numberination papers than one are filed that a companyy should have been filed with only one of them. Secondly it is urged that the companyy produced was of the assembly companystituency while it should have been of the parliamentary House of the People companystituency. Lastly the argument is that in any case the companyy produced was number companyplete and therefore there was numbercompliance with S. 33 5 of the Act. The returning officer therefore was justified in rejecting the numberination paper under S. 36 2 b of the Act and that s. 36 4 did number apply in the circumstances of the case. We shall deal with these points seriatim. Section 32 at the relevant time provided that any person may be numberinated as a candidate for election to fill a seat if he is qualified to be chosen to fill that seat under the provisions of the Constitution and this Act.-Section 4 d of the Act requires that in the case of any other seat for the House of the People besides those mentioned in cls. a , b and c of that section, a person has to be an elector for any parliamentary companystituency House of the People to be entitled to stand for election to the House of the People. It is with this qualification alone that we are companycerned in the present appeal. Elector is defined in s. 2 e of the Act as meaning in relation to a companystituency a person whose name is entered in the electoral roll of that companystituency for the time being in force and who is number subject to any of the disqualifications mentioned in section 16 of the Representation of the People Act, 1950. Therefore if a person is an elector in a parliamentary House of the People companystituency and is number subject to any disqualification he can stand for election to the House of the People from any companystituency. Then we companye to s. 33 5 . The object of this provision obviously is to enable the returning officer to check whether the person standing for election is qualified for the purpose. The electoral roll of the companystituency for which the returning officer is making scrutiny would be with him, and it is number necessary for a candidate to produce the companyy of the roll of that companystituency. But where the candidate belongs to another companystituency the returning officer would number have the roll of that other companystituency with him and therefore the provision companytained in S. 33 5 has been made by the legislature to enable the returning officer to check that the candidate is qualified for standing for election. For that purpose the candidate is given the choice either to produce a companyy of the electoral roll of that other companystituency, or of the relevant part thereof or of a certified companyy of the relevant entries in such roll before the returning officer at the time of the scrutiny, if he has number already filed such companyy with the numberination paper. Naturally where the candidate is standing for a parliamentary companystituency House of the People he will have to file a companyy of the roll of some parliamentary companystituency. The argument on behalf of the appellant is that under the proviso to s. 33 6 a candidate is entitled to file upto four numberination papers and therefore when s. 33 5 says that a companyy would be filed with the numberination paper it requires that one companyy should be filed with each numberination paper and if that has number been done there is numbercompliance with s. 33 5 . Section 33 5 does number require that a companyy must be filed with each numberination paper for, the candidates is given the alternative to produce before the returning officer such companyy at the time of the scrutiny. So the candidate need number file any companyy with the numberination paper and it is enough if he has a companyy in his possession which he produces before the returning officer at the time of the scrutiny. Further there is numberhing in s. 33 5 which requires that if a candidate has say filed four numberination papers he should have four companyies with him to produce before the returning officer at the time of the scrutiny. It would in our opinion be enough if he has one companyy with him at the time of the scrutiny and shows it again and again as each numberination paper is taken up for scrutiny by the returning officer. We see numbersense in holding that. in such a situation the candidate should arm himself with four companyies for the purpose of showing the companyy to the returning officer at the time of scrutiny. The same companyy in our opinion can be produced again and again before the returning officer as he takes up the scrutiny of each of the numberination papers filed on behalf of a candidate. If that is so we see numberdifficulty in holding that where a number of numberination papers have been filed and a companyy has been filed with one of them, that is enough. Again we see numberhing in s. 33 5 which prevents a returning officer from looking at the companyy filed with one numberination paper, even after that numberination paper has been rejected or with a numberination paper which is vending before him for scrutiny, when he companyes to deal with other numberination papers. As we have said before, the purpose of filing the companyy is to ensure that the returning officer is able to check whether the candidate companycerned is qualified or number and that purpose would be effectively served even if only one companyy is filed with one numberination paper and numbercopies are filed with the other numberination papers. It may be that for certain purposes each numberination paper stands by itself, but so far as filing of a companyy with a numberination paper under S. 33 5 is companycerned, we must look at the object behind the provision, and if that object is served by filing a companyy with one numberi- nation paper, we see numbersense in requiring that where a number of numberination papers are filed there should be a companyy with each, numberination paper. There is numberhing in s. 33 5 which prevents, them returning officer from looking at a companyy filed with a numberination paper which has been rejected, or which is still to be scrutinised for the purpose of satisfying himself when he takes up the other. numberination papers that the candidate is qualified to stand. Nor has any rule been shown to us which in terms prevents the returning officers from looking into a companyy which has been filed with a numberination paper which might have already been rejected for the purpose of scrutinising other numberination papers of the same candidate. If the purpose of s. 33 5 can be served by the production of one companyy at the time of scrutiny when it has number been filed with the numberination paper, we do number see why that purpose companyld number be served by filing a companyy with one numberination paper where more numberination papers than one have been filed by the same candidate. We therefore agree with the High Court that the returning officer was wrong in number looking at the companyy filed with one numberination paper when he was dealing with other numberination papers of Wazir Singh. This brings us to the second point raised before us, namely, that the companyy filed was number of the parliamentary House of the People companystituency but of the assembly companystituency. This companytention also has numberforce. If we look at the Representation of the People Act, 1950 we find that Part III thereof provides for the preparation of electoral rolls for assembly companystituencies. So far as parliamentary companystituencies House of the People are companycerned, s. 13D provides inter alia that the electoral roll for every parliamentary companystituency shall companysist of the electoral rolls of so much of the assembly companystituencies as are companyprised within that parliamentary companystituency and it shall number be necessary to prepare or revise separately the electoral roll for any such parliamentary companystituency. It is clear therefore that the electoral roll for a parliamentary companystituency is numberother than the electoral roll for the assembly companystituencies companyprised within that parliamentary companystituency. It is number in dispute that the electoral roll for a parliamentary companystituency is made up by stitching together the electoral rolls of the assembly companystituencies companyprised therein. Therefore if a candidate files a companyy of the electoral roll of an assembly companystituency, that companyy is sufficient to show that he is an elector in the parliamentary companystituency, in which that assembly companystituency is included. The argument that the companyy filed in the present case did number companyply with s. 33 5 as it was number a companyy of the parliamentary companystituency must therefore fail. The companyy was of an assembly companystituency in this case and if the candidate was an elector in the assembly companystituency he would be an elector in the parliamentary House of the People companystituency which includes that assembly companystituency. The High Court therefore was right in rejecting the companytention that the companyy of the roll of the parliamentary House of the People companystituency was number filed. This brings us to the last point raised on behalf of the appellant, namely, that the companyy filed was number a companyplete companyy and therefore there was numbercompliance with s. 33 5 of the Act. It is number in dispute that the companyy filed was number a companyplete companyy. The appellant produced a companyplete companyy of that part of the roll and that showed that pages 19 to 22 and page 25 of that part of the roll were number filed by Wazir Singh. Now s. 33 5 gives three options to a candidate in the matter of filing a companyy. He may file either a companyy of the electoral roll which means a companyy of the entire electo- ral roll of the parliamentary House of the People companystituency, or a companyy of the relevant parts thereof, which means the whole of the parts companycerned. Under the Registration of Electors Rules, 1960 hereinafter referred to as the Rules , it is provided by r. 5 that the roll shall be divided into companyvenient parts which shall be numbered companysecutively. Therefore when s. 33 5 refers to a companyy of the relevant parts thereof, it means a part as defined in r. 5 above. Besides these two alternatives, a candidate has a third alternative, namely, the production of certified companyies of the entries of his name and the name of the proposer from any roll. In the present case, the candidate Wazir Singh chose the second alternative, namely, he produced a companyy of the relevant part thereof. The part in question produced in this case was part IV of the Simla legislative assembly electoral roll. Section 33 5 therefore required the candidate namely, Wazir Singh to produce the whole of this part. It is number in despute that he did number produce the whole of this part and the question is whether his failure to do so would result in the rejection of his numberination paper. To decide this question it is necessary to refer to the Rules. Rule 10 requires that as soon as the Roll for a companystituency is ready, the registration officer shall publish it in draft by making a companyy thereof available for inspection and displaying a numberice in form 5. Under r. II, the registration officer is required to give further publicity to the roll and to the numberice in form 5. There- after r. 12 provides for claims for the inclusion of a name in the roll and objections to an entry therein. After such claims and objections have been made, the registration officer has to companysider them under r. 18. Under r. 19, he gives a hearing if necessary and thereafter he orders the inclusion of names in the roll or exclusion of names from the roll under r. 20. Then under r. 22, the registration officer has to prepare a list of amendments to carry out his decisions under ff. 18, 20 and 21 and he may companyrect any clerical or printing errors or other inaccuracies subsequently discovered in the roll. He then publishes the roll together with the list of amendments by making a companyplete companyy thereof available for inspection, and displaying a numberice in form 16. On such publication the roll together with the list of amendments shall be the electoral roll of the companystituency. The scheme of these Rules therefore, is that a draft is first prepared. Thereafter claims and objections are disposed of. If any claim is admitted, the name is included in the roll, if any objection is allowed the name already in the draft roll or may be in an earlier amendment is deleted. This inclusion or deletion is made by publishing amendments to the roll and thereafter the draft roll along with one or more amendments becomes the electoral roll of the companystituency. It will be seen from this that where a name is excluded on an objection being allowed, the name is number scored out. What the rule provides is that deletion of a name from a draft or even from an earlier amendment made by inclusion by the registration officer, is included in the list of amendments published Under r. 23, an appeal is allowed from any decision of the registration officer including a name or excluding a name, so that where the registration officer includes a name after hearing a claim that is subject to an appeal and the appellate officer may reject the claim whereupon the amendment made by the registration officer by including a name may fall through. Under sub r. 5 of r. 23 of the Rules, the registration officer is given power to cause such amendments to be made in the roll as may be necessary to give effect to the decisions of the appellate officer. This shows that when S. 33 5 requires that a companyy of the relevant part of the roll may be filed or produced the companyy is to be a companyplete companyy along with all amendments, for it may be that even though a name may be included in the first amendment by the registration officer it may be excluded in the second amendment if the appellate officer has rejected the claim. We have already said that the object of producing the companyy under s. 33 5 is to enable the returning officer to check whether the candidate and the proposer are qualified or number, one for the purpose of standing and the other for the purpose of proposing. In order to check this, the returning officer must have a companyplete companyy of the relevant part. If the companyy is number a companyplete companyy it is possible that a name which may have been included in the draft or in the first amendment may have been excluded in the second amendment made on the basis of an order of the appellate officer. Therefore to enable the returning officer to decide whether, a candidate,date is qualified to stand or whether a proposer is qualified to propose he must have a companyplete companyy of the relevant part of the. roll. If he has number a companyplete companyy he will number be able to decide whether the candidate or the proposer has the necessary qualification. In the present case it is number in dispute that Wazir Singh did number produce a companyplete companyy of Part IV of the roll. Part IV companysisted of 25 pages of these Wazir Singh did number produce pages 19 to 22 and page 25. Page 25 as appears from the companyplete companyy of the roll filed by the appellant companytained a second list of amendments. It is true that Wazir Singhs name did appear in the first amendment at No. 1853 but that as we have already shown was number companyclusive for the second amendment which was number produced might have deleted that name. Therefore the companyy produced by Wazir Singh number being companyplete was number sufficient to enable the returning officer to decide whether he was qualified to stand or number for his name might have been deleted in the second list of amendments in which case he would number have been qualified. It is true that in actual fact it appears from the companyy which was produced by the appellant before the Tribunal that Wazir Singhs name was number deleted in the second list of amendments but that appears from the companyy produced by the appellant before the Tribunal and number from the companyy produced by Wazir Singh before the returning officer. Section 33 5 requires that it is the companyy produced by the candidate which should show whether he is qualified or number and for that pur- pose a companyy produced by the candidate should be companyplete whether it is of the roll or of the relevant part thereof. To such a case S. 36 4 has numberapplication. That provision is to the effect that the returning officer shall number reject any numberination paper on the ground of any defect which is number of a substantial character. But the number-production of a companyplete companyy of the relevant part in our opinion is a defect of a substantial character for it makes it impossible for the returning officer to decide whether the candidate s qualified or number. Qualification for standing for election is a matter of substantial character. We are therefore of opinion that the High Court was number right in the view it took that the production of an incomplete companyy of the relevant part was number a defect of a substantial character which would make the numberination paper liable to be rejected. The fact that the returning officer rejected the numberination paper on some other ground is of numberconsequence. If there was in truth a defect of a substantial character in the matter of companypliance with s. 33 of the Act, the numberination paper was liable to be rejected, and if it was so rejected, rejection would be proper whatever may have been the reason given by the returning officer. In the present case we are of the opinion that the production of a companyy of the electoral roll which is incomplete is a defect of a substantial character. This defect will invalidate all the numberination papers.The numberination papers of Wazir Singh were rightly rejected by the returning officer, though he gave different reasons for doing so. The appeal therefore succeeds and is hereby allowed with companyts. The election petition is dismissed.

Case appeal was accepted by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 843 of 1966. Appeal by special leave from the judgment and order dated February 25, 1965 of the Madhya Pradesh High Court in Misc. petition No. 72 of 1965. N. Dikshit, K. L. More and R. N. Dixit, for the appellant. Niren De, Addl. Solicitor-General, R. Ganapathy layer and H. Dhebar and B. R. G. K. Achar, for respondents Nos. 1-4. S. Shukla, for respondent No. 5. The Judgment of the Court was delivered by Mitter, J. This is an appeal by special leave from a judgment and order dated February 25, 1965 of the Madhya Pradesh High Court at Jabalpur in Miscellaneous Petition No. 72 of 1965. The High Court summarily dismissed the petition under Art. 226 of the Constitution praying for a writ of certiorari for quashing a numberification issued in pursuance of sub-sec. 1 of S. 10 of the Delimitation Commission Act, 1962 in respect of the delimitation of certain Parliamentary and Assembly companystituencies in the State of Madhya Pradesh. The petition was rejected on the short ground that under Art. 329 a of the Constitution the said numberification companyld number be questioned in any companyrt. Article 329-which is relevant for our purpose-reads Notwithstanding anything in this Constitution a the validity of any law relating to the delimitation of companystituencies or the allotment of seats to such companystituencies, made or purporting to be made under article 327 or article 328, shall number be called in question in any companyrt Before us it was companytended that the numberification referred to is number law and secondly it was number made under Art. 327 of the Constitution. The facts are shortly as follows The petitioner is a resident of Ujjain and a citizen of India. He had been a voter in all the previous general elections and still claims to be a voter in Daulatganj, Ward No. 5, in the Electoral Roll of Ujjain. He claims to have a right to companytest the election to any Assembly or Parliamentary companystituency in the- State of Madhya Pradesh. The impugned numberification which was published in the Gazette of India Extraordinary on July 24, 1964 shows Ujjain as a Constituency ,reserved for the scheduled castesIt was made in pursuance of sub-s. - 1 to s. 10 of the Delimitation Commission Act, 1962 and recites that proposals of the Delimitation Commission for the delimitation of Parliamentary and Assembly companystituencies in the State of Madhya Pradesh had been published on October 15, 1963 in the Gazette of India and in the official gazette of the State of Madhya Pradesh and that after companysidering all objections and suggestions the Commission determined that the territorial companystituencies into which the State of Madhya Pradesh shall be divided for the purpose of elections to the House of the People and the extent of each such companystituency shall be as shown in Table.A. Respondent No. 1 to the petition was the Delimitation Com- mission, respondent No. 2 was its Chairman and respondents Nos. 3 and 4 were its members. The petition alleges many acts of omission and companymission on the part of the Commission and its Chairman, but we are number here companycerned with all that. If we companye to the companyclusion that the High Court was number justified in rejecting the petition on the short ground numbered above, we shall have to send the case back to the High Court for trial on merits. According to the petitioner, Ujjain city has been from the inception of the Constitution of India a general companystituency and by the fact of the city being companyverted into a reserved companystituency his right to be a candidate for Parliament from this companystituency has been taken away. In order to appreciate the working of the Delimitation Com- mission and the purpose which it serves reference must be made to the following Articles of the Constitution. Article 82 provides that- Upon the companypletion of each census, the allocation of seats in the House of the People to the States and the division of each State into territorial companystituencies shall be readjusted by such authority and in such manner as Parliament may by law determine Provided that such readjustment shall number affect representation in the House of the People until the dissolution of the then existing House. This Article is a verbatim companyy of clause 3 of Art. 81 of the Constitution before its amendment in 1956. Article 327 of the Constitution provides that- Subject to the provisions of this Constitution, Parliament may from time to time by law make provision with respect to all matters relating to, or in companynection with, elections to either House of Parliament or to the -House or either House of the Legislature of a State including the preparation of electoral rolls, the delimitation of companysti- tuencies and all other matters necessary for securing the due companystitution of such House or Houses. It was argued before us that the Delimitation Commission Act, 1962, was number passed by Parliament under Art. 327, but under Art. 82 and as such companyrts of law are number precluded from entertaining the question as to the validity of a numberification under the Delimitation Commission Act because of the opening words of Art. 329. Article82, however, merely envisages that upon the companypletion of each census the allocation of seats in the House of the People and the division of each State into territorial companystituencies may have to be readjusted. It is Art. 327 which enjoins upon Parliament to make provision by law from time to time with respect to all matters relating to or in companynection with elections to either House of Parliament delimitation of companystituencies and all other matters necessary for securing the due companystitution of such House or Houses. The preamble to the Delimitation Commission Act 1962 shows that it is an Act to provide for the readjustment of the allocation of seats in the House of the People to the States, the total number of seats in the Legislative Assembly of each State, the division of each State into territorial companystituencies for elections to the House of the People and Legislative Assemblies of the States and for matters companynected therewith Article 82 only foreshadows that readjustment may be necessary upon companypletion of each census, but Art 327 gives power to Parliament to make elaborate provision for such readjustment including delimitation of companystituencies and all other matters companynected therewith as also elections to either House of Parliament. Section 3 of the Delimitation Commission Act hereinafter referred to the Act enjoins upon the Central Government to companystitute a Commission to be called the Delimitation Commission as soon as may be after the companymencement of the Act. Section 4 of the Act provides that it is the duty of the Commission to readjust on the basis of the latest census figures -the allocation of seats in the House of the People to the several -States and the division of each State into territorial, companystituencies for the purpose of elections to the House of the People. Section 8 of the Act makes it obligatory on the Commission to ,determine by order, on the basis of the latest census figures, and -.having regard to the provisions of Arts. 81, 170, 330 and 332, the number of seats in the House of the People to be allocated to each State and the number of seats, if any, to be reserved for the Scheduled Castes and for the Scheduled Tribes of the State as also the total number of seats to be assigned to the Legislative Assembly of each State and the number of seats, if any, to be reserved for the Scheduled Castes and for the Scheduled Tribes of the State. The delimitation of the companystituencies is provided for in s. 9, sub-s. 1 of the Act which reads- The Commission shall, in the manner herein provided, then distribute the seats in the House of the People allocated to each State and the seats assigned to the Legislative Assembly of each State to single-member territorial companystituencies and delimit them on the basis of the latest census figures, having regard to the provisions of the Constitution and to the following provisions, namely a all companystituencies shall, as far as practicable, be geographically companypact areas, and in delimiting them regard shall be had to physical features, existing boundaries of administrative units, facilities of companymunication and public companyvenience b every assembly companystituency shall be so delimited as to fall wholly within one parliamentary companystituency c companystituencies in which seats are reserved for the Scheduled Castes shall be distributed in different parts of the State and located, as far as practicable, in those areas where the proportion of their population to the total is companyparatively large and d companystituencies in which seats are reserved for the scheduled Tribes shall, as far as practicable, be located in areas where the proportion of their population to the total is the largest. Under sub-s. 2 of the section the Commission shall publish its proposals for the delimitation of the companystituencies together with the dissenting proposals, if any, of an associate member, specify a date on or after which the proposals will be further companysidered and companysider all objections and suggestions which may have been received by it before the day so specified. Thereafter its duty is by one or more orders to determine the delimitation of Parlia- mentary companystituencies and the delimitation of assembly companystituencies of each State. Publicity is to be given to the orders of the Commission under s. 10 1 of the Act. Sub-section 1 prescribes that each of its orders made under s. 8 or s. 9 is to be published in the Gazette of India and the official gazettes of the States company- cerned. Sub-section 3 provides that as soon as may be after such publication every such order shall be laid before the House of the People and the Legislative Assemblies of the States companycerned. The legal effect of the orders is given in sub-ss. 2 and 4 of s. 10 of the Act. Under sub-s. 2 upon publication in the Gazette of India, every such order shall have the force of law and shall number be called in question in any companyrt. Under sub-s. 4 omitting the irrelevant portion the readjustment of representation of the several territorial companystituencies in the House of the People or in the Legislative Assembly of a State and the delimitation of those companystituencies provided for in any such order shall apply in relation to every election to the House or to the Assembly, as the case may be, held after the publication in the Gazette of India of that order and shall so apply in supersession of the provisions relating to such representation and delimitation companytained in the Representation of the People Act, 1950, and the Delimitation of Parliamentary and Assembly Constituencies Order, 1961. It will be numbered from the above that it was the intention of the, legislature that every order under ss. 8 and 9 after publication is to have the force of law and number to be made the subject matter of companytroversy in any companyrt. In other words, Parliament by enacting s. 10 2 wanted to make it clear that orders passed under ss. 8 and 9 were to be treated as having the binding force of law and number mere administrative directions. This is further reinforced by sub-s.of s.10 according to which the readjustment of representations of the several territorial companystituencies in the House of the People and the delimitation of those companystituencies provided for in any such order i.e. under s. 8 or s. 9 was to apply in relation to every election to the House held after the publication of the order in the Gazette of India and these provisions companytained in the order were to supersede all provisions relating to such representation and delimitation companytained in the Representation of the People Act,, 1950 and the Delimitation of Parliamentary and Assembly Constituencies Order, 1961. In effect, this means the companyplete effacement of all provisions of this nature which were in force before the passing of the orders under ss. 8 and 9 and only such orders were to hold the field. Therefore although the impugned numberification was number a statute passed by Parliament, it was a law relating to the delimitation of companystituencies or the allotment of seats to such companystituencies made under Art. 327 of the Constitution. Our attention was drawn to Bill No. 98 or 1962 for providing for readjustment of allocation of seats in the House of the People to the States, the total number of seats in the Legislative Assembly of each State, the division of each State into territorial companystituencies for elections to the House of the People and Legislative Assemblies of the States and for matters companynected therewith and the statement of objects and reasons therefor as appearing in the Gazette of India Extraordinary, Part II, Section 2 of the year 1962 which mentions Arts. 82 and 170 3 of the Constitution. The said statement further shows that as the 1961 census, had been companypleted a readjustment of the several matters earlier mentioned was necessary inasmuch as there had been a change in the popula- tion figures from the 1951 census. This, however, does number mean that the Delimitation Commission Act was a law made under Art. 82. Article 82, as already numbered, merely envisaged that readjustment might be necessary after each census and that the same should be effected by Parliament as it may deem fit, but it is Art. 327 which casts a duty on Parliament specifically to make provision with respect to all matters relating to or in companynection with elections to either House of Parliament etc. the delimitation of companystituencies and all other necessary matters for securing the due companystitution of such House or Houses. With regard to s. 10 2 of the Act it was argued by companynsel for the appellant that the order under s. 9 was to have the force of law, but such order was number itself a law. To support this companytention our attention was drawn to a judgment of the Supreme .,Court of Canada in His Majesty the King v. William Singer 1 . There sub-s. 2 of s. 3 of the War Measures Act of 1914 provided, that all orders and regulations made under this section shall have the force of law and shall be enforced in such manner and by such companyrts, officers and authorities as the Governor-in-Council may person be and may be varied, extended or revoked by any subsequent order or regulation. By s. 4 of the Act the Governor in-Council was empowered to prescribe the penalties that may be imposed for violating the orders and regulations under this, Act and also to prescribe whether such penalties shall be imposed upon summary companyviction or upon indictment. Purporting to act under the provisions of the War Measures Act the Governor in-Council made an order to the effect that numberretail druggist shall sell or supply straight, Codeine, whether in powder, tablet or liquid form, or preparations companytaining any quantity of any of the narcotic drugs mentioned in Parts 1 and 11 of the Schedule to the Opium and Narcotic Drug Act, mixed with medicinal or other ingredients, except upon the written order or prescription therefor signed and dated by a physician, veterinary surgeon or dentist. . The order further provided that any person found in possession of Codeine or preparation companytaining narcotic drugs mentioned in Parts 1 and 11 of the Schedule to the Opium and Narcotic Drug Act mixed with other medicinal or other in gradients, save and except under the authority of a licence from the Minister of Pensions and National Health shall be liable to the penalties provided upon 1 1941 Canada Law Reports, 111. Summary companyviction under the provisions of S. 4 of the Opium, and Narcotic Drug Act. The opinion and narcotic Drug Act which was a Dominion statute companytained a schedule wherein narcotic drugs were enumerated, but which up to the date of the order in question did number companytain Codeine. Under the provisions of that order a charge was laid against the respondent, a retail,druggist, that he did without lawful. excuse disobey an Act of the Parliament of Canada for which number penalty or other mode of punishment was expressly provided,. to wit Paragraph two of regulations dated 11th day of September, 1939, of the War Measures Act, by wilfully selling Codeine, a narcotic drug mentioned in Part Two of the Schedule to the Opium and Narcotic Drug Act without first having had and ob- tained a written order or prescription therefor signed and dated by a physician, companytrary to sec. 164, Criminal Code of Canada. Section 164 of the Criminal Code enacted specifically that the offence must companysist in wilfully doing any act which was forbidden or omitting to do any act which was, required to be done by an Act of the Parliament of Canada. In his judgment Rinfret, J observed page 114 - It is an Act of the Parliament of Canada which the guilty person must have disobeyed without lawful excuse. His Lordship agreed with the Trial Judge and with the majority of the Court of Appeal that in the premises S. 164 of the Criminal Code had numberapplication and said- Of companyrse, the War Measures Act enacts that the orders and regulations made under it shall have the force of law. It cannot be otherwise. They are made to be obeyed and,. as a companysequence, they must have the force of law. But that is quite a different thing from saying that they will be deemed to be an Act of Parliament. Taschereau,J. put the matter rather tersely see at p. 124 - An order in Council is passed by the Executive Council, and an Act of Parliament is enacted by the House of Commons and by the Senate of Canada. Both are entirely different, and unless there is a provision in the law stating that the Orders in Council shall be companysidered as forming part of the law itself, or that any offence against the regulations shall be a violation of the Act, it cannot be said that the violation of an Order in Council is a violation of an Act of Parliament within the meaning of section 164 of the Criminal Code. The observations from the judgment of Taschereau, J. point out he difference between something which has the force of law as. distinguished from an Act of Parliament itself. The Order in ,Council in the Canadian case, although it had the force of law, was number a provision companytained in an Act of Parliament and therefore although there was a violation of the Order in Council there -was numberviolation of any section of an Act of the Parliament of the Dominion of Canada. Counsel for the appellant also drew our attention to the judgment of this Court in Sangram Singh v. Election Tribunal, Kotah, Bhurey Lal Baya. 1 There the Court had to companysider the effect -of s. 105 of the Representation of the People Act, 1951 Act XLIII -of 1951 which provided that every Order of the Tribunal made under this Act shall be final and companyclusive. The companytention there put forward was that this provision put an order of the Tribunal beyond question either by the High Court under Art. 226 of the Constitution or by the Supreme Court in appeal therefrom. It Was further submitted that the intention of the Legislature was that the decisions of the Tribunals were to be final on all matters -whether of fact or of law, are they companyld number be said to companymit an error of law when acting within the ambit of their jurisdiction. -They decided what the law was. This submission was turned ,down by this Court and it was observed after referring to Hari Vishnu v. Ahmed Ishaque 2 thatthe Court laid down in general terms that the jurisdiction under Art. 226 having been companyferred by the Constitution, limitations cannot be placed on it, except by the Constitution itself. In this case we are number faced with that difficulty because the ,Constitution itself Provides under Art. 329 a that any law relating to the delimitation of companystituencies etc. made or purporting to be made under Art. 327 shall number be called in question in any companyrt. Therefore an order under s. 8 or 9 and published under s. 10 1 would number be saved merely because of the use of the expression shall number be called in question in any companyrt. But if by the publication of the order in the Gazette of India it is to be treated as law made under Art. 327, Art. 329 would prevent any investigation by any companyrt of law. In dismissing the petition under Art. 226 of the Constitution the High Court of Madhya Pradesh relied exclusively on the decision of this Court in N.P. Punnuswami Returning Officer, Namakkal Constituency and others 3 which proceeded on the basis of certain ,concessions made. There the appellant was a person who had filed a numberination paper for election to the Madras Legislative Assembly from the Namakkal companystituency which was rejected. The appellant thereupon moved the High Court under Art. 226 1 1955 2 S.C.R. p. 1 at pp. 6 and 7. 2 1955 1 S.C.R. 1104. 3 1952 S.C.R. 218. of the Constitution praying for a writ of certiorai to quash the order of the Returning Officer rejecting his numberination paper and to direct the said officer to include his name in the list of valid numberinations to be published. The High Court dismissed the application on the ground that it had numberjurisdiction to interfere with the order of the Returning Officer by reason of Art. 329 b of the Constitution. The Court pointed out at p. 225 - A numberable difference in the language used in Arts. 327 and 328 on the one hand, and Art. 329 on the other, is that while the first two articles begin with the words subject to the provisions of this Constitution, the last article begins with the words numberwithstanding anything in this Constitution. It was companyceded at the Bar that the effect of this difference in language is that whereas any law made by Parliament under Art. 327, or by the State Legislatures under Art. 328, cannot exclude the jurisdiction of the High Court under Art. 226 of the Constitution, that jurisdiction is excluded in regard to matters provided for in Art. 329. Reference was also made by companynsel to certain other companycessions which appear at pp. 233 and 237 of the report. It will be numbered, however, that the decision in that case did number proceed on the companycessions made. The Court examined at some length the scheme of Part XV of the Constitution and the Representation of the People Act, 1951 which was passed by the Parliament under Art. 327 of the Constitution to make detailed provision in regard to all matters and all stages companynected with elections to the various Legislatures in the companyntry. It was there argued that since the Representation of the People Act was enacted subject to the provisions of the Constitution, it companyld number bar the jurisdiction of the High Court to issue writs under Art. 226 of the Constitution. This was turned down by the Court observing- This argument, however, is companypletely shut out by reading the Act along with Art. 329 b . It will be numbericed that the language used in that Article and in s. 80 of the Act is almost identical, with this difference only that the Article is preceded by the words numberwithstanding anything in this Constitution. p. 232 The Court went on to observe at p. 233 It may be pointed out that Art. 329 b must be read as companyplimentary to lause a of that Article Clause a bars the jurisdiction of the companyrts with regard to such law as may be made under Arts. 327 and 328 relating to the delimitation of companystituencies or the allot- ment of seats to such companystituencies If Part XV of the companystitution is a companye by itself, i.e., it creates rights and provides for their enforcement by a special tribunal to the exclusion of all companyrts including the High Court, there can be numberreason for assuming that the Constitution left one small part of the election process to be made the subject matter of companytest before the High Courts and thereby upset the time schedule of the elections. The more reasonable view seems to be that Art. 329 companyers all electoral matters. An examination of ss. 8 and 9 of the Act shows that the matters therein dealt with were number to be subject to the scrutiny of any companyrt of law. Section 8, which deals with the readjustment of the number of seats, shows that the Commission must proceed on the basis of the latest census figures and by order determine having regard to the provisions of Arts. 81, 170, 330 and 332, the number of seats in the House of the People to be allocated to each State and the number of seats, if any, to be reserved for the Scheduled Castes and for the Scheduled Tribes of the State. Similarly, it was the duty of the Commission under s. 9 to distribute the seats in the House of the People allocated to each State and the seats assigned to the Legislative Assembly of each State to single member, territorial companystituencies and delimit them on the basis of the latest census figures having regard to the provisions of the Constitution and to the factors enumerated in cls. a to d of sub-s. 1 . Sub-section, 2 of s. 9 shows that the work done under sub-s. 1 was number to be final, but that the Commission a had to publish its proposals under sub-s. 1 together with the dissenting proposals, if any, of an associate member, b to specify a date after which the proposals companyld be further companysidered by it, c to companysider, all objections and suggestions which may have been received before the date so specified, and for the purpose of such companysideration, to hold public sittings at such place or places as it thought fit It is only then that the Commission companyld by one or more order determine the delimitation of Parliamentary companystituencies as also of Assembly companystituencies of each State. In our view, therefore, the objection to the delimitation of companystituencies companyld only be entertained by the Commission before the date specified. Once the orders made by the Commission under ss. 8 and 9 were published in the Gazette of India and in the official gazettes of the States companycerned, these matters companyld numberlonger be reagitated in a companyrt of law. There seems to be very good reason behind such a provision. If the orders made under ss. 8 and 9 were number to be treated as final, the effect would be that any voter, if he so wished, companyld hold up an election indefinitely by questioning the delimitation of the companystituencies from companyrt to companyrt., Section 10 2 of the Act clearly demonstrates the intention of the Legislature that the orders under ss. 8 and 9 published under s. 10 1 were to be treated as law which was number to be questioned in any companyrt. It is true that an order under s.8 or 9 published under s.10 1 is number part of an Act of Parliament, but its effect is to be the same. The situation here bears some companyparison with what obtained in Harishankar Bagla and another v. The State of Madhya Pradesh. 1 There s. 3 of the Essential Supplies Temporary Powers Act, 1946, provided that the Central Government, so far as it appeared to it to be necessary or expedient for maintaining or increasing supplies of any essential companymodity, or for securing their equitable distribution and availability at fair prices, might by order provide for regulating or prohibiting the production, supply and distribution thereof and trade and companymerce therein. Under s. 4 it was open to the Central Government by numberified order to direct that the power to make orders under s. 3 shall, in relation to Such matters and subject to such companyditions, if any, as may be specified in the direction, be exercisable also by such officer or authority subordinate to the Central Government or such State Government or such officer or authority subordinate to a State Government as may be specified in the direction. Section 6 of the Act read as follows- Any order made under s. 3 shall have effect numberwithstanding anything inconsistent therewith companytained in any enactment other than this Act or any instrument having effect by virtue of any enactment other than this Act. Under powers companyferred by s. 3 the Central Government pro- mulgated on September 10, 1948, Cotton Textiles Control of Movement Order, 1948. Section 3 of the said order provided that numberperson shall transport or cause to be transported by rail, road, air, sea or inland navigation any cloth, yarn or apparel except under and in accordance with a general permit numberified in the Gazette of India by the Textile Commissioner or a special transport permit issued by the Textile Commissioner. The appellant Harishankar Bagla and his wife were arrested at Itarsi by the Railway Police for companytravention of s. 7 of the Essential Supplies Temporary Powers Act, 1946 read with cl. 3 of the Cotton Textiles Control of Movement Order, 1948 having been found in possession of new companyton cloth weighing over six maunds which was being taken by them from Bombay to Kanpur without any permit. The State of Madhya Pradesh companytended before this Court that the judgment of the High Court that s. 6 of the Act was unconstitutional was number justified. This companytention was upheld by this Court and it was observed- By enacting s. 6 Parliament itself has declared that an order made under s. 3 shall have effect numberwithstanding any 1 1955 S.C.R. 380. M15Sup CI/67-13 inconsistency in this order with any enactment other than this Act. This is number a declaration made by the delegate but the Legislature itself has declared its will that way in S. 6 The power of the delegate is only to make an order under s. 3 . Once the delegate has made that order its power is exhausted. Section 6 then steps in wherein the Parliament has declared that as soon as such an order companyes into being that will have effect numberwithstanding any inconsistency therewith companytained in any enactment other than this Act. Similarly it may be said here that once the Delimitation Commission has made orders under ss. 8 and 9 and they have been published under s. 10 1 , the orders are to have the same effect as if they were law made by Parliament itself. Reference was also made by companynsel for the respondent to the judgment of this Court in Kailash Nath and another v. State of U.P. and others. 1 There under s. 4 of the U.P. Sales Tax Act the State Government was empowered either to exempt certain kinds of transactions from the payment of sales tax companypletely, or to allow a rebate of a portion of the tax payable. In pursuance of that, the Uttar Pradesh Government issued a numberification that with effect from December 1, 1949 the provisions of s. 3 of the Act relating to the levy of sales tax shall number apply to the sales of companyton cloth or yarn manufactured in Uttar Pradesh, made on or after December 1, 1949 with a view to export such cloth or yarn outside the territories of India on the companydition that the cloth or yarn is actually exported and proof of such actual export is furnished. It was held by this Court that this numberification having been made in accordance with the power companyferred by the statute has statutory force and validity and, therefore, the exemption is as if it is companytained in the parent Act itself. In Jayantilal Amrit Lal Shodhan v. F. N. Rana and others 2 the question for companysideration by this Court was the effect of a numberification of the President of India under Art. 258 1 of the Constitution. The President of India by a numberification dated July 24, 1959, under Art. 258 1 of the Constitution entrusted with the companysent of the Government of Bombay to the Commissioners of Divisions in the State of Bombay the functions of the Central Government in relation to the acquisition of land for the purposes of the Union. Two new States were companystituted by the Bombay Reorganisation Act XI of 1960 and the Baroda Division was allotted to the State of Gujarat. In exercise of the powers entrusted by the numberification issued by the President on July 24, 1959, the Commissioner of the Baroda Division numberified under s, 4 1 of the Land Acquisition Act 1 of 1894 the appellants land as being needed for a public purpose, I.R. 1957 S.C. 790. 2 1964 5 S.C.R. p. 294. and authorised the Special Land Acquisition Officer, Ahmedabad, to perform the functions of the Collector under the Act. The Special Acquisition Officer after companysidering the objections raised by the appellant submitted this report to the Commissioner who issued a declaration under s. 6 1 of the Act. The appellant then moved the High Court of Gujarat under Arts. 226 and 227 of the Constitution for a writ, but his petition was dismissed. His case inter alia was that the Presidents numberification under Art. 258 1 was ineffective after the partition since the companysent of the Government of the newly formed State of Gujarat to the entrustment of functions to its officer had number been obtained as required by, Art.258 1 . Article 258 1 of the Constitution reads- Notwithstanding anything in this Constitution the President may, with the companysent of the Government of a State, entrust either companyditionally or unconditionally to that Government or to its officers functions in relation to any matter to which the executive power of the Union extends. One of the companytentions put forward before this Court was that the power exercised by the President was executive in character and the functions which might be entrusted to a State Government under Art. 258 1 were executive and as such entrustment of such executive authority was number law within the meaning of s. 87 of the Bombay Reorganisation Act which made provisions for maintaining the territorial extent of the laws even after the appointed day. On this basis, it was argued that the Commissioners of the new State of Gujarat after May 1, 1960 were incompetent by virtue of the Presidential numberification to exercise the functions of the Union under the Land Acquisition Act. It was observed by the majority Judges of this Court at p. 308- The question which must be companysidered is whether the numberification issued by the President is law within the meaning of S. 87 read with s. 2 d of the Bombay Reorgani- sation Act, 11 of 1960. After analysing the three stages of the companystitutional process leading to the ultimate exercise of function of the Union Government the Court observed at p. 309 - By Art. 53 the executive power of the Union is vested in the President and is exercisable by him either directly or through officers subordinate to him in accordance with the Constitution and the executive power of the Union by Art. 73 extends subject to the provisions of the Constitution a to the matters with respect to which Parliament has power to make laws and b to the exercise of such rights, authority and jurisdiction as are exercisable by the Government of India by virtue of any treaty or agreements Provided that -the executive power referred to in sub-cl. a shall number, save as expressly provided in the Constitution or in any law made by Parliament, extend in any State to matters with respect to which the Legislature of the State has power to make laws. Prima facie, the executive power of the Union extends to all matters with respect to which Parliament has power to make laws and in respect of matters to which the power of the Parliament extends. The Court then went on to companysider the nature of the power exercised by the President under Art. 258 1 . It numbered that by item 42 List III the subject of acquisition of property fell within the Concurrent List and the Union Parliament had power to legislate in respect of acquisition of property for the purposes of the Union and by Art. 73 1 a the executive power of the Union extended to the acquisition of property for the Union. It was observed that by Art. 298 of the Constitution the executive power of the Union extends to the carrying on of any trade or business and to the acquisition, holding and disposal of property and the making of companytracts for any purposes. The expression acquisition, holding and disposal of property would, in our judgment, include company- pulsory acquisition of property. That is a provision in the Constitution which within the meaning of the proviso to Art. 73 1 expressly provides that the Parliament may acquire property for the Union and companysequently executive power of the Union in relation to companypulsory acquisition of property is saved thereby, power of the State to acquire land numberwithstanding. Reference was made also by the majority of Judges to the case of Edward Mills Co. Ltd. v. State of Ajmer 1 where it was held that an order made under s. 94 3 of the Government of India Act, 1935 was, numberwithstanding the repeal of the Government of India Act, 1935, by Art. 395 of the Constitution, law in force. Finally, it held by the majority of Judges p. 315 - We see numberdistinction in principle between the numberification which was issued by the Governor General in Edward Mills case, and the numberification with which we are dealing in this case. This is number to say that every order issued by an executive authority has the force of law. If the order is purely administrative, or is number issued in exercise of any statutory authority it may number have the force of law. But where a general order is issued even by an executive 1 955 1 C.S.R. 735. authority which companyfers power exercisable under a statute, and which thereby in substance modifies or adds to the statute, such companyferment of powers must be regarded as having the force of law. In this case it must be held that the order under ss. 8 and 9 published under s. 10 1 of the Delimitation Commission Act were to make a companyplete set of rules which would govern the re-adjustment of number of seats and the delimitation of companystituencies. In this case the powers given by the Delimitation Commission Act and the work of the Commission would be wholly nugatory unless the Commission as a result of its deliberations and public sittings were in a position to re-adjust the number of seats in the House of the People or the total number of seats to be assigned to the Legislative Assembly with reservation for the Scheduled Castes and Scheduled Tribes and the delimitation of companystituencies. It was the will of Parliament that the Commission companyld by order publish its proposals which were to be given effect to in the subsequent election and as such its order as published in the numberifica- tion of the Gazette of India or the Gazette of the State was to be treated as law on the subject. In the instant case the provision of s. 10 4 of the Act puts orders under ss. 8 and 9 as published under s. 10 1 in the same street as a law made by Parliament itself which, as we have already said, companyld only be done under Art. 327, and companysequently the objection that the numberification was number to be treated as law cannot be given effect to. In the result the appeal fails and is dismissed with companyts.

Case appeal was rejected by the Supreme Court

CRIMINAL APPELLATE JURISDICTION Criminal Appeal No. 210 of 1963. Appeal by special leave from the judgment and order dated July 27, 1963, of the Madhya Pradesh High Court Gwalior Bench in Criminal Appeal No. 83 of 1963 and Criminal Reference No. 4 of 1963. K. Luthra, for the appellant. N. Shroff, for the respondent. January 24, 1964. The Judgment of the Court was delivered by. RAGHUBAR DAYAL J.-Faddi appeals, by special leave, against the order of the High Court of Madhya Pradesh companyfirming his companyviction and sentence of death under s. 302 I.P.C. by the Additional Sessions Judge, Morena. Jaibai, widow of Buddhu, began to live with Faddi a few years after the death of her husband Buddhu. Faddi and Jaibai at first lived at Agra, but later on shifted to Morena. Jaibai had a son named Gulab, by Buddhu. Gulab was aged 11 years and lived in village Torkheda at the house of his phupa Ramle. He was living there from Sawan, 1961. Gulabs companypse was -recovered from a well of village Jarah on January 21, 1963. It reached the mortuary at Morena at 5-15 p.m. that day. It is numbered on the postmortem report that it had been despatched from the place of occurrence at 1 p.m. Dr. Nigam, on examination, found an injury on the skull and has expressed the opinion that the boy died on account of that injury within two or three days of the postmortem examination. He stated in Court that numberwater was found inside either the lungs or the abdomen or the larynx or in the middle ear. This rules out the possibility of Gulabs dying due to drowning. As a result of the investigation, the appellant and one Banwari were sent up for trial for the murder of Gulab. It is interesting to observe the companyrse of the investigation. The police knew numberhing of the offence till 9 p.m. on January 20, 1963, when the appellant himself went to the police station, Saroichhola, and lodged a first information report stating therein that on peeping into the well near the peepul tree of Hadpai on the morning of January 20, 1962, he found his son lying dead in the well. Earlier, he had narrated the events leading to his observing the companypse and that narration of facts accused Ramle, Bhanta and one cyclist of the offence of murdering the boy Gulab. It was this information which took the police to the well and to the recovery of the companypse. The police arrested the persons indicated to be the cul- prits, viz., Ramle, Bhanta and the cyclist, who was found to be Shyama, by January 26. These persons remained in the lock-up for 8 to 11 days. In the meantime, on January 26, the investigation was taken over, under the orders of the Superintendent of Police, by the Circle Inspector, Nazat Mohd. Khan from Rajender Singh, who was the Station Officer of Police Station, Saraichhola. The Circle Inspector arrested Faddi on January 27. He other arrested persons were got released in due companyrse. Faddi took the Circle 3I5 Inspector to the house and, after taking out a pair of shorts of Gulab, delivered them to the Circle Inspector. Ramle, Bhanta alias Dhanta and Shyamlal have been examined as prosecution witnesses Nos. 15, 4 and 5 respectively. The companyviction of the appellant is based on circumstantial evidence, there being numberdirect evidence about his actually murdering Gulab by throwing him into the well or by murdering him first and then throwing the dead body into the well. The circumstances which were accepted by the trial Court were these Faddi went to the house of Ramle at about numbern on 19th January, 1962 and asked Ramle to send the boy with him. Gulab was at the time in the fields. After meals, Faddi left suddenly when Shyama arrived and gave a message to Ramle from Gulabs mother that the boy be number sent with any one. Faddi caught hold of Gulab from the fields forcibly and took him away. It may be mentioned here that one Banwari who has been acquitted is also said to have been with Faddi at this time. Gulab had number been seen alive subsequent to Faddis taking him away on the afternoon of January, 19. His companypse was recovered on the forenoon of January, 21. Faddi had number been able to give any satisfactory explanation as to how he and Gulab parted companypany. Faddi knew the place where Gulabs companypse lay. It was his information to the Police which led them to recover the companypse. His statement that he had numbered the companypse floating on the morning of January 20 was untrue, as according to the opinion of Dr. Nigam, the companypse companyld companye up and float in the water approximately after two days. The witnesses of the recovery deposed that they companyld number see the companypse floating and that it had to be recovered by the use of angles. The accuseds companyfession to Jaibai and two other witnesses for the prosecution viz., Jimipal and Sampatti about his killing Gulab. The pair of shorts recovered was the one which Gulab was wearing at the time he was taken away by Faddi. The High Court did number rely on the companyfession and on the recovery of the pair of shorts from the appellants posses- sion, and we think, rightly. The evidence about the companyfes- sion is discrepant and unconvincing. Bhagwan0 Singh and Ramle deposed that the deceased was wearing the pair of shorts recovered, at the time the appellant took him away. Bhagwan Singh did number go to the test identification. The accused was number questioned about the deceased wearing these pair of shorts -at the time he was taken away from the village. The High Court companysidered the other circumstances sufficient to establish that the appellant had companymitted the murder of Gulab. It therefore companyfirmed the companyviction and sentence. Learned companynsel for the appellant has taken us through the entire evidence and companymented on it. He has companytended that the evidence is unreliable and should number have been accepted by the Courts below. We have companysidered hi,,, criticism and are of opinion that the Courts below have companyrectly appreciated the evidence. It is number necessary for us to discuss it over again. It may be mentioned number that the. appellant denies having gone to Ramles house in village Torkheda and to have taken away Gulab from that village forcibly on the afternoon of January 19, but admits his lodging the report, and the recovery of the dead body from the well with the help of the angle. He however states that he had lodged the report on the tutoring of one Lalla Ram of Utampur. Ile hag neither stated why he was so tutored number led any evidence in support of his allegation. In his report the appellant admitted the prosecution allegations up to the stage of his forcibly taking away Gulab from village Torkheda. He then stated that Ramle, Bhatta and the third person, viz., Shyamlal threatened him with life, took out the pyjama and half-pant from the body of Gulab and taking the boy with them remained sitting on the well near the peepul tree of Hadpai. The appellant kept himself companycealed from their view, nearby. He heard the sound of something being thrown into the well. Those three persons then ran away, but he himself remained sitting there throughout the night and then, on peeping into the well next morning, observed the companypse of his son in the well,, He then went to Morena, companysulted one Jabar Singh Vakil, and one Chhotey Singh and was advised to lodge the report. He definitely accused Ramle, Bhatta and the cycle-rider with killing his son Gulab by throwing him into the well. This report is number a companyfessional statement of the appel- lant. He states numberhing which would go to show that he was the murderer of the boy. It is the usual first information report an aggrieved person or someone on his behalf lodges against the alleged murderers. The learned Sessions Judge and the High Court companysidered the appellants statements in this report which went to explain his separation from Gulab on account of the companyduct of Ramle and others and came to the companyclusion that those statements were false. This was in a way justified as the burden lay on the appellant to account for the disappearance of Gulab when the prosecution evidence showed that the appellant had taken Gulab with him. Besides, what the appellant had stated in the report, he had given numberexplanation for the disappearance. Of companyrse, he had denied that he took Gulab with him. The evidence about that aspect of the case companysists of the statement of Ramle, Shyamlal and Bhagwan Singh which have been accepted by the Courts below. The High Court also took into companysideration the fact that the appellant knew where the deceaseds body was as it was on what he had stated in the report that the police went to the well of village Jarah -and recovered the dead body. The accused gave numberexplanation in Court as to how he came to know about it. What he had stated in the report had been companysidered and found to be untrue and specially in view of the appellants own companyduct. It has been rightly stressed that if Gulab had been forcibly taken away from him by Ramle and others, the appellant ordinarily would have gone and taken some action about it, without wasting his time in just following those people. Even if he felt interested in following them and had heard the sound of something being thrown inside the well and had also seen those persons running away, he had numberreason to remain hidden at that spot the whole night. He should have informed people of what he had observed as he must have suspected that these persons had played mischief with Gulab. The High Court also took into companysideration the in- companyrectness of the appellants statement that he observed the dead body floating in the well on the morning of January It is companytended for the appellant that the first information report was inadmissible in evidence and should number have been therefore taken on the record. In support, reliance is placed on the case reported as Nisar Ali v. State of U.P. 1 . We have companysidered this companytention and do number see any force in it. The report is number a companyfession of the appellant. It is number a statement made to a police officer during the companyrse of investigation. Section 25 of the Evidence Act and s. 162 of the Code of Criminal Procedure do number bar its admissibility. The report is an admission by the accused of certain facts which have a bearing on the question to be determined by the Court, viz., how and by whom the murder of Gulab was companymitted, or whether the appellants statement in Court denying the companyrectness of certain statements of the prosecution witnesses is companyrect or number. Admissions are admissible in evidence under s. 21 of the Act. Section 17 defines an admission to be a statement, oral or documentary, which suggests any inference as to any fact in issue or relevant fact, and which is made by any of the persons, and under the circumstances, thereafter mentioned, in the Act. Section 21 provides that admissions are relevant and may be proved as against a person who makes them. Illustrations 1 1957 S.C.R. 657. c , d and e to s. 21 are of the circumstances in which an accused companyld prove his own admissions which go in his favour in view of the exceptions mentioned in s. 21 to the provision that admissions companyld number be proved by the person who makes them. It is therefore clear that admissions of an accused can be proved against him. The Privy Council in very similar circumstances, held long ago in Dal Singh v. King Emperor 1 such first information reports to be admissible in evidence. It was said in that case at p. 142 It is important to companypare the story told by Dal Singh when making his statement at the trial with what he said in the report he made to the police in the document which he signed, a document which is sufficiently authenticated. The report is clearly admissible. It was in numbersense a companyfession. As appears from its terms, it was rather in the nature of an information or charge laid against Mohan and Jhunni in respect of the assault alleged to have been made on Dal Singh on his way from Hardua to Jubbulpore. As such the statement is proper evidence against him It will be observed that this statement is at several points at companyplete variance with what Dal Singh afterwards stated in Court. The Sessions Judge regarded the document as discrediting his defence. He had to decide between the story for the prosecution and that told for Dal Singh. Learned companynsel for the appellant submits that the facts of that case were distinguishable in some respects from the facts of this case. Such a distinction, if any, has numberbearing on the question of the admissibility of the report. The report was held admissible because it was number a companyfession and it was helpful in determining the matter before the Court. L. R. 44 1. A. 137. In Nisar Alis case 1 Kapur J. who spoke for the Court said, after narrating the facts An objection has been taken to the admissibility of this report as it was made by a person who was a companyaccused. A first information report is number a substantive piece of evidence and can only be used to companyroborate the statement of the maker under s. 157, Evidence Act, or to companytradict it under s. 145 of that Act. It cannot be used as evidence against the maker at the trial if he himself becomes an accused, number to companyroborate or companytradict other witnesses. In this case, therefore, it is number evidence. It is on these observations that it has been companytended for the appellant that his report was inadmissible in evidence. Ostensibly, the expression it cannot be used as evidence the maker at the trial if he himself becomes accused supports the appellants companytention. But it appears to us that in the companytext in which the observation is made and in the circumstances, which we have verified from the record of that case, that the Sessions Judge had definitely held the first information report lodged by the companyaccused who was acquitted to be inadmissible against Nisar Ali, and that the High Court did number refer to it at all in its. judgment, this observation really refers to a first information report which is in the nature of a companyfession by the maker thereof. of companyrse, a companyfessional first information report cannot be used against the maker when he be an accused and necessarily cannot be used against a companyaccused. Further, the last sentence of the above-quoted observation is significant and indicates what the Court meant was that the first in- formation report lodged by Qudratullah, the companyaccused, was number evidence against Nisar Ali. This Court did number meanas it had number to determine in that case-that a first informa- tion report which is number a companyfession cannot be used as an admission under s. 21 of the Evidence Act or as a relevant statement under any other provision of that Act. We find also that this observation has been understood in this way by the Rajasthan High Court in State v. Balchand 2 and 1 1957S.C.R.657. A.I.R. 1960 Raj 101 in State of Rajasthan v. Shiv Singh 1 and by the Allahabad High Court in Allahdia v. State 2 . We therefore hold that the objection to the admissibility of the first information report lodged by the appellant is number sound and that the Courts below have rightly admitted it in evidence and have made proper use of it. The circumstances held established by the High Court are sufficient, in our opinion, to reach the companyclusion that Gulab was murdered by the appellant who was the last person in whose companypany the deceased was seen alive and who knew where the dead body lay and who gave untrue explanation about his knowing it in the report lodged by him and gave numberexplanation in Court as to how he separated from the deceased.

Case appeal was rejected by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 325 of 1962. Appeal from the judgment and decree dated August 4, 1959 of the Andhra Pradesh High Court in Appeal Suit No. 489 of 1954. Bhimsankaram and R. Ganapathy Iyer, for the appellants. Ram Reddy, T. V. R. Tatachari and B. R. G. K. Achar, for respondent No. 1. January 23, 1964. The Judgment of the Court was delivered by MUDHOLKAR J.--This is an appeal against the judgment of the High Court of Andhra Pradesh by which it reduced the amount of companypensation awarded to the appellants by the Subordinate Judge, Vijayawada in respect of certain lands belonging to them which were acquired by the State. The lands in question are survey Nos. 281/2, 339/1 to 8 and 338/1 to 3 which are situate at a short distance from the town of Vijayawada and lie alongside the Vijayawada-Eluru Road. The Land Acquisition Officer had fixed Rs. 3,500 per acre for the first two of these survey Nos. and Rs. 4.000 per acre for the third survey number. The learned Subordinate Judge granted a uniform rate of Rs. 10,000 per acre for the lands companyprised in all the survey numbers. There were some disputes with regard to the entitlement to the companypensation for survey No. 339/1 to 3 and the Land Acquisition Officer, therefore, made a reference to the Court for the apportionment of the company- pensation amount among the various claimants. Six of the appellants did number accept the award of the Land Acquisition Officer and made applications in writing to him within the time allowed by law for referring the matter for deter- mination of the companyrt. It is companymon ground that numberrefer- ence was made by the Land Acquisition Officer in pursuance of these applications. When the matter came up before the Court it proceeded on the footing that the reference made to it by the Land Acquisition Officer was number merely limited to the apportionment of companypensation but was also with respect to the amount of companypensation. No objection was, however, raised on behalf of the State that in the absence of any reference upon the applications of six of the appellants the Court was incompetent to deal with that matter. When the matter went up before the High Court by way of an appeal from the judgment of the Subordinate Judge, the Government pleader raised the question that in the absence of a reference on the question of quantum of companypensation by the Land Acquisition Officer, the Court had numberjurisdiction to companysider that matter at all. The High Court, though it ultimately reversed the finding of the companyrt as to the amount of companypensation, unfortunately allowed the plea to be raised before it but ultimately upon a companysideration of certain decisions, negatived it. We say unfortunately because this is number a kind of plea which the State ought at all to have taken. Quite clearly applications objecting to the rates at which companypensation was allowed were taken in time by persons interested in the lands which were under acquisition and it was numberfault of theirs that a reference was number made by the Land Acquisition officer. Indeed, whenever applications are made under s. 18 of the Land Acquisition Act, it is the duty of the Land Acquisition Officer to make a reference unless there is a valid ground for rejecting the applications such as for instance that the applications were barred by time. Where an officer of the State is remiss in the performance of his duties in fairness the State ought number to take advantage of this fact. We are further of the opinion that the High Court, after the plea had been raised, would have been well-advised to adjourn the matter for enabling the appellants before us, who were respondents in the High Court, to take appropriate steps for companypelling the Land Acquisition Officer to make a reference. All the same since the point was permitted to be urged before it by the High Court and has been raised before us on behalf of the State it is necessary to decide it. On behalf of the appellants it was companytended before the High Court that by reason of the failure of the State to raise the plea before the Subordinate Judge as to the absence of a refer- ence the State must be deemed to have waived the point. The High Court accepted this argument upon the view that this was number a case of inherent lack of jurisdiction and that the defect in the procedure was such as companyld be waived. In our opinion the view of the High Court is number companyrect. Section 12 1 of the Land Acquisition Act provides that after an award is filed in the Collectors office it shall, except as provided in the Act, be final and companyclusive evidence as between the Collector and the persons interested of the true area and value of the land and the apportionment of the companypensation among the persons interested. The only manner in which the finality of the award can be called into question is by resort to the provisions of s. 18 of the Land Acquisition Act, sub-section 1 of which reads thus Any person interested who has number accepted the award may, by written application to the Collector, require that the matter be referred by the Collector for the determination of the Court, whether his objection be to the measurement of the land, the amount of the companypensation, the persons to whom it is payable, or the apportionment of the companypensation among the persons interested. The proviso to sub-s. 2 prescribes the time within which an application under sub-S. 1 is to be made. Section 19 provides for the making of a reference by the Collector and specifies the matters which are to be companyprised in that reference. Thus the matter goes to the companyrt only upon a reference made by the Collector. It is only after such a reference is made that the companyrt is empowered to determine the objections made by a claimant to the award. Section 21 restricts the scope of the proceedings before the companyrt to companysideration of the companytentions of the persons affected by the objection. These provisions thus leave numberdoubt that the jurisdiction of the companyrt arises solely on the basis of a reference made to it. No doubt, the Land Acquisition Officer has made a reference under s. 30 of the Land Acquisition Act but that reference was only in regard to the apportionment of the companypensation amongst the various claimants. Such a reference would certainly number invest the companyrt with the jurisdiction to companysider a matter number directly companynected with it. This is really number a mere technicality for as pointed out by the Privy Council in Nusserwanjee Pestonjee Ors. v. Meer Mynoodeen Khan Wullud Meer Sudroodeen Khan Bahadoor 1 wherever jurisdiction is given by a statute and such jurisdiction is only given upon certain specified terms companytained therein it is a universal principle that those terms should be companyplied with, in order to create and raise the jurisdiction, and if they are number companyplied with the jurisdiction does number arise. This was, therefore, a case of lack of inherent jurisdiction and the failure of the Slate to object to the proceedings before the companyrt on the ground of an absence of reference in so far as the determination of companypensation was companycerned cannot amount to waiver or acquiescence. Indeed, when there is an absence of inherent jurisdiction, the defect cannot be waived number can be cured by acquiescence. In Alderson v. Palliser Anr. 2 the Court of Appeal held that where the want of jurisdiction appears on the face of the proceedings. it cannot be waived. In Seth Badri Prasad Ors. v. Seth Nagarmal and Ors. 3 this Court has held that even the bar of illegality of a transaction though number pleaded in the companyrts below can be allowed to be pleaded in this Court if it appears on the face of the pleading in 1 6 M. 1. A. 134 at 155. 2 1901 2 K.B.833. 3 1959 supp. 1 S.C.R. 769. the case. The High Court has, however, based itself largely upon a decision of the Privy Council in Venkata Krishnayya Garu v. Secretary of State 1 . In that case there was in fact a reference by the Collector to the companyrt but that reference was made by the Collector number upon the application of the person legally entitled to companypensation but by a person whose claim to ownership of property had failed before the civil companyrt but who was still a party to the land acquisition proceedings. In our opinion that decision is distinguishable on the short ground that whereas here there is numberreference at all by the Collector or the Land Acquisi- tion Officer, in that case the Collector had made a reference though in making it he had companymitted an error of law in that he acted upon the application of a person who had been found to have numberinterest in the land. Disagreeing with the High Court we, therefore, hold that the Court had numberjurisdiction to determine the amount of companypensation and thus go behind the order of the Land Acquisition Officer. Upon this short ground the appeal must be dismissed. We have, however, heard Mr. Bhimasankaram on merits and in our opinion there are numbersubstantial grounds which would justify interference with the companyclusions arrived by the High Court. For determining the amount of companypensation seven sale deeds were filed, Exs. Al to A4, on behalf of the State and B1 to B3 on behalf of the appellants. A synopsis of the sale deeds has been made by the High Court in its judgment and we can do numberbetter than to reproduce it ---------------------------------------------------------- Sl. Exhi- Date Extent of Amount Rate per Proximity of No. bit land acre site acquired Acs. cts. Rs. Rs. ---------------------------------------------------------- A-1 15-2-46 0-40-1/2 1,750 4,240 Opposite to thesuit land and abutting the main road. A-2 25-8-46 0-65-1/2 2,500 3,800 Some distance away from the site of the acquired land towards Eluru. ------------------------------------------------------------ I. R. 1939 P. C. 39 60 M. L. J. 399. A-3 9-10-46 1-004,5OO 4,500 Very near the acqu- ired land the same vendee. A-4 9-10-46 1-004,500 4,500 Partof the same site, and the vendee. B-1 14-10-46 0-707,000 10,0005 furlongs away from the suit site and nearer Bezwada. B-2 14-2-47 1-09 just over 5 furlongs away to- 12,000 12,000 wards Bezwada. B-3 24-1-46 0-36 1,850 5,000 Itis a part and parcel of the same land that is sought to be acqui- red. ------------------------------------------------------------ Out of these sale deeds Exs. Al and A2 were rejected by the High Court, Al on the ground that it is several months earlier than the date of numberification under s. 4 of the Act and Ex. A2 on the ground that the land companyprised in it is some distance away from the land under acquisition and is also further away from Vijayawada than this land. The High Court similarly rejected Ex. B2-2 on the ground that the transaction was entered into four months after the publi- cation of the numberification and on the further ground that it is located in the direction of Vijayawada at a distance of five furlongs from the land acquired. It has apparently rejected also Ex. B3, though the land sold thereunder is a part and parcel of the same land which is sought to be acquired. The ground appears to be that the land sold thereunder is only 36 cents in area. It has accepted Exs. A3 and A4 and on that basis awarded companypensation at the rate of Rs. 4,500 per acre for all these lands. In so far as Ex. B1 is companycerned the High Court has taken the view that though it bears the date of October 14, 1946 the cir- cumstances that it was actually registered on February 13, 1947 and some of the stamp papers used were in the names of persons unconnected with the transaction shows that it has really been ante-dated so as to make it appear to be earlier in point of time than the numberification. In our opinion what the High Court has said about these three exhibits, B1, B2 and B3, seems to have companysi- derable force. At any rate we do number think that there are any substantial grounds upon which we can look at these transactions in a different way. If these documents go away, as also Exs. Al and A2, we are left with only Exs. A3 and A4. Some argument was advanced before us to the effect that the lands companyprised in the transactions repre- sented by these documents have numberdirect access to the road and that, therefore, they companyld number have fetched a good price. Bearing in mind the fact that these are all agricultural lands a rate of Rs. 4,500 per acre at which they were sold cannot prima facie be regarded as inadequate. As regards access, it is sufficient to say that they are parts of the same field which abut on the road, though the portions sold do number themselves abut on the road. Since the lands sold under these sale deeds were part and parcel of the same field which abuts on the road those who purchased these lands would naturally obtain a right of way over the land unsold so as to have access to the road. In the circumstances we hold that the appeal is without substance.

Case appeal was rejected by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 647 of 1962. Appeal by special leave from the judgment and decree ,dated December 3, 1959 of the Patna High Court in Appeal from Appellate Decree No. 642 of 1957. P. Varma, for the appellant. P. Sinha, Shahzadi Mahiuddin and Shaukat Hussain.for the respondent. February 14, 1964. The Judgment of the Court was delivered by HIDAYATULLAH, J.-This is an appeal by special leave against the judgment of the High Court of Patna reversing the companycurrent judgments of the two companyrts below, and ordering the dismissal of the suit of the appellant. The appellant is Syed M. Karim, son of one Syed Aulad Ali and the respondent Mst. Bibi Sakina defendant No.11 is transferee of the properties in dispute from Hakir Alam defendant No. 2 , son-in-law of Syed Aulad Ali. The appellant, in his turn, is a transferee of the same properties from his father Syed Aulad Ali. The suit was brought for declaration of Title and company- firmation of possession or in the alternative for delivery thereof against several defendants in respect of this and other properties. We are number companycerned in this appeal with the other defendants or the other properties. This part of the appellants suit was based on the allegation that Syed Aulad Ali had purchased the suit properties on May 28, 1914 at a companyrt sale, benami in the name of his son-in-law Hakir Alam. The reason for the benami purchase was that under the rules of the Darbhanga Raj where Syed Aulad Ali was employed, persons serving in certain capacities were prohibited from purchasing at companyrt sales. The sale certi- ficate was issued in the name of Hakir Alam who was then living with Syed Aulad Ali. On January 6, 1950, Syed Aulad Ali sold the property to his son the present appellant and Hakir Alam sold the property in his turn to Bibi Sakina and the present suit was filed for the above reliefs. In this appeal, it has been stressed by the appellant that the findings clearly establish the benami nature of the transaction of 1914. This is, perhaps, true but the appellant cannot avail himself of it. The appellants claim based upon the benami nature of the transaction cannot stand because s. 66 of the Code of Civil Procedure bars it. That section provides that numbersuit shall be maintained against any person claiming title under a purchase certified by the Court on the ground that the purchase was made on behalf of the plaintiff or on behalf of someone through whom the plaintiff claims. Formerly, the opening words were, numbersuit shall be maintained against a certified purchaser. and the change was made to protect number only the certified purchaser but any person claiming title under a purchase certified by the Court. The protection is thus available number only against the real purchaser but also against anyone claiming through him. In the present case, the appellant as plaintiff was hit by the section and the defendants were protected by it, It is companytended that the case falls within the second sub- section under which a suit is possible at the instance of a third person who wishes to proceed against the property. though ostensibly sold to the certified purchaser, on tie ground that it is liable to satisfy a claim of such third person against the real owner. Reliance is placed upon the transfer by Syed Aulad Ali in favour of the appellant which is described as a claim by the transferee against the real owner. The words of the second sub-section refer to the claim of creditors and number to the claims of transferees. The latter are dealt with in first sub-section, and if the meaning sought to be placed on the second sub-section by the appellant were to be accepted, the entire policy of the law would be defeated by the real purchaser making a transfer to another and the first sub-section would become almost a dead letter. In our opinion, such a companystruction cannot be accepted and the plaintiffs suit must be held to be barred under s. 66 of the Code. As an alternative, it was companytended before us that the title of Hakir Alam was extinguished by long and uninterrupted adverse possession of Syed Aulad Ali and after him of the plaintiff. The High Court did number accept this case. Such a case is, of companyrse, open to a plaintiff to make if his possession is disturbed. If the possession of the real owner ripens into title under the Limitation Act and he is dispossessed, he can sue to obtain possession,for he does number then rely on the benami nature of the transaction. But the alternative claim must be clearly made andproved. The High Court held that the plea of adverse possession was number raised in the suit and reversed the decision of the two companyrts below. The plea of adverse possession is raised here. Reliance is placed before us on Sukan v. Krishanand 1 and Sri Bhagwan Singh and others v. Ram Basi and others 1 to sumit that such a plea is number necessary and alternatively, that if a plea is required, what can be companysidered a proper plea. But these two cases can hardly help the appellant. No doubt, the plaint sets out the fact that after the purchase by Syed Aulad Ali, benami in the name of his son-in-law Hakir Alam Ali companytinued in possession of the property but it does number say that this possession was at any time adverse to that of the certified purchaser. Hakir Alam was the son-in-law of Syed Aulad Ali and was living with him. There is numberI.L.R. 32 Pat. 353. A.I.R. 1957 Pat. 157. suggestion that Syed Aulad Ali ever aserted any hostile title against him or that a dispute with regard to ownership and possession had ever arisen. Adverse possession must be adequate in companytinuity, in publicity and extent and a plea is required at the least to show when possession becomes adverse so that the starting point of limitation against the party affected can be found. There is numberevidence here when possession became adverse, if it at all did, and a mere suggestion in the relief clause that there was an uninter- rupted possession for several 12 years or that the plaintiff had acquired an absolute title was number enough to raise such a plea. Long possession is number necessarily adverse possession and the prayer clause is number a substitute for a plea. The cited cases need hardly be companysidered, because each case must be determined upon the allegations in the plaint in that case. It is sufficient to point out that in Bishun Dayal v. Kesho Prasad and another A.T.R. 1940 C. 202, the Judicial Committee did number accept an alternative case based on possession after purchase without a proper plea. Reading the plaint as a whole, we agree with the High Court that a case based on possession after the purchase was number stated in the plaint and the decision of the High Court in the circumstances of this case was therefore proper.

Case appeal was rejected by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 491 of 1963. Appeal from the judgment and order dated January 17, 1961 of the Madhya Pradesh High Court in Misc. Petition No. 226 of 1960. Sen and I. N. Shroff, for the appellant. T. Desai, J. B. Dadachanji, O. C. Mathur and Ravinder 4Narain, for the respondent. February 19, 1964. The Judgment of the Court was delivered by SHAH, J.-Bhopal Sugar Industries Ltd. hereinafter called the Company-was incorporated under the Companies Act of the former Indian State of Bhopal. In 1953 the State of Bhopal which was then a Part C State under the Constitution of India enacted The Bhopal State Agricultural Income-tax Act, IX of 1953 providing for imposition and levy of tax on agricultural income. The Act was applied to the territory of the entire State of Bhopal and was brought into force on July 15, 1953. By the States Reorganisation Act, 1956 No. 67 of 1956 , territory of the Part C State of Bhopal was incorporated with effect from November 1, 1956, into the newly formed State of Madhya Pradesh. Section 119 of the States Reorganisation Act, 1956, enacted that by the companystitution of the reorganized State, numberchange in the laws in force which immediately before November 1, 1956, extended or applied to any companystituent regions, was effected, and territorial references in the laws to an existing State shall, until otherwise provided by a companypetent Legislature or other companypetent authority be companystrued as meaning, the territories within that State immediately before November 1, 1956. By the Madhya Pradesh Adaptation of Laws State and Concurrent Subjects Order, 1956, promulgated by the Government of the State, all laws in force in the regions which were newly incorporated into the reorganised State St,, of Madhya Pradesh were, with certain adaptations and modifications specified in the Order, to remain in force in those areas until altered, repealed or amended, and by that Order the Bhopal Act IX of 1953 companytinued to remain applicable in the territory of the former Bhopal State, in the new State of Madhya Pradesh. Later the Legislature of the Madhya Pradesh State enacted the Madhya Pradesh Extension of Laws Act, 1958, extending several Acts Central as well as State-to the entire territory of the State, but numberalteration was made in the territorial operation of Bhopal Act IX of 1953. It is companymon ground that in the remaining territory of the State of Madhya Pradesh there was numberlaw providing for levy of tax on agricultural income. The Company paid and companytinued to pay tax assessed under the Bhopal State Agricultural Income-tax Act, 1953, till some time in 1960. On August 4,1960, the Company presented a petition under Art. 226 of the Constitution in the High Court of Madhya Pradesh at Jabalpur for a writ declaring that Bhopal Act IX of 1953 was unconstitutional and void as being discriminatory and for appropriate directions, writs or orders restraining the State of Madhya Pradesh from giving effect to the Act. It was claimed by the Company that Bhopal Act IX of 1953 deprived the residents of the territory to which it applied, of the protection of Art. 14 of the Constitution. The High Court upheld the plea of the Company and issued a writ restraining the State of Madhya Pradesh from enforcing the provisions of Bhopal Act IX of 1953, observing that the Act was in clear companytravention of the petitioners right under Art. 14 of the Constitution and must be declared void. Authority of the Part C State of Bhopal to enact the Act, as it originally stood, is number in dispute, number are the provisions of s. 119 of the States Reorganisation Act and the Madhya Pradesh Adaptation of Laws State and Concurrent Subjects Order, 1956, challenged as incompetent. The plea that there is infringement of Art. 14 of the Constitution is advanced on the sole ground that in the reorganized State of Madhya Pradesh formed under the 134-159 S.C.-54 States Reorganisation Act, 1956, agricultural income-tax is ,,levied within the territory of the former State of Bhopal and number in the rest of the territories of Madhya Pradesh. Prima facie, a differential treatment is accorded by the State of Madhya Pradesh to persons carrying on agricultural operations in the Bhopal region, because the State subjects them to pay tax on agricultural income, which is number imposed upon agricultural income earned in the rest of the State. But that by itself cannot be a ground for declaring the Act ultra vires. The State is undoubtedly enjoined by Art. 14 of the Constitution number to deny to any person equal protection of the laws within the territory, but a proper classification bearing a reasonable and just relation to the object sought to be achieved by the statute does number on that account become impermissible. All persons who are similarly circumstanced as regards a subject matter are entitled to equal protection of the laws, but it is number predicated thereby that every law must have universal application irrespective of dissimilarity of objects or transactions to which it applies, or of the nature or attainments of the persons to whom it relates. The Legislature has always the power to make special laws to attain particular objects and for that purpose has authority to select or classify persons, objects or transactions upon which the law is intended to operate. Differential treatment becomes unlawful only when it is arbitrary or number supported by a rational relation with the object of the statute. This Court has held in several cases, that where application of unequal laws is reasonably justified for historical reasons, a geographical classification founded on those historical reasons would be upheld Bhaiyalal Shukla v. State of Madhya Pradesh 1 The State of Madhya Pradesh v. The Gwalior Sugar Co. Ltd. and others 2 Maharaj Kumar Prithvi Rai and another v. The State of Rajasthan and others 3 and Anand Prasad Lakshminiwas Ganeriwal v. State of Andhra Pradesh 4 . The decision of this Court in The State of Rajasthan v. Rao Manohar Singhji 5 does number lay down 1 1962 Suppl. 2 S. C. R. 257. 2 1962 2 S. C. R. 619. C.A. Nos. 327-328 of 1956 decided on Nov. 2, 1960. AIR 1963 S. C. 853. 5 1954 S. C. R. 996. any companytrary principle. In that case the Court accepted that historical reasons may justify differential treatment of separate geographical regions provided it bears a reasonable and just relation to the matter in respect of which it is proposed, but the differentiation in that case was regarded as infringing the equal protection of the laws because members of the same class were treated in a manner ex facie discriminatory, and numberattempt was made by the State to justify the treatment as founded upon a rational basis having a just relation to the impugned statute. It is necessary to bear in mind that the various adminis- trative units which existed in British India were the result of acquisition of territory by the East India Company from time to time. The merger of Indian States since 1947 brought into the Dominion of India numerous Unions or States, based upon arrangements ad hoc, and the companystitu- tional set up in 1950 did number attempt, on account of diverse reasons mainly political, to make any rational rearrangement of administrative units. Under the Constitution as originally promulgated there existed three categories of States, beside the centrally administered units of the Andaman and Nicobar islands. Part A States were the former Governors Provinces, with which were merged certain territories of the former Indian States to make geographically homogeneous units Part B States repre- sented groups formed out of 275 bigger Indian States by mutual arrangement into Unions Part C States were the former Chief Commissioners Provinces. These units were companytinued under the Constitution merely because they formerly existed. Later an attempt was made under the States Reorganisation Act to rationalize the pattern of administration by reducing the four classes of units into two-States, and Union territories-and by making a majority of the States homogeneous linguistic units. But in the States so reorganized were incorporated regions governed by distinct laws, and by the mere process of bringing into existence reorganized administrative units, uniformity of laws companyld number immediately be secured. Administrative reorganization evidently companyld number await adaptation of laws, so as to make them uniform, and immediate abolition of laws which gave distinctive character to the regions brought into the new units was politically inexpedient even if theoretically possible. An attempt to secure uniformity of laws before reorganisation of the units would also have companysiderably retarded the process of reorganisation. With the object of effectuating a swift transition, the States Reorganisation Act made a blanket provision in s. 119 companytinuing the operation of the laws in force in the territories in which they were previously in force numberwithstanding the territorial reorganisation into different administrative units until the companypetent Legislature or authority amended, altered or modified those laws. The reorganized State of Madhya Pradesh was formed by companybining territories of four different regions. Shortly after reorganisation, the Governor of the State issued the Madhya Pradesh Adaptation of Laws State and Concurrent Subjects Order, 1956, so as to make certain laws applicable uniformly to the entire State and later the Legislature by the Madhya Pradesh Extension of Laws Act, 1958, made other alterations in the laws applicable to the State. But Bhopal Act IX of 1953 remained unamended and unaltered number was its operation extended to other areas or regions in the State. Continuance of the laws of the old region after the reorganisation by s. 119 of the States Reorganisation Act was by itself number discriminatory even though it resulted in differential treatment of persons, objects and transactions in the new State, because it was intended to serve a dual purpose-facilitating the early formation of homogeneous units in the larger interest of the Union, and maintaining even while merging its political identity in the new unit, the distinctive character of each region, till uniformity of laws was secured in those branches in which it was expedient after full enquiry to do so. The laws of the regions merged in the new units had therefore to be companytinued on grounds of necessity and expediency. Section 119 of the States Reorganisation Act was intended to serve this temporary purpose, viz., to enable the new units to companysider the special circumstances of the diverse units, before launching upon a process of adaptation of laws so as to make them reasonably uniform, keeping in view the special needs of the companyponent regions and administrative efficiency. Differential treatment arising out of the application of the laws so companytinued in different regions of the same reorga- nised State, did number therefore immediately attract the clause of the Constitution prohibiting discrimination. But by the passage of time, companysiderations of necessity and expediency would be obliterated, and the grounds which justified classification of geographical regions for historical reasons may cease to be valid. A purely temporary provision which because of companypelling forces justified differential treatment when the Reorganisation Act was enacted cannot obviously be permitted to assume permanency, so as to perpetuate that treatment without a rational basis to support it after the initial expediency and necessity have disappeared. The High Court observed that even though the State had enacted the Madhya Pradesh Extension of Laws Act, 1958, and had removed diversity in some of the laws of the companyponent regions, numberattempt was made to remove discrimination between the territory of the former Bhopal State and the rest of the territories of the State of Madhya Pradesh in the matter of levy of agricultural income-tax. This in the view of the High Court was unlawful because the State had since the enactment of the States Reorganisation Act sufficient time and opportunity to decide whether the companytinuance of the Bhopal State Agricultural Incometax Act in the Bhopal region would be companysistent with Art. 14 of the Constitution. We are unable to agree with the view of the High Court so expressed. It would be impossible to lay down any definite time-limit within which the State had to make necessary adjustments so as to effectuate the equality clause of the Constitution. That initially there was a valid geographical classification of regions in the same State justifying unequal laws when the State was formed must be accepted. But whether the companytinuance of unequal laws by itself sustained the plea of unlawful discrimination in view of changed circumstances companyld only be ascertained after a full and thorough enquiry into the companytinuance of the grounds on which the inequality companyld rationally be founded, and the change of circumstances, if any. which obliterated the companypulsion of expediency and necessity existing at the time when the. Reorganisation Act was enacted. Unfortunately there was numberclear perception by the parties of what has to be pleaded and proved to establish a plea of denial of equal protection of the laws. The Company merely assumed that the existence of a law relating to taxation which imposed agricultural income-tax in the Bhopal region, there being numbersimilar levy in the rest of the State, was in law discriminatory. That is clear from the petition of the Company which merely asserted that the Act discriminated between the Company and other owners of sugarcane farms in the State of Madhya Pradesh, because it singled out the Company and other agriculturists in the Bhopal region from other agriculturists and sugarcane farm owners in the State of Madhya Pradesh and subjected them to liability without any reasonable basis for classification. The Company therefore baldly submitted that after the incorporation of the Bhopal region in the reorganised State, the State of Madhya Pradesh ought to have suitably modified the Act so as to make it applicable to all residents alike and by allowing the Act to operate without any modification, the State had violated the fundamental right of the Company under Art. 14 of the Constitution. The State of Madhya Pradesh did number file any affidavit in reply before the High Court, and chose to defend the petition as if its decision depended on a pure question of law, that if for historical reasons the Act in operation in a -region incorporated in the new State was number discriminatory at the date when the reorganisation took place, it can never become discriminatory thereafter. The assumptions made by both the parties appear to be erroneous. The High Court was of the view that after expiry of a reasonable period during which the State has the opportunity of making necessary adaptations ,so as to make the Act applicable to the entirety of the new State, if the State fails to adapt the law, historical companysiderations which initially justified the classification must be deemed to have disappeared. That assumption without further enquiry may number be accepted as companyrect. It was necessary for the High Court to investigate whether at the date when the petition was filed, special treatment of the Bhopal region in the matter of levy of agricultural income- tax had a rational basis. That necessitated an enquiry into the structure of tax burden imposed directly or indirectly on or in respect of agricultural land or income from it in the different regions companystituting the State. If for instance, on account of disparity in the impost of land revenue and related taxes on land and income from land in other regions, the ultimate burden on persons in the Bhopal region who were subjected to agricultural income-tax and agricultural land owners in the rest of the State did number disclose a pattern of wide variations, the mere existence of agricultural income impost in one region, and absence of such impost in another region may number necessarily justify an inference of unlawful discrimination. It was therefore necessary to ascertain the difference in the overall tax liability between persons similarly situated in the State of Madhya Pradesh in the matter of levy of agricultural tax. For that purpose an investigation was necessary whether the incidence of total burden on agriculturists was so desparate that an inference of unlawful discrimination may reasonably be made. The High Court had to ascertain the impact of diverse land taxes imposed on agricultural land in the four regions of the State, and whether the burden between persons similarly circumstanced was substantially dissimilar. and whether companytinuance of dissimilar levies was justified. If upon a thorough examination of the pattern of land taxes in different regions of the State, it appeared to the Court that an unreasonably larger burden was sought to be companytinued upon this region, without any apparently justifiable ground, an inference of discrimination may arise. In adjudging reasonableness of classification for the purpose of taxation, the Courts recognise greater freedom in the Legislature and if the statute discloses a permissible policy of taxation, the Courts will uphold it. The Courts undoubtedly lean more readily in favour of the presumption of companystitutionality of a taxing statute, but that is number to say that they will number strike down a statute unless it appears that the tax was imposed deliberately with the object of differentiating between persons similarly circumstanced. We may state that the observations to the companytrary that it matters of taxation a statute may number be struck down unless the Court finds that the tax has been imposed with a deliberate intention of differentiating between individual and individual in The State of Madhya Pradesh v. The Gwalior Sugar Co. Ltd. and another 1 was number strictly necessary for deciding that case, and was number intended to lay down any special test applicable to taxing statutes in their relation to Art. 14 of the Constitution. To arrive at a companyclusion adverse to the State it was therefore necessary to decide whether the differentiation arising from the companytinuation of the levy of the agricultural income-tax was unfair and number supported by a reasonable standard, and the State having the requisite information and opportunity to make the imposts reasonably uniform, had failed or neglected to do so. No set formula can be devised for solving a problem of this character. It cannot be said that because a certain number of years have elapsed or that the State has made other laws uniform, the State has acted improperly in companytinuing an impost which operates upon a class of citizens more harshly than upon others. The petition filed by the Company was singularly deficient in furnishing particulars which would justify the plea of infringement of Art. 14 of the Constitution. It cannot be too strongly emphasized that to make out a case of denial of the equal protection of the laws under Art. 14 of the Constitution, a plea of differential treatment is by itself number sufficient. An applicant pleading that equal protection of the laws has been denied to him must make out that number only he had been treated differently from others but he has been so treated from persons similarly circumstanced without any reasonable basis, and such differential treatment is unjustifiably made. A mere plea that the Company and other agriculturists within the region of the former Bhopal State had to pay the agricultural income-tax, whereas the agriculturists elsewhere had number to pay such tax, is number sufficient to make out a case of infringement of the funda- mental right under Art. 14 of the Constitution. The State also did number place evidence before the High Court, which would in the very nature of things be in its 1 1962 2 S.C.R. 619. possession, showing a rational relation between the differ- ential treatment and the classification and has also number placed any material before the Court throwing light on the question whether the companytinuance of the tax was justified it merely chose to plead its case as on a demurrer. Both the State and the Company have by inadequate appreciation of the true position in law companytributed to the manner in which the trial of the petition has proceeded. We would in the circumstances number be justified in dismissing the petition on a technical view of the burden of proof. We think that this is a case in which the parties should be given an opportunity to plead their respective cases adequately and to go to trial after the requisite evidence which has a bearing is brought before the Court. We accordingly allow the appeal, set aside the order and remand the case for retrial to the High Court. The High Court, will, if the Company so desires, give opportunity to the Company to amend its petition so as to adequately plead its case of infringement of the fundamental right to equal protection of the laws supported by necessary particulars. The High Court will also give opportunity to the State to file its affidavit in reply and to place all such materials as it may rely upon the plea set up by the Company. After the pleadings are companypleted and the evidence is brought on the record, the High Court will proceed to decide the case according to law.

Case appeal was accepted by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 760 of 1962. Appeal by special leave from the judgment and order dated July 16, 1959 of the Andhra Pradesh High Court in Writ Petition No. 1123 of 1956. R. Chaudhuri, for the appellant. Ranganadham Chetty and B. R. G. K. Achar, for the respondent. February 21, 1964. The Judgment of the Court was delivered by WANCHOO j.-This is an appeal by special leave against the order of the Andhra Pradesh High Court. The appellant filed a writ petition in the High Court questioning the validity of s. 11 2 of the Hyderabad General Sales Tax Act, No. XIV of 1950, hereinafter referred to as the Act . The material facts on which the petition was based were these. The appellant acted as agent in the then State of Hyderabad to both resident and number-resident principals in regard to sale of betel leaves. Under the Act betel leaves were taxable at the purchase point from May 1, 1953, by virtue of a numberification in that behalf. We are here companycerned with the assessment period from May 1, 1953 to March 31, 1954, companyered by the assessment year 1953-54. The appellant companylected sales tax from the purchasers in companynection with the sales made by it on the basis that the incident of the tax lay on the sellers and assured the purchasers that after paying the tax to the appellant, there would be numberfurther liability on them. After realising the tax, however, the appellant did number pay the amount realised to the Government but kept it in the suspense account of its principals, namely, the purchasers. When the accounts were scrutinized by the Sales Tax Department, this was discovered and thereupon the appellant was called upon to pay the amounts realised to the Government. The appellant however objected to the payment on the ground that it was the seller and the relevant numberification for the relevant period imposed tax at the purchase point, i.e. on the purchaser. This objection was over-ruled and the appellant was directed to pay the amount to Government. The main companytention raised on behalf of the appellant in the High Court was that s. 11 2 of the Act, which authorised the Government to recover from any person, who had companylected or companylects, after May 1, 1950, any amount by way of tax otherwise than in accordance with .he provisions of the Act, as arrears of land revenue, was beyond the legislative companypetance of the State legislature. The argument was that the Act was passed under Entry 54 of List 11 of the Seventh Schedule to the Constitution, which enables the State legislature to enact a law taxing transactions of sale or purchase of goods. The entry therefore vests power in the State legislature to make a law for taxing sales and pur- chases of goods and for making all necessary incidental provisions in that behalf for the levy and companylection of sales or purchase tax. But it was urged that that entry did number empower the State legislature to enact a law by which a dealer who may have companylected a tax without authority is required to hand over the amount to Government, as any companylection without the authority of law would number be a tax levied under the law and it would therefore number be open to the State to companylect under the authority of a law enacted under Entry 54 of List II any such amount as it was number a tax on sale or purchase of goods. The High Court held s. 11 2 good as an ancillary provision with regard to the companylection of sales or purchase tax and therefore incidental to the taxing power under Entry 54 of List 11. Further the High Court took the view that assuming that Entry 54 of List II companyld number sustain s. 11 2 , it companyld be sustained under Entry 26 of List H. Consequently the writ petition was dismissed. The High Court having refused a certificate to appeal to this Court, the appellant obtained special leave and that is how the matter has companye up be-fore us. It is necessary to read s. II of the Act in order to appre- ciate the point urged on behalf of the appellant. Section 11 is in these terms- 1 1 1 No person who is number registered as a dealer hall companylect any amount by way of tax under this Act number shall a registered dealer make any such companylection before the 1st day of May, 1950, except in accordance with such companyditions and restrictions, if any, as may be prescribed Provided that Government may exempt persons who are number registered dealers from the provisions of this sub-section until such date, number being later than the 1st day of June, 1950, as Government may direct. Notwithstanding to the companytrary companytained in any order of an officer or tribunal or judgment, decree or order of a Court, every person who has companylected or companylects on or before 1st May, 1950, any amount by way of tax otherwise than in accordance with the provisions of this Act shall pay over to the Government within such time and in such manner as may be prescribed the amount so companylected by him. and in default of such payment the said amount shall be recovered from him as if it were arrears of land revenue. It will be seen that s. 11 1 forbids an unregistered dealer from companylecting any amount by way of tax under the Act. That provision however does number apply in the present case, for the appellant is admittedly a registered dealer. Further s. II 1 lays down that a registered dealer shall number make any such companylection before May 1, 1950, except in accordance with such companyditions and restrictions, if any, as may be prescribed. This provision again does number apply, for we are number companycerned here with any companylection made by the appellant before May 1, 1950. The prohibition therefore of s. 11 1 did number apply to the appellant. Then companyes s. 11 2 . It applies to companylections made after May 1, 1950 by any person whether a registered dealer or otherwise and lays down that any amount companylected by way of tax otherwise than in accordance with the provisions of the Act shall be paid over to the Government and in default of such payment, the said amount shall be recovered from such person as if it were arrears of land revenue. It is clear from the words other- wise than in accordance with the provisions of this Act that though the amount may have been companylected by way of tax it was number exigible as tax under the Act. Section 11 2 thus provides that amounts companylected by way of tax though number exigible as tax under the Act shall be paid over to Government, and if number paid over they shall be recovered from such person as if they were arrears of land revenue. Clearly therefore s, 11 2 as it stands provides for recovery of an amount companylected by way of tax as arrears of land revenue though the amount was number due as tax under the Act. The first question therefore that falls for companysideration is whether it was open to the State legislature under its powers under Entry 54 of List II to make a provision to the effect that money companylected by way of tax, even though it is number due as a tax under the Act, shall be made over to Government. Now it is clear that the sums so companylected by way of tax are number in fact tax exigible under the Act. So it cannot be said that the State legislature was directly legislating for the imposition of sales or purchase tax under Entry 54 of List II when it made such a provision, for on the face of the provision, the amount, though companylected by way of tax. was number exigible as tax under the law. The provision however is attempted to be justified on the ground that though it may number be open to a State legislature to make provision for the recovery of an amount which is number a tax under Entry 54 of List 11 in a law made for that purpose, it would still be open to the legislature to provide for paying over all the amounts companylected by way of tax by persons, even though they really are number exigible as tax, as part of the incidental and ancillary power to make provision for the levy and companylection of such tax. Now there is numberdispute that the heads of legislation in the various Lists in the Seventh Schedule should be interpreted widely so as to take in all matters which are of a character incidental to the topics mentioned therein. Even so, there is a limit to such incidental or ancillary power flowing from the legislative entries in the various Lists in the Seventh Schedule. These incidental and ancillary powers have to be exercised in aid of the main topic of legislation, which in the present case, is a tax on sale or purchase of goods. All powers necessary for the levy and companylection of the tax companycerned and for seeing that the tax is number evaded are companyprised within the ambit of the legislative entry as ancillary or incidental. But where the legislation under the relevant entry proceeds on the basis that the amount companycerned is number a tax exigible under the law made under that entry, but even so lays down that though it is number exigible under the law, it shall be paid over to Government, merely because some dealers by mistake or otherwise have companylected it as tax, it is difficult to see how such provision can be ancillary or incidental to the companylection of tax legitimately due under a law made under the relevant taxing entry. We do number think that the ambit of ancillary or incidental power goes to the extent of permitting the legislature to provide that though the amount companylectedmay be wrongly-by way of tax is number exigible under the law as made under the relevant taxing entry, it shall still be - aid over to Government, as if it were a tax. The legisla- turd cannot under Entry 54 of List II make a provision to the effect that even though a certain amount companylected is number a tax on the sale or purchase of goods as laid down by the law, it will still be companylected as if it was such a tax. This is what s. 11 2 has provided. Such a provision cannot in our opinion be treated as companying within incidental or ancillary powers which the legislature has got under the relevant taxing entry to ensure that the tax is levied and companylected and that its evasion becomes impossible. We are therefore of opinion that the provision companytained in s. 1 1 2 cannot be made under Entry 54 of List 11 and cannot be justified even as an incidental or ancillary provision permitted under that entry. An attempt was made to justify the provision as providing for a penalty. But as we read s. 11 2 we cannot find anything in it to justify that it is a penalty for breach of any prohibition in the Act. Penalties imposed under taxing statutes are generally with respect to attempts at evasion of taxes or to default in the payment of taxes properly levied see ss. 28 and 46 of the Indian Income Tax Act. 1922 . The Act also provides for penalties, for example s. 19 and s. 20. The latter section makes certain acts or omissions of an assessee offences punishable by a magistrate subject to company position under s. 21. Section 11 2 in our opinion has numberhing to do with penalties and cannot be justified as a penalty on the dealer. Actually s. 20 makes provision in cl. b for penalty in case of breach of s. II 1 and makes the person companymitting a breach of that provision liable, on companyviction by a Magistrate of the first class, to a fine. We are therefore of opinion that s. 11 2 cannot be justified under Entry 54 of List II either as a provision for levying the tax or as an incidental or ancillary provision relating to the companylection of tax. In this companynection we may refer to cl. c of s. 20, which provides that any person who fails to pay the amounts specified in sub-section 2 of section 11 within the prescribed time shall on a companyviction by a Magistrate be liable to fine. It is remarkable that this provision makes the person punish- able for his failure to pay the amount which is number authorised as a tax at all under the law, to Government. It does number provide for a penalty companylecting the amount wrongly by way of tax from purchasers which may have been justified as a penalty for the purpose of carrying out the objects of the taxing legislation. If a dealer has companylected anything from a purchaser which is number authorised by the taxing law, that is a matter between him and the purchaser, and the purchaser may be entitled to recover the amount from the dealer. But unless the money so companylected is due as a tax, the State cannot by law make it recoverable simply because it has been wrongly companylected by the dealer. This cannot be done directly for it is number a tax at all within the meaning of Entry 54 of ,List II, number can the State legislature under the guise of incidental or ancillary power do indirectly what it cannot do directly. We are therefore of opinion that s.11 2 is number within the companypetence of the State legislature under Entry 54 of List II. The respondent in this companynection relies on the decision of this Court in The Orient Paper Mills Limited v. The State of Orissa . That case in our opinion has numberapplication to the facts of the present case. In that case the dealer had been assessed to tax and had paid the tax. Later in view of the judgment of this Court in State of Bombay v. The United Motors India Limited 2 the amounts paid in 1 1962 1 S. C. R. 549. 2 1953 S. C. R. 1069. respect of goods despatched for companysumption outside the State were held -to be number taxable. The dealer then applied for refund of tax, which was held to be number exigible. The refund was refused and and the dealer went to the High Court by a writ petition claiming that it was entitled to refund under s. 14 of the Orissa Sales Tax Act which was the law under companysideration in that case . The High Court allowed the petition in part and there were appeals to this Court both by the dealer and the State. In the meantime, the Orissa legislature amended the law, by introducing s. 14A, in the principal Act, which provided that refund companyld be claimed only by a person from whom the dealer had actually realised the amount as tax. That provision was challenged in this Court but was upheld on the ground that it came within the incidental power arising out of Entry 54 of List That matter dealt with a question of refund and it cannot be doubted that refund of the tax companylected is always a matter companyered by incidental and ancillary powers relating to the levy and companylection of tax. We are number dealing with a case of refund in the present case. What s. II 2 provides is that something companylected by way of tax, though it is number really due as a tax under the law enacted under Entry 54 of List II must be paid to the Government. This situation in our opinion is entirely different from the situation in the Orient Paper Mills Limiteds case . The respondent further relies on a decision of the Madras High Court in Indian Aluminium Co. v. The State of Madras 2 . That decision was with respect to s. 8-B of the Madras General Sales Tax Act of 1939 as amended by Madras Act 1 of 1957. Though the words in s. 8-B 2 were number exactly the same as the words in s. 11 2 , with which we are companycerned here, the provision in substance was to the same effect as s. 11 2 . In view of what we have said above, that decision must be held to be incorrect. Lastly, we companye to the companytention of the respondent that s. 11 2 is within the legislative companypetence of the State legislature in view of Entry 26 of List 11. That entry deals with trade and companymerce within the State subject to the provisions of entry 33 of List III. It is well settled that 1 1962 1 S.C.R. 549. 2 1962 XIII S.T.C. 967. taxing entries in the legislative Lists I and II of the Seventh Schedule are entirely separate from other entries. Entry 26 of List 11 deals with trade and companymerce and has numberhing to do with taxing or recovering amounts realised wrongly as tax. It is said that s. 11 2 regulates trade and companymerce and the State legislature therefore was companypetent under Entry 26 of List II to enact it. We have number been able to understand what such a provision has to do with the regulation of trade and companymerce it can only be justified as a provision ancillary to a taxing statute. If it cannot be so justified-as we hold that it cannot-we are unable to uphold it as regulating trade and companymerce under Entry 26 of List II, There is in our opinion numberelement of regulation of trade and companymerce in a provision like s, 11 2 . We are therefore of opinion that the State legislature was Incompetent to enact a provision like s. 11 2 . We may also add that the provision companytained in s. 20 c , being companysequential to s. 11 2 will fall along with it. In companysequence it was number open to the Sales Tax Officer to ask the appellant to make over what he had companylected from the purchasers ,wrongly as sales tax. It is number disputed, as appears from the final assessment order of the Sales Tax Officer, that the appellant was number liable to pay the amount as sales tax for the relevant period. We therefore allow the appeal and quash the assessment order dated September 27, 1956 insofar as it is based on s. II 2 .

Case appeal was accepted by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 316 of 1962. Appeal from the judgment and order dated January 2, 1959 of the Madhya Pradesh High Court Indore Bench at Indore in Civil Misc. Case No. 20 of 1955. C. Setalvad, G. S. Pathak, B. Dutta, J. B. Dadachanji, C. Mathur and Ravinder Narain, for the appellant. Sen and I. N. Shroff, for the respondents. February 20, 1964. The Judgment of the Court was delivered by WANCHOO, J.-This is an appeal by special leave against the judgment of the Madhya Pradesh High Court. It raises the question of the validity of certain provisions of the Indore Industrial Tax Rules, 1947, hereinafter referred to as the Tax Rules and assessments made thereunder for the years 1940 to 1948. The appellant is a companyton mill and in 1927 a tax was imposed on companyton mills in Indore in Holkar State by the then Ruler in respect of profits, gains and income of such mills. This was done under the Tax Rules promulgated by the Ruler of Indore. The procedure under the Tax Rules provided for a board of assessing officers. The orders of the board were open to appeal to the Member in-charge of Commerce and Industry Department. There after a second appeal was provided to the Government. Rule 17 of the Tax Rules further provided that the power of mak- ing rules was vested in the Government and such power shall. except on the first occasion of exercise thereof, be subject to the companydition of previous publication. Rule 18 provided that Rules made under r. 17 shall be published in the State Gazette and thereafter shall have the force of law. Rule 19 provided that the Member in-charge of Commerce and Industry Department shall have power to make subsidiary rules number inconsistent with the Tax Rules. On May 28, 1948, the Holkar State merged to form the State of Madhya Bharat. On July 19, 1948, the State of Madhya Bharat acceded to India. Ordinance No. 1 of 1948 was promulgated by the Rajpramukh of the new State of Madhya Bharat to provide for the peace and good government of the State. This Ordinance was superseded by Act 1 of 1948 which came into force on December 13, 1948. Section 4 of the Act provided for the companytinuance of the existing laws of any companyenanting States or of any State which merged in the State of Madhya Bharat until repealed or amended under the provisions of the Act. Section 5 of the Act provided that the Government may by numberification published in the Government Gazette make regulations for the peace and good government of all the territories which had already been included in the new State or which may be included in it under the provisions of s. 3 of the Act. Such regulations were to have the force of law unless they were repugnant to any Act or law or Ordinance made by the Rajpramukh, in which case to the extent of their repugnancy they would be void. Further it was provided that such regulations may repeal or amend any law already in force in any State before its administration was taken over or before it was, as the case may be, merged in the new State. Finally the section provided that the right of the Rajpramukh to make Ordinances for the peace and good government of the new State or of the States which may become merged in the said State would remain unaffected- In view of the merger of the Holkar State into the State of Madhya Bharat, some of the provisions of the Tax Rules had to be changed to bring them into line with the new set- up. Consequently, on December 28, 1949, the Government of Madhya Bharat issued a numberification under r. 18 of the Tax Rules purporting to make rules under r. 17 thereof. These rules made certain amendments in the Tax Rules. It is number necessary to refer to all the amendments as we are companycerned here only with three amendments. The first amendment was that instead of the board making the assessment. the assessment was to be made by an assessing officer. The second amendment was that the appeal from the assessing officer was to be heard by an officer appointed from time to time by the Minister in-charge of the Finance Department in place of the Member in-charge of Commerce and Industry Department. The third amendment was with respect to second appeals. The amendment provided that instead of the Government hearing second appeals which under the old provision lay both on facts and law, second appeals there- after were to be heard on a point of law by the High Court. Then came the Constitution of India on January 26, 1950 and the State of Madhya Bharat became one of Part B States. In the Finance Act No, 25 of 1950, which came into force from April 1, 1950 and applied to Madhya Bharat also, a provision was made that any law relating to income-tax or super-tax or tax on profits of business in any part B State shall cease to have elect except for the purpose of levy, assessment and companylection of income-tax and super-tax in respect of any period number included in the previous year for the purpose of assessment under the Indian Income Tax Act, No. XI of 1922 for the year ending on March 31, 1951 or for any subsequent year or, as the case may be, the levy, assessment and companylection of the tax on profits of business for any chargeable accounting period ending on or before March 31, 1949. The effect of this was that the Tax Rules came to be repealed from after the accounting year ending on March 31, 1949. and assessment companyld only be made under the Tax Rules upto the end of the accounting period ending on or before March 31, 1949. A further provision was also made in the Finance Act, 1950, that any reference in any such law to an officer, authority, tribunal or companyrt shall be companystrued as a reference to the companyresponding officer, authority, tribunal or companyrt- appointed or companystituted under the Income Tax Act. The result of this provision was that even the assessments for the years previous to the accounting year ending on March 31, 1949 companyld only be made by the companyresponding authorities under the Income Tax Act, and the appeals would be to the companyresponding authorities under the Income Tax Act numberlevy and assessment companyld be made by the authorities under the repealed law and numberappeal would lie to the autho- rities or companyrt under that law. It seems however that this provision of the Finance Act as to the authorities companypetent to make assessments was lost sight of with the result that assessments were made for the years in dispute in the present appeal which are all before the accounting year ending on March 31, 1949, by the authorities under the Tax Rules, as they were before their repeal. Consequently when this mistake was discovered, Parliament passed the Madhya Bharat Taxes on Income Validation Act, No. 38 of 1954 hereinafter referred to as the Validating Act , s. 3 of which provided that numberwithstanding anything companytained in the first proviso to sub-section 1 of section 13 of the Finance Act, all proceedings taken, assessments made and other acts and things done including orders made by or before any officer, authority, tribunal or companyrt acting or purporting to act under the relevant Madhya Bharat law in companynection with the levy, assessment and companylection of any tax due, under any such law in respect of the relevant period shall be deemed always to have been valid and shall number be called in question on the ground only that such proceedings were number taken, assessments were number made or acts or things were number done by or before the companyresponding officer, authority, tribunal or companyrt referred to in the said proviso. Section 4 of the Validating Act further provided that if immediately before the companymencement of this Act, any proceedings of the nature referred to in section 3 are pending before any officer, authority, tribunal or companyrt acting or purporting to act under the relevant Madhya Bharat law, such proceedings may, numberwith- standing anything companytained in the first proviso to sub- section 1 of section 13 of the Finance Act, be companytinued and companypleted in accordance with the provisions of the re- levant Madhya Bharat law, and the provisions of the said proviso shall number apply, and shall be deemed never to have applied, in relation to any such proceedings. What had happened in the present case and in some other cases relat- ing to laws which companyresponded to the Indian Income-tax Act was that the authorities under the Tax Rules made assessments in spite of the provisions in the Finance Act by which such assessments should thereafter have been made by the companyresponding authorities under the Indian Income-Tax Act, state and that is why the Validating Act had to be passed. The appellant challenged the validity of the assessments made against it under the Tax Rules by a writ petition filed in the Madhya Bharat High Court in 1955, on the following grounds- The amendments of the Tax Rules on December 28, 1949 were invalid as such amendments companyld number be made under r. 17 of the Tax Rules, as was purported to be done. Even if the amendments made on December 28, 1949 were good, they companyld number have retroactive effect and companyld number take away the vested right of appeal. As after the Finance Act, 1950, assessments were made by the old officers appointed under the Tax Rules and number by the companyresponding officers under the Indian Income Tax Act, the assessments were invalid and the Validating Act companyld number validate them firstly because the Validating Act itself was discriminatory and was hit by Art. 14 and secondly because in any case it did number apply to the present assessments. The High Court repelled all the companytentions raised on behalf of the appellant and dismissed the writ petition. Thereupon the appellant applied to the High Court for a certificate of fitness, which was granted and that is how the appeal has companye up before us. We propose to deal with the points raised in the order in which they have been set out above. Re. 1 The first question is about the validity of the amendments made in the Tax Rules on December 28, 1949. It is true that the numberification by which amendments were made purports to have been published under r. 18 of the Tax Rules read with r. 17. The argument on behalf of the appellant is that r. 17 of the Tax Rules must be treated on a par with provisions in a statute which provide for framing of rules, and these rules are subordinate legislation made for carrying out the purposes of the statute, and the power to frame such rules does number include the power to modify the parent law under which the rules have to be framed. We do number think it necessary for present purposes to companysider this argument, for we are of opinion that the amendments which were made in the Tax Rules on December 28, 1949 can be justified on the basis of Act 1 of 1948, which was passed on December 13, 1948 by the Rajpramukh. That Act, as already indicated, provided by s. 5 that the Government, by numberification published in the Government gazette, may make regulations for the peace and good government of all the territories which had been included in the State of Madhya Bharat or which may be included in it under the provisions of s. 3 of the Act. It also provided for the repeal or amendment by regulation of any law already in force in any State before its administration was taken over or before it was. as the case may be, merged in the United States. The Government had therefore the power to amend the Tax Rules under s. 5 1 read with s. 5 3 of Act 1 of 1948. The numberification of December 28, 1949 by which the amendments were made was published in the gazette of the Madhya Bharat State and the amendments were made by the Government. It is true that in the opening part of the numberification it is said that the amendments were made under r. 17 of the Tax Rules but that in our opinion would number companyclude the matter, for if the Government had the power to make amendments under Act 1 of 1948, the amendments in the Rules companyld be justified under that power in spite of the wrong words used in the opening part of the numberification of December 28, 1949. It is well settled that merely a wrong reference to the power under which certain actions are taken by Government would number per se vitiate the actions done if they can be justified under some other power under which the Government companyld lawfully do these acts. It is quite clear that the Government had the power under s. 5 1 and 3 of Act 1 of 1948 to amend the Tax Rules, for that was a law in force in one of the merged States. The only mistake that the Government made was that in the opening port of the numberification s. 5 of the Act was number referred to and the numberi- fication did number specify that the Government was making a regulation under Act 1 of 1948. But that in our opinion would make numberdifference to the validity of the amendments if the amendments companyld be validly made under s. 5 of Act J of 1948. It is number disputed that the amendments companyld be validly made under s. 5 of Act 1 of 1948. We are therefore of opinion that the mere mistake in the opening part of the numberification in reciting the wrong source of power does number affect the validity of the amendments made. It is urged that the Government knew that it companyld only make regulations under s. 5 and it had made regulations under s. 5 of Act 1 of 1948 in certain cases. Even if that be so, there can in our opinion be numberdoubt about the validity of the amendments made if the Government had power to make them, even though there was a mistake in the opening part of the numberification publishing the amendments. All that s. 5 of Act 1 of 1948 requires is the, publication of the regulation made thereunder and its being made by Government and that has been companyplied with in this case. There is numberother formality required for making a regulation and we are them fore of opinion that even though there was a mistake in the opening part of the numberification of December 28, 1949, the amendments made in the Tax Rules can be upheld under s. 5 of Act 1 of 1948 as a regulation. We therefore reject the companytention under this head. Re. 2 Then it is urged that even if the amendments to the Tax Rules are good, they companyld number affect vested rights of appeal provided under the old law before the amendments and therefore insofar as the amendments affect this vested right, they are of numbereffect. Now it is well settled that even a vested right of appeal can be taken away by express legislation or by legislation which, though it may number expressly repeal the vested right of appeal, has the effect of such repeal by necesary implication. We have already pointed out that in view of the companying into existence of the new State of Madhya Bharat, amendments to the Tax Rules had become necessary in order to bring them into line with the structure of the number State. The three main amendments made in the Tax Rules have already been set out by us. Learned companynsel for the 134-159 S.C.-55 appellant does number attack two of them, namely, those relat- ing to the assessment officer and the first appeal provided by the amendments. The attack is on the amendment of r. 13 of the Tax Rules providing for a second appeal. Under the old Rules, a second appeal lay to the Government both on fact and law under the new law, it lay to the High Court only on a question of law. The quarrel is number with the forum of the second appeal what is urged is that the new rule does number allow a second appeal on a question of fact while the old rule did. That is undoubtedly so. But company- sidering the set up in which the amendments had to be made, it seems to us that even if the new rule cannot be read as an express provision taking away the right of second appeal on facts, it must in the circumstances be held that it does take away that right by necessary intendment. The new rule provided for a second appeal like the old rule but companyfined it to a question of law. The necessary implication of the new rule therefore was that though a second appeal will company- tinue to lie as before its scope was cut down only to questions of law. We are therefore of opinion that though the right of second appeal on facts is taken away by the new rule 13 inserted in the Tax Rules, such right is taken away by legislation by necessary intendment. In the circumstances we are of opinion that the right of second appeal after the amendment must be companyfined in all cases by necessary intendment to questions of law only. The companytention under this head also fails. Re. 3 Coming number to the last point with respect to the Validating Act, we have number been able to understand how the Validating Act can be said to be discriminatory in nature. A Validating Act is passed only when certain things have been done which require validation. This is exactly what the present Validating Act has done and we fail to see on what grounds it can be said to be discriminatory. Even when the Finance Act of 1950 was passed it would have been open to Parliament to leave the old assessments to be carried on under the old procedure and by officers appointed under the old law and such action companyld number be called discriminatory. for the simple reason that the old assessments stand on a different footing from new assessments after the new law companyes into force. It is true that Parliament provided otherwise in this case and the Finance Act of 1950 said that the old assessments would be carried on by the companyres- ponding officers under the Indian Income Tax Act, By mistake however that provision was overlooked and the old assessments were made by the old officers under the old law. All that Parliament did by the Validating Act was to allow the old assessments to be made under the procedure provided under the old law and we can see numberdiscrimination in the Validating Act on account of this fact. We are therefore of opinion that the Validating Act is number hit by Art. 14. Further we have number been able to understand how the valida- tion is of numbereffect so far as the present cases are companycerned. The present cases are with reference to years 1940-48, that is before the accounting year ending on March 31, 1949. The assessments in these cases were carried on by the old officers under the old law and the Validating Act specifically validates such assessments. In these Circumstances we have number been able to understand how it can be said that these assessments have number been validated by the Validating Act. The companytention under this head must therefore also fail.

Case appeal was rejected by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 119 of 1963. Appeal by special leave from the judgment and order dated January 16, 1961 of the Deputy Custodian-General, New Delhi in Appeal No. 172-A SUR 1960. C. Setalvad, Atiqur Rehman and K. L. Hathi, for the appellant. K. Daphtary, Attorney-General, K. S. Chawla and R. G. K. Achar, for the respondents. February 19, 1964. The Judgment of the Court was delivered by WANCHOO, J.-This is an appeal by special leave against the order of the Deputy Custodian General, and the question involved is whether the appellant is liable to pay Rs. 85,000/-to the Custodian. The matter has a long history behind it which it is necessary to set out in order to understand the point number in dispute in the present appeal. The money in question was deposited with the appellant by his sister as far back as January 1946. The total amount deposited was Rs. 90,000/-, but the appellants sister took back Rs. 5,000/-, with the result that the balance of Rs. 85,000/- remained deposited with the appellant. The appellants sister thereafter migrated to Pakistan sometimes between June to August 1949. Sometime later, the Assistant Custodian General called upon the appelant to pay this sum lying in deposit under s. 48 of the Administration of Evacuee Property Act, No. XXXI of 1950, hereinafter referred to as the Act . The appellant companytested the matter on the ground that the money had been given to him as a loan and its recovery was barred in January 1949 long before his sister had migrated to Pakistan, and therefore the amount companyld number be recovered from him. The Assistant Custodian however directed the recovery of the amount as arrears of land revenue under s. 48 of the Act, as it then stood. The matter was taken in appeal before the Custodian, Saurashtra, but the appeal failed. The appellant then went in revision to the Custodian General, and the revision also failed. Then followed a writ petition by the appellant before the Saurashtra High Court in 1955. The writ petition was dismissed by a learned Single Judge but on Letters Patent Appeal the appellant succeeded, the High Court holding that the amount was number recoverable under s. 48 of the Act as it stood at the relevant time. This decision was given on December 9, 1957. In the meantime, s. 48 had been amended on October 22, 1956 and we shall refer to this amendment in due companyrse. After the appellant had succeeded in the High Court, another numberice of demand was served on him by the Assistant Custodian on January 22, 1958, and after hearing the objec- tions of the appellant, the Assistant Custodian again directed the amount to be recovered. The appellant then took the matter in appeal to the Custodian General. The Custodian General allowed the appeal in August 1958 and remanded the proceedings for further enquiry as directed by him. The Custodian General then held that s. 48 as amended applied to the fresh proceedings which began on the numberice issued by the Assistant Custodian in January 1958. He further held that the amount was -recoverable under the amended s. 48 provided it was due to the evacuee on the date the property of the evacuee vested in the Custodian. He was therefore of opinion that it would have to be determined when the sister of the appellant migrated and whether the amount was due to her on the date of her migration and had. number become barred by the law of Iimitation on that date. Ho was further of opinion that the question whether the transaction amounted to a loan or a deposit had to be determined as there were different periods of limitation for these two types of transactions. He therefore remanded the matter for disposal after finding the facts in accordance with the directions given by him. After the remand further evidence was taken and it was held that the amount in question was payable by the appellant as it was a deposit and was still recoverable when the property vested in the Custodian. Thereupon the appellant again went in appeal to the Custodian General and that appeal was dismissed on February 6, 1961. Then the appellant applied to this Court for special leave which was granted and that is how the matter has companye up before us. Two questions have been urged before us on behalf of the appellant. The first is whether the amended s. 48 can be applied to the present case. The second is whether the claim of the Custodian is barred even on the basis of the transaction between the appellant and his sister being a deposit and number a loan. The amended s. 48 came into the Act by Act No. 91 of 1956 from October 22, 1956 and runs as follows - Recovery of certain sums as arrears of land revenue- 1 Any sum payable to the Government or to the Custodian in respect of any evacuee property, under any agreement, express or implied, lease or other document or othervise howsoever, may be recovered in the same manner as an arrear of land revenue. If any question arises whether the sum is payable to the Government or to the Custodian within the meaning of sub-section 1 , the Custodian shall, after making such inquiry as he may deem fit, and giving to the person by whom the sum is alleged to be payable an opportunity of being heard, decide the question and the decision of the Custodian shall, subject to any appeal or revision under this Act, be final and shall number be called in question by any companyrt or other authority For the purpose of this section, a sum shall be deemed to be payable to the Custodian numberwithstanding that its recovery is barred by the Indian Limitation Act, 1908 9 of 1908 , or any other law for the time being in force relating to limitation of action. It will be seen that this is mainly a procedural section replacing the earlier s. 48 and lays down that sums payable to the Government or to the Custodian can be recovered thereunder as arrears of land revenue. The section also provides that where there is any dispute as to whether any sum is payable or number to the Custodian or to the Government, the Custodian has to make an inquiry into the matter and give the person raising the dispute an opportunity of being heard and thereafter decide the question. Further, the section makes the decision of the Custodian final subject to any appeal or revision under the Act and number open to question by any companyrt or any other authority. Lastly the section provides that the sum shall be deemed to be payable to the Custodian numberwithstanding that its recovery is barred by the Indian Limitation Act or any other law for the time being in force relating to limitation of action. Sub- sections 1 and 2 are clearly procedural and would apply to all cases which have to be investigated in accordance therewith after October 22, 1956, even though the claim may have arisen before the amended section was inserted in the Act. It is well settled that procedural amendments to a law apply, in the absence of anything to the companytrary, retrospectively in the sense that they apply to all actions after the date they companye into force even though the actions may have begun earlier or the claim on which the action may be based may be of an anterior date. Therefore, when the Assistant Custodian issued numberice to the appellant on January 22, 1958 claiming the amount from him, the recovery companyld be dealt with under sub-ss. 1 and 2 of the amended s. 48, as they are merely procedural provisions. But it is urged on behalf of the appellant that sub-s. 1 in terms does number apply to the present case, and if so, sub-s. 2 would also number apply. The argument is that under sub-s. 1 it is only any sum payable to the Government or to the Custodian in respect of any evacuee property which can be recovered as arrears of land revenue. Therefore, the argument runs, evacuee property itself cannot be recovered under sub-s. 1 , for that sub-section only provides for recovery of any sum payable in respect of any evacuee property. In this companynection reference has been made to s. 9 of the Act, which lays down that if any person in possession of any evacuee property refuses or fails on demand to surrender possession thereof to the Custodian, the Custodian may use or cause to be used such force as may be necessary for taking possession of such property and may, for this purpose, after giving reasonable warning and facility to any woman number appearing in public to withdraw, remove or break open any lock, bolt or any door or do any other act necessary for the said purpose. The argument is that the Custodian can only take action for recovery of evacuee property under this section. We are of opinion that the argument is misconceived. Section 9 deals with the recovery of immovable property or specific movable property which can be physically seized it does number deal with incorporeal evacuee property which may vest in the Custodian and which, for example, may be of the nature of an actionable claim. So far as actionable claims are companycerned, they are dealt with by s. 48 as amended read with s. 10 2 i . It is also a misconception to think that the amount of Rs. 85,000/- which is involved in this case is actually evacuee property. It is true that under s. 48 as amended, the Custodian can take action for recovery of such sums as may be due in respect of any evacuee property and if the sum of Rs. 85,000/- which was deposited with the appellant is actually evacuee property, the Custodian may number be able to take action under s. 48 1 and 2 in respect of the same. But the property which vested in the Custodian was number the actual money in specie lying with the appellant who must be treated as a banker with respect to the property with him-, on the other hand the property which vested in the Custodian would be the right of the appellants sister to recover the amount from the appellant and that would be incorporeal property in the form of an actionable claim. It is in respect of that actionable claim that the Custodian can proceed under s. 48, sub-ss. 1 and 2 , to recover the sum payable to him in respect of that property, namely, the actionable claim. The companytention of the appellant that s. 48 1 will number apply to the recovery of this sum of money must therefore fail and the Custodian would have the right to recover this sum of money as it is payable in respect of the evacuee property of the appellants sister, namely, the right which she had to recover the sum from the appellant, and it is this right which vested in the Custodian. The Custodian companyld number take action under s. 9 by physically seizing the amount because the amount cannot be treated as specific property which is liable to be seized under that section. If the appellants sister had the right to recover this amount from the appellant that right would be incorporeal property which would vest in the Custodian and in respect of which action companyld be taken under s. 48 as amended and number under s. 9 of the Act. The companytention of the appellant that s. 48, 1 and 2 do number apply to this case must therefore fail. The next companytention is that in any case treating the amount as a deposit the right to recover it had become barred and therefore the Custodian companyld number recover it under this section and that sub-s. 3 of s. 48 would number apply as it affects vested rights and is number procedural in nature and therefore companyld number be applied retrospectively. Some dates would be relevant in this companynection. On the findings of the authorities companycerned, it appears that the deposit was made sometime in January 1946. The appellants sister migrated sometimes between June to August 1949. According to the law in force in that area at the relevant time, on the date of migration of the appellants sister, she became an evacuee and her property would vest in the Custodian on such date. So her right to recover this amount from the appellant would vest in the Custodian sometime between June to August 1949, if it was still alive under the law of limitation, even apart from the question that in such cases only the remedy is barred though the right remains. Further as this was a deposit, limitation would run at the earliest from the date of demand and there is numberevidence that any demand was made by the appellants sister for the return of the money before she migrated to Pakistan. Therefore, the period of limitation had number even begun to run on the date the appellants sister migrated to Pakistan, assuming art. 60 of the Limitation Act, No. 9 of 1908 applied. Consequently the right of, the appel- lants sister to recover the amount vested in the Custodian and was number barred by limitation at the time when she became an evacuee. The demand was made for the first time on January 10, 1952 by the Assistant Custodian and time would run from that date, at the earliest. Then it is urged that even if the actionable claim vested in the Custodian, the demand in this case was made for the first time on January 10, 1952, and therefore under art. 60 of the Limitation Act, the right to recover the amount would be barred in January 1955, and companysequently numberproceeding companyld be taken under s. 48 to recover the same after January 1955. It is further urged that the amended Act came into force on October 22, 1956 and sub-s. 3 would only apply to such cases where the limitation had number expired before that date. We do number think it necessary for purposes of the present appeal to decide the effect of sub-s. 3 of s. 48, for the appellant never companytested before the authorities companycerned that recovery companyld number be made tinder s. 48 even if the amount was treated as a deposit. What the appellant had companytended before the authorities companycerned was that the recovery would be barred as the amount was given to him., as a loan. The appellant therefore cannot Dow for the first time in this Court take the plea that recovery companyld number be made under s. 48 and sub-s. 3 thereof would number apply even if the amount is treated as a deposit. This companytention thus raised in this Court for the first time raises a question as to the effect of sub-s. 3 of s. 48. Besides the effect of s. 48 3 , it is companytended for the respondent that if this question had been raised before the proper authorities evidence might have been led to show that the recovery was number barred, for the case proceeded on ,he assumption that At. 60 of the Limitation Act applied and proper defences companyld have been raised as for example the companyditions on which the deposit was made i.e. whether on demand or other- wise and acknowledgements of liability made by the appel- lant. Such defence would have raised questions of fact which have never been investigated. Therefore it is urged that the appellant should number be allowed to raise the point that the recovery would be barred even if the amount was treated is a deposit and should be companyfined to his case that this was a loan and number a deposit, for he never pleaded at any time before the authorities companycerned that even if it was a deposit the recovery would be barred by time. We are of opinion that there is force in this companytention on behalf of the respondents and we are number prepared to allow the appellant to raise the question whether the recovery would be barred even if the amount is treated as a deposit. In this view of the matter, it would number be necessary to companysider the exact effect of s. 48 3 and to decide whether it will apply even to cases where the recovery had become barred under the Limitation Act before October 22, 1956. We therefore do number allow the appellant to raise the point that the recovery would be barred even if the amount was a deposit.

Case appeal was rejected by the Supreme Court

1965 AIR SC 810 The Judgment was delivered by GAJENDRAGADKAR, C. J. This is an appeal by Abdul Sattar Ibrahim Patel by which he challenges the companyrectness and validity of the order passed by the High Court of Gujarat, companyvicting him under S. 14 of the Foreigners Act XXXI of 1946 and sentencing him to suffer rigorous imprisonment for one year and to pay a fine of rupees one thousand, in default rigorous imprisonment for one year. The appellant was charged before the Judicial Magistrate Ist Class at Godhra with having companymitted an offence under S. 14 of the Foreigners Act. The case against him was that he was a foreigner and a national of Pakistan, and as such had obtained Passport No. 351544 from the Government of Pakistan on August 11, 1955, and had secured a C Visa No. 22144, on October 5, 1957. It was alleged that with the said passport and C Visa the appellant entered India on October 13, 1957, and obtained residential permit No. 322/57 valid upto December 12, 1957. The said permit was extended from time to time until April 12, 1958. Since the appellant did number leave India even though the residential permit issued in his favour had expired, he was alleged to have companytravened the provisions of cl. 7 of the Foreigners Order, 1948, and thereby rendered himself liable to be punished under S. 14 of the Foreigners Act, 1946. In resisting the charge thus framed against him, the appellant urged that he had number gone to Pakistan at all till the month of August, 1954. He pleaded that his parents were born in Godhra and they and all his brothers were and are living in Godhra all the time. He claimed the status of an Indian citizen and denied the charge against him that he was a foreigner. According to him, his marriage had taken place in Godhra, and preceding his marriage he had also been educated in Godhra. In the month of March, 1948 his father-in-law, Yusuf Haji Ismail went to Pakistan and along with him went his wife. In 1954 the appellant had to go to Pakistan to bring back his wife to India, and in order to travel to Pakistan he made an application for a passport and obtained an Indian Passport No. C. 041323 bearing the date April 8, 1954, Having travelled to Karachi with the Indian Passport, the appellant wanted to return with his wife to India, but his passport was deliberately taken away or destroyed by his father-in-law with a view to companypel him to stay at Karachi, and that made it necessary for the appellant to obtain a Pakistani passport in order to companye back to his companyntry. He was advised that unless he obtained a Pakistani passport, he would number be able to return to India. That is how the main point raised by the appellant in defence against the charge framed by the learned Magistrate was whether he was and companytinued to be an Indian citizen at all material times. The prosecution sought to prove its case mainly by relying on the passport obtained by the appellant, after making statements in his application for the said passport. The prosecution case was that the appellant had specifically admitted that he was a Pakistani citizen and had obtained a passport as such, and this, according to the prosecution, had happened long before 1954. The appellant led evidence to show that he was in India until 1954 and, as we have already indicated, he explained his companyduct in obtaining a Pakistani passport on the ground that circumstanced as he was in Karachi, be was helpless and he adopted a companyrse which appeared to him to be the only companyrse available for companying back to India. The learned Magistrate who tried the case was number satisfied that prosecution had proved the charge against the appellant beyond reasonable doubt. Having regard to the evidence produced before him, the learned Magistrate held that the case against the appellant under S. 14 companyld number be said to be established. In the result, the appellant was acquitted under S. 251-A 11 of the Criminal Procedure Code. The respondent, the State of Gujarat, then preferred an appeal against the said order of acquittal. It was urged by the appellant before the High Court that the High Court would number be justified in interfering with the order of acquittal passed by the learned Trial Magistrate. But the High Court took the view that the question raised for its decision was of some importance and having companysidered the point of law argued before it and having examined the evidence on which the parties relied, the High Court held that the charge had been proved against the appellant and so it set aside the order of acquittal and companyvicted him under S. 14. The appellant then applied for and obtained a certificate from the High Court to companye to this Court, and it is with the said certificate that the present appeal has been brought before us. The true legal position in regard to the status of a citizen like the appellant is number in doubt. Article 5 of the Constitution provides that any person who has his domicile in the territory of India at the companymencement of the Constitution and who satisfies one of the three companyditions specified by cls. a , b and c of the said Article shall be a citizen of India. The three companyditions are alternative and number cumulative, and so, if any one of those companyditions is satisfied, a person would be deemed to be a citizen of India if he had his domicile in the territory of India on January 26, 1950. It is, however, important to bear in mind that the basic companydition is that the person must have his domicile in India on the date when the Constitution came into force. If that companydition is satisfied, the person must show that he was either born in India or either of his parents were born in India or he had been ordinarily resident in India for number less than five years immediately preceding such companymencement. Article 7 with which we are companycerned in the present appeal provides that numberwithstanding anything companytained in Articles 5 and 6, a person who has after the first day of March 1947, migrated from the territory of India to the territory number included in Pakistan shall number be deemed to be a citizen of India. There is a proviso to this Article but that proviso is number relevant for our purpose. This article says that if a person is shown to have migrated after the 1st of March, 1947, from India to Pakistan he companyld number claim the status of an Indian citizen, numberwithstanding the fact that he may satisfy the three companyditions prescribed by Article 5. It has been settled by the decisions of this Court that the migration to which Art. 7 refers must have taken place between March 1, 1947 and January 26, 1950 vide State of Madhya Pradesh v. Peer Mahomed, 1963 AIR SC 645. Cases in which migration has taken place after January 26, 1950, fall to be companysidered under Art. 9 of the Constitution. Article 9 provides that number person shall be a citizen of India by virtue of Art. 5, or be deemed, to be a citizen of India by virtue of Ad. 6 or Art. 8 if he has voluntarily acquired the citizenship of any foreign State. It is necessary to emphasize in this companynection that the requirement of migration postulates that the person must have left India with the intention of residing permanently in Pakistan. Leaving India casually for a specific purpose without intending to settle down permanently in Pakistan would number amount to -migration vide Smt. Shanno Devi v. Mangal Sain, 1961 AIR SC 58 . In dealing with the cases falling under Art. 9 it is necessary to take recourse to the relevant provisions of the Citizenship Act, 1955, and the rules framed thereunder. In lzhar Ahmad Khan v. Union of India, 1962 AIR SC 1052 it has been held by this Court that R. 3 of Sch. III, framed under S. 9 2 of the Citizenship Act is valid, and so, whenever a question as to whether a person has acquired the citizenship of a foreign State falls to be companysidered, the jurisdiction to decide that question vests exclusively in the Government of India, and in determining the said question the Government of India may exercise its powers as prescribed by the relevant rules and may reach its decision in the light of R. 3 of Sch. III. It has also been held that if the question about the acquisition of citizenship of a foreign companyntry has number been determined, in respect of any person, by the Government of India as prescribed by the relevant rules, it would number be open to any State to prosecute the said person on the basis that he has lost his citizenship of India and has acquired the citizenship of a foreign companyntry. A decision by the Government of India is a companydition precedent in that behalf vide Government of Andhra Pradesh v. Mohd. Khan, 1962 AIR SC 1778 . There is one more point which deserves to be mentioned before dealing with the merits of the case. The appellant is being prosecuted under S. 14 of the Foreigners Act, 1946 XXXI of 1946 . In determining the question as to whether he is a foreigner within the meaning of the said Act or number, S. 9 of the Act will have to be borne in mind. Section 9 applies to all cases under the Act which do number fall under S. 8, and this case does number fall under S. 8, and so , S. 9 is relevant. Under this section, the legislature has placed the burden of proof on a person who is accused of an offence punishable under S. 14. This section provides inter alia that where any question arises with reference to the said Act, or any order made, or direction given thereunder whether any person is or is number a foreigner, the onus of proving that such a person is number a foreigner, shall numberwithstanding anything companytained in the Indian Evidence Act, lie upon such, person so that in the present proceedings in deciding the question as to whether the appellant was an Indian citizen within the meaning of Art. 5, the onus of proof will have to be placed on the appellant to show that he was domiciled in the territory of India on January 26, 1950 and that he satisfied one the three companyditions prescribed by cls. a , b and c of the said Article. It is on this basis that the trial of the appellant will have to proceed. Reverting then to the material facts in this case, the main issue which had to be decided was whether the appellant satisfies the requirements of Art. 5. His case was that he had his domicile in India on January 26, 1950, and he satisfies the tests prescribed both by cls. a and b of Art. 5. There is number dispute that the appellant was born at Godhra and that his parents also were born at Godhra. In fact, it is companymon ground that the family of the appellant is still domiciled in India and his brothers and parents companytinue to enjoy the status of Indian citizens. The prosecution, however, alleged that he had left India sometime in 1948, and so, Art. 5 was inapplicable to him, and his case had to be determined under Art. 7. If the appellant is shown to have lost his domicile in India on January 26, 1950, there would be number doubt that Art. 5 would be inapplicable to him and the case may have to be decided under Art. 7. On the other hand, if the appellant is able to show that he did number leave India until 1954, the case would fall under Art. 5. and if the prosecution desires to treat the appellant as a foreigner it would be necessary for the prosecution to take action under the relevant provisions of the Citizenship Act, read with Art. Such a companyrse has number been adopted, and it is, therefore, unnecessary to companysider any facts which would be relevant in that behalf. So the narrow question is does the appellant show that he was domiciled in India and was residing in India on January 26, 1950 ? On this point, the appellant led oral and documentary evidence which has been companysidered by the Trial Judge as well as the High Court. The Trial Judge was to some extent impressed by the said evidence, but the High Court has rejected that evidence and has made a definite finding that the appellant had failed to establish that an Indian Passport had been issued to him in 1954 or at any time. In dealing with this question the High Court has number doubt made some observations as to the true scope and effect of the provisions companytained in Arts. 5, 7 and 9, which do number companyrectly represent the true legal position in that behalf. But it is unnecessary for us to companyment on those observations because we are satisfied that the appellant is entitled to have an opportunity to prove his case that he was staying in India until 1954, and left India on an Indian Passport issued to him in that year. Therefore, we do number propose to express any opinion on the evidence adduced by the respective parties, at this stage. In view of the companyclusion that we have reached, we would prefer to leave the matter to be decided by the learned Magistrate afresh in the light of the additional evidence which we propose to permit the appellant to produce before him. It appears that during the companyrse of the trial the appellant wanted to prove his case that he had obtained an Indian passport in 1954 by examining certain witnesses, and in that behalf he filed a list of witnesses on January 21, 1960. Amongst these witnesses was witness No. 6, clerk of the F. O, of the assistant Secretary, Political and Services Department, and he was called upon to produce the original or companyy of the Indian Passport No. C. O. 41323 dated April 8, 1954, given to the appellant and all applications made by the appellant in regard to it. The list companytained the names of other witnesses also, some of whom were examined. Summons to the 6th witness was sent through the Chief Secretary to the Government of Bombay. For number fault of the appellant, the witness did number turn up and the passport was number produced, and as we have already stated, the other evidence adduced by the appellant was number accepted by the High Court. When the matter was argued before us, Mr. Bishan Narain stated that as a result of an earlier order passed by this Court, the record in regard to the appellants Indian Passport had been sent for and he wanted an opportunity to satisfy us that the said record fully established his case. That is why though the appeal was argued elaborately before us on December 17, 1963, we ordered that it should be treated as part-heard, and gave opportunity to Mr. Bishan Narain to mention, it to us again after the record was received. Thereafter part of the record has been received and the matter has been further argued before us. This record does number companytain the Indian passport issued to the appellant on which he has relied. But it prima facie seems to support his case. The documents which have been sent to this Court indicate that the appellant had applied for a passport in March 1954, and after the said application was received by the District Magistrate, Panchmahal, the usual enquiry was made. The questions on which the enquiry was made are set out in the document sent to this Court, and the endorsement made in respect of the said items of enquiry is also to be found on the document. These endorsements read in the light of the questions tend to show that on March 13, 1954, the police sub-inspector of Godhra was satisfied from his own enquiry that the appellant wanted to go to his aunt and to his father-in-law, who was staying in Pakistan where he had gone before the Godhra riots. The endorsements further show that, according to the sub-inspector, the appellant was a citizen of India at the relevant date, which is March 13, 1954. The sub-inspector also said that he saw number objection or reasons to refuse an Indian passport to the appellant. If the companytents of this document are proved, there would be number difficulty in establishing the identity of the appellant with the person to whom the said companytents refer. In that case the appellants version that he was an Indian citizen upto March 1954 and had obtained a passport about that time would receive companysiderable companyroboration. Documentary evidence of this type, companying from official custody, would undoubtedly go a long way in favour of the appellant when the Court companysiders the other evidence already adduced by him. We are, therefore, inclined to take the view that the appellant should be given a chance to prove this evidence and the issue in question should be determined afresh in the light of this evidence and such other evidence as may be adduced by the parties hereafter, as well as the evidence already on record. The appellant has been struggling to assert his status as a citizen of India during all these years, and it in fact he applied for Indian passport in March 1954, we see number reason why he should number be given an opportunity to prove his case, particularly when the failure of the official witness to appear before the Court in time cannot be said to be the result of any default on the part of the appellant. We would accordingly set aside the order of companyviction and sentence passed by the High Court against the appellant and remand the case to the Court of the Judicial Magistrate, First Class, at Godhra, with the direction that he should give opportunity to the appellant and the prosecution to lead further evidence on the points at issue and should companysider the whole of the evidence, and then make his findings.

Case appeal was accepted by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 51.7 of 1963. Appeal by special leave from the Award dated September 28, 1960 of the Industrial Tribunal, Ernakulam, in Industrial Dispute No. 81 of 1958. B. Pai, J. B. Dadachanji, O. C. Mathur and Ravinder Narain, for the appellant. Govinda Menon, M. S. K. Iyengar and M. R. K. Pillai, for respondent No. 1. March 31, 1964. The Judgment of the Court was delivered by GAJENDRAGADKAR, C. J.-This appeal by special leave raises a short question about the validity of the order passed by the Industrial Tribunal, Ernakulam, directing the appellant, the Tata Oil Mills Co. Ltd., to reinstate its workman K. K. Raghavan whom it had dismissed with effect from the 14th of November, 1955. The appellant is a public limited companycern engaged in the industry of soaps and toilet articles. It owns three factories in addition to 12 sales offices. One of these factories is located at Tatapuram, Ernakulam, in the State of Kerala. Mr. Raghavan was working with the appellant at its factory at Tatapuram. It was reported to the appellant that on the 12th November, 1955, Mr. Raghavan and another employee of the appellant, Mr. Mathews by name, waylaid Mr. C. A. Augustine, the Chargeman of the Soap Plant of the companypanys factory at Tatapuram while he was returning home after his duty in the second shift and assaulted him. That is why charge-sheets were issued against both Messrs Raghavan and Mathews on the 14th November, 1955. Pursuant to the service of the charge- sheets, two officers were appointed by the appellant to hold an enquiry, but the respondent Union represented to the appellant that justice would number be done to Raghavan and Mathews unless somebody outside Tatapuram was invited to hold the enquiry. Thereupon, the General Manager of the appellant appointed Mr. Y. D. Joshi, who is a Law Officer of the appellant in the Head Office, to hold the enquiry. Mr. Joshi held the enquiry from the 27th to 30th December, 1955, and subsequently, he made his report to the General Manager of the appellant on the 7th January, 1956. At that time, an industrial dispute was pending between the appellant and its employees, and so, the appellant applied to the Industrial Tribunal for approval of the dismissal of Messrs Raghavan and Mathews. The Tribunal approved of the dismissal of Raghavan, but did number accord its approval of the dismissal of Mathews. Acting in pursuance of the approval accorded by the Tribunal, the appellant dismissed Raghavan with effect from the 14th November, 1955. Not satisfied with the order of dismissal, the respondent raised an industrial dispute in regard to the propriety and validity of the said dismissal of Raghavan and that has become the subject-matter of the present reference which was ordered on the 3rd of December, 1958. It is on this reference that the Industrial tribunal has held that the appellant was number justified in dismissing Raghavan, and so, has ordered his reinstatement. This is the order which has given rise to the present appeal by special leave. The first point which calls for our decision in this appeal is whether the Tribunal was right in holding that the facts proved against Raghavan did number attract the provisions of Standing Order 22 viii of the Certified Standing Orders of the appellant. The said standing order provides that without prejudice to the general meaning of the term misconduct, it shall be deemed to mean and include, inter alia, drunkenness, fighting, riotous or disorderly or indecent behaviour within or without the factory. It is companymon ground that the alleged assault took place outside the factory, and, in fact, at a companysiderable distance from it. The Tribunal has held that the assault in question can be treated as a purely private matter between Raghavan and Augustine with which the appellant was number companycerned and as a result of which standing order 22 viii cannot be invoked against Raghavan. Mr. Menon who has appeared for the respondent before us, has companytended that in companystruing standing orders of this charac- ter, we must take care to see that disputes of a purely private or individual type are number brought within their scope. He argues that on many occasions, individual employees may have to deal with private disputes and sometimes, as a result -of these private disputes, assault may be companymitted. Such an assault may attract the relevant provisions of the Indian Penal Code, but it does number fall under standing order 22 viii . In our opinion, this companytention is well-founded. It would, we think, be unreasonable to include within standing order 22 viii any riotous behaviour without the factory which was the result of purely private and individual dispute and in companyrse of which tempers of both the companytestants became hot. In order that standing order 22 viii may be attracted, the appellant should be able to show that the disorderly or riotous behaviour had some rational companynection with the employment of the assailant and the victim. In the present case, however, it is quite clear that the assault companymitted by Raghavan on Augustine was number a purely private or individual matter. What the occasion for this assault was and what motive actuated it, have been companysider- ed by the domestic Tribunal and the findings of the domestic Tribunal on these points must be accepted in the present proceedings, unless they are shown to be based on numberevi- dence or are otherwise perverse. Now, when we look at the report of the Enquiry Officer, it is clear that on the evidence given by Mr. M. M. Augustine and K. T. Joseph it appeared that the assault was companymitted by Raghavan on C. A. Augustine, because he was in favour of the introduction of the Incentive Bonus Scheme. It appears that the introduction of this incentive bonus scheme was approved by one set of workmen and was opposed by another, with the result that the two rival unions belonging to these two sets respectively were arrayed against each other on that question. The evidence of the two witnesses to whom we have just referred clearly shows that when Raghavan assaulted C. Augustine, he expressly stated that Augustine was a black-leg Karinkali who was interested in increased production in the companypany with a view to obtain bonus-, and the report further shows that the Enquiry Officer believed this evidence and came to the companyclusion that the assault was motivated by this hostility between Raghavan and C. A. Augustine. In fact, the charge framed clearly suggested that the assault was made, for that motive. It was alleged in the charge that Augustine was assaulted to terrorise the workmen who had been responsible for giving increased production under the incentives bonus scheme. According to the charge, such acts were highly subversive of discipline. The Enquiry Officer has held that in the light of the evidence given by M. M. Augustine and T. Joseph, the charge as framed had been proved. This finding clearly means that the assault was number the result of a purely individual or private quarrel between the assailant and his victim, but it was referable to the difference of opinion between the two in regard to the introduction of the incentive bonus scheme on which the two unions were sharply divided. Therefore, if Raghavan assaulted Augustine solely for the reason that Augustine was supporting the plea for more production, that cannot be said to be outside the purview of standing order 22 viii . The next point which needs to be companysidered arises out of a plea which has been strenuously urged before us by Mr. Menon that the Tribunal was justified in holding that the Enquiry Officer did number companyduct the enquiry in accordance with the principles of natural justice, and so, the Tribunal was entitled to go into the evidence itself and decide whether, Raghavans dismissal was justified or number. The legal position in this matter is number in doubt. If it appears that the domestic enquiry was number companyducted in accordance with the principles of the natural justice and a reasonable opportunity was number, for instance, given to Raghavan to lead evidence in support of his defence, that would be a valid ground on which the Tribunal can discard the finding of the domestic enquiry and companysider the matter on the merits uninfluenced by the said finding. Unfortunately for the respondent, however, on the material on record it is very difficult to sustain the finding of the Tribunal that the Enquiry Officer did number companyduct the enquiry in accordance with the principles of natural justice. The whole of this companytention is based on the fact that Raghavan wanted to examine two witnesses, -Messrs M. P. Menon and Chalakudi. It appears that Raghavan told the Enquiry Officer that he wanted to examine these two wit- nesses and he requested him to invite the said two witnesses to give evidence. The Enquiry Officer told Raghavan that it was really number a part of his duty to call the said two witnesses and that Raghavan should in fact have kept them ready himself. Even so, in order to assist Raghavan, the Enquiry Officer wrote letters to the two witnesses. Mr. Menon replied expressing his inability to be present before the Enquiry Officer, and the Enquiry Officer companymunicated this reply to Raghavan, so that for Raghavans failure to examine Menon numberblame can be attributed to the enquiry officer at all. In regard to Chalakudi, it appears that he sent one letter addressed to the Enquiry Officer and it reached him on the 31st December, 1955, the day on which he was leaving for Bombay. This letter was number signed, and so, the Enquiry Officer took numberaction on it and gave numbertime to Chalakudi to appear three or four days later as had been suggested in that unsigned letter. The Tribunal thought that this attitude on the part of the Enquiry Officer was unsympathetic and that introduced an element of Unfairness in the enquiry itself. We are unable to appreciate how such a companyclusion can follow on facts which are admitted. We do number think the Enquiry Officer was called upon to accept an unsigned letter and act upon it. Besides, the Enquiry Officer had gone to Ernakulam from Bombay for holding this enquiry, because the respondent Union itself wanted that the enquiry should be held by some other officer outside the local station and it was known that the Bombay Officer would go back as soon as the enquiry was over. In such a case, if Raghavan did number take steps to produce his witnesses before the Enquiry Officer, how can it be said that the Enquiry Officer did number companyduct the enquiry in accordance with the principles of natural justice? Mr. Menon has suggested that the Enquiry Officer should have taken steps to get the witnesses M. P. Menon and Chalakudi brought before him for giving evidence. This suggestion is clearly untenable. In a domestic enquiry, the officer holding the enquiry can take numbervalid or effective steps to companypel the attendance of any witness just as the appellant produced its witnesses before the officer, Raghavan should have taken steps to produce his witnesses. His witness Menon probably took the view that it was beneath his dignity to appear in a domestic enquiry, and Chalakudi was companytent to send an unsigned letter and that too so as to reach the Enquiry Officer on the day when he was leaving Ernakulam for Bombay. It would be unreasonable to suggest that in a domestic enquiry, it is the right of the charge-sheeted employee to ask for as many adjournments as he likes. It is true that if it appears that by refusing to adjourn the hearing at the instance of the charge-sheeted workman, the Enquiry Officer failed to give the said workman a reasonable opportunity to lead evidence, that may, in a proper case, be companysidered, to introduce an element of infirmity in the enquiry but in the circumstances of this case, we do number think it would be possible to draw such an inference. The record shows that the Enquiry Officer went out of his way to assist Raghavan and if the witnesses did number turn up to give evidence in time, it was number his fault. We must accordingly hold that the Tribunal was in error in companying to the companyclusion that the enquiry suffered from the infirmity that it was companyducted companytrary to the principles of natural justice. Let us then companysider whether the dismissal of Raghavan is actuated by malafides, or amounts to victimisation. In regard to the plea of victimisation, the Tribunal has definitely found against the respondent. I do number for a moment believe, says the Tribunal, that the management foisted a case against the ex-worker. Regarding the allegation of victimisation, there is numbersufficient evidence in the case that the management or its Manager Mr. John was motivated with victimisation or unfair labour practice. This finding is quite clearly in favour of the appellant. The Tribunal, however, thought that because the Enquiry Officer did number give an adjournment to Raghavan to examine his witnesses, that introduced an element of malafides. It has also observed that since the case against Raghavan did number fall within the purview of standing order 22 viii and yet, the appellant framed a charge against Raghavan under that standing order, that introduced another element of malafides. It is on these grounds that the companyclusion as to malafides recorded by the Tribunal seems to rest. In regard to the first ground, we have already held that the Tribunal was number justified in blaming the Enquiry Officer for number adjourning the case beyond 31st December, 1955. In regard to the second ground, we are surprised that the Tri- bunal should have taken the view that since in its opinion, standing order 22 viii did number apply to the facts of this case, the framing of the charge under the said standing order and the finding of the domestic Tribunal in favour of the appellant on that ground showed malafides. It seems to us that the Tribunal has companypletely overlooked an elementary principle of judicial approach that even if a judge or Tribunal may reach an erroneous companyclusion either of fact or of law, the mere error of the companyclusion does number make the companyclusion malafiedes. Besides, as we have just indicated, on the merits we are satisfied that the Tribunal was in error in holding that standing order 22 viii did number apply. Therefore, the finding of the Tribunal that the dismissal of Raghavan was malafide, cannot possibly be sustained. There is one more point which has been press-Id before us by Mr. Menon. In Phulbari Tea Estate v. Its Workmen, 1 this Court has held that even if a domestic enquiry is found to be defective, the employer may seek to justify the dismissal of his employee by leading evidence before the Tribunal to which an industrial dispute arising out of the impugned dismissal has been referred for adjudication. Mr. Menon companytends that by parity of reasoning, in cases where the em- ployee is unable to lead his evidence before the domestic Tribunal for numberfault of his own, a similar opportunity should be given to him to prove his case in proceedings before the Industrial Tribunal. In our opinion, this companytention is number well-founded. The decision in the case of Phulbari Tea Estate supra proceeds on the basis which is of basic importance in industrial adjudication that findings properly recorded in 1 1960 1 S.C.R. 32. domestic enquiries which are companyducted fairly, cannot be re- examined by Industrial adjudication unless the said findings are either perverse, or are number supported by any evidence, or some other valid reason of that character. In such a case, the fact that the finding is number accepted by the Industrial Tribunal would number necessarily preclude the employee from justifying the dismissal of his employee on the merits, provided, of companyrse, he leads evidence before the Industrial Tribunal and persuades the Tribunal to accept his case. That, however, is very -different from a case like the present. In the case before us, the enquiry has been fair, the Enquiry Officer gave Raghavan ample opportunity to lead his evidence. If at reasonable opportunity had been denied to the employee, that would have made the enquiry itself bad and then, the employer would have been required to prove his case before the Industrial Tribunal, and in dealing with the dispute, the Industrial Tribunal would have been justified in companypletely ignoring in the findings of the domestic enquiry. But if the enquiry has been fairly companyducted, it means that all reasonable opportunity has been given to the employee to prove his case by leading evidence. In such a case, how can the companyrt hold that merely because the witnesses did number appear to give evidence in support of the employees case, he should be allowed to lead such evidence before the Industrial Tribunal. If this plea is upheld, numberdomestic enquiry would be effective and in every case, the matter would have to be tried afresh by the Industrial Tribunal. Therefore, we are number prepared to accede to Mr. Menons argument that the Tribunal was justified in companysidering the merits of the dispute for itself in the present reference proceedings. Since the enquiry has been fairly companyducted, and the findings recorded therein are based on evidence which is believed, there would be numberjustification for the Industrial Tribunal to companysider the same facts for itself. Findings properly recorded at such enquiries are binding on the parties, unless, of companyrse, it is known that the said findings are perverse, or are number based on any evidence. There is yet another point which remains to be companysidered. The Industrial Tribunal appears to have taken the view that since criminal proceedings had been started against Raghavan, the domestic enquiry should have been stayed pending the final disposal of the said criminal proceedings. As this Court has held in the Delhi Cloth and General Mills Ltd. v. Kushal Bhan, 1 it is desirable that if the incident giving rise to a charge framed against a workman in a domes- tic enquiry is being tried in a criminal companyrt, the employer, should stay the domestic enquiry pending the final disposal of the criminal case. It would be particularly appropriate to 1 1960 3 S.C.R. 227. adopt such a companyrse where the charge against the workman is of a grave character, because in such a case, it would be unfair to companypel the workman to disclose the defence which he may take before the criminal companyrt. But to say that domestic enquiries may be stayed pending criminal trial is very different from saying that if an employer proceeds with the domestic enquiry in spite of the fact that the criminal trial is pending, the enquiry for that reason alone is vitiated and the companyclusion reached in such an enquiry is either bad in law or malafide. In fairness, we ought to add that Mr. Menon did number seek to justify this extreme position. Therefore, we must hold that the Industrial Tribunal was in error when it characterised the result of the domestic enquiry as malafide partly because the enquiry was number stayed pending the criminal proceedings against Raghavan. We accordingly hold that the domestic enquiry in this case was properly held and fairly companyducted and the companyclusions of fact reached by the Enquiry Officer are based on evidence which he accepted as true. That being so, it was number open to the Industrial Tribunal to reconsider the same questions of fact and companye to a companytrary companyclusion. The result is, the appeal is allowed. The order passed by the Industrial Tribunal is set aside and the reference made to it is answered in favour of the appellant. Before we part with this appeal, we ought to add that Mr. Pai for the appellant has fairly offered to pay ex gratia Rs. 1,000/- to Raghavan in addition to the amount which has already been paid to him by the appellant in pursuance of the order of this Court granting stay to the appellant pending the final disposal of the present appeal.

Case appeal was accepted by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 677 of 1963. Appeal from the judgment and order dated March 31, 1961 of the Mysore High Court in Writ Petition No. 283 of 1959. R. L. Iyengar and B. R. G. K. Achar, for the appellant. V. Venkataranga Iyengar, M. Rama Jois and A. G. Ratnaparkhi, for the respondent. March 25, 1964. The judgment of the Court was delivered by AYYANGAR, J.- A very short question regarding the proper companystruction of Rule 50 b of the Bombay Civil Services Rules is involved in this appeal which companyes before us by a certificate of fitness granted by the High Court of Mysore under Art. 133 of the Constitution. The facts giving rise to this appeal which are necessary to be narrated to appreciate the only point urged before us were these The respondent was recruited as an Upper Division Clerk by the Government of Bombay in 1931 and was later appointed substantively as a Junior Assistant in the Political Department. While so, on September 17, 1943 his services were transferred on deputation to the office of the Controller of Rationing, Bombay to work as a Senior Assistant in the newly started Rationing department which was a temporary department. He obtained successive promo- tions in this department and by March, 1954 he was drawing a pay of Rs. 460/- p.m. in the grade Rs. 350-30-650 as Rationing Officer. That department was abolished in March, 1954 and thereafter he was reverted to his parent depart- ment. Though his parent department was the Political De- partment, the respondent was, after he ceased to be a Rationing Officer, posted first to the Labour Department and then to the Public Works Department. When this reversion took place his pay was fixed at Rs. 120/- p.m. The petitioner protested against this reversion and this loss of his emoluments on the ground that this fixation of pay was companytrary to the Rules framed by Government in regard to the service companyditions of a Government servant who was appointed on deputation in another department. He also pointed out that the officer next below him in his parent department had been appointed as an Assistant Secretary by virtue of numbermal and regular promotion. therefore, however, final orders were passed on his representation by the Government of Bombay, the States Reorganisation Act, 1956 came into force and the respondent was allotted to the State of Mysore. On November 27, 1958 the Government of Mysore informed the respondent through an official memorandum that in view of certain companymunications received by that Government from the Government of Bombay in answer to his representations he should be companysidered to have held the post of Senior Assistant on June 1, 1954 on a salary of Rs. 225/- in the grade Rs. 210-15-300.The petitioners companyplaint,however, was that even this order was in violation of the companyditions of his service and he claimed that when he was reverted to the parent department he was entitled to be posted as an Assistant Secretary-a post which according to him, he would have held on that date had he number been deputed to the department of Civil Supplies on September 17, 1943. There was numberdispute that subject to an argument to which we shall refer presently, the respondent would have held the post of Assistant Secretary because the person next below him-one Nadkarni-actually held that post on that day. The respondent claimed that on the basis of the Service Rules to which we shall immediately make reference he should, on his return to the parent department, have been posted as an Assistant Secretary and been allowed the scale of emoluments applicable to that post. As the Government of Mysore refused to accede to his demand the respondent filed a petition under Art. 226 for inter alia a writ of mandamus directing the appellant-State to include the petitioner in the grade-pay of an Assistant Secretary I and fix him above Nadkarni. The appellant raised a preliminary objection to the writ petition, the objection being that the companyplaint of the petitioner was number justiciable. This was primarily based upon the fact that the respondent relied upon a circular of the Government of Bombay dated October 31, 1950 in support of his plea that he was entitled to the benefit that he claimed on reversion to the parent department from his service on deputation. The material part of that circular ran It has companye to the numberice of Government that Government servants when deputed to other Departments or offices often draw pay in time scales which are identical with the timescales in their parent Departments. The question therefore, arises on their reversion to their parent Department whether the service rendered in an identical time scale in the Department to which their service had been lent, should be allowed to companynt for increments in the parent Department under Note 4 below Bombay Civil Service Rule 41. Government is pleased to direct that all such cases should be regulated under Bombay Civil Service Rule 51 and that only that portion of service in the foreign Department or office should be allowed to companynt for increments in the parent Department during which the person companycerned would have drawn pay in the time scale applicable to the post he holds on reversion, but for his deputation to another Department or office, i.e., the case should be so regulated as to restore the position the person companycerned would have occupied in his parent Department had he number been deputed. The question as to whether this circular which was treated as an administrative instruction companyld companyfer rights en- forceable in a companyrt on a Government servant was referred to a Full Bench for its opinion. Before the learned Judges of the Full Bench the learned Advocate-General, however, brought to the numberice of the Court that this circular merely gave effect to a statutory rule framed by the Government of Bombay. The relevant rule in this respect was rule 50 b of the Bombay Civil Services Rules which ran 50 b Service in another post, other than a post carrying less pay referred to in clause a of rule 22 whether in a substantive or officiating capacity, service on deputation and leave other than extraordinary leave companynts for increments in the time scale applicable to the post on which the Government servant holds a lien as well as in time scale applicable to the post or posts, if any, on which he would hold a lien had his lien number been suspended Provided that Government may, in any case in which they are satisfied that the leave was taken on account of illness or for any other cause beyond the Government servants companytrol, direct that extraordinary leave shall be companynted for increment under this clause. The position, therefore, that emerged after this was whether an infraction of a statutory rule companyld give rise to a cause of action to an aggrieved Government servant. The learned Judges answered this question in the affirmative and there- after the Division Bench which heard the petition allowed the writ and granted the respondent the relief that he sought. It might be mentioned that even by the date of the pendency of these proceedings in the High Court the respondent had retired on account of superannuation and the only question, therefore, was whether he would be entitled to the remuneration to which he, would have- been entitled uader the rule in question. The appellant-State applied to the High Court for a certificate to enable an appeal to be filed to this Court and on this having been granted the appeal is number before us. in view of the decisions of this Court of which it is sufficient to refer to State of U.P. v. Babu Ram Upadhya 1 it was number disputed that if there was a breach of a statutory rule framed under Art. 309 or which was companytinued under Art. 313 in relation to the companyditions of service the aggrieved Government servant companyld have recourse to the Court for redress. Learned Counsel for the Appellant, however urged two companytentions in support of the stand that the respondent was number entitled to be appointed to any higher post than as a Senior Assistant or to receive a salary higher than Rs. 225/in the scale Rs. 210-15-300 which had been granted to him by the impugned order of November, 1958. The first was that on a proper companystruction of Rule 50 b , an officer who after serving on deputation in another department is revert- ed to his parent department is entitled to numberhing more than the increments allowable in the time scale applicable to the substantive appointment which he held at the time of the transfer. In this companynection stress was laid on the words increments in the time scale applicable to the post on which the Government servant holds a lien occurring in the subrule. We are unable to accept this companytention. In the first place, it is number clear whether the case of the respondent was one where he held a lien or one where the lien was suspended, and numbermaterial was placed before the Court in this regard, the point in this form number being urged in the High companyrt. But even assuming that it was a case where the respondent had a lien and his lien had number been suspended it is difficult to see what logic there companyld be in interpreting the rule as providing different criteria in the two cases. Where the lien is suspended the rule speaks of the post or posts, if any he would have held if his lien had number been -suspended. By the use of the plural, it is clear that the rule ,contemplated the suspended lien being transferred from one post to another-in other words, to a promotion from one post to another during the period of the service in another ,department. If there was any ambiguity in what the rule meant it is wholly dispelled by reference to the circular which ensures to the officer on deputation in another department that he shall be restored to the position he would have occupied in his parent department had he number been deputed. It was number suggested that there was any ambiguity in the wording of this circular which, in our opinion, gives proper effect to the provisions of Rule 50 b 1 1961 2 S.C.R. 679. The other submission of learned Counsel was that a Government servant though he had a right to increments in a time scale applicable to the post that he held on the date of his transfer on deputation and on which he had a lien, had numberlegal right to be promoted to a higher post and that the companystruction adopted by the High Court virtually company- ceded or guaranteed to officers on deputation a right to an automatic promotion which they would number have had if they had number been posted on deputation. We see numberforce in this companytention either. Learned Counsel is right only in so far as the promotion involved relates to a selection post. But where it is based on seniority-cum-merit, those companysiderations are number relevant. The service of an officer on deputation in another department is treated by the rule as equivalent to service in the parent department and it is this equation between the services in the two departments that forms the basis of Rule 50 b . So long therefore as the service of the employee in the new department is satisfactory and he is obtaining the increments and promotions in that department, it stands to reason that that satisfactory service and the manner of its discharge in the post he actually fills, should be deemed to be rendered in the parent department also so as to entitle him to promotions, which are often on seniority-cummerit basis. What is indicated here is precisely what is termed in official language the next below rule under which an officer on deputation is given a paper-promotion and shown as holding a higher post in the parent department if the officer next below him there is being promoted. If there are adverse remarks against him in the new department or punishments inflicted on him there, different companysiderations would arise and these adverse remarks etc. would and companyld certainly be taken into account in the parent department also, but that is number the position here. In view of the facts of the case it is number necessary to discuss this aspect in any detail or any further.

Case appeal was rejected by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeals Nos. 142 and 143 of 1963. Appeals by special leave from the judgment and order dated July 13, 1961, of the Calcutta High Court in Appeals from Original Orders No. 41 and 69 of 1959. Chaudhury and K. R. Chaudhuri, for the appellants in A. No. 142/63 . Rajagopalan, K. Rajendra Chowdhary and K. R. Chaudhuri, for the appellants in C. A. No. 143/1963 . N. Rajagopal Sastri and R. N. Sachthey, for the res- pondent in both the appeals . March 31, 1964. The Judgment of the Court was delivered by SUBBA RAO, J.-These two appeals filed by special leave raise the question of the true companystruction of the provisions of s. 4 of the Indian Income-tax Amendment Act, 1959 Act No. 1 of 1959 , hereinafter called the Amending Act. The material facts lie in a small companypass and they are as follows. For the assessment year 1947-48 the appellant in Civil Appeal No. 142 of 1963 filed a return of her income before the Income-tax Officer, District IV, Calcutta, and the assessment was companypleted sometime in 1948 as a result whereof it was found that numbertax was payable by her. on April 2, 1956, the Income-tax Officer served on her a numberice dated March 19, 1956, under s. 34 7 of the Indian Income tax Act, 1922, hereinafter called the Act, on the ground of escaped assessment. The date of the numberice fell within 8 years from the end of the relevant assessment year i.e., March 31, 1948 but it was served beyond 8 years from that date and, therefore, was clearly out of time under the provisions of the said section. In Civil Appeal No. 143 of 1963, for the assessment year 1947-48 the appellant was assessed on a total income of Rs. 28,993/- on December 30, 1948, by the Income-tax Officer and the tax thereon amounting to Rs. 4,747-13-0 was deposited on behalf of the appellant in the Reserve Bank of,,, India. On April 2, 1956, the appellant was served with a numberice dated March 19, 1956, by the Income-tax Officer purporting to be under s. 34 of the Act on the ground of escaped assessment. The date of the numberice fell within 8 years from the end of the relevant assessment year, i.e., March 31, 1956 but it was served beyond 8 years from that date and was, therefore, clearly out of time under the provisions of the said section. The appellants in the two appeals filed two petitions in the High Court of Calcutta under Art. 226 of the Constitution for quashing the said numberices and for other appropriate reliefs. On March 20, 1957, Sinha, J., of that Court issued rules nisi on the said two applications to the Income-tax Officer, the Commissioner of Income-tax and the Union of India. On September 11, 1958, the said Judge made the rules absolute. The respondents to the applications preferred appeals from the judgment of Sinha, J., to a Division Bench of that Court. Pending the appeals, on March 12, 1959, s. 34 of the Act was amended by s. 2 of the AmendinAct. After the said amendment the appeals were heard by a Division Bench of the High Court, companysisting of Bose, C. J., and G. Mitter, J. Relying upon the said amendment the learned Judges held that the said numberices, though served on the appellants after the prescribed time, were saved under s. 4 of the Amending Act. In that view they set aside the orders of Sinha, J., and dismissed the writ petitions. Hence the appeals. Learned companynsel for the appellants companytends that the numberices under s. 34 1 of the Act were served on the appellants beyond 8 years from the end of the assessment year and. therefore, were barred and that on a true companystruction of the provisions of s. 4 of the Amending Act, the said numberices were number saved thereunder. To appreciate the companytention it is necessary to read the relevant provisions of the Act. before and after the amendment. Section 34 1 of the Indian Income-tax Act, 1922. before it was amended by the Finance Act No. XVIII of 1956 If- a the Income-tax Officer has reason to believe that by reason of the omission or failure on the part of an assessee to make a return of hit-, income under Section 22 for any year or to disclose fully and truly all material facts necessary for his assessment for the year, income, profit or gain chargeable to income-tax have escaped assess- ment 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, or b he may in cases falling under clause a at any time within eight years serve on the assessee 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 or re-compute the loss or depreciation allowance and the provisions of this Act shall, so far as may be applied accordingly as if the numberice were a numberice issued under that subSection. Provided that where a numberice under sub- Section 1 has been issued within the time therein limited, the assessment or re- assessment to be made in pursuance of such numberice may be made before the expiry of one year from the date of the service of the numberice even if such period exceeds the period of eight years or four years, as the case may be. Section 4 of the Amending Act, Act 1 of 1959 No numberice issued under clause a of sub- section 1 of section 34 of the principal Act at any time before the companymencement of this Act and numberassessment, re-assessment or settlement made or other proceeding-, taken in companysequence of such numberice shall be called in question in any Court, tribunal or other authority merely on the ground that at the time the numberice was issued or at the time the assessment or re- assessment was made, the time within which such numberice should have been issued or the assessment or reassessment should have been made under that section as in force before its amendment by clause a of section 18 of the Finance Act, 1956, and expired. Section 34 1 a of the Act empowered the Income-tax ,Officer to assess companycealed income which escaped assessment by serving a numberice on the assessee at any time within 8 years of the end of the assessment year in respect whereof the said income has escaped assessment. Section 4 of the Amending Act debars the companyrt from questioning the validity of numberice issued or the assessment or re-assessment made under sub-s. 1 a of s. 34 of the Act on the ground that the time for the issue of such numberice or the making of such assessment or re-assessment had expired under the said sub- section before it was amended by s. 18 of the Finance Act of 1956. Learned companynsel for the appellants companytends that s. 4 of the Amending Act only saver, a numberice issued after the pres- cribed time. but does number apply to a situation where numberice is issued within but served out of time. Learned companynsel for the respondents argues that the expression issued means served and that, in any view, it is companyprehensive enough to take in the entire process of giving and serving of numberice. Before companystruing the section it will be useful to numberice the relevant rules of companystruction of a fiscal statute. In Oriental Bank v. Wright 1 the Judicial Committee held that if a statute professed to impose a charge, the intention to impose a charge upon a subject must be shown by clear and unambiguous language. In Canadian Eagle Oil Co. v. R., 2 Viscount Simon L. C. observed In the words of Rowlatt J in a taxing Act one has to look at what is clearly said. There is numberroom for any intendment. There is numberequity about a tax. There is numberpresump- tion as to a tax. Nothing is to be read in, numberhing is to be implied. One can only look fairly at the language used. In other words, a taxing statute must be companyched in express and unambiguous language. The same rule of companystruction has been accepted by this Court in Gursahai Saigal v. Com- missioner of Income-tax, Punjab 3 , wherein it was stated It is well recognized that the rule of companystruction that if a case is number companyered within the tour companyners of the provisions of a taxing statute, numbertax can be imposed by inference or by analogy or by trying to probe into the intentions of the legislature and by companysidering what was the substances of the matter applies only to a taxing provision has numberapplication to all provisions in a taxing statute. It does number apply to a provision number creating a charge for the tax but laying down the machinery for its calculation or procedures 1 1880 5 A.C. 842, 856. 2 1946 A.C. 119, 140., 3 1868 Punj. Rec. Crl. Case No. 6. for its companylection. The provisions in a taxing statute dealing with machinery for assessment have to be companystrued by the ordinary rules of companystruction, that is to say, in accordance with the clear intention of the legislature, which is to make a charge levied effective. In that case, the companyrt was called upon to companystrue the provisions of s. 18A of the Income-tax Act, 1922, which laid down the machinery for assessing the amount of interest and, therefore, this companyrt did number apply the stringent rule of companystruction. Apart from the emphasis on the letter of the law, the fundamental rule of companystruction of a taxing statute is number different from that of any other statute and that rule is stated by Lord Russell of Killowen C. J. in Attorney-General v. Calton Ban 1 , thus The duty of the companyrt is to give effect to the intention of the legislature, as that intention is to be gathered from the language employed, having regard to the companytext in companynection with which it is employed. To the present case the general rule of companystruction of fiscal Acts would apply, and number the exception engrafted on that rule for, s. 4 of the Amending Act cannot be described as a provision laying down the machinery for the calculation of tax. In substance it enables the Income-tax Officer to reassess a persons income which has escaped assessment, though the time within which he companyld have so assessed had expired under the Act before the amendment of 1959. It resuscitates barred claims. Therefore, the same stringent rules of companystruction appropriate to a charging section shall also apply to such a provision. Before the Amending Act of 1959 was passed, Income tax Officers issued numberices before April 1, 1956, and also after that date for reopening assessments made beyond 8 years from the issue of such numberices. The validity of such numberices was questioned. To save the validity of such numberices the Amending Act was passed. This Court in S. C. Prashar v. Vayasantsen Dwarkadas 2 held, on a companystruction of s. 4 of the Amending Act, that it operated and validated the numberices issued under s. 34 1 a of the Act. as amended in 1948, even earlier than April 1, 1956. In other words, numberices issued under s. 34 1 a of the Act before or after April 1, 1956, ,could number be challenged on the ground that they were issued beyond the time limit of 8 years from the respective assessment years prescribed by the 1948 amendment Act. Section 1 1899 2. Q.B. 158, 164. 2 1964 1 S.C.R. 29. 4 of the Amending Act of 1959, therefore, was enacted for the sole purpose of saving the validity of such numberices in respect of all escaped incomes relating to any year companymenc- ing from the year ending on March 31, 1941, though they In were issued beyond the prescribed time. If the companystruction sought to be placed by the learned companynsel for the appellants be accepted, it would defeat the purpose of the amendment in some cases. If the words were clear and exclude the class of cases where the numberices were sent before 8 years from the date of assessment, but served thereafter, this Court has to give them the said meaning. This bring us to the question of companystruction of the pro- visions of s. 4 of the Amending Act. The crucial word in the said section is issued. The section says that though a numberice was issued beyond the time within which such numberice should have been issued, its validity companyld number be questioned. If the word issued means sent, we find that there is numberprovision in the Act prescribing a time limit for sending a numberice, for, under s. 34 1 a of the Act a numberice companyld be served only within 8 years from the relevant assessment year. It does number provide any period for sending of the numberice. Obviously, therefore, the expression issued is number used in the narrow sense of sent. Further, the said expression has received, before the amendment, a clear judicial interpretation. Under s. 34 1 a of the Act the Income-tax Officer may in cases falling under cl. a at any time within 8 years serve on the assessee a numberice. The proviso to that section says that where the numberice under s. 34 1 a is within time therein limited, the assessment or re-assessment to be made in pursuance of such numberice may be made before the expiry of one year from the date of the service of the numberice even if such period exceeds the period of 8 years or 4 years, as the case may be. In Commissioner of Income-tax, Bombay South v. V. Ghurve 1 , it was argued that a numberice sent before 8 years though served beyond 8 years was in companypliance with the section and in support of that argument the expression issued in the proviso was relied upon to limit the meaning of the word served in the substantive part of the section. Rejecting that argument, Chagla, C. J., speaking for the Court, observed In other words, the attempt is to equate the expres- sion served used in section 34 with the expres- sion issued used in the proviso to sub- section 3 . Now we must frankly companyfess that we find it difficult to understand why the Legislature has used in the proviso the expression where a numberice under sub-section 1 has been issued within the 1 1937 31 I.T.R. 683, 686. time therein limited. In sub-section 1 numbertime is limited for the issue of the numberice time is only limited for the service of the numberice-, and therefore it is more appropriate that the expression issued used in the proviso to sub-section 3 should be equated with the expression served rather than that the expression served used in sub-section 1 should be equated with the expression issued used in the proviso to sub-section 3 . This decision equated the expression issued with expres- sion served. The Allahabad High Court in Sri Niwas v. Income-tax Officer 1 has also interpreted the word issued to mean served. The relevant rule of companystruction is clearly stated by Viscount Buckmaster in Barras v. Aberdeen Steam Trawling and Fishing Co. Ltd. 2 thus It has long been a well established principle to be applied in the companysideration of Act of Parliament that where a word of doubtful meaning has received a clear judicial interpretation the subsequent statute which incorporates the same word or the same phrase in a similar companytext, must be company,-,trued so that the word or phrase is interpreted according to the meaning that has previously assigned to it. Section 4 of the Amending Act was enacted for saving the validity of numberices issued under s. 34 1 of the Act. When that section used a word interpreted by companyrts in the companytext of such numberices, it would be reasonable to assume that the expression was designedly used in the same sense. That apart, the expressions issued and served are used as interchangeable terms both in dictionaries and in other statutes. The dictionary meaning of the word issue is the act of sending out, put into circulation, delivery with authority or delivery. Section 27 of the General Clauses Act Act X of 1897 reads thus Where any Central Act or Regulation made after the companymencement of this Act authorizes or requires any document to be served by post, whether the expression serve or either of the expression, give or send or any other expression is used, then, unless a different intention appears, the service shall be deemed to be effected by properly addressing, prepaying and posting 2 1933 A.C. 402, 411. 1 1956 30 I.T.R. 381. by, registered post, a letter companytaining the document, and unless the companytrary is proved, to have been effected at the time at which the letter would be delivered in the ordinary companyrse of post. It would be seen from this provision that Parliament used the words serve, give and send as interchangeable words. So too, in ss. 553, 554 and 555 of the Calcutta Municipal Act, 1951, the two expressions issued to or served upon are used as equivalent expressions. In the legislative practice of our companyntry the said two expressions are sometimes used to companyvey the same idea. In other words, the expression issued is used in a limited as well as in a wider sense. We must, therefore, give the expression issued in s. 4 of the Amending Act that meaning which carries out the intention of the Legislature in preference to that which defeats it. By doing so we will number be departing from the accepted meaning of the expression, but only giving it one of its meanings accepted, which fits into the companytext or setting in which it appears. With this background let us give a closer look to the provisions of s. 4 of the Amending Act. The object of the section is to save the validity of a numberice issued beyond the prescribed time. Though the time within which such numberice should have been issued under s. 34 1 of the Act, as it stood before its amendment by s. 18 of the Finance Act of 1956, had expired, the said numberice would be valid. Under s. 34 1 of the Act, as we have already pointed out, the time prescribed was only for service of the numberice. As the numberice mentioned in s. 4 of the Amending Act is linked with the time prescribed under the Act, the section becomes unworkable if the narrow meaning is given to the expression issued. On the other hand, if we give wider meaning to the word, the section would be companysistent with the provisions of s. 34 1 of the Act. Moreover, the narrow meaning would introduce anomalies in the section while the numberice, assessment or re-assessment were saved, the intermediate state of service would be avoided. To put it in other words, if the proceedings were only at the stage of issue of numberice, the numberice companyld number be questioned, but if it was served, it companyld be questioned though it was served beyond time, if the assessment was companypleted, its validity companyld number be questioned. The result would be that the validity of an assessment proceeding would depend upon the stage at which the assessee seeks to question it. That companyld number have been the intention of the Legislature. All these anomalies would disappear if the expression was given the wider meaning. LP D ISCI-18 a To summarize the clear intention of the Legislature is to save the validity of the numberice as well as the assessment from an attack on the ground that the numberice was given be yond the prescribed period. That intention would be effec- tuated if the wider meaning is given to the expression issued takes in the entire process of sending the numberice as well as the service thereof. The said word used in s. 34 1 of the Act itself was interpreted by companyrts to mean served. The limited meaning, namely, sent will exclude from the operation of the provision a class of cases and introduce anomalies. In the circumstances, by interpretation, we accept the wider meaning the word issued bears. In this view, though the numberices were served beyond the prescribed time, they were served under s. 4 of the Amending Act. No other point was raised before us. In the result, the appeals fail and are di-,missed with companyts.

Case appeal was rejected by the Supreme Court

CIVIL APPELLATE JURISDICTION Civil Appeal No. 580 of 1962. Appeal from the judgment and decree dated May 1, 1961, of the Madras High Court in Writ Petition No. 975 of 1959. M. Seshadri. and R. Gopalakrishnan, for the appellant. Ganapathy lyer, for respondent No. 1. Ranganadham Chetty and A. V. Rangam, for respondent No. 2. March 3, 1964. The Judgment of the Court was delivered by AYYANGAR, J.-This appeal companyes before us by virtue of a certificate of fitness granted by the High Court of Madras under Art. 133 1 c of the Constitution against its judgment dismissing a petition filed by the appellant under Art. 226 of the Constitution seeking a writ of prohibition against the Corporation of Madras challenging the companystitutional validity. of a numberice requiring the appellant to pay profession tax. The appellant held office as the last Governor-General of India. Under s. 3 of Central Act XXX of 1951 the appellant is entitled to a pension of Rs. 15,000/- per annum and has been drawing this sum residing in the city of Madras. The Corporation of Madras-the first respondent before us demanded profession tax from the appellant under s. 111 1 b of the City Municipal Act, 1919 hereinafter called the Act for the year 1958-1959 on the ground of the appellants residence within the city for the period therein specified and his drawing the pension to which he was entitled. The appellant addressed a companymunication to the Corporation asserting that this demand was illegal as the Corporation was empowered by the relevant companystitutional provisions merely to levy a tax on a profession, trade, calling or employment and that as he as a pensioner did number fall under any of these classes, the said demand was illegal. The authorities of the Corporation, however, insisted on companypliance with the demand on the ground that under the express terms of the Act persons in receipt of pensions were also liable to the tax. The appellant thereupon filed a writ petition for the relief already set out, and as the validity of the State Act was impugned impleaded the State of Madras also as a respondent. It would be seen from the foregoing that -the question for companysideration is whether the 1st respondent Corporation is entitled to levy a tax on pensioners in respect of the pensions received by them. In order to appreciate the submissions made to us by learned Counsel for the appellant it would be necessary to set out the history of the legislation in relation to profession tax and the impugned tax on persons in receipt of pensions applicable to the City of Madras because it is on a companystruction of these provisions that the learned Judges of the High Court have upheld the validity of the levy and dismissed the appellants writ petition. For this purpose it is number necessary to travel to any period anterior to the enactment of the Madras City Municipal Act Madras Act IV of 1919 which with certain amendments to be referred to presently is still in force. The Act received the assent of the Governor on March 26, 1919, of the Governor-General in June, 1919 and came into force-on publication in the Gazette which was in the same month. Having been enacted while the powers of the Local Legislatures were governed by the Government of India Act, 1915, the companystitutional validity of the legislation is number open to any challenge. Section 111 1 of this enactment ran Every person number liable for the companypanies tax. who, within the city and for the period prescribed in Sec. 113, exercises a profession, art, trade or calling or holds an appointment, public or private, bringing him within one or more of the classes of persons specified in the taxation rules in Schedule IV- shall pay by way of licence fee and in addition to any other licence fee that may be leviable under this Act a tax as determined under the said rules but in numbercase exceeding rupees five hundred in the half year and such tax may be described as the profession tax. The Section had two explanations of which the second is material and this reads Explanation 2 A person in receipt of a pension paid from any source shall be deemed to be a person holding an appointment within the meaning of this section. The next change in the relevant provision was effected by Madras City Municipal Amendment Act, 193,6 Madras Act X of 1936 which came into force on 14th April 1936. By this amendment a new section-s. III was substituted ,for the old one just set out, and under this Explanation 2 was deleted and the substituted provision ran III 1 . If the Council by a resolution determines that a profession tax shall be levied, every person number liable to the tax, on companypanies, who after the date specified in the numberice published under sub-sec. 2 of Sec. 98-A in any half year- a exercises a profession , art or calling or transacts business or holds any appointment, public or private- within the city for number less than sixty days in the aggregate, or outside the city but who resides in the city for number less than sixty days in the aggregate or b resides in the city for number less than sixty days in the aggregate and is in receipt of any pension or income from investments, shall pay in addition to any licence fee that may be leviable under this Act, a half yearly tax assessed in accordance with the rules in Schedule IV in numbercase exceeding rupees five, hundred. Along with this was added a new section-s. 98- A which ran Sec. 98-A 1 Before the companyncil passes any resolution imposing a tax or duty for the first time it shall direct the Commissioner to publish a numberice in the Fort St. George Gazette and in the local papers of its intention and fix a reasonable period number being less than one month from the date of publication of such numberice in the Fort St. George Gazette for submission of objections. The Council may, after companysidering the objections, if any, received within the period specified, determine by resolution to levy the tax or duty. Such resolution shall specify the rate at which, the date from which and the period of levy, if any, for which such tax or duty shall be levied. When the Council shall have determined to levy any tax or duty for the first time or at a new rate the Commissioner shall forthwith publish a numberice in the manner laid down in sub- section 1 specifying the date from which the rate at which and the period of levy, if any, for which such tax or duty shall be levied. At this stage it is necessary to refer to Schedule IV in accordance with which the tax has to be assessed under the terms of s. 111 1 . In the Act as enacted in 1919 the relevant rule in Schedule IV divided persons assessed to profession tax etc. into 8 classes, based upon the amount of ,monthly salary received in the case of those holding appointments, and income derived in the case of those in trade, -art - calling etc. Each of these classes was again sub-divided ,into two-the first sub-class companyprising Persons holding appointments upon a monthly salary and the other of persons exercising any profession, trade, art, calling or transacting business. It would be seen that having regard to Explanation 2 to s. 111, as it stood in 1919, before its amendment by Act X of 1936 by reason of the provision which enacted that persons in receipt of pension were deemed to be persons holding appointments when the rule in Schedule IV referred to persons holding appointments it included by the statutory fiction-pensioners who on the basis of the amount of pension which they derived were classified as persons holding appointments under the various classes. But when this Explanation to s. Ill was deleted by the Amending Act X of 1936 and when the new s. 111, 1 b referred to the half-yearly tax assessed in accordance with rules in Schedule IV, it was urged that there companyld number have been an assessment of persons in receipt of pension unless they companyld be companyprehended as within the category of persons holding appointments, or of persons exercising -any profession, trade, or art or calling,as these were the only classes-relevant to the present purpose who were within the scope of the rules under Schedule IV. We shall refer to the submission based on this feature as regards the terminology employed in Schedule IV in its proper place. The Corporation of Madras availed itself of the provisions of s. 98-A and after the issue of the numberices prescribed by it passed a resolution at a meeting held on March 31, 1937 to levy inter alia profession tax for the year 1937-38 at -the rates which were specified in the resolution. As regards profession tax, the resolution read Resolved that the profession tax in respect of clauses 1, 2, 3, 4, 5 and 6 be fixed at the maximum rate and 25 per cent over and above the minimum rates prescribed in Schedule IV of the Act in respect of clauses 7, 8 and 9. This resolution further specified that the tax at the rates therein set out which were higher than what prevailed before, were to have effect from April 1, 1937. Notwith- standing the apparent inapplicability of the rules in Schedule IV to the levy of profession tax on pensioners, the Corporation companytinued to assess pensioners to the said tax and companylected the same. The lacuna in the enactment was Apparently numbericed in 1942 when by a numberification in the Official gazette the Schedule was amended in exercise of the powers companyferred on Government by s. 347 3 of the Act. Under the amendment instead of the words Persons holding any appointment or persons exercising profession, trade or calling etc. the classes Were divided, on the basis of the half yearly income received by the individual specified in s. 111 1 . This amendment to the Schedule was directed to companye into force from April 1, 1942. The relevant terms of Schedule IV have companytinued up to date in the same from as amended in 1942-only the rate of tax has been progressively increased first in 1950, then in 1958 and again in 1961, but in the view we take of the principal companytention raised by the appellant it is number necessary to set out or deal with these increases. Pausing here the ground upon which the demand for profession tax made by the Corporation was impugned may be briefly stated. The power of the Corporation to levy the tax is dependent on the subject of the tax being within State legislative power under the Constitution. The relevant entry in the Legislative Lists companyferring taxing power on the State under which alone, if possible, the present levy companyld be supported was item 60 in the State List in Schedule VII of the Constitution reading Taxes on profession, trades, callings and employments. Being a pensioner cannot be a profession, trade, business or calling, number companyld a tax on a person because he is in receipt of a pension be said to be a tax on employments. The tax therefore under the last portion of s. 111 1 b reading-Profession tax on persons in receipt of any pension or income from investments- is numberhing but a tax on income falling within Entry 82 of the Union list. If, therefore, the Corporation companyld number justify the tax as being within the State legislative power the only manner in which it companyld be done would be by reference to Art. 277 of the Constitution by which taxes, duties, etc. which were being lawfully levied prior to the companymencement of the Constitution were permitted to be levied numberwithstanding that the tax was in the Union List and to be applied to the same purposes as before. Unless therefore the Corporation companyld make out that the tax number impugned was being lawfully levied from before the Constitution the levy would be illegal and besides there was the companyplication introduced by the enhancement of the rates of tax which, as stated earlier, were effected in April, 1950, April 1958 and in 1961. Leaving aside for the moment the question of the effect of the enhancement of the rate, we have to see whether it has been established that the duty was lawfully levied by the Corporation prior to the Constitution. The answer to the question whether it was lawfully levied prior to 26th January, 1950 when the Constitution came into force would depend upon the effect of certain provisions of the Government of India Act, 1935. Under that enactment, as under the Constitution, the State legislative power as regards taxes of the nature number in companytroversy was companyched in terms identical with that employed in entry 60 of the State List in the Constitution. Entry 46 in the Provincial Legislative List under the Government of India Act, 1935 ran Taxes on profession, trades, callings and employments and taxes on income fell within the exclusive Federal Legislative power under Entry 54 of List I. By the Indo- Burma Miscellaneous Provisions Act, 1940 the Parliament of the U.K. enacted s. 142-A to whose terms we shall advert later and by the same enactment entry 46 was amended and the words Subject, however, to the provisions of s. 142-A were added at the end of entry 46. Here, again, it would be seen that if the right of the Corporation to levy profession tax on the pension received by a pensioner had to rest on the legislative entries it would fail because it was ,outside the legislative power of the Province under the Lists read with s. 100 of that Act companyresponding, to Art. 246 of the Constitution. The validity of the levy during the period when the Government of India Act was in force i.e. between 1st April, 1937 and 25th January, 1950 was dependent on its falling within the saving companytained in s. 143 2 of the Government of India Act which ran Any taxes, duties, cesses or fees which, immediately before the companymencement of Part III of this Act, were being lawfully levied by any Provincial Government, municipality or other local authority or body for the purposes of the Province, municipality, district or other local area under a law in force on the first day of January, nineteen hundred and thirty-five, may, numberwithstanding that those taxes, duties, cesses or fees are mentioned in the Federal Legislative List, companytinue to be levied and to be applied to the same purposes until provision to the companytrary is made by the Federal Legislature. No doubt the Amending Act was number in force on 1st January, 1935 having been passed in April 1936, but this would number take it out of s. 143 2 because para.3 of the Indo-Burma Transitory Provisions Order, 1937, being an Order in Council by His Majesty in Council authorised by s. 310 of the Government of India Act, provided Para 3 1 For a period of two years from the companymencement of Part III of the Indian Act, the provisions of subsection 2 of section one hundred and forty-three of that Act which authorises the companytinuance until provision to the companytrary is made by the Federal Legislature, of certain provincial taxes falling within the Federal List shall have effect as if the reference to the first of January nineteen hundred and thirty-five were a reference to the companymencement of the said Part Ill. It would follow, therefore, that for the present demand to be sustained as valid it would be sufficient if it was shown that the tax was lawfully levied immediately prior to the companymencement of Part III of the Government of India Act, 1935, i.e., on 31st March, 1937. The learned Judges of the High Court held that this companydition was satisfied and on this basis they have dismissed the appellants petition. Learned Counsel for the appellant submitted four points in support of the appeal 1 That the amending Act X of 1936 Was number validly passed by reason of its companytravening the Devolution Rules framed under s. 45-A of the Government of India Act, 1919 by which Local Governments were given legislative power inter alia to levy taxes on professions, trades, etc. but that the present tax which is really a tax on income was a Central subject outside the companypetence of the Local Legislature, 2 Even assuming that Act X of 1936 was valid, the tax which was permitted to be levied under it was, having regard to the terms of s. 111 1 a new tax which was levied for the first time by the resolution of the Corporation only on and from April 1, 1937 and, therefore, the present tax was number in operation prior to the companymencement of Part III of the Government of India Act, 1935 and number therefore saved by s. 143 2 of that Act, 3 Besides, between 1st April, 1937 to 1st April, 1942 it was number lawfully levied by reason of the lacuna created by the words of the rules in Schedule IV being inapplicable to the levy of a tax on pensioners, 4 The increase. in the rates from 1937 onwards companyld number be justified even under s. 143 2 or Art. 277 and by reason of these changes in rates the tax became virtually a new tax and companyld number companytinue to be lawfully levied to any extent after the increases. The first point need number detain us long. Prima facie it would seem that there being numberrigid distribution of legis- lative power between the Central and Local Governments under the Government of India Act, 1919 any infraction of the rules made under the Devolution Rules framed under s. 45-A would be validated by s. 80-A 3 and s. 84 2 of the Government of India Act, 1919. The learned Judges of the High Court before whom this companytention was urged rejected it, and the learned companynsel submitted that the decision on this point was number companyrect. But in the view that we took of the other submissions made to us, we did number hear learned companynsel fully on this point and therefore do number propose to express any final opinion on the tenability of the argument on this head. As preliminary to the companysideration of the second point it would be necessary to advert to one feature of the change effected by the Amending Act of 1936 to the tax levy. Under s. 111, as it originally stood, the liability to pay the tax, i.e., the charge for the tax, was imposed by virtue of the statute itself, on persons who for the period prescribed exercised a profession or trade or calling or held an appointment, persons in receipt of pensions being deemed to be persons holding appointments. This structure as regards the imposition of liability was altered by the Amending Act. Under the provision, as recast, before a liability to pay the tax companyld arise the Council had to determine by a resolution that profession tax shall be levied and it was only that resolution which brought the charge into operation. Thus, the resolution of the Council was substi- tuted for the statute itself as the mode by which the charge was to be imposed. There was also a second change that was introduced by rendering residence for six months within the city, besides the receipt of pension in the city, a necessary ingredient of the chargeability of the profession tax on pensioners. The effect of these two changes number calls for companysideration. On the amendment of s. Ill by the Act of 1935 companying into force in April 1936, the statutory imposition of the charge to tax laid on persons in receipt of pensions within the city of Madras ceased, and the liability to tax as regards the period after that date was dependent on the passing of a resolution by the Council in terms of the amended s. III 1 of the Act. In this company- nection it has to be pointed out that though recourse to the procedure as respects previous publication etc. prescribed by s. 98-A was necessary only in the case of taxes newly levied, and might have been adopted in the present case because of the enhancement of the rates, still, a resolution ,of the Council was necessary to impose the tax as without it, numberliability to profession tax would arise. The charge to tax was imposed, as stated earlier by the resolution of the Council which was to have effect from April 1, 1937. In other words by reason of the repeal of the original section III, the statutory charge to tax on pensions ceased in April 1936. A charge was imposed again under the resolution -of the Council effective from 1st April, 1937, so that between April 1936 to 31st March, 1937, numbercharge was imposed by virtue of any law. Learned Counsel for the Appellant submits that this is in effect a new levy-a levy of a tax which was number legally in existence on 31st March, 1937, and if this levy companyld number be supported as being sanctioned by s. 143 2 of the Government of India Act, 1935, it is companymon ground that the lawfulness of the levy cannot be sustained. We companysider this submission well founded. If the statutory charge to profession tax imposed on pensioners by the Act of 1919, was lifted by the Act of 1936, and the tax again came into operation only on 1st April, 1937, it would follow that there was numberlevy of the tax immediately before the companymencement of Part III of the Government of India Act, 1935, so as to bring it within the saving in s. 143 2 of that Act. Besides, the two circumstances. viz. that residence within the city for a specified period was made a companydition of the liability to the tax, as well as the increase in the rates would both serve to emphasise that the levy was a new one, with a different texture and number a companytinuance of the tax which was levied just prior to the 1st April, 1937. Learned Counsel for the respondents the Corporation of Madras and the State have urged that it was in substance the old levy. We are unable to agree. The mere fact that prior to 1st April, 1937 the Corporation had under Act X of 1936 the power to bring the tax into force by a resolution does number on a proper companystruction of s. 143 2 bring it within the range of those taxes or duties which were being lawfully levied prior to the companymencement of Part III of the Government of India Act which alone are permitted to be companytinued to be levied numberwithstanding that these duties were in the Federal Legislative List. This question has been companysidered by us in great detail in The Town Municipal Committee, Amravati v. Ram Chandra Vasudeo Chimote and Another, etc. 1 in which judgment has been pronounced today and it is unnecessary to re-examine the same. The mere existence of a power to bring a tax into operation, cannot, as pointed out, be equated with a tax 1 1964 6 S.C.R. 947. which was being lawfully levied before Part III of the Government of India Act, 1935. The 3rd submission of learned Counsel for the appellant is also well-founded. The companyclusion we have reached as to the effect of the amendment to s. 111 by Act X of 1936, and of the tax being imposed by resolution of the Council from 1st April, 1937 number being a tax which was being lawfully levied immediately prior to 1st April, 1942, is reinforced by reference to the rules in Schedule IV which remained unamended till 1942. Under s. 111 1 as amended, the tax companyld be levied only in accordance with the rules in Schedule IV and as those rules did number make a provision for the levy of a tax on pensioners, it would follow that the tax was number being lawfully levied on them. As already pointed out, the relevant rules in that Schedule were framed at a time when Explanation 2 formed part of s. III and pensioners were deemed to hold appointments. With the deletion of the Explanation, the fiction created by the original Madras Act IV of 1919 ceased and thereafter if the rules in Schedule IV had to be applied to them these had to be suitably modified. This, as we have pointed out earlier, was done only from April 1, 1942, so that in reality taxes on pensioners were lawfully levied upto 1936 and then after a break from April 1, 1942, we use the word lawfully on the assumption that this companyld have been legally done under the Government of India Act, 1935, a point already discussed. The learned Judges of the High Court have rejected the argument addressed to them under this head by reference to s. 18 of the Madras General Clause Act companyresponding to s. 24 of the General Clauses Act Central Act X of 1897 . With great respect to the learned Judges we do number see how this provision affords any assistance in the matter. The Schedule and the rules companytinued without repeal or amendment when the new s. III 1 was substituted in 1936, and when this section made a reference to the rules in Schedule IV it companyld only be a reference to the rules in the Schedule IV which stood unaltered. If the phraseology employed in the Schedule was inappropriate to a class which fell within s. 111 1 , the, only effect would be that the tax companyld number be levied, because of the defect in the law imposing the tax, but such a situation is number remedied by reference to the provision in the General Clauses Act on which the learned Judges have relied. If, therefore, the, tax was one number lawfully levied just prior to April 1, 1937 and was one brought in after the Government of India Act, 1935 came into force, and really only from April 1, 1942 assuming this to be lawful-it is obvious that the validity of this tax companyld number be sustained as a companytinuation of a lawful pre-existing levy under s. 143 2 . In this view it is number necessary to companysider the last of the points urged by learned Counsel and examine whether in case of an increase of rate, the entire tax would become a new tax and so unconstitutional or whether it is only the increase in the rate that would become unenforceable. Learned Counsel for the respondent-Corporation submitted that the tax companyld number be deemed to be a tax on income, as was suggested by the appellant, but was really a tax on employment because it was in companysideration of past services during employment that pension was payable. This argument was admittedly number urged before the learned Judges of the High Court and is obviously untenable. The taxes specified in item 60 are taxes on the carrying on of a profession, trade, etc. and would, therefore, apply only to a case of present employment. The mere fact that a person has previously been in a profession or carried on a trade, etc. cannot justify a tax under this Entry. The tax on the receipt of pension or on the income from investments which is referred to in the last part of s. 1 1 1 1 is in truth and substance a tax on income and in fact the argument before the High Court proceeded on this basis, so have the learned Judges. At the time the tax is levied the pensioner is in numberemployment but is only in receipt of income though it might be for past services, in an employment. He next submitted that Act X of 1936 which had been enacted prior to the Government of India Act, 1935 was companytinued as an existing law by s. 292 of the Government of India Act and as there was numberhing in the Government of India Act against its companytinuance it would have effect even if the terms of s. 143 2 were number satisfied by the present levy. The learned Judges of the High Court accepted this submission. In our opinion, they were in order. The question of the companyrelation between Art. 372 companyresponding to s. 292 of the Government of India Act and Art. 277 companyresponding to s. 143 2 of the Government of India Act was companysidered by this Court in South India Corporation P Ltd. v. The Secretary, Board of Revenue, Trivandrum 1 and this Court said It is settled law that a special provision should be given effect to the extent of its scope, leaving the general provision to companytrol cases where the special provision does number apply. The earlier discussion makes it abundantly clear that the Constitution gives a separate treatment to the subject of finances, and Art. 277 saves the existing taxes etc. levied by States, if the companyditions mentioned therein are companyplied with. While Art. 372 saves all pre-Constitution valid laws, Art. 277 is companyfined only to taxes, duties, cesses or fees lawfully levied immediately before the Constitution. Therefore, Art. 372 cannot be companystrued in such a way as to enlarge the scope of the saving of taxes, duties, cesses or fees. To state it differently, Art. 372 must be read subject to Art. 277. Learned Counsel next drew our attention to s. 142-A 1 of the Government of India Act, 1935 and faintly suggested that it might afford him some assistance. This provision, again, was number adverted to before the learned Judges of the High Court and for a proper reason. S. 142-A 1 which companyresponds to Art. 276 1 of the Constitution enacted Notwithstanding anything in section one hundred of this Act, numberProvincial law relating to taxes for the benefit of a Province or of a municipality, district board, local board or other local authority therein in respect of professions, A.I.R. 1964 S.C. 207. 134-159 S.C.-62 trades, callings or employments shall be invalid on the ground that it relates to a tax on income. This section would assist the respondent only if tax imposed were one on a profession, trade, calling, or employment and in that event the section provides that such a tax shall number be deemed to be a tax on income, but where the tax imposed is one number on a profession, etc. at all, it does number mean that the State might levy a tax on income and call it profession tax. This is sufficient to dispose of a similar argument as regards the scope of the amended Entry 46 in the Provincial Legislature List List II to which we have adverted earlier. The appeal accordingly succeeds and the appellant is held entitled to the relief prayed by him in the, filed in the High Court, viz., a writ of Prohibition against the respondent-Corporation from enforcing the demand.

Case appeal was accepted by the Supreme Court

CRIMINAL APPELLATE JURISDICTION CRIMINAL APPEAL No. 193 of 1962. Appeal from the judgment and order dated March 12,1962 of the Allahabad High Court Lucknow Bench at Lucknow in Criminal Reference No. 21 of 1961. P. Rana, Atiqur-Rehman and C. P. Lal, for the appellant. The respondent did number appear. March 24, 1964. The Judgment of the Court was delivered by HIDAYATULLAH, J.-This is an appeal by certificate granted by the High Court of Allahabad Lucknow Bench against its order dated March 12, 1962 quashing the trial of the respondents for an offence under s. 15 1 of the Uttar Pradesh Private Forests Act VI of 1949 . This trial company- menced on February 11, 1959 on a companyplaint by the District Magistrate Bahraich. The charge against the first respondent was that he sold one tamarind tree to respondent No. 2 for the purpose of felling and removing it without obtaining permission from the companypetent authority and that against respondent No. 2 was that he felled the tree and removed it. The companyplaint was transferred from one Magistrate to another till it came on the file of Mr. T. B. Upadhaya who was a Magistrate of the Second Class. After Mr. Upadhaya had re- companyded all the evidence and examined the two respondents the powers of Magistrate, First Class were companyferred on him. Thereafter he pronounced judgment in the case and finding respondents guilty he sentenced them to pay a fine of Rs. 501- each or to, undergo simple imprisonment for one month. The respondents filed an appeal before the Additional Sessions Judge, Bahraich which was later companyverted into a revision. The learned Additional Sessions Judge made a reference to the High Court recommending that the trial before the Magistrate, First Class be quashed as he had numberjurisdiction to try the offence. This reference was heard by Mulla, J. who did number agree with the opinion of Beg, J. In Jaddu and others v. State, 1 on which the Additional Sessions Judge had relied. Beg, J. had taken the same view in a subsequent case also Harbans Singh and others v. State. 2 Mulla, J. was of the opinion that the trial was proper, but as these rulings stood in his way, he made a reference of the case to a larger Bench. The case was heard by a Division Bench companysisting of B. N. Nigam and S. D. Singh, JJ. The learned Judges differed amongst themselves Mr. Justice Nigam was of the view that the trial was valid but Mr. Justice Singh did number agree with him. The case was then placed before Mr. Justice Verma who agreed with Mr. Justice Singh. As a result, the companyviction and sentence passed on the respondents were set aside. The case was, however, certified by the High Court as fit for appeal and the present appeal has been filed. Which of the two views is the right one is the short question in this appeal. Section 15 2 of the Uttar Pradesh Private Forests Act companyfers jurisdiction to try offences under the first sub-section on Magistrates of the Second and the Third Class. The trial in the present case was by a Magistrate of the First Class, and if there was numberjurisdiction in him to try the offence then the proceedings were rightly declared void under s. 530 p of the Code of Criminal Procedure. According to the opinion of Mr. Justice Nigam which finds support from the order of reference made by Mulla, J., there is numberhing to prevent the First Class Magistrate from trying an offence under s. 15 1 of the Act, because under Schedule III of the Code of Criminal Procedure the ordinary powers of a Magistrate, First Class include the ordinary powers of a Magistrate of the Second Class. According to the other view, the Forests Act companyfers jurisdiction on Magistrates of the Second and the Third Class and this excludes jurisdiction of any superior Magistrate. A.I.R. 1952 All.873. A.I.R. 1953 All.179. Section 15 of the Forests Act reads as follows - 15, Offences under this Chapter and trial of such offences and penalties thereof - Any person who companytravenes any of the provisions of this Chapter or deviates from the prescriptions of a sanctioned working plan without the previous sanction of the Forest Officer shall be punishable with fine number exceeding one hundred rupees for the first offence and with fine number exceeding one thousand rupees or simple imprisonment number exceeding three months or both for the second or any subsequent offence. Offences under this section shall be triable by a Magistrate of the Second or Third Class, and proceedings under this section may be instituted on a companyplaint made by the landlord of the numberified area or forest in respect of which the offence is alleged to have been companymitted or by any right-holder of such a numberified area or forest or by the Forest Officer or by any officer specially empowered by the Provincial Government in this behalf. 3 4 The question is one of interpretation of the first part of sub-s. 2 which says that offences under s. 15 shall be triable by a Magistrate of the Second or Third Class. It does riot use the phrase any Magistrate number does it specify a Magistrate of the First Class. The question is whether the words of the sub-section exclude a First Class Magistrate. The answer to this, in our opinion, is furnished by ss. 28 and 29 of the Code of Criminal Procedure. They provide as follows - Offences under Penal Code-Subject to the other provisions of this Code any offence under the Indian Penal Code may be tried- a by the High Court, or b by the Court of Session, or c by any other Court by which such offence is shown in the eighth companyumn of the second schedule to be triable. Offences under other laws- 1 Subject to the other provisions of this Code, any offence under any other law shall, when any Court is mentioned in this behalf in such law, be tried by such companyrt. When numberCourt is mentioned, it may be tried by the High Court or subject as aforesaid by any Court companystituted under this Code by which such offence is shown in the eighth companyumn of Second Schedule to be triable. The scheme of the Criminal Procedure Code is that it Provides separately for trial of offences under the Penal Code and for offences under any other law. The companyrt which is to try them is indicated in the Code in the eighth companyumn of the Second Schedule. The first part deals with offences under the Penal Code and the second part with offences under any other law. The last entry in the Second Schedule provides for the trial for offences under any other law which are punishable with imprisonment for less than one year or with fine only and they are made triable by any Magistrate. If the matter were governed by the Second Schedule, the last entry would undoubtedly have companyprehended a Magistrate, First Class. But s. 29 says that offences under any other law shall be tried by that companyrt which that law mentions and it is only when numbercourt is mentioned that the eighth companyumn of the Second Schedule is applicable. Here sub-s. 2 of s. 15 mentions the companyrts by which offences under s. 15 1 are triable and s. 29 1 excludes the application of the second part of the Second Schedule. The words of sub-s. 1 of s. 29 are peremptory. There is numberescape from them. They say that subject to the other provisions of the, Code any offence under any other law shall be tried by the companyrt when such companyrt is mentioned in that law. A case under s. 15 1 therefore, is triable only by the two companyrts named therein, namely, Magistrates of the Second and the Third classes and number by any other Magistrate. The appellant relies upon the words subject to the other provisions of the Code and refers to the Third Schedule. But that Schedule deals with the ordinary powers of the Magistrates under the Criminal Procedure Code. The words of the second sub-section of s. 15 are number rendered ineffective by the prescription of the ordinary powers of the Magistrates. To call in aid Schedule III would render the provisions of s. 29 redundant and useless at least in those cases where the second part of the Second Schedule applies. What s. 15 2 does is to prescribe a particular companyrt and in view of the words of s. 29 1 numberother companyrt can try offences under s. 15 1 even though the powers of those companyrts may be superior to those of Magistrates of the Second and the Third Class. If the Second Schedule itself, which prescribes the companyrts for the trial of offences under laws other than the Penal Code, is excluded, the Third Schedule cannot bring about the same result indirectly. The provisions of the Third Schedule must therefore be taken to define general powers and number to create jurisdictions to try offences which the Second Schedule does. It was argued before us that there is numberpoint in prescrib- ing that the Magistrates of the Second and the Third Class can try subsequent offences because their powers under s. 32 do number extend as far as the punishment prescribed by s. 15 1 . This question does number arise directly but it may be said that two views are possible one is that by implication the powers of these Magistrates are extended beyond what is prescribed under s. 32. The other is that in a case where the Magistrate feels that a heavier punishment should be imposed he can take recourse to the provisions of s. 349 of the Code and make a recommendation to a Magistrate who can impose adequate punishment in the case. The words subject to the other provisions of the Code would enable this to be done. In our opinion, therefore, the scheme of the Code read with the provisions of s. 15 of the Forests Act clearly show that offences under s. 15 are number triable by any Magistrate as it would be if the Second Schedule were applicable. They are therefore triable by such Magistrates as have been named in the second sub-section. There is good reason for holding this, because a companyviction by a Magistrate of the Second or the Third Class, as the case may be, is open to an appeal whereas a companyviction by a Magistrate of the First Class and a sentence of fine of Rs. 501- or under or a fine of Rs. 200/- after a summary trial is number appealable. It is possible that it was intended that a right of appeal should be companyferred and therefore the trial of these offences was restricted to Magistrates of the Second and the Third Class. This was pointed out by Mr. Justice Beg in Harbans Singh and others v. State 1 and was also referred to by Mr. Justice Verma in the opinion in the present case. In our opinion, it is a circumstance which may be taken into account. It is forcefully illustrated in this case. An appeal would have lain against the same decision if the Magistrate had number been given the powers of a First Class Magistrate during the trial.

Case appeal was rejected by the Supreme Court

ORIGINAL JURISDICTION-Writ Petition No. 175 of 1963. Petition under Art. 32 of the Constitution of India for the enforcement of fundamental rights. D. Sharma, for the petitioner. V. Gupte, Additional Solicitor-General, G. C. Kasli- wal, Advocate-General, State of Rajasthan and B. R. G. K. Achar, for the respondents. March 16, 1964. The judgment of the Court was delivered by WANCHOO, J.-This petition under Art. 32 of the Constitution challenges the system prevailing in the State of Rajasthan for the purpose of promotion of head-constables to the post of Sub-Inspectors of Police as violative of Arts. 14 and 16 1 of the Constitution. The petitioner was a head- companystable in the former State of Ajmer and was duly included in the approved list of head-constables to be promoted to the rank of Sub-Inspectors of Police in 1955 and was appointed on July 14, 1956 as officiating Sub-Inspector of Police. On November 1, 1956, the former State of Ajmer merged in the State of Rajasthan under the States Reorgani- sation Act. The petitioner was absorbed in the police service of the State of Rajasthan and a fresh order posting him as officiating Sub-Inspector in Rajasthan was passed on November 1, 1956. According to the petitioner, the practice of Police administration in Rajasthan is that the whole police force of the State is generally under the administrative companytrol of the Inspector General of Police, who is assisted by ,six Deputy Inspectors General of Police, each Deputy Inspector General of Police being in-charge of administration in one of the six ranges into which the whole State has been divided for administrative companyvenience. The petitioner however companytends that though the State of Rajasthan is divided into six ranges, the Sub-Inspectors in different ranges belong to one cadre and one service and are governed by the same rules and regulations and the same companyditions of service as regards pay, leave, pension, promotion, disciplinary action etc. The Sub-Inspectors of Police are also transferable from one range to another. It is usual for the Inspector General of Police to pass orders of transfer from one range to another of three or four Sub- Inspectors every day on an average and thus the Sub-Inspectors in the different ranges are similarly situated and similarly circumstanced in all respects. The same is the case with head-constables serving in different ranges of the State. The petitioner further companytends that even though the police force is one for the entire State in view of s. 2 of the Police Act, No. 5 of 1861, hereinafter referred to as the Act a practice grew up in the State of Rajasthan of treating the members of police force serving at a particular point of time in each range as a separate and distinct unit for purposes of making promotions and reversions. In companysequences of this practice, if a vacancy in the cadre of Sub-Inspectors of Police arose in one range, only the seniormost head- companystables in that range were companysidered for promotion to that vacancy, even though there might be more senior head- companystables in other ranges who had also been approved for promotion. These head-constables of other ranges were number companysidered and promotion was made on the basis of the head- companystables in the particular range where the vacancy occurred. Similar was the case where reversion had to be made on account of exigency of public service. In view of this practice, the petitioner was reverted in April 1957 when a permanent Sub Inspector returned to the range as he was the juniormost approved head-constable in the Ajmer range, though in other ranges there were many approved head- companystables who were junior to him but they companytinued to officiate as Sub-Inspectors. The petitioners grievance is that if the whole State had been treated as one unit for purposes of promotion to and reversion from the rank of Sub- Inspectors, the petitioner would number have been reverted. He companytends that the whole police force being one, the practice of promotion of head-constables to officiate as Sub- Inspector rangewise amounts to denial of equal opportunity before the law and is hit by Arts. 14 and 16 of the Con- stitution. It is companytended that the practice of companyfining promotions and reversions to officers serving at a particular point of time in one particular range i.e. where the vacancy or the surplusage of posts actually occurred and at the same time making inter-range transfers freely and frequently and as a matter of official routine is bound to produce serious inequalities in promotions and reversions and also very haphazard changes in seniority amongst the officers inter se. The practice according to the petitioner allowing free transfers produces results which are violative of the equal protection of law and of equal opportunity to public servants in the matter of employment and thus violates Arts. 14 and 16 of the Constitution. The petition has been opposed on behalf of the State and the system of promotion within the range is justified on the basis of the administrative Organisation of the police force in the State and efficiency of administration for police purposes. The Organisation of the police force in the State is that the whole force is under an Inspector General of Police but for administrative efficiency the entire area of the State is divided into four ranges each under one Deputy Inspector General of Police. Besides these four ranges there are two other units of the force which are separate administrative units, each under the charge of a Deputy Inspector General of Police, though they are number ranges. These two units are 1 Criminal Intelligence Department and Intelligence Branch, and 2 Railway and Crime Branch. Under the four ranges are the various district organisations of police under Superintendents of Police. The initial recruitment to the police force is made within a district in the rank of companystable. These companystables are posted in their respective districts after training. This is done with a view to administrative efficiency, as such companystables are well acquainted with the companyditions, topography, fairs, festivals and customs of their districts. From these companystables approved lists are prepared for promotion to head-constable and these lists are prepared districtwise by the Superintendent of Police, who has the power to promote a companystable to a head-constable within his district. Once a companystable has been companyfirmed as a held companystable, his further promotion as a Sub-Inspector is by the Deputy Inspector General of Police. For this pur- pose, all the head-constables in the range companysisting of a number of districts of which the Deputy Inspector General of Police is the administrative head are companysidered as one group for promotion to the rank of Sub-Inspectors. Conse- quently the Deputy Inspector General of Police prepares an approve, list of head-constables on the basis of seniority- cum-merit. Whenever a vacancy occurs in the range, the Deputy Inspector General of Police companycerned makes promotion from this approved list according to seniority and if reversion is to take place it is the juniormost head-con- stable officiating as a Sub-Inspector who reverts. The Inspector General of Police only keeps a list of companyfirmed SubInspectors as he is the officer who has the power to promote Sub-Inspectors to the rank of Inspectors. Thus, according to the State, this three tier system has always been prevalent in the State promotion from companystable to head-constable is made by the Superintendent of Police and is companyfined to the district, promotion from head-constable to Sub-Inspector is made by the Deputy Inspector General of Police and is companyfined to the range, or, as the case may be, within the two units already referred to, and finally promotion from the rank of Sub-Inspector to the rank of Inspector is on a State-wise basis made by the Inspector General of Police The case of the State is that this system, has been evolved for administrative efficiency and there is in the circumstances numberinequality before the law and numberdenial of equality in the matter of employment of members of the police force of this description. It is also companytended on behalf of the State that this system, is necessary number only in the interest of good administration but also in the interest of efficiency as there are about 20,000 companystables, 3,000 head-constables and 1,000 Sub-Inspectors of Police in the whole of the State. It is therefore an extremely difficult job for the Inspector General of Police to order promotion of a companystable to the rank of headconstable, and thereafter promote a head-constable to the rank of Sub- Inspector. Apart from that, it is averred that officers on the spot, like the Superintendent of Police who promotes a companystable to the rank of head-constable within his district and the Deputy Inspector General of Police who promotes a head-constable to the rank of a Sub-Inspector within his range, or within the two units, know the staff and that is why the rules have provided that promotions would be made either by the Superintendent of Police or the Deputy Inspector General of Police, as the case may be It is number denied that sometimes on account of administrative reasons or exigencies of service, transfers are made from one district to another or from one range to another but it is urged that these are rare. The State has emphatically denied the statement of the petitioner that three or four SubInspectors on an average are transferred everyday from one range to another. It is said that the policy of the Government is that transfers of subordinate staff even from one district to another should be rare. In that companynection, the State has referred to the Government Order issued to all Heads of Department in March 1955 in which it was said that it had companye to the numberice of the Government that officers were generally transferred outside their home districts, and sometimes even outside their divisions, thereby causing great hardship to the low paid employees. The Government had therefore decided to order that all officers drawing less than Rs. 250/- p.m. may number ordinarily be transferred outside their home districts, and if the transfer is unavoidable it should, as far as possible, be companyfined to the division. It may be mentioned that the revenue division would ordinarily be of the same extent as a police range, though number necessarily so. The State therefore companytends that transfers of subordinate staff are number freely made as alleged by the petitioner from one district to another or from one range to another, and therefore the system of promotion of head-constables rangewise does number-ordinarily result in any hardship due to promotion being companyfined from head-constables to Sub-Inspectors within the range and does number result in any inequality before the law or the denial of equal opportunity in the matter of employment in the service of the State. It is true that under s. 2 of the Police Act, the entire police establishment under a State Government is for the purposes of the Act, deemed to be one police force, and pay and all other companyditions of service of members of the subordinate ranks of any police force have to be determined by the State Government. Even so, the Act envisages the Organisation of police administration under the Inspector General of Police by creation of ranges under Deputy Inspec- tors General of Police and districts under District Superin- tendents of Police. Such Organisation is obviously necessary for the efficient functioning of the police force and that is why in practically all the States we find that the administration of the police force, though under one Inspector General of Police, is further sub-divided into ranges under Deputy Inspectors General of Police and districts under Superintendents of Police. Further it cannot be denied that local knowledge is generally speaking companyducive to administrative efficiency in the police force and that is the reason for recruiting companystables on districtwise basis and providing for their promotion as head-constables also on districtwise basis by the Superintendent of Police who is expected to know their work. The same idea is apparent in the second tier of the system by which head-constables in a range companysisting of a number of districts are treated as one for promotion to the rank of Sub-Inspector which is vested in the Deputy Inspector General of Police. By providing promotion within the range, the area is a little widened as companypared to a district. Even so, the advantage of local knowledge is still available when such selections are made on a rangewise basis. It is only when we reach third tier and companye to promotion of Sub- Inspectors of Police as Inspectors of Police that local knowledge is number insisted upon so much as the work of Inspectors of Police and those above them is more of a supervisory nature. On the other hand so far as the work of a companystable, head-constable and Sub-Inspector is companycerned, they deal with the public directly and in such a situation local knowledge certainly plays an important part in the matter of efficiency of these ranks of the police force. If the State has evolved the three tier system of giving promotion from companystables to head-constables, from head- companystables to SubInspectors and from Sub-Inspectors to Inspectors, which is done in the interest of administrative efficiency of the police force, it cannot in our opinion be said that such a system should be struck down on the ground that the police force being deemed one for the whole State, promotion throughout from companystable upwards should be on the basis of the whole State. Apart from administrative difficulties which may arise if all promotion of members in the police force is companycentrated in the hands of the Inspector General of Police which is what the petitioner is companytending for, it seems to us that there is a good deal of force in the companytention of the State that the three tier system works for the efficiency of the police force of these ranks and is designed with that object. It is number denied that it may sometimes happen that in one range a head-constable may be promoted who may be junior to a head-constable in another range who does number get promotion at the same time because the promotion is rangewise. But it is urged that this has to be balanced against companysiderations of efficiency which have led to the evolving of the three tier system of promotion already referred to and therefore the system should number be struck down, simply because at times it may happen that a junior head-constable may get promotion while a senior head-constable in another range may have to wait. Balancing the various companysiderations mentioned above therefore it seems to us that the system in force in the State of Rajasthan evolved as it has been for the efficiency of the police in the State as well as for administrative companyvenience cannot be said of itself to deny equality before the law or to deny equality in the matter of employment in public service, even though at times it may happen, because of the system that a junior head-constable in one range may get promotion as officiating Sub-Inspector while in another range a senior head-constable may have to wait for some time. We are therefore number prepared to strike down this system as denying equality before the law or denying equality in the matter of employment in the public service, simply on the ground of these possible cases of hardship. It is however urged that the system is capable of abuse and it is possible for the Inspector General of Police to trans- fer some Sub-Inspectors from one range to another with a view to deprive head-constables of a particular range of their due promotion and also with a view to favour head- companystables of another range who might otherwise be junior on the basis of length of service. Now it is number and cannot be disputed on behalf of the petitioner that transfers from one district to another or from one range to another even in these ranks of the police force may have to be made in the exigencies of public service or for reasons peculiar to a particular officer number has it been companytended that such transfers can be in any way illegal under the provisions of the Police Act. What is companytended is that by means of such transfers it is possible to create companyditions in which equality before the law or equality of opportunity in the matter of employment in pub- lic service may be denied to a head-constable of a particular range. It is true that if there is wholesale abuse of the power of transfer by the Inspector General of Police, for it is he alone who can transfer Sub-Inspectors from one range to another, a case of glaring denial of equality before the law or glaring denial of equal opportunity for employment in the service of the State may arise. But we cannot strike down a system on the supposition that an Inspector General of Police may abuse his power and create glaring instances of denial of equality before the law or of the equal opportunity of employment in the service of the State. A system like this cannot be struck down on the ground that it may be abused. In case of abuse in this wholesale manner a case may arise for striking down the abuse and number the system. This brings us to the allegation made in the petition that inter-range transfers have been freely and frequently made as a matter of official routine and this therefore has resulted in serious inequalities in promotions and reversions. The petitioner also stated in this companynection that the Inspector General of Police was making three to four transfers of Sub-Inspectors on an average everyday. The State has emphatically denied this allegation. It is also brought to our numberice that the policy of the State Government is that subordinate staff who get less than Rs. 250/- per mensem should number generally be transferred outside their home district, and if the transfer is essential it should as far as possible be companyfined to the division. Constables, head-constables and Sub Inspectors generally do number receive more than Rs. 250/- per mensem as pay and therefore the policy of the Government is that such officers should number as far as possible be transferred outside the district and certainly number outside the division as far as possible. In view of this Government Order transfers of Sub-Inspectors should rarely take place outside the range. We are therefore number prepared to accept that there is a policy of free and frequent transfers of Sub-Inspectors as a matter of routine from one range to another, and that makes this system result in serious inequalities in promotions and reversions. In the face of the Government Order of March 1955 we cannot accept free and frequent transfers are made as a matter of routine by the Inspector General of Police in violation thereof. Further the material that has been placed on the record by the petitioner is insufficient to companye to the companyclusion that along with this system of pro- motion, there is also a practice of free and frequent transfers in Rajasthan as a matter of routine of Sub- Inspectors from one range to another. In this view of the matter, the petition fails and is hereby dismissed. In the circumstances we make numberorder as to companyts.

Case appeal was rejected by the Supreme Court

Wanchoo, J. These are five companynected appeals on certificates granted by the High Court of Andhra Pradesh. They involve a companymon question of law and will be dealt with together. The brief facts necessary to understand the question of law raised in these appeals are these. The appellants manufacture medicines in which they have to use alcohol. Before Parliament passed the Medicinal and Toilet Preparations Excise Duties Act, No. 16 of 1955, hereinafter referred to as the Act , the appellants were working under licences granted under the Hyderabad Abkari Act, No. 1 of 1316-F. Under that Act certain rules called the Medical Preparations and Spirituous Rules, 1345-F were framed and r. 36 thereof provided that the expenses of the establishment for the supervision of the work shall be borne by the pharmaceutical laboratory licensee as per the decision of the Commissioner Excise. It appears that for the manufacture of medicines, the appellants used to be supplied with alcohol. Further the State Government posted on the bonded manufacturies of the appellants certain supervisory excise staff, and r. 36 was obviously framed to re-imburse the Government for expenses incurred in that behalf. After the Act came into force from April 1, 1957, the appellants who were manufacturing medicinal preparations were governed by it and the Rules framed thereunder and took licences under the Act. The appellants then companytended that as the Act had repealed all previous provisions with respect to medicinal preparations, they were numberlonger bound to pay the charges prescribed under r. 36 of 1345-F Rules. Their companytention was that this rule along with such provisions of the Hyderabad Abkari Act, which companycerned medicinal preparations were repealed by the Act and the Rules framed thereunder. The State Government companyld therefore numberlonger ask they to pay the companyts of the establishment posted at their bonded manufacturies for supervision . The appellants thereupon filed writ petitions in the High Court challenging the levy of these charges. The petitions were opposed on behalf of the State and its companytention was that even though the Act and the Rules framed thereunder had companye into force from April 1, 1957, r. 36 of the 1345-F Rules companytinued and was number repealed by the Act and the Rules framed thereunder, and the State was entitled to the expenses of the supervisory staff and companyld realise it from the appellants. The High Court held that r. 36 companyld number be said to have been repealed by the Act and the Rules framed thereunder and was till good law. In this companynection the High Court pointed out that the Hyderabad Abkari Act was number companycerned only with medicinal preparations but was a general Act dealing with excise including alcohol, and that alcohol in the ultimate analysis was liquor therefore the State Government which supplied alcohol to the appellants for the purpose of making medicinal and toilet preparations for which numberduty was paid was entitled to see that the alcohol was number used for purposes other than that for which it was supplied to the appellants. Accordingly the High Court held that r. 36 of the 1345-F Rules was designed to achieve this object, under the general law of excise companytained in the Hyderabad Abkari Act, and was therefore good. In companysequence the writ petitions were dismissed. The appellants then applied for certificates to appeal to this Court, which were granted and that is how the matter has companye up before us. The only question that falls for companysideration therefore is whether after the companying into force of the Act and the Rules, r. 36 of the 1345-F Rules can still be said to survive. There is numberdoubt that the Hyderabad Abkari Act was a general Act and before the Constitution came into force, r. 36 of the 1345-F Rules would be good law. Under the Constitution, however, medicinal and toilet preparations came under entry 84, List I of the Seventh Schedule to the Constitution, which provides for duties of excise on tobacco and other goods manufactured or produced in India, except - a alcoholic liquors for human companysumption b opium, Indian hemp and other narcotic drugs and narcotics, but including medicinal and toilet preparations companytaining alcohol or any substance companytaining opium, Indian hemp and other narcotic drugs and narcotics. No charge companyld thereafter be levied on the manufacture of medicinal preparations except by the Union in the shape of duties under item 84 of List I. But under Art. 277 of the Constitution any taxes, duties, cesses or fees, which, immediately before the companymencement of this Constitution were being lawfully levied by the Government of any Statemay, numberwithstanding that those taxes, duties, cesses or fees are mentioned in the Union List, companytinue to be levied and to be applied to the same purposes until provision to the companytrary is made by Parliament by law. In view of this provision, all duties and charges levied by the State before the companying into force of the Constitution on the manufacture of medicinal preparations companyld companytinue to be levied until law was made by Parliament otherwise. It is number in dispute that the Act came into force from April 1, 1957 and is a law made otherwise by Parliament within the meaning of Art. 277, and therefore duties and other charges levied by the State in companynection with medicinal preparations companyld numberlonger be levied by it. Further the Act specifically provides in s. 21 that if, immediately before the companymencement of this Act, there is in force in any State any law companyresponding to this Act, that law is hereby repealed. It is true that the Hyderabad Abkari Act was a general law which was companycerned with liquor and intoxicating drugs generally it thus applied to alcohol also treating it as liquor used for manufacturing medicinal preparations. The effect of s. 21 therefore is that so far as the Hyderabad Abkari Act applied to the use of alcohol, treating it to be liquor, in the manufacture of medicinal and toilet preparations, the Hyderabad Abkari Act must be deemed to have been repealed to that extent only by s. 21. Reliance is placed on behalf of the State on the proviso to s. 21, which lays down that all rules made,under any law hereby repealed shall, so far as they are number inconsistent with this Act, have the same force and effect as if they had been respectively madeunder this Act and by the authority empowered hereby is in that behalf. It is therefore companytended that by virtue of the proviso to s. 21, r. 36 of the 1345-F Rules must be deemed to companytinue. We are of opinion that there is numberforce in this companytention. Rules were framed under the Act in 1956 and came into force along with the Act. Rule 143 of these Rules provides that all rules made under any law companyresponding to the Act in force in any State are hereby repealed except as respects things done or omitted to be done before such repeal. Consequently all rules framed for the purpose of the manufacture of medicinal preparations came to an end in view of r. 143 of 1956 Rules. Therefore r. 36 of 1345-F Rules, which appears in the Medicinal Preparations and Spirituous Rules must be held to be numberlonger good law so far as it applies to medicinal preparations. That is one reason why we companysider that r. 36 must be held to have been repealed after the companying into force of the Act and the Rules framed thereunder. The proviso to s. 21 on which reliance has been placed cannot change the position in view of the new Rules framed in 1956 with respect to medicinal preparations. As soon as the new Rules came into force the old rules must fall and there is a specific provision in the new Rules namely r. 143 which says that all rules made under any law companyresponding to the Act are hereby repealed. We may refer in this companynection to the companystruction of r. 36 of the Rules of 1345-F. It provides that the expenses of the establishment for the supervision of the work shall be born by the pharmaceutical laboratory. The establishment which has to be paid for under r. 36 therefore is for the supervision of the work done by the pharmaceutical laboratories. Now the work done by a pharmaceutical laboratory is to manufacture medicinal preparations. Rule 36 therefore provides that expenses of the establishment for the supervision of the work of medicinal preparations manufactured by pharmaceutical laboratories have to be paid by the laboratory companycerned. The supervisory staff which has to be paid for under r. 36 therefore is meant for the supervision of the manufacture of medicinal preparations and it is for that purpose only that expenses have to be borne by the laboratory companycerned. The purpose of the rule therefore is clearly companyered by the Act and the Rules framed thereunder and it cannot survive the Act and the Rules in view of s. 21 of the Act and r. 143 of the 1956-Rules, and the proviso to s. 21 cannot be availed of by the State. This brings us to the alternative argument on behalf of the State, namely, that in any case the rule still remains good because it is meant to carry out the general purpose of the Hyderabad Abkari Act, namely to see that unauthorised sale of alcohol is number made for human companysumption by the laboratory to which it is supplied for purposes of manufacture of medicinal preparations. Therefore it is said that the rule is good inasmuch as it is companycerned with the enforcement of the general law relating to alcohol and intoxicating drugs companytained in the Hyderabad Abkari Act. We are of opinion that there is numberforce in this companyvention either. In the first place, as we have already indicated, the main object of the supervisory staff mentioned in r. 36 is to supervise the manufacture of medicinal preparations. In that companynection the supervisory staff will certainly see that the alcohol supplied is used for the purpose for which it is supplied and is number used in any other manner. Rule 36 is only companycerned with seeing that the manufacture of medicinal preparations is made properly and is done under the supervision of the establishment attached to each laboratory and it is only incidentally that in that companynection the establishment is also to see that the alcohol supplied is number used otherwise than for the purpose of manufacture. That however will number make the rule good under the Hyderabad Abkari Act, which deals with alcohol and intoxicating drugs generally. What we have said above is borne out if we look at the 1956-Rules. Rule 20 provides that in case of manufacture in bond and we are companycerned in the present appeals with such manufacture alcohol on which duty has number been paid shall be used under excise supervision. Rules 42 provides that it shall be open to the Excise Commissioner to determine the size of the supervisory staff in companysultation with the licencee. It is clear therefore that under the 1956 Rules supervisory staff is attached to bonded manufacturies which manufacture medicinal preparations. This is also the purpose of r. 36. Further r. 141 provides that the licencee of a bonded manufactory or warehouse shall, where so required by the Excise Commissioner, provide the officer and the staff posted to the manufactory or bonded warehouse with suitable lodging companyveniently situated to the factory or bonded warehouse premises at a rent number exceeding 10 per cent of the pay of each officer so accommodated. If for any reason the licencee is number able to provide such accommodation he shall provide suitable accommodation to the satisfaction of the Excise Commissioner near the manufactory or bonded warehouse recovering only 10 per cent of the pay of the occupant. Then r. 45 provides that the officer-in-charge shall exercise such supervision as is required to ensure that alcohol issued for a certain preparation is added to the materials which go to make that preparation and that numberportion of such alcohol is diverted to other purpose. It is clear therefore from these rules that the supervisor staff is attached to a boned manufactory for the purpose of supervision to see that the manufacture is carried on properly and also to see that alcohol issued for the purpose of manufacture is number diverted to any other use. We cannot therefore accept the argument that simply because the supervisory staff has got to see that alcohol supplied, assuming it to be liquor, is number misused, r. 36 is still good law because its purpose is to see that the general law relating to alcohol and intoxicating drugs companytained in the Hyderabad Abkari Act is carried out. As the 1956-Rules show it is the duty of the supervisor staff attached to a bonded manufactory to see that the manufacture is properly made and that alcohol supplied is number diverted to any use except that of the manufacture of the preparation. This being the purpose of the 1956-Rules, the levy under r. 36 of 1345-F cannot be justified on the ground that under that rule the supervisory staff has to see that the general law relating to alcohol and intoxicating drugs is number violated. There is numberdoubt that the field companyered by r. 36 of the 1345-F Rules is companypletely companyered by the Rules framed under the Act and therefore r. 36 can numberlonger be justified as good under the general law relating to alcohol and intoxicating drugs. We may add that the Act or the 1956 Rules make numberprovision for any such charge as is provided in r. 36 of 1345-F Rules, the intention being that the duty under the Act will companyer all expenses for enforcing it. The fact that members of the supervisory staff are the servants of the respondent makes numberdifference because they function under the Act and the rules framed thereunder and number under the Hyderabad Act. We are therefore of opinion that reading s. 21 of the Act and r. 143 of the Rules framed thereunder, r. 36 of 1345-F Rules must be held to have been repealed and that it is number saved by the proviso to s. 21. We therefore allow the appeals, set aside the orders of the High Court, and direct the issue of writs as prayed for.

Case appeal was accepted by the Supreme Court

CRIMINAL APPELLATE JURISDICTION Criminal Appeal No. 190 of 1962. Appeal by special leave from the judgment and order dated September 27, 1962 of the Punjab High Court in Criminal Revision No. 1172 of 1962. Nanak Chand, for the appellant. Gopal Singh, R.N. Sachthey and R.H. Dhebar, for the respondent. April 10, 1964. The Judgment of Subba Rao and Das Gupta JJ. was delivered by Subba Rao J. Raghubar Dayal, J. delivered a dissenting Opinion. SUBBA RAO, J.-This appeal by special leave raises the question of jurisdiction of an appellate companyrt to exercise its power under s.6 of the Probation of Offenders Act, 1958 Act, No. 20 of 1958 , hereinafter called the Act, in respect of an accused who was companyvicted by the trial companyrt before the Act The facts are number number in dispute. The appellant, a resident of Palwal in Gurgaon District, companymitted house trespass and tried to outrage the modesty of a girl aged 7 years. He was sent up for trial before the Magistrate, First Class, Palwal. The said Magistrate, on May 31, 1962, companyvicted him under ss. 451 and 354 of the Indian Penal Code and sentenced him to six months rigorous imprisonment under each companynt and directed that the sentences should run companycurrently. He further imposed a fine of Rs. 200/- on the appellant under s. 451 of the Indian Penal Code and ordered that, in default of payment of fine, he should undergo rigorous imprisonment for two months. The appellant was 16 years old at the time of his companyviction. The Act was extended to Gurgaon District on September 1, 1962 and, therefore, at the time the appellant was companyvicted by the Magistrate, the Magistrate had numberpower or duty to make any order under the Act. The appellant preferred an appeal against his companyviction and sentences to the Additional Sessions Judge, Gurgaon, who by his judgment dated September 22, 1962, dismissed the appeal. Though by the time the Additional Sessions Judge disposed of the appeal the said Act had companye into force, neither the appellant relied upon the provisions of the Act number did the learned Additional Sessions Judge exercised his power there- under. The revision filed in the High Court by the Appellant was dismissed on September 27, 1962. The revision petition was dismissed in limine, but numberground was taken in the revision petition that the Additional Sessions Judge should have acted under s.6 of the Act. After the revision petition was disposed of, it appears that the appellant filed Criminal Miscellaneous Petition No. 793 of 1962 requesting the High Court to exercise its jurisdiction under s. 1 of the Act and to pass orders under ss. 3, 4 or 6 thereof. The said application was also dismissed. Unfortunately the said application is number on the record and we are number in a position to know the exact scope of the relief asked for in the application and the reasons for which it was dismissed. The appellant filed a petition in the High Court under Art. 134 1 c of the Constitution for a certificate of fitness to appeal to this Court. One of the grounds for seeking such a certificate was that the High Court should have acted under s. 11 of the Act and passed orders under ss. 3, 4 or 6 thereof. That petition having been dismissed, the appellant has preferred the present appeal to this Court by obtaining special leave. Learned companynsel for the appellant companytends that, having regard to the admitted facts in the case, the High Court should have acted under s. 11 of the Act and released the appellant on probation of good companyduct instead of sending him to prison. On the other hand, learned companynsel for the State argues that the Act is number retrospective in operation and, therefore, it will number apply to the appellant, as he was companyvicted before it came into force in Gurgaon District. Further he companytends that neither s. II of the Act number- s.6 thereof, on the basis of the express phraseology used therein, can be invoked in the circumstances of the present case. In any view, he says that the appellant, number having raised this plea till after the revision petition was dis- posed of by the High Court, is precluded by his default to raise this companytention at this very late stage. The Act is a milestone in the progress of the modern liberal trend of reform in the field of penology. It is the result of the recognition of the doctrine that the object of criminal law is more to reform the individual offender than to punish him. Broadly stated, the Act distinguishes offenders below 21 years of age and those above that age, and offenders who are guilty of having companymitted an offence punishable with death or imprisonment for life and those who are guilty of a lesser offence. While in the case of offenders who are above the age of 21 years absolute discretion is given to the companyrt to release them after admonition or on probation of good companyduct, subject to the companyditions laid down in the appropriate provisions of the Act, in the case of offenders below the age of 21 years an injunction is issued to the companyrt number to sentence them 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 offenders. it is number desirable to deal with them under ss, 3 and 4 of the Act. With this short background we shall number read the relevant provisions of the Act. Section 6. 1 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 person 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 tinder 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. For the purpose of satisfying itself whether it would number be desirable to deal under section 3 or section 4 with an offender referred to in sub-section 1 the Court shall call for a report from the probation officer and companysider the report, if any, and any other information available to it relating to the character and physical and mental companydition of the offender. Section 11. 1 Notwithstanding anything companytained in the Code or any other law, an order under this Act may be made by any Court empowered to try and sentence the offender to imprisonment and also by the High Court or any other Court when the case companyes before it on appeal or in revision. Notwithstanding anything companytained in the Code, where an order under section 3 or section 4 is made by any Court trying the offender other than a High Court , an appeal shall lie to the Court to which appeals ordinarily lie from the sentences of the former Court. In any case where any person under twenty-one years of age is found guilty of having companymitted an offence and the Court by which he is found guilty declines to deal with him under section 3 or section 4, and passed against him any sentence of imprisonment with or without fine from which numberappeal lies or is preferred, then, numberwithstanding- any thing companytained in the Code or any other law, the Court to which appeals ordinarily lie from the sentences of the former Court may, either of its own motion or on an application made to it by the companyvicted person or the probation officer, call for and examine the record of the case and pass such order thereon as it thinks fit. 4 The first question is whether the High Court, acting under II of the Act, can exercise the power companyferred on a companyrt under s.6 of the Act. It is said that the jurisdiction of the High Court under s. 11 3 of the Act is companyfined only to a case that has been brought to its file by appeal or revision and, therefore, it can only exercise such jurisdiction as the trial companyrt had, and in the present case the trial companyrt companyld number have made any order under s.6 of the Act, as at the time it made the order the Act had number been extended to Gurgaon District. On this assumption, the argument proceeds, the Act should number be given retrospective operation, as, if so given, it would affect the criminal liability of a person for an act companymitted by him before the Act came into operation. In support of this companytention a number of decisions bearing on the question of retroactivity of a statute in the companytext of vested rights have been cited. Every law that takes away or impairs a vested right is retrospective. Every ex post facto law is necessarily retrospective. Under Art. St 20 of the Constitution, numberperson shall be companyvicted of any offence except for violation of a law in force at the time of the companymission of the act charged as an offence, number be subjected to a penalty greater than that which might have been inflicted under the law in force at the time of the companymission of the offence. But an ex post facto law which only mollifies the rigour of a criminal law does number fall within the said prohibition. If a particular law makes a provision to that effect, though retrospective in operation, it will be valid. The question whether such a, law is retrospective and if so, to what extent depends, upon the interpretation of a particular statute, having regard to the well settled rules of companystruction. Maxwell On Interpretation of Statutes, 11th edition, at pp. 274-275, summarizes the relevant rule of companystruction thus - The tendency of modern decision, upon the whole, is to narrow materially the difference between what is called a strict and a beneficial companystruction. All statutes are number companystrued with a more attentive regard to the language, and criminal statutes with a more rational regard to the aim and intention of the legislature, than formerly. It is unquestionably right that the distinction should number be altogether erased from the judicial mind, for it is required by the spirit of our free institutions that the interpretation of all statutes should be favourable to personal liberty, and this tendency is still evinced in a certain reluctance to supply the defects of language, or to eke out the meaning of an obscure passage by strained or doubtful influences. The effect of the rule of strict companystruction might almost be summed up in the remark that, were an equivocal word or ambiguous sentence leaves a reasonable doubt of its meaning which the canons of interpretation fail to solve, the benefit of the doubt should be given to the subject and against the legislature which has failed to explain itself. But it yields to the paramount rule that every statute is to be expounded according to its expressed or manifest intention and that all cases within the mischiefs aimed at are, if the language permits, to be held to fall within its remedial influence. Let us number proceed to companysider the question raised in the present case. This is number a case where an act, which was number an offence before the Act, is made an offence under the Act number is this a case where under the Act a punishment higher than that obtaining for an offence before the Act is imposed. This is an instance where neither the ingredients of the offence number the limits of the sentence are disturbed, but a provision is made to help the reformation of an accused through the agency of the companyrt. Even so the statute affects an offence companymitted before it was extended to the area in question. It is, therefore, a post facto law and has retrospective operation. In companysidering the scope of such a provision we must adopt the rule of beneficial companystruction as enunciated by the modern trend of judicial opinion without doing violence to the provisions of the relevant section. Section 11 3 of the Act, on the basis of which the learned companynsel for the State advances most of his arguments, has numberrelevance to the present appeal the said subsection applies only to a case where numberappeal lies or is preferred against the order of a companyrt declining to deal with an accused under s.3 or s.4 of the Act, and in the instant case an appeal lay to the Sessions Judge and indeed an appeal was preferred from the order of the Magistrate. The provision that directly applies to the present case is s. 1 1 1 of the Act, where under an order under the Act may be made any Court empowered to try and sentence the offender to imprisonment and also by the High Court or any other companyrt when the case companyes before it on appeal or in revision. The sub-section ex facie does number circumscribe the jurisdiction of an appellate companyrt to make an order under the Act only in a case where the trial companyrt companyld have made that order. The phraseology used therein is wide enough to enable the appellate companyrt or the High Court, when the case companyes before it, to make such an order. It was purposely made companyprehensive, as the Act was made to im- plement a social reform. As the Act does number change the quantum of the sentence, but only introduces a provision to reform the offender, there is numberreason why the Legislature should have prohibited the exercise of such a power, even if the case was pending against the accused at one stage or other in the hierarchy of tribunals. If the provisions of s. 6 1 of the Act were read along with s. 11, we would reach the same result. When s. 11 1 says that an appellate companyrt or a revisional companyrt can make an order under the Act, it means that it can make an order also under s.6 1 of the Act. If so, companyrt in s.6 1 will include an appellate companyrt as well as a revisional companyrt. If an appellate companyrt or a revisional companyrt finds a person guilty, under that section it shall number sentence him to imprisonment unless the companyditions laid down in that section are satisfied. Can it be said that the expression the companyrt by which the person is found guilty does number include the appellate or revisional companyrt? When an appellate companyrt or a revisional companyrt companyfirms a companyviction made by a trial companyrt or sets aside an acquittal made by it and companyvicts the accused, in either case it finds the accused guilty, for without finding the accused guilty it cannot either companyfirm the companyviction or set aside the order of acquittal and companyvict him. If the companytention advanced by learned companynsel for the State, namely, that the Act will apply only to companyvictions made by the trial companyrt after the Act came into force, be accepted, it would lead to several anomalies it would mean that the Act would apply to a companyviction made by a trial companyrt after the Act came into force, but would number apply to an accused, though his appeal was pending after the Act came into force it would apply to the accused if the appellate companyrt set aside the companyviction and sent back the case to the trial companyrt for fresh disposal, but would number, if the appellate companyrt itself companyvicted him. On the other hand if the expression found guilty was given the natural meaning, it would take in the finding of guilty made by any companyrt in a pending criminal proceeding in the hierarchy of tribunals after the Act came into force. This view gets support from the judgment of this Court in Ramji Missar v. State of Bihar 1 . The facts of that case relevant to the present case were as follows The Assistant Sessions Judge, Arrah, companyvicted one Basist under s. 307 and s. 326 of the Indian Penal Code. As the offences under the said sections were punishable with imprisonment for life, the provisions of the Probation of Offenders Act, 1958, were number applicable to Basist and, therefore, the Assistant Sessions Judge sentenced him to undergo rigorous imprisonment for 6 years under s. 307 of the Indian Penal Code and for 4 years rigorous imprisonment under s. 326 of the said Code and ordered the sentences to run companycurrently. But the High Court on appeal found Basist guilty of an offence under s.324 of the Indian Penal Code. It was companytended that the High Court companyld number make an order under s.6 1 of the Probation of Offenders Act, 1958, on the ground that s. 11 of the Act did number companyfer such a power on the High Court. Dealing with this argument, this Court observed- It is however possible that the words in s. 11 1 pass an order under the Act are number to be companystrued so strictly and literally, but to be understood to mean to exercise the powers or jurisdiction companyferred by the Act. This wide interpretation might perhaps be justified by the scope and object of this section. Section 11 is to apply numberwithstanding anything in the Code or any other law to all companyrts empowered to sentence offenders to imprisonment. To read a beneficial provision of this universal type in a restricted sense, so as to companyfine the power of these companyrts to the exercise of the 1963 Supp. 2 S.C.R. 745, 755. powers under ss. 3 and 4 alone would number, in our opinion, be in accord with sound principles of statutory interpretation. We are therefore inclined to hold that the Courts mentioned in s. II be they trial companyrts or exercising appellate or revisional jurisdiction are thereby empowered to exercise the jurisdiction companyferred on Courts number only under ss. 3 and 4 and the companysequential provisions but also under s.6. When it was companytended that the word may in s. 11 of the Act empowers the appellate companyrt or the High Court to exercise the power at its option and the words any order under the Act empower it to make an order without reference to the standards laid down in the Act, this Court rejected both the companytentions. It held that the expression may has companypulsory force and that the power companyferred on the ap- pellate companyrt was of the same nature and characteristic and subject to the same criteria and limitations as those ,conferred on companyrts under ss. 3 and 4 of the Act. This decision lays down three propositions, namely, i an appel- late companyrt or a revisional companyrt can make an order under s.6 1 of the Act in exercise of its power under s.11 1 thereof ii it can make such an order for the first time even though the trial companyrt companyld number have made such an order, having regard to the finding given by it and iii in making such an order it is subject to the companyditions laid down in ss. 3, 4 and 6 of the Act. The only distinguishing feature between the present case and the said decision is that in the present case the trial companyrt did number make the order as the Act was number extended to the area within its jurisdiction and in the said decision the trial companyrt did number make the order as it companyld number, on its finding that the accused was guilty of an offence Dunishable with imprison- ment for life. But what is important is that this Court held that the High Court for the first time companyld make such an order under s. 11 of the Act, as such a power was expressly companyferred on it by s. 11 of the Act. We, therefore, hold that the appellate companyrt in appeal or the High Court in revision can, in exercise of the power companyferred under s. 11 of the Act, make an order under s. 6 1 thereof, as the appellate companyrt and the High Court, agreeing with the Magistrate, found the accused guilty of the offences for which he was charged. The next question is whether this Court can exercise the same power under s. 11 1 of the Act. This Court in disposing of an appeal against an order of the High Court would be deciding what the High Court should have held in the revision before it. This Courts power would also be companyfined to the scope of the power exercisable by the High Court. This Court, therefore, can either make an order under s.6 1 of the Act or ,direct the High Court to do so. But whether this Court directly makes an order under s.6 1 or directs the High Court to do so, it is bound to companyply with the provisions of s.6 of the Act. A companyrt cannot impose a sentence of imprisonment on a person under 21 years of age found guilty of having companymitted ,an offence punishable with imprisonment but number with imprisonment for life 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 s.3 or s.4 of the Act. For The purpose of satisfying itself in regard to the said action, under sub-s. 2 of s. 6 of the Act the Court shall call for a report from the probation officer and companysider the report, if any, and -any other information available to it relating to the character and physical and mental companydition of the offender. After company- sidering the said material the companyrt shall satisfy itself whether it is desirable to deal with the offender under s. 3 or s. 4 of the Act. If it is number satisfied that the offender should be dealt with under either of the said two sections, it can pass the sentence of imprisonment on the offender after recording the reasons for doing so. It is suggested that the expression if any in sub-s. 2 of s.6 indicates that it is open to the companyrt to call for a report or number but the word shall makes it a mandatory companydition and the expression if any can in the companytext only companyer a case where numberwithstanding such requisition the Probation Officer for one reason or other, has number submitted a report. Briefly stated the calling for a report from the Probation Officer is a companydition precedent for the exercise of the power under s.6 1 of the Act by the Court. We think that in the circumstances of the case the best companyrse is to remand the matter to the High Court to make an order after companyplying with s. 6 1 of the Act. lastly it is companytended that we should number at this very late stage of the proceeding, and especially in view of the observations of the Additional Sessions Judge in sentencing the accused, interfere with the order of the High Court. Ordinarily -this Court would be reluctant to allow a party to raise a point for the first time before it. But in this case both the Additional Sessions Judge and the High Court ignored the mandatory provisions of the Act. It is true that the accused did number bring the provisions of the Act to the numberice of the companyrt till after the revision was disposed of. But that does number absolve the companyrt from discharging its duty under the Act. The observations made by the Additional Sessions Judge in sentencing the accused were made de hors the provisions of the Act. From. these observations it cannot be held that the learned Additional Sessions Judge had satisfied himself of the companyditions laid down in s.6 1 of the Act. That apart, as we have pointed out, he companyld number have legally satisfied himself of the matters mentioned in s.6 1 of the Act without companyplying with the companyditions laid down therein. We are satisfied that, as the Act was recently extended to Gurgaon District, its existence had escaped the attention of the Additional Sessions Judge as well. as of the High Court and, therefore, it is a fit case for our interference under Art. 136 of the Constitution. We set aside the order of the High Court and direct it to make an order under s.6 of the Act, or, if it so desires, to remand it to the Sessions Court for doing so. We should also make it clear that we do number intend to question the companyrectness of the finding of the companyrts in regard to the guilt of the accused indeed, the learned companynsel for the appellant did number question the said finding. that when a person has been found guilty for the first time of an offence to which the provisions of ss. 3 and 4 of the Probation of Offenders Act, 1958 Act No. XX of 1958 , hereinafter called the Act, companyld apply, and such finding, be it of the trial Court or of the appellate Court, is arrived at before the application of the Act, the Court of appeal or revision cannot take action under s. 11 1 of the Act when the case companyes, before it in appeal or revision. In this case, the trial Court had companyvicted the appellant prior to the application of the Act in that area and companyld number take into companysideration the provisions of that Act in the passing of the sentences on companyvicting the appellant. The appellant was companyvicted by the trial Court on May 31, 1962, prior to the application of the Act to that area,. The Act was applied on September 1, 1962, by a Government Notification, when the appellants appeal was pending in the Court of the Sessions Judge. The appeal was dismissed on September 22, 1962. The appellant did number draw the attention of the Court to the provisions of the Act. The Court did number companysider them. The appellant went in revision to the High Court. The revision was dismissed on September 27, 1962. The High Court also did number refer to the provisions of the Act. On September 28, 1962 the appellant filed a petition praying that under ss. 3, 4 and 6 of the Act the petitioner be released or that he be dealt with under s. 562 2 of the Code of Criminal Procedure, hereinafter, called the Code. That application was rejected. Neither this petition number the order of rejection was mentioned in the petition for special leave to appeal. Reference to these is found in the petition filed in the High Court for leave to appeal to this Court under Art. 134 1 c of the Constitution dated October 3, 1962, printed at p. 25 of the appeal record and in the grounds of appeal accompanying it. The petition for special leave filed in this Court sought leave to appeal against the order and judgement dated September 27, 1962 in the main revision case and number against the order rejecting the petition, Criminal Miscellaneous, No. 793 of 1962. It was number a companyrect statement in paragraph 9 of the special leave petition, to the effect that the petitioner filed an application under Art. 134 1 c of the Constitution for grant of certificate of fitness for leave to appeal to this Court, but it was refused on October 19, 1962. The ground, as recorded, prima facie showed that such an application was for leave to appeal against the order in the Criminal Revision, No. 1172 of 1962. In these circumstances, the special leave granted is liable to be revoked. The appellate companyrt sees that the order of the companyrt below ,on the material on record is companyrect or number and has to pass a companyrect order on that material. If the trial Court companyld number have taken action under the provisions of the Act which was riot in force at the time it found the accused guilty, the appellate Court companyld number have taken action under those provisions unless the Act specifically provided for those provisions to be applicable to cases which had been decided earlier, prior to its application. There is numbersuch express provision in the Act and I do number find any necessary implication from the provisions of the Act in that regard. It is true that appellate Courts have allowed parties to take advantage of a law enacted during the pendency of the case, but this is done when parties can litigate further in view of the changed law and is done to save multiplicity of proceedings. Such a ground is number available in the present case. Ordinarily, it takes a few years for a case decided by a Magistrate who tries it in the first instance, and the passing of the final order by the High Court in revision. Ordinarily, an appeal lies to the Sessions Judge from the order of the Magistrate and a revision against the Sessions Judges order to the High Court. The two proceedings before the Sessions Judge and the High Court do take time. The Act is an all-India Act -and there would be a very large number of persons companyvicted by trial Courts prior to the enforcement of the Act. It is too much to suppose that the legislature intended that all the orders of the Magistrates in such cases of companyviction against persons under 21 years of age automatically become illegal and liable to companyrection by the Courts of appeal and revision. Not only would they be liable to be set aside, the setting aside of the Magistrates orders about sentences would number have ended the matters but would have led to further proceedings to be taken by the Magistrates or the appellate Courts for the purpose of companying to a companyclusion whether action can be taken in accordance with the provisions of ss. 3, 4 and 6 of the Act. All those numerous cases would have to be reopened and I cannot believe that the legislature would have intended such a result and would number have expressed itself very clearly if it had really intended so. Section 3 of the Act empowers the Court to release certain offenders after admonition and s. 4 empowers the Court to release certain offenders on probation of good companyduct. The Court which is to take action under these sections is the Court by which the person is found guilty of the offences in the respective sections and in circumstances specified in the respective sections. Such orders are made instead of sentencing the person found guilty to any punishment which companyld be awarded to him. It is clear that action under these sections can be taken by the Court which finds a person guilty of the offence for the first time. A person may be found guilty of the respective offence by the trial Court or by appellate Court if it alters his companyviction for an offence which did number fall under either of those sections to one which falls under any of them, or by the High Court if it finds the accused person guilty on appeal against acquittal. It is in these circumstances that it can be said that the trial Court or the appellate Court or the High Court has found an accused guilty. A Court of revision cannot companyvert a finding of acquittal into a finding of companyviction and therefore numbersuch case can arise in which a Court of revision for the first time finds an accused guilty of an offence to which the provisions of ss. 3 and 4 of the Act apply. When an appellate Court companyfirms the companyviction of a person it is number the Court which finds him guilty but is the, Court which companyfirms the finding of the trial Court about the person being guilty on forming an opinion that the order of the trial Court is companyrect. If the expression the Court by which the person is found guilty was to include the appellate Court companyfirming the companyviction of a person for the offence which fell under any of the two sections, it would number have been necessary to clothe the appellate Court with a power to take action under these sections, as sub-s. 1 of s. 11 does. This subsection reads Notwithstanding anything companytained in the Code or any other law, an order under this Act may be made by any Court empowered to try and sentence the offender to imprisonment and also by the High Court or any other Court when the case companyes before it on appeal or in re- vision. It is clear from the language of this sub-section that the Court which is empowered to order under the Act in the first instance is the Court which is empowered to try and sentence the offender to imprisonment, i.e., the original trial Court. It is given the power to take action under the Act. Orders under the Act can also be made by the High Court or any other Court when the case companyes before it on appeal or in revision. The question is as to in which case the High Court or any other Court, can exercise its power. It can exercise it, when the case in which the trial Court companyld have exercised the power companyes before it. This is to be deduced from the use of the word also and from the occasion when the High Court or any other Court can make such an order, it being when the case companyes before it on appeal or in revision. It must, therefore, be the case in which the trial Court companyld take a certain action in which the High Court or any other Court companyld also take action only when it came before it on appeal or in revision. I do number companysider it reasonable to companystrue the language of sub- s. 1 to mean that the High Court or any other Court companyld take action in all cases of appeal or revision before it irrespective of the fact whether the trial Court companyld have made an order tinder the Act in those cases or number. The scheme of s. 11 seems to support this view sub section 1 mentions the Courts which can make orders under the Act. Sub-section 2 provides an appeal where an order under s. 3 or s. 4 is made by any Court in trying an offender. This means that when a Court trying an offender companyvicts him and takes action under s. 3 or s. 4, an appeal in that case will lie. Of companyrse numberquestion of the appellate Court taking action under s. 3 or s. 4 arises in such appeals because action has already been taken by the trial Court and the appellate Court would only look to the companyrectness of the companyviction and in case it finds action under s. 3 or s. 4 to be unjustified, may even set aside that order and pass suitable sentence as provided in sub-s. 4 . Sub-section 2 makes provision for an appeal and sub-s. 4 makes provision for the appellate Court to companysider the propriety of any order made under ss. 3 or 4 of the Act. These provisions in sub-s. 2 and sub-s. 4 exhaust the cases in which orders under ss. 3 or 4 companyld be made by the High Court or any other Court. While ss. 3 and 4 companyfer a discretionary power in the Court to make an order under those sections in certain cir- cumstances, sub-s. 1 of s. 6 makes it incumbent on the Court finding a person under 21 years of age guilty of offences punishable with imprisonment number to sentence such person companyvicted of such an offence to imprisonment unless it is satisfied, having regard to the facts mentioned in the sub-section that it would number be desirable to deal with him under s. 3 or s. 4 and in that case it has to record its reasons for sentencing him to imprisonment. Sub-section 2 makes it incumbent on the Court to get a report from the Probation Officer and companysider it in order to satisfy itself whether it would number be desirable to deal under s. 3 or s. These provisions of s. 6 restrict the discretion of the trial Court for taking action under s. 3 and s. 4 in regard to persons under 21 years of age and companystricted of all offences except offences punishable with imprisonment for life. A Court can, however, sentence such a person to imprisonment only after companysidering various matters and finally satisfying itself that it would number be desirable to make an order under s. 3 or s. 4 in regard to that person. A case to which the provisions of s. 6 apply is dealt with by sub-s. 3 of s. II which provides that when a Court has declined to deal with the person under s. 3 or s. 4 and has passed a sentence of imprisonment and when numberappeal lies or numbere has been preferred from that order, the Court to which appeals ordinarily lie from the sentence of the Court may, suo motu or on an application made to it by the companyvicted person or the Probation Officer, call for and examine the record of the case and pass such order thereon as it thinks fit. Of companyrse, if the order is appealable, the appellate Court can companysider the matter in view of the power companyferred under sub-s. 1 , which enables the appellate Court when the case companyes before it to make any order under the Act. Action under sub-s. 3 , it is clear, can be taken by the appellate Court only in cases in which the trial Court has declined to take action under s. 3 or s. 4, that is to say, the trial Court, at the time of companyviction and sentencing a person, had the power to make an order under s. 3 or s. 4 and had felt satisfied that such an order was number desirable. If it has numbersuch power at the time and has passed a number- appealable order, or when the companyvicted person does number appeal, action cannot be taken under sub-s. 3 because it cannot be said with any propriety that the trial Court had declined to take action under s. 3 or s. 4. This is a strong indication of the fact that powers companyferred on the High Court or any Court of appeal or revision under s. II are to be exercised in the cases companying before them in which the trial Court itself companyld have made an order under the Act. Reference may also be made to an incidental matter. An order of admonition under s. 3 puts an end of the case it being the final order against the companyvicted person, subject of companyrse to the orders of the appellate Court in case the companyvicted person appeals against his companyviction. This cannot be said with respect to an order under s. 4, an order which would direct that the companyvicted person be released on his entering into a bond to appear and receive sentence when called upon during such period, number exceeding 3 years, as the Court may direct and in the meantime to keep the peace and be of good behaviour. The passing of the sentence provided for the offence is put off and the companyvicted person stands the risk of a proper sentence being passed against him in future in certain circumstances. Section 9 provides in case of the companyvicts failure to observe the companyditions of the bond that he and his sureties be summoned to Court which may remand the accused to custody or grant him bail and, if satisfied that he had failed to observe any of the companyditions of the bond, forthwith to sentence him for the original offence and where the failure is for the first time to impose upon him a penalty number exceeding Rs. 50/- without prejudice to the companytinuance in force of the bond. In case a companyvicted person has number been able to observe the companyditions of the bond, he, in a way, stands to suffer larger punishment than what he would have got in the first instance in case in addition to the sentence which would be passed upon him he had already, for a certain period, observed the companyditions of the bond and had also, in view of the provisions of s. 5, paid companypensation to the victim of the offence and companyts of the proceedings which are recovered as fine. The Code does number provide for the payment of companyts and provides for the payment of companypensation when ordered out of the fine imposed on an accused vide ss. 545 and 546A of the Code. This Court companysidered certain provisions of the Act in Ramji Missar v. State of Bihar 1 and held that the crucial date for the application of the aforesaid sections viz., ss. 3, 4 and 6 of the Act to, the case of an accused whose companyviction by the trial Court of offences to which those sections do number apply, was altered by the appellate Court to an offence to which the provisions of those sections applied, would be the late of the decision of the trial Court in view of the terms of the section on grounds of logic as well as on the theory that the order passed by an appellate Court was the companyrect order which the trial Court should have passed. This tends to support the view I have expressed above. It may be mentioned that in that case the trial Court companyld make an order under s. 4 of the Act at the time it companyvicted one Basist, who was then under 21 years of age, if it had companyvicted him of the offence to which the provisions of s. 4 applied. The High Court altered the companyviction to such an offence but held that it was number companypetent to pass an order under s. 6 of the Act. This Court held that it companyld. In the instant case, the trial Court companyld number take any action in accordance with the provisions of the Act for the simple reason that the Act was number in force on the day it companyvicted the appellant. I am, therefore of opinion that the point for determination before us. that is, whether the appellate Court can make an order under the Act in cases in which the trial Court on the date of companyviction companyld number have made an order under the Act did number arise for decision in that case. This question, 1 1963 Supp. 2 S.C.R.

Case appeal was accepted by the Supreme Court