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ition No. 13029 of 1985.
(Under Articles 32 of the Constitution of India).
Petitioner in person.
Altaf Ahmed, Additional Solicitor General , Sri Narain Mathur, R. Mohan, Ms. Anil Katiyar, Ms. Sushma Suri, K. Swamy, R.K. Maheshwari and S.M. Ashri for the Respondents.
The Judgement of the Court was delivered by.
RANGANATH MISRA, CJ.
This is an application under Article 32 of the Constitution in the public interest litigation sector.
A practising advocate who is the Chairman of the Environment Protection Cell operating at Delhi is the petioner.
This Court has been asked to issue directions for closing down of hazardous industries located in the densely populated areas of Delhi and for regulation of air pollution caused by automobiles operating in the area as also the thermal units generating power for the Delhi Electric Supply Undertaking, (here after referred to as `DESU ').
The Union Territory of Delhi has a total population of about 96 868 lakhs, out of which the urban area consisting of old Delhi, New Delhi and the Cantonment has a population of around 90 lakhs.
By 1947 when the country became independent, Delhi had a population of a little over 5 lakhs.
In these little more than two scores of years the population has, thus, multiplied by 18 times.
Though it is a spread out city, in some pockets, the density of population is very high and these have become congested.
The problem of environmental pollution is global in a increasingly small world and concerns all countries irrespective of their size, level of development or ideology.
Notwithstanding political division of the world into national units, the oceanic world in an inter connected whole; the winds that blow over the countries are also one.
Pollution is capable of moving from continent to continent.
If USSR carries out a nuclear test, the fall out may be carried by the winds to any part of the world and such fall out or irresponsible disposal of radio active waste from a remote energy plant in one country may turn out to have greater adverse effect on the neighbouring countries that the danger of full fledged war.
Informed public mind is already agitated over the polluting effect of the Gulf War and the common concern of the entire homosapien race is obsessed by the apprehension of acid rain, toxic effect on the seas and even on the atmosphere.
The awareness of interaction of man with his environment is of recent origin.
The Declaration of the United Nations Conference on the Human Environment held in Stockholm in June, 1972 stated: "Man is both creature and moulder of his environment which gives him physical sustenance and affords him the opportunity for intellectual, moral, social and spiritual growth.
In the long and tortuous evolution of the human race on this planet a stage has been reached when, through rapid acceleration of science and technology, man has acquired the power to transform his environment in countless ways and on an unprecedented scale.
Both aspects of man 's environment, the natural and the man made, are essential to his well being and to the enjoyment of basic human rights even of life itself." Principle No. 1 of the same Declaration went on to say: "Man has the fundamental right to freedom, equality and adequate conditions of life, in an environment of a quality 869 that permits a life of dignity and well being, and he bears solemn responsibility to protect and improve the environment for present and future generations. ".
The closeness of the undeveloped and under developed communities to nature is not found in the developed ones.
Our ancestors had realised the importance of the tie between man and his environment.
The Samaveda note that Flute of Divine love by saying: "Listen to the melodious music of the divine poet.
He plays upon the flute of love, the notes soar to high heaven and reach the distant stars and dance on the raging waves of the sea." The earth, the seas, the sky, the stars are all woven together by the soft strains of the divine music.
Its vibrants echo through the corridors of time in the endless canopy of the sky." Norman Myers quoted in Sir Edmond Hillary 's Ecology 2,000 ' has rightly observed: " The fate of African environments is thus determined not only by local circumstances.
It is influenced, in part at least, by the lifestyles of the developed world.
These economic ecological linkages between different members of the international community are little recognized to date, but they represent a significant factor for land use patterns in Africa 's Savannahs".
Our Constitution by the Forty Second Amendment introduced Article 48A as also Article 51A into the Constitution.
these Articles provide: "48A. The State shall endeavour to protect and improve the environment and to safeguard the forests and wild life of the country."" 51A. It shall be the duty of every citizen of India: (g) to protect and improve the natural environment including forests, rivers and wild life, and to have compassion for living creatures.
" 870 The incorporation of protection of environment as an obligation of the State in the Directive Principles and the mandate in Article 51 A to the citizens of India as part of fundamental duty are indications of the Constitutional recognition of importance of environment on life both the flora and the fauna.
Ours is a great country territorywise, from the stand point of population as also legacy wise.
Though politically divided into many States throughout the ages it has been bound by a common culture short lived empires have grown up and Delhi became the capital of such empires of the north.
Delhi was the capital of the Mughals too but the Britishers had in the initial period Calcutta as their capital and it was only 1911 that the Indian capital of the British empire was shifted from Calcutta to Delhi.
With the growth of importance of Delhi, on the outskirts of the then city gradually industries developed.
Lack of vision and inadequate statesmanship allowed many of these industries to grow perilously close to human habitation and in the process of expansion of the city with the growth of population and activity, the industrial belt became a part of the city.
Hindustan Insecticides Limited, which is respondent No. 6 before us, is one of such industries, DESU has three generating units One known as the indraprastha Power Station, the other as the GT Power Stations and the third as the RPR Power Station.
These too are located within the densely populated area.
The Delhi Transport Corporation (hereafter DTC) which provides the public transport facility to the residents of Delhi operates thousands of buses has been impleaded as respondent No. 5 on the allegation that it is one of the notorious polluting agencies.
A monitoring Committee on ambient and automotive emission levels was set up for examining the impact of surface transport on air environment of Delhi at the instance of the Director of Transport, Delhi Administration.
The facts and figures available from the report may briefly be indicated.
As on March 31, 1982.
Delhi had a total number of 5,92,584 vehicles of which 65% were two wheelers, 3.5% were three wheelers, 25% cars, jeeps and other medium size vehicles and 1.5% were buses and the remaining 7% were goods carriers.
The affidavit of the Deputy Director of Transport of the Delhi Administration indicates that the vehicular population of 1990 is 13.5 lakhs.
This means that within about 8 years there has been an increase of about 8 lakhs of vehicles in Delhi which would work out to an addition of 871 about 1 lakh every year.
The proportion of the two wheelers has perhaps not been seriously disturbed.
Though the Deputy director of Transport has indicated that the automobiles contribute about 50% of the polluting factor there is material to suggest that the proportion is still higher.
Two wheelers and three wheelers contribute over sixty percent of the total emission of carbon monoxide and about eighty percent of the total hydrocarbons.
To meet the challenging task of controlling pollution, Air (Prevention and Control of Pollution) Act, 1981 has been enacted.
Respondent 3 is the Central Board set up under the Act.
The statute authorise Government in consultation with the Board to instruct the Transport Authorities for developing expertise by taking vehicular pollution survey covering all ramifications.
The Union Territory of Delhi was chosen on selective basis because it maintains the highest traffic volume.
Under the Motor Vehicles Act of 1989 certain provision have been made for regulating emission resulting in pollution.
Transport Authorities of the Delhi Administration had placed facts and figures relating to steps taken under the Act for regulating pollution.
Emission checking.
prosecution as also steps for canceling of registration are said to be the normal steps taken by the Administration in this behalf.
We were , however, not satisfied that the action taken in this behalf was adequate and the challenging task of pollution control could not be successfully dealt with that way.
Law alone also cannot help in restoring a balance in the biospheric disturbance.
Nor can funds help effectively.
The situation requires a clear perception and imaginative planning.
It also requires sustained effort and result oriented strategic action.
Campaign for general awakening of the people using automobiles of different classifications and among the people inhabiting the capital is indispensable preliminary.
All persons using automobiles should have a fair knowledge of the baneful effect on the community including those who use such vehicles on account of the emission from such vehicles.
Until that is done in an effective way the appropriate attitude would not develop and cooperation for reducing pollution would not emerge.
A brief extract from the journal entitled `Environmetal Policy & law ' vol.
13 nos.
1 2 Spring 1983) published from North Holland describes the problem thus: 872 "It became clear that all these measures are not themselves sufficient to come to grips with the problem of air pollution caused by road traffic.
In every one of the towns and cities, the problem of air pollution from motor vehicle traffic is a considerable one, and it was more or less generally apparent that present norms for motor vehicle exhausts are not adequate so as to achieve the necessary reductions in a rapid space of time.
In fact, the problem is, in part, on the increase.
This is not only true of private cars, especially diesel powered vehicles, but also of commercial vehicles . " "Despite the legal and other restrictions mentioned above, which hamper the towns and cities involved in pursuing effective policies aimed at limiting motor vehicle exhausts, some interesting strategies have been thought up which have either led to improvements in themselves or at least stimulated attitudes towards environmental policies.
For example, in formulating their regulations in the event of smog, both Munich and Berlin offered positive stimulus for the purchase of vehicles fitted with catalytic converters.
As far as city owned motor vehicles are concerned, some authorities have pursued a deliberate policy of purchasing those automobiles with improved exhaust systems.
" In course of the hearing of this matter we had called upon counsel to look at the problem not as an adversial litigation but to come forward with useful deliberations so that something concreate could finally emerge for easing the situation.
We were shown some literature and even gadgets which might help reduction of pollution.
The question of eliminating use of motor spirit and replacement of battery operated two wheelers was also mooted.
The Association of Indian Automobile Manufacturers had made an application for intervention and was present in Court.
Some of the aspects which came up for discussion were indeed sufficiently technical.
Some other aspects require laboratory testing and probe into efficacy.
Therefore, the question of setting up of a high powered committee was also mooted.
We are happy to find that the deliberations in course of the hearing have taken a concreate shape and the Ministry of Environment & Forests has ultimately instructed the learned Attorney General in writing (copy placed on the record) that a Committee could be set up by the Court to look into the problem of vehicular pollution in Delhi 873 and for devising methods of solution of the problem.
The Ministry has agreed that a retired Judge of this Court could act as Chairman and has suggested that Shri M.C. Mehta, the petitioner herein and Shri.
N.S. Tiwana, Chairman of he Central Pollution Control Board may be made the Members of the Committee.
We find this suggestion of the Ministry acceptable subject to certain modification.
We are inclined to take the view that Shri Sudhakar Girdharlal Shah representing the Association of Indian Automobile Manufacturers could be taken as a member of the Committee and the Committee would also have the power to co opt experts not exceeding three for its efficient working from time to time.
Shri Justice K.N. Saikia who has recently retired as a Judge of this Court is appointed as the Chairman of the Committee with Shri N.S. Tiwana, Shri M.C. Mehta and Shri.
S.G. Shah as Members.
The Joint Secretary in the Ministry of Environment and Forests shall be the convenor Secretary of the Committee.
Shri Justice Saikia shall be entitled to all the benefits to which a retired Judge of this Court while called back to duty is entitled.
The Committee may be constituted with effect from 18th March, 1991, under an appropriate Notification of the Union Government in the relevant Ministry.
The terms of reference for the time being as recommended by the Ministry are the following: "(i) To make an assessment of the technologies available for vehicular pollution control in the world; (ii) To make an assessment of the current status of technology available in India for controlling vehicular pollution; (iii) To look at the low cost alternatives for operating vehicles at reduced pollution levels in the metropolitan cities of India.
(iv) To examine the feasibility of measures to reduce/eliminate pollution from motor vehicles both on short term and long term basis and make appropriate recommendations in this regard; (v) To make specific recommendations on the administrative/legal regulations required for implementing the recommendations in (iii) above.
" For the time being the Committee may proceed to consider these.
874 other relevant aspects may be taken into consideration by the Committee.
This writ petition shall be deemed to be pending for the purpose of monitoring.
The Committee shall furnish a report to this Court once in two months as to the steps taken in the matter.
The Union Government and the Delhi Administration are directed to effectively cooperate with the Committee for its successful operation.
V.P.R. Petition pending for monitoring.
| The petitioner, an Advocate and Chairman of the Environmental Protection Cell filed the petition under Article 32 asking the Court to issue directions for closing down of hazardous industries located in the densely populated areas of Delhi, and for regulation of air pollution caused by automobiles operating in the area as also the thermal units generating power for the Delhi Electric Supply Undertaking.
Making an interim order, and keeping the writ petition pending for the purpose of monitoring, the Court.
HELD: 1.
The incorporation of protection of environment as an obligation of the State in the Directive Principles and the mandate in Article 51 A to the citizens of India as part of fundamental duty are indications of the Constitutional recognition of importance of environment of life both the flora and the fauna.
[870 A B] 2.
Law alone also cannot help in restoring a balance in the biospheric disturbance.
Nor can funds help effectively.
The situation requires a perception and imaginative planning.
It also requires sustained effort and result oriented strategic action.
Campaign for general awakening of the people using automobiles of different classification and among the people inhabiting the Capital is an indispensable preliminary.
[871E G] 3.
All persons using automobiles should have a fair knowledge of the baneful effect on the community including those who use such vehicles on account of the emission from such vehicles.
Until that is done in an effective way the appropriate attitude would not develop and cooperation for reducing pollution would not emerge.
[871 F H] 867 4.
A Committee is set up by this court to look into the problem of vehicular pollution in Delhi and for devising methods of solution of the problem.
[ 872 H 873 A].
A retired Judge of this court to act as Chairman, the petitioner and the Chairman of the Central Pollution Control Board and the person representing the Association of Indian Automobiles Manufacturers could be the members of the Committee.
The Committee would also have the power to co opt experts not exceeding three for its efficient working from time to time.
The Joint Secretary in the Ministry of Environment and Forests shall be the Convenor Secretary of the Committee.
[873A D] 6.
The Committee may be constituted with effect from 18th March, 1991, under an appropriate Notification of the Union Government.
[873D] 7.
The Committee shall furnish a report to this Court once in two months as to the steps taken in the matter.
The Union Government and the Delhi Administration are directed to effectively cooperate with the Committee for its successful operation.
[874B]
|
ivil Appeal Nos.
1249/75 & 2075/79.
From the Judgment and Order dated ' 26.9.1974 and 16.10.1978 of Gujarat High Court in I.T.R. Nos. 19 of 1973 and 318 of 1977.
Harish N. Salve, P.H. Parekh and Sunil Degra for the Appellant.
915 V. Gauri Shanker, Sr.
and section Rajappa for the Respondent.
The Judgment of the Court was delivered by RANGANATHAN, J.
These appeals raise a question of some complexity on the interpretation of the provisions of the Income Tax Act, 1961, (The 1961 Act '), in regard to which there is a difference of opinion among various High Courts.
In the judgment under appeal, reported in , the Gujarat High Court has answered the question raised in favour of the Revenue and against the assessees.
Hence these appeals by the assessee, M/s. Garden Silk Weaving Factory, Surat.
The two appeals relate to the assessment years 1967 68 and 1968 69 for which the relevant previous years were the Saka years 2022 and 2023 respectively.
The question arises in similar circumstances for both the years.
We shall set out the facts relevant for the assessment year 1968 69 as the appeals and reference in respect of that year were disposed of earlier than those pertaining to the assessment year 1967 68.
The assessee, M/s. Garden Silk Weaving Factory, is a registered firm.
For the assessment year in question, it returned a total income of Rs.3,96,483 and a provisional assessment, under section 141 of the Act, was made accepting the income returned.
Subsequently, the Income Tax Officer found that, for the assessment year in question, the assessee had made an income of Rs. 11,82,056 but deducted there three figures aggregating to Rs.7,87,573 to arrive at the net income of Rs.3,94,483 which had been returned and accepted.
These three figures were figures carried over from the previous year for the assessment year 1967 68.
They comprised of: (i) Unabsorbed Rs. 1,59,181 Depreciation (ii) Unabsorbed Rs. 2,79,150 Development Rebate (iii) Unabsorbed Rs. 3,49,242 Business loss Total : Rs. 7,87,573 The Income Tax Officer (I.T.O.) agreed that, out of the above three months, the unabsorbed development rebate pertaining to the assessment year 1967 68 had been rightly carried forward and set off in computing the total income for the assessment year 1968 69.
However, 916 for reasons which will become clear later, the Income Tax Officer was of the opinion that the sum of Rs. 1,59,181 (which represented the amount of unabsorbed depreciation relating to the assessment year 1967 68) and the amount of Rs.3,49,242 (which represented the unabsorbed loss pertaining to the assessment year 1967 68) could not be carried forward, as done by the assessee, to the assessment year 1968 69.
He, therefore, added back the sum of Rs.5,08,423 (the aggregate of the above two amounts) to the returned income for determining the total income for assessment year 1968 69.
This action of the Income Tax Officer was confirmed by the Appellate Assistant Commissioner (A.A.C.).
However, on further appeal, the Income tax Appellate Tribunal (A.T.) took a different view.
It upheld the Income tax Officer 's stand that the firm could not be allowed to carry forward and set off the business loss carried from the earlier year.
But, so far as the unabsorbed depreciation was concerned, it upheld the assesses contention.
A reference to the High, Court followed.
The following two questions were referred to the High Court of Gujarat for its decision: 1.
Whether on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the assessee registered firm is entitled to carry forward unabsorbed depreciation from earlier years and that it will be deemed to be an allowance in the nature of depreciation in the previous year, relevant to assessment year 1968 69? 2.
Whether the claim of the assessee to carry forward and set off loss of Rs.3,49,242 against its total income for the assessment year 1968 69 has been rightly rejected?" The High Court, in a very detailed judgment, discussed the issues threadbare and answered both the questions against the assessee and in favour of the Revenue.
Hence the assesse 's appeal for the assessment year 1968 69 under a certificate of fitness granted by the High Court.
For the assessment year 1967 68, a full paper book containing all the orders and statement of facts has not been placed before us.
However, the petition of appeal gives a few facts which may be sufficient to dispose of the appeal.
The relevant facts are these.
For this assessment year, the assessee filed a return on 30/6/67 showing a loss of Rs.7,87,515 but filed a revised return on 22/3/72 showing a loss of Rs.5,46,351.
On 14 3 73 the I.T.O. completed the assessment determining a loss of Rs.4,85,250.
(It will be noticed that the assessment order for 1968 69 gives a different figure and also shows its composition as partly loss, partly unabsorbed depreciation and partly unab 917 sorbed development rebate but this is not very material for deciding the principle in issue before us).
The assessee 's request that this loss should be carried forward to the subsequent assessment year was rejected by the I.T.O. This was confirmed by the A.A.C. on further appeal, the A.T. confirmed the order of the A.A.C., following the High Court 's decision for assessment year 1968 69 which had by then been announced.
Thereupon the following question of law was referred to the High Court for its opinion: "Whether, on the facts and circumstances of the case, the Tribunal was justified in rejecting the claim for carry forward of business loss in the hands of the firm in view of the decision reported in " The High Court answered the question in the affirmative following its earlier decision but granted a certificate of fitness for appeal to this Court.
This is how the second appeal is before us.
It will be seen from the above that, though there are two appeals before us, the question involved in both the appeals is the same.
Before discussing the question at issue, it may be useful to briefly summarise the procedure under the statute for determining the total income of an assessee in respect of a previous year.
All income accruing or arising to the assessee and includible in his total income, is, to begin with, classified (see section 14) under six different heads: A. Salaries.
B. Interest on Securities: (recently omitted) C. Income from Property.
D. Profits and gains of business, profession or vocation.
(briefly, "business income") E. Capital gains F. Income from other sources.
In computing the income of the assessee according to this classification, two aspects have to be borne in mind.
One is that, even under the same head, an assessee may have different sources.
If so, the 918 income has first to be arrived at in respect of each such source.
Thus, if an assessee carries on several businesses, the income of each and every such, business has to be separately computed by allowing against the gross profits and gains of that business only the deductions relevant and appropriate to that business.
The second is that, for arriving at the figure of income assessable under a particular head, the individual figures in respect of all the sources have to be aggregated.
Thus, to take up the head, "profits and gains of business, profession or vocation", the statute contemplates the computation of the profits and gains of each business, profession or vocation carried on by the assessee separately.
The result of such computation may be either a profit or a loss.
If all the businesses end in profits, the profits are aggregated to arrive at a resultant figure of profits from "business".
On the other hand, if some of the businesses make profit and some of them result in a loss, the profits and the losses have to be added together in order to arrive at the consolidated income under the head "profits and gains of business.
" If the total amount of profits exceeds the total amount of losses, there will be a positive income under this head, assessable for that particular assessment year.
If on the other hand the losses exceed the profits, they will be "adjusted" against the profits, so as to reduce the assessable income under the head to nil; in addition, the losses of one or more businesses will remain "unabsorbed".
There will thus be one resultant figure of profit or loss under each head.
This is one aspect of the matter.
This is the first stage of computation which we may call "intra head adjustments".
This was not specifically provided for in the Indian Income tax Act, 1922 (the 1922 Act) but now finds specific mention in section 70 of the 1961 Act.
section 24(1) of the 1922 Act and section 71 of the 1961 Act next contemplate a mutual set off of the losses under one head against the income under some other head subject to some exceptions (like speculation loss, capital loss etc.
which, to avoid unnecessary complications and confusion, we shall leave out of account).
Thus if, in any particular assessment year, an assessee has incurred a loss under the head "business", this loss can be set off against the income earned by the assessee during that previous year under other heads.
Thus, for example, if an assessee has got income by way of salary of Rs.20,000 and income from house property of Rs.25,000 but has sustained a loss of Rs.40,000 in business, the Act envisages the set off of the loss of Rs.40,000 against the income of Rs.45,000 resulting in a total income of Rs.5,000 only.
This is the second stage in the process of assessment which we may describe as "inter head adjustment" or "set off".
919 The Acts [section 24(2) of 1922 Act and section 72 of the 1961 Act] next envisage a third stage in the process of assessment which can ' be described as the process of "carry forward and set off".
By this process, the assessee is permitted to carry forward a loss he had not been able to adjust or set off in the first and second stages of assessment.
This benefit is not available to all kinds of losses but, subject to certain conditions and restrictions on which we need not dilate, it is available to business losses.
A business loss of one assessment year which remains "unabsorbed" by the processes of intra and inter head ;adjustments can be carried forward to the succeeding assessment years ,and can be set off against any other business income in those years.
A modification to the above scheme had to be enacted in respect of partnership.
Partnership firms are treated as separate assesses for the purposes of the Income Tax Acts.
Under the Acts, firms are classified into two registered firms and unregistered firms.
Unregistered firms are distinct assesses which are liable to pay tax on their total income.
The Acts provided that any unabsorbed loss in the case of such a firm could be carried forward only by the firm and not by it 's partners.
However, under the 1922 Act, as it stood between 1939 and 1956, registered firms were treated as assesses only to this extent that the total income (or loss) of the firm in any previous year was computed.
However, the firm itself was not liable to any income tax.
The income of the firm was apportioned among its partners and each partner was assessed on his share of income from the firm.
In this scheme, it was obvious that, as soon as the income or loss of a firm was computed, there was nothing further to be done in the case of the firm; the income or loss became that of the partner for all practical purposes.
A partner 's share of a business loss of the firm which remained unabsorbed became business loss in the hands of the partner liable to intera head adjustments, inter head adjustments and carry forward as if the loss had been incurred by the partner himself.
The Act, therefore, provided that in the case of registered firms the loss which could not be absorbed in the same assessment year by the other income of the firm could be carried forward to the subsequent year not by the firm itself but only by the partners.
In other words, each partner carried forward to subsequent years his share of the business loss of the firm and set it off against his business income, whether from the firm or otherwise.
There is a third category of unregistered firms assessed as registered the provisions regarding which are not relevant for our present purposes.
Leaving them out of account, the Acts outlined a very simple scheme stemmed from the basic fact that a registered firm was not liable to pay tax whereas an unregistered firm had to pay 920 tax.
Under this scheme the full advantage of carry forward of the loss incurred by the firm was enjoyed by the partners in the case of a registered firm and in the case of an unregistered firm by the firm itself.
The simplicity of the above scheme of assessment of registered and unregistered firms, however, was not allowed to last.
In 1956, the legislature decided that registered firms should also be made to pay a tax.
This tax, called "firm 's tax" was at rates lower than those applicable to unregistered firms and other assesses.
Under the new scheme, which became effective from 1.4.1956, the total income of a registered firm is determined and it is liable to income tax thereon.
The income of the firm (less the firm 's tax) is then apportioned among the partners (subject to certain adjustment as before).
The share income of each partner is aggregated with the rest of his income to arrive at his total income on which he also pays tax.
In this new scheme the question arises: "when the net result of a business carried on by a registered firm in a particular year is a loss, who is to carry forward such loss? Is it the firm (as in the case of unregistered firms) or is it is the partners (as, earlier, in the case of registered firms) or both?" The answer to this question is furnished by the statute which, while broadly continuing the scheme of assessment of registered firms with the modification indicated above, makes a specific provision in regard to carry forward of losses.
The provisions of Ss. 75 and 77 in their present form can be usefully extracted here (though they contain references to certain amended provisions which we need not touch upon): 75.
Losses of registered firms: (1) Where the assessee is a registered firm, any loss which cannot be set off against any other income of the firm shall be apportioned between the partners of the firm, and they alone shall be entitled to have the amount of the loss set off and carried forward for set off under sections 70, 71, 72, 73, 74 and 74A. (2) Nothing contained in sub section (1) of section 72, sub section (2) of section 73, sub section (1) or sub section (3) of section 74 or sub section (3) of section 74A shall entitle any assessee, being a registered firm, to have its loss carried forward and set off under the provisions of the aforesaid section.
921 76.
Losses of unregistered firms assessed as registered firms: In the case of an unregistered firm assessed under the provisions of clause (b) of section 183 in respect of any assessment year, its losses for that assessment year shall be dealt with as if it were a registered firm.
Losses of unregistered firms or their partners: 1) Where the assessee is an unregistered firm which has not been assessed as a registered firm under the provisions of clause (b) of section 183, any loss of the firm shall be set off or carried forward and set off only against the income of the firm.
(2) Where the assessee is a partner of an unregistered firm which has not been assessed as a registered firm under the provisions of clause (b) of section 183 and his share in the income of the firm is a loss, then, whether the firm has already been assessed or not (a) such loss shall not be set off under the provisions of section 70, section 71, sub section (1) of section 73 or section 74A; (b) nothing contained in sub section (1) of section 72 or sub section (2) of section 73 or sub section (1) or sub section (3) of section 74 or sub section (3) of section 74A shall entitle the assessee to have such loss carried forward and set off against his own income.
In view of this specific provision the High Court, following an earlier decision of the same High Court in C. I. T. vs Dhanji Shamji Mana vdar,[ 1974 ] I.T.R. 173 (Guj.) answered the second question referred to it in the reference relating to assessment year 1968 69 and the only referred in regard to the assessment year 1967 68 in favour of the Revenue and against the assessee.
The correctness of this answer has not been challenged before us.
The first question referred to the High Court in respect of assessment year 1968 69, however, arises in a slightly different way.
It arises the context of "depreciation" which is one of the notional 922 allowances by which expression we mean a deduction in respect of an outgoing which is not an item of actual expenditure or is one, which cannot be treated as an outgoing of a revenue nature permitted by the statute to be deducted in the computation of the profits and gains, of a business.
In a sense, where the depreciation allowance exceeds the profits, otherwise arrived at, in respect of the business, there will be a resultant "loss" in the business; and, indeed, the Department 's contention is that there is no difference between an unabsorbed loss and unabsorbed depreciation.
It would, however, be useful to refer to the treatment meted out by the statute in respect of three items of deductions allowed in the computation of the profits of a business, which may be larger than the profits of the business otherwise computed.
One is the development rebate regarding which the statute provides that it has to be set off against the total income of the assessee so as to reduce it to nil and that the balance is, to be carried forward to succeeding assessment years to be accorded a similar treatment.
[See Ss.
10(2)(vib) of the 1922 Act and 33(2) of the 1961 Act].
This is an allowance which cannot be a constituent element of a figure of loss to be carried forward to later years and stands on a totally different footing.
The second is the allowance for depreciation under S10(2)(vi) of the 1922 Act.
In respect of this allowance, section 10(12)(vi) provided that if full effect to the allowance could not be given in the assessment of an assessee for any assessment year, the unabsorbed allowance could be carried forward and set off against business profits in succeeding assessment years indefinitely.
This provision, namely clause (b) of the proviso to section 10(2)(vi) of the 1922 Act after an addition in 1953 of the words underlined in the extract below reads thus,: " 10(2)(vi) . .
Provided that . . (a) . . . (b) where, in the assessment of the assessee or, if the assessee is a registered firm, in the assessment of its partners, full effect cannot be given to any such allowance in any year not being a year which ended prior to the I April, 1939, owing to there being no profits or gains chargeable for that year, or owing to the profits, or gains chargeable, being less than the allowance, then, subject to the provisions of clause (b) of the proviso to sub section (2) of section 24, the allowance or part of the allowance to which effect has not been given, as the case may be, shall be added to the. amount of the allowance for depreciation for the following year and 923 deemed to be the allowance for that year, and so on for succeeding years.
" This provision has, in substance, there are certain verbal differences which are not material for our purposes been re enacted as section 32(2) of the 1961 Act, which now reads thus: B "32(2) Where, in the assessment of the assessee (or, if the assessee is a registered firm or an unregistered firm assessed as a registered firm, in the assessment of its partners) full effect cannot be given to any allowance under clause (ii) of sub section ( 1) in any previous year, owing to there being no profits or gains chargeable for that previous year, or owing to the profits or gains chargeable being less than the allowance, then, subject to the provisions of sub section (2) of section 72 and sub section (3) of section 73, the allowance or part of the allowance to which effect has not been given, as the case may be, shall be added to the amount of the allowance for depreciation for the following previous .year and deemed to be part of that allowance, or if there is no such allowance for that previous year, be deemed to be the allowance for that previous year, and so on for the succeeding previous years.
" The third type of allowance of this nature, a carry forward of which is contemplated, is an allowance in respect of expenditure on capital assets related to a business.
This, by virtue of clause (f) of the proviso to section 10(2)(xiv) of the 1922 Act, re enacted in section 35(4) of the 1961 Act, is treated on the same lines as the depreciation allowance dealt with in section 10(2)(vi) and section 32(2).
We shall, however, leave this out of account in our future discussion as it is not material for the purposes of the present case and as, in any event, whatever is decided in regard to unabsorbed depreciation would apply equally in respect of such allowance as well.
From the above discussion, it will be seen that unabsorbed losses and unabsorbed depreciation are to be carried forward to future years to be set off against future income.
There is, however, one important difference.
Unabsorbed losses can be carried forward only for a period of eight years whereas unabsorbed depreciation can be carried forward indefinitely.
A rule of priority of set off as between these two therefore becomes necessary and this is provided by section 72(2) of the 1961 Act which deals with carry forward of losses the counterpart of 924 the proviso to section 24(2) of the 1922 Act which reads thus: "Where any allowance or part thereof is, under sub section (2) of section 32 or sub section (4) of section 35, to be carried forward, effect shall first be given to the provisions of this section.
" This is the historical context and statutory language on the basis of which the issue before us has to be resolved.
The issue is: when there is an unabsorbed depreciation computed in the assessment of a registered firm for any year, how is it to be treated for purposes of carry forward? Three alternatives are possible: (i) It should be retained (without apportionment) and carried forward by the firm only.
(ii) It should be apportioned among the partners.
Thereafter, it can be dealt with even for carry forward purposes only in the assessments of each of the partners in respect of his aliquot share thereof.
(iii) It should be apportioned among the partners each of whom may set off his share thereof against his other income.
If, after this, any amount remains unabsorbed, it will revert to the firm.
The firm will carry it forward.
set it off against its other income in the succeeding year.
This operation will be repeated every year indefinitely until the unabsorbed depreciation gets absorbed.
The three alternatives will yield widely different results and hence the present controversy.
On the above issue there has been a strong cleavage of opinion between the various High Courts.
The view that unabsorbed depreciation once allocated to the partners cannot be taken back to the firm 's assessment for being carried forward by the firm and that the partners alone are entitled to carry forward the unabsorbed depreciation for being set off against their income, has been taken in the following cases: (a) K. T. Wire Products vs Union of India, (b) Garden Silk Weaving Factory, and Garden Silk Weaving Factory, (c) CIT vs Ram Swarup Gupta, and Raj Narayan Aggarwala vs CIT, ; (d) Shankaranarayana Construction Co. vs CIT, The view that the unabsorbed depreciation, after being carried forward by the partners and set off against their income, reverts back to the registered firm for being carried forward and set off against its income and that any depreciation still remaining unabsorbed will again go to the partners and that if it still remained unabsorbed would revert back to the firm and so on, has been accepted in: (a) Ballarpur Collieries Co. vs CIT, 219 and CIT vs Nagpur Gas & Domestic Appliances, ; (b) CIT vs Nagapattinam Import and Export Corp., ; CIT vs Madras Wire Products, and CIT vs Madras Wire Products, ; (c) CIT vs Singh Transport Co., ; (d) CIT vs J. Patel & Co., ; (e) CIT vs Shrinivasa Sugar (Co., (f) Pearl Woollen Mills vs CIT, and CIT vs Mahavir Steel Rolling Mills,5, & H); and (g) CIT vs R. J. Trivedi & Sons, Shri Harish Salve, learned counsel for the assessee, canvassed the latter of the above views but with a slight modification.
He submitted that, in the present case, the firm as well as the partners had been returning losses all along with the result that no part of the unabsorbed depreciation of the firm had been set off in the partners ' hands.
He, therefore, submitted that it was sufficient for him to urge the first of the three alternatives set out earlier and that he need not, for the purposes of this case, seek to support the third alternative, upheld in some of the decisions, which may create an impression in the mind that the assessee was deriving a double benefit by having the unabsorbed depreciation set off in the hands of both the firm and the partners.
On the other hand, Dr. Gaurishankar, for the Revenue, strongly advocated the second alternative.
According to him, once the assessment is completed, and the total income or loss of the firm ascertained, it has to be apportioned amongst the partners.
Thereafter, there remained nothing in the assessment of the firm to be carried forward.
Only each of the partners can carry forward his share of the unabsorbed loss (and this, according to him, will include also the unabsorbed depreciation) for set off in his future assessments.
The answer to the problem before us has to be discovered in the language of section 32(2) supplemented by that of other sections which deal with the mode of assessment of a firm and its partners.
Before turning to these provisions, it will be necessary to clear up one aspect of section 32(2) to which Sri Salve drew attention in the course of his reply.
He pointed out that section 32(2) permits the carry forward of the depreciation allowance "where full effect cannot be given to it" owing to there being no profits or gains chargeable for that previous year, or owing to the profits or gains chargeable being less than the allowance.
Laying emphasis on the words "profits or gains", he contended that the carry forward of depreciation allowance is at a stage much anterior to that of the determination of the total income of the assessee.
On this construction, if an assessee A carries on two businesses, in one of which there is 926 an unabsorbed depreciation of Rs. 15,000 and the profits and gains of the other business is only Rs. 10,000, the net unabsorbed depreciation of Rs.5,000 has to be carried forward irrespective of the other income of the assessee in that year, to the succeeding year.
This contention, however, cannot be accepted.
Though the section, somewhat infelicitiously, uses the expression "profits and gains" as it occurs in the statute in the fasciculus of sections dealing with the computation of business income, the question of the carry forward of unabsorbed depreciation has always been understood and interpreted as arising only after the intra head and intra head adjustments, referred to earlier, have been carried out.
Thus, in the illustration given above, if A has a property income of Rs.6,000 the unabsorbed depreciation of Rs.5,000 will be set off against the property income and there will be no unabsorbed depreciation left for being carried forward to the subsequent assessment year.
This is because, where the depreciation allowance attributable to a particular business exceeds the profits otherwise computed for that business, the deduction of the depreciation allowance from such profits can only result in a "loss" from that business this, however, is subject to a limitation that will be discussed later and a business loss has to be set off against income from any other business, by way of intera head adjustment, under section 70 and the income under any other head, by way of inter head adjustment, under section 71.
This principle indeed emerges even from the language of section 32(2) in so far as it implicitly recognises that the excessive depreciation of one business can be "given effect to" against the profits and gains of another business in the same year.
This, indeed, is a well settled proposition, and it should be sufficient to cite two decisions of this Court which make this clear, In C.I.T. vs Jaipuria China Clay Mines (P) Ltd., [1966]591,T.R.555 this Court observed: "Mr. Shastri, learned counsel for the revenue, urges that depreciation, although a permissible allowance under section 10(2) of the Act, serves to compensate an assessee for the capital loss suffered by him by way of depreciation of his assets.
He says that if it had not been expressly allowed as allowance, it would have been treated as capital expenditure and would have been excluded.
He further says that depreciation is a charge on the profits of a business.
Bearing these two factors in mind, he urges that the expression "loss of profits and gains" in section 24(1 does not include any deficiency resulting from depreciation and, therefore, an assessee is not entitled to ask the department to include the depreciation in the amount which can be set 927 off against income, profits and gains under Other heads such as income from property or dividends.
Mr. Rajagopala Shastri for the assessee relies on the history of the legislation and a number of authorities to support the judgment of the High Court.
Apart from authority, looking at the Act as it stood on April 1, 1952, it is clear that the underlying idea of the Act is to assess the total income of an assessee.
Prima facie, it would be unfair to compute the total income of an assessee carrying on business without pooling the income from business with the income or loss under other heads.
The second consideration which is relevant is that the Act draws no express distinction between the various allowances mentioned in section 10(2).
They all have to be deducted from the gross profits and gains of a business.
According to commercial principles, depreciation would be shown in the accounts and the Profit and Loss account would reflect the depreciation accounted for in the accounts.
If the profits are not large enough to wipe off depreciation, the profits and loss account would show a loss.
Therefore, apart from proviso (b) to section 10(2)(vi), neither the Act nor commercial principles draw any distinction between the various allowances mentioned in section 10(2); the only distinction is that while the other allowances may be outgoings, depreciation is not an actual outgoing." and expressly disproved the observations of the Madras High Court in C.I.T. vs Nagi Reddy, [19641 that the deduction for depreciation should be limited to the amount of the profits and cannot result in working out a loss.
The following observations in the more recent decision in Rajapalayam Mills Ltd. vs C.I.T., , S.C. place the position beyond doubt: It is clear on a plain reading of the language of provision (b) to cl.
(vi) that it comes into operation only where full effect cannot be given to the depreciation allowance for the assessment year in question owing to there being no profits or gains chargeable for that year or profits or gains chargeable being less than the depreciation allowance.
Now, it is well settled, as a result of the decision of this court in CIT vs Jaipuria China Clay Mines (P) Ltd., , that the words "no profits or gains chargeable for that year" are not confined to profits and gains derived 928 from the business whose income is being computed under section 10, but they refer to the totality of the profits or gains computed under the various heads and chargeable to tax.
It is, therefore, clear that effect must be given to depreciation allowance first against the profits or gains of the particular business whose income is being computed under section 10 and if the profits of that business are not sufficient to absorb the depreciation allowance, the allowance to the extent to which it is not absorbed would be set off against the profits of any other business and if a part of the depreciation allowance still remains unabsorbed, it would be liable to be set off against the profits or gains chargeable under any other head and it is only if some part of the depreciation allowance still remains unabsorbed that it can be carried forward to the next assessment year.
Obviously, therefore, there would be no scope for the applicability of provision (b) to cl.
(vi), if the total income of the assessee chargeable to tax is sufficient to absorb the depreciation allowance, for then there would not be any unabsorbed depreciation allowance to be carried forward to the following assessment year.
But where any part of the depreciation allowance remains unabsorbed after being set off against the total income chargeable to tax, it can be carried forward under provision (b) to cl.
(vi) to the following year and set off against that year 's income and so on for succeeding years.
" The resultant position, therefore, is that initially, the depreciation allowance has to be deducted from the profits and gains of the business to which the assets earning the depreciation relate but, if it remains unabsorbed by such profits, the allowance has to be set off against the other business income of the assessee and, where that is also insufficient, against the other taxable income of the assessee.
The carry forward of any depreciation as unabsorbed cannot arise until the stage of final assessment is reached and the total income of the assessee otherwise computed is insufficient to absorb the year 's depreciation allowance.
Sri Salve 's argument that the stage of carry forward of depreciation arises at a stage anterior to the completion of the assessment and determination of the total income cannot, therefore, be accepted.
Shri Salve, then, contended that there is no statutory provision which enables the apportionment of the firm 's unabsorbed depreciation among the partners and that, therefore, the unabsorbed deprecia 929 tion has to be carried forward by the firm itself and none else.
In our opinion, this contention also is not well founded.
section 182, to the extent relevant for our present purposes, reads "section 182.
(]) Assessment of registered firms Not withstanding anything contained in section 143 and 144 and subject to the provisions of sub section (3), in the case of a registered firm, after assessing the total income of the firm, (i) the income tax payable by the firm shall be determined, and (ii) the share of each partner in the income of the firm shall be included in his total income and assessed to tax accordingly.
(2) If such share of any partner is a loss it shall be set off against his other income or carried forward and set off in accordance with the provisions of sections 70 to 75.
(3) When any of the partners of a registered firm is a non resident, the tax on his share in the income of the firm shall be assessed on the firm at the rate or rates which would be applicable if it were assessed on him personally, and the tax so assessed shall be paid by the firm.
(4) A registered firm may retain out of share of each partner in the income of the firm a sum not exceeding thirty percent thereof until such time as the tax which may be levied on the partner in respect of that share is paid by him; and where the tax so levied cannot be recovered from the partner, whether wholly or in part, the firm shall be liable to pay the tax, to the extent of the amount retained or could have been so retained.
" How this share is to be computed is set out in section 67 which may be set out here: section 67(1) Method of computing a partner 's share in the income of the firm In computing the total income of an assessee who is a partner of a firm, whether the net result of the computation of total income of the firm is a profit or a 930 loss, his share (whether a net profit or a net loss) shall be computed as follows: (a) any interest, salary, commission or other remuneration paid to any partner in respect of the previous year, and, where the firm is a registered firm or an unregistered firm assessed as a registered firm under clause (b) of section [183], the income tax, if any, payable by it in respect of the total income of the previous year, shall be deducted from the total income of the firm and the balance ascertained and apportioned among the partners; (b) where the amount apportioned to the partner under, clause (a) is a profit, any salary, interest, commission or other remuneration paid to the partner by the firm in respect of the previous year shall be added to that amount, and the result shall be treated as the partner 's share in the income of the firm; (c) where the amount apportioned to the partner under clause (a) is a loss, any salary, interest, commission or other remuneration paid to the partner by the firm in respect of the previous year shall be adjusted against that amount, and the result shall be treated as the partner 's share in the income of the firm.
(2) The share of a partner in the income or loss of the firm, as computed under sub section (1) shall, for the purposes of assessment, be apportioned under the various heads of income in the same manner in which the income or loss of the firm has been determined under each head of income.
(3) Any interest paid by a partner on capital borrowed by him for the purposes of investment in the firm shall, in computing his income chargeable under the head "Profits and gains of business or profession" in respect of his share in the income of the firm, be deducted from the share.
(4) If the share of a partner in the income of a registered firm or [an unregistered firm assessed as a registered firm under clause (b) of section 183, as computed under this section, is a loss, such loss may be set off, or carried forward and set off, in accordance with the provisions of this Chapter.
931 Explanation: In this section, "paid" has the same meaning as is assigned to it in clause (2) of section 23. 1.
"Sri Salve contends that these provisions talk only of "loss" and that to take this expression as including "unabsorbed depreciation" as well will obliterate the distinction in the treatment meted out to these as separate items by section 32(2) and section 72(2) and (3).
We think this argument is misconceived.
An unabsorbed depreciation is indeed a part of the "loss".
This is so because, in the first place, "depreciation" is a normal outgoing though in a sense notional, which has to be debited in the computation of the profits of a business on commercial principles (quite apart from statute) and it is difficult to see why, when such deduction yields a negative figure of profits, it cannot be a "loss" as generally understood.
Jaipuria definitely says so as pointed out earlier.
Again, as pointed out earlier, if it is treated as a genus totally different from a "loss", there is"no statutory provision that will permit its adjustment against other business income implicit in section 32( '2) itself and against all other income of the assessee as held by the above decisions.
We therefore do not see why "loss" and "unabsorbed depreciation should be treated as antithetical to, or mutually exclusive of, each other.
Nor are we persuaded that any mix up or anomaly will result as, suggested by counsel if we treat the expressions as synonymous except to the extent specifically treated differently by the statute.
In our view, there is nothing anomalous or absurd in the statute providing for a dissection of the amount of loss for purposes of carry forward and providing for a special or different treatment to unabsorbed depreciation in this regard although it is a component element of the genus described as "loss".
To illustrate, suppose an assessee,has a "profit" of Rs.5,000 in one business before deduction of depreciation of, say, Rs. 10,000 and a loss of Rs. 15,000 in another business, it will be quite correct to say that he has a business loss of Rs.20,000 in that assessment year.
But for purposes of carry forward this has to be considered under to headings: (a) an unabsorbed depreciation of Rs.5,000 and (b) a business loss of Rs. 15,000.
The amount of Rs.20,000 will be carried forward to the subsequent year but the carry forward of Rs.5,000 will be according to the provisions of section 32(2) and the carry forward under section 72 will have, perforce, to be restricted to the other amount of Rs, 15,000.
The language of section 72(2) itself contains an indication that, where unabsorbed depreciation is a component of the figure of loss carried forward, the amount of loss proper should be set off first and the unabsorbed depreciation later.
But for the special treatment ac 932 corded by section 32(2) and section 72 for purposes of carry forward, there is no difference between an item of "unabsorbed depreciation" and an item of "loss".
We are, therefore, of opinion that the unabsorbed depreciation will be allocated among the partners and, like any other loss, will be available to the partner for set off against his business income or other income in the same assessment year.
In fact section 32(2), in so far as it talks of depreciation being given effect to in the partners ' assessments recognises that such unabsorbed depreciation should be allocated among the partners.
So the first of the three alternatives referred to by us earlier is, in our opinion, out.
We now come to the crucial question as to what is to be done when the amount of unabsorbed depreciation does not get absorbed by the other income of the firm and, further, the aliquot shares of the partners therein do not also get absorbed in the partners ' assessments against their other income.
There can be two answers to this: (1) that the partners in whose hands the unabsorbed depreciation has been allocated should carry forward the depreciation to succeeding years; or (2) that the amount of depreciation so remaining unabsorbed should be carried forward by the firm for set off in future assessments.
We have given our most careful consideration to this matter, particularly in view of the controversy of judicial decisions prevailing thereon, and we have come to the conclusion that the second of these alternatives is what is truly envisaged by the statute.
The most formidable obstacle put forward to this course is that, once the unabsorbed depreciation gets divided and allocated to the partners, there is no statutory provision for recalling, to the firm 's "file", the amount remaining unabsorbed.
We think this, criticism really proceeds on an unduly narrow construction placed on the provisions of section 32(2).
In our opinion, section 32(2) itself contains an inbuilt mechanism for doing this.
It is plain, on the language of this sub section, that the benefit of the carry forward is to be given to the assessee.
Where the assessee is other than a registered firm or an unregistered firm assessed as a registered firm, this is indeed very plain.
In the case of this category of assessee, the difficulty arises because of the words in parenthesis.
But a moment 's thought will make it clear that the word "or" in the sub section is really used as a conjunctive.
It cannot be an alternative, for there can be no doubt that even in the case of such an assessee the 933 unabsorbed depreciation, for reasons already set out, has to be adjusted against its other income.
The assessment of the firm cannot be complete without such a set off.
Thus, where a firm assessed as a registered firm, has only unabsorbed depreciation of say, Rs.8,000, in the business carried on by it but a property income of Rs.12,000 its total income for the year has to be Rs.4,000; it cannot be assessed on an income of Rs. 12,000 with the depreciation of Rs.8,000 apportioned to its partners.
We have already pointed out that the partner 's share in the unabsorbed depreciation is part of his share in the loss of the firm and, by virtue of section 67(3), will be treated as business loss which is capable of adjustment against his business and other income.
This is the position envisaged by section 32(2) when it talks of effect being given to the unabsorbed depreciation in the assessment of the partners.
This can refer only to cases where the depreciation cannot be given effect to in the firm 's assessment.
It is, therefore, clear that section 32(2) contemplates the situation where the unabsorbed depreciation in the hands of the firm is too large to get absorbed, first, in the hands of the firm and then, after apportionment, in the hands of the partners.
What remains thereafter has obviously to be carried forward by the firm which is the assessee referred to in the sub section.
Perhaps the meaning of the provision will become clearer if its relevant words are rearranged as follows: "Where full effect cannot be given to any (depreciation) in any previous year in the assessment of the assessee (whatever category it belongs to) and, if the assessee is a registered firm or an unregistered firm assessed as a registered firm, in the assessment of its partners .
. . the allowance shall be added . . ".
As in the case of all other assesses, the carry forward will be available to the registered firm which is the assessee that is referred to in the sub section.
This construction is also strengthened by the last part of the sub section.
When it talks of the depreciation allowance carried forward being added to the allowance for depreciation for the following previous year it obviously refers to the depreciation allowance due to the assessee (that is, the firm) in the subsequent previous year.
In the normal run of cases, it will thus either get added to the subsequent year 's depreciation in respect of the same assets and get set off against the income from the same business or some other business of the same assessee or, failing that, against other income of such assessee.
What 934 the sub section clearly provides for is that the aggregate of the depreciation available to an assessee over the years will be taken into consideration for set off against its income over a period of years.
No doubt, the latter portion of section 32(2) does not envisage that the business carried on by the assessee in the subsequent years should be the same or that the assets to the depreciation in respect of which the unabsorbed depreciation is to be added should be the same or, indeed, that any depreciation at all should be allowable to the assessee in the subsequent year.
It is no doubt true that the words of the sub section are so widely couched that they can, with a certain amount of difficulty, be rendered capable of application to the situation of each partner carrying forward his share of the unabsorbed depreciation for set off, even where he has no business or business income, against his other income.
But we think that it is too strained a construction of the sub section.
When, as pointed out by Sri Salve, there is nothing in the sub section or the Act specifically providing even for an apportionment of the depreciation among the partners, it is too contrived a construction to read into the sub section several words intended to provide for a number of partners, each carrying forward his share of the unabsorbed depreciation to successive assessment years.
It seems natural and reasonable to construe the section as envisaging the following steps where the assessee is a registered firm: (i) Excessive depreciation should be adjusted in the assessment of the assessee against other business income and against other heads of income; (ii) Depreciation, which remains unabsorbed under (i), will be apportioned to the partners and the share of each will be adjusted against the business and other income of each of the partners pro tanto; (iii) If full effect cannot be given to the depreciation allowance of the assessee by the above processes and some depreciation remains unadjusted, the assessee firm will carry it forward to the succeeding assessment year.
The objection to this course is based on a mental imagery of the firm and its partners as altogether different assesses and of the impermissibility of "bringing back" to the firm 's "file" what has gone away to the files of the partners.
We think this approach of viewing the two assessments in water tight compartments is not correct.
The Act itself contains several provisions [e.g. Ss. 67(2) & (3)] which indicate 935 that this is not so.
The observations of this Court in Sankappa vs I. T. O., at pp.
766 7 also bring out the regions of inter dependence of these two assessments.
In any event, any such theoretical dichotomy cannot prevail over the provisions of section 32(2).
There is also one further reason why this view should find acceptance.
As we have pointed out earlier, unabsorbed depreciation is only a species of business loss.
But for purposes of carry forward the statute has drawn a distinction between them.
In doing so, it specifically out lines the procedure for carry forward and set off of losses in the case of a registered firm but is silent in regard to unabsorbed depreciation.
There is no statutory prohibition against the carry forward of unabsorbed depreciation by the registered firm as there is against carry forward of loss.
The need felt to enact a specific prohibition in respect of losses and the absence of a like provision in respect of depreciation are significant pointers in support of the above construction.
An argument has been put forward by Dr. Gaurishankar on the basis of the amendment to the proviso to section 10(2)(vib) in 1953 to submit that it was intended to negative the claim of carry forward by the firm which was earlier being accepted on the strength of the earlier language resulting in a double advantage.
Attention has been drawn to the objects and reasons of the amendment, set out thus at p. 57 in (1952) 21 I.T.R. (Statutes): "The (amendment) is intended to make it clear that where unabsorbed depreciation has been effectively allowed in the assessment of a partner of a registered firm, it would not be carried forward in the case of the firm." (emphasis added) It is true that the clause, before its amendment, permitted all assesses and this included registered firms as well to carry forward their unabsorbed depreciation and that though the registered firm paid no tax, it could, on the language claim a carry forward of the depreciation which had been apportioned among the partners.
This resulted in such carry forward being claimed even where the whole or a part of the unabsorbed depreciation of the firm had been set off in the assessment of individual partners.
The amendment, vide the words emphasised in the extract above, only seeks to make it clear that such carry forward will not be permitted to the extent it has been given effect to in the partners ' assessments; by necessary implication the carry forward, to the extent it has not been effectively allowed to the partner, continues 936 to be available.
The amendment of 1953, therefore, not only does not help the case of the Revenue, it actually lands support to the construction we are inclined to place on the proviso.
It is possible that our conclusion may give scope for two grounds of criticism: (i) that the partners derive a double advantage of setting off the unabsorbed depreciation to reduce the taxable income of the firm as well as the partners; and (ii) that this will distort the relief available to various partners depending upon the variations in income as between the several partners as well as over a period of years.
We do not think that the first criticism is a valid one.
For it is now settled law, that though a firm and its partners are distinct assesses for purposes of income tax, the Act still recognises the principle that a firm is only a compendious name for its partners and that the business carried on by the firm is also a business carried on by each of the partners too vide section 67(2) and (4) and the loss of a registered firm is treated as the losses of its partners too.
The procedure envisaged by it will only enable a firm and the partners to set off the aggregate of the unabsorbed depreciation of the firm against the aggregate income of the firm and partners.
To the extent effect is given to such unabsorbed depreciation to one or more of the partners the firm cannot again get the benefit and vice versa.
There is, therefore, really no double advantage.
There is some point in the second criticism.
But, then, a certain amount of imbalance among the partners is inherent in the application of any one of the three possible alternatives.
If, as suggested by Sri Salve, only the firm and not the partners can carry forward the unabsorbed depreciation, there will be an injustice to the partners who may have other income against which it could be set off.
On the other hand, if the unabsorbed depreciation is allocated to the partners and they alone can carry forward and set it off, it will have this consequence that the partners who have other high income will derive the benefit of set off qua their shares but no benefit can be got by partners whose total income is not enough to offset their share of the depreciation and the unabsorbed depreciation will not get absorbed even though the firm may have sufficiently large income in subsequent years.
In other words, whichever procedure is adopted, the relief available to the partners will not be uniform.
This is a consequence flowing from the variations in the income sources of various partners and cannot be avoided under any scheme of carry forward and set off.
We, therefore, do not think that this consideration should weigh against our reaching the conclusion which naturally flows from the language of the sub section.
937 For the reasons discussed above, we are of the opinion that the assessee appellant firm is entitled to a carry forward of the unabsorbed depreciation computed for the assessment year 1967 68 and have it set off in its assessment for the assessment year 1968 69.
The unabsorbed loss computed for the assessment year 1967 68, however, cannot be carried forward by the firm to be set off in its assessment for the assessment year 1968 69.
So far as the assessment year 1967 68 is concerned, the High Court was right in holding that unabsorbed business loss of one year cannot be carried forward and set off by the firm in a subsequent year; but, if there was any unabsorbed depreciation computed for the assessment year 1966 67, it could have been allowed to be brought forward and set off in the assessment for the assessment year 1967 68 in the manner discussed in the judgment.
In the result, appeals for both the assessment years are allowed to the extent indicated and the assessments directed to be modified appropriately.
We, however, make no order regarding costs.
V. P. R. Appeals allowed.
| For the assessment year of 1968 69, the assessee appellant, a registered firm, returned a total income of Rs.3,94,483 and a provisional assessment was made.
Subsequently, the Income Tax Officer found that for the said assessment year, the assessee had made an income of Rs. 11,82,056 and deducting therefrom three figures viz., (i) unabsorbed depreciation: Rs.1,59,181; (ii) unabsorbed development rebate: Rs.2,79,150; and (iii) unabsorbed business loss: Rs.3,49,242, aggregating to Rs.7,87,573 and arrived at the net income of Rs.3,94,483, which had been returned and accepted.
The three figures were the figures carried over from the previous year for the assessment year 1967 68.
The Income Tax Officer allowed the unabsorbed development 910 rebate pertaining to the assessment year of 1967 68 to be carried for ward and set off in computing the total income for the assessment year of 1968 69, but he did not allow the amounts of unabsorbed depreciation and unabsorbed business loss.
He, therefore, added back the sum of Rs.5,08,423 (the aggregate of the amounts of unabsorbed depreciation and unabsorbed business loss) to the returned income for determining the total income for the assessment year of 1968 69.
The action of the Income Tax Officer was confirmed by the Appellate Assistant Commissioners (A.A.C.).
However, on further appeal, the Income tax Appellate Tribunal (A.T.) upheld the income tax Officer 's stand that the firm could not be allowed to carry forward and set off the business loss carried from the earlier year but, so far as the unabsorbed depreciation was concerned, it upheld the assessee 's contention.
On these two issues a reference to the High Court was made and the High Court answered them against the assessee.
For the assessment year 1967 68, the assessee filed a return on 30.6.67 showing a loss of Rs.7,87,515 but filed a revised return on 22.3.1972 showing a loss of Rs.5,46,351.
On 14.3.73 the I.T.O. completed the assessment determining a loss of Rs.4,85,250.
The assessee 's request that this loss should be carried forward to the subsequent assessment year was rejected by the I.T.O. This was confirmed by the A.A.C. On further appeal, the A.T. confirmed the order of the A.A.C., following the High Court 's decision for the assessment year 1968 69 which had by then been announced.
The High Court answered the (question "Whether, on the facts and circumstances of the case, the Tribunal was justified in rejecting the claim for carry forward of business loss in the hands of the firm in view of the decision reported in 101I.T.R. 658? in the affirmative.
Hence the assessee 's the appeals one appeal for the assessment year of 1968 69 and the other for the assessment year of 1967 68 under certificates of fitness granted by the High Court.
On behalf of the assessee it was contended that the firm as well as the partners had been returning losses all along with the result that no part of the unabsorbed depreciation of the firm had been set off in the partner 's hands; that when there was an unabsorbed depreciation computed in the assessment of a registered firm for any year, for the 911 purpose of carry forward, it should be retained and carried forward by the firm only.
On the other hand, it was submitted for the Revenue that once the assessment was completed and the total income or loss of the firm ascertained, it had to be apportioned amongst the partners.
Thereafter there remained nothing in the assessment of the firm to be carried forward.
Only each of the partners can carry forward his share of the unabsorbed loss, which also included the unabsorbed depreciation, as there was no difference between unabsorbed loss and unabsorbed depreciation; and that the amendment to the proviso to section 10(2)(vib) in 1953 of depreciation was intended to negative the claim of carry forward, by the firm which was earlier being accepted on the strength of the earlier language resulting in a double advantage.
Allowing the appeals, this Court, HELD: 1.
"Depreciation" is one of the notional allowances which expression means a deduction in respect an outgoing which is not an item of actual expenditure or is one which cannot be treated as an outgoing of a revenue nature permitted by the statute to be deducted in the computation of the profits and gains of a business.
[921H 922B] 2.
Initially, the depreciation allowances has to be deducted from the profits and gains of the business to which the assets earning the depreciation relate but, if it remains unabsorbed by such profits, the allowance has to be set off against the other business income of the assessee and, where that is also insufficient, against the other taxable income of the assessee.
The carry forward of any depreciation as unabsorbed cannot arise until the stage of final assessment is reached and the total income of the assessee otherwise computed is insufficient to absorb the year 's depreciation allowance.
[928E G] 3.
An unabsorbed depreciation is a part of the "loss".
This is so because, in the first place, "depreciation" is a normal outgoing, though in a sense notional, which has to be debited in the computation of the profits of a business on commercial principles (quite apart from statute) and it is difficult to see why, when such deduction yields a negative figure of profits, it cannot be a "loss" as generally understood.
Where the depreciation allowance attributable to a particular business exceeds the profits otherwise computed for that business, the deduction of the depreciation allowance from such profits can only result in a "loss" from that business and a business loss has to be set off against income 912 from any other business, by way of intra head adjustment, under section 70 and the income under any other head, by way of intra head adjustment, under section 71.
This is implicit in the provision that the excessive depreciation of one business can be "given effect toll against the profits and gains of another business in the same year and has been recognised by decisions holding that it can be set off against income from other heads.
If unabsorbed depreciation is treated as a genus totally different from a "loss", there is no statutory provision that will permit its adjustment against other business income implicit in section 32(2) itself and against all other income of the assessee.
"Loss" and "unabsorbed depreciation" should not be treated as antithetical to, or mutually exclusive of, each other.
However, there is nothing anomalous or absurd in the statute providing for a dissection of the amount of loss for purposes of carry forward and providing for a special or different treatment to unabsorbed depreciation in this regard although it is a component element of the genus described as "loss" [931B C, 926C E, 93IC F] 4.
Unabsorbed losses and unabsorbed depreciation are to be carried forward to future years to be set off against future income.
There is, however, one important difference.
Unabsorbed losses can be carried forward only for a period of eight years whereas unabsorbed depreciation can be carried forward indefinitely.
[923G H] 5.
There is also difference between the two in the matter of their carry forward in the case of assessment of a registered firm.
In this case, the unabsorbed loss cannot be carried forward by the firm at all.
The statute clearly so provides.
So far as unabsorbed depreciation is concerned, three alternatives are possible to be urged: (i) It should be retained (without apportionment) and carried forward by the firm only.
(ii) It should be apportioned among the partners.
Thereafter, it can be dealt with even for carry forward purpose only in the assessment of each of the partners in respect of his aliquot share thereof.
(iii) It should be apportioned among the partners each of whom may set off his share thereof against his other income.
If, after this, any amount remains unabsorbed, it will revert to the firm.
The firm will carry it forward, set it off against its other income in the succeeding year.
This operation will be repeated every year indefinitely until the unabsorbed depreciation gets absorbed.
[924B E] 6.
The third alternative is the correct one: (a) The unabsorbed depreciation should be allocated among the partners and, like any other loss, will be available to the partners to the extent of his share therein for set off against his business income or other income in the same 913 assessment year.
In fact section 32(2), in so far as it talks of depreciation being given effect to in the partners ' assessments recognises that such unabsorbed depreciation should be allocated among the partners.
The question is what is to be done thereafter.
[932A B] (b) When there is nothing in the sub section or the Act specifically providing even for an apportionment of the depreciation among the partners, it is too contrived a construction to read into the sub section several words intended to provide for a number of partners, each carrying forward his share of the unabsorbed depreciation to successive assessment years.
It seems natural and reasonable to construe the section as envisaging the following steps where the assessee is a registered firm: (i) Excessive depreciation should be adjusted in the assessment of the assessee against other business income and against other heads of income; (ii) Depreciation, which remains unabsorbed under (i), will be apportioned to the partners and the share of each will be adjusted against the business and other income of each of the partners pro tanto; (iii) If full effect cannot be given to the depreciation allowance of the assessee by the above processes and some depreciation remains unadjusted, the assessee firm will carry it forward to the succeeding assessment year.
[934C G] (c) The sub section, before its 1953 amendment, permitted all assesses and this included registered firms as well to carry forward their unabsorbed depreciation so that though the registered firm paid no tax, it could, on the language claim a carry forward of the depreciation which had been apportioned among the partners.
This resulted in such carry forward being claimed even where the whole or a part of the unabsorbed depreciation of the firm had been set off in the assessment of individual partners.
The amendment only seeks to make it clear that such carry forward will not be permitted to the extent it has been given effect to in the partners ' assessments; by necessary implication, the carry forward, to the extent it has not been effectively allowed to the partner, continues to be available.
The amendment of 1953, therefore, does not help the case of the Revenue.
[935F 936A] (d) The objection to the above course is also based on a mental imagery of the firm and its partners as altogether different assesses 914 and of the impermissibility of "bringing back" to the firm 's "file" what has gone away to the* files of the partners.
This approach of viewing the two assessments in water tight compartments for all purposes is not correct.
In any event, any such theoretical dichotomy cannot prevail over the provisions of section 32(2).
[934G 935A] (e) The construction suggested does not result in any double advantage to the partners.
[936D] (f) It is true that the construction may result in a certain amount of imbalance in the quantum of relief available as among different partners.
But similar imbalance is inherent in the application of any of the three possible alternatives.
[936E F] 7.
The assessee appellant firm is entitled to carry forward the unabsorbed depreciation computed for the assessment year 1967 68 and have it set off in its assessment for the assessment year 1968 69.
The unabsorbed loss for the assessment year, 1967 68, however, cannot be carried forward by the firm to be set off in its assessment for the assessment year 1968 69.
[937A B] K. T. Wire Products vs Union of India, ; Garden Silk Weaving Factory, ; Garden Silk Weaving Factory, C. I. T. vs Ram Swarup Gupta, ; Raj Narayan Aggarwala vs C.I.T., [1979] 75 ITR I (Del.); Shankaranarayana Construction Co. vs C. I. T., ; Ballarpur Collieries Co. vs C.I.T., ; C. 1.
T. vs Nagpur Gas & Domestic Appliances, ; CIT vs Nagapattinam Import and Export Corp., ; CIT vs Madras Wire Products, ; CIT vs Madras Wire Products, ; CIT vs J. Patel & Co., ; CIT vs Shrinivas Sugar Co., ; CIT vs Singh Transport Co., ; Pearl Wollen Mills vs CIT, ; CIT vs Mahavir Steel Rolling Mills, & H) and CIT vs R. J. Trivedi & Sons, , referred to.
IT vs Jaipuria China Clay Mines (P.) Ltd., and Rajapalayam Mills Ltd. vs C. I. T., , followed.
|
Civil Appeal No.1396 of 1991.
From the Judgement and Order dated 8.3.1990 of the Orissa High Court in Case No. 2867 of 1987.
Mrs. Uma Metha Jain and M.A. Firoz for the Appellant.
Ashok Kumar Panda for the Respondents.
The Judgement of the Court was delivered by KULDIP SINGH, J. Special leave granted.
Rabinarayan Mohapatra the appellant was appointed as Hindi Teacher in Bani gochha, M.E. School (Orrisa) for a period of 89 days or till a candidate selected by the State Selection Board was made available.
He joined the school on July 12, 1982.
The appointment was made by the District Inspector (Schools) on the recommendation of the managing committee of the school.
He continued to serve the school with repeated spells of 89 day appointments and one day break in between the spells, till May 25, 1986.
He was not paid the salary for the period of summer vacations during all these years.
Although the period of summer vacation during all these years.
Although the appellant continues to serve the school to date under orders of the managing committee yet his appointment after 1986 has not been approved by the educational authorities.
The managing committee even passed a resolution on July 6,1987, requesting the educational authorities of the State of Orissa to approve the continuous appointment of the appellant as Hindi Teacher but no action was taken by the said authorities.
The appellant filed a writ petition under Article 226 of the Constitution of India before the Orissa High Court claiming regularisation as Hindi Teacher with effect from July 12,1982.
The only argument raised before the High Court was that the appellant was entitled to be regularised in terms of the provisions of Section 3 of the Orissa Aided Educational Institutions (Appointment of Teachers Validation) Act, 1989 (hereinafter called 'the Validation Act ').
The relevant part of Section 3 of the Act is reproduced hereinafter : 3.
Validation of certain appointments Not withstanding 993 anything contained in the Education Act or in the Rules or Regulations framed thereunder. (a) graduate teacher, intermediate and matriculate teachers, physical education teachers and classical teachers and Hindi teachers of aided schools appointed by the managing authorities of such schools on ad hoc basic on or after the 1st December , 1976 but not later than the 31st December, 1984; (b) . . . (c) . . . who have continuous service as such teachers or lecturers for a period of at least one year without any break or with a break or breaks in one or more aided schools or Colleges and who are continuing as such teachers or whose services have been terminated after the 31st December ,1984 save for misconduct or. . . shall for all intents and purposes, be deemed to have been validly and regularly appointed, and no such appointment shall be challenged in any court of law merely on the ground that the appointment was made otherwise than in accordance with procedure laid down in the Education Act and the Rules and Regulations framed thereunder;. . . . .
The High Court rejected the prayer for regularisation, and held that the appellant was not entitled to the benefit of the Validation Act, on the following reasoning; "Admittedly, the petitioner was appointed on 12.7.1982 and continued till 18.7.1986 with breaks in between and the petitioner 's appointment was conditioned by the stipulation that he would continue until replaced by a candidate from the Select List.
His case, therefore, will not come within the preview of the Validation Act and, therefore, the question of issuing any direction to regularise his service in a substantive vacancy because of the Validation Act does not arise.
" We have heard Mrs. Uma Mehta Jain, learned counsel for the applellant.
This Court in Rattan Lal vs State of Haryana.
A.I.R. 1987 S.C. 478 speaking through Venkataramaiah, J. (as the learned Judge then was ) observed as under: 994 "The State Government of Haryana has failed to discharge that duty in these cases.
It has been appointing teachers for quite some time on an ad hoc basis for short periods as stated above without any justifiable reason.
In some cases the appointments are made for a period of six months only and they are renewed after break of a few days.
The number of teachers in the State of Haryana who are thus appointed on such ad hoc basis is very large indeed.
If the teachers had been appointed regularly, they would have been entitled to the benefits of summer vacation along with the salary and allowances payable in respect of that period and to all other privileges such as casual leave, medical leave, maternity leave etc.
available to all the Government servants.
These benefits are denied to these ad hoc teachers unreasonably on account of this pernicious system of appointment adopted by the State Government.
These ad hoc teachers are unnecessarily subjected to an arbitrary `hiring and firing ' policy.
These teachers who constitute the bulk of the educated unemployed are compelled to accept these jobs on an ad hoc basis with miserable conditions of service.
The Government appears to be exploiting this situation.
This is not a sound personnel policy.
It is bound to have serious repurcussions on the education institutions and the children studying there.
The policy of `ad hocism ' followed by the State Government for a long period has led to the breach of Article 14 of the Constitution.
Such a situation cannot be permitted to last any longer.
It is needless to say that the State Government is expected to function as a model employer".
"We strongly deprecate the policy of the State Government under which `ad hoc ' teachers are denied the salary and allowances or the period of the summer vacation by resorting to the fictional breaks of the type referred to above.
These `ad hoc ' teachers shall be paid salary and allowances for the period of summer vacation as long as they hold the office under this order.
Those who are entitled to maternity or medical leave shall also be granted such leave in accordance with the rules.
" The Validation Act has been enacted by the Orissa legislature with the obvious object of granting relief to those members of teaching community who are being exploited for years together by keeping 995 them in short spell appointments like 89 day appointments as here with one day break and in the process denying them their rightful dues and other service benefits.
Inspite of repeated depreciation by this Court the practice continues to be followed by various State Governments in the country.
Under the Constitution the State is committed to secure right to education for all citizens.
Bulk of our population is yet illiterate.
Till the time illiteracy is effaced from the country the resolution enshrined in the Preamble cannot be fulfilled.
Education is the dire need of the country.
There are neither enough schools nor teachers to teach.
Insecurity is writ large on the face of the teaching community because of nebulous and unsatisfactory conditions of service.
In order to make the existing educational set up effective and efficient it is necessary to do away with ad hocism in teaching appointments.
An appointment on 89 day basis with one day break which deprives a teacher of his salary for the period of summer vacation and other service benefits, is wholly arbitrary and suffers from the vice of discrimination.
The Validation Act covers the field upto December 31, 1984.
The State of Orissa will do well to consider the cases of all those who have completed one year or more as ad hoc teachers after December, 31, 1984 and come out with a scheme or any other appropriate measure to regularise their services.
Mrs. Jain contended that on the plain reading of Section 3 of the Validation Act the appellant is entitled to be regularised as Hindi Teacher with effect from July 12,1982.
To come within the purview of the Validation Act the following conditions are to be satisfied: 1.
The appointment by the managing authority of the school on ad hoc basis must be on or after the 1st December, 1976 but not later than 31st December, 1984; 2.
The service as such teacher is continuous for a period of atleast one year without any break or with a break or breaks in one or more aided schools; 3.
Is continuing as such teacher or his services were terminated after the 31st December, 1984 save for misconduct.
The apellant was appointed on July 12,1982 and has been working with the approval of the authorities for almost 4 years with short breaks.
The managing committee is still utilising his services though there is no approval by the educational authorities for the period subsequent to 1986.
It is no body 's case that his services were 996 ever terminated on grounds of inefficiency or misconduct.
The case of the appellant is, thus, fully covered by Section 3 of the Validation Act.
We are of the view that the High Court erred in denying the benefit of the Validation Act to the appellant on the ground that his initial appointment for 89 days was conditioned by the stipulation that he would continue until replaced by a candidate from the select list.
The High Court read into the Act what was not there.
In response to the notice issued in the Special Leave Petition the managing committee through its Secretary cum Head Master has stated that the appellant is still continuing to serve as Hindi teacher in the school under the orders of the managing committee.
We therefore, set aside the judgment of the High Court and direct the respondents to treat the appellant as the regularly appointed Hindi teacher in the school with effect from July 12, 1982.
The appeallant shall be entitled to his salary, including the salary for summer vacations and other breaks which must be taken as non est, from the date of his regular appointment i.e. July 12, 1982.
The respondents are directed to pay the arrears of salary and other emoluments due to the appellant as a result of his regularisation within a period of 3 months from today.
| The appellant was appointed as Hindi Teacher in the M.E. School for a period of 89 days from July 12,1982 by the District Inspector (Schools) on the recommendation of the Managing Committee of the School.
He continued to serve the school with repeated spells of 89 day appointments and one day break in between the spells, till may 25, 1986.
He was not paid the salary for the period of summer vacations during all these years.
Although the appellant continues to serve the school to date under orders of the managing committee, but his appointment after 1986 was not approved by the educational authorities, in spite of the resolution of the managing committee dated July 6,1987.
The appellant filed a writ petition before the High Court claiming regularisation with effect from July 12,1982, contending that he was entitled to be regularsed in terms of the provisions of Section 3 of the Orissa Aided Educational Institutions (Appointment of Teachers Validation) Act, 1989.
The High Court dismissed the petition holding that the appellant was not entitled to the benefit of the Validation ACt, against which present appeal was filed by the appellant contending that his services were to be regularised with effect from July 12, 1982 under the provisions contained in Section 3 of the Validation Act.
Allowing the appeal, this Court, 991 HELD:1.1.
The Validation Act has been enacted by the Orissa Legislature with the obvious object of granting relief to those members of the teaching community who are being exploited for years together by keeping them in short spell appointments like 89 day appointments with one day break and in the process denying them their rightful dues and other service benefits.[994G 995A] 1.2 An appointment on 89 day basis with one day break which deprives a teacher of his salary for the period of summer vacation and other service benefits, is wholly arbitrary and suffers from the vice of discrimination.
The Validation Act covers the field upto December 31, 1984.
The State of Orissa will do well to consider the cases of all those who have completed one year or more as ad hoc teachers after December 31,1984 and come out with a scheme or any other appropriate measure to regularise their services.[995C D] 2.
To come with in the preview of the Validation Act the following conditions are to be satisfied: 1.
The appointment by the managing authority of the school on ad hoc basis must be on or after the 1st December 1976 but not later than 31st December 1984.
The services as such teacher is continuous for a period of at least one year without any break or with a break or breaks in one or more aided schools; 3.
Is continuing as such teacher or his services were terminated after the 31st December ,1984 save for misconduct.[995E G] 2.2.
The appellant was appointed on July 12,1982 and has been working with the approval of the authorities for almost 4 years with short breaks.
The managing committee is still utilising his services though there is no approval by the educational authorities for the period subsequent to 1986.
The case of the appellant is, thus, fully covered by Section 3 of the Validation Act.[995G 996A] 3.
The High Court erred in denying the benefit of the Validation Act to the appellant on the ground that his initial appointment for 89 days was conditioned by the stipulation that he would continue until replaced by a candidate from the select list.
The High Court read into the Act what was not there,[996A B] 992 Rattan Lal vs State of Haryana, A.I.R. 1987 S.C. 478, followed.
|
Civil Appeal No. 1401 of 1991.
From the Judgment and Order dated 26.10.1987 of the Karnataka High Court in W.A. No. 607 of 1982.
S.R. Bhat and Prabir Chaudhury (NP) for the Appellants.
A.B. Rohtagi, M. Veerappa, R.L. Bhardwaj and Vishnu Mathur for the Respondents.
The Judgment of the Court was delivered by FATHIMA BEEVI, J.
The Karnataka Slum Areas (Improvement and Clearance) Act, 1973, which received the assent of the President on 1st October, 1974, is an Act to provide for improvement and clearance of slums in the State of Karnataka.
Section 3 of the Act empowers the Government to declare certain areas as slum areas.
If the Government is satisfied that any area which is likely to be a source of danger to health, safety or convenience of the public of that area or of its neighbourhood by reason of the area being low lying, unsanitary, squalid, over crowded or otherwise, the Government may by notification declare the areas as 'slum area '.
Under Section 11, when the Government is satisfied on a report from the competent authority that the most satisfactory method of dealing with the conditions in the area is the clearance of such area and demolition of the buildings in the area, it may, by notification, declare the area to be the 'slum clearance area '.
The Notification No. HMA 59 MCS 76 dated 17.1.1977 was issued by the Karnataka Government declaring an extent of one acre in Timber Yard slum by the side of Main Road, Cottonpet, Bangalore, as 'slum area '.
After considering the objections, another notification dated 30.12.1977 was issued under Section I(1) of the Act declaring 978 the entire land as 'slum clearance area '.
However, on January 20, 1981, the Government issued notification under Section 3(1) cancelling the earlier notification dated 30.12.1977 and re declaring an extent of 14 1/2 guntas only as 'slum area '.
The notification dated 20.1.1981 had been challenged by the appellants mainly on the grounds that it is in violation of the principle of natural justice and Article 14 of the Constitution has been violated.
It was contended that slum dwellers who are affected by the Government 's action have not been given an opportunity of being heard and they have been denied equality by denying basic human needs since a major part of the slum area has been excluded from the operation of the scheme.
The single Judge of the High Court took the view that the appellants had no locus standi to challenge the impugned notification and even on merits there was no case.
The Division Bench of the High Court agreed on the question of locus standi and without going into the merits confirmed the judgment.
The appellants have approached this Court under Article 136 of the Constitution of India.
We have granted special leave to appeal.
The learned counsel for the appellants relying on the decisions of this Court in section P. Gupta vs Union of India, [1982] 2 SCR 365 and Olga Tellis vs Bombay Municipal Corporation, [ 1985] Suppl.
2 SCR 51 vehemently contended that the High Court has erred in holding that the petitioners have no locus standi.
He also submitted that in view of the purpose of the legislation and the scheme contemplated thereunder once action has been taken declaring a larger area as 'slum clearance area ', any change thereafter which would directly affect the slum dwellers could not be taken without giving the affected persons an opportunity of being heard and, there is, therefore, the clear violation of the principle of natural justice.
It was also urged that there is no specific provision under the statute enabling the Government to rescind the notification and assuming that it exists, there was no proper exercise of the power.
Mr. Rohtagi, counsel appearing on behalf of the 3rd respondent, submitted that the first notification dated 17.1.1977 was challenged by the owners of the land in a writ petition as they were not heard as required and the fresh notification have been issued on the assurance given before the Court that they would be heard.
It was pointed out that there was no need to hear the owners or occupiers at the stage of issuing the notification under Section 3(1) of the Act and Section 11 979 does not confer any Statutory right to the occupiers.
Relying on Section 21 of the General Clauses Act, it was maintained that the power to withdraw or rescind the notification was inherent and the authority who is empowered to issue the notification is entilitled to rescind the same.
It was also pointed out that there had been dispute over the title of the land in question that civil litigation was in progress and that the earlier declaration was made without proper basis.
Action has been taken by the owners against the tenants for eviction and orders have been obtained in their favour and the petitioners have no case and are not entitled to any relief.
The counsel for the State adopted these arguments.
The first question that falls for consideration is whether the appellants can challenge the action of the Government.
This question need not detain us when the law is now settled that in such situation even a public interest litigation would lie.
The first appellant Association represents the interests of the slum dwellers and the second appellant himself is one of the residents in the area.
The action of the Government on the averments made affects a class of persons and if that group of persons is represented by the Association, they have a right to be heard in the matter.
Where a member of the public acting bona fide moves the Court for enforcement of a fundamental right on behalf of a person or class of persons who on account of poverty or disability or socially or economically disadvantaged position cannot approach the Court for relief, such member of the public may move the Court even by just writing a letter as held by this Court in Bandhua Mukti Morcha vs Union of India & Ors., ; We are, therefore, of the view that the High Court was wrong in concluding that appellants were incompetent to invoke the jurisdiction of the Court.
We shall now consider the argument that the State Government had no power to rescind the notification issued under Sections 3 and 11 in the absence of any specific provision in the Act.
Section 21 of the General Clauses Act is in pari materia with Section 10 of the Karnataka General Clauses Act.
This Section reads: "21.
POWER TO ISSUE TO INCLUDE, POWER TO ADD TO, AMEND, VARY OR RESCIND NOTIFICATIONS,ORDERS, RULES OR BYE LAWS.
Where, by any Central Act or Regulation, a power to issue notifications, orders, rules, or bye laws is conferred, then that power includes a power, exercisable in the like manner and subject to the like sanction and conditions (if any) to add 980 to, amend, vary or rescind any notifications, orders, rule or bye laws so issued.
" Under Section 21 of the General Clauses Act, the power to issue a notification includes the power to rescind it.
It is always open to the Government to rescind the notification.
We shall refer to the decisions of this Court in State of Kerala vs K. G. Madhavan Pillai, ; ; State of M. P. vs, V. P. Sharma, [ ; and Lt. Governor of H. P. vs Sri Avinash Sharma,[1970] 2 SCC 149.
In these cases arising under the Land Acquisition Act, the issue before the Court was whether the Government could exercise powers only under Section 48 of the Land Acquisition Act to withdraw a notification for acquisition made under Section 4(1) of the Act.
When the Government issued successive notifications under Section 6 covering different portions of the land notified for acquisition under Section 4(1), the validity of the last of the notification was challenged on the ground that a notification under Section 4(1) could be followed only by one notification under Section 6.
In repelling the contention, this Court incidentally observed at page 693 thus: "That the only way in which the notification under Section 4(1) can come to an end is by withdrawal under Section 48(1)" is not correct because "under Section 21 of the General Clauses Act, the power to issue a notification includes the power to rescind it and therefore it is always open to the Government to rescind a notification under Section 4 or under Section 6 and a withdrawal under Section 48(1) is not the only way in which a notification under Section 4 or Section 6 can be brought to an end." In Lt. Governor of H.P. vs Sri Avinash Sharma, (supra) the Court observed at page 151 thus: "Power to cancel a notification for compulsory acquisition is, it is true, not affected by Section 48 of the Act; by a notification under Section 21 of the General Clauses Act, the Government may cancel or rescind the notification issued under Sections 4 and 6 of the Land Acquisition Act.
But the power under Section 21 of the General Clauses Act cannot be exercised after the land statutorily vests in the State Government.
" In Lachmi Narain vs Union of India, ; , this 981 Court observed at page 808 thus: "Section 21, as pointed out by this Court in Gopichand vs Delhi Admn., [1959] Suppl.
2 SCR 87, embodies only a rule of constructions and the nature and extent of its application must be governed by the relevant statute which confers the power to issue the notification.
" In State of Bihar vs D.N. Ganguly & Ors., ; , it was held that it is well settled that the rule of construction embodied in S.21 of the General Clauses Act can apply to the provisions of a statute only where the subject matter, context or effect of such provisions are in no way inconsistent with such application.
In that case, the question was where an industrial dispute has been referred to a tribunal for adjudication by the appropriate government under Section 10(1)(d) of the Industrial Disputes Act, can the said government supersede the said reference pending adjudication before the tribunal constituted for that purpose? The Court held the notification to be invalid and ultra vires pointing our that is would be necessary to examine carefully the scheme of the ACt, its object and all its relevant and material provisions before deciding the application of the rule of construction enunciate by Section 21.
After examining the relevant provisions of the Act, the Court said that once an order in writing is made by the appropriate government under Section 10(1)(d), the proceedings before the tribunal are deemed to have commenced and if the appropriate government has by implication the power to cancel its order passed under Section 10(1), the proceedings before the tribunal would be rendered wholly ineffective by the exercise of such power and Section 21 cannot be invoked.
In Kamla Prasad Khetan vs Union of India, ; , this Court considred the scope of Section 21 of the General Clause Act.
At page 1068, the Court observed thus: "The power to issue an order under any Central Act includes a power to amend the order; but this power is subject to a very important qualification and the qualification is contained in the words `exercisable in the like manner and subject to the like sanction and conditions (if any) '. . . . . .
The true scope and effect of the expression `subject to the like conditions (if any) ' occurring in Section 21 of the General Clauses Act has been explained.
" 982 Relying on these decisions, the learned counsel for the appellants contended that even if source of power could be traced under Section 21, the exercised of that power could only be in the same manner as provided and when a notification under Section 3(1) had been issued declaring certain areas as `slum area ', the power to rescind the notification and limit the extent could be exercised only after hearing the affected parties, for the Government to satisfy itself that what has already been declared does not come within the scope of the proposed scheme.
The object of the statute and the relief that was sought to be conferred are matters to be taken into consideration in such action.
It has been brought to our notice that about 100 persons had been living in the area under conditions which require the implementation of the scheme under the Act for their redressal and once steps have been taken in that direction any variation that could affect the occupants in the areas was required to be made only after giving them an opportunity of being heard.
It is thus maintained that there had been no proper exercise of the power assuming that the power is vested on the Government and there is clear violation of the principle of natural justice.
It is one of the fundamental rules of our constitutional set up that every citizen is protected against exercise of arbitrary authority by the State or its officers.
If there is power to decide and determine to the prejudice of a person, duty to act judicially is implicit in the exercise of such power and the rule of natural justice operates in areas not covered by any law validly made.
What particular rule of natural justice should apply to a given case must depend to an extent on the facts and circumstances of that case, the frame work of the law under which the enquiry is held and the body of persons appointed for the purpose.
It is only where there is nothing in the statue to actually prohibit the giving of an opportunity to be heard, but on the other hand, the nature of the statutory duty imposed itself necessarily implied an obligation to hear before deciding, that the audi alteram partem rule could be imported.
The Mysore Slum Areas (Improvement and Clearnance) ACt, 1958, this Court held in Government of Mysore & Ors.
vs J.V. Bhat etc.
; , thus: There can be no two opinions about the need to hear the affected persons before declaring an area to be a slum area under section 3 or an area as a clearance area under section 9 or before taking action under section 10.
All these difficulties will be removed if the affected persons are given 983 an opportunity to be heard in respect of the action proposed.
" The Preamble to the present Act itself states that the Act is to provide for the improvement and clearance of slums in the State.
Under the existing law, it has not been possible effectively to check the increase and to eliminate congestion and to provide for basic needs such as streets, water supply, and drainage and to clear the slums which are unfit for human habitation.
To obviate this difficulty, it is considered expedient to provide for the removal of unhygenic and insanitary conditions prevailing in the slums for better accommodation and improved living conditions for slum dwellers for the promotion of public health generally.
These are the objectives sought to be achieved by the enactment which has been made in implementation of the Directive Principles of State Policy to improve public health.
It is, therefore, obvious that when a declaration has been made in implementation of the Directive Principles of State Policy to improve public health.
It is, therefore, obvious that when a declaration is made under section 3 and a further declaration is made under section 11, the inhabitants of the areas are affected and any further action in relation to the area which areas are affected and any further action in relation to the area which is declared to the `slum clearance area ' without affording such persons an opportunity of being heard would prejudicially affect their rights.
The right to be heard in the matter has been acquired by the earlier action of the authority in considering the area for the purpose of the scheme.
This is clear from the proviso to sub sec.
(1) of Section 11 of scheme.
This is clear from the proviso to sub sec.
(1) of Section 11 of the Act.
When any alternation is sought to be made in the original scheme, it becomes incumbent upon the authorities to give an opportunity to the persons who had been affected by the earlier order and required to adopt a certain course of action.
In this view of the matter it is to be held that when a notification is made rescinding the earlier notifications without hearing the affected parties, it is clear violation of the principle of natural justice.
Such action is exercise of the implied power to rescind cannot then be said to have been exercised implied power to rescind cannot then be said to have been exercised implied power to rescind cannot then be said to have been exercised subject to be quashed on this ground.
It shall be open to the Government to proceed after affording the slum dwellers an opportunity of being heard on the basis of the earlier notifications that were in force.
In the result, the appeal is allowed and the order of the High Court is set aside.
The impugned notification is quashed subject to the observations made.
We make no order as to costs.
Appeal allowed.
| Under Section 3 of the Karnataka Slum Areas (Improvement and Clearance) Act, 1973 Notification No. HMA 59 MCS 76 dated 17.1.1977 was issued by the State Government declaring an extent of one acre in the city of Bangalore, as 'slum area '.
After considering the objections, another notification dated 30.12.1977 was issued under Section 11(1) of the Act declaring the entire land as 'slum clearance area '.
However, on January 20, 1981, the Government issued notification under Section 3(1) cancelling the earlier notification dated 3.12.1977 and re declaring an extent of 14 1/2 guntas only as 'slum area '.
The appellants, an Association representing the interest of slum dwellers and a resident of the area challenged notification dated 20.1.1981 on the ground that it was in violation of the principle of natural justice and Article 14 of the Constitution inasmuch as the slum dwellers affected by the Government 's action were not given an opportunity of being heard and were denied equality, since a major part of the slum area has been excluded from the operation of the scheme.
A Single Judge of the High Court held that the appellants had no locus standi to challenge the notification and that even on merits there was no case.
The Division Bench agreed on the question of locus standi but did not go into the merits.
975 The appellants filed an appeal by special leave before this Court, contending that the High Court had erred in holding that the petitioners had no locus standi, that in view of the purpose of the legislation and the scheme contemplated thereunder, once action had been taken declaring a larger area as 'slum clearance area ', any change thereafter which directly affected the slum dwellers could not be taken without giving the affected persons an opportunity of being heard and, there was, therefore, clear violation of the principle of natural justice, and that there was no specific provision under the statute enabling the Government to rescind the notification, and even assuming that it existed there was no proper exercise of the power.
On behalf of Respondent No. 3 it was submitted that there was no need to hear the owners or occupiers at the stage of issuing notification under Section 3(1) of the Act and Section 11 did not confer any statutory right on the occupiers, and that under Section 21 of the General Clauses Act, the power to withdraw or rescind the notification was inherent and the authority who was empowered to issue the notification was entitled to rescind the same.
The State adopted the contentions of Respondents No. 3.
Allowing the appeal, this Court, HELD: 1. 1.
Where a member of the public acting bona fide moves the Court for enforcement of a fundamental right on behalf of a person or class of persons who, on account of poverty or disability or socially or economically disadvantaged position cannot approach the Court for relief, such member of the public may move the Court even by just writing a letter.
[979E] Bandhua Mukti Morcha vs Union of India & Ors.
, ; , relied on.
section P. Gupta vs Union of India, [19821 2 SCR 365; Olga Tellis vs Bombay Municipal Corporation, [1985] Suppl.
2 SCR 51, referred to. 1.2.
The first appellant Association represents the interests of the slum dwellers and the second appellant himself is one of the residents in the area.
The action of the Government affects a class of persons and if that group of persons is represented by the Association, they have a right to be heard in the matter.
Even a public interest litigation would lie in such a situation.
Therefore, the High Court was wrong in concluding that appellants were incompetent to invoke the jurisdiction of the Court.[979D, F] 976 2.1.
What particular rule of natural justice should apply to a given case must depend to an extent on the facts and circumstances of that case, the framework of the law under which the enquiry is held and the body of persons appointed for that purpose.
It is only where there is nothing in the statute to actually prohibit the giving of an opportunity to be heard but, on the other hand, the nature of the statutory duty imposed itself necessarily implied an obligation to hear before deciding, that the audi alteram partem rule could be imported.
1982F] 2.2.
It is one of the fundamental rules of our constitutional set up that every citizen is protected against exercise of arbitrary authority by the State or its officers.
If there is power to decide and determine to the prejudice of a person, duty to act judicially is implicit in the exercise of such power and the rule of natural justice operates in areas not covered by any law validly made.
[982E] 2.3.
When a declaration is made under Section 3 and a further declaration is made under Section 11, the inhabitants of the areas are affected and any further action in relation to the area which is declared to be 'slum clearance area ' without affording such persons an opportunity of being heard would prejudicially affect their rights.
The right to be heard in the matter has been acquired by the earlier action of the authority in considering the area for the purpose of the scheme.
This is clear from the proviso to sub section (1) of Section 11 of the Act.
When any alteration is sought to be made in the original scheme, it becomes incumbent upon the authorities to give an opportunity to the persons who had been affected by the earlier order and required to adopt a certain course of action.
[983D E] 2.4.
It is true that under Section 21 of the General Clauses Act, the power to issue a notification includes the power to rescind it, and it is always open to the Government to rescind the notification.
[980B] State of Kerala vs K. G. Madhavan Pillai, ; ; State of M.P. vs V.P. Sharma, [1966]3 SCR557; Lt. Governor of H.P. vs Sri Avinash Sharma, [ ; ; Lachmi Narain vs Union of India,[ ; ; State of Bihar vs D. N. Ganguly & Ors., [ ; and Kamia Prasad Khetan vs Union of India, ; , referred to.
But when a notification is made rescinding the earlier notifications without hearing the affected parties, it is clear violation of the principles of natural justice.
Such action in exercise of the implied 977 power to rescind cannot then be said to have been exercised subject to the like conditions within the scope of Section 21 of the General Clauses Act.
[983F] In the circumstances, the notification dated 20.1.1981 is liable to be quashed.
It shall be open to the Government to proceed after affording the slum dwellers an opportunity of being heard on the basis of the earlier notifications that were in force.
[983F G]
|
N: Criminal Appeal No.647 48 of 1979.
From the Judgment and Order dated the 9.3.1979 of the Additional Sessions Judge, Ahmedabad in Crl.
Revision Application Nos.
356 & 357 of 1978.
P. Chidambram, A.T. Patra, S.R. Aggarwal Ms. Monika Mohil and Ms.
Bina Gupta for the Appellants.
S.K. Dholakia, and Anip Sachthey for the Respondents.
The Judgment of the Court was delivered by K.JAYACHANDRA REDDY, J.
The question of general importance that arises in these three appeals is whether criminal proceedings can be instituted under Section 14 of the (`Act ' for short) against an establishment exempted under Section 17 of the for the contravention of the provisions of Section 6 of the ? The appellants, who are common in each of these three appeals, were connected with the management of M/S Shri Subhlaxmi Mills Ltd. (hereinafter referred to as the "said Company") an establishment governed by the .
By a Notification dated 17th October, 1957 the Central Government in exercise of the powers under Section 17 of the granted exemption to the said Company subject to the conditions specified in Schedule 2 annexed to the said Notification.
As a result of the said exemption the provisions of the employees ' Provident Fund Scheme 1952 framed under Section 5 of the did not apply to the said Company which created a Trust and the management made contributions of provident fund to the said trust and admittedly the exemption continued to be in operation at all material times.
In or about September/October, 1975 the Inspector of Provident Fund filed criminal complaints in the Court of the Judicial Magistrate Cambay against the appellant on the allegation that they being incharge of the 945 management failed to pay the contributions to the provident fund trust and thereby committed offences punishable under Sections 14(1A), 14(2), 14(2A), 14A(1), 14A(2) and Paragraph 76 of the Employees ' Provident Fund Scheme, 1952.
The appellants also received notice dated 15th September, 1975 from the Inspector threatening to cancel the exemption granted under Section 17 of the .
However, some time in September, 1975 the said Company 's Mill had to be closed down and liquidation proceedings were initiated.
The criminal complaints persuant to an order of the High Court were transferred to the Court of the Second Metropolitan Magistrate, Ahmedabad.
The respondent No. 1, the complainant was examined who in his evidence admitted that the Government of India had exempted the said Company under Section 17 of the and the same had not been subsequently canceled and was in existence at all material times.
The appellants filed an application praying that the proceedings against them should be dropped and they should be acquitted on the ground that Section 6 of the was not applicable to the establishment exempted under Section 17 of the and therefore no proceedings under Section 14 can be initiated against them.
The learned Metropolitan Magistrate by his order dated 28th November, 1978 rejected the aforesaid application.
Being aggrieved they filed three criminal revision applications in the Court of the Additional Sessions Judge, Ahmedabad who by a common order dismissed the same taking the view that Section 6 of the covers and attracts all the establishments including the exempted establishment.
Against that order in those three revision applications, the present appeals have been filed.
Shri P. Chidambram, learned counsel for the appellants, submitted that none of the Sections of the mentioned in the complaints can be applied as against the appellants since the establishment in question is exempted under Section 17 of the and consequently is not governed by the 1952 Scheme nor by Section 6 of the .
According to the learned counsel, the does not provide for prosecution in respect of any of the offences enumerated under Section 14 in case of breach by an exempted establishment in not paying the provident fund contributions to the trust and therefore no prosecution can be launched and that if at all the management of the establishment had not deposited the provident fund contributions with the trust, the Government was empowered only to cancel the exemption which also amounts to a penalty.
The learned counsel appearing on both sides addressed elaborate arguments and referred to various provisions of the and 946 Employees ' Provident Fund Scheme 1952 and also took us through several citations and also some passages in various text books.
Before we proceed to consider the same, we must note some undisputed facts.
The establishment in question was governed by the provisions of the and it was exempted under Section 17 of the and it had its own trust in respect of the provident fund contributions but failed to pay the provident fund contributions to the trust for some period during 1974 and thus there was a default.
The controversy therefore is whether such failure attracts the prosecution or only warrants the cancellation of the exemption granted.
This Act (No. 19 of 1952) was enacted to provide for institution of provident fund for employees in factories and other establishments and is made applicable to every establishment which comes within the meaning of 'factory '.
The underwent major amendments by No. 16 of 1971 and also by some amendments thereafter.
We are mainly concerned with the provisions of the that were in force at the relevant time i.e. in 1974.
Section 2 contains various definitions and commences with the words "In this , unless the context otherwise requires," and thereafter the definitions are enumerated.
"Contribution" is defined in Section 2(c) which means a contribution payable in respect of a member under the Scheme.
The words "Contribution", "employer", "employee", "factory", "fund" and "scheme" are defined in Sections 2(c), 2(e), 2(f), 2(g), 2(h) and 2(1) respectively.
They reads as under: 2.
In this , unless the context otherwise requires, "2(c).
"contribution" means a contribution payable in respect of a member under a Scheme (or the contribution payable in respect of an employee to whom the Insurance Scheme applies);" "2(e) "employer" means (i) in relation to an establishment which is a factory, the owner or occupier of the factory, including the agent of such owner or occupier, the legal representative of a deceased owner or occupier and, where a person has been named as a manager of the factory under clause (f) of sub section ( 1) of Section 8 of the , the named; and;person so 947 (ii) in relation to any other establishment, the person who, or the authority which, has the ultimate control over the affairs of the establishment and where the said affairs are entrusted to a manager, managing director or managing agent, such manager, managing director or managing agent; "2(f) "employee" means any person who is employed for wages in any kind of work, manual or otherwise, in or in connection with the work of an establishment, and who gets his wages directly or indirectly from the employer, and includes any person employed by or through a contractor in or in connection with the work of the establishment;" "2( 'g) "factory" means any premises, including the precints thereof, in any part of which a manufacturing process is being carried on or is ordinarily so carried on, whether with the aid of power or without the aid of power;" "2( 'h) "fund" means the provident fund established under a Scheme ," "2(1) "scheme" means the Employees ' Provident Fund Scheme framed under Section 5;" Section 5 provides for framing a scheme which is in the following terms: "5(1) The Central Government may, by notification in the Official Gazette, frame a Scheme to be called the Employees ' Provident Fund Scheme for the establishment of provident funds under this for employees or for any class of employees and specify the establishments or class of establishments to which the said scheme shall apply and there shall be established, as soon as may be after the framing of the Scheme, a Fund in accordance with the provisions of this and the Scheme.
xx xx xx We may mention here that the Employees ' Provident Fund Scheme 1952 was duly framed as provided under Section 5 and the relevant provisions of the Scheme shall be referred to at the appro 948 priate stages.
Section 6 is an important provision which deals with the contribution and allied matters and reads thus: "6.
The contribution which shall be paid by the employer to the Fund shall be six and a quarter per cent of the basic wages, dearness allowance and retaining allowance (if any) for the time being payable to each of the employees (whether employed by him directly or by or through a contractor), and the employees ' contribution shall be equal to the contribution payable by the employer in respect of him and may, if any employee so desires and if the Scheme makes provision therefor, be an amount not exceeding eight and one third per cent, of his basic wages, dearness allowance and retaining allowance (if any); Provided that in its application to any establishment or class of establishments which the Central Government, after making such enquiry as it deems fit, may by notification in the Official Gazette specify this section shall be subject to the modification that for the words "six and a quarter per cent," the words "eight per cent" shall be substituted: Provided further that where the amount of any contribution payable under this involves a fraction of a rupee, the Scheme may provide for the rounding off of such fraction to the nearest rupee, half of a rupee or quarter of a rupee.
Explanation 1 For the purposes of this section, dearness allowance shall be deemed to include also the cash value of any food concession allowed to the employee.
Explanation 2 For the purposes of this section, "retaining allowance" means an allowance payable for the time being to an employee of any factory or other establishment during any period in which the establishment is not working, for retaining his services.
The next important Section is Section 14 which deals with penalties.
For the purposes of the present case it would be enough if we extract the relevant provisions of Section 14 as mentioned in the complaints.
949 Penalties: 14(IA) An employer who contravenes or makes default in complying with the provisions of section 6 or clause (a) of sub section (3) of section 17 in so far as it relates to the payment of inspection charges, or paragraph 38 of the Scheme in so far as it relates to the payment of administrative charges, shall be punishable with imprisonment for a term which may extend to six months but (a) which shall not be less than three months in case of default in payment of the employees ' contribution which has been deducted by the employer from the employees ' wages; (b) which shall not be less than one month, in any other case; and shall also be liable to fine which may extend to two thousand rupee; Provided that the court may, for any adequate and special reasons to be recorded in the judgment, impose a sentence of imprisonment for a lesser term or of fine only in lieu of imprisonment;" " 14(2) Subject to the provisions of this , the Scheme (,the Family Pension Scheme or the Insurance Scheme) may provide that any person who contravenes, or makes default in complying,with, any of the provisions thereof shall be punishable with imprisonment for a term which may extend to six months, or with fine which may extend to one thousand rupees, or with both.
" 14(2A) Whoever contravenes or makes default in complying with any provisions of this or of any condition subject to which exemption was granted under Section 17 shall, if no other penalty is elsewhere provided by or under this for such contravention or non compliance, be punishable with imprisonment which may extend to three months, or with fine which may extend to one thousand rupees, or with both." 14A(l) If the person committing an offence under this , the Scheme (the Family Pension Scheme or the Insurance 950 Scheme) is a company, every person, who at the time the offence was committed was in charge of, and was responsible to, the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly; Provided that nothing contained in this sub section shall render any such person liable to any punishment, if he proves that the offence was committed without his knowledge or that he exercised all due diligence to prevent the commission of such offence.
"14A(2) Notwithstanding anything contained in sub section (1), where an offence under this , the Scheme or the Family Pension Scheme or the Insurance Scheme has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to, any neglect on the part of, any director or manager, secretary or other officer of the company, such director, manager, secretary or other officer shall be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.
Explanation For the purposes of this Section, (a) "company" means any body corporate and includes a firm and other association of individuals; and (b) "director" in relation to a firm, means a partner in the firm," The next important Section to be noted is Section 17(1) ( 'a) which empowers the Government to grant exemption which is in the following terms: "17(1) The appropriate Government may, by notification in the Official Gazette and subject to such conditions as may be specified in the notification, exempt from the operation of all or any of the provisions of any Scheme (a) any establishment to which this applies if, in the opinion of the appropriate Government.
the rules of its 951 provident fund with respect to the rates of contribution are not less favourable than those specified in Section 6 and the employees are also in enjoyment of other provident fund benefits which on the whole are not less favourable to the employees than the benefits provided under this or any Scheme In relation to the employees in any other establishment of a similar character; or xx xx xx Section 17(4) provides for cancellation of such an exemption if any employer fails to comply with the conditions.
The relevant provision 17(14) (a) reads thus: " 17(4) Any exemption granted under this section may be cancelled by the authority which granted it, by order in writing, if an employer fails to comply, (a) in the case of an exemption granted under sub section (1), with any of the conditions imposed under that sub section or with any of the provisions of sub section xx xx xx xx xx xx Section 17(5) deals with transfer of provident fund so far contributed after such cancellation and it reads as under: 17(5) Where any exemption granted under sub section (1), sub section (IA), sub section (2), sub section (2A) or sub section (2B) is cancelled, the amount of accumulations to the credit of every employee to whom such exemption applies, in the provident fund, the family pension fund or the insurance fund of the establishment in which he is employed shall be transferred within such time and in such manner as may be specified in the Scheme or the Family Pension Scheme or the insurance Scheme to the Credit of his account in the Fund or the Family Pension Fund or the Insurance Fund, as the case may be.
" The only other provision to be noted before we proceed further is paragraph 76 of the 1952 Scheme the contravention of which is also mentioned in the complaints.
It reads thus: 952 "76.
Punishment for failure to pay contributions etc.
If any person (a) deducts or attempts to deduct from the wages or other remuneration of a member the whole or any part of the employer 's contribution, or (b) fails or refuses to submit any return, statement or other document required by this Scheme or submit a false return, statement or other document, or makes a false declaration, or (c) obstructs any Inspector or other official appointed under the or this Scheme in the discharge of his duties or fails to produce any record for inspection by such Inspector or other official, or (d) is guilty of contravention of or non compliance with any other requirement of this Scheme, he shall be punishable with imprisonment which may extend to six months or with fine which may extend to one thousand rupees, or with both.
On a perusal of the above extracted provisions of the the following aspects to the extent relevant to the present case can be spelt out.
The Management of an establishment has to contribute to the provident fund and the Government under Section 5 can frame a scheme called Employees ' Provident Fund Scheme and such a scheme was framed in the year 1952.
The scheme provides for the establishment of provident fund under the for employees of the establishments specified therein.
Section 6 is the material provision and deals with contributions which may be provided under the Scheme and also prescribes the rate of contribution to the fund and that the employees ' contribution should be equal to the contribution payable by the employer.
Section 14 deals with the penalties and section 14(1A) lays down that an employer who contravenes, or makes default in complying with the provisions of Section 6 shall be punishable with imprisonment for a term which may extend to six months but shall not be less than three months in case of default in payment of the employees ' contribution which has been deducted by the employer from the employees 'wages.
But for adequate reasons it can be less.
Paragraph 76 of the Scheme also provides for punishment for failure to pay such contributions to 953 the fund.
Then we have Section 17 which provides for the exemption.
As per the said Section the appropriate Government may be notification and subject to such conditions, as may be specified in the notification, exempt from the operation of all or any of the provisions of any Scheme (in the present case 1952 scheme) if the appropriate Government is satisfied that the rules of the provident fund which a particular establishment is following in the matter of contribution to the provident fund are not less favourable than those specified in Section 6 and that the employees are also in enjoyment of other provident fund benefits.
In other words the exemption from the operation of the scheme is granted provided the particular establishment makes contribution as per its own rules governing the contribution to the fund, which in other words, can be called a provident fund scheme of its own are not less favourable than those specified in Section 6.
Accordingly the exempted establishment has to provide for its employees the benefits which are in no way less favourable than the ones provided under the and the Scheme.
Now the question is whether failure to make the contribution by the exempted establishment to the provident fund as per its one rules could attract the penal provisions of Section 14? The learned Additional Sessions Judge, however, as hereinbefore mentioned, held that Section 6 covers and attracts all be establishments including the exempted establishment.
Even otherwise according to him, Section 14(2A) which applies to an exempted establishment is clearly attracted inasmuch as the conditions subject to which exemption was granted under Section 17 have been violated in the instant case.
The learned Additional Sessions Judge also gave a finding that Section 14(IA) also is attracted as in his view even an exempted establishment is not absolved from the liability of employer 's contribution as also the employees ' contribution to the provident fund and therefore by necessary implication the employer and the employees of an exempted establishment have to make full contribution to the provident fund as required under Section 6 of the , and if its contribution remains unpaid it amounts to contravention of the provisions of Section 6 of the the thus attracts Section 14(1A).
We may point out at this stage that Section 14(2) and paragraph 76 of the Scheme are not attracted in the present case.
So far as Section 14(2) is concerned it can be seen that the provision deals with the family pension scheme or the insurance scheme etc.
We are not concerned, in the present case, with any such scheme.
We are only concerned with the provident fund as defined under Section 2(h) of the 954 .
Similarly paragraph 76 of the 1952 Scheme also is not attracted because the establishment herein is admittedly exempted from the operation of the scheme.
We may also mention here that similarly Sections 14A(1), 14A(2) and 14AA which are also mentioned in the complaints also are not attracted.
Shri S.K. Dolakia, learned counsel appearing for the respondents, could not dispute the same.
Then we are left with Sections 14(IA) and 14(2A).
While it was the submission of Mr. Chidambram, learned counsel for the appellants that even these two provisions are also not attracted, Shri Dholakia, on the other hand, submitted that both the provisions are attracted and at any rate Section 14(2A) is clearly attracted and therefore no interference is called for in these appeals.
We shall first take up the submissions in respect of Section 14( '2A).
This Section lays down that whoever contravenes or makes default in complying with any provisions of the or of any condition subject to which exemption was granted under Section 17 shall, if no other penalty is elsewhere provided by or under this for such contravention or non compliance, be punishable with imprisonment and also fine mentioned therein.
Firstly, it is submitted that the only contravention alleged against the appellants is that no contribution was made to the provident fund and since it is an exempted establishment, Section 6 is not attracted and therefore it must be held that there is no contravention or non compliance of any of the provisions of the .
In other words, the submission is that Section 6 of the applies only to the non exempted establishments and covered under the statutory exemption.
The learned Additional Sessions Judge, however, as already noted, has held that Section 6 applies to both exempted and non exempted establishments.
This aspect we will consider at a later stage while examining the applicability of Section 14(, IA).
So far Section 14(2A) is concerned, the later part of it specifically is made applicable to the exempted establishments and if there is contravention of any of the conditions subject to which exemption was granted under Section 17 and if no other penalty is elsewhere provided by or under the then such contravention or non compliance is punishable.
The essentials of these provisions are; (i) there should be a contravention or default in complying with the provisions of the , or ( 'ii) there should be a contravention or default in complying with any of the conditions subject to which exemption was granted under Section 17, and (iii) there should be no other penalty elsewhere provided by or under the for such contravention or non compliance.
Only when these essentials are satisfied, the Section is attracted.
The learned counsel for the appellants submitted that in the present case there is no such contra 955 vention or non compliance of any of the conditions subject to which exemption was granted.
His further submission in this context is that the cancellation of an exemption as provided under Section 17(4) is a penalty provided by or under the for such contravention and therefore Section 14(2A) is not attracted.
To appreciate these contentions it becomes necessary to refer to the conditions subject to which the exemption under Section 17 was granted in the present case.
The relevant conditions for our purposes are Conditions Nos. 1, 2(a),(b), 10 and 15 and they read as under: "SCHEDULE II (Conditions) 1.
Every factory shall have a provident fund scheme in force the rules of which with respect to the rates of contribution shall not be less favourable than those specified in Section 6 of the and the employees shall also be in enjoyment of other provident fund benefits which on the whole shall not be less favourable to the employees than the benefits provided under the or any Scheme in relation to the employees in any other factory of a similar character and these rules shall be followed in all respects.
The employer in relation to each factory (hereinafter referred to as the 'employer ') shall within three months of the date of publication of this notification, amend the constitution of the Provident Fund maintained in respect of the factory in regard to the following matters namely: (a) The Provident Fund shall vest in a Board of Trustees and there shall be a valid instrument in writing which adequately safeguards the interests of the employees and such instruments shall be duly registered under Section 5 of the ; (b) the Board of Trustees shall consist of an equal number of representatives of the employees and the employer and all questions before the Board shall be decided by a majority of votes; xx xx xx 10.
The employer shall accept the past provident fund accumulations or an exempted fund and who obtains employment in his factory.
Such an employee shall immediately 956 be admitted as a member of the factory 's Provident Fund.
His accumulations which shall be transferred within 3 months of his joining the factory shall be credited to his account.
xx xx xx 15.
Exemption granted by this notification is liable to be withdrawn by the Central Provident Fund Commissioner for breach of any of the aforesaid conditions or for any other sufficient cause which may be considered appropriate.
As per condition No. I the exempted factory should have a provident fund scheme in force the rules of which with respect to the rates of contribution shall not be less favourable than those specified in Section 6.
This part of the condition is in conformity with the requirement under Section 17(1).
The condition proceeds to lay down that these rules shall be followed in all respects.
There is no dispute that as per the rules governing the provident fund scheme of the exempted establishment in question, the contributions have to be made regularly and condition No. I lays down that these rules should be followed in all respects.
The default in making the contribution amounts to contravention of the rules and consequently the condition No. 1, subject to which the exemption was granted, is clearly violated.
That there was a violation of this condition is also made clear by the notice issued by the Regional Provident Fund Commissioner on 15.9.75.
The relevant portion of the notice reads thus: "And thus it has violated the conditions governing grant of exemption for contravention of which the offenders are liable for the cancellation of the exemption granted under Section 17 of the Employees ' Provident Fund Act, 1952.
" We are therefore satisfied that some of the conditions subject to which the exemption was granted have been violated.
So this part of Section 14(2A) is satisfied.
Now we shall see whether the cancellation under Section 17(4) is a penalty provided by or under the Act.
In the common parlance the word 'penalty ' is understood to mean; a legal or official punishment such as a term of imprisonment.
In some contexts it is also understood to mean some other form of punishment such as fine or forfeiture for not fulfilling a contract.
But 957 in gathering the meaning of this word, the context in which this is used is significant.
In the Act, as already noted, Section 14 deals with penalties and enumerates various contraventions or non compliances which are punishable with imprisonment.
Every contravention mentioned in each of the sub sections is punishable with imprisonment and for offences covered by Sections 14(1A), 14(1B) and 14(2A) minimum imprisonment is also made compulsory.
The imposition of fine also is prescribed.
The penalties mentioned in this connection would indicate that the Legislature envisaged that a penalty should necessarily mean imprisonment or atleast imposition of fine.
We find from the reports that the National Commission of Labour having found that tile working of the Employees ' Provident Fund and Family Pension Fund Act, 1952 are not effective and that in order to cheque the growth of arrears penalties for defaults in payment of provident fund dues should be made more stringent and the default should be made cognizable.
Accordingly it was proposed to amend the Act so as to render penal provisions more stringent and to make defaults cognizable offences and provisions were also made for compulsory imprisonment in case of non payment of contributions and administrative and inspection charges.
The provisions of the Act thereafter are suitably amended.
We must bear this object and reasons in mind in examining whether a mere cancellation of the exemption granted under Section 17(4) would amount to a penalty.
No doubt under Section 14(2A) one of the requirements is that "there should be no other penalty elsewhere provided by or under the Act for such contravention or non compliance," but we are not persuaded to hold that the mere cancellation of an exemption amounts to a penalty particularly expected to be stringent as contemplated under Section 14.
However, we shall proceed to consider some of the submissions made on this aspect.
The learned counsel referred to certain standard books on words and phrases.
In Butterworths ' Words and Phrases, legally defined Third Edition page 343 the meaning of the word 'Penalty ' is given as that the word penalty ' is large enough to mean, is intended to mean, and does mean, any punishment whether by imprisonment or otherwise.
Blackburn,J. in R. vs Smith, [ ; at 138, observed as under: "I consider that the word "penalty" falls to be read in a wide popular sense, .
and I select two definitions adequately conveying that sense.
The late Mr. Roberton Christie The Encyclopedia, Vol.
I 1, p 204) said:"Penalty in the broad sense may be defined as any suffering in person or property by way of forfeiture, deprivation or disability, imposed as a punishment by law or judicial 958 authority in respect of . an act prohibited by statute.
" The Oxford Dictionary echoes the same wide conception by referring to "a loss, disability or disadvantage of some kind . fixed by law for some offence.
The meaning of the word 'penalty ' as given in the Collins English Dictionary, is as under: "Penalty: 1.
a legal or official punishment, such as a term of imprisonment.
some other form of punishment, such as a fine or forfeit for not fulfilling a contract.
3. loss, suffering, or other unfortunate result of one 's own action, error, etc.
Sport, games etc.
a handicap awarded against a player or team for illegal play, such as a free shot at goal by the opposing team, loss of points, etc.
" In addition, the learned counsel also relied on some decisions of foreign courts where the meaning of the word 'penalty ' was considered.
In People ex rel Risso vs Randall, , 268 Misc.1057, it was held that: "A "penalty" may refer to both criminal and civil liability, being denied as penal retribution, punishment for crime of offense, the suffering in person, rights or property which is annexed by law or judicial decision to commission of a crime or public offense.
" In City of Fort Wayne vs Bishop, , 547, , it was observed as under: "The term "penalty" embraces all consequences visited by law on heads of those who violate police regulations and extends to all penalties whether exigible by state in interest of community or by private persons in their own interest, even when statute is remedial as well as penal." In City of Cincinnativ.
Wright, 67N.E.2d 358,361,77 Ohio App.261,it was noted that: "The word "penalty" is not confined to punishment or crime; it has a broader meaning in law of contracts; it is used as contradistinguished from liquidated damages.
It is also used to indicate the sum to be forfeited on breach of a 959 bond.
And in common parlance it expresses any disadvantage resulting from an act.
The learned counsel relying on the above meanings given to the word 'penalty ' submitted that a cancellation in other words a forfeiture of the right given amounts to punishment.
It is also his submission that this is a penalty provided by or under the Act inasmuch as such a cancellation is contemplated under Section 17(4) and that the word "under" cannot but be understood to mean that it covers the cancellation of the exemption also provided under Section 17(4).
In this context he relied on the meaning of the word "under" as given in Butterworths ' Words and Phrases, legally defined.
Third edition page 345:, which reads thus: "In one sense every act of a body which is the creature of statute may be said to be done "under" or by virtue of the statute creating it." The author has extracted the observations made by O ' Bryan, J. in R. D vs Clyne, ex p Harrap ( 194 1) VLR 200 at 20 1, as under: "In another sense the acts of such a body may be said to be done .under" or by virtue of some provision granting a general jurisdiction to act in relation to a variety of matters.
But the expression is also quite commonly used in relation to a particular act, when the general jurisdiction to act is assumed, to designate the more particular power to do that particular act.
It is rash to attempt to substitute a different expression for the more simple and usual one used, but in this connection "under" is perhaps more aptly translated by the expression "pursuant to" than by the phrase "by virtue of.
" It is necessary to have regard to the context to determine in which sense the word is used." (emphasis supplied) It therefore cannot be gainsaid that the context in which these words are used is significant.
At this juncture we may also note that the scheme or rules framed by a company in respect of the provident fund of the employees are meant to be duly complied with.
The exemption under Section 17 is incorporated in the Act for getting better benefits for the employees and the same is granted with a view to avoiding duplication that is to say for framing a scheme by the appropriate Government on the lines as framed by the establishment itself and 960 such an exemption is meant to ensure to the employees the continuance of the benefits and the purpose of the exemption is only to ensure such a scheme better than the one under Section 6 of the Act.
It must also be noted that notwithstanding the exemption granted under Section 17 of the Act the appropriate Government does not lose its hold over the scheme framed by the establishment and there are built in safeguards in Section 17 itself to protect the interests of the employees and Section 17(14) is one such safeguards.
In Mohmedalli and Others vs Union of India and another, [1963] Suppl.
I SCR 993; it is held that: "It would appear from the terms of the relevant portion of section 17 that the exemption to be granted by the appropriate Government is not in the nature of completely absolving the establishments from all liability to provide the facilities contemplated by the Act.
The exemptions are to be granted by the appropriate Government only if in its opinion the exempted establishment has provisions made for provident fund, in terms at least equal, if not more favourable, to its employees.
In other words the exemption is with a view to avoiding duplication and permitting the employees concerned the benefit of the preexisting scheme, which presumably has been working satisfactorily, so that the exemption is not meant to deprive the employees concerned of the benefit of a provident fund but to ensure to them the continuance of the benefit which at least is not in terms less favourable to them.
As the whole scheme of provident fund is intended for the benefit of employees, section 17 only saves pre existing schemes of provident fund pertaining to particular establishments.
" (emphasis supplied) Having examined the scope of Section 14( '2A) in this background, we find it difficult to agree with the learned counsel that the cancellation of the exemption granted under Section 17(4) amounts to a penalty under Act within the meaning of Section 14(12A).
We may also note that Section 14(2A) was introduced in the year 1953 by Act No. 37 of 1953 whereas sub section 4 of Section 17 was introduced in the year 1963 by the amendment Act No. 28 of 1963, nearly ten years later.
This only shows that the cancellation is not meant to be treated as one of the penalties and the reasonable inference is, particularly having regard to the object underlying the Act, that the expression 'penalty ' in the context in which it is used particu 961 larly in Section 14 including Section 14(2A) only connotes imposition of imprisonment or fine.
The cancellation as provided under Section 17(4) is only consequential and also rather procedural meant to be applied to the exemption granted under Section 17( 1) in case of noncompliance of the conditions subject to which such exemption was granted.
A close perusal of Section 17 and its various sub sections would clearly indicate that it is a self contained provision dealing with the power to grant exemption and the consequent obligations and the procedural aspects and Section 17(4) is a built in provision providing for cancellation of such exemption in case of contravention or noncompliance of the conditions.
By a cancellation of the exemption only the privilege granted is being withdrawn by an executive order.
Suffice it to say that such a cancellation does not penalise the management and consequently does not result in any punishment that is normally awarded in respect of an offence.
In State of Uttar Pradesh through the Provident Fund Inspector, U.P. vs Lala Ram Gopal Gupta and three Others, a Division Bench considered this very question and held that the cancellation of exemption in accordance with Section 17(4)(a) does not involve imposition of a penalty within the meaning of Section 14(12A) of the Act.
In our view the Division Bench of the Allahabad High Court rightly held that cancellation under Section 17(4)(a) is not an alternative penalty for failure to comply with the conditions subject to which the exemption was granted and if the Parliament had contemplated that the cancellation of the exemption amounted to penalty within the meaning of Section 14(2A) it was purposeless to provide for any similar penalty under Section 14(2A).
It is thus clear that if the contention of the learned counsel is to be accepted then Section 14(2A) would become otoise and redundant.
The learned counsel submitted that these being penal provisions should be interpreted strictly and if so interpreted the cancellation of exemption under Section 17(4) cannot but be a penalty under the Act.
The learned author Justice G.P. Singh in his book Principles of Statutory Interpretation Fourth Edition 1988, has stated the general principles regarding the construction of penal statutes as follows: "Clear language is now needed to create a crime . .
If there is a reasonable interpretation which will avoid the penalty in any particular case we must adopt that construction and if there are two reasonable constructions we must give the more lenient one.
" 962 In Tolaram vs State of Bombay, ; Mahajan, C.J. observed as under: "If two possible and reasonable constructions can be put upon a penal provision, the court must lean towards that construction which exempts the subject from penalty rather than the one which imposes penalty.
It is not competent to the court to stretch the meaning of an expression used by the legislature in order to carry out the intention of the legislature.
" The learned author Justice G.P. Singh after extracting the principles laid down by the Supreme Court as well as by the English courts summed up the principles in the following manner: "The content of the rule and its limits, in the sense now understood, may be summed up in the following propositions: (1) If the prohibitory words in their known signification cover only some class of persons or some well defined activity, their import cannot be extended to cover other persons or other activity on considerations of policy or object of the statute.
(2) If the prohibitory words are reasonably capable of having a wider as also a narrower meaning and if there is no clear indication in the statute or in its policy or object that the words were used in the wider sense, they would be given the narrower meaning.
(3) When the prohibitory words are equally open to two constructions, one of which covers the subject and the other does not, the benefit of construction will be given to the subject.
(4) If the prohibitory words in their known signification bear a wider meaning which also fits in with the object or policy of the statute, the words will receive that wider meaning and their import will not be restricted even if in some other context they can bear a narrower meaning.
(5) If the literal reading of the prohibitory words produces 963 an unintelligible or non sensual result.
but the statute read as a whole gives out its meaning clearly, effect will be given to that meaning by curing a mere defect in phraseology.
Relying on the aforesaid principles governing the construction of the penal statute Shri P. Chidambram, learned counsel for the appellants submitted that the provisions of Section 14(2A) and Section 17(4) should reasonably be construed and if so construed Section 14(2A) becomes inapplicable to the facts of the case on hand.
It is true that all the penal statutes should be construed strictly and the court must see that the thing charged as an offence is within the plain meaning of the words used but it must also be borne in mind that the context in which the words are used is important.
The legislative purpose must be noted and the statute must be read as a whole.
In our view taking into consideration the object underlying the Act and on reading Sections 14 and 17 in full, it becomes clear that cancellation of the exemption granted does not amount to a penalty within the meaning of Section 14(2A).
As already noted these provisions which form part of the Act, which is a welfare legislation are meant to ensure the employees the continuance of the benefits of the provident fund.
They should be interpreted in such a way so that the purpose of the legislation is allowed to be achieved (vide M/s International Ore and Fertilizers (India) Pvt. Ltd. vs Employees 'State Insurance Corporation, AIR 1988 SC 79.
In Seaford Court Estates Ltd. vs Asher, [ 19491 2 All E R 155, Lord Denning, L.J. observed: "The English language is not an instrument of mathematical precision.
Our literature would be much poorer if it were.
This is where the draftsmen of Acts of Parliament have often been unfairly criticised.
A judge, believing himself to be fettered by the supposed rule that he must look to the language and nothing else, laments that the draftsmen have not provided for this or that, or have been guilty of some or other ambiguity.
It would certainly save the judges trouble if the Acts of Parliament were drafted with divine prescience and perfect clarity.
In the absence of it, when a defect appears, a Judge cannot simply fold his hands and blame the draftsman.
He must set to work on the constructive task of finding the intention of Parliament, and he must do this not only from the language of the statute, but also from a consideration of the social conditions which gave rise to it and of the mischief which it was passed to remedy, and then he must supplement the written word so as to give 'force 964 and life ' to the intention of legislature.
A Judge should ask himself the question how, if the makers of the Act had themselves come across this ruck in the texture of it, they would have straightened it out? He must then do so as they would have done.
A judge must not alter the material of which the Act is woven, but he can and should iron out the creases.
(emphasis supplied) Therefore in a case of this nature, a purposive approach is necessary, However, in our view the interpretation of the word 'penalty ' used in Section 14(2A) does not present any difficulty and cancellation is not a punishment amounting to penalty within the meaning of this Section.
Shri P. Chidambram, however, submitted that unless the context otherwise requires, such a purposive or liberal approach need not be resorted to.
He invited our attention to the opening words "unless the context otherwise requires" occurring in Section 2 which contains definitions.
We may at this juncture point out that these words strictly apply to definitions and while considering the scope of Section 14(2A) we have proceeded adhering to the language of the Section.
However, we shall consider the effect of these opening words in Section 2A, at a later stage while considering the submissions of Shri Dholakia regarding the applicability of Section 14(1A).
Shri P. Chidambaram, learned counsel for the appellants, however, contended that the failure to contribute to the fund under the 1952 Scheme only is punishable as it amounts to "contravention" and that in the instant case the complaint is that the management failed to contribute to the fund maintained by the establishment itself and such a failure is not punishable and the word "contribution" must be construed strictly as defined under Section 2 and not otherwise as the context does not otherwise require.
Similar words occur in Section 2 of the Companies Act and in section K. Gupta and Another vs K. P. Jain and Another, ; wherein it is held as under: "Where in a definition section of a statute a word is defined to mean a certain thing, wherever that word is used in that statute, it shall mean what is stated in the definitions unless the context otherwise requires.
But where the definition is an inclusive definition, the word not only bears its ordinary, popular and natural sense whenever that would be applicable but it also bears its extended statutory meaning.
965 At any rate, such expansive definition should be so construed as not cutting down the enacting provisions of an Act unless the phrase is absolutely clear in having opposite effect.
" In State Bank of India etc.
vs Yogendera Kumar Srivastava and Others etc.
; , it is observed: "Repugnancy of the definition of any term may arise only if such definition does not agree with the subject or context of a particular provision.
But, surely, any action not in conformity ' with the provision of the definition clause will not render the definition of a term repugnant to the subject or context of any provision of the statute containing the term.
Relying on the above, passages, the learned counsel for the appellants further submitted that the context in which the word 'penalty ' is used would show that Section 14(2A) does not necessarily require that there should be a punishment of either imprisonment or fine inasmuch as the "cancellation" also can be a penalty within the meaning of Section 14(2A).
At any rate according to the learned counsel for the appellants there is an ambiguity and that this being a penal law, the provisions should be construed strictly and necessarily the benefit of doubt, if any, should go to the accused.
In view of the discussion already made by us on this aspect, this contention does not merit acceptance.
In our view, there is no ambiguity as suggested by the learned counsel for the appellants.
Even assuming so, in view of the object underlying the Act the context does definitely require a reasonable interpretation of Section 14(2A) so as to make it applicable also to a case of failure to contribute to the fund as per the conditions under which the exemption was granted.
Like wise it must also be interpreted to mean that cancellation does not amount to a penalty.
Therefore the submission that Section 14(2A) is not attracted does not merit acceptance.
Shri Dholakia, learned counsel for the respondents, as already noted, submitted that in addition to Section 14(2A), Section 14(A) is also attracted and the appellants are punishable under that provision for the contravention and non compliance of Section 6 of the Act.
In his submission, the words "fund" and "scheme" should be given a wider meaning and cannot be restricted merely because of their definitions as contained in Section 2.
According to the learned counsel, the opening words of Section 2 namely "Unless the context otherwise 966 requires" give a scope for a wider interpretation and they cannot be narrowly understood to mean only "fund" and "scheme" as mentioned therein.
As this point has been argued in support of the applicability of Section 14(1A) we shall consider the same from that perspective.
Section 2 begins with the words "In this Act, unless the context otherwise requires.".
Section 2(c) defines "contribution" to mean a contribution payable in respect of a member under a Scheme Section 2(h) defines "fund" to mean the provident fund established under a Scheme and Section 2(1) defines "Scheme" to mean the Employees ' Provident Fund Scheme, framed under Section 5.
Section 5 empowers the Central Government by a notification to frame a scheme and such a scheme was framed in 1952 called the Employees ' Provident Fund Scheme of 1952.
Section 6, as already noted, lays down that the "contribution" which shall be paid by the employer to the "Fund" shall be of the percentage mentioned therein.
We shall now examine Section 14(1A).
This provision was introduced in the year 1973 and specifies a penalty laying down that if an employer who contravenes or makes default in complying with the provisions of Section 6 or clause (a) of sub section (3) of Section 18, shall be punishable with imprisonment mentioned therein.
For the purpose of this case we have to see whether there is a contravention or non compliance with the provisions of Section 6.
According to Shri Dholakia the "scheme" should be interpreted liberally as to mean a scheme framed and followed by the employer himself and "fund" in that context should be taken to mean a provident fund established under such a scheme by the employer and the "contribution" should consequently mean a contribution payable by him under such a private scheme and consequently if there is a default in payment of the contribution to such a scheme it amounts to contravention of Section 6 punishable under Section 14(1A).
Learned counsel for the respondents very much relied on the opening words of Section 2 namely "In this Act, unless the context otherwise requires," and urged that these words can otherwise, than as mentioned in the definitions, also be interpreted keeping in view the object of the Act.
He further urged that the duties under the scheme framed under Section 5 i.e. 1952 scheme and the private scheme followed by an employer because of an exemption granted are one and the same and that if viewed from this angle, the expressions "contribution", "fund" and "scheme" can be understood to be wide enough to carry the same meanings in respect of the private scheme also and consequently failure to contribute to the fund under a private, scheme framed and operated by the employer attracts Section 14(IA).
After a careful consideration we are inclined to agree with the 967 learned counsel fOr the respondents.
In this context we may note a passage in Knightsbridge Estates Trust Ltd. vs Byrne and Others, which reads thus: "It is perhaps worth pointing out that the words "unless the context otherwise requires" which we find in the consolidating Act of 1929 are not to be found in the amending Act of 1928.
I attribute little weight to this fact, for, in my opinion, some such words are to be implied in all statutes where the expressions which are interpreted by a definition clause are used in a number of sections with meanings sometimes of a wide, and sometimes of an obviously limited, character.
On the other hand, I think due weight ought to be attributed to the words "otherwise requires" in the Companies Act, 1929, and it is incumbent on those who contend that the definition does not apply to sect.
74 to show with reasonable clearness that the context does in fact require a more limited interpretation of the word "debenture" then Sect.
380 has assigned to it." In National Buildings Construction Corporation vs Pritam Singh Gill and Others, [ ; this Court observed as under: "as is usual with most of the definition sections, with the clause, "unless there is anything repugnant in the subject or context.
" This clearly indicates that it is always a matter for argument whether or not this statutory definition is to apply to the word "workman" as used in the particular clause of the Act which is under consideration, for this word may both be restricted or expanded by its subject matter.
The context and the subject matter in connection with which the word "workman" is used are accordingly important factors having a bearing on the question.
The propriety or necessity of thus construing the word "workman" is obvious because all parts of the Act have to be in harmony with the statutory intent." (emphasis supplied) In Commissioner of Expenditure Tax, Gujarat, Ahmedabad vs Darshan Surendra Parekh; , it was observed as under: "Undoubtedly the definitions in section 2 of words and expressions used in the Act apply unless the context otherwise 968 requires, and if the context in section 4 requires that the expression "dependent" should not be given the meaning which is assigned thereto by the definition in cl.
(g) of section 2, the Court would be justified in discarding that definition.
It is a settled rule of interpretation that in arriving at the true meaning which is assigned thereto by the definition in cl.
(g) to be viewed isolated from its context; it must be viewed in its whole context, the title, the preamble and all the other enacting parts of the statute.
It follows there from that all statutory definitions must be read subject to the qualifications expressed in the definition clauses which create them, such as "unless the context otherwise requires"; or "unless a contrary intention appears" or "if not inconsistent with the context or subject matter.
(emphasis supplied) In Bennett Coleman & Co. (P) Ltd. vs Punya Priya Das Gupta, [1970]I SCR 181 this Court observed thus: "But assuming that there is such a conflict as contended, we do not have to resolve that conflict for the purposes of the problem before us.
The definition of section 2 of the present Act commences with the words "In this Act unless the context otherwise requires" and provides that the definitions of the various expressions will be those that are given there.
Similar qualifying expressions are also to be found in the , the , the C.P. & Berar Industrial Disputes Settlement Act, 1947 and certain other statutes dealing with industrial questions.
It is, therefore, clear that the definitions of "a newspaper employee" and "a working journalist" have to be construed in the light of and subject to the context requiring otherwise.
" The above passages throw a flood of light on the scope of interpretation of these opening words of Section 2 and it is clear that they must be examined in the light of the context, the title, the preamble and all the other enacting parts of the statute.
Due weight ought to be given to the words "unless the context otherwise requires".
The subject matter and the context in which a particular word is used are of great importance and it is axiomatic that the object underlying the Act must 969 always be kept in view in construing the context in which a particular word is used.
In the Statement of Object and Reasons of Act No. 40 of 1973 by which Section 14(IA) was introduced, it is clearly mentioned that National Commission of Labour has recommended that in order to check the growth of arrears, penalties for defaults in payment of provident fund dues should be more stringent and the default should be made cognizable.
The concept which prompted the Legislature to enact this welfare law should also be borne in mind in interpretation of the provisions.
Chagla, C.J. in Prakash Cotton Mill.
(P) Ltd. vs State of Bombay, [1957]2 LLJ 490 observed as under: "no Labour legislation, no special legislation, no economic, legislation, can be considered by a court without applying the principles of social justice in interpreting the provisions of these laws.
Social justice is an objective which is embodied and enshrined in our Constitution . . it would indeed be startling for anyone to suggest that the court should shut its eyes to social justice and consider and interpret a law as if our country had not pledged itself to bringing about social justice." In Organo Chemical Industries and Another vs Union of India and Others, [ 19791 4 SCC 573 it was observed that: "A policy oriented interpretation.
when a welfare legislation falls for determination, especially in the context of a developing country, is sanctioned by principle and precedent and is implicit in Article 37 of the Constitution since the judicial branch is, in a sense, part of the State.
So it is reasonable to assign to 'damages ' a larger, fulfilling meaning.
In Kanwar Singh vs Delhi Administration, ; it was observed as under: "It is the duty of the court in construing a statute to give effect to the intention of the legislature.
If, therefore, giving a literal meaning to a word used by the draftsman, particularly in a penal statute, would defeat the object of the legislature, which is to suppress a mischief, the court can depart from the dictionary meaning or even the popular meaning of the word and instead give it a meaning which will advance the remedy and suppress the mischief.
" 970 In State of Gujarat vs Chaturbhuj Maganlal and Another, ; it was observed as under: "It is well recognised that where the language of a statutory provision is susceptible of two interpretations, the one which promotes the object of the provision, comports best with its purpose and preserves its smooth working, should be chosen in preference to the other which introduces inconvenience and uncertainty in the working of the system.
This rule will apply in full force where the provision confers ample discretion on the Government for a specific purpose to enable it to bring about an effective result." In Vanguard Fire & Gen. Ins. Co. vs Fraser & Ross, AIR 1960 SC 1971 it was held that "the Court has not only to look at the words but also at the context, the collocation and the object of such words and interpret the meaning intended to be conveyed by the use of the words under the circumstances" We feel it may not be necessary to multiply the authorities on this aspect.
In this background if we examine the opening words of Section 2 namely "In this Act, unless the context otherwise, requires," then we necessarily feel that there is much in the context to show that the restricted meaning in the definitions should not be applied.
So much is about the opening words to Section 2 and it, therefore, follows that the words 'contribution ', 'Scheme ', 'fund ' occurring in the said section should in the "context" be otherwise interpreted as to apply to a private scheme also and if there is a default in "contribution" by the exempted establishment, the same amounts to contravention of Section 6 punishable under Section 14(1A).
Before we conclude we shall however refer to one general submission of Sri Chidambaram.
He submitted that the fact that Section 17(1A) was introduced in 1988 prescribing a penalty in respect of contraventions or non compliances committed by an exempted establishment, would go to show that Sections 14(1a) and 14(2A) were not intended to be made applicable to an exempted establishment and that cancellation of the exemption under Section 17(4) was the only prescribed penalty.
He also invited our attention to the Statement of Objects and Reasons of Amendment Act No. 33 of 1988.
We see no force in this submission.
The mere fact that Section 17(1A) was intro 971 duced in the year 1988 does not necessarily lead to an inference that Sections 14(IA) and 14(2A) were not intended to be made applicable to an exempted establishment.
As stated in the foregoing paragraphs the object underlying every amendment was mainly intended to render the penal provisions more stringent in order to check the growth of arrears and to punish the defaulters.
Likewise in the Amendment Act No. 33 of 1988 also it was intended to make the existing penal provisions more stringent.
This Amendment Act was passed on the recommendations of a high level committee set up to review the working of the employees provident fund organisation and to suggest improvements.
One of the recommendations was to make the existing penal provisions more stringent and also make the existing legal and penal provisions as applicable to unexempted establishments being made applicable to exempted establishments so as to check the defaults on their part.
The learned counsel for the appellants very much relied on this part of Objects and Reasons and submitted that it is only by the introduction of Section 17(1A) that the exempted establishments also are brought within the purview of the penal provisions which hitherto were applicable to unexempted establishments, and therefore Sections 14(1a) and 14(2A) were hitherto inapplicable to exempted establishments.
We are unable to agree that this part of the Statement of Objects and Reasons would necessarily lead to such an inference.
As already discussed many aspects are common to both the types of provident fund.
So far as unexempted establishments are concerned there are several other penal provisions like Sections 14(1), 14(2) and 14AA and also in particular Paragraph 76 of the 1952 Scheme.
There are other legal provisions also which apply to unexempted establishments.
Therefore under the Amendment Act No. 33 of 1988 the Legislature wanted to make as far as possible these existing legal and penal provisions which are applicable to unexempted establishments, applicable also to exempted establishments.
That does not mean that there were no penal provisions earlier applicable to exempted establishments.
Section 17(1A) is in the following terms: " 17(1 A) Where an exemption has been granted to an establishment under clause (a) of sub section (1), (a) the provisions of Sections 6, 7 A, 8 and 14 B shall, so far as may be, apply to the employer of the exempted establishment in addition to such other conditions as may be specified in the notification granting such exemption, and where such employer contravenes, or makes default in complying with any of the said provisions or conditions or 972 any other provision of this Act, he shall be punishable under Section 14 as if the said establishment had not been exempted under the said clause (a); (b) the employer shall establish a Board of Trustees for the administration of the provident fund consisting of such number of members as may be specified in the Scheme; (c) the terms and conditions of service of members of the Board of Trustees shall be such as may be specified in the Scheme; (d) the Board of Trustees constituted under clause (b)shall (i) maintain detailed accounts to show the contributions credited, withdrawals made and interest accrued in respect of each employee; (ii) submit such returns to the Regional Provident Fund Commissioner or any other officer as the Central Government may direct from time to time; (iii) invest the provident fund moneys in accordance with the directions issued by the Central Government from time to time; (iv) transfer, where necessary, the provident fund account of any employee; and (v) perform such other duties as may be specified in the Scheme.
A perusal of this Section would only go to show that some more provisions, legal and penal, are also made applicable to the exempted establishments with a view to make the penal provisions more stringent with a view to check the growth of arrears.
Therefore we are unable to agree with the learned counsel that Sections 14(IA) and 14(2A) are inapplicable to exempted establishments.
From the above discussion, it emerges that atleast Sections 14(IA) and 14(2A) are attracted to the facts in the present case and therefore it cannot be said that there is no prima facie case and conse 973 quently the accused cannot claim any acquittal, even before the conclusion of the trial under Chapter XX Cr P.C. dealing with trial of summons cases.
Other Sections like 14(2), 14A(l) and 14A(2) and paragraph 76 of the Employees Provident Fund Scheme 1952 will not apply to the facts of the present case.
Therefore the trial court may proceed with the trial for the offences punishable under Sections 14(IA) and 14(2A) against the appellants and dispose of the matter in accordance with law.
Subject to the above directions, these appeals are disposed of.
| was enacted with a view to provide for institution of provident fund for employees in factories and other establishments and was made applicable to every establishment which came within the meaning of 939 'factory '.
The Central Government under section 5 of the Act, framed the Employees ' Provident Fund Scheme in 1952 for establishment of provident funds for the employees of the establishments governed by the Act.
Management of such establishments had to contribute to the provident fund of its employees in accordance with section 6.
Contravention or default in complying with section 6.
was punishable under s 14.
Under section 17 the appropriate government was empowered to grant exemption from the operation of the 1952 Scheme provided the concerned establishment had Instituted its own provident fund scheme and the rules in this respect were not less favourable than those specified in section 6 and the employees were also in the enjoyment of other provident fund benefits.
The Act underwent major amendments in 1971 and thereafter.
The appellants were in the management of an establishment governed by the Act.
By a notification dated 17.10.1957 the Central Government granted exemption under section 17 to,the said establishment subject to the conditions specified in Schedule II, to the notification.
Condition No. 1 was to the effect that the factory was to have a provident fund scheme in force, the rules of which with respect to the rates of contribution should not be less favourable than those specified in section 6 of the Act and the employees should also be in the enjoyment of other provident fund benefits provided under the Act.
Consequently the 1952 Scheme did not apply to the company as it created a trust and the management was making contributions of provident fund to the said trust.
In September/October, 1975, the Inspector Provident Fund filed complaints that the appellants being incharge of the management of the establishment failed to pay contributions to the provident fund trust in 1974 and thereby committed offences punishable under sections 14(1A), 14(2), 14(2A), 14A(l), 14A(2), of the Act and Paragraph 76 of the 1952 Scheme, the appellants also received notice dated 15.9.1975 threatening to cancel the exemption granted under section 17.
In September 1975 the company was closed and liquidation proceedings were initiated.
The appellant filed applications before the Metropolitan Magistrate, before whom the complaints were pending, contending that section 6 of the Act was not applicable to establishments exempted under section 17, and no proceedings under section 14 could be initiated against them; and prayed for their acquittal and for dropping of the proceedings.
The application were rejected.
The appellants thereupon filed revision applications which were dismissed by the Addl.
Sessions Judge, holding that section 6 covered all the establishments Including the exempted one; that even an exempted 940 establishment was required to make full contribution to the provident fund as provided by section 6 and failure to pay contributions amounted to contravention of section 6 and attracted section 14(1A); and that since the conditions, subject to which exemption was granted under s.17, were violated, section 14(2A) was also attracted.
In appeal to this Court, it was contended by the appellants that since the establishment was exempted under section 17, it was governed neither by the 1952 Scheme nor by section 6 of the Act; that cancellation of exemption under section 17(4) was a penalty provided by or under the Act; that if the word 'contribution ' was construed strictly as defined in section 2, failure by an exempted establishment in not paying provident fund contributions to the trust was not a contravention of s.6; and that before the introduction of s.17(1A) by the Amendment Act 33 of 1988 the penal provisions including section 14(1A), and 14(2A) were not applicable to establishment exempted under section 17.
On the questions whether: (1) for contravention of the provisions of the , criminal proceedings could be instituted under section 14 of the Act against an establishment exempted under section 17; and (2) failure by the establishment in question to pay the provident fund contributions to the trust attracted the prosecution or only warranted cancellation of the exemption under section 17(4).
Disposing of the appeals, this Court, HELD: 1.1 An exempted establishment has to provide for its employees the benefits which are in no way less favourable than those provided under the and the Employees ' Provident Fund Scheme 1952.
Under section 17 the appropriate government may by notification and subject to such conditions as may be specified in the said notification, exempt an establishment from operation of the 1952 Scheme if it is satisfied that the establishment makes contribution to the provident fund, which can be called a provident fund scheme of its own, and the rules governing such scheme are not less favourable than those specified in section 6.
[953A c] 1.2 Contravention or non compliance of any of the conditions, subject to which exemption was granted under section 17 is punishable under section 14(2A) if no other penalty is elsewhere provided by or under the Act.
The essentials of the provisions are that there should be a contravention 941 or default in complying with the provisions of the Act or any of the conditions subject to which exemption was granted under section 17; and that there should be no other penalty elsewhere provided by or under the Act for such contravention or non compliance.
[954F G] 1.3 In the instant case, the default in making the provident fund contributions to the trust by the company amounted to contravention of the rules; and consequently condition no.1 mentioned in Schedule II to the notification dated 17.10.1957, subject to which the exemption was granted, was clearly violated.
[956D E] 2.1 In common parlance the word 'penalty ' is understood to mean: a legal or official punishment such as a term of imprisonment.
In some contexts it is also understood to mean some other form of punishment such as fine or forfeiture for not fulfilling a contract.
But in gathering the meaning of this word, the context in which it is used is significant.
[956G H; 957A] 2.2 Section 14 of the Act dealing with penalties shows that every contravention or non compliance mentioned in each of the sub sections is punishable with imprisonment and/or fine; and for some offences minimum punishment is also made compulsory.
The penalties mentioned in this connection would indicate that the Legislature envisaged that a penalty should necessarily mean imprisonment or at least imposition of fine.
Having regard to the object underlying the Act, the expression 'penalty ' in the context in which it is used in s.14 including section 14(2A), only connotes imposition of imprisonment or fine.
[957A B] 3.1 It is true that all the penal statutes should be construed strictly and the court must see that the thing charged as an offence is within the plain meaning of the words used, but it must also be borne in mind that the context in which the words are used is important.
The legislative purpose must be noted and the statute must be read as a whole.
The is a welfare legislation and section 14 including sections 14(2A) and 17 are part of it: and they should be interpreted in such a way so that the purpose of the legislation is allowed to be achieved.
[963B D] M/S International Ore and Fertilizers (India) Pvt. Ltd. vs Employees ' State Insurance Corporation; , , relied on.
Seaford Court Estates Ltd. vs Asher, [1949] 2 All E.R. 155, referred to.
942 3.2 Taking into consideration the object underlying the Act and on reading sections 14 and 17 In full, it becomes clear that cancellation of exemption does not amount to a penalty within the meaning of section 14(2A).
It cannot be said that mere cancellation of an exemption granted under s.17 amounts to a penalty particularly expected to be stringent as contemplated under section 14.
[963C; 957E] State of Uttar Pradesh through the Provident Fund Inspector, U.P. vs Lala Ram Gopal Gupta and three Others, [1973] Allahabad Law journal 355, approved.
Notwithstanding the exemption granted, the appropriate government does not lose its hold over the scheme framed by the establishment, and there are built in safeguards like section 17(4) to protect the interests of the employees.
Section 17 is a self contained provision dealing with the power to grant exemption and the consequent obligation.
The exemption is granted for getting better benefits and to ensure their continuance for the employees with a view to avoiding duplication in framing a scheme by the appropriate government on the lines as framed by the establishment itself and the purpose of the exemption is only to ensure such a scheme better than the one under section 6.The procedural aspect of section 17(4) provides for cancellation of such exemption by which only the privilege granted is being withdrawn by an executive order.
Such a cancellation does not penalise the management and consequently does not result in any punishment that is normally allowed in respect of an offence.
[960A B; 961B C] Mohmedalli and Others vs Union of India and Another, [1963] Suppl.
1 SCR 993, relied on.
3.4 So far as unexempted establishments are concerned, there are several other penal provisions like sections 14(1), 14(2) and 14AA and also in particular Paragraph 76 of the 1952 Scheme.
There are other legal provisions also which apply to unexempted establishments.
Therefore under the Amendment Act No. 33 of 1988 the Legislature wanted to make as far as possible these existing legal and penal provisions which are applicable to unexempted establishments, applicable also to exempted establishments.
That does not mean that there were no penal provisions earlier applicable to exempted establishments.
[971E F] 4.
The subject matter and the context in which a particular word is used are of great importance and it is axiomatic that the object underlying the Act must always be kept in view in construing the con 943 text in which a particular word is used.
The concept which prompted the legislature to enact this welfare law should also be borne in mind in interpreting the provisions ' Due weight ought to be given to the words "unless the context otherwise requires" occurring in section 2, which show that restricted meaning in the definitions should not be applied; and the words 'contribution ', 'scheme ', 'fund ' occurring in the said section should in the "context" be otherwise interpreted as to apply to a private scheme also and if there is a default in "contribution" by the exempted establishment, the same amounts to contravention of section 6 punishable under section 14(1a).
[968G H; 969A; 970D F] Commissioner of Expenditure Tax, Gujarat, Ahmedabad vs Darshan Surendra Parekh; , ; Bennet Coleman & Co. (P) Ltd. vs Punya Priya Das Gupta, ; ; Organo Chemical Industries and Another vs Union of India and Others, ; ; Kanwar Singh vs Delhi Administration, ; ; State of Gujarat vs Chaturbhuj Maganlal and Another, ; and Vanguard Fire & Gen. Ins Co. vs Fraser & Ross, ; , relied on.
Parekh cotton Mills (P) Ltd. vs State of Bombay, , referred to.
Sections 14(1A) and 14(2A) of the Act are attracted to the facts in the instant case and it cannot be said that there is no prima facie case; and consequently the accused cannot claim acquittal even before the conclusion of the trial under Chapter XX Cr.
P.C. dealing with trial of summons cases.
[972G H; 973A] Besides sections 14A(l) and 14A(2) of the Act, not being applicable, section 14(2) dealing with family pension scheme and insurance scheme is not relevant in the instant case.
Similarly Paragraph 76 of the 1952 Scheme is also not attracted as the establishment in question is exempted from operation of the said scheme.
[953G H; 954A; 973A] R. vs Smith, ; ; People ex rel Risso vs Randall, , ; City of Fort Wayne vs Bishop, , 547, ; City of Cincinnati vs Wright, 361, 77 Ohio App. 261; R. vs Clyne, ex p. Harrap ; at 201; Tolaram vs State of Bombay, ; ; S.K. Gupta and Another vs K.P. Jain and Another, [19791 3 SCC 54; State Bank of India etc.
vs Yogendra Kumar Srivastava and Others etc. ; ; Knightbridge Estates Trust Ltd. vs Byrne and Others, [1940] 2 All and National Buildings Construction Corporation vs Pritam Singh Gill and Others, ; , referred to.
Collins English Dictionary, Butterworths ' Words and Phrases, Legally defined 3rd Edn.
page 345, Principles of Statutory Interpretation by G.P. Singh Fourth Edition,1988, referred to.
|
tion No. 320 of 1987.
(Under Article 32 of the Constitution of India.) Jitender Sharma for the Petitioners.
Kepil Sibal, Ms. Tamali Das Gupta, Ms. J. Wad and Mr. R.Venkataramani (NP) for the Respondent.
The Judgement of the Court was delivered by THOMMEN,J.
This petition has been filed by the D.T.C. Workers ' Union and some its members.
The main relief sought by them, as contained in prayer (a), reads: "Issue a Writ of Mandamus or Direction to the respondent the Delhi Transport Corporation to implement w.e.f. 1.1.86 the recommendations of the Fourth Pay Commission as approved by the Government of India to the Central Government employees as per the undertakings gives to its employees vide Office Order NO.PLD IX(465)/83/10589 dated 15.9.1983 and DGM(IR)/84/93 dated 7.2.1984." The petitioners as well as the respondent, the Delhi Transport Corporation, rely heavily upon the Office Order No. DGM(IR)/84/90 dated 7.2.1984 issued by the Deputy General Manager of the respondent Corporation, although they differ in their construction of what it contains.
We shall, therefore, read the whole Order; 986 ". .
Before Interim Relief was announced by the Central Government for its employees to be paid w.e.f. 1.6.83, the Wage Group constituted by the Government of India for considering the demand regarding revision of pay scales of the employees of the Delhi Transport Corporation gave its report recommending revision of pay scales of all the Class III & IV employees as an interim measure pending receipt of Fourth Pay Commission report.
Thus the revised scales themselves were in the shape of an interim relief.
As interim relief was announced by the Government for its employees almost simultaneously some unions approached the Management opposing the introduction of new scales and asking for the interim relief as at the Government rates.
It was explained to them that the revised scales have a greater in built advantage as the benefit in some cases go even over hundred rupees while interim relief for workers was fifty to seventy rupees.
However, an option was given vide circular No.
PLD IX(465)/83/10589 dated 15.9.83 to the employees of the Corporation either to avail the benefit of interim relief and retain the old pay scales or to avail the benefit of the revised pay scales.
In reference to the clarification sought by the Unions, it was made absolutely clear beyond any ambiguity to the employees that (1) there is absolutely no intention to de link the DTC from the Central Government pay structure and DA pattern arbitrarily or unilaterally; (ii) if the Fourth Pay Commission granted any further interim relief or benefit before the final report, such benefit will be available to the DTC employees; (iii) the differential in the head start now given in the pay scales will be maintained even while implementing the scales recommended by the Fourth Pay Commission and (iv) the payscales recommended by the Working Group would be enforceable for a period of four year or the receipt of report of the Commission whichever is earlier.
It has already been made amply clear that differential in "head start" given in the revised pay scales will be maintained even while implementing the scales recommended by the Fourth Pay Commission.
In fixation of pay in the scales to be recommended by the Foruth Pay Commission, the employees coming over to the revised scales of pay will be given due benefit of Central Government Interim Relief so as to ensure that they are not at any disadvantage because of having opted for the revised scales now.
For instance, if the 987 pay of an individual in the pay scale of Rs.260 400 drawing a basic pay of Rs.260 per month who had opted for interim Relief at Central Government rates is fixed at Rs.310 p.m. by adding Rs.50 as Interim Relief a Basic Pay of Rs.260 whereas the pay of an employee who has opted for corresponding revised pay scale of Rs.284 440 and is drawing Basic pay of Rs.284 p.m. will be fixed at Rs.334 p.m. by adding Rs.50 to his Basic Pay of Rs.284.
In this connection our circular NoPLD IX(465) 83 dated 20.9.93 referees.
It has been clearly shown in the above illustrations as to how the revised pay scales will be beneficial to the employees.
It is opted that the employees will not be mislead now by any such interpretation which is being placed on the Ministry of Finance 's O.M. of 28th November ,1983.
" Referring to the concept of "head start" mentioned in the Order, Mr. Jitender Sharma, appearing for the petitioners, submits that it being the intention of the Corporation to protect the interim relief granted to the employees, not withstanding the recommendations of the Fourth Pay Commission, the employees are entitled to the interim relief, referred to as the "head start", in addition to the pay scale recommended by the Fourth Pay Commission, In other words, according to Mr.Sharma, the employees will be entitled not only to the new pay scale recommended by the Fourth Pay Commission, but more in the shape of interim reliefs which they had enjoyed during the period of the interregnum between their original pay scale and the new payscale.
Mr. Kapil Sibal, appearing for the respondent Corporation, submits that all that the Order dated 7.2.1984 has intended to state is that the "head start" in the form of interim relief will not deprive the employees of the full benefits of either the revised interim pay scale, i.e., the scale as revised during the interregnum, or the new pay scale subsequently introduced as per the recommendations of the Fourth Pay Commission.
The employees had the option either to accept the additional payment in the nature of an interim relief in the sum of Rs.50 or Rs.70 as the case may be, or the revised interim pay scale which was itself in the nature of an interim relief, pending adoption of the new scale recommended by the Fourth Pay Commission.
But once the employees are placed on the scale recommended by the Fourth Pay Commission, all the reliefs which they had earlier received would merge into the new scale and they would have no entitlement to any 988 additional payment.
Any payment in addition to what the Fourth Pay Commission recommended would place the employees of the Corporation at an undue advantage in comparison to the employees of the Government in Corresponding grades.
Any such deferential treatment, counsel points out, will be discriminatory and, therefore, unsustainable.
Mr. Sharma, however, refers to the scales of pay relating to the category of conductors, tailors,compositors etc.
Their scale of pay prior to June, 1983 was Rs.260 6 290 EB 6 326 EB 8 390 10 400.
A revised interim scale was introduced on 1.6.1983.
This scale was Rs.284 8 340 10 440.
On 1.1.86, a new scale was introduced on the basis of the recommendations of the Fourth Pay Commission.
That scale is Rs.950 20 1150 EB 25 1500.
This shows that, prior to 1.1.1986, an employee on the scale of Rs.260 400 as on 31.5.1983 had the option either to remain on that scale and draw an additional allowance or be placed on the revised interim scale of Rs.284 440 .
On 1.1.1986 all employees in the category of conductors etc., came on the scale of Rs.950 1500 whether or not, prior to that date, they had, in exercise of their option, remained on the original scale or Rs.260 400 with the additional allowances or been placed on the revised interim scale Rs.284 440.
According to Mr. Sharma, the "head start" promised by the Corporation means the additional allowances or revised scales recieved by the employees during the interregnum, and such benefits have to be super imposed over the new scale of Rs.950 1500.
He further submits, insofar as none of the employees of the Corporation had opted to remain on the original scale with the additional allowances, but had come on the revised interim pay scale, all the employees brought on the new pay scales on 1.1.86 are entitled to be fitted with reference to the total emoluments drawn on the revised interim scale.
A careful reading of the Order dated 7.2.1984 shows that certain interim benefits were granted to the employees preceding the introduction of the new pay scale on the basis of the recommendations of the Fourth Pay commission.
These benefits which were either in the nature of an additional payment or a revised interim pay scale were intended to cover the period preceding the introduction of the regular pay scale which came into effect on 1.1.86.
The Order further shows that the Corporation was to carry the same pay structure and DA pattern as in the case of the Government employees in the corresponding categories.
All benefits granted by the Fourth Pay Commission in the nature of interim reliefs were also to be made available to the 989 Corporation employees.
The interim reliefs granted by the Corporation in the nature of what is imprecisely referred to as "head start" were to be maintained in implementing the scales recommended by the Fourth Pay Commission.
The figures worked out in the penultimate paragraph of the Report indicate that whether the employees were retained on the original pay scale with the additional emoluments by way of interim relief or they had, as in the instant case, opted for the revised interim scale, they should suffer no loss by reason of the option they hadexercised.
But the overriding consideration behind the Other dated 7.2.1984 is that, as in the case of all Government employees, so in the case of the Corporation employees, the new scale recommended by the Fourth Pay Commission should be fully implemented.
What ever may be the amounts actually payable in terms of the interim reliefs, the employees of the Corporation should neither be paid less nor more than the Government employees in the corresponding categories.
This means that all employees, whether retained on the original pay scale or placed on the revised interim pay scale during the period preceding 1.1.86 will be placed on the pay scale adopted as per the recommendations of the Fourth Pay Commission in such a way that they will be fitted exactly in positions corresponding to their positions on the earlier pay scales.
But the corresponding positions in the new pay scales will naturally carry better emoluments, so as to maintain parity with the Government employees in like categories.
In the circumstances, we have no doubt that the recommendations of the Fourth Pay Commission will be fully implemendted in terms thereof.
Mr. Kapil Sibal, appearing for the Corporation, assures us that it will be so done.
Mr. Sibal 's submission is recorded.
In the circumstances, no further order is required.
The writ petition is accordingly disposed of.
No costs.
R.N.J. Pentition disposed of.
| The D.T.C. Workers ' Union and some of its members have filed this Writ Petition under Article 32 of the Constitution praying, as the main relief, for issue of a Writ of Mandamus or Direction to the respondent Corporation to implement w.e.f. 1.1.86 the recommendations of the Fourth Pay Commission as approved by the Government of India to the Central Government employees as per the undertakings given to its employees vide Office Orders No.
PLD IX (465/83/10589 dated 15.9.1983 and DGM(IR)/84/90 dated 7.2.1984.
Relying on the undertakings given in the said Office Orders it has been contended on behalf of the petitioners that the D.T.C. employees will be entitled not only to new pay scales as recommended by the Fourth Pay Commission to the corresponding categories in the Central Government but more in the shape of interim reliefs which they has enjoyed during the period of interregnum between their original pay scale and the new pay scales.
On behalf of the Corporation it has been submitted that all the reliefs which its employees had earlier received, be it additional payment in the nature of interim relief in the sum of Rs.50 or Rs.70 as the case may be, or the revised interim pay scale, pending adoption of the new scale recommended by the Fourth Pay Commission, would merge into the new scale and they would have no entitlement to any additional payment as any such differential treatment will be discriminatory and, therefore, unsustainable.
Disposing of the Writ Petition, this Court, HELD: The overriding consideration behind the Order dated 7.2.1984 is that, as in the case of all Government employees, so in the case of the Corporation employees, the new scales recommended by the Fourth Pay Commission should be fully implemented.
Whatever may be the amounts actually payable in terms to the interim reliefs, the 985 employees of the Corporation should neither be paid less nor more than the Government employees in the corresponding categories.[989C] All employees, whether retained on the original pay scale or placed on the revised interim pay scale during the period preceding 1.1.86, will be placed on the pay scale adopted as per the recommendations of the Fourth Pay Commission in such a way that will be fitted exactly in positions corresponding to their positions on the earlier pay scales.
But the corresponding positions in the new pay scale will naturally carry better emoluments, so as to maintain parity with the Government employees in like categories.
We have no doubt that the recommendations of the Fourth Pay Commission will be fully implemented in terms thereof.
[989D E]
|
Civil Appeal No.4094 of 1984.
From the Judgment and order dated 9.7.1984 of the Punjab & Haryana High Court in Civil Writ Petition No.5371 of 1981.
P.P. Rao, Sr.
and Janendra lal for the appellants.
S.C. Gupta, Rajinder Sachhar, Sudarshan Goyal, Vivek Bhandari, S.C.Patel, mahabir Singh and C.M. Nayar (NP) for the Respondents.
The Judgment of the Court was delivered by K.RAMASWAMY, J.
The appellants and the proforma respondents, thirty in number are employed in the Punjab Service of Engineers, Class II.
The Governor, in exercise of the power under proviso to article 309 of the Constitution of India framed the Punjab Service of Engineers, Class I, P.W.D. (Road and Buildings) Rules.
1960 for short the Rules constituting the Punjab Service of 204 Engineers, Class I, P.W.D. (Roads and Buildings Branch), After the formation of State of Haryana w.e.f.
November 1, 1966, the rules are called Haryana Service of Engineers, Class I, P.W.D. (Roads and Buildings Branch).
The services consist of Asstt.
Executive Engineers, Executive Engineers, Superintending Engineers, and Chief Engineers, as may be specified by the Government of Haryana from time to time (Rule 3(1).
The recruitment to the service is made by the government as per Rule 5(1); (a) by direct recruitment; (b) by transfer from any other services of the State Govt.
or of the Union of India; and (c) by promotion from Haryana Engineers, Class II Service.
The appellants for short 'the promotees" from Class II Service were promoted as Executive Engineers by relaxing five years length of service as Class II Engineers in officiating capacity on various dates between January 6, 1969 to May 29, 1971, There of them, namely, A.N. Sehgal, Raj Kumar and H.C. Sethi were confirmed as Executive Engineers w.e.f. July 11, 1973, December 11, 1974 and December 9, 1975 respectively.
The rest are yet to be confirmed.
Raje Ram Sheoran was recruited and appointed directly as Asstt.
Executive Engineer w.e.f October 25, 1971.
He too was given relaxation of the length of service of five years as Asstt.
Executive Engineer and was promoted as Executive Engineer on October 8, 1973.
He was confirmed w.e.f. December 22, 1976.
All the appellants except M.R. Gupta were further promoted as Superintending Engineers on different dates between 1980 to 1984 and Mr. Sheoran was promoted as Superintending Engineer on March 4, 1987 A.N. Sehgal was further promoted as Chief Engineer, Equally Mr. Sheoran was also promoted as Chief Engineer but the validity was challenged and it is not necessary to refer any further as it is subject matter of proceedings in the High Court.
R.R. Sheoran who was shown junior to the appellants, field Writ Petition No. 5371/81 and sought a writ of mandamus directing the second respondent, State Government to consider his case for promotion as Superintending Engineer from the date on which the respondents were promoted; to quash the gradation list; to assign the seniority over the appellants and the consequential reliefs.
On reference, a Division Bench of the High Court by its judgement dated July 9, 1984 agreed with the ratio laid down in M.S. Mighlani vs State of haryana & Anr., [1983] 1 S.L.R. 421 and held that R.R. Sheoran was a member of the service from the date of his initial appointment as Asstt.
Executive Engineer and the appellants and the proforma respondents are not members of the service and directed the learned Single Judge to dispose of th matter on merit.
This appeal on leave arises against the judgement of the Division Bench.
205 The controversy centres round the inter se seniority of the appellants and R.R. Sheoran.
For its determination the Rules need interpretation.
The counsel for parties agreed that we should decide the principles on consideration of the Rules and leave the matter for the State Govt.
to determine the inter se seniority by applying the law, so for as the controversy relating to relaxation of the length of service is concerned it is set at rest by this Court in J.C. Yadav vs State of Haryana, and K.K. Khosla V. State of Haryana, [1990] 2 SCC 199 by a bench of three Judges to which one of us (K.N. Singh, J.) was a member.
The only question which survives is as to when `the appellants ' and `R.R. sheoran ' become members of the respective services.
Shri P.P.Rao, learned Senior Counsel for the appellants contends that the appellants were promoted as Executive Engineers against regular vacancies, which were neither a stop gap arrangement nor fortuitous, and they continued in service without any break from the respective dates of their promotion, therefore, they are members of the service in a substantive capacity as Executive Engineers from the respective dates of promotion.
He further argued that since Raje Ram Sheoran was recruited as Asstt.
Executive Engineer w.e.f. August 30, 1971 along after the promotion of the appellants upto B.L. Goyal, the appellants are senior to R.R. Sheoran as Executive Engineers.
Proviso to Rule 5(2) entitles them to remain in a substantive capacity as Executive Engineers since requisite number of qualified Asstt.
Executive Engineers were not available for promotion.
In view of their continous officiation as Executive Engineers in terms of Rule 2(12)(a) of the rules, they must be deemed to be the members of the service from the dates of promotion and, therefore, they are seniors to R.R.Sheoran .
M/s. Sachhar, learned counsel for the State and Gupta for R.R. Sheoran on the other hand contended that unless the appellants were appointed substantively to the cadre posts they could not be members of the service.
R.R. Sheoran became member of the service from the date of his initial appointment as Asstt.
Executive Engineer, therefore, he is senior to the appellants and proforma respondents and the High Court rightly interpreted rule 5(2).
Since the High Court did not enter into the merits of the respective claims of the appellants and Sheoran, we express no opinion on merits except, as agreed by the parties, we declare the law on the interpretation of the rules and leave it to the State Govt.
to decide the inter se seniority on merits.
It is necessary to have a look into the Rules regulating the 206 service.
Rule 3(1) postulates that the service shall comprise of Assistant Executive Engineers, Executive Engineers, Superintending Engineers and Chief Engineers.
Rule 3(2) read with appendix `A ' enjoins the State of Haryana to determine the cadre strength of service each year.
Appendix `A ' lays down procedure to determine the cadre strength of service.
The senior posts include Executive Engineers and above while junior scale posts include Asst.
Executive Engineers .
Ex cadre posts also are contemplated in the respective senior posts and junior scale posts.
Rule 5(1)(a) posits recruitment to the service: (a) by direct recruitment; (b) by transfer and (c) by promotion from Class II service.
Sub rule (4) of Rule 5 says that all direct appointments to the service shall be to the post of Asstt.
Executive Engineer.
Proviso therein gives power to the government to appoint by direct recruitment as Executive Engineers, in exceptional circumstances, for reasons to be recorded in writing.
Rules 6 and 7 prescribe qualifications and method of appointment by direct recruitment .
Subrule (3) of Rule 7 states that appointment to the service shall be made according to the number of vacancies to be filled by direct recruitment strictly in the order of merit as indicated by the Public Service Commission.
As per Rule 11(1) and direct recruit shall remain on probation for a period of two years or extended period upto maximum of three years.
On satisfactory completion of probation, the government may confirm under clause (a) of sub rule (3) of Rule 11 or to discharge him from service otherwise.
The post of Asstt.
Executive Engineer is a junior scale post.
Under rule 12(3), they year of allotment of an Asstt.
Executive Engineer shall be the calendar year in which the order of appointment is issued by the government.
Rule 2(1) defines appointment to the service which includes an appointment made according to the terms and provisions of the rules to an officiating vacancy or to an ex cadre post provided that an officer so appointed shall not be deemed to have become a member of the service as defined in Clause (12) of Rule 2.
The Asstt.
Executive Engineer means a member of the service in the junior scale of pay, (Rule 2(2)).
Cadre post means permanent post in the service as per Rule 2(3).
`Class II Service ' means the Punjab Service of Engineers, Class II, in the Buildings and Roads Branch and includes, for purposes of promotion to and fixation of seniority in the Class I Service, Temporary Asstt.
engineers when a suitable Class II Officer is not available vide Rule 2(5).
Direct appointment means an appointment by open competition but does not include (a) an appointment made by promotion; (b) an appointment by transfer of an officer from the service of the State Government or of the Union, (Rule 2(7).
Ex cadre 207 post means a temporary post of the same rank as a cadre post vide Rule 2(10).
A member of the service means an officer appointed sub stantively to a cadre post and includes (a) in the case of a direct appointment an officer on probation, or such an officer who, having successfully completed his probation, awaits appointment to a cadre post vide Rule 2(12)(a).
A reading of the rules clearly indicates that an Asstt.
Executive Engineer appointment by open competition to a substantive vacancy in a cadre post and put on probation is a member of the service.
Equally such Asstt.
Executive Engineer recruited by open competition and appointment to an ex cadre post and put on probation and who having successfully completed his probation and awaits appointment to a cadre post would also become a member of the service.
The contention of Shri P.P.Rao is that an officer appointed substantively to a cadre post is a direct recruit and the inclusive definition encompasses within its ambit the promotee and the phase ``such an officer who having successfully completed his probation and awaits appointment to the cadre post ' ' is only referable to a promotee.
So promotee is also a member of the service from the date of initial promotion.
We may make it clear at this juncture that in normal service jurisprudence a direct recruit would always be recruited and appointed to a substantive vacancy and from the date he starts discharging the duty attached to the post he is a member of the service subject to his successfully completing the probation and declaration thereof at a later date and his appointment relates back to the date of initial appointment, subject to his being discharge from service on failure to complete the probation within or extended period or termination of the service according to rules.
Equally it is settle law that a promotee would have initial officiating promotion to a temporary vacancy or substantive vacancy and on successful completion and declaration of the probation, unless reverted to lower posts, he awaits appointment to a substantive vacancy.
Only on appointment to a substantive vacancy he become a member of the service.
But confirmation and appointment to a substantive vacancy always an inglorious uncertainty and would take unduly long time.
Therefore, the confirmation or appointment to a substantive capacity would not normally be a condition precedent to reckon the continuous length of service for the purpose of seniority.
On the facts of the case and the settled legal position, at first blush the argument of Shri P.P.Rao carried weight that the appellants would get their seniority from the respective dates of the initial promotion as Executive Engineers.
But we find that in the instant case the rules have made departure from the normal service jurisprudence as would 208 appear from the scheme under the rules.
Para 11(b) of appendix `A ' read with Rule 3(2), while determining the cadre strength of the service, adumbrates creation and appointment of Asstt.
Executive Engineers (direct recruit) to an ex cadre junior scale post in each year.
Therefore in a given situation, a direct recruit appointed to an ex cadre post, cannot be kept in lurch until he is appointed to a cadre post so as to become a member of the service.
Obviously to avoid such a hiatus, Rule 2(12)(a) was introduced.
The main part o Rule 2(12)(a) declares that an appointee substantively to a cadre post i.e., permanent post is a member of the service.
The inclusive definition brings an officer `by direct appointment on probation ' who having successfully completed probation and awaits appointment to a cadre post is also a member of the service.
Take for instance if direct recruitment is made to fill in five posts of Asstt.
Executive Engineers of which four are cadre posts and one ex cadre post and four persons are appointed to cadre posts in the order of merit and the last one to the ex cadre post.
The first four officers appointed on probation to the substantive vacancies and they are covered by the main part of Rule 2(12)(a).
The fifth one intended to cover the field of operation of the inclusive definition which says that `and also includes an officer directly appointed on probation ' `and such an officer who having successfully completed his probation, awaits appointment to a cadre post '.
The words `and such an officer ' `directly appointed ' would obviously referable to an Asstt.
Executive Engineer directly appointed to an ex cadre post; who may be placed on probation and awaits appointment to a cadre post.
By operation of the definition clause he also becomes the member of the service from the date of initial appointment.
This view is further fortified by the definition the `appointment to the service ' in Rule 2(1) which says that appointment to the service includes an appointment made according to the terms and provisions of these rules to an officiating vacancy or to an ex cadre post.
Rule 2(7) says that direct appointment means appointment by open competition but excludes `promotee ' or `transferee '.
So a promotee promoted to an officiating vacancy or on ex cadre post does not become member of the service unless he is appointed substantively to a cadre post.
We, therefore, hold that a direct recruit appointed to an ex cadre post alone is a member of the service even while on probation and Rule 2(12)(a) applies to them and it does not apply to promotee from Class II service.
An Asstt.
Executive Engineer, on putting five years of service under rule 9(3)(a) and passing the department examination as 209 required under rule (15), (unless the qualifications are relaxed in exercise of the power under rule (22) of the rules) becomes eligible for promotion as Executive Engineer.
The State Govt.
had relaxed the required length of five years service of the promotees as well as direct recruits.
R.R.Sheoran therefor became eligible to be considered for promotion.
As per the procedure prescribed in this regard under rule 9(2), he was found fit and suitable and was promoted as an Executive Engineer w.e.f. October 8, 1973.
Though M/s. Sachhar and Gupta contended that the direct recruit need not undergo the required probation ad Executive Engineer, we find no force in the contention.
The normal channel of appointment to the post of Executive Engineer, a senior post, is by way of promotion to which a direct recruit Asstt.
Executive Engineer is entitled to be considered.
On promotion he shall be on probation for a period of one year as per Rule 11(1)(a), but the period spent on officiation as Executive Engineer shall be taken into account for purposes of completing the period of probation and on its successful completion, he shall remain in service As Executive Engineer.
On a conjoint reading of Rule 12(3) and 12(5) it is clear that the year of allotment of the Asstt.
Executive engineer in the post of Executive Engineer, shall be the calendar year in which th order of appointment as Asstt.
Executive Engineer had been made.
Thus his seniority as Executive engineer, by fiction of law, would relate back to his date of initial appointment as Asstt.
Executive Engineer and in Juxta position to Class II officers ' seniority as Executive Engineer is unalterable.
The date of the seniority of Mr. R.R.Sheoran 1971.
The question then is what is the date from which the seniority of a promotee as Executive Engineer shall be reckoned? The contention of Shri P.P. Rao is that Rule 5(2) reserve 50% of the posts to the direct recruits but the proviso thereto makes a built in relaxation, namely, so long as the required number of direct recruits are not available to occupy those posts, the promotees are entitled to hold those posts also.
Admittedly except R.R. Sheoran no other direct recruit was available.
The promotees are eligible to occupy all the cadre posts even in excess of their quota.
The seniority has to be determined from the respective dates of initial officiating promotion.
Shri Rao ' further contention that the phrase `such an officer appointed to an officiating post ' has reference only to promotees cannot be accepted for the reasons given earlier.
The officer appointed directly is referable only to Asstt.
Executive Engineer and a promotee by operation of Rules 2(7) stands excluded until he is appointed substantively to a cadre post.
210 When an officer is appointed substantively to a cadre post, is the next question.
It is settled law that all the rules should be harmoniously construed giving life, force and effect to every part of the rule of clause or word so that no part would be rendered redundant, ineffectual, nugatory or otiose.
Rule 5(1) regulates recruitment to the service from three sources, namely, direct recruitment; by transfer and by promotion from Class II service.
Sub rule (2) thereof prescribes the ratio between the promotees and others.
It says that, "recruitment to the service shall be so regulated that the number of posts so filled by promotion from Class II service shall not exceed 50%" of the number of posts in the service excluding the posts of Asstt.
Executive Engineers; provided that till such time the adequate number of Asstt.
Executive Engineers who ar eligible and considered fit for promotion are available, the actual percentage of officers promoted from Class II service `may be larger than 50%.
A reading thereof clearly manifests the legislative animation, namely, that the promotees from Class II service shall not exceed 50% of the posts in the service.
The word `shall ' indicates that it is mandatory that the remaining 50% shall be kept open only to the Asstt.
Executive Engineers who were directly recruited but later were found eligible and fit for promotion as Executive Engineers.
Therefore, unless the government resorts exceptionally with prior permission of Public Service Commission, vide Rule 10 to recruitment by transfer of an officer from other service of the State Govt.
or of the Union, the remaining 50% of the posts as Executive Engineers, Superintending Engineers and Chief Engineers shall be occupied only by the direct recruit Asstt.
Executive Engineers.
It is settled law that prescription of quota for recruitment from different sources is constitutionally a valid rule.
Rule 5(2) limits 50% posts to the promotees from Class II Service and no further, but the proviso to the Rule lays down that till adequate number of Asstt.
Executive Engineers are available, the rigour of 50% quota may be relaxed and Class II officers may be promoted in excess of their quota.
What is the intendment of the class `the actual percentage of officers promoted from Class II service may be larger than 50% is the question.
The mandate of Rule 5(2) is that the officers promoted from Class II service shall in no case exceed 50% of the number of posts in the service.
Unless it is relaxed, the appointment and occupation of the posts by promotee in excess thereof is irregular or illegal and the government have no power to promote persons from Class II service to fill in such posts of Executive Engineers Superintending Engineers and Chief Engineers.
It is common knowledge that direct recruitment as Asstt.
Executive Engineers 211 or Executive Engineer; in exceptional circumstances is a tardy process and even after appointment they have to put in five years service.
The balance 50% of the posts cannot be kept vacant.
With a view to allow the wheels of the administration moving, the proviso carves out an exception and allows the promotees to occupy temporarily the posts in excess of their quota.
In this view the contention of Shri Rao that the seniority as Executive Engineer is to be counted from the date of initial temporary promotion cannot be accepted as it would allow the promotees to occupy 100% posts of Executive Engineers, Superintending Engineers and Chief Engineers leaving little room for Rule 5(2) (a) to operate in full force.
The exception would eat away the flesh and blood of Rule 5(2)(a) freezing the channel of promotion to the direct recruits to senior posts for a very long time to come.
In the absence of rule of rotation there may be no chance to a direct recruits to occupy the senior posts.
That does not appear to be the intendment, scope and operation of the proviso.
The intendment appears to be that so long as the direct recruit Asstt.
Executive Engineer, eligible and considered fit for promotion is not available, the promotee from Class II service in excess of the quota is eligible to occupy on officiating capacity the senior posts, i.e., Executive Engineers and above.
The moment direct recruits are available, they alone are entitled to occupy 50% of their quota and the promotees shall give place to the direct recruits.
It is a cardinal rule of interpretation that a proviso to a particular provision of a statute only embraces the field which is covered by the main provision.
It carves out an exception to the main provision to which it has been enacted by the proviso and to no other.
The proper function of a proviso is to except and deal with a cause which would otherwise fall within the general language of the main enactment, and its effect is to confine to that case.
Where the language of the main enactment is explicit and unambiguous, the proviso can have no repercussion on the interpretation of the main enactment, so as to exclude from it, by implication what clearly falls within its express terms.
The scope of the proviso, therefore, is to carve out an exception to the main enactment and it excludes something which otherwise would have been within the rule.
It has to operate in the same field and if the language of the main enactment is clear, the proviso cannot be torn apart from the main enactment nor can it he used to nullify by implication what the enactment clearly says nor set at naught the real object of the main enactment, unless the words of the proviso are such 212 that it is its necessary effect.
In V.B. Badami, etc.
vs State of Mysore, [1976] 1SCR 815 dealing with the problem arising out of quota rule between promotees, this Court observed that: "In working out the quota rule, these principles are generally followed.
First, where rules prescribe quota between direct recruits and promotees, confirmation or substantive appointment can only be in respect of clear vacancies in the permanent strength of the cadre.
Second, confirmed persons are senior to those who are officiating.
Third, as between persons appointed in officiating capacity, seniority is to be counted on the length of continuous service.
Fourth, direct recruitment is possible only by competitive examination which is prescribed procedure under the rules.
In promotional vacancies, the promotion is either by selection or on the principle of seniority cum merit, a promotion could be made in respect of a temporary post or for a specified period but a direct recruitment has generally to be made only in respect of clear permanent vacancy either existing or anticipated to arise at or about the period of probation is expected to be completed.
Fifth, if promotions ar made to vacancies in excess of the promotional quota, the promotions may not be totally illegal but would be irregular.
The promotees cannot claim any right to hold the promotional posts unless the vacancies fall within their quota.
If the promotees occupy any vacancies which are within the quota of direct recruits, when direct recruitment takes place the direct recruits will occupy vacancies within their quota.
Promotees who were occupying the vacancies within the quota of direct recruits will either be reverted or they will be absorbed in the vacancies within their quota in the facts and circumstances of a case".
With a view to have efficient and dedicated services accountable to proper implementation of Govt.
policies, it is open, and is constitutionally permissible for the State, to infuse into the services, both talented fresh blood imbued with constitutional commitments, enthusiasm, drive and initiative by direct recruitment, blended with matured wealth of experience from the subordinate services.
It is permissible to constitute an integrated service of persons recruited from two or more sources, namely, direct recruitment, promotion from subordinate 213 service or transfer from other services, Promotee from subordinate generally would get few chances of promotion to higher echolans of services.
Avenues and facilities for promotion to the higher services to the less privileged members of the subordinate service would inculcate in them dedication to excel their latent capabilities to man the cadre posts.
Talent is not the privilege of few but equal avenues made available would explore common man 's capabilities overcoming environmental adversity and open up full opportunities to develop one 's capabilities to shoulder higher responsibilities without succumbing to despondence.
Equally talented young men/women of great promise would enter into service by direct recruitment when chances of promotions are attractive.
The aspiration to reach higher echolans of service would thus enthuse a member to dedicate honestly and diligently to exhibit competence, straightforwardness with missionary zeal exercising effective control and supervision in the implementation of the programmes.
The chances of promotion would also enable a promotee to imbue involvement in the performance of the duties; obviate frustration and eliminate proclivity to corrupt practices, lest one would tend to become corrupt, sloven and mediocre and a dead wood.
In other words, equal opportunity would harness the human resources to augment the efficiency of the service and under emphasis on either would upset the scales of equality germinating the seeds of degeneration.
With a view to achieve this objective, the rule making authority envisaged to appoint direct recruits as well as by promotion from Class II Service, otherwise by transfer from other services.
In interpreting the rules, effect must be given to allow everyone drawn from these sources to have their due share in the service and chances of involvement of effectively discharge the duties of the posts honestly and efficiently with dedication.
Any wanton or deliberate deviation in the implementation of the rules should be curbed and snubbed and the rules must be strictly implemented to achieve the above purpose.
If wanton deviations are allowed to be repeated, it would breed indiscipline among the service and amounts to undue favour to some and denial of equality for many for reasons known or unknown subverting the purpose of the rules.
It is settled law that appointment to a post in accordance with the rules is condition precedent and no one can claim appointment to a post or promotion, as of right, but has a right to be considered in accordance with the rules.
Appointment by promotion or direct recruitment, therefore, must be in accordance with the rules so as to 214 become a member of the service in a substantive capacity.
Seniority is to be fixed in accordance with the principles laid down in the rules.
Rule 8 prescribes procedure for appointment by promotion from Class II services.
Rule 9(2) states that promotion would be made by selection on the basis of merit and suitability in all respect and no member of the service shall have any claim, to such promotion as a matter of right by mere seniority.
The committee as constituted under Rule 8 shall prepare the list of officers considered fit for promotion in the order of merit and on approval by the public Service Commission, the State Govt.
shall appoint the persons from the list in the order in which the names have been placed by the Commission, Appointment by promotion may be made under Rule 8(12) to an excadre post or to any post in the cadre in an officiating capacity from the list prepared as aforesaid.
On promotion, as per Rule 11(1), officer shall be on probation for a period of one year, but if the officer had been officiating as an Executive Engineer the period of officiation would be counted towards probation.
Rule 11(4) provides the on satisfactory completion of the probationary period, the Govt.
confirms the officiating promotee and "appoint him in a substantive capacity on a cadre post provided the post is available to him".
If no cadre post is available, the officer has to wait for an appointment to the cadre post.
A promotee within quota under rule 5(2) gets his seniority from the initial date of his promotion and the year of allotment, as contemplated in Rule 12(6) shall be the next below "the junior most officer in the service whether officiating or confirmed as Executive Engineer before the former 's appointment ' counting the entire officiating period towards seniority, unless there is break in the service or from the date of later promotion.
Such promotee, by necessary implication, would normally become senior to the direct recruit promoted later.
Combined operation of sub rules (3) to (5) of Rule 12 makes the direct recruit a member of the service of Executive Engineer from the date of year of allotment as an Asstt.
Executive Engineer.
The result is that the promotee occupying the posts within 50% quota of the direct recruits, acquired no right to the post and should yield to direct recruit though promoted later to him, to the senior scale posts i.e., Executive Engineer, Superintending Engineer and Chief Engineer.
The promotee has right to confirmation in the cadre post as per Rule 11(4) if a post is available to him within his quota or at a later date under rule 5(2) read with 11(4) and gets appointment under section 8(11).
His seniority would be reckoned only from the date of the date of the availability of the post and the year of allotment, he shall be next below to his immediate 215 senior promotee of that year or the junior most of the previous year of allotment whether officiating or permanent occupying the post within 50% quota.
The officiating period of the promotee between the dates of initial promotion and the date of the availability of the cadre post would thus be rendered fortuitous and stands excluded.
A direct recruit on promotion within his quota, though later to the promotee is interposed in between the periods and interjects the promotee 's seniority; shaps the links in the chain of continuity and steals a march over the approved promotee probationer.
Harmonious construction of rule 2(1), 2(3), 2(7), 2(10), 2(12),(a) 5(2)(a), 8,9(2), 11, 12(3), 12(5) to 12(7) would yield to the above result, lest the legislative animation would be defeated and the rules would be rendered otiose and surpluses.
It would also adversely effect the morale and efficiency of the service.
Mere officiating appointment by promotion to a cadre post outside the quota; continuous officiation therein and declaration of probation would not clothe the promotee with any right to claim seniority over the direct recruits.
The necessary conclusion would, therefore, be that the direct recruit shall get his seniority with effect from the date of the year of the allotment as Asstt.
Executive Engineer which is not alterable.
Whereas the promotee would get his seniority w.e.f.
the date of the availability of the posts within 50% quota of the promotees.
The year of allotment is variable and the seniority shall be reckoned accordingly.
Appointment to the cadre post substantively and confirmation thereof shall be made under rule 8(11) read with Rule 11(4) of the rules.
A promotee Executive Engineer would only then become member of the service, `Appointed substantively ' within the meaning of Rule 2(12) (a) shall be construed accordingly.
We, further hold that the seniority of the promotee from Class II service as Executive Engineer shall be determined with effect from the date of which the cadre post was available to him and the seniority shall be determined accordingly.
In K.C.Joshi & Ors. etc.
vs Union of India & Ors., [1990]2 Scale 951 a Bench of three Judges to which one of us (K. Ramaswamy, J.) was a member, considered similar question.
In that case U.P. Forest Service Rules, 1952 provides, two sources of recruitment to the post of Asstt.
Conservators of Forest.
The petitioners therein were Forest Range Officers in U.P. Forest Subordinate Service.
The respondents were direct recruits as Asstt.
Conservators of Forest.
The rules prescribed ratio between direct recruits and promotees.
Due to delay in recruitment as Asstt.
Conservators of Forest, the Forest Rangers were promoted in excess of their quota as Asstt.
Conservators of Forest temporarily and continued in service without any break for 5 to 12 216 years.
The promotees claimed seniority from the date of their initial promotion.
Considering the scope of the rules and rights acquired by the petitioners therein and the direct recruits, the Court held that: "When promotion was outside the quota, the seniority would be reckoned from the date of the vacancy within the quota, rendering the pervious service fortuitous.
The previous promotion would be regular only from the date of the vacancy within the quota and seniority shall be counted from that date and not from the date of his earlier promotion or subsequent confirmation.
In order to do justice to the promotees it would not be proper to do injustice to the direct recruits.
The rule of quota being a statutory one must be strictly implemented and it is impermissible for the authorities concerned to deviate from the rule due to administrative exigencies of expediency.
The result of punishing down the promotees appointed in excess of the quota may work hardship but it is unavoidable and any construction otherwise would be illegal, nullifying the force of statutory rules and would offend articles 14 & 16(1).
Therefore, the rules must be carefully applied in such a manner as not to violate the rules or equality assured under article 14 of the Constitution.
This Court interpreted that equity is an integral part of article 14.
So every attempt would be made to minimise, as far as possible inequity.
Disparity is inherent in the system of working out integration of the employees drawn from different sources, who have legitimate aspiration to reach higher echolans of service.
A feeling of hardship to one, or heart burning to either would be avoided.
At the same time equality is accorded to all the employees".
Shri P.P. Rao urged that the cadre posts in Rule 2(12) must include not only the permanent posts but also temporary posts continued for more than three years and notional posts which may have existed for short spells during preceding three years taking into account the number of months and days for which each post had existed as per the formula prescribed in appendix `A ' read with Rule 3 of the rules.
He further urged that the promotees appointed to such posts should be treated to be `members of the service ' interms of Rule 2(12)(a) and that their promotion should be retrospectively declared to have been promoted w.e.f.
the dates on which the posts were created.
We are unable to accept this contention.
Rule 3 read with 217 appendix `A ' confers power and also imposes duty on the State Govt.
to determine the cadre posts from time to time and in the first five years on the first day of each year.
This exercise should be done in the light of the criteria prescribed in appendix `A '.
The present controversy does not concern itself with the method and manner of determination of th cadre posts, though determination of seniority hinge upon it.
Therefore, for determining seniority, the State Govt.
should undertake the exercise interms of Rule 3 read with appendix `A '.
The rules postulate that substantive appointment to a cadre post is a condition precedent to become a member of the service.
A class II officer shall be promoted to a temporary post or in an officiating capacity to a cadre post if vacancy exist ' when he occupies a vacancy in a substantive post and continued uninterruptedly it would be open to the appointing authority to put the promotee Executive Engineer on probation.
Though confirmation is an inglorious uncertainty depending neither on the efficiency of the officer nor generally on the availability of the post, the mandate of Quota of 50% in Rule 5(2) should be adhered to.
Declaration of probation and confirmation to a cadre post, if available, under Rule 11(4) shall be made.
Seniority of such approved or confirmed promotee should be counted from the date of either initial officiating promotion of continous later officiation from the date of availability of the cadre post, however, should be next below his senior promotee or the junior most of the preceding year of allotment within the quota.
If no post is available till such date of the availability, the entire period of continuous officiation would be rendered fortuitous.
The contention, therefore, that the promotion would relate back retrospectively to the date of creation of the post and the appointment to the vacancy shall be with reference to the date of the creation of the post, would result anomalies and render Rule 5(2) to the direct recruits surplusage.
Shri P.P. Rao 's further contention that the de facto promotion and the retrospective declaration of cadre post would make the Class II officers as de jure members of the service from the very date of temporary appointment w.e.f.
the date of initial appointment also lacks force for the same reasons.
The principles laid down in R.P. Khanna vs S.A.F. Abbas & Ors., [1973]3 SCR. 548 at 557 C J .
is not applicable to the facts of this case.
In that case the certain posts in State services were required to be declared as senior cadre posts in the All India Service, but before such declaration could be made some of the promotee officers officiated in the senior cadre post.
In that context the Court observed that 1the promotee could not get the benefit of officiation unless the post was declared a equivalent to a senior cadre 218 post before the promotee was appointed; to officiate him would defeat the policy of the government ' and held that they are entitled to the benefit of the retrospective declaration `in the absence of things practical as well as reasonable.
The scheme of the rules made a definite departure to the normal service jurisprudence and the operation of the scheme in the rules must be given full effect.
In the instant case under the Rules `determination of seniority would be ' made only after the promotee becomes a member of the service.
Therefore, the year of allotment must be determined having regard to (i) availability of the cadre post within quota; (ii) satisfactory completion of the probation; and (iii) appointment to the post in the substantive capacity in term of Rules 12(6) and (7) read with 11(4) and Rule 8(12).
Any other construction would be contrary to the avowed object of the rules as a whole.
The inclusive definition of Rule 2(12) (a) must be interpreted liberally and not restrictively.
Undoubtedly the inclusive definition always receives liberal interpretation to bring within its ambit cognate but unforeseen similes.
But the rules envisage only three sources of recruitment, namely, direct recruitment, appointment by promotion and in exceptional cases with prior approval of the Public Service Commission as per Rule 10, the appointment by transfer from other services of the State or Central Govt.
Until the ex cadre posts are declared to be cadre posts they remain ex cadre posts.
The promotion to the ex cadre post is temporary or to a cadre post could be only on officiating basis.
It may be open to the government to abolish at any time the ex cadre posts.
Determination of cadre strength is a condition precedent for Rule 5(2)(a) to operate.
Till a promotee is confirmed in a substantive capacity as Executive Engineer, he continues to retain line in Class II service.
The interpretation that the promotion to the temporary post or ex cadre post within the meaning of Rule 2(10) should also be deemed to be an appointment to a substantive post would do violence to the language of the relevant rules and the scheme.
It is true that this Court in Baleshwar Dass & Ors.
vs State of U.P. & Ors.
, [1981] 1 SCR 449 at 463 held that there cannot be probation for a government servant who is not to be absorbed substantively in the service on completion.
The ratio therein does not apply to the facts of this case for the reason that the Govt.
itself did not understand the scope and operation of the rules properly as is amply demonstrated from their mutually irreconcilable inconsistent stand taken in the counter affidavits filed by the State Govt.
in the High Court and in this Court.
That apart, it would appear that in the instant case after the formation of the State of Haryana, adequate number of officers were 219 not available to hold the posts.
The length of service and passing of prescribed tests were relaxed enmass.
In view of the above peculiar and special facts merely because the promotee Class II Officers were put on probation and the same was declared it does not clothe them with any right to deemed appointment to substantive vacancies in excess of their quota with retrospective effect from the date of initial promotion to the cadre posts.
The year of allotment of a direct recruit is always the year in which he is appointed to the junior scale post of Asstt.
Executive Engineer but the year of allotment to the promotee is variable depending on the availability of the cadre post within quota of 50% and subject to taking the seniority next below the junior most promotee of the preceding year of allotment or immediate senior of the same year.
If the contention of Shri P.P. Rao is accepted is accepted it would render Rule 8(11) mutually inconsistent with Rule 5(2w) read with Rules 2(7) and 2(12) and Rule 2(1).
No countenance could be given to the contention that the officers put on probation in terms of Rule 11(1) irrespective whether they occupied declared posts, but also posts which ought to have been declared as such from time to time and have continuously remained in service entitle them to become member of service and that, as and when the posts occupied by them are declared as cadre posts with retrospective effect, they are entitled to be treated as members of the service w.e.f.
the due dates.
In other words it amounts to put a premium on the inaction on the part of the State Govt.
to declare the cadre posts in terms of Rule 3(2) read with appendix `A ' defeating the scheme of the Rules.
The contention that our interpretation renders Rule 2(12) arbitrary and discriminatory violating articles 14 and 16 is also not tenable.
A direct recruit, by operation of Rule 2(12) (a) read with Rules 2(1) and 2(10), though appointed to an ex cadre post, by fiction of law, becomes a member of the service from the date of his initial appointment since being a fresh recruit.
On his satisfactory completion of the prohibition and on availability of the cadre post as Asstt.
Executive Engineer, he becomes a confirmed Asstt.
Executive Engineer.
While a promotee Executive Engineer continues to retain his line on the posts as Class II officers still he is appointed substantively to Class I service.
There is reasonable classification and discernable distinction drawn between the direct recruit and the promotee.
The nexus is to treat direct recruit Asstt.
Executive Engineer appointed to the cadre posts as well as ex cadre post at par as members of the service and the deeming clause is to serve this purpose.
Thus, there is nether invidious discrimination nor arbitrariness in Rule 2(12)(a) offending articles 12 & 16.
The differentiation drawn between direct recruit and the 220 promotee bears rational relation to the object of Rule 2(12), the ratio of the Constitution Bench in B.S. Yadav vs State of Haryana, and The Direct Recruit, Class II Engineering Officers ' Association vs State of Maharashtra & Ors., ; at 745 cannot be imported bodily and applies to the ficts of the case in the light of the operation of the rules in question.
The further contention that Rule 12 adumbrates that not only a member of the service, but even an officer officiating as an Executive Engineer before becoming a member of the service is entitled to an year of allotment because the rules nowhere say that only members of service are entitled to year of allotment is devoid of substance.
As already discussed a promotee cannot be given year of allotment, before he becomes a member of the service and his seniority cannot be fixed arbitrarily with reference to the date of his initial promotion to an ex cadre post or continuous officiating in a cadre post without break, as the case may be.
We accordingly, direct the Government of Haryana to determine the cadre posts, if not already done, regularly from time to time including the post created due to exigencies of service in terms of Rule 3(2) read with appendix `A ' and allot the posts ineach year of allotment as contemplated under rule 12 read with Rule 5(2)(a) and issue orders appointing substantively to the respective posts within the quota and determine the inter se seniority between the appellants promotees and R.R. Sheoran, direct recruits in the respective quota cadre posts of Executive Engineers etc.
within four months from the date of receipt of this judgment.
The inter se seniority of promotees and direct recruits shall be determined accordingly.
All the inpugned promotions or those pending proceedings in the High Court or in this Court shall be subject to the above determination and the status quo would continue till the appointments according to the rules are made and seniority is determined in the light of the law declared inthis judgment.
The appeals is disposed of accordingly.
In the circumstances parties are directed to bear their respective costs.
| The appellants, `the promotees ' from Class II service were promoted as Executive Engineers by relaxing five years length of service as Class II Engineers in officiating capacity on various dates between January 6, 1969 to May 29, 1971.
Only the appellant No. 1 and two other were confirmed as Executive Engineers w.e.f. July 11, 1973, December 11, 1974 and December 9, 1975 respectively.
The respondent No.1 was recruited and appointed directly as Asstt.
Executive Engineer w.e.f. October 25,1971.
he was also given relaxation of the length of service of five years as Asstt.
Executive Engineer and was promoted as Executive Engineer on October 8, 1973 and was confirmed w.e.f. December 22, 1976.
199 All the appellants except one M.R. Gupta were further promoted as Superintending Engineers on different dates between 1980 to 1984 whereas the respondent No. 1 was promoted as Superintending Engineer on March 4, 1987.
The applicant No. 1 was further promoted as Chief Engineer The validity of the promotion of respondent No. 1 to the post of Chief Engineer was challenged.
The respondent No. 1 who was shown junior to the appellants, field Writ Petition seeking a writ of mandamus directing the second respondent, State Government to consider his case for promotion as Superintending Engineer from the date on which the respondents were promoted assigning the seniority over the appellants and the consequential reliefs.
On reference, a Division Bench of the High Court held that respondent No. 1 was a member of the service from the date of his initial appointment as Asstt.
Executive Engineer and the appellants and the proforma respondents were not members of the service and directed the Single Judge to dispose of the matter on merit, against which, this appeal on leave was filed.
The appellants contended that the appellants being promoted as Executive Engineers against regular vacancies, which were neither a stop gap arrangement nor fortuitous, and being continued in service without any break from the respective dates o their promotion, they were members of the service in a substantive capacity as Executive Engineers from the respective dates of promotion; that since the respondent No. 1 was recruited as Asstt.
Executive Engineer w.e.f. August 30, 1971 long after the promotion of the appellants, the appellants were seniors to the respondent No. 1 as Executive Engineers, as Proviso to Rule (5)2 entitles them to remain in a substantive capacity as Executive Engineer since requisite number of qualified Asst.
Executive Engineers were not available for promotion; that in view of their continous officiation as Executive Engineers in terms of Rule 2(12)(a) of the rules, they must be deemed to be the members of the service from the dates of promotion and, therefore, they were seniors to the respondent no.1.
The respondents contended that unless the appellants were appointed substantively to the cadre posts they could not be members of the service.
The respondent No. 1 became a member of the service 200 from the date of his initial appointment as Asstt.
Executive Engineer, therefore, he was senior to the appellants and proforma respondents.
As agreed by the parties, this Court declare the law on the interpretation of the rules and leave the matter for the State Govt.
to decide the inter seniority on merits.
Disposing the appeal, it is.
HELD: 1.
Appointment to a post in accordance with the rules is a condition precedent and no one can claim appointment to a post or promotion, as of right, but has a right to be considered in accordance with the rules, Appointment by promotion or direct recruitment, therefore, must be in accordance with the rules so as to become a member of the service in a substantive capacity.
Seniority is to be fixed in accordance with the principle laid down in the rules.
[213G 214A] 2.
The promotee has right to confirmation in the cadre post as per Rule 11(4) if a post is available to him within his quota or at a later date under rule 5(2) read with rule 11(4) and gets appointment under rule 8(11).
His seniority would be reckoned only from the date of the availability of the post and the year of allotment, he shall be next below to his immediate senior promotee of that year or the junior most of the previous year of allotment whether officiating or permanent occupying the post within 50% quota.
[214G 215A] 3.
A direct recruit on promotion within his quota, though later to the promotee is interposed in between the periods and interject the promotee 's seniority; snaps the links in the chain of continuity and steals a march over the approved promotee probationer.[215B] 4.
Mere officiating appointment by promotion to a cadre post outside the quota; continuous efficiation therein and declaration of probation would not clothe the promotee with any right to claim seniority over the direct recruits.
The necessary conclusion would, therefore, be that the direct recruit shall get his seniority with effect from the date of the year of the allotment as Asstt.
Executive Engineer which is not alterable.
Where the promotee would get his seniority w.e.f.
the date of the availability of the posts within 50% quota of the promotees.
[215D] 5.
The seniority of the promotee from Class II service Executive Engineer shall be determined with effect from the date on which the cadre post was available to him and the seniority shall be determined accordingly.[215F] 201 6.
Under the Rules `determination of seniority would be made only after the promotee becomes a member of the service '.
Therefore the year of allotment must be determined having regard to (i) availability of the cadre post within quota; (ii) satisfactory completion of the probation, and (iii) appointment to the post in the substantive capacity in term of Rules 12(6) and (7) read with Rule 11(4) and Rule 8(12).
Any other construction would be contrary to the avowed object of the rules as a whole.[218B C] 7.
There is neither invidious discrimination nor arbitrariness in Rule 2(12)(a) offending articles 14 & 16.
The differentiation drawn between direct recruit and the promotee bears rational relation to the object of Rule 2(12).
[219H] 8.
The Government of Haryana to determine the cadre posts, if not already done, regularly from time to time including the post created due to exigencies of service in terms of Rule 3(2) read with appendix `A ' and allot the post in each year of allotment as contemplated under rule 12 read with Rule 5(2)(a) and issue orders appointing substantively to the respective posts within the quota and determine the inter se seniority between the appellants promotees and the direct recruit in the respective quota cadre posts of Executive Engineers etc.
within four months from the date of receipt of this judgment.
The inter se seniority of promotees and direct recruits shall be determined accordingly.
[220D E] M.S. Mighlani vs State of Haryana & Anr. ; J.C. Yadav vs State of Haryana, ; K.K. Khosla vs State of haryana, [1990] 2 SCC 199; V.B. Badami, etc.
vs Stat of Mysore [1976] 1 SCR 815; K.C. Joshi & Ors.
vs Union of India & Ors., to.
R.P. Khanna vs S.A.F. Abbas & Ors, at 557 C J; Baleshwar Dass & Ors.
vs State of U.P. & Ors.
, [1981] 1 SCR 449 at 463; B.S. Yadav vs State of Haryana, ; The Direct Recruit, Clall II Engineering Officers ' Association vs State of Maharasthra & Ors., ; at 745 Distinguished. 9.
It is a cardinal rule of interpretation that a proviso to a particular provision of a stature only embraces the field which is covered by the main provision.
It carves out an exception to the main provision to which it has been enacted by the proviso and to no other.
The proper function of proviso is to except and deal with a case which would otherwise fall within the general language o the main enactment, 202 and its effect to confine to that case.
Where the language of the main enactment is explicit and unambiguous, the proviso can have no repercussion on the interpretation of the main enactment, so as to exclude from it, by implication what clearly falls within its express terms.
[211E F] 10.
The scope of the proviso is to carve out an exception to the main enactment and it excludes something which otherwise would have been within the rule.
It has to operate in the same field and if the language of the main enactment is clear, the proviso cannot be torn apart from the main enactment nor can it be used to nullify by implication what the enactment clearly says nor set a naught the real object of the main enactment, unless the words of the proviso are such that it is its necessary effect [211G H] 11.
In interpreting the rule, effect must be given to allow everyone drawn from the sources to have their due share in the service and chances of involvement to effectively discharge the duties of the posts honestly and efficiently with dedication.
Any wanton or deliberate deviation in the implementation of the rules should be curbed and snubbed and the rules must be strictly implemented to achieve the above purpose.
If wanton doviations are allowed to be repeated, it would breed indiscipline among the services and amounts to undue favour to some and denial of equity for many for reasons known or unknown subverting the purpose of the rules.{213F] 12.
Rules 2(1), 2(3), 2(7), 2(10), 2(12)(a) 5(2)(a) 8, 9(2) 11, 12(3) 12(5) to 12(7) to be construed harmoniously.
lest the legislative animation would be defeated and the rules would be rendered otiose and surpluses.
It would also adversely effect the morale and efficiency of the service.[215C] 13.
With a view to have efficient and dedicated services accountable to proper implementation of Govt.
policies, it is open and is constitutionally permissible for the State, to infuse into the services, both talented fresh blood imbued with constitutional commitments, enthusiasm,drive and initiative by direct recuritment, blended with matured wealth of experience from the subordinate services.[212G] 14.
It is permissible to constitute an integrated service of persons recruited from two or more sources, namely, direct recruitment, promotion from subordinate service or transfer from other services.
Promotee from subordinate service generally would get few chances of 203 promotion to higher echolans of services.
[212H] 15.
Avenues and facilities for promotion to the higher services to the less privileged member of the subordinate service would inculcate in them dedication to excel their latent capabilities to man to cadre posts {213A] 16.
Talent is not the privilege of few but equal avenues made available would explore common man 's capabilities overcoming environmental adversity and open up full opportunities to develop one 's capabilities to shoulder higher responsibilities without succumbing to despondence.
Equity talented young men/women of great promise would enter into service by direct recruitment when chances of promotions are attractive.
[213B] 17.
The chance of promotion would also enable a promotee to imbue involvement in the performance of the duties, obviate frustration and eliminate proclivity to corrupt practices, lest one would tend to become corrupt, sloven and mediocre and a dead wood.
In other words, equal opportunity would harness the human resources to augment the efficiency of the service and undue emphasis on either would upset the scale of equality germinating the seeds of degeneration. {213D]
|
ivil Appeal Nos.1761 62 of 1991 From the Judgment and Order dated 13.8.90 of the Madras High Court in C.M.P. No. 10274 and 10275 of 90. 233 WITH C.A. No. 1763 18 of 1991.
V. Krishnamurthy for the Appellants.
Mrs. N. Chidambaram, K.Parasaran, M.N. Krishnamani, G. Srinivasan, B.Rabu Manohar G.Vijay Anand, V. Balachandran and Ajit K. Sinha for the Respondents.
The following Order of the Court was delivered: Leave granted.
In the State of Tamil Nadu a number of educational institutions were set up for running courses for teachers training.
The respondent Institutions and certain other institutions sought recognition from the Director and the Joint Director of Education of the State of Tamil Nadu for running the teachers training courses.
In some cases the recognition was not a corded as the institutions did not fulfill the conditions required for setting up the Teachers Training Institution while in other cases the application for recognition was pending consideration.
Indisputably none of the respondent Institutions had been accorded recognition but they admitted students to the course of study for conferring the Diploma in Teachers sTraining.
Since, the Education Department of the State Government was not willing to allow the students of such Institutions to appear at the public examination held by the Government, the affected institutions filed writ petitions before the High Court claiming relief for issuance of mandamus directing the Government to recognise the Institutions and also for a direction permitting the students to appear at the public examination with a further direction for declaring the result of the examination.
A learned Single Judge of the High Court referred the matter to Full Bench.
The Full Bench considered the question: "Whether the students of unrecognized Educational Institutions can be permitted to write the public examinations held by the Government." The Full Bench on an elaborate discussion held that in the absence of recognition accorded to an Educational Institution, the students of such Institutions were not entitled to appear at the public examination held by the Government.
In this view of the Full Bench the students were not entitled to any relief but the Full Bench adopted a peculiar course to grant relief.
The Full Bench on account of the "persistent and persuasive stand of the 234 petitioners" issued directions to the State Government and the Education Department on humanitarian ground directing them to hold supplementary examination for enabling the student of the concerned unrecognized Institution to appear at the examination with a condition that the declaration of their result will be subject to the ultimate settlement of the question of recognition.
With these directions the Full Bench disposed of the writ petitions before it by its order dated 24.7.1990.
The writ petitions out of which the present appeals have arisen were filed by the unrecognized Educational Institutions.
These petitions were heard by a Division Bench of the High Court.
The Division Bench following the decision of the Full Bench in Writ Petition No. 2712 of 1990 and other connected matters (fathima Secondary Grade Teachers Training Institute vs Commissioner and Secretary to Government, Education Department), issued similar directions permitting the student to appear at the examination and directing the State Government to arrange for supplementary examination to enable the students to appear at that examination.
These appeals are directed against the order of the Division Bench.
After hearing learned counsel for the parties were are of the opinion that these appeals must succeed.
There is no dispute that the respondent educational Institutions were established for imparting education in Teachers Training Course without obtaining recognition from the Education Department of the State Government.
In the absence of recognition from the Education Department the students pursuing their studies in these Institutions could not appear at the public examination held by the Education Department The Full Bench rightly held that students of unrecognized educational institutions could not be permitted to appear at the public examination held by the Government.
On its own finding, the Full Bench should have refused relief in the petitioners, but it was persuaded to issue directions on humanitarian ground which were in effect destructive of its own findings, and the law laid down by it.
The Full Bench issued directions permitting the students to appear at the examination and directing the appellant authorities to make a special provision for supplementary examination.
These directions in our opinion were unauthorised and wholly unjustified.
The practice of admitting students by unauthorised educational Institutions and then seeking permission for permitting the students to appear at the examination has been looked with disfavour by this Court.
235 In Nageshwaramma vs State of Andhra Pradesh, [1986] Supl.
SCC 166 this Court observed that if permission was granted to the student of an unrecognised Institution to appear at the examination, it would amount, to encouraging and condoning the establishment of unauthorised institutions.
The Court declared that the Jurisdiction of this Court under Article 32 or of the High Court under Article 226 of the Constitution should not be frittered away for such of purpose.
In A.P. Christains Medical Educational Society vs Government of Andhra Pradesh & Anr., ; a similar request made on behalf of the institution and the student for permitting them to appear at the examination even though affiliation had not been granted, was rejected by this court.
The court observed that any direction of the nature sought for permitting the students to appear at the examination without the institution being affiliated or recognised would be in clear transgression of the provision of the Act and the regulations.
The Court cannot be a party to direct the students to disobey the statute as that would be destructive of the rule of law.
The full Bench noted these decisions and observations and yet is granted relief to the students on humanitarian ground Courts can not grant relief to a party on humanitarian grounds contrary to law.
Since the students of unrecognised institutions were legally not entitled to appear at the examination held by the Education Department of the Government, the High Court acted in violation of law in granting permission to such students for appearing at the public examination.
The directions issued by the full Bench are destructive of the rule of law.
Since the Division Bench,issued the impugned orders following the judgment of the Full Bench, the impugned orders are not sustainable in law.
Nalini Chidambaram contended that under Section 9 of the Tamil Nadu Act a minority community is entitled to establish an educational institution without obtaining permission from the Government and the students of such institution are entitled to appear at the public examinations.
We find no merit in the submission.
Under Article 30 of the Constitution minorities based on religion or language, have fundamental freedom to establish educational institutions their own choice, but the State has right to prescribe regulatory provisions for ensuring educational excellence.
Minority institutions which do not seek recognition are free to function according to their own choice, but if such an institution seeks recognition from the State, it has to comply with prescribed conditions for granting recognition, and in that event the minority institution has to follow prescribed syllabus for examination, courses of study and other allied matters.
These conditions are necessary to be followed to ensure efficiency and educational standard in 236 minority institutions.
See: All Bihar Christian Schools Association & Anr.
vs State of Bihar & Ors.
, [1988] 1 S.C.C. 206.
We are, therefore, of the opinion that even if a minority community has fundamental right to establish and administer educational institution, it has no right to insist upon the State to allow students to appear at the public examinations without recognition or without complying with the conditions prescribed for such recognition.
We, accordingly, allow the appeals and set aside the order of the High Court and dismiss the writ petitions filed by the respondents.
There will be no order as to costs.
G.N. Appeals allowed.
| In the appellant State, there were number of educational institutions running teachers straining course.
Recognition was not accorded to some institutions as they did not fulfill the conditions.
In other cases, the recognition was under consideration.
Admittedly, none of the respondent institutions was accorded recognition.
Since the Education Department did not permit their students to appear at the Public Examination, the respondent institutions filed a Writ Petition before the High Court praying for direction to the appellant State to recognise the institutions and also for a direction permitting their students to appear at the Public Examination.
Following the decision of the Full Bench in similar cases, the Division Bench directed the appellant State to arrange for supplementary examination in respect of the students of the respondent institutions.
Against the said Judgment the State has preferred these appeals, by special leave.
Allowing the appeals, this court, HELD: 1.1.
In the absence of recognition from the Education Department the students pursuing their studies in such Institution could not appear at the public examination held by the Education Department.
The Full Bench rightly held that students of unrecognized educational 232 institutions could not be permitted to appear at the public examination held by the Government.
On its own findings,s the Full Bench should have refused relief to the petitioners.
The Full Bench 's directions permitting the student to appear at the examination and directing the appellant authorities to make a special provision for supplementary examination were unauthorized and wholly unjustified.
[234E G] 1.2.
The Court cannot be a party to direct the students in disobey the statue as that would be destructive of the rule of law.
Courts cannot grant relief to a party on humanitarian ground contrary to law.
Since the Division Bench issued the said orders following the Judgment of the Full Bench, the orders are not sustainable in law.
Nageshwaramma vs State of Andhra Pradesh, [1986](Suppl.) SCC 166 and A.P. Christians Medical Educational Society vs Government of Andhra Pradesh & Anr., ; , relied on.
2.1 Under Article 30 of the Constitution minorities based on religion or language, have fundamental freedom to establish educational institutions of their own choice, but the State has the right to prescribe regulatory provisions for ensuring educational excellence.
Minority institutions which do not seek recognition are free to function according to their own choice, but if such an institution seeks recognition from the State it has to comply with the prescribed conditions for granting recognition and in that event the minority institution has to follow the prescribed syllabus for examination, courses of study and other allied matters.
These conditions are necessary to be followed to ensure efficiency and educational standard in minority institutions.
[235C F] 2.2.
Even if a minority community has fundamental right to establish and administer educational institution, it has no right to insist upon the State to allow its students to appear at the public examination without recognition or without complying with the conditions prescribed for such recognition.
[236A B] All Bihar Christian Schools Association & Anr.
vs State of Bihar & Ors.
, ; , relied on.
|
ivil Appeal Nos.1426 to 1428 (NT) of 1975.
From the judgment and Orders dated 24.2.1972 & 23.4.1974 of the Allahabad High Court in Income Tax Reference Nos.456/68 & 47 of 1973.
WITH Civil Appeal No.1653 (NT) of 1991.
Raja Ram Aggarwal and E.C.Aggarwal for the Appellant.
V.Gauri Shankar, B.B.Ahuja, S.Rajappa and Ms.
A.Subhashini for the Respondents.
The Judgment of the Court was delivered by RANGANATHAN,J.
These four matters arise out of income tax assessments of the same assessee and involve the same questions.
We grant leave in the Special Leave Petition after condoning the delay of 141 days in the circumstances set out in the application for condonation 240 of delay and proceed to dispose of all the four appeals by this common judgment.
The assessee appellant in all these cases is a Hindu Undivided Family (HUF) known as M/s Moti Lal Chhadami Lal Jain carrying on business at Ferozabad.
The HUF consisted of the karta, Chhadamilal Jain, and his son Bimal Kumar Jain.
Appeal No.1426 of 1975 relates to the assessment year 1962 63, Civil Appeal Nos.1427 and 1428 relate to assessment years 1968 69 and 1969 70 and the other remaining Civil Appeal relates to the assessment year 1973 74.
The facts relevant for the assessment year 1962 63 may now be set out: For the assessment year in question (the previous year for which ended on 12.7.1961), the assessee HUF derived income from property as well as hire, rent and commission from Jain Glass Works(P) Ltd. (hereinafter referred to as `the company ').
On 3.5.1960, the assessee family had granted a perpetual lease of certain buildings, furnaces and lands owned by it to the company.
It appears that a firm known as Jain Glass Works P.Ltd.
had taken on lease the above assets of the HUF at an annual rent of Rs.62,000 for running its business in the manufacture of glassware.
The lease deed recited that the company which had taken over the running business of the firm was to continue to have its factory for manufacture of glassware on the land belonging to the joint family and continue to use and enjoy all the facilities for the manufacture of glassware on the bhatties belonging to the family.
In consideration of the use of all the above premises, the company was to pay the HUF an annual rent of Rs.21,000 for the period during which the company continued to have its factory in the premises of the lessor and also to pay the HUF a commission at one per cent of the total turnover of the company for financial year.
Under clause 3 of the lease deed, the company was to pay the annual rent of Rs.21,000 in the following manner: (a) Rs.10,000 to Shri Chhadami Lal Jain Trust Degree College, Ferozabad.
(b) Rs.11,000 direct to the lessor M/s.
Moti Lal Chhadami Lal, HUF.
On 5.5.1962, another agreement was entered into between four parties the two male members of the assessee HUF, the company, the 241 Chhadami Lal Jain Trust (hereinafter referred to as `the Trust ') and the Chhadami Lal Jain Degree College (hereinafter referred to as `the College) which is an educational institution run by the Trust.
This document referred to the earlier lease agreement between the family and the company and its terms.
The agreement recorded, inter alia that out of the total rent of Rs.21,000 payable by the company, a sum of Rs.10,000 would be paid to the college and the balance to the HUF in four equal quarterly installments.
Clause 7 of the deed reads as follows: "That in the event of the `second party ' failing to pay the rent every quarter in accordance with the above mentioned conditions or violates the terms of this agreement, then, in the first place, the `fourth party ' shall have full rights to recover Rs.10,000 (ten thousand rupees) per year as rent by recourse to the Court in whatsoever manner it deems fit and shall have first charge on the full property mentioned below.
Subsequently, the `first party ' shall recover the balance of Rs.11,000 per year rent alongwith the interest costs and expenses from the `second party ' and such recovery will not be objected to by the `second party ' or its successors.
" For the assessment year 1962 63 the assessee family returned Rs.11,000 as lease rent received from the company.
It was claimed that the balance of Rs.10,000 was the income of the trust and hence not part of the income of the assessee.
It was explained that the University, while granting affiliation to the college had imposed a condition that security should be given for the running expenses of the college and as such a security was given by creating a charge of Rs.10,000 in favour of the college on the immovable property of the joint family.
The contention was that the sum of Rs.10,000 out of the rent payable by the lessee for the property got diverted by overriding title to the college and ceased to be the income of the assessee.
This contention was negatived by the Income Tax Officer (I.T.O.), the Appellate Assistant Commissioner (A.A.C.) and the Income tax Appellate Tribunal (the Tribunal).
The Tribunal, however, directed the I.T.O. to give appropriate relief u/s 88 in respect of this amount.
Another bone of contention between the parties related to the income from certain properties claimed to have been transferred by the assessee family to the Trust on 14.11.1947.
On that date, the assessee executed a Trust Deed which was also registered at Ferozabad.
By this deed, Chhadami Lal, the karta of the assessee family, 242 expressed his desire to create a charitable trust which would fulfill the needs of education, religion and medical facilities in the town of Ferozabad.
He, therefore, proceeded to create a trust which would run a boarding house, a dharamshala with a temple, a commercial and industrial Institute, a Jain Dharam School, a Jain Aushadhalya, a students ' scholarship fund and a public library and reading room.
Clause 3 of the deed provided.
"That the expenditure of the trust and expenses for the above mentioned objects will be made from the income of the following properties which income will be of the trust.
I will have no personal concern with this income nor will be used for my personal benefit but will be spent on the aims of the trust.
" Chhadami Lal constituted himself the trustee to look after the trust as long as he lived and manage its affairs.
The deed then proceeded to set out the details of "the property the income from which will be used for the purpose of the trust".
The properties were said to be of the value of Rs.6,12,000 and to yield an income of about Rs.18,000 per annum.
On the strength of the above document, the assessee HUF was not assessed on the income from the properties for the assessment year 1949 50.
However, while scrutinizing the accounts for the assessment years 1951 52 to 1959 60, the I.T.O. assessed the income from the properties in the hands of the family, as he was of opinion that the Trust Deed only purported to transfer the income from the properties to the Trust but not the corpus thereof and that, therefore, the income was not eligible for exemption under s.4(3)(i) of the Indian Income Tax Act, 1922.
Appeals by the assessee to the A.A.C. and the Tribunal were unsuccessful.
It was be mentioned here that, on 9th August, 1960, Shri Chhadami Lal and his son had executed another registered document.
This document referred to the creation of the Trust in 1947 which, it was stated, had been running several educational and charitable institutions regularly and successfully.
The document proceeded to say: "Thus there has been a great progress in the working of the above mentioned institutions and the property above mentioned was felt to be insufficient in the year 1957; therefore, both of us thought it proper that in order to run 243 the trust successfully, the properties mentioned below should also be invested in the trust and to be under the same so that Shri Chhadami Lal Jain Trust should always run properly and the public good that has been done upto now, as stated above, should continue to be so done in the same rather better way.
Public good should continue to be done.
Therefore, we executants had given to the trust on the Ist July, 1957 the following property the value of which was Rs.25,000 [by] canceling mutation thereof in respect thereof in our name and giving up possession of the below mentioned property, at the same time, had transferred it to the Trust.
Since the Ist of July, 1957, we have had no connection with the property mentioned below nor shall we have any concern with it is the future.
" The deed then proceeded to mention the details of the property "which has been in the use of the trust above mentioned since 1957 and will continue likewise to be in the use of the trust always".
It then proceeded to appoint eleven persons who were to be trustees to continue to run the Trust and the institutions.
Chhadami Lal, Bimal Kumar and his wife were three of the trustees, the others being outsiders.
Then followed several clauses.
Clause 3 referred to "the properties which has been given to the trust before and now" and empowered the trustees to sell or lease out the land to construct a building for the trust if it was found necessary.
Clause 5, however, prohibited the trustees from "putting the property of the trust to personal use, wasting it or from mortgaging and selling it except in accordance with clause 3." Despite this document, the I.T.O. assessed the family on the income from the above properties.
Appeals to the A.A.C. failed but the Tribunal allowed the appeals of the assessee.
For the assessment year 1962 63, the Tribunal, following its earlier orders in the case of the Trust viz. I.T.A. No.17157 of 1963 64 and I.T.A. No.11774 of 1964 65, allowed the assessee 's appeal.
The assessee, aggrieved by the Tribunal 's decision on the first contention and the department, aggrieved by the decision on the second contention, sought references to the High Court.
Thus, two questions were referred to the High Court in relation to the assessment year 1962 63 (I.T.Ref.456/1968).
These questions were: (1) Whether on a proper construction of the lease deeds dated 244 3.5.1960 and 5.5.1962 and the accompanying facts and circumstances of the case, the sum of Rs.10,000 is the income of the assessee and not that of Chhadami Lal Jain Degree College? (2) Whether, on the facts and circumstances of the case, the income of Rs.14,000 from properties purported to have been transferred to Seth Chhadami Lal Jain Trust was not assessable in the hands of the assessee family? I.T.R.47 of 1973 related to assessment years 1968 69 and 1969 70 for which the relevant previous years ended on 1.9.67 and 1.9.68.
For these assessment years also, the inclusion of the income of Rs.13,920 from the properties claimed to have been transferred to the Trust in the assessments of the HUF having been deleted by the Tribunal following its orders in the appeals relating to 1964 65 to 1967 68, the following question was referred to the High Court (in R.A.Nos.88 and 89 of 1972 73 dated 8.12.72): "Whether on the facts and in the circumstances of the case, income of Rs.13,920 from properties purported to have been transferred to the trust was not assessable in the hands of assessee family?" It may be mentioned that though a reference was also made by the Tribunal on the other question regarding income from the property (in R.A.No.90 and 91 of 1972 73 dated 7.3.72), that was not the subject matter of I.T.R. 47/73 and hence we are not concerned with that here.
In I.T.R.168/79 which relates to the assessment year 1973 74, three questions were referred to the High Court, of which we are concerned with only two here.
These are: "(2) Whether on the facts and in the circumstances of the case, income of Rs.6,329 from properties purported to have been transferred to the Trust was not assessable in the hands of the assessee family? (3) Whether on a proper construction of the lease deeds dated 3.5.1960 and 5.5.1962 and accompanying facts and circumstances of the case, the sum of Rs.10,000 is the income of the assessee and not that of Chhadami Lal Jain Degree College?" 245 The questions referred were answered by the High Court against the assessee and in favour of the Department.
The judgment of the High Court in I.T.R.456/68 is reported in (1977) 106 I.T.R.909 (All).
This judgment contains the reasons for the conclusion on the question relating to the rental income is concerned.
But so far as the other question is concerned, the High Court answered it following its earlier decision in I.T.R.72 of 1969 arising out of the Tribunal 's orders in the case of the trust in I.T.A.Nos.17157 of 1963 64 and I.T.A.No.11774 of 1964 65 referred to earlier and reported in The judgment in I.T.R. 47/73 follows the decision in I.T.R. 456/68.
In I.T.R. 168/79, again, the ruling in has been followed and the decision given against the assessee.
These are the three judgments in appeal before us.
Before considering the questions arising in these appeals we would like to point out that there is no information before us as to what has happened (a) in the assessment years 1950 51 to 1959 60; (b) in the intervening assessment years 1963 64 to 1967 68 and, again, from 1970 71 to 1972 73; (c) in the assessment years subsequent thereto; and (d) for assessment years 1968 69 and (1969 70 so far as the issue regarding the rental income is concerned.
We are indeed surprised that even the assessee who, in all probability, must have been affected by the assessments for those years, should not have cared to place the relevant information before us.
It is regrettable that neither party has cared to verify whether any appeals before the authorities or references in the High Court or appeals or special leave petitions are pending for those years.
It would have been helpful to both sides if an attempt had been made to find out all the information so that all the connected matters could have been consolidated and heard together.
So far as the question of rental income is concerned, we agree with the view taken by the High Court.
The assessee is the owner of the properties in question and has leased out the properties in question to the company for an annual rent of Rs.21,000.
This is the income of the family.
The assessee 's agreement with the company is only that Rs.10,000, out of the rent due to it, should be paid directly to the College.
This is only a mode of application of the income by the family which will make no difference in its liability to tax on the entire rent of Rs.21,000.
Nor does the fact that the College has been given a right, by the four party agreement, to sue for and recover the sum of Rs.10,000 directly from the company in case of default alter this position.
That is only a mode of recourse provided to the College for the enforcement of the promise made to it by the assessee.
The payment to, or recovery 246 of, Rs.10,000 by the College will only discharge in part the liability of the company to pay a rent of Rs.21,000 to the assessee under the lease deed.
It is contended on behalf of the assessee that it would not be correct to treat this a case of a mere application, by the assessee, of a part of the rental income due to, and receivable by, it.
The right given to the College to sue the company, directly coupled with the creation of a charge in its favour on the property yielding the rent for such payment, has the result of diverting that part of the rental income at the very source or inception.
Under the second agreement, it is urged, not merely an amount of Rs.10,000 per annum but the very right to receive, and enforce the payment of, that part of the rent is assigned to the College by the assessee.
Its effect is that the income from the property thereafter accrues partly to the assessee and partly to the College with the result that the assessee is left only with the right to receive Rs.11,000 from the company every year.
Reliance is placed, in this context, on the decisions in C.I.T. vs Sitaldas Tirathdas, , S.C. and Murlidhar Himmatsingka vs I.T.O., , S.C. We are of opinion that this contention cannot be accepted.
As we have pointed out earlier, the right given to the College to sue the company is only the right to recover part of amount which has already accrued to the assessee.
The creation of a charge in favour of the College does not make any difference.
It only obliges the company to pay a part of the rent to the College on behalf of the assessee but the existence of a mere obligation is not sufficient to constitute diversion of income.
The classic statement of the true principle is set out in C.I.T. vs Sitaldas Tirathdas, (supra): "Obligation, no doubt, there are in every case, but it is the nature of the obligation which is the decisive factor.
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 (self imposed and gratuitous) after such income reaches the assessee, the same consequence in law does not follow.
It is the first kind of payment which can truly be excused and not the second.
The second payment is merely 247 an obligation to pay another a portion of one 's own income which has been received and is since applied.
The first is a case in which the income never reaches the assessee who, even if he was to collect it, does so, not as part of his income but for and on behalf of the persons to whom it is payable.
" In the above passage, it is clear, the expressions "reaches the assessee" and "has been received" have been used not in the sense of the income being received in cash by one person or another.
What the passage emphasises is the nature of the obligation by reason of which the income becomes payable to a person other than the one entitled to it.
Where the obligation flows out of an antecedent and independent title in the former (such as, for example, the rights of dependents to maintenance or of coparceners on partition, or rights under a statutory provision or an obligation imposed by a third party and the like), it effectively slices away a part of the corpus of the right of the latter to receive the entire income and so it would be a case of diversion.
On the other hand, where the obligation is self imposed or gratuitous (as here) it is only a case of an application of income.
The case of a sub partnership, referred to on behalf of the assessee, is really a case on the borderline.
It is possible to take a view that it is nothing more than a case of one partner agreeing to divide his share of profits from a firm with others and, indeed, this was the view taken earlier: see, Mahaliram Santhalia vs C.I.T., But, apparently in view of the commercial necessities which compel the formation of sub partnerships, a series of judicial decisions, approved in Murlidhar Himmatsingka vs I.T.O., (supra) have held that they represent cases of diversion.
That analogy cannot be extended to cases such as the present.
We would also like in this context to refer to S.24(1)(iv) of the Income tax Act, 1961.
It provides for a deduction, in the computation of income from house property, in respect of the amount of an annual charge on the property.
The statutory provision was initially wide enough to rope in cases of such charges irrespective of the purpose for which they were created and even where they were voluntarily created by an assessee.
But the provision has been amended w.e.f.1.4.1969 to exclude deduction of an annual charge voluntarily by the assessee.
The case before us is not one of income from house property computed under Ss.22 24 and we are referring to this only as a matter of interest.
This amendment also indicates that a charge voluntarily created would 248 stand on an different footing from super imposed charges.
For these reasons, we agree with the view taken by the High Court and hold that the assessee is liable to tax on the entire rental income of Rs.21,000.
Turning now to the second question before us, it talks of the income from the properties "purported to have been transferred to the Trust" and in the words in quotation lies the crucial issue in the case.
There is no dispute that the income from the property is applied wholly for religious and charitable purposes.
S.4(3)(i) of the Indian Income tax Act, 1922 and its successor section 11(1)(a) of the Income tax Act, 1961 (insofar as they were applicable to the assessment years before us) exempt the income derived by an assessee from "property held in trust or other legal obligation" for such purposes.
This exemption has been denied to the assessee on the short ground that the properties (with the income from which we are concerned) continue to vest in the assessee and have not been effectively transferred to the Trust.
This is said to be so far two reasons.
The first is that the trust has been created in respect of immovable properties of the value of more then Rs.100 and this is possible only if the properties had been duly conveyed to the trustees by a deed duly stamped and registered.
The second is that the deeds of trust themselves do not speak of the corpus of the properties being held in trust.
Clause 3 of the 1947 deed only stipulates that the income from the properties will be the income of the trust.
A little later also the deed proceeds to set out the "properties the income from which will be used for the purposes of the trust".
In other words, the deed only records the assessee 's desire to utilise the income for the objects mentioned in the deed and not for his personal benefit.
The document of 1960 does not improve matters any further.
So, it is said no valid trust has been created by the assessee to merit the claim for exemption.
We are of the opinion that the view of the High Court proceeds on an unduly narrow construction of the deeds of 1947, and 1960.
We have pointed out that, under the deed of 1947 the karta of the assessee family is the sole trustee to execute the objects of the trust.
It appears to have been overlooked that while a registered conveyance to the trustees by the owner of immovable property is necessary where the trustees are persons other than the author, this requirement does not arise where the author of the trust is to be the sole trustee.
While a trust is not complete until the trust property is vested in trustees for the benefit of the cestui que trust, this can be done by the settlor, where he is 249 himself the trustee, by a declaration of trust, using language which, taken in connection with his acts, shows a clear intention on his part to divest himself of all beneficial interest in it and to exercise dominion and control over it exclusively in the character of a trustee.
Sec.6 of the Indian Trusts Act, makes this clear beyond all doubt.
In the present case there is a deed which makes clear the unequivocal intention to utilise the income from the properties in the manner set out in the deed of trust.
It is in the context of the above legal position that one has to understand the references in the trust deed to the income of the properties belonging to the trust.
Indeed, this is made clear by the conduct of the party all through and the language of the second deed.
The assessee 's full ownership of, and unqualified right to enjoy, the properties gets restricted and qualified on the execution of such a trust deed by the various conditions set out and imposed by the trust deed.
The execution of the trust deed creates an overriding title in the beneficiaries thereunder (viz. the various cross sections of the public covered by it) to require that the income from the properties, which are made the subject matter of the trust, be utilised in the manner set out therein and no other.
Indeed, after the execution of the trust deed, the properties are no longer held by the assessee as the absolute owner thereof; they are held by the assessee under trust and legal obligation to apply the income exclusively for charitable purposes, thus attracting the provisions for exemption contained in the Act.
For the reasons discussed above, we are inclined to take the view that the deed of 1947 should be construed as a valid trust which has the effect of diverting the income at the source and that the income thereafter has ceased to be the income of the assessee family.
We therefore answer the question referred to the High Court on this issue in favour of the assessee.
In the result of C.A. 1427/ 8/75 are allowed and the other two civil appeals are allowed in part.
There will, however, be no order regarding costs.
R.N.J. C.A.1427 28/75 allowed.
C.A.1426/75 & 1653/91.
partly allowed.
| For the assessment year 1962 63 the Assessee family returned Rs.11,000 as the rent received from the lessee Company.
Regarding the balance of Rs.10,000,it was contended on behalf of the assessee that this amount being directly payable by the lessee company under the lease deed dated 5.5.62 to the Trust College, this ceased to be the income of the assessee.
This contention was negatived by the Department right upto the Income Tax Appellate Tribunal.
The other point of dispute concerned the income accruing from certain properties claimed to have been transferred by the family to a charitable Trust created under a Trust Deed dated 14.11.1947.
The I.T.O. assessed the income from these properties in the hands of the family taking the view that the Trust deed only purported to transfer income from the properties and not the corpus and therefore, this income was not eligible for exemption under section 4 (3) (i) of the Indian Income Tax Act 1922.
Assessee 's appeal to the Appellate Assistant Commissioner failed but further appeal to the Tribunal succeeded.
238 Thus the assessee aggrieved on the first contention and the department on the second contention sought references to the High Court.
In respect of assessment year 1962 63 two questions were referred to the High Court on the above two points.
A question in respect of the first point was also referred for the assessment years 1968 69 and 1969 70 and two questions on the two points mentioned above were referred to the High Court in respect of assessment Year 1972 73.
As the High Court answered these questions against the assessee, it preferred four appeals covering the four assessment year in question.
Allowing the appeals in respect of assessment years 1968 69 and 1969 70 and party allowing the other two appeals in respect of assessment years 1962 63 and 1973 74, this Court, HELD:(1) The assessee is the owner of the properties in question leased out to the company on an annual rent of Rs.21,000.
This is income of the family.
The Assessee 's agreement with the company that Rs.10,000 out of the rent due to it should be paid directly to the College is only a mode of application of the income by the family which makes no difference in its liability to tax on the entire rent of Rs.21,000 nor does the fact that the college has been given a right to sue for and recover this sum directly from the company in case of default, alter this position.
The payment to, or recovery of, Rs.10,000 by the college will only discharge, in part, the liability of the company to pay a rent of Rs.21,000 to the assessee under the lease deed.
The creation of a charge in favour of the college does not make any difference.
It only obliges the company to pay a part of the rent to the college on behalf of the assessee but the existence of a mere obligation is not sufficient to constitute diversion of income.
Where the obligation flows out of an antecedent and independent title in the former, it effectively slices away a part of the corpus of the right of the latter to receive the entire income and so it would be a case of diversion.
On the other hand, where the obligation is self imposed or gratuitous it is only a case of an application of income.
We, therefore, agree with the High Court that the assessee is liable to tax on the entire rental income of Rs.21,000.
[245F 246A, E;247C D,248B] (2) A registered conveyance of immovable property to the trustees is necessary where the trustees are persons other than the author.
But this requirement does not arise where the author is himself to be the trustee.
While a trust is not complete until the trust property is vested in trustees for the benefit of the cestui que trust, this can be 239 done by the settlor, where he is himself the trustee, by a declaration of trust, using language which, taken in connection with his acts, shows a clear intention on his part to divest himself of all beneficial interest in it and to exercise dominion and control over it exclusively as a trustee.
Section 6 of the Indian Trusts Act, makes this clear beyond all doubt.
The assessee 's full ownership of an unqualified right to enjoy the properties gets restricted by the trust deed, which creates an overriding title in the beneficiaries regarding the use of the income from such properties in the manner set out therein and no other.
In fact after the execution of such a trust deed, the properties are no longer held by the assessee as the absolute owner thereof but as a trustee with a legal obligation to apply the income exclusively for charitable purposes, thus attracting the provisions for exemption contained in the Act.
We are inclined to take the view that the Trust deed of 1947 should be construed as a valid trust which has the effect of diverting the income at the source and that the income thereafter ceased to be the income of the assessee family.[248G 249B, C D; E F] C.I.T. vs Sitaldas Tirathdas, [1961] 41 I.T.R.367, S.C.Murlidhar Himmatsingka vs I.T.O., [1961] 62 I.T.R.323, S.C.Mahaliram Santhalia vs C.I.T., [1958] 33 I.T.R.261, referred to.
|
ivil Appeal Nos.1756 59 of 1991.
From the Judgment and Order dated 17.1.1990 of the Allahabad High Court in C.M.W.P. Nos.10962,10901, 10902 and 10903 of 1987.
Raju Rama Chandran for the Appellants.
Prem Malhotra for the Respondents.
The Judgment of the Court was delivered by K.JAGANNATHA SHETTY,J.
We grant Special Leave and proceed to dispose of these appeals.
These appeals preferred against the decision of the Allahabad High Court raise common questions as to the scope of Regulations 17(2) and 17(3) of the U.P. State Road Transport Corporation Employees (Other than officers) Service Regulations, 1981 (`the Regulations ').
277 The respondents were appointed as drivers in the erstwhile U.P. Government Roadways.
Upon the formation of the U.P.State Road Transport Corporation (`Corporation ') they were absorbed in the services of the Corporation.
The Corporation has framed the Regulations inter alia prescribing medical test to drivers every year for the purpose of assessing their suitability for the job.
Pursuant to these Regulations, the Managing Director of the Corporation issued a circular dated December 19,1986 stating that all drivers should be medically examined and those found unsuitable either because of ill health or poor eye sight, be not given duty and their services be dispensed with.
This was followed by another circular dated March 12, 1987 by which the Managing Director directed the Regional Managers to terminate the services of the drivers who are medically found unfit to drive the vehicles.
It was also directed in the circular that such employees whose services are dispensed with should be paid benefits like retrenchment compensation under Section 6(N) of the U.P. Industrial Act.
In the beginning of 1987, all the respondents were subjected to medical examination and it was found that their eye sights were defective.
In view of the medical report, the Corporation discharged them with immediate effect by paying them one month salary in lieu of notice and also retrenchment compensation under the Industrial Disputes Act.
The respondents challenged their retrenchment by means of writ petitions before the Allahabad High Court.
The High Court has allowed the writ petitions directing the Corporation to offer alternative jobs to the respondents.
The Corporation being aggrieved by the decision of the High Court has appealed to this Court.
Regulations 17(2) and 17(3) read as follows: "17(2) A person, appointed to the post of driver, will be required to undergo medical test, particularly vision test, every year or at such intervals as may be prescribed by the General Manager from time to time.
17(3) The service of a person who fails to pass the fitness test, referred to in the sub regulation (2), may be dispensed with: 278 Provided that the persons, whose services are so dispensed with may, in the discretion of the Corporation, be offered alternative job.
" Regulation 17(2) requires that the drivers have to undergo medical test particularly vision test every year, or at such intervals as may be prescribed by the General Manager of the Corporation.
Regulation 17(3) has two branches.
The first branch provides power to the Corporation to remove the driver from the service who fails to pass the medical test.
The second branch of Regulation 17(3) though styled as proviso also appears to be an independent branch.
It is not proviso.
The proviso ordinarily carves out an exception from the general rule enacted in the main provision.
However, sometimes the insertion of a proviso by the draftsman is not strictly adhered to its legitimate use and it may be in substance a substantive provision adding to and not merely excepting something out of or qualifying what goes before it.
The proviso with which we are concerned in Regulation 17(3) does not carve out an exception from the general rule contained in the first branch.
It is an independent and substantive provision providing discretion to the Corporation to offer an alternative job to the retrenched driver.
This offer is to be made after the exercise of power under the first branch of Regulation 17(3).
There is therefore, no doubt that the second branch of Regulation 17(3) is a substantive provision and not in the nature of a proviso to first branch thereof.
The first branch of Regulation 17(3) appears to be in the public interest.
The driver who is found medically unfit to drive the vehicle on the public road certainly cannot be permitted to continue as a driver.
His driving licence is liable to be revoked.
His continuance as driver would, perhaps be perilous to the interests of passengers and pedestrians.
The Corporation therefore, has been empowered to remove him from service as driver.
At the same time, the second branch to Regulation 17(3) shows concern for the person who has been removed from service for want of medical fitness.
It confers discretion on the Corporation to offer him an alternative job.
What does this mean in practical terms? Does it mean that the retrenched driver has a statutory right to get an alternative job? Is it obligatory for the Corporation to offer an alternative job to the driver who is certified to be medically unfit for the driver 's job? The High Court has expressed the view that the Corporation before terminating the service of a driver who fails to satisfy the medical test, is obliged to offer him an alternative job and that offer shall be in writing.
In other 279 words, the High Court seems to be of the opinion that the proviso to Regulation 17(3) imposes an obligation on the Corporation to offer an alternative job to all those who are found medically unfit to carry on their duties in the existing jobs.
The view taken by the High Court appears to be fallacious.
The discretion conferred by Regulation 17(3) confers no vested right on the retrenched workmen to get an alternative job in the Corporation.
Like all other statutory discretion in the administrative law, Regulation 17(3) creates no legal right in favour of a person in respect of whom the discretion is required to be exercised other than a right to have his case honestly considered for an alternative job by the Corporation.
The High Court was equally in error in directing the Corporation to offer alternative job to drivers who are found to be medically unfit before dispensing with their services.
The Court cannot dictate the decision of the statutory authority that ought to be made in the exercise of discretion in a given case.
The Court cannot direct the statutory authority to exercise the discretion in a particular manner not expressly required by law.
The Court could only command the statutory authority by a writ of mandamus to perform its duty by exercising the discretion according to law.
Whether alternative job is to be offered or not is a matter left to the discretion of the competent authority of the Corporation and the Corporation has to exercise the discretion in individual cases.
The Court cannot command the Corporation to exercise discretion in a particular manner and in favour of a particular person.
That would be beyond the jurisdiction of the Court.
In the instant case, the Corporation has denied itself the discretion to offer an alternative job which the regulation requires it to exercise in individual cases of retrenchment.
As earlier stated, the Managing Director has issued two circulars: (i) dated December 19, 1986 and (ii) dated March 12 1987 directing the Regional Managers to dispense with the services of the drivers who are found to be medically unfit to drive the vehicles.
It is directed in the circulars that such drivers should be paid benefits like retrenchment compensation which they are entitled to under the U.P.Industrial Disputes Act.
The circulars thus leave no scope for exercising discretion to consider the individual cases of retrenched drivers for any alternative job.
It may be stated that the statutory discretion cannot be fettered by self created rules or policy.
Although it is open to an authority to which discretion has been entrusted to lay down the norms or rules to regulate exercise 280 of discretion it cannot, however, deny itself the discretion which the statute requires it to exercise in individual cases.
The concerned authority of the Corporation therefore, notwithstanding the said circulars are required to consider the cases of retrenched drivers for alternative jobs.
Counsel for the respondents argued that the object of Regulation 17(3) was to rehabilitate the drivers who are found to be medically unfit to drive vehicles and it is therefore, obligatory for the authority or Officer of the Corporation to exercise discretion in favour of such drivers by offering them alternative jobs.
But counsel for the Corporation considers that it is an absolute discretion of the Corporation to offer or not to offer an alternative job to such drivers and there is no compulsion in the matter.
These are, in our opinion, extreme contentions which are not sustainable under law.
There are two aspects to be borne in mind in exercising the discretion.
Firstly, there are constraints within which the Corporation has to exercise its discretion.
The Corporation is a public utility organisation where medicating motion is efficiency and effectiveness of public service.
Efficiency and effectiveness of public service are the basic concepts which cannot be sacrificed in public administration by any statutory corporation.
The Corporation has to render this public service within the resource use and allocation.
It is within these constraints the Corporation has to exercise its discretion and perform its task.
The second aspect relates to the manner in which the statutory discretion is to be exercised.
The discretion allowed by the statute to the holder of an office, as Lord Halsbury observed in Sharp vs Wakefield, at 179 is intended to be exercised "according to the rules of reason and justice, not according to private opinion; according to law and not humor.
It is to be, no arbitrary, vague and fanciful but legal and regular.
And it must be exercised within the limits to which an honest man competent to the discharge of his office ought to confine himself." Every discretion conferred by statute on a holder of public office must be exercised in furtherance of accomplishment of purpose of the power.
The purpose of discretionary decision making under Regulation 17(3) was intended to rehabilitate the disabled drivers to the extent possible and within the above said constraints.
The Corporation therefore, cannot act mechanically.
The discretion should not be exercised according to whim, caprice or ritual.
The discretion should be exercised reasonably and rationally.
It should be exercised faithfully and impartially.
There should be proper value judgment with fairness and equity.
Those drivers would have served 281 the Corporation till their superannuation but for their unfortunate medical unfitness to carry on the driver 's job.
Therefore, it would not be improper if the discretion is exercised with greater concern for and sympathetic outlook to the disabled drivers subject of course to the paramount consideration of good and efficient administration.
These are some of the relevant factors to be borne in mind in exercising the discretion vested in the Corporation under Regulation 17(3).
In the result we allow these appeals.
In reversal of the judgment of the High Court, we direct the Corporation to consider the cases of respondents in the light of the observations made.
In the circumstances of the case, however, we make no order as to costs.
D.R.L. Appeals allowed.
| The respondents were employed as drivers in the U.P.State Road Transport Corporation.
The Corporation has framed the U.P.State Road Transport Corporation Employees (other than Officers) Service Regulations, 1981, Regulations 17(2) inter alia requires the drivers to undergo medical test particularly vision test every year and under Regulation 17(3) services of those drivers who fail to pass the fitness test are to be dispensed with, with the proviso that such drivers may, in the discretion of the Corporation, be offered alternative jobs.
Pursuant to these Regulations, the Managing Director of the Corporation issued two circulars dated December 19, 1986 and March 12, 1987 directing the Regional Managers to terminate the Services of the drivers who are medically found unfit to drive the vehicles with the further direction that such drivers should be paid benefits like retrenchment compensation under Section 6(N) of the U.P.Industrial Disputes Act.
The respondents were subjected to medical examination and it was found that their eye sights were defective.
Consequently, the Corporation discharged the respondents with immediate effect by paying them one month salary in lieu of notice and also retrenchment compensation under the U.P. Industrial Disputes Act.
The respondents challenged their retrenchment by means of writ petitions before the High Court.
The High Court allowed the writ petitions directing the Corporation to offer alternative jobs to the respondents.
Being aggrieved, the Corporation has preferred these appeals to this Court.
Allowing the appeals, the Court, 275 HELD: 1.
Regulation 17(2) requires that the drivers have to undergo medical test particularly vision test every year, or at such intervals as may be prescribed by the General Manager of the Corporation.
Regulation 17(3) has two branches.
The first branch provides power to the Corporation to remove the driver from the service who fails to pass the medical test.
The second branch of Regulation 17(3) though styled as proviso is an independent and substantive provision providing discretion to the Corporation to offer an alternative job to the retrenched driver.
[278B D] 2.
The discretion conferred by Regulation 17(3) confers no vested right on the retrenched workmen to get an alternative job in the Corporation.
Like all other statutory discretion in the administrative law, Regulation 17(3) creates no legal right in favour of a person in respect of whom the discretion is required to be exercised other than a right to have his case honestly considered for an alternative job by the Corporation.
[279B] 3.
The High Court was in error in directing the Corporation to offer alternative jobs to the respondents because the Court cannot direct the statutory authority to exercise the discretion in a particular manner not expressly required by law and that it could only command the statutory authority by a writ of mandamus to perform its duty by exercising the discretion according to law.
The Court cannot command the Corporation to exercise discretion in a particular manner and in favour of a particular person.
That would be beyond the jurisdiction of the Court.
[279E] In the instant case, the Corporation has denied itself the discretion to offer an alternative job which the regulation requires it to exercise in individual cases of retrenchment.
Although it is open to an authority to which discretion has been entrusted to lay down the norms or rules to regulate exercise of discretion, it cannot however deny itself the discretion which the statute requires it to exercise in individual cases.
The concerned authority of the Corporation therefore are required to consider the cases of retrenched drivers for alternative jobs.[279F G;280A] 4.1 There are two aspects to be borne in mind in exercising the discretion.
Firstly, there are constraints with which the Corporation has to exercise its discretion and perform its task.
The Corporation is a public utility organisation where mediating motion is efficiency and effectiveness of public service.
Efficiency and effectiveness of public 276 service are the basic concepts which cannot be sacrificed in public administration by any statutory corporation.
The Corporation has to render this public service within the resource use and allocation.[280D] 4.2 The second aspect relates to the manner in which the statutory discretion is to be exercised.
Every discretion conferred by statute on a holder of public office must be exercised in furtherance of accomplishment of purpose of the power.
[280E G] Sharp vs Wakefield, at 179, referred to.
The Corporation therefore cannot act mechanically.
The discretion should not be exercised according to him, caprice and ritual.
The discretion should be exercised reasonably and rationally.
It should be exercised faithfully and impartially.
There should be proper value judgment with fairness and equity.
[280H] Therefore, it would not be improper if the discretion is exercised with greater concern for and sympathetic outlook to the disabled drivers subject of course to the paramount consideration of good and efficient administration.
[281A B]
|
Civil Appeal Nos.4353 54 of 1983 etc.
From the Judgment and Order dated 7.3.1983 of the Orissa High Court in O.J.C. No. 1517 of 1978.
A.K. Ganguli, G. Ramaswamy, T.S. Krishnamurthy Iyer, Dr. 114 L.M. Singhvi, Shanti Bhushan, P. Chidambram, R.B. Datar, T.V. S.K. Iyer, V.A. Bobde B.Sen, M.S. Gujral, R.F. Narinan, P.H. Parekh Ms. Shalini, Soni, K.K. Lahiri, J.B.Dadachanji, S.Sukumaran, P.N.Gupta, R.K. Mehta, A.K.Panda, Sakes Kumar, Ashok Singh, Satish Agnihotri, D. Goburdhan, D.N. Mishra, Shri Narain, Abhey Sapra, Sandep Narain, Mrs. Kirti Misra, Harish N.Salve, S.R. Grover, K.J.John, M.P. Sharma, Ms. Deepa Dixit, Sanjay Parekh, Praveen Kumar, Darshan Singh, K.V. Srekumar, T.G.N.Nair, B.R.Agrawal, S.K. Bagga, Mrs. S.K.Bagga, Rameshwar Nath and A.M. Dittia for the appearing parties.
The Judgment of the Court was delivered by RANGANATHAN, J.
These are connected batches of Civil Appeals and Special Leave Petitions.
We grant special leave to appeal in all the petitions (condoning the delay in the filing of the unnumbered one referred to below) and proceed to dispose of all the appeals by this common judgment.
The details of the appeals and petition are, for sake of convenient reference, tabulated below: High Court Date of Civil Appeal/ Name of Judgment SLP Nos.
Appellant 1.
Orissa 17.4.1980 C.A.2053 2080/80 Tata Iron & Steel Co. Ltd. 7.3.1983 C.A.4353 4354/83 Orissa Cement Ltd. 22.12.1989 S.L.P. 1479/90 State of Orissa 22.12.1989 S.L.P. /90 Orient Paper & Industries Ltd. & Anr.
13.7.1990 S.L.P.11939/90 do 2.
Bihar 10.2.1986 C.A. 592/86 Tata Iron & Steel Co. Ltd. 3.
Madhya 28.3.1986 C.A. 1641 1662/86 State of M.P. Pradesh We shall discuss later the manner in which these appeals and petitions have arisen.
115 THE ISSUE The validity of the levy of a "cess", based on the royalty derived from mining lands, by the States of Bihar, Orissa and Madhya Pradesh is challenged in these petitions and appeals.
A seven Judge Bench of this Court in India Cement, struck down a similar levy under a Tamil Nadu Act as beyond the legislative competence of the State Legislature.
The assessees, in the matters now before us, claim that the issue here is directly and squarely governed by the above decision.
The State, on the other hand, claim that the nature and character of the levies imposed by them is totally different from that of the Tamil Nadu levy and that they are entirely within the scope of the States ' Legislative powers under the Constitution.
This is the issue to be decided in these matters.
As the impugned enactments of Bihar, Orissa and Madhya Pradesh mutually differ from one another in some respects, they will need separate consideration.
However, the basic issue being the same, all these matters have been heard together and it is found convenient to dispose of them all by this common judgment.
We may mention in passing that, initially, these matters were listed before a Bench of two Judges of this court.
It referred the matters on 17.8.1990 to the learned Chief Justice for the constitution of a larger Bench.
The matters have come up before us in pursuance of the directions of the Hon 'ble Chief Justice.
THE LEGISLATIVE ENTRIES It will be convenient, at the outset, to refer to the various entries of the Union and the State Lists in the Seventh Schedule to the constitution which have a bearing on the issues to be discussed.
These are: List I (Union List) Entry 52: Industries, the control of which by the Union declared by Parliament by law to be expedient in the public interest.
Entry 54: Regulation of mines and mineral development to the extent to which such regulation and development under the control of Union is declared by Parliament by law to be expedient in the public interest.
116 List II (State List) Entry 18: Land, that is to say, rights in or over land, land tenures including the relation of landlord and tenant, and the collection of rents; transfer and alienation of agricultural land; improvement and agricultural land; colonization.
Entry 23: Regulation of mines and mineral development subject to the provisions of List I with respect to regulation and development under the control of the Union.
Entry 45: Land revenue, including the assessment and collection of revenue, the maintenance of land records, survey for revenue purposes and records of rights, and alienation of revenues.
Entry 49: Taxes on lands and buildings.
Entry 50: Taxes on mineral rights subject to nay limitations imposed by Parliament by law relating to mineral development.
Entry 66: Fees in respect of any of the matters in this List, but not including fees taken in any court.
EARLIER HISTORY Before proceeding to consider the provisions of the enactments impugned, and the issues debated, before us, it is necessary to set out certain earlier controversies that led to India Cement.
Hingir Rampur Case As early as in 1960, this Court had to consider the constitutional validity of the Orissa Mining Areas Development Fund Act, 1952 (Orissa Act XXVII of 1952).
section 3 of the Act empowered the State Government to constitute mining areas whenever it appeared to the Government that it was necessary and expedient to provide amenities 117 life communications, water supply and electricity for the better development of such areas or to provide for the welfare of the residents or workers in areas within which persons employed in a mine or a group of mines reside or work.
S.4 empowered the State Government to impose and collect a cess or fee on the minerals extracted the rate of which was not to exceed 5% of the valuation of the minerals at the pit 'smouth.
S.5 provided for the constitution of the Orissa Mining Areas Development Fund.
The proceeds of the cess recovered in pursuance of S.4 along with other subsidies from Government, local authorities and other public subscriptions were credited to the fund and the expenses for such collection debited thereto.
The fund has to be utilised to meet expenditure incurred in connection with such development measures as the State Government might draw up for the purposes above mentioned as well as for the purposes specified in clauses (a) to (e) of S.5(5).
The validity of this levy of cess was challenged by the petitioner coal company in the Hingir Rampur case as ultra vires the powers of the State Legislature because (a) the cess was not a fee but a duty of excise on coal which was a field covered by Entry 84 of List I in the Seventh Schedule and repugnant to the Local Mines Labour Welfare Fund Act, 1947 (Central Act XXXII of 1947); and (b) even if it was treated as a fee relatable to Entries 23 and 66 of List II in the Seventh Schedule, it was hit by Entry 54 of List I read with the Mines and Minerals (Development & Regulation) Act, (Central Act LIII of 1948) (`the MMRD Act ' for short) or by Entry 52 of List I read with the Industries (Development and Regulation) Act (`the IDR Act ' for short), 1951 (Central ACt LXV of 1951).
The first of the above arguments was based on the fact that the cess was fixed at a percentage of the valuation of the mineral concerned at pit 's mouth.
This argument was based on two considerations.
The first related to the form and the second to the extent of the levy.
Repelling the argument, it was held that the extent of levy of a fee would always depend upon the nature of the services intended to be rendered and the financial obligations incurred thereby and cannot by itself alter the character of the levy from a fee into the of a duty of excise except where the correlation between the levy and services is not genuine or real or where the levy is disproportionately higher than the requirements of the services intended to be rendered.
So far as the first consideration was concerned, it was observed that the method in which the fee is recovered is a matter of convenience and by itself it cannot fix upon the levy the character of a duty of excise.
Though the method in which an impost is levied may be relevant in determining its character its significance and effect cannot be exaggerated.
The court, therefore, came to the conclusion that the cess levied by the impugned act was 118 neither a tax nor a duty of excise but a fee.
The second argument turned on the impact of the MMRD Act on the State 's power to levy a fee under Entry 66 read with Entry 23 of List II as a consequence of the declaration contained in S.2 of the Central Act.
The Court agreed that a declaration by Parliament in terms of Entry 54 of List I operated as a limitation on the legislative competence of the State Legislature itself and observed: "if Parliament by its law has declared that regulation and development of mines should in public interest be under the control of the Union, to the extent of such declaration the jurisdiction of the State Legislature is excluded.
In other words, if a Central Act has been passed which contains a declaration by Parliament as required by Entry 54, and if the said declaration covers the field occupied by the impugned Act, the impugned Act would be ultra vires not because of any repugnance between the two statutes but because the State Legislature had no jurisdiction to pass the law." (underlining ours) However, the answer to the argument was easily found by the Court inasmuch as the declaration on the terms of Entry 54 of List I relied on for the coal company was founded on Act LIII of 1948 which was an Act of the Dominion Legislature and not an Act of Parliament.
However, the Court did not stop here.
It proceeded to review the provisions of Central ACt LIII of 1948 and concluded that, if this Act were held to contain the declaration referred to in Entry 23, there would be no difficulty in holding that the declaration covered the field of conservation and development of minerals, and that the said field was indistinguishable from the field covered by the impugned Act.
In coming to this conclusion the Court pointed out that the rule making powers conferred on the Central Government under Section 6(2) of the Act included the levy and collection of royalties, fees and taxes in respect of minerals, mines, quarried excavated or collected.
The circumstance that no rules had in fact been framed by the Central Government in regard to the levy and collection of any fees, it was held, would not make any difference, The Court observed: "What Entry 23 provides is that the legislative competence of the State Legislature is subject to the provisions of List I with respect to regulation and development under the con 119 trol of the Union, and Entry 54 in List I requires a declaration by Parliament by law that regulation and development of mines should be under the control of the Union in public interest.
Therefore, if a Central Act has been passed for the purpose of providing for the conservation and development of minerals, and if it contains the requisite declaration, then it would not be competent to the State Legislature to pass an Act in respect of the subject matter covered by the said declaration.
In order that the declaration should be effective it is not necessary that rules should be made or enforced; all that this required is a declaration by Parliament that it is expedient in the public interest to take the regulation and development of mines under the control of the Union.
In such a case the test must be whether the legislative declaration covers the field or not.
Judged by this test there can be no doubt that the field covered by the impugned Act is covered by the Central Act LIII of 1948.
" The Court then considered the argument based on Entry 52 of List I and the provisions of the IDR Act but came to the conclusion that the vires of the impugned Act could not be successfully challenged on this ground.
Wanchoo J., delivered a separate dissenting judgment.
He held that the levy was not a fee or a land cess but a duty of excise.
He pointed out (at p 579 80) how taxes could be turned into fees on the so called basis of quantification with the help of the device of creating a fund and attaching certain services to be rendered out of monies in the fund.
In this view, he did not consider the question how far the Central Acts of 1948 and 1951 impaired the State 's competence to levy the fees in question.
He negatived the State 's attempt to bring the levy in question (treating it as a tax) within the scope of Entry 50 of List II.
He was of opinion that the expressions "taxes on mineral rights" referred to taxes on the right to extract minerals and not taxes on the minerals actually extracted.
He held that the cess in the present case was not a tax on mineral rights but a tax on the minerals actually produced.
It was no different in pith and substance from a a tax on goods produced which comes under Item 84 of List I as duty of excise.
Tulloch case ; The same issue regarding the competence of the Orissa State Legislature to levy the very same cess came up for consideration again 120 in the Tulloch case.
The scenario had changed because the levy now challenged was in respect of the period July 1957 to March, 1958 by which time the MMRD Act, 1957 (Central Act (Central Act LIII of 1948).
The 1948 Act, which had earlier provided for the regulation of mines and oil fields and for the development of minerals, was now limited only to oil fields and the 1957 Act provided for the regulation of mines and mineral development.
S.2 of the 1957 Act, like the predecessor 1948 Act, contained the following declaration in terms of Entry 54 of List I.
It read: "It is hereby declared that it is expedient in the public interest that the Union should take under its control the regulation of mines and the development of minerals to the extent hereinafter provided".
but unlike the earlier one this was a declaration contained in an Act of Parliament which had the effect of impairing the legislative competence of the State under Entry 23 read with Entry 66 of the State List.
The hurdle which prevented the Supreme Court from considering the provisions of the 1948 Act as a bar to the levy of the cess was therefore out of the way.
The Court analysed in detail the provisions of the impugned State Act as well as the two Central Acts.
It referred to its conclusion in the Hingir Rampur case that the field covered by the impugned State Act was covered by the 1948 Act and observed that this fully applied to the State Act vis a vis the 1957 Act also, particularly as Ss.
18(1) and (2) of the 1957 Act were wider in scope and amplitude and conferred larger powers on the Central Government than the corresponding provisions of the 1948 Act.
Counsel for the State attempted to distinguish the ambit of the 1957 Act from that of the 1948 Act.
But the Court pointed out that the argument could not prevail.
section 13 of the 1957 Act contained an express provision for the levy of a fee.
section 25 though not as categorically as section 6 of the 1948 Act clearly implied a power to levy "rent, royalty, tax, fee and other sums" a nd, besides, section 18 of the Central Act of 1957 were wider in scope and amplitude and conferred larger powers on the Central Government than the corresponding provisions of the Act of 1948.
It was reiterated, referring to Hingir Rampur and distinguishing Ch.
Tika Ramji & Ors.
vs The State of Uttar Pradesh & Ors., ; that it was incorrect to think that, until rules were made under section 13 or steps taken under S.25 to collect fees etc., the Central Act would not cover the field.
The Court observed, further: 121 "But even if the matter was res integra the argument cannot be accepted.
Repugnancy arises when two enactments both within the competence of the two Legislatures collide and when the Constitution expressly or by necessary implication provides that the enactment of one legislature has superiority over the other then to the extent of the repugnancy the one supersedes the other.
But two enactments may be repugnant to each other even though obedience to each of them is possible without disobeying the other.
The test of two legislations containing contradictory, for if a competent legislature with a superior efficacy expressly or impliedly evinces by its legislation an intention to cover the whole field, the enactments of the other legislature whether passed before or after would be overborne on the ground of repugnance.
Where such is the position, the inconsistency is demonstrated not by a detailed comparison of provisions of the two statutes but by the mere existence of the two pieces of legislation.
In the present case, having regard to the terms of section 18(1) it appears clear to us that the intention of Parliament was to cover the entire field and thus to leave no scope for the argument that until rules were framed, there was no inconsistency and no supersession of the State Act".
Meeting the argument that the power to levy a fee was an independent head of legislative power under each of the three legislative lists and that the levy of tax undue the State Act could be traced to this entry, the Court pointed out the fallacy underlying the argument in the following words: "The materials words of the Entries are: "Fees in respect of any of the matters in this List".
It is, therefore, a prerequisite for the valid imposition of a fee that it is in respect of a "matter in the list".
If by reason of the declaration by Parliament the entire subject matter of "conservation and development of minerals" has been taken over, for being dealt with by Parliament, thus depriving the State of the power which it theretofore possessed, it would follow that the "matter" in the State List is, to the extent of the declaration, subtracted from the scope and ambit of Entry 23 of the State List.
There would, therefore, after the Central Act of 1957, be "no matter in the List" to which the fee 122 could be related in order to render it valid.
" The result was that Tulloch declared the levy of the cess to be invalid and it was held that, as and from 1.6.1958, the date on which the 1957 Act came into force, the Orissa Act should be deemed to be non existent for every purpose.
Murthy case We now come to the third important case on the topic, Murthy vs Collector of Chittoor, which seems to strike a somewhat different note although in both Tulloch and Murthy the judgments were delivered within a few month of each other by Rajagopala Ayyangar J. on behalf of 5 Judge Benches which were constituted differently.
The erstwhile Province of Madras (later State of Tamil Nadu) had been levying, since long, a cess on land revenue under the Madras District Boards Act (Madras Act XIV) of 1920.
Under S.78 of the Act, a cess was levied on the annual rent value of all occupied lands on whatever tenure held.
It was a tax at two annas in the rupee of the annual rent value of all lands ins the district.
The annual rent value of the land was to be calculated in the manner prescribed in S.79 of the Act.
The appellant held certain lands under a mining lease (for extraction of iron ore) from the Government which stipulated for the payment of a stipulated amount of dead rent, a royalty on the basis of every ton of ore mined as well as a surface rent per acre of the surface area occupied or used.
In the case of such lands, S.79(i) provided that "the lease amount, royalty or other sum payable to the Government for the lands" shall be taken to be the such lands, annual rent value.
The appellant was, therefore, called upon to pay a cess based on the royalty paid by him to the State Government (of Andhra Pradesh, which had succeeded to the State of Madras in respect of the territories in question) and it was the validity of this levy which was upheld by the High Court that came up for the consideration of this Court.
It was contended, on behalf of the appellant, relying on Hingir Rampur and Tulloch, that the provision imposing land cess quoad royalty must be held to be repealed by MMRD Act of 1948 or, in any event, by the MMRD Act, 1957 (Central Act LXVII of 1957) and that, after the date when these enactments came into force, the land cess that could be levied must be exclusive of royalty under a mining lease.
Distinguishing the decisions cited, this Court rejected the contention.
It observed: 123 "It will be seen that there is no resemblance, whatever, between the provision of the Orissa Act considered in the two decisions and the provision for the levy of the land cess under sections 78 and 79 of the Act with which we are concerned.
Sections 78 and 79 have nothing to do and are not concerned with the development of mines and minerals or their regulation.
The proceeds of the land cess are, under s.92 of the Act, to be credited to the District fund, into which, under the terms of the Finance Rules in section V to the Act, the land cess as well as several other taxes, fees and receipts are directed to be credited.
This fund is to be used under Ch.
VII of the Act with which s.112 starts "for everything necessary for or conducive to the safety, health, convenience or education of the inhabitants or the amenities of the local area concerned and everything incidental to the administration" and include in particular the several matters which are mentioned in those sections.
It will thus be seen that there is no connection between the regulation and development of mines and collection of land cess for which provision is made by ss.78 and 79 of the Act.
There is therefore no scope at all for the argument that there is anything in common between the Act and the Central Acts of 1948 and 1957 so as to require any detailed examination of these enactments for discovering whether there is any over lapping" A second contention raised before the Court was that, as the impugned land cess was payable only in the event of the lessee winning the mineral and not when no minerals were extracted, it was in effect a tax on the minerals won and, therefore, on mineral rights.
Rejecting this contention, the Court observed: "We are unable to accept this argument.
When a question arises as to the precise head of legislative power under which a taxing statue has been passed, the subject for enquiry is what in truth and substance is the nature of the tax.
No doubt, in a sense, but in a very remote sense, it has relationship to mining as also to the mineral won from the mine under a contract by which royally is payable on the quantity of mineral extracted.
But that does not stamp it as a tax on either the extraction of the mineral or on the mineral right.
It is unnecessary for the purpose of this case 124 to examine the question as to what exactly is a tax on mineral rights seeing that such a tax is not leviable by Parliament but only by the State and the sole limitation on the State 's power to levy the tax is that it must not interfere with a law made by Parliament as regards mineral development.
Our attention was not invited to the provision of any such law enacted by Parliament.
In the context of ss.78 and 79 and the scheme of those provisions it is clear that the land cess is in truth a "tax on land" within Entry 49 of the State List".
(emphasis added) The Court proceeded to explain why the land cess before it was nothing else except a land tax falling within Entry 49.
"Under section 78 of the Act the cess is levied on occupied land on whatever tenure held.
The basis of the levy is the "annual rent value" i.e., the value of the beneficial enjoyment of the property.
This being the basis of the Tax and disclosing its true nature, s.79 provides for the manner in which the "annual rent value" is determined i.e., what is the amount for which the land could reasonably be let, the benefit to the lessor representing the rateable value "or the annual rent value".
In the case of ryotwari lands it is the assessment which is payable to the Government that is taken as the rental value being the benefit that accrues to the Government.
Where the land is held under lease it is the lease amount that forms the basis.
Where land is held under a mining lease, that which the occupier is willing to pay is accordingly treated as the "annual rent value" of the property.
Such a rent value would, therefore, necessarily include not merely the surface rent, but the dead rent, as well as the royalty payable by the licensee, lessee or occupier for the user of the property.
The position then is that the rent which a tenant might be expected to pay for the property is, in the case of lease hold interests, treated as the statutory "annual rent value".
It is therefore not possible to accept the contention, that the fact that the lessee or licensee pays a royalty on the mineral won, which extended only to the mere use of the surface land, places it in a category different from other types where the lessee uses the surface of the land alone.
In each case the rent 125 which a lessee or licensee actually pays for the land being the test, it is manifest that the land cess is nothing else except a land tax.
" The judgment of the Supreme Court in the Murthy case (supra) held the field from 1964 to 1990.
Murthy followed: The above type of levy was not peculiar to the State of Tamil Nadu.
In fact, a cess on royalty was bound to be very remunerative to States having a wealth of mineral resources.
We are informed that similar cess is being levied in several States.
We have already referred to the cess levied in Orissa which came to be considered by this Court as early as 1961 and 1964 in the Hingir Rampur and Tulloch cases.
Further cases came up for consideration, on the same lines; in Bihar, Associated Cement Co. Ltd. vState of Bihar, and Tata Iron & Steel Co. vs State, (C.W.J.C. 30/1978 decided on 15.5.84 , the subject matter of C.A. 592/86 before us); in Orissa, Laxmi Narayan Agarwala vs State, A.I.R. 1983 Ori.
210; in Rajasthan, Bherulal vs State, A.I.R. 1965 Raj. 161; in Punjab, Sharma vs State, A.I.R, ; in Gujarat, Saurashtra Cement & Chemical Industries Ltd. vs Union, ; and Madhya Pradesh, Hiralal Rameshwar Prasad vs State, (m.P. 410/83 decided on 28.3.1986) and M.P. Lime Manufactures ' Association vs State of M.P., A.I.R. 1989 M.P. 264 F.B. and, except for the last two cases from Madhya Pradesh, the others upheld the levy of a cess which depended on royalties, following Murthy.
India Cement case The correctness of the above line of decisions came to be tested in India Cement Ltd. vs State.
The Government of Tamil Nadu and granted a mining lease on 19.7.1963 to the appellant for extraction of limestone and kankar for a period of twenty years.
The lease deed, which was in accordance with the Mineral Concession Rules, stipulated for the payment of royalty, dead rent and surface rent and also provided that the lessee was bound to pay all Central and State Government dues except land revenue.
At the time the lease was obtained, S.115(1) of the Madras Panchayats Act.
1958 provided for the levy, in each panchayat development block, of a local cess at the rate of 45 paise on every ruupee of land revenue payable to the Government in respect of any land for every fasli.
section 115(2) provided that the 126 local cess will be deemed to be public revenue and all the lands and buildings thereon shall be regarded as security therefore.
S 115(3) and (4) set out the various purposes for which the cess levied and collected under section 115 could be utilised.
S116 provided for the levy of a local cess surcharge.
The maximum amount of such surcharge was originally left to be prescribed by the Government and was in 1970 limited to Rs.1.50 on every rupee of land revenue and in 1972 to Rs.2.50 on every rupee of land revenue.
Apparently inspired by the decision in Murthy, the Tamil Nadu Panchayats (Amendment and Miscellaneous Provisions) Act (Tamil Nadu Act 18 of 1964) added, with full retrospective effect, the following Explanation to S.115(1): "Explanation: In this section and in Section 116, `land revenue ' means public revenue due on land and includes water cess payable to the government for water supplied or used for the irrigation of land, royalty, lease amount or other sums payable to the government in respect of land held direct from the government on lease or licence, but does not include any other cess or the surcharge payable under Section 116, provided that lands revenue remitted shall not be deemed to be land revenue payable for the purpose of this section".
The appellants ' challenge in the High Court to this levy which was consequent on the 1964 amendment was unsuccessful.
The High Court upheld it as a "tax on land" measured with reference to land revenue, royalty or lease or other amount as mentioned in the Explanation.
The challenge based on Entry 54 of List I read with Entry 23 of List II and the provisions of the MMRD Act, 1957 was also repelled, applying the decision in Murthy.
The appeal to this Court was referred to a Bench of seven Judges who came to the conclusion that Murthy dity of the levy of the cess.
It may be necessary to refer, in greater detail, to some passages in the judgment later but it will be convenient,.
for the present, to summarise the salient conclusions of the Court.
These were: 1.
The levy could not be supported under: (a) Entry 45 of List II: as it is not a tax on land revenue, an expression which has a well defined connotation.
`Land revenue ' is separate and distinct from `royalty.
The Explanation to S.115(1) itself proceeds on the basis that royalty cannot be land revenue 127 properly so called or conventionally so known.
(b) Entry 49 of List II: as it is not a tax on land.
A tax on land can only be levied on tax as a unit, must be imposed directly on land and must bear a definite relationship to it.
There is a clear distinction between a tax directly on land and a tax on income arising from land.
The cess is not a tax directly on land as a unit but only a tax on royalty which is indirectly connected with land.
In the words of Oza.
J. it is a tax not only on land but on labour and capital as well.
It could have been treated as a tax on land if it had been confined to `surface rent ' instead of `royalty.
(c) Entry 50 of List II: as a tax on royalty as it is not a tax on mineral rights and so is outside the purview of Entry 50.
Even otherwise, Entry 50 is subject to the provisions of List I and is, therefore, subject to the declaration contained in, and the purview of, the MMRD Act 1957.
Even if the cess is regarded as a fee, the State 's competence to levy the same can, if at all, only be justified with reference to Entry 23 and Entry 50 of List II but this recourse is not available as the field is already covered by Central Legislation referable to Entry 54 of List I. 3.
Murthy was not rightly decided.
The view of the Rajasthan, Punjab, Gujarat and Orissa decisions was overruled.
In the view taken by the Court, i.e. Madhya Pradesh ruling was not examined n detail, particularly as it was said to be pending in appeal before the Supreme Court.
In issue before us now are the levies of cesses based on royalty from lands containing minerals by the States of Orissa, Bihar and Madhya Pradesh.
Since the relevant statutes vary in detail and the parties concerned have also taken different stands, emphasising different aspects, the arguments have to be considered and dealt with separately, We may, however, mention that the appeals before us include those in the cases of Laxmi Narayan Agarwalla (Orissa).
land Harilal Rameshwar Prasad (Madhya Pradesh) noticed earlier.
THE VARIOUS ENACTMENTS ORISSA The invalidation in 1961 of Orissa Act XXVII of 1952 in Hingir Rampur apparently rendered it necessary for the State to bring in fresh 128 legislation.
The Orissa enactment with which we are now concerned is the Orissa Cess Act (Orissa Act IIof 1962) as amended by Act 42 of 1976.
According to the Statement of Objects and Reasons accompanying the bill, the primary objective of the legislation is to condense and simplify the existing law on the subject by consolidating the different enactments, customs and usages relating to the levy of cess in the State, to cure defects and deficiencies therein and to introduce uniformity in the levy of cess throughout the State.
The Act proposed to adopt a uniform rate of 25 paise in the rupee of the annual rental value and distribute the entire gross collection among the zilla parishads, panchayat samithis (referred to as `samithis ' in the Act) and grama panchayats in the ratio 5:8:12 respectively thus providing them with enhanced revenues to enable them to discharge their statutory responsibilities more efficiently by taking up development works and providing better amenities to the people of the State.
Its principal provisions are as follows: (i) Under Section 4, from and after the commencement of the Act, all lands (other than lands which were not liable to payment of rent or revenue before 1.4.77 and lands which were subject to a tax on land holdings sunder a 1950 Municipal Act) are made liable to the payment of cess (in addition to any land revenue, tax, cess rate or fee otherwise payable in respect thereof) determined and payable "as herein provided".
A 1976 amendment makes it clear that `lands held for carrying on mining operations" ar not exempt from the cess.
(ii) The "rate of cess, assessment [and] fixation of cess year" are dealt with by S.5 which originally read thus: "5.(1) The cess shall be assessed on the annual value of all lands on whatever tenure held calculated in the manner hereinafter appearing.
(2) The rate per year at which such cess shall be levied shall be twenty five percentum of the annual value of the land.
(3) x x x" Sub section(2) was amended by Act 13 of 1970 by substituting of 50% in place of 25% but a 1982 amendment inserted S.5A to provide that for a period 1.4.1977 to 31.3.1980, the cess would be levied at 25% of the annual value in respect of lands held for carrying on mining 129 operations.
section 5 was again amended by Act 15 of 1988 w.e.f. 26.10.1988 to read thus: "(2) The rate at which such cess shall be levied shall be.
a) in case of lands held for carrying on mining operations in relation to any mineral, on such percentum of the annual value of the said lands as specified against that mineral in Schedule II; and b) in case of other lands fifty percentum of the annual value.
Clause (a) was again amended by Act 17 of 1989 to read thus: "(a) in the case of land held for carrying on mining operations in relation to any mineral, such percentum of the annual value as the State Government may, by notification, specify from time to time in relation to such mineral".
It will thus be seen that, in place of a fixed rate, an elasticity was provided for, initially, by requiring the rates to be specified in the Schedule differently for different minerals.
Schedule II prescribed the percentage which the cess was to bear to the annual value; the percentages varied from 650% in the case of sand, to 300% in the case of coal, 200% in respect of certain minerals such as iron ore, limestone, manganese ore (except those meant for export or cement manufacture), 150% in the case of certain other minerals and 100% in respect of the rest.
Further elasticity was provided for in 1989 by leaving it to the Government to vary the rates by a simple notification.
In consequence of this amendment, Schedule has been omitted and a notification has been issued prescribing the percentage of the royalty or the dead rent (as the case may be) that is to be levied as the cess in respect of various items of specified minerals.
The rates specified are 650%, 400%, 300%, 200% and 150%.
In respect of all minerals not specified in the notification, the rate of cess is to be 100% of the royalty or dead rent.
(iii) S.6 specifies the person by whom the cess is payable.
In so far as is material for our present purposes, it directs that the cess is payable "(c) by a person for the lands he holds for carrying on mining operations and shall be paid by him to the Government".
This clause was inserted in S.6 simultaneously with the amendment of S.5 by Act 42 of 1976.
130 (iv) "Annual value" is defined in S.7 thus: "7.
Annual Value (1) The annual value of lands held by a raiyat shall be the rent payable by such raiyat to the land lord immediately under whom he holds the land: x x x x x x (2) In the case of lands held as an estate the annual value shall be the aggregate of (a) the amount which the intermediary is entitled to receive on account of revenue or rent less the amount payable by such intermediary as revenue to the intermediary immediately superior to him or to the Government, as the case may be; and (b) the rent, if any, payable held for carrying on mining operations, the annual value shall be the royalty or, as the case may be, the dead rent payable by the person carrying or mining operations(s) to the Government.
" The Explanation to the section defines "dead rent" and "royalty" in terms of their definitions in the MMRD Act,1957.
It also states the "royalty" would include "any payments made or likely to be make to the Government for the right of raising minerals from the land which shall be calculated on every tone of such minerals despatched from the land at the same rate as prescribed under the said Act or such other rate as may be fixed by the Government but not exceeding the amount which would have been otherwise payable as royalty under the said Act".
Act 17 of 1989 also amended S.7(3) to red thus: "(3) In the case of lands held for carrying on mining operations, the annual value shall be the royalty or, as the case may be, the dead rent payable by the person carrying on mining operations(s) to the Government or the pit 's mouth value wherever it has determined".
This was apparently intended to regulate the cess on coal in respect of which the pit 's mouth value had been determined.
So a notification 131 dated 14.8.89 was issued to provide that the cess in respect of coal bearing lands would be 30% of the pit 's mouth value of the said mineral.
(v) Sections 8 to 9B provide for the assessment of the cess in respect of various cases.
S.9B, inserted by the 1976 amendment, provided: "9B Assessment of cess on lands held for mining operations: (1) The cess payable in respect of lands held for carrying on mining operations shall be assessed in the prescribed manner.
(2) Nothing contained in Sections 8,9 and 9A shall apply in relation to the assessment of cess in respect of the aforesaid lands: The prescribed manner of such assessment had been already set out in the Orissa Cess Rules, 1963.
Rule 6A, inserted in 1977, deals with this but it is unnecessary for us to consider the details except to mention that it is assessed and collected, along with the amount of royalty or dead rent, by the Mining Officer concerned.
(vi) S.10 also needs to be referred to.
It originally read thus: "10.
Application of proceeds of the cess: (1) Notwithstanding anything contained in any other law the amount collected as cess shall be credited to the Consolidated Fund of the State and shall be utilised in the following manner, namely: (a) amounts collected in respect of lands within the local limits of any Municipality or Notified Area constituted under the Orissa.
Municipal Act, 1950 shall be paid to the concerned Municipal Council or Notified Area Council, as the case may be; and (b) amounts other than those referred to in clause (a) shall be distributed in the prescribed manner among the Grama Panchayats, Samitis and Parishads in the ratio of twelve is to eight is to five.
132 Explanation In this section "Grama Panchayat" mean a Grama panchayat constituted under the Orissa Grama Panchayats Act, 1948 and "Samiti" and "Parishad" respectively mean the Samiti and Parishad constituted under the Orissa Panchayat Samiti and Zila Parishad Act, 1964 and "Samiti" means a panchayat samiti constituted under the Orissa Panchayat Samitis Act 1959.
Orissa Act 13 of 1970 substituted the following section for the above: "10 Application of proceeds of the cess.
(1) Notwithstanding anything contained in any other law, the amount collected as cess shall be credited to the Consolidated Fund of the State and shell be utilised for the following purposes, namely: (a) primary education; (b) contribution to Grama Panchayats; and (c) contribution to Samitis.
Explanation In this section"Grama Panchayat" means & Grama Panchayat constituted under the Orissa Panchayat Samitis Act, 1959.
(2) The proportion in which the amount collected as cess is to be allotted for the said purpose shall be as may be prescribed.
As substituted by Act 42 of 1976, it reads: "10.
Application of proceeds of the cess: (1) Notwithstanding anything contained in any other law, all amounts collected as cess shall be credited fifty percentum of those which represent cess collected in respect of lands, other than lands held by carrying on mining operations, shall be utilised for the following purposes, namely: (a) primary education; (b) contribution to Grama Panchayats: and (c) contribution to Samitis.
(2) The allotment of amounts to be utilised for the pur 133 poses mentioned in clause (a) , (b) and (c) of sub section(1) shall be made in such proportion as may be prescribed" BIHAR We shall now turn to the relevant provisions of the Bihar Act.
Bihar is governed in this respect by the provisions of the Bengal Cess Act (Act IX of 1880).
It is sufficient to refer to the provisions of Sections 4 to 6,9 and to certain notifications.
(i) A definition of `royalty ' was introduced in S.4 of the Act by an ordinance of 1975.
It was amended by the Bihar Finance Act, 1981 and then by the Bihar Finance Act, 1982.
The definition as amended, w.e.f.
1.4.1982, by the latter reads as follows: "royalty for the purpose of this Act in respect of mines and quarries means payment (which includes dead rent) made or likely to be made to the owner of mines and minerals for the right of working the same on the quantity or value of such produce by a lessee if the land had been under a lease granted under MMRD Act, 1957, and rules made thereunder and includes any amount which Government may demand from the appropriation of mines and minerals belonging to the Government and any amount that may be paid as or in lieu of royalty for the right of working mines and quarries in areas held or acquired under any Act or agreement".
At the end of the section it added the following `interpretation clause ': "Valuation of mineral bearing land" means with reference to assessment of local cess in any year on land held for working mines and quarries the value at pit 's mouth of all the mineral extracted form the land in that year and the Explanation, which defines the value at pit 's mouth of a mineral; (ii) S.5 provided that, from and after the commencement of this Act, in any district or part of a district, all immovable property situate therein except otherwise in Section2 provided shall be liable to the payment of a local cess.
134 (iii) Section 6, again, is a much amended section, As substituted by Ordinance No.209 of 1975 dated 2.12.75, it read: "6.
Cess has to be assessed: The local cess shall be assessed on the annual value of lands and until provision to the contrary is made by the Parliament on the royalty of mines and quarries, sale value of the other immovable properties including forest produce and annual net profits from tramways and railways as contained respectively as prescribed in this Act and the rate at which the local cess shall be levied for each other shall be (a) in the case of royalty, the rate will be determined by the government from time to time but it will not exceed the amount of royalty; (b) in the case such annual net profits, fifteen paise on each rupee of such profits; (c) in the case of annual value of lands, twenty paise per rupee of the annual value; and (d) in the case of sale value of immovable properties including first produce, the rate will not exceed 10% and the State Government may, by notification, prescribe from time to time the commodities on the sale of which cess would be levied along with the rate at which it would be levied".
It was amended by a series of Bihar Cess (Amendment) ordinances between 1975 and 1982 .
It was further amended by the Finance Act, 1982 (w.e.f. 1.4.82), the Finance Act, 1984, the Finance Act, 1985 (w.e.f. 1.8.1985) and the Bihar Cess (Amendment) Ordinance, 1985, After the last of these amendments, the section stood thus: "S.6.
Cess how to be assessed: The local cess shall be assessed on the annual value of the lands and, until provision to the contrary is made by the Parliament, on the royalty of mines and quarries or on value of mineral bearing land as the case may be, sale value of other immovable properties including forest produce and annual net profits from tramways and railways ascertained respectively as prescribed in the Act and the rate at which the local cess 135 shall be levied for each year shall be (a) in the case of royalty, the rate will be determined by the Government from time to time but it will not exceed five times the amount of royalty, provided that the local cess payable in any one year shall not be less than the amount arrived at by multiplying the dead rent with the rate of cess determined undo clause (a); (aa) in the case of value of mineral bearing land, where the local cess payable in any year in respect of any mineral bearing land as assessed in clause (a) is less than 30 per cent of the value of mineral bearing land in that year, then, notwithstanding anything hereinbefore contained, the State Government may assess the local cess at such percentage of the value of the mineral bearing land, not exceeding [of] 30 per cent, as may be notified in the Official Gazette from time to time although the cess so assessed may exceed five times the amounts of royalty; (b) in the case of annual net profit, fifteen paise on each rupee of such profits; (c) in the case of annual value of land, twenty five paise per rupee of the annual value; and (d) in the case of sale value of immovable properties including first produce, the rate will not exceed 30 per cent and the State Government may , be notification prescribe from time to time the commodities on the sale of which cess would be levied along with the rates at which it would be levied".
The Bihar Cess (Amendment) Ordinance, 1987 (replaced by Act 3 of 1988) substituted 40% for 30% in clause (aa).
(iv) S.9 of the Act deals with the application of the proceeds of cess.
It has been amended from time to time, inter alia in 1976, 1977, 1978, 1979, 1980, 1981 and 1982.
After all these amendments, the section stood thus: "9.
Application of the proceeds of cess: The proceeds of local cess and all sums levied or recovered as interest or 136 otherwise shall in each district be paid in the district fund (i) at such rate as may, from time to time, be determined by the State Government in the case of local cess on annual value of land; and (ii) at such rate as may, from time to time, be determined by the State Government, subject to a maximum of twenty per cent in case of local cess on royalty of mines and quarries, or value of mineral bearing land, sale value of other immovable properties, forest produce and annual net profit from tramways and railways and the remaining amount shall be deposited in the consolidated fund of the State for the construction and maintenance of other works of public utility; xxx xxx xxx xxx xxx Provided further that out of the remaining amount not less than ten percent of the amount of the local cess collected under clause (a) or clause (aa) of Section 6 shall be spent for purposes relating to mineral development ' '.
(v) In exercise of the powers conferred by section 6 above, the State Government issued a notification on 20.11.80 determining the rate of cess on the amount of royalty of all minerals of the State at 100% w.e.f. 1.2.1980.
Our attention has also been drawn to, and some print made of, a notification dated 20.4.85 by which the State Government, modifying the earlier notification of 1.10.1981, determined the rate of cess ``on the amount of royalty of iron ore which is extracted from manually operated iron ore mines ' ' at 100% w.e.f. 1.10.84 which was followed up by a notification dated 20.11.85 enhancing the rate at 300% on the amount of royalty of iron ore w.e.f.21.6.85 in respect of mines other than those in which the ore is extracted manually.
Other notifications were also issued determining the rate of cess in respect of other minerals as indicated below : Date of Effective Mineral Rate Notification Date 20.11.85 21.6.85 Bauxite Ore, sand 500% for stowing 20.11.85 21.6.85 Copper Ore and 300% uranium 20.11.85 21.6.85 Lime stone and kynite 200% 20.11.85 21.6.85 Coal 30% of pit 's mouth value or 500% on the amount of royalty whichever is greater 137 Madhya Pradesh: In Madhya Pradesh, two statutes have to be considered: The first is the Madhya Pradesh Upkar Adhiniyam, 1981 (Act 1 of 1982).
It provides for the levy of an energy development cess (Part I), an urban development cess (Part II), a cess on transfer of vacant land (Part III), and a cess on storage of coal (Part IV).
The Act provided that the cesses levied under Parts I and IV should first be credited to the Consolidated Fund of the State but subsequently withdrawn and credited to a separate Electrical Development Fund [Ss.3(2)] and Coal bearing Area Development Fund [section 12(1)] and that the amounts to the credit of the funds as well as the cesses collected under Parts II and III should be utilised for special purposes connected respectively with energy development [S.3(3)] development of coal bearing areas [S.12(2)] urban development [section 7(2)] and rural development [section 9(5)].
Act 21 of 1987 changed Part IV into a part dealing with ``cess on land held in connection with mineral rights ' ' with full retrospective effect.
Part IV, as now substituted, deals only with ``land situate in the State and held under a mining lease for undertaking mining operations in relation to major mineral including operations for raising, winning or extracting coal ' '.
Section 11 and 12 read thus: ``Section 11: There shall be levied and collected a cess on land held in connection with mineral rights at such rate as may be notified by the State Government per ton of major mineral raised and the rate of cess prevailing in respect of coal during the period commencing from the date of commencement of the Principal Act and ending on the date of commencement of the Madhya Pradesh Upkar (Sanshodhan) Adhiniyam, 1987, shall be deemed to be the rate of cess notified under this sub section in respect of coal: Provided the subject to the limitation mentioned above the State Government may, by notification, increase or 138 reduce the rate of cess at an interval of not less than one year, where the rate is increased it shall not be in excess of fifty per cent of the rate for the time being in force; Provided further that every notification under the above proviso shall be laid on the table of the Legislative Assembly and the provisions of Section 24 A of the Madhya Pradesh General Clauses Act, 1957 (No. 3 of 1958) shall apply thereto as they apply to rule.
(2) The rate of cess to be notified for the first time in exercise of the powers conferred by Sub section (1) shall be effective from the [first of] April, 1987.
(3) The cess levied under sub section (1) shall, subject to and in accordance with the rules made in this behalf, be assessed and collected by such agencies and in such manner as may be prescribed.
(4) The agencies prescribed under sub section (3) shall for the purpose of assessment, collection and recovery of cess and all matters connected therewith, exercise such of the powers conferred upon the authorities specified in section 3 of the Madhya Pradesh General Sales Tax Act, 1958 (No. 2 of 1959) for the purpose aforesaid in respect of sales tax under said Act and the rules made thereunder, as may be prescribed as if such agencies were the authorities specified in the section 3 and the cess on land held in connection with mineral rights were the tax levied under the said Act.
Section 12 : The proceeds of the cess on land held in connection with the mineral rights may be utilised by the State Government for the general development of the mineral bearing areas. ' ' Section 12 has, however been omitted by an Amending Act of 1989, again, with full retrospective effect i.e. from 1.10.1982.
It appears, however, that there was in force in Madhya Pradesh w.e.f. 1.11.1982 another statute levying mineral development cess.
It was the M.P. Karadhan Adhiniyam, 1982 (Act 15 of 1982) as amended by M.P. Acts 1983 and 13 of 1985 which was challenged before the 139 M.P. High Court in Hiralal Rameshwar Prasad vs State and other connected cases.
The Madhya Pradesh Karadhan Adhiniyam, 1982, was enacted by State Legislature ``to provide for levy of school building cess, forest development cess and mineral areas development cess and matters incidental thereto ' '.
Part II of the Act deals with the school building cess.
Section 5 therein requires the holder of every holding of six hectares and above to pay the school building cess as provided therein.
The proceeds of the school building cess are required by S.4 to be credited to a separate Fund supplemented by a State contribution equal to 50% thereof and utilised for construction and furnishing of primary school buildings in non urban areas.
Part III of the Act deals with the forest development cess.
Section 7 imposes forest development cess on every sale or supply for forest produce by the Forest Department.
The proceeds thereof are to be credited to a separate Fund and utilised for social forestry, afforestation, reforestation, forest rehabilitation and other purposes connected with forest development.
Then comes Part IV dealing with the mineral areas development cess, the provisions of which are relevant for the purpose of these appeals and it is the charging provision therefor contained in Section 9 which has been attacked as constitutionally invalid.
The Section read thus: ``9. Levy of mineral areas development cess on land under mining lease ' '.
(1) There shall be levied and collected on the land held under a mining lease for undertaking mining operation a mineral areas development cess at the rate of twenty five percent of the rental value thereof.
(2) For the purpose of sub section (1), rental value shall be equal to the royalty or dead rent, as the case may be, whichever is higher.
(3) The mineral areas development cess shall be payable by person to whom the mining lease is granted.
(4) The mineral areas development cess shall, subject to and in accordance with the rules made in this behalf, be collected by such agencies and in such manner as may be prescribed and shall be applied towards development of mineral bearing areas ' '.
140 The 1983 amendment substituted the following sub section (1) in Section 9: ``(1) There shall be levied and collected on the land held under a mining lease for undertaking minor operations for a major mineral, a mineral areas development cess at the rate of one hundred percentum o the rental value thereof ' '.
The 1985 amendment substituted the following sub section in place of the above w.e.f.
1.8.1985: ``(1) There shall be levied and collected (a) on the land held under mining lease for undertaking mining operations for a major mineral other than coal a mineral areas development cess at the rate of one hundred percentum of the rental value thereof; (b) on the land held under mining lease for undertaking mining operations for coal, a mineral area development cess at the rate of the hundred twenty five percentum of the rental value thereof ' '.
and also made a provision for payment of interest on arrears of cess.
Rules have been framed under this Act called ``The Madhya Pradesh Mineral Areas Development Cess Rules, 1982 ' '.
Rule 3 provided for the collection of the cess every month along with the royalty or dividend.
Rule 10 thereof is alone relevant for the purpose of these partitions and read as under: ``10.
Application of cess: The State Government shall decide from time to time the manner in which the amount collected from cess shall be utilized for the development of mining lease areas ' '.
In 1985, an amendment substituted the words ``mineral bearing ' ' for the words ``mining lease ' ' in this rule.
It will be seen that, unlike the cesses referred to in Part I and III, the Act did not provide for the creation of a separate Fund for the mineral areas development cess.
The manner of utilisation thereof was also left to the discretion of the State Government though it had to be spent for development of mineral bearing areas.
141 THE CONTENTIONS ORISSA In the historical and statutory context set out above, the attempt of Sri T.S. Krishnamurthy Iyer, learned counsel for the State of Orissa to save the impugned legislation of the State is two fold.
First, he points out that in India Cement the statute, by Ss. 115 and 116, imposed a cess and surcharge on `land revenue ' and the explanation to section 115 defined `land revenue ' to mean `royalties '.
In other words that was a clear case of direct cess or Tax on royalties.
Here, on the other hand, s.5 makes it clear that what the legislature has provided for is a tax assessed on the annual value of all lands, on whatever tenure held, calculated at a percentage of the annual value of the land.
section 7, which defines `annual value ', provides for different measures for determining the annual value in respect of lands held under different kinds of tenures; and, in the case of lands held for mining operations, the measure of such annual value is the royalty or dead rent paid to the Government.
On a proper construction of the statute, he submits, the cess levied is a cess or tax on land and the `royalty ' is only taken as a measure for determining the quantum of tax.
He contends that India Cement only forbids a cess or tax on royalty as such and not a cess or tax on land, which may be measured by reference to the royalty derived from it.
He presses in aid of his argument the well marked distinction between the subject matter of a tax and its measure outlined, amongst others, in Ralla Ram 's case [1948] F.C.R.207 at pp.
218, 224 and Bombay Tyre International v Union, [1984] 1 S.C.C.487 at pp.
481 4.
This argument, Sri Iyer contended, is based on the statutory language used in the Orissa Cess Act, 1962 and should prevail independently of the correctness or otherwise of Murthy, Secondly, he submitted that `royalty ' is not a tax and the cess on royalty is also not a tax but only a fee.
This view is supported, he said, by the limitations imposed in the statute on the modes of its utilisation.
Being a fee, the State Legislature 's competence to impose it has to be determined with reference to Entry 23 read with Entry 66 of the State List.
So doing, the validity of the levy has to be upheld as, in counsel 's submission, the declaration contained in, and the provisions of, the MMRD Act, 1957 do not, in any way whittle down or impair this competence.
Basically, it will seen, two questions arise (1) Can the cess be considered as ``land revenue ' ' under Entry 45 or as a ``tax on land ' ' under Entry 49 or as a ``tax 142 on mineral rights ' ' under Entry 50 of the State List? (2) If the answer to question (1) is in the negative, can the cess be considered to be a fee pertaining to the field covered by Entry 23 of the State List or has the State been denuded of the legislative competence under this Entry because of Parliament having enacted the MMRD Act, 1957? Taking up the first question, the attempt to bring the levy under Entry 45 of the State List proceeds in two steps.
First, land revenue is the sovereign 's share of the proceeds of the land belonging to the sovereign and is represented, in the case of land containing minerals, by the payment of royalty to the Government.
Second, the cess, being an accretion to royalty, partakes of the same character.
This argument, however, must fail in view of the categorical observations of the Supreme Court in india Cement, (vide paras 20 and 21) as to the connection of the expression `land revenues '.
At least, in India Cement, the statute sought to include royalty within the meaning of `land revenue ' but there is no such provision in the Orissa Act and, this being so, royalty or the tax thereon cannot be equated to land revenue.
The cess here cannot be, therefore, brought under Entry 45.
Turning next to Entry 50, though Murthy left open the question how far a levy of this nature can be considered to be a tax on mineral rights (vide page 676), India Cement has chosen to approve the contrary view of Wanchoo J. in his dissenting judgment in Hingir Rampur (para 30).
Actually, it appears that the observations of Wanchoo J. have not been fully examined.
The learned Judge held that the tax in the case before him was not a tax on mineral rights because it was levied on the value of the minerals extracted.
If his observations in this context are read as a whole, it would seem that he also was of opinion that a tax on royalty would be a tax on mineral rights, for he observed (at pp.
582 3): `The next contention on behalf of the State of Orissa is that if the cess is not justified as a fee, it is a tax under item 50 of List II of the Seventy Schedule.
Item 50 provides for taxes on mineral rights subject to any limitations imposed by Parliament by law relating to mineral development.
This raises a question as to what are taxes on mineral rights.
Obviously, taxes on mineral rights must be different from taxes on goods produced in the nature of duties of excise.
If 143 taxes on mineral rights also include taxes on minerals produced, there would be no difference between taxes on mineral rights and duties of excise under item 84 of List I. A comparison of List I and II of the Seventh Schedule shows that the same tax is not put in both the Lists.
There fore, taxes on minerals rights must be different from duties of excise which are taxes on minerals produced.
The difference can be understood if one sees that before minerals are extracted and become liable to duties of excise somebody has got to work the mines.
The usual method of working them is for the owner of the mine to grant mining leases to those who have got the capital to work the mines.
There should therefore be no difficulty in holding that taxes on mineral rights are taxes on the right to extract minerals and not taxes on the minerals actually extracted.
Thus tax on mineral rights would be confined, for example, to taxes on leases of mineral rights and on premium or royalty for that.
Taxes on such premium and royalty would be taxes on mineral rights while taxes on the minerals actually extracted would be duties of excise.
It is said that there may be cases where the owner himself extracts minerals and does not give any right of extraction to somebody else and that in such cases in the absence of mining leases or sub leases there would be no way of leaving tax on mineral rights.
It is enough to say that these cases also, rare though they are, present no difficulty.
Take the case of taxes on annual value of buildings.
Where there is a lease of the building, the annual value is determined by the lease money; but there are many cases where owners themselves live in buildings.
In such cases also taxes on buildings are levied on the annual value worked out according to certain rules.
There would be no difficulty where an owner himself works the mine to value the mineral rights on the same principles on which leases of mineral rights are made and then to tax the royalty which, for example, the owner might have got if instead of working the mine himself he had leased it out to somebody else.
there can be no doubt therefore that taxes on mineral rights are taxes of this nature and not taxes on minerals actually produced.
Therefore the present cess is not a tax on mineral rights; it is a tax on the minerals actually produced.
Therefore the present cess is not a tax on mineral rights; it is a tax on the minerals actually produced and can be no different in pith and substance from a 144 tax on goods produced which comes under Item 84 of List I, as duty of excise.
The present levy therefore under section 4 of the Act cannot be justified as a tax on mineral rights.
However, the conclusion of India Cement is clear that a tax on royalties cannot be a tax on minerals and we are bound thereby.
This apart, we shall also advert, while discussing the second question, to another hurdle in the way of the State 's attempt to have recourse to Entry 50, which has also been touched upon by India Cement.
Can, then, the cess be described as a tax on land ' '? The Status considered in India Cement, as Sri Iyer correctly points out, was differently worded.
It purported to levy a cess on land revenue and `royalty ' was brought within the definition of that expression.
It was therefore, a case where they levy had no reference to land at all but only to the income from the land, in the case of Government lands, got by way of land revenue or otherwise.
Here the Statute is different.
The objective of the Cess Act as set out earlier, is to levy a cess on all land.
Indeed, originally the idea was to levy a uniform cess at 25% of the annual value of all land which was subsequently raised to 50%.
It is argued that the tax here is, therefore, a tax on land and it is immaterial that this tax is quantified with reference to the income yielded by the land.
A tax on land may be levied, inter alia with reference to its capital value or with reference to its annual value.
One realistic measure of such capital or annual value will be the income that the land will yield just as, for property tax purposes, the annual value is based on the amount for which the property can reasonably let from year to year.
The income from the land may be more or less due to a variety of reasons.
In the case of agricultural lands, it may depend on the fertility of the soil, the sources of irrigation available, the nature of crops grown and other such factors.
Likewise, where the land is one containing minerals, naturally the value (whether annual or capital value) will be more if it contains richer minerals and can be legitimately measured by reference to the royalties paid in respect thereof.
the mere fact, it is argued, that the annual value is measured with reference to the royalty, dead rent or pit 's mouth value of the mineral does not mean that it ceases to have the character of a tax on land.
In this context, Sri Iyer places strong reliance on the decision of a Constitution Bench of this Court in Ajay Kumar Mukherjea vs Local Board of Barpeta, [1965]3 S.C.R. 47.
There a local Board was authorised to ``grant. a license for the use of any land as a market and impose an annual tax thereon ' '.
The Court held, examining the Scheme and the language of the provision in question, that the tax imposed was a tax 145 on land under Entry 49.
The Court indicated the following approach to the issue before it: ``The first question which falls for consideration therefore is whether the impost in the present case is a tax on land within the meaning of Entry 49 of List II of the Seventh Schedule to the Constitution.
It is well settled that the entries in the three legislative lists have to be interpreted interpreted in their widest amplitude and therefore if a tax can reasonably be held to be a tax on land it will come within Entry 49.
Further it is equally well settled that tax on land may be based on the annual value of the land and would still be a tax on land and would not be beyond the competence of the State legislature on the ground that it is a tax on income: see Ralla Ram vs The Province of East Punjab, [1948] F.C.R.207.
it follows therefore that the use to which the land is put can be taken into account in imposing a tax on it within the meaning of entry 49 of List II, for the annual value of land which can certainly be taken into account in imposing a tax for the purpose of this entry would necessarily depend upon the use to which the land it put.
It is in the light of this settled proposition that we have to examine the scheme of section 62 of the Act which imposes a tax under challenge. ' ' On the other hand, it is contended for the respondents that, whatever may have been the original intention, the true and real impact of the cess is only on the royalties.
It is said that, at any rate, after the amendments of 1976, when lands held for mining operations were segregated for levy of separate and steep rates of cess based on royalty, the ostensible appearance of levying a tax on all land with reference to annual value has disappeared and a direct, undisguised tax on royalties from mining lands has taken its place.
it is urged that, for deciding whether the tax is really a tax on land as in Murthy or whether it is really a tax on royalties which has been struck down in India Cement, it is not the form or the statutory machinery that matters; one has to look at the real substance and true impact of the levy.
If this is done, it is said, there can be no doubt that the cess impugned here suffers from the same vice that vitiated the levy in India Cement.
The decision of this Court in Buxa Dooars Tea Co. vs State, was referred to by Sri G.Ramaswamy, learned 146 counsel for Orient Paper Mills, in support of this contention.
In that case, this Court was concerned with a cess levied annually.
Initially section 4(2) of the relevant statute levied the cess: ``(a) in respect of lands, at the rate of six paise on each rupee of development value thereof; (b) in respect of coal mines, at the rate of fifty paise on each tonne of coal on the annual dispatches therefrom; (c) in respect of mines other than coal mines and quarries, at the rate of six paise on each rupee of annual net profits thereof ' '.
With effect from 1.4.1981, clause (a) above was amended and clause (aa) inserted to provide for the levy of cess ``(a) in respect of land other than a tea estate, at the rate of six paise on each rupee of development value thereof; (aa) in respect of a tea estate at such rate, not exceeding rupees six on each kilogram of tea on the dispatches from such tea estate of tea grown therein, as the State Government may, by notification in the Official Gazette, fix in this behalf: Provided that in calculating the dispatches of tea for the purpose of levy of rural employment cess, such dispatches for sale made at such tea auction centres as may be recognised by the State Government by notification in the Official Gazette shall be excluded: Provided further that the State Government may fix different rates on dispatches of different kinds of tea ' '.
Sub section (4) was added in Section 4 to enable the State Government, if it considers necessary so to do, by notification in the Official Gazette, to exempt such categories of dispatches or such percentage of despatches from liability to pay the whole or any part of the rural employment cess or reduce the rate of rural employment cess payable thereon, under clause (aa) of sub section (2), on such terms and conditions as may be specified in the notification.
With effect from 1.10.1982, the first proviso to clause (aa) was omitted.
It was contended 147 for the tea estate, inter alia that the above levy violated the provisions of Article 301 of the Constitution and was also beyond the legislative competence of the State Government.
Upholding these contentions, the Court observed: ``The question then is whether the impugned levy impedes the free flow of trade and commerce throughout the territory of India and, if it does, whether it falls within the exception carved out in article 304(b).
If the levy imposes a cess in respect of tea estate, it may will be said that even though the free flow of trade is impeded in its Government throughout the territory of India, it is in consequence of an indirect or remote effect of the levy and that it cannot be said that article 301 is contravened.
The contention of the petitioners is, however, that it is ostensibly only in respect of tea estate but in fact it is a levy on despatches of tea.
If that contention is sound, there can be no doubt that it constitutes a violation of article 301 unless the legislation is brought within the scope of article 304(b).
To determine whether the levy is in respect of tea estates or is a levy on despatches of tea, the substance of the legislation must be ascertained from the relevant provisions of the statute.
It cannot be disputed that the subject of the levy, the nature of which defines the quality of the levy, must not be confused with the measure of liability, that is to say, the quantum of the tax.
There is a plenitude of case law supporting that principle, among the cases, being Union of India vs Bombay Tyre International, [1984] 1 S.C.R.347.
But what is the position here?. .
Now, for determining the true nature of the legislation, whether it is a legislation in respect of tea estate and therefore of land, or in respect of despatches of tea, we must, as we have said take all relevant provisions into account and ascertain the essential substance of it.
It seems to us that although the impugned provisions speak of a levy of cess in respect of tea estates, what is contemplated is a levy on despatches of tea instead.
The entire structure of the levy points to that conclusion.
If the levy is regarded as one in respect of tea estates and the measure of the liability is defined in terms of the weight of tea dispatched, there must be a nexus between the two indicating relationship between the levy, on the tea estate and the criteria for determining the 148 measure of liability.
If there is no nexus at all it can conceivably be inferred that the levy is not what it purports to be.
The statutory provisions for measuring the liability on account of the levy throws light on the general character of the tax as observed by the Privy Council in Re: A Reference under the Government of Ireland Act, 1920 and Section 3 of the Finance Act (Northern Ireland), 1934 [1963] 2 A.E.R. III.
In R.R. Engineering Co. vs Zilla Parishad, Barielly, ; this Court observed that the method of determining the rate of levy would be relevant in considering the character of the levy.
All these cases were referred to in Bombay Tyer International Ltd.; , where in the discussion on this point at page 367 this Court said: Any standard which maintains a nexus with the essential character of the levy can be regarded as a valid basis for assessing the measure of the levy ' '.
Applying the above tests to the case before it, the Court reached the conclusion that, in substance the impugned levy was a levy in respect of despatches of tea and not in respect of tea estates.
It was then pointed out that the question of legislative competence also turned on this issue: ``If this impugned legislation were to be regarded as a levy in respect of the estates, it would be referable to entry 49 in List II of the Seventh Schedule of the Constitution which speaks ``taxes on lands and buildings ' '.
But if the legislation is in substance legislation in respect of despatches of tea, legislative authority must be found for it with reference to some other entry ' ' Pointing out that no such entry in List II or III had been brought o its notice and further that, under S.2 of the Tea Ct, 1953, control over the tea industry has been assumed by Parliament within the meaning of Entry 54 of List I, the Court upheld the challenge to the competence of the State legislature to levy the impugned cess.
it is submitted that, likewise, here the levy is one in substance on royalties and not one on land.
There is force in the contention urged by Sri T.S.K. Iyer that there is a difference in principle between a tax on royalties derived 149 from land and a tax on land measured by reference to the income derived therefrom.
That a tax on building does not cease to be such merely because it is quantified on the basis of the income it fetches is nowhere better illustrated than by the form of the levy upheld in Ralla Ram, followed by Bhagwan Dass Jain; , which illustrates the converse situation.
Mukherjea (supra) also supports this line of reasoning.
But here the levy is not measured by the income derived by the assessee from the land, as is the case with lands other than mineral lands.
The measure of the levy is the royalty paid, in respect of the land, by the assessee to his lessor which is quite a different thing.
Moreover, interesting as the argument is, we are constrained to observe that it is only a reiteration of the ratio in Murthy which has been upset in India Cement.
We may point out that this is of significance because, unlike in India Cement, the statute considered in Murthy, as the one here, only purported to levy a cess on the annual value of all land.
India Cement draws a ``clear distinction between tax on land and tax on income arising from land ' '.
The former must be one directly imposed on land, levied on land as a unit and bearing a direct relationship to it.
In para 23 of the judgment, the Court has categorically stated that a tax on royalty cannot be said to be a tax directly on land as a unit.
Sri Iyer contended that all the observations and propositions in India Cement stem from the basic conclusion of the Court that the cess levied there was a cess on royalty in view of the Explanation to section 115.
He also submitted that the statue under consideration in India Cement did not provide for any cess in the case of land which did not yield any royalty; in other words, the Act did not use dead rent as a basis on which land was to be valued.
He drew attention to the observations of Oza, J.In para 42 of India Cement that if the Explanation to section 115 had used the words `surface rent ' in place of `royalty ' the position would have been different and that, if a cess on such `surface rent ' or `dead rent ' is charged, it could be justified as a tax on land falling within the purview of Entry 49, Here, however, the position is different and so, he urged, the nature of the levy is also different.
We may have considered these points as furnishing some ground to distinguish the present levy from that in india Cement but for the Court 's specific disapproval of Murthy.
We are unable to accept the plea of Sri Iyer that, in spite of Murthy, he can support the validity of the levy, as the statute considered in Murthy contained exactly the same features as are here emphasised by Shri Iyer and the validity of such Levy cannot be upheld after India Cement.
As to the second contention based on the observations in the judgment of Oza J., we may point out here the 150 levy is not one confined to dead rent or surface rent as suggested by Oza J. but one on royalty which even according to Oza J. cannot be described as a tax on land.
Sri Iyer contended that unless the case of the assessees is that the statute is a piece of colourable legislation, it is not possible to construe the levy on mineral lands differently.
He pointed out that section 4 of the Orissa Cess Act, 1962 levies a cess on all land and that, if Sc.
7(1) and (2) measuring the cess by reference to the income of other categories of land are valid, there is no reason why S.7(3) alone should be treated differently and objected to as imposing a tax on royalties particularly when the levy also extends to dead rent.
The answer to this contention appears to be that the plea of the assessee need not go to the extent of saying that the levy is a colourable piece of legislation.
it is sufficient to restrict oneself to the issue of a proper determination of the pith and substance of the legislation.
There is no doubt an apparent anomaly in considering section 7(1) and (2) as levying a tax on land but construing section 7(3) as imposing a tax on royalties and this anomaly has been noticed in India Cement (vide para 42).
But the question is, what is it that is really being taxed by the Legislature? So far as mineral bearing lands are concerned, is the impact of the tax on the land or on royalties? The change in the scheme of taxation under S.7 in 1976; the importance and magnitude of the revenue by way of royalties received by the State; the charge of the cess as a percentage and, indeed, as multiples of the amount of royalty; and the mode and collection of the cess amount along with the royalties and as part thereof are circumstances which go to show that the legislation in this regard is with respect to royalty rather than with respect to land.
Sri Iyer had invited our attention to the decision of this Court in R.R. Engineering Co. v Zila Parishad, ; which upheld the validity of a `circumstances and property tax ' levied by a Zila Parishad.
The High Court had held this levy could not be traced to any entry other than the residuary Entry 97 of List I. This Court, on appeal, pointed out the distinction between a tax of this type and a tax on income.
It held that the tax was a composite one referable to Entry 49 (tax on lands and buildings), Entry 58 (taxes on animals and boats) and Entry 60 (tax as on professions, trades, callings and employments) of List II.
While holding, therefore, that the ceiling of Rs.250 per annum referred to in Entry 60 would not be applicable to the tax, the Court uttered a ``word of caution ' '.
151 ``The fact that one of the components of the impugned tax, namely, the component of `circumstances ' is referable to other entries in addition to Entry 60, shall not be construed as conferring an unlimited charter on the local authorities to impose disproportionately excessive levies on the assessees who are subject to their jurisdiction.
An excessive levy on circumstances will tend to blue the distinction between a tax on income and a tax on circumstances.
income will then cease to be a mere measure or yardstick of the tax and will become the very subject matter of the tax.
Restraint in this behalf will be a prudent prescription for the local authorities to follow ' '.
While Sri Iyer sought to use this decision in support of his contention that a tax on property can be legitimately measured on the basis of the income therefrom, we think the observations extracted above are very apposite here.
The manner in which the levy, initially introduced a uniform cess on all land, was slowly converted, qua mining lands, into a levy computed at multiples of the royalty amounts paid by the lesses thereof seem to bear out the contention that it is being availed of as a tax on the royalties rather than one on the annual value of the land containing the minerals.
In the words of Chandrachud J. (as he then was) one can legitimately conclude that royalty has ceased to be a mere measure or yardstick of the tax and has become the very subject matter thereof.
For the reasons discussed above, we repel the contention of the State seeking to justify the levy under Entry 45, 49 and 50 of List II of the Seventh Schedule.
There has been considerable discussion before us as to whether `royalty ' itself is a tax or not.
The controversy before us centres round the discussion contained in paras 31 to 34 of the India Cement judgement.
Counsel for the assessees respondents invite attention to the opening sentence of para 34 which runs: ``In the aforesaid view of the matter, we are of the opinion that royalty is a tax ' ' and argue that this clinches the issue.
On the other hand, Sri Iyer submits that this purported conclusion does not follow from the earlier discussion and is also inconsistent with what follows.
He points out that though there is a reference in para 27 to the conclusion of Venkataramiah J. in a judgement of the Mysore High Court that royalty under S.9 of the MMRD Act is really a tax, and a reference in para 31 to the Rajasthan, Punjab, Gujarat and Orissa decisions to the effect that royalty is not a 152 tax, there is no discussion, criticism or approval of any of the decision on this point and that, therefore, the first sentence of para 34, relied upon for the respondents, is non sequitir.
He submits that, perhaps, there is a typographical error in the first sentence of para 34 and that the sentence should really read thus: ``In the aforesaid view of the matter, we are of opinion that cess is a tax, and as such a cess on royalty being a tax on royalty, is beyond the competence of the State Legislature. . ' ' He also points out that the last sentence of para 34 reads thus: ``Royalty on mineral right is not a tax on land but a payment for the use of land ' '.
He submits, therefore, that this issue has not been decided in India Cement.
He submits that, before we express any opinion on this issue, we should consider the matter afresh and places before us extracts from various lexicons and dictionaries to show that a royalty is nothing more than the rent or lease amount paid to a lessor in consideration for the grant of a lease to exploit minerals.
Reference may also be made to the discussion in this respect in paras 35 40 of Trivedi & Sons vs State of Gujarat, [1986] Supp.
S.C.C. 20.
It is therefore, neither a fee nor a tax but merely a price paid for the use of mineral bearing land.
We do not think that it is necessary for us to express an opinion either way on this controversy for, it seems to us, it is immaterial for the purposes of the present case.
If royalty itself were to be regarded as a tax, it can perhaps be described properly as a tax on mineral rights and has to conform to the requirements of section 50 which are discussed later.
We are, however, here concerned with the validity of the levy of not royalty but of cess.
If the cess is taken as a tax, then, unless it can be described as land revenue or a tax on land or a tax on mining rights, it cannot be upheld under Entry 45, 49 or 50.
On the contrary, if it is treated to Entry 23, a proposition the effect of which will be considered later.
the question whether royalty is a tax or not does not assist us much in furnishing an answer to the two questions posed in the present case and set out earlier.
We shall, therefore, leave this question to rest here.
This takes us to the second question posed by us initially and this 153 turns on the effect of M.M.R.D. Act, 1957 and the declaration contained in S.2 thereof which has been extracted earlier.
This will arise if we treat the levy as a tax falling under Entry 50 of List II or, alternatively, as a fee though it may not affect the State 's competence if it can be attributed to Entry 49 of List II.
To take up Entry 50 first, a perusal of entry 50 world show that the competence of the State Legislature with respect thereto is circumscribed by ``any limitations imposed by Parliament by law relating to mineral development ' '.
The M.M.R.D Act, 1957, is there can be no doubt about this a law of Parliament relating to mineral development.
S.9 of the said Act empowers the Central Government to fix, alter, enhance or reduce the rates of royalty payable in respect of minerals removed from the land or consumed by the lessee.
Sub section (3) of Section 9 in terms states that the royalties payable under the Second Schedule to the Act shall not be enhanced more than once during a period of three years.
India Cement has held that this is a clear bar on the State legislature taxing royalty so as, in effect, to amend the Second Schedule to the Central Act and that if the cess is taken as a tax falling under Entry 50 it will be ultra vires in view of the provisions of the Central Act.
It is possible, then, to treat the levy as a fee which the State legislature is competent to legislate for under Entry 66 of the State List? Sri Iyer contends for this position particularly on the strength of S.10 of the Orissa Cess Act, 1962.
There is one great difficulty in accepting this solution to the State 's problem.
S.10 as it stands now earmarks the purposes of utilisation of only fifty percent of the proceeds of the cess and that, too, is limited to the cess collected in respect of ``lands other than lands held for carrying on mining operations ' '.
In other words, the levy cannot be correlated to any services rendered or to be rendered by the State to the class of persons from whom the levy is collected.
Whether royalty is a tax or not, the cess is only a tax and cannot be properly described as a fee.
This consideration apart, even assuming it is a fee, the State legislature can impose a fee only in respect of any of the matters in the State List.
The entry in the State List that is relied upon for this purpose is Entry 23.
But Entry 23, it will be seen, is ``subject to the provisions of List I with respect to regulation and development ' ' of mines and minerals under the control of the Union.
Under Entry 54 of List I, regulation of mines and mineral development is in the field of Parliamentary legislation ``to the extent to which such regulation and 154 development under the control of the Union is declared by Parliament by law to be expedient in the public interest ' '.
Such a declaration is contained in section 2 of the M.M.R.D. Act, 1957, which has been set out earlier.
It, therefore, follow that any State legislation to the extent it encroaches on the field covered by the M.M.R.D. Act, 1957, will be ultra vires.
The assessees contend, in this case, that the legislation in question is beyond the purview of the State legislature by reason of the enactment of the M.M.R.D. Act.
It would appear, prima facie that the contention has to be upheld on the basis of the trilogy of decisions referred to at the outset viz. Hingir Rampur, Tulloch and India Cement.
They seem to provide a complete answer to this question.
The argument is, however, discussed at some length, because it has been put forward, mutatis mutandis, in support of the levy of cess by the other State as well.
Before dealing with the contentions of the counsel for the State in this behalf, a reference may be made to a difference in wording between Entry 52 and Entry 54 of List I. The languages of Entry 52 read with Entry 24 would suggest that, once it is declared by Parliament by law that the control of a particular industry by the Union is expedient in the public interest, the State legislatures completely lose all competence to legislate with respect to such an industry in any respect whatever, indian Tobacoo Co. Ltd. vs Union [1985] Supp. 1 S.C.R. 145.
But, even here, there are judicial decisions holding that such declaration does not divest the State legislature of the competence to make laws the pith and substance of which fall within the entries in List II, (see for e.g. Kannan Dewan Hills Co. vs State of Kerala; , and Ishwari Khetan Sugar Mills Ltd. vs State of U.P., ; to which reference will also be made later, merely on the ground that it has some effect on such industry.
Compared to that of Entry 52, the language of Entry 54 is very guarded.
It deprives the States of legislative competence only to the extent to which the law of Parliament considers the control of Union to be expedient in the matter of regulation of mines and mineral development.
Emphasising this difference, learned counsel for the State of Orissa submits that the intent, purpose and scope of the M.M.R.D. Act is totally different and does not cross the field covered by the impugned Act.
It is a law to provide for the proper exploitation and development of minerals and regulates the persons to whom, the manner in which and procedure according to which licenses for prospecting or leases for minerals should be granted.
The enactment is concerned with the need for a proper exploitation of minerals from lands.
The impugned Act, on the other hand, concentrates on the need 155 for development of mineral areas as such and provides for the collection of cess to cater to these needs.
The scope of the subject matter of legislation under the two Acts are entirely different and the M.M.R.D. Act cannot be considered to exclude State legislation of the nature presently under consideration.
Before considering the above contention, it will be useful to refer to certain earlier decisions of this Court which have a bearing on this issue.
State of West Bengal vs Union, [1964] 1 S.C.R. 371 concerned the validity of an Act of Parliament proposing to acquire certain coal bearing areas in the State qua certain areas vested in the State itself.
While upholding the general right of Parliament to legislate for the acquisition of even property vested in a State, the Court pointed out that this could be done only if there is some provision in the Central Act, expressly or necessarily implying that the property of the State is to be acquired by the Union.
However, the Court held, when the requisite declaration under Entry 54 is made, the power to legislate for regulation and development of mines and minerals under the control of the Union, would, by necessary implication, include the power to acquire mines and minerals.
Baijnath Kedia vs State of Bihar, ; was a case arising out of a 1964 amendment to the Bihar Land Reforms Act, 1950.
By section 10 of the 1950 Act, all the rights of former landlords or lessors under mining leases granted by them in their "estates" came to be vested in the State; but the terms and conditions of those leases were made binding upon the State Government.
Under a second proviso to this provision and a sub rule added by virtue of the 1964 amendment, additional demands were made to lessees, the validity of which was challenged successfully before this Court.
The Court, applying Hingir Rampur and Tulloch held that the whose whole of the legislative field in respect of minor minerals was covered by Parliamentary legislation and Entry 23 of List II was to the extent cut down by Entry 54 of List I.
The old leases could not be modified except by a legislative enactment by Parliament on the lines of S.16 of the M.M.R.D. Act, 1957.
In State of Haryana vs Chanan Mal, ; the State Government had declared saltpetre as a minor mineral and auctioned saltpetre mines in the State under the M.M.R.D. Act, 1957 read with the Punjab Minor Minerals Concession Rules, 1964.
In a writ petition filed by one of the owners, the High Court held, unless the mineral deposits were specifically mentioned in the wajib ul arz of the village 156 as having vested in the State, their ownership would continue to remain vested in the former proprietors according to the record of rights.
To meet this difficulty and the difficulties that had been created by haphazard leases created by the erstwhile proprietors, the State legislature passed the Haryana Minerals (Vesting of Rights) Act, 1973 and issued notifications thereunder again acquiring the rights to the saltpetre in the lands putting up certain saltpetre bearing lands to auction.
The High Court upheld the challenge to the validity of the notifications holding that, in view of the declaration contained in S.2 of the M.M.R.D. Act, the field covered by the impugned Act was already fully occupied by Central legislation and that, therefore, the State Act was void and imperative on grounds of repugnancy.
This Court, however, reversed the High Court 's decision.
It held that though the stated objects and reasons of the State Act showed that the acquisition was to be made to protect the mineral potentialities of the land and to ensure their proper development and exploitation on scientific lines and this did not materially differ from that which could be said to lie behind the Central Act the character of the State Act had to be judged by the substance and effect of its provisions and not merely by the purpose given in the Statement of Objects and Reasons.
Analysing the provisions of the Central Act, the Court pointed out that, subject to the overall supervision of the Central Government, the State Government had a sphere of its own powers and could take legally specified actions under the Central Act and rules.
In particular S.16(1)(b) of the Central Act showed that Parliament itself contemplated State legislation for vesting of lands containing minerals deposits in the State Government, a feature that could be explained only on the assumption that Parliament did not intend to touch upon the power of State legislatures under Entry 18 of List II read with Entry 42 of List III.S.17 also showed that there was no intention to interfere with vesting of lands in the States by the provisions of the Central Act.
The decision of Hingir Rampur, Tulloch and Baijnath Kedia were distinguished.
In Chanana Mal (Supra), the respondents relied upon certain observation in Hingir Rampur and State of West Bengal vs Union, (supra).
The Court, however, distinguished them saying: "In the two cases discussed above no provision of the Central Act 67 of 1957 was under consideration by this Court.
Moreover, power to acquire for purposes of development and regulation has not been exercised by Act 67 of 1957.
The existence of power of Parliament to legislate on this topic as an incident of exercise of legislative power on another subject is one thing.
Its actual exercise is another.
157 It is difficult to see how the field of acquisition could become occupied by a Central Act in the same way as it had been in the West Bengal 's case (supra) even before Parliament legislate to acquire land ina State.
At least untill Parliament has so legislated as it was shown to have done by the statute considered by this Court in the case from West Bengal, the field is free for State legislation falling under the express provisions of entry 42 of List III".
Tulloch and Baijnath Kedia were also considered no longer applicable as Ss.16 and 17 of the M.M.R.D. Act, 1957 had been amended to get over the need for a parliamentary legislation pointed out in Baijnath Kedia.
A similar question whether the State legislature was competent to acquire certain sugar undertakings, when the sugar industry had become a "declared: industry under the provisions of Entry 52 of List I read with S.2 of the I.D.R. Act, arose for consideration of Ishwari Khetan Sugar Mills (P) Ltd. vs State of U.P.,[1980] 3.
S.C.R. 331.
Answering this question in the affirmative, the Court observed : "The argument that the State legislature lacked competence to enact the impugned legislation is without force.
Legislative power of the State under Entry 24, List II is eroded only to the extent control is assumed by the Union pursuant to a declaration made by the Parliament in respect of a declared industry as spelt out by the legislative enactment and the field occupied by such enactment is measure of erosion.
Subject to such erosion, on the remainder the State legislature will have power to legislate in respect of a declared industry without in any way trenching upon the occupied field.
State legislature, which is otherwise competent to deal with industry under Entry 24, List II, can deal with that industry in exercise of other powers enabling it to legislate under different heads set out in Lists II and III and this power cannot be denied to the State.
The contention that the impugned Act is in violation of section 20 of the Central Act had no merit.
The impugned legislation was no enacted for taking over the management or control of nay industrial undertaken by the State undertakings.
If an attempt was made to take over the manage 158 ment or control of any industrial undertaking in a declared industry the bar of section 20 would inhibit exercise of such executive power.
The inhibition of section 20 is on the executive power which if as a sequel to an acquisition of an industrial undertaking the management or control of the industrial undertaking stands transferred to the acquiring authority section 20 is not attracted.
It does not preclude or forbid a State legislature exercising legislative power under an entry other than Entry 24 of List II and if in exercise of that legislative power the consequential transfer of management or control over the industry or undertaking follows as an incident of acquisition such taking over of management or control pursuant to an exercise of legislative power is not within the inhibition of section 20:.
The decisions in the above two case were, again, applied in Western Coalfields Ltd. vs Special Area Development Authority, ; Here the question was whether the enactment of the Coal Mines Nationalisation Act, 1973 and the M.M.R.D. Act 1957 precluded the State legislature from providing for the levy of a property tax by the Special Area Development Authority, constituted under a 1973 Act of the State legislature, in respect of lands and buildings used for the purposes of and covered by coal mines.
The plea on behalf of the appellant coalfields was that the State Act was invalid (a) as it encroached on the field vested in the Centre by reason of the declaration of S.2 of M.M.R.D. Act and (b) as it impeded the powers and functions of the union under the Coal Mines Nationalosation Act 1973 which had been enacted by Parliament "for acquisition of coal mines with a view to reorganising and restructuring such coal mines so to ensure the rational, coordinated and scientific development and utilisation of coal resources as best to subserve the common good".
Rejecting this contention the Court held : " Apart from the fact that there is no data before us showing that the property tax constitutes an impediment in the achievement of the goals of the Coal Mines Nationalisation Act, the provisions of the M.P. Act of 1973, under which Special Areas and Special Area Development Authorities are constituted afford an effective answer to the Attorney General 's contention.
Entry 23 of List II relates to "Regulation of mines and mineral development subject to the provisions of List I with respect to regulation and development under the control of the Union".
Entry 54 of List I 159 relates to "Regulation of mines and mineral development to the extent to which such regulation and development under control of the Union is declared by Parliament by law to be expedient in the public interest".
It is true that on account of declaration contained in S.2 of the Mines and Minerals (Development & Regulation) Act.
1957, the legislative field covered by Entry 23 of List II will pass on to Parliament by virtue of Entry 54, List I.
But in order to judge whether, on that account, the State legislature loses its competence to pass the Act of 1973, it is necessary to have regard to the object and purpose of that Act and to the relevant provisions thereof, under which Special Area development Authorities are given the power to tax lands and buildings within their jurisdiction.
We have set out the objects of the Act at the commencement of this judgement, one of which is to provide for the development and administration of Special Areas through Special Area Development Authorities.
Section 64 of the Act of 1973, which provides for the constitution of the special areas, lays down by sub section (4) that: Notwithstanding anything contained in the Madhya Pradesh Municipal Corporation Act, 1956, the Madhya Pradesh Panchayats Act, 1962 the Municipal Corporation, Municipal Council, Notified Area Committee or a Panchayat, as the case may be shall, in relation to the special area and as from the date of the Special Area Development Authority undertakes the function under clause (v) of clause (vi) of Section 68 ceases to exercise the powers and perform the function and duties which the Special Area Development Authority is competent to exercise and perform under the Act of 1973.
Section 68 defines the function of the Special Area Development Authority, one of which as prescribed by clause (v), is to provide the municipal services as specified in sections 123 and 124 of the Madhya Pradesh Municipalities Act, 1961.
Section 69, which defines the powers of the authority, shows that those powers are conferred, inter alia for the purpose of municipal adminstration.
Surely, the functions, powers and duties of Municipalities do not become an occupied filed by reason of the declaration contained in section 2 of the mines and Minerals (Development & Regulation) Act, 1957.
Though, therefore, on account of that declaration, the legislative field covered by Entry 23, List II may pass 160 on to the Parliament by virtue of Entry 54, List I, the competence of the State Government to enact laws for municipal adminstration will remain unaffected by our declaration.
Entry 5 of List II related to "Local Government, that is to say, the constitution and powers of municipal corporation and other local authorities for the purpose of local self Government".
It is in pursuance of this power that the State legislature enacted the Act of 1973.
The power to impose tax on lands and buildings is derived by the State Legislature from Entry 49 of List II: " Taxes on lands and buildings".
The power of the municipalities to levy tax on lands and buildings has been conferred by the State Legislature on the Sspecial Area Development Authorities.
Those authorities have the power to levy that tax in order effectively to discharge the municipal functions which are passed on them.
Entry 54 of List I does not contemplate the taking over of municipal functions.
" The Court pointed out that Murthy provided a complete answer to the above contention.
Chanan Mal and Ishwari Khetan, were referred to and Baijnath Kedia distinguished.
The decision of the Madhya Pradesh High Court in Central Coalfields vs State of M.P., A.I.R. 1986 M.P. 33 also arose out of similar facts: The question for consideration was whether the functions, powers and duties of Municipalities and Special Area Development Authority (SADA) become an occupied field by virtue of S.2 of the MMRD Act, 1957 and the powers vested in them to regulate construction activities relating to mining areas was ultra vires.
It was found that SADA had become the local authority to discharge the functions of a municipal adminstration under a State Act and that the regulation of construction activities was one of the aspects of municipal adminstration and management.
In this situation, the question posed was answered in the negative following Ishwari Khetan, Western Coalfields and Chanan Mal.
Placing considerable reliance on the decisions in Chanan Mal, Ishwari Khetan and Western Coalfields, Sri Iyer contended that the State legislation in the present case is not vitiated by reason of M.M.R.D. Act, 1957.
He also pointed out that India Cement also dies not consider in detail the reasoning in Hingir Rampur and Tulloch but only reefers to certain observations in the dissenting judgement of Wanchoo J ( as His Lordship then was) in the former case and urged.
161 that the entire matter requires careful consideration.
He submitted that Tulloch and Western Coalfields represent two lines of cases which need reconciliation and that this task has not been attempted at all in India Cement.
On the other hand, learned counsel for the respondents submitted that the authority of the Constitution Bench in Western Coalfields which endorsed Murthy should be considered weak after India Cement which has overruled Murthy.
The present case, it is submitted, is closer to Baijnath Kedia.
It is submitted that the principles of Tulloch have been referred to with approval in a number of cases [ Karunanidhi, 1979 3SCR 254 at 277] Hind Stone; , at 746m I.T.C., at 168 and are too well settled to need any reconsideration.
It is clear from a perusal of the decisions referred to above that the answer to the question before us depends on a proper understanding of the scope of M.M.R.D. Act 1957, and an assessment of the encroachment made by the impugned State legislation into the field covered by it.
Each of the cases referred to above turned on such an appreciation of the respective spheres of the two legislations.
As pointed out in Ishwari Khetan, the mere declaration of a law of Parliament that it is expedient for an industry of the regulation and development of mines and minerals to be under the control of the Union under Entry 52 or entry 54 does not denude the State legislatures of their legislative powers with respect to the fields covered by the several entries in List II or List III.
Particularly, in the case of a declaration under Entry 54, this Legislature Power is extended to the extent control is assumed by the Union pursuant to such declaration as spelt out by the legislative enactment which makes the declaration.
The measure of erosion turns upon the field of the enactment framed in pursuance of the declaration.
While the legislation in Hingir Rampur and Tulloch was found to fall within the pale of the prohibition, those in Chanan Mal, Ishwari Khetan and Western Coalfields were general in nature and traceable to specific entries in the State List and did not encroach on the field of the Central enactment except by way of incidental impact.
The Central Act, considered in Chanan Mal, seemed to envisage and indeed permit State legislation of the nature in question.
To turn to the respective spheres of the two legislations we are here concerned with, the Central Act (M.M.R.D. Act, 1957) demarcates the sphere of Union control in the matter of mines and mineral development.
While concerning itself generally with the requirements 162 regarding grants of licenses and leases for prospecting and exploitation of minerals, it contains certain provisions which are of direct relevance to the issue before us.
S.9, which deals with the topic of royalties and specifies not only the quantum by also the limitations on the enhancement thereof, has already been noticed.
S.9A enacts a like provision in respect of dead rent.
Reference may also be made to S.13 and S.18, which to the extent relevant, are extracted here.
Power of Central Government to make rules in respect of minerals (1) The Central Government may, by notification in the Official Gazette, make rules for regulating the grant of prospecting licenses and mining leases in respect of minerals and for purposes connected therewith.
(2) In particular, and without prejudice to the generality of the foregoing power, such rules may provide for all or any of the following matters, namely : (i) the fixing and collection of fees for prospecting licenses or mining leases, surface rent, security deposit, fines, other fees or charges and the time within which and the manner in which the dead rent or royalty shall be payable;* XXX XXX XXX XXX XXX (m) the construction, maintenance and use of roads, power transmission lines, tramways, railways, aerial rope ways, pipe lines and the making of passages for water for mining purposes on any land comprised in the mining lease; XXX XXX XXX XXX XXX (qq) The manner in which rehabilitation of flora and other vegetation such as trees and the like destroyed by reason of any prospecting a mining operation shall be made in the ______________________________________________________________ *Substituted by Act 37 of 1986 for the original clause (i) which read: (i) the fixing and collection of dead rent, fines, fees or other charges and their collection of royalties in respect of (i) prospecting licenses, (ii) mining leases, (iii) minerals, mines, quarried, excavated or collected".
163 same area or in any other area selected by the Central Government (whether by way of reimbursement of the cost of rehabilitation or otherwise) by the person holding the prospecting license or mining lease"* S.18, which originally laid a duty on the Central Government to take all such steps as may be necessary "for the conservation and development of minerals in India" has been amended by Act 37 of 1986 to cover steps "for the conservation and systematic development of minerals in India and for the protection of environment by preventing or controlling any pollution which may be caused by prospecting or mining operations" and the scope of the rule making power under S.18(2) has likewise been enlarged.
S.25(1) read thus: "25(1) Any rent, royalty, tax fee or other sum due to the Government under this Act or the rules made thereunder or under the terms and conditions of any prospecting licence or mining lease may, on a certificate of such effect as may be specified by the State Government in this behalf by general or special order, be recovered in the same manner as an arrear of land revenue".
and sub section (2) provides, further, that all such "rent, royalty, tax, fee" etc.
shall be a first charge of the assets of the holder of the prospecting licence or mining lease as the case may be.
If one looks at the above provisions and bears in mind that, in assessing the field covered by the Act of Parliament in question, one should be guided (as laid down in Hingir Rampur and Tulloch) not merely by the actual provisions of the Central Act or the rules made thereunder but should also take into account matters and aspects which can legitimately be brought within the scope of the said statute, the conclusion seems irresistible, particularly in view of Hingir Rampur and Tulloch, that the State Act has trespassed into the field covered by the Central Act.
The nature of the incursion made into the fields of the Central Act in the other cases were different.
The present legislation, traceable to the legislative power under Entry 23 or Entry 50 of the State List which stands impaired by the Parliamentary declaration under Entry 54, can hardly be equated to the law for land acquisition or municipal administration which were considered in the cases cited and which are traceable to different specific entries in List II or List III.
___________________________________________________________ *Newly inserted by Act 37 of 1986 164 Sri Iyer contended that the object and purposes of the Orissa Act and its provisions were quite distinct and different from the object and purposes of the Central Act with the result that the two enactments could validly coexist since they do not cover the same field.
It was argued that the impugned Act was concerned with the raising of funds to enable panchayats and Samitis to discharge their responsibilities of local administration and take steps for proper development of areas (including mining areas) under their jurisdiction whereas the Central Act was concerned not with any social purpose but merely with the development of mineral resources of the country and as such the State legislation in this regard may also be treated as referable to Entry No.5 of the State List as the statute in Western Coalfields (supra).
As to the reliance on Entry 5 of List II, it is plainly to tenuous.
As pointed out by Sri Bobde, there is a difference between the `object ' of the ACt and its `subject.
The object of the levy of the fees may be to strengthen the finances of local bodies but the Act has noting to do with municipal or local administration.
In this context, it may be pointed out that while S.10 of the Orissa Act, as originally enacted, provided for a distribution of the cess collected among local bodies, an amendment of 1970 restricted the utilisation of the cess partly for primary education and partly for the above purpose.
Even this was amended in 1976 whereafter there has been no restriction regarding the cess collected in respect of mining areas which form part of the consolidated fund of the State.
The levy has, therefore, ceased to be capable of being described as a fee.
Even if its purpose is only to levy a fee, the fee can be described only as one with respect of `land ' (Entry 18) if considered generally or with respect to mines and minerals development (Entry23) if restricted to the nature of the issue before us.
We shall discuss the relevance of Entry 18 later but, so far as Entry 23 is concerned, the State 's legislative competence is subject to the field covered by the Central Act.
Turning therefore to the distinction sought to be made between the respective areas of operation of the two Acts the answer to this contention is provided by Hingir Rampur.
The Constitution Bench first set out the scheme of the impugned Act thus : "The scheme of this Act thus clearly shows that it has been passed for the purpose of development of mining areas in the State.
The basis for the operation of the Act is the constitution of a mining area, and it is in regard to mining areas thus constituted that the provision of the Act come 165 into play.
It is not difficult to appreciate the intention of the State Legislature evidenced by this Act.
Orissa is an under developed State in the Union of India though it has a lot of mineral wealth of great potential value.
Unfortunately its mineral wealth is located generally in areas sparsely populated with bad communication.
Inevitably the exploitation of the minerals is handicapped by lack of communications, and the difficulty experienced in keeping the labour force sufficiently healthy and in congenial surroundings.
The mineral development of the State, thereof, requires that provision should be made for improving the communications by constructing good roads and by providing means of transport such as tramways, supply of water and electricity would also help.
It would also be necessary to provide for amenities of sanitation and education to the labour force in order to attract workmen to the area.
Before the Act wa passed it appears that the mine owners tried to put up small length roads and tramways for their own individual purpose, but that obviously could not be as effective as roads constructed by the State and tramway service provided by it.
It is on a consideration of these facts that the State Legislature decided to take an active part in a systematic development of its mineral areas which would held the mine owners in moving their minerals quickly through the shortest route and would attract labour to assist the excavation of the minerals.
Thus there can be no doubt that the primary and the principal object of the Act is to develop the mineral areas in the State and to assist more efficient and extended exploitation of its mineral wealth".
A little later, at pare 559, the provisions of Central Act LIII of 1948 which were less far reaching that those of 1957 ACt as can be seen from the observations at page 476 of Tulloch were analysed and the Court concluded : "Amongst the matters covered by S.6(2) is the levy and collection of royalties, fees or taxes in respect of minerals mined, quarried, excavated or collected.
It is true that no rules have in fact been framed by the Central Government in regard to the levy and collection of any fees; but, in our opinion, that would not make any difference.
If it is held that this Act contains the declaration referred to in Entry 166 23 there would be no difficulty in holding that the declaration covers the field of conservation and development of minerals, and the said field is indistinguishable from the field covered by the impugned Act.
What Entry 23 provides is that the legislative competence of the State Legislature is subject to the provisions of List 1 with respect of regulation and development under the control of the Union, the Entry 54 in List 1 requires a declaration by Parliament by law that regulation and development of mines should be under the control of the Union in public interest.
Therefore, if a Central Act has been passed for the purpose of providing for the conservation and development of minerals, and if it contains the requisite declaration, then it would not be competent to State Legislature to pass an Act in respect of the subject matter covered by the said declaration.
In order that the declaration should be effective it is not necessary that rules should be made or enforced; all that this required is a declaration by Parliament that it is expedient in the public interest to take the regulation and development of mines under the control of the Union.
In such a case the test must be whether the legislative declaration covers the field or not.
Judged by this test there can be no doubt that the field covered by the impugned Act is covered by the Central Act LIII of 1948".
The following observations in Tulloch are also apposite in this context: " On the other hand, Mr. Setalvad learned counsel for the respondent urged that the Central ACt covered the entire field of mineral development, that being the "extent" to which Parliament had declared by law and it was expedient that the Union should assume control.
In this connection he relied most strongly on the terms of s.18(1) which laid a duty upon the Central Government "to take all such steps as may be necessary for the conservation and development of minerals in India and " for that propose the Central Government may, by notification, make such rules as it deems fit".
If the entire field of mineral development was taken over, that would include the provision of amenities to workmen employed in the mines which was necessary in order to stimulate or maintain the working of mines.
The test which he suggested was whether, if under the power 167 conferred by s.18(1) of the Central Act, the Central Government has made rules providing for the amenities for which provision was made by the Orissa Act and if the Central Government had imposed a fee to defray the expenses of the provision of these amenities, would such rules be held to be ultra vires of the Central Government, and this particularly when taken in conjunction with the matters for which rules could be made under s.13 to which reference has already been made.
We consider there is considerable force in this submission of learned counsel for the respondent, and thus would require very detailed and careful scrutiny.
We are, however, relieved from this task of detailed examination and discussion of this matter because we consider that it is concluded by a decision of the Court in the Hingir Rampur Coal Co. Ltd & Ors.
vs The State of Orissa & Ors., [1961] 2.S.C.R. 537 The above argument was accepted by the Court, vide page 476, Reference may also be made here to the recent decision of this Court in Bharat Coking Coal vs State of Bihar, ; The question whether the State of Bihar had the authority to grant a lease for lifting coal slurry coming out of the appellants washeries and getting deposited on the river bed or other lands was answered in the negative the court came to the conclusion that the "slurry" was a "mineral" and that its regulation was within the exclusive jurisdiction of Parliament.
The Court, in coming to the conclusion, held that no rules had been framed under S.18(1) or 18(2) (k) disposal or discharge of waste, slime or tailing arising from any mining or metallurgical operations carried out but held that this was immaterial in view of the principles laid down in Hingir Rampur, Tulloch and Baijnath Kedia.
These observations establish on the one hand that the distinction sought to be made between mineral development and mineral area development is not a real one as the two types of development are inextricably and integrally interconnected and, on the other, that, fees of the nature we are concerned with squarely fall with the scope of the provisions of Central Act.
The object of S.9 of the Central Act cannot be ignored.
The terms of S.13 of the Central Act extracted earlier empower the Union to frame rules in regard to matters concerning roads and environment.
S.18(1) empowers the Central Government to take all such steps as may be necessary for the conservation and development of minerals in India and for protection of environment.
These, in the very nature of things, cannot mean such amenities only in the mines but take in also the areas leading to and all 168 around the mines.
The development of mineral areas is implicit in them.
S.25 implicitly authorises the levy of rent, royalty, taxes and fees under the Act and the rules.
The scope of the powers thus conferred is very wide.
Read as a whole, the purpose of the Union control envisaged by Entry 45 and the M.M.R.D. Act 1957, is to provide for proper development of mines and mineral areas and also to bring about a uniformity all over the country in regard to the minerals specified in Schedule I in the matter of royalties and, consequently prices.
Sri Bobde, who appears for certain Central Government undertakings, points out that the prices of their exports are fixed and cannot be escalated with the enhancement of the royalties and that, if different royalties were to be charged in different States, their working would become impossible.
There appears to be force in this submission.
As pointed out in India Cement, the Central Act bars an enhancement of the royalty directly or indirectly, except by the Union and in the manner specified by the 1957 Act, and this is exactly what the impugned Act does.
We have, therefore, come to the conclusion that the validity of the impugned Act cannot be upheld by reference to Entry 23 or Entry 50 of List II.
An attempt was made to rest the legislation of Entry 18 of List II viz. `land '.
This attempt cannot succeed for the reasons whichever have set out to negative the plea that it falls under Entry 49.
A similar pleas in Baijnath was rejected by Hidayatullah C.J. in the following words : "Mr. L.N. Sinha argued that the topic of legislation concerns land and therefore falls under entry 18 of the State List and he drew our attention to other provisions on the subject of mines in the Land Reforms Act as originally passed.
The abolition of the rights of intermediaries to the mines and vesting these rights as lessors in the State Government was a topic connected with land and land tenures.
But after the mining leases stood between the State Government and the lessees, any attempt to regulate those mining leases will fall not in entry 18 but in entry 23 even though the regulation incidentally touches land.
The pith and substance of the amendment to s.10 of the Reforms Act falls within entry 23 although it incidentally touches land and not vice versa.
Therefore this amendment was subject to the overriding power of Parliament as declared in Act 67 of 1957 in S.15.
Entry 18 of the State List, therefore, is no help".
169 It will be seen that, if the levy in question cannot be described as a tax on land, it cannot be described as fee with regard to land either.
For the reasons above mentioned, we hold that the levy of cess under S.5 to 7 of the Orissa Cess Act, 1962 is beyond the competence of the State Legislature.
Bihar: The relevant provisions of the Bihar statutes have been set out earlier.
While S.5 only lays down that all immovable property shall be liable to a local cess and S.6 provides for the levy to be based on the annual value of lands and sale value of other immovable properties, the latter section specifically enacts that the cess will be on royalty from mines and quarries and on the annual net profit the railways and tramways.
The further amendments of S.6 have not changed this basic position.
Though the section refers also to the value of the mineral bearing land, that furnishes only the maximum upto which the cess, based on royalty, could go.
In other words, the cess is levied directly on royalties from mines and quarries.
The case is, therefore, indistinguishable from India Cement.
The notifications place the matter beyond all doubt.
The levy is a percentage or multiple of the royalty depending upon the kind of mineral and in the case of iron ore the method of extraction and nature of the process employed.
There are no clear indications in the stature that the amounts are collected by way of fee and not tax.
The provisions of S.9 extracted earlier would indicate that only a small percentage goes to the district fund and the remaining forms parts of the consolidated fund of the State "for the construction and maintenance of other works of public utility".
However, the proviso does require at least ten percent to be spent for purposes relating to mineral development.
We shall, therefore assume that the levy can be treated, in part, as a fee and, in part, as a tax.
But even this does not advance the case of the respondents for the reasons already discussed.
Shri Chidambaram submits that, in the original counter affidavit filed on behalf of the State, no case was sought to be made out that it was a tax on land, the case was that it was a "tax on mineral rights".
He urged that, this being out of question because of India Cement (para 23 and 30) a belated attempt is made to bring it under Entry 49.
we do not need to discuss the contentions here in detail because this is a clearer case of levy on royalty than in Orissa; and, for the reasons we have outlines in our discussion in regard to the Orissa Acts, this levy 170 has also to be declared invalid.
Shri Chidambaram also contended that the State cannot seek sustain the levy by relying of article 277 of the Constitution , in view of the fact that the cess is being levied since 1880.
Article 277 is in these terms : "Any taxes, duties, cesses or fees which, immediately before the commencement of this Constitution, were being lawfully levied by the Government of any State or by an municipality or other authority or body for the purposes of the State, municipality, district or other local area may, notwithstanding that those taxes, duties, cesses or fees are mentioned in the Union List, continue to be levied and to be applied to the same purposes until provision to the contrary is made by Parliament by law".
We think, as rightly contended by Sri Chidambaram that a reliance on article 277 will be misplaced for three reasons : (a) The levy that is challenged is under S.6, as amended in 1975, i.e. a post constitution levy; (b) S.6 on its own language, is operative only "until provision to the contrary is made by the Parliament" and, as we have held that the field is covered by the M.M.R.D. Act, is supersedes the effect of S.6 re:mineral lands; and (c) Article 277 only saves taxes, duties, and cesses mentioned therein if they continue to be applied for the same purposes and until Parliament by law provides to the contrary and with the enactment of the M.M.R.D. Act, 1957, they cease to be valid.
In this context, the following observations of this Court in Ramakrishna Ramanath vs Janpad Sabha,[1962] Supp 3 SCR 70 quoted in Town Municipal Committee vs Ramachandra, ; at 959 are quire apposite : "Dealing next with the import of the words `may continue to be levied ' the same was summarized in these terms: (1) The tax must be one which was lawfully levied by a local authority for the purpose of a local area, 171 (2) the identity of the body that collects the tax, the area for whose benefit the tax is to be utilised and the purposes for which the utilization is to take place continue to be the same, and (3) the rate of the tax is not enhanced not its incidence in any manner altered, so that it continues to be the same tax".
It is obvious that if these tests were applied the attempt to sustain the tax on the basis of article 277 cannot succeed.
Indeed, no such attempt was made before us.
We, therefore, hold that the levy of cess has to be struck down.
It has also been brought to our notice that a Bench of two Judges of this Court has already allowed an appeal by an assessee from a judgement of the Patna High Court to the contrary viz. CA No.1521 of 1990.
It has been brought to our notice also that the Patna High Court has recently invalidated the levy of the cess in Central Coalfields Ltd. vs State, (CWJC 2085/89 and connected cases) in a judgement dated 6.11.90, following India Cement.
Madhya Pradesh : We now turn to the provisions of Madhya Pradesh Act 15 of 1982.
We are concerned only with Part IV which levies a cess not on land in general which could be referred to Entry 18 or Entry 49 but only on land held in connection with mineral rights which, in the State, are principally in regard to coal and limestone.
Under S.9 the proceeds are to utilised only towards the general development of mineral bearing areas.
Although there is no provision for the constitution of a separate fund for this purpose as is found in relation to the cesses levied under Part II or Part III of the Act this considerations alone does not preclude the levy from being considered as a fee:vide Srinivasa Traders V. STate [1983] 3.SCR 843 at 873.
The clear ear marking of the levy for purposes connected with development of mineral areas was considered by the High Court, in our view rightly, sufficient to treat it as a fee.
However, the High Court pointed out, such fee would be referable to item 23 and, hence, out of bounds for the State Legislature, after the enactment of M.M.R.D. Act, 1957.
For the reasons which have already been discussed in relation to the Orissa Statute, we uphold this conclusion.
172 The other statute viz. the Madhya Pradesh Upkar Adhiniyam (Act 1 of 1982) came up for consideration of a Full Bench of the Madhya Pradesh High Court in M.P. Lime Manufacturer 's Association vs State, (and connected cases) in AIR 1989 M.P. 264.
The Full Bench held that, in view of s.12 of the Act having been deleted by the 1989 amendment, the levy under s.11 of the Act ceased to be a fee and become a tax.
It held further that the levy was not covered by Entry 49 or Entry 50 of List II and was, therefore, ultra vires.
It observed : "It is significant to note that cess is not imposed on all land and that it is not dependent either on the extent of the land held in connection with mineral rights or on the value thereof.
The subject matter of tax, therefore, is major mineral raised from the land held in connection with mineral right.
If no minerals are raised, tax is not livable.
The tax is not dependent on the extent of the land held in connection with mineral rights.
It is not case where all land is liable to payment of cess, that the liability is assessed on the basis of the value of the land and that the measure of the tax in so far as land held under a mining lease is concerned, is the value of the minerals produced.
Under the impugned Act, value of the land or of the minerals produced does not play any part in the levy of cess.
The quantity of major minerals produced from the land determines the liability to pay tax.
In these circumstances, the impugned levy cannot be held to be a tax on land which is covered by Entry 49 of the State List.
After distinguishing Ajay Kumar Mukherjea vs Local Board, ; and referring to Union vs Bombay International Ltd. AIR 1984 SC 420 the Courted concluded : " The character of impost in the instant case is that though in form it appears to be a tax on land, in substance, it is a tax on minerals produced therefrom.
The subject matter of tax is, therefore, not covered by Entry 49 of the State List." As for Entry 50, after referring Hingir Rampur, the Court observed : "Now from a perusal of S.11 of the Act, it would be clear that in the instant case by the charging section, tax is not imposed on the mineral rights of every holder of mining 173 lease.
The tax is levied on minerals produced in land held under mining lease.
In these circumstances, the tax levied by the Act cannot be held to be a tax covered by Entry 50 of List II of the Seventh Schedule to the Constitution.
In our opinion, therefore, it has not been shown that the State Legislature is competent to levy the impugned cess.
" This conclusion is obviously correct in the light of our earlier discussion.
The court, however, expressed an opinion, in paras 10 to 12 of the judgment, that in case the levy could be treated as a tax imposable under Entry 49 or 50 of List II in the Second Schedule to the Constitution, such power "has not been taken away by the provision of the MMRD Act".
We think, as already pointed out by us that though the MMRD Act, 1957, unlike s.6(2) of the 1948 Act does not contain a specific provision for the levy of taxes, s.25 of the former does indicate the existence of such power.
The above observations of the High Court, therefore, in our view, do not attach sufficient importance to s.25 of the MMRD Act and the field covered thereby.
This aspect, however, is not of significance in view of the conclusion that the tax is not referable to Entry 49 or Entry 50.
We may add that a Bench of this Court has already dismissed the State 's petition for leave to appeal from the judgment of the Full Bench (S.L.P. 10052/89, 12696/84 etc.
disposed of on 5.2.90) in limine as squarely covered by India Cement.
It is brought to our notice that the Madhya Pradesh High Court, after India Cement, has reaffirment its conclusions in Hiralal and M.P. Lime Manufacturers ' Association in Ankur Textiles and Another vs South Eastern Coalfields, (M.P. No. 1547 of 1990) in the light of India Cement.
THE REFUND ISSUE Having thus concluded that the levy of cess under the Orissa, Bihar and Madhya Pradesh enactments is invalid,, it becomes necessary to consider the logical consequences of such a conclusion.
Prima facia it would seem that the levy should be considered bad since its inception and that all cess levied under the impugned provisions should be directed to be refunded to the assessees, particularly in view of Article 265 of the Constitution.
For the States, however, reliance is placed on the following observations in para 35 of the judgement in India Cement to contend to the contrary.
Towards the conclusion of his judgement, Sabyasachi Mukherjee, C.J. dealt with this issue thus : 174 "Mr. Krishnamurthy Iyer, however, submitted that, in any event, the decision in H.R.S. Murthy case was the decision of the Constitution Bench of this Court.
Cess has been realised on that basis for the organisation of village and town panchayats and comprehensive programme of measures had been framed under the National Extension of Service Scheme to which our attention was drawn.
Mr. Krishnamurthy Iyer further submitted that the Directive Principles of State Policy embodied in the Constitution enjoined that the States should take steps to organise village panchayats and endow them with power and authority as may be necessary to enable them to function as units of self government and as the amounts have been realised on that basis, it at all, we should declare the said cess on reality to be ultra vires prospective, In other words, the amounts that have been collected by virtue of the said provision,s should not be declared to be illegal retrospectively and the State made liable to refund the same.
We see good deal of substance in this submission.
After all, there was a decision of this Court in H.R.S. Murthy case and amounts have been collected on the basis that the said decision was the correct position.
We are, therefore, of the opinion that we will be justified in declaring the levy of the said cess to be ultra vires the power of the State Legislature prospectively only".
Relying on the above, observations, it is submitted for the States that they should not be directed to refund a cess which they have been levying for several years in the past on the basis of the law declared by the Supreme Court in Murthy.
Certain other circumstances have also been brought to our notice in this connection : (i) Several States have preceded on the basis that they are entitled to levy a cess of the nature in question.
In addition to the States referred to earlier in the judgement, Rajashtan and Andhra Pradesh have also similar statues.
(ii) The levy accounts for a substantial part of the States finances particularly in States which are rich in minerals.
For e.g. State of Madhya Pradesh accounts for a good percentage of this country 's mineral resource.
It produces 26.53% of the country 's production in limestone.
36% in dolomite, 28.14% in coal, 21.5% in iron ore, 13% in bauxite, 21.38% in Manganese ore, 175 14.43% in rock phosphate, 33% in copper ore and so on.
The amounts of cess run to several crores.
A direction to refund the cess collected thus far will result in crying halt to all developmental activities initiated and put through and cause irreparable loss to the State.
(iii) As pointed out (for e.g. in pars 5 to 8 in CMP Nos. 31187 to 31196 of 1984 in CA Nos. 1640 to 1643,1645,1649, 1654, 1655,1659, and 1662 of 1986) the impact of the cess has already been passed on by the assessees which are leading industries that can easily bear the brunt of the same to their customers.
A refund granted to them will only result in their unjust enrichment and this should be safeguarded against applying the principles in U.P. State Electricity Board, Lucknow & Ors.
vs City Board, Mussoorie & Ors., ; at page 824 and State of Madhya Pradesh vs Vyankatlal & Anr., ; at page 568.
The above request was vehemently opposed by the assessees counsel.
Presenting their case on this issue, Sri Nariman (appear for the appellants in C.A. 4353 4 of 1983 and C.A. 2053 80 of 1980) contended that we should ignore the dicta in para 35 of India Cement as per incuriam.
He submitted, first, that the Court there has acted on the assumption that a doctrine of prospective overruling had been enunciated in Golaknath; , Analysing the various judgments delivered in that case, he submitted that, while Subba Rao C.J. and four other judges (pp 805 813) approved of the applicability of this doctrine in India, five other judges spoke against it (pp 890, 897, 899 922, 921 and 952) and the eleventh judge was neutral (p.408).
He therefore, submitted that the judges who decided Golaknath were equally divided on the issue and so there is no reason disdained of the Court binding on us.
Second, he submitted that the doctrine of prospective overruling was evolved by the Supreme Court of the United States in the absence of any constitutional provision militating against it, vide sunburst (at page 366) and Linkletter; , (at page 604 8).
In India, however, the application of the doctrine, particularly in the context of an issue regarding the validity of a tax levy, would run counter to specific provisions contained Articles 246 and 265 of the Constitution.
Where the Court finds that a legislation is beyond the competence of the concerned legislature, it stands uprooted altogether because Articles 246 and 265 say so.
There is no scope for, and no room for the exercise of any discretion by, the Court to say that, there articles of the Constitution notwithstanding, they 176 would treat the legislation to be valid for a certain period or for certain purposes.
Third, he submitted that the above objection cannot be "circumvented" by a resort to Article 142.
Sri Nariman referred us in this context to the observations in the following decisions of this Court: Re: Article 246 Pesikaka at pp652,654,656 Chamarbaugwala at p. 940 Sundararamier & Co ; at pp 1468 1474 West Ramnad at p.764 M.L. Jain 1963 Supp 1SCR 912 at pp 530 41 Re: Article 265 Moopil Nayar at p. 89 Balaji at p. 996 Chottachan 1962 Supp.
2 SCR 1 at pp.
29 30 Bakshi Singh at p. 233 Re: Article 142 Garg 1963 Suppl.
1 SCR at pp.
896 8 It is submitted , relying on Mahabir Kishore Ors.
vs State of Madhya Pradesh, [1989] 4 SCC 1 that a refund is the automatic and inevitable consequence of the declaration of invalidity and should be granted proved a suit within a period of limitation or a writ for declaration and consequential relief is filed.
Supplementing the above arguments, Sri G. Ramaswamy appearing for some of the assessees, contended that there can be no question of the Court exercising any discretion under Article 142 so as to destroy a fundamental right of the assessees.
Learned counsel also submitted that considerations of hardship of the States, in case they are called upon to refund huge amounts, can be no relevant consideration at all.
He urged, that in some at least of the cases here, there is no averment, much less evidence, of any irreparable hardship that is likely to result if a refund is ordered.
He also pointed out that in the 177 converse situation where a retrospective levy is held to be valid, assessees have been held entitled to no relief from payment of back duty on grounds of hardship: vide Chhotabhai Jethabhai Patel & Co.v.
Union of India [1962] 2 Supp.
at Pp12,13 and urged that there cannot be a different rule for the State.
Sri B. Sen submitted that the ruling in Murthy could not be invoked to seek prospective invalidation as, at least so far as Orissa was concerned, as the decision in Tulloch had clearly defined the limitations of the State 's power to make such levies.
In addition to the above general arguments, reliance had also been placed by the assessees on certain specific interim orders passed in these cases and it has been contended that these orders should be given effect to, or at least taken into account, in deciding the issue of the final relief to be granted.
It is therefore necessary to refer to these orders : (i) In C.A. Nos.
4353 4 of 1983, there is no interim order staying recovery of the cess at all except of the arrears for the period from 1.1.1983 to 31.3.1983 and even this was made subject to the furnishing of a bank guarantee by the assessee.
(ii) In C.A. 2053 80 of 1980 there was initially (on 2/2/1981) an order of stay of recovery of cess on the furnishing of bank guarantees.
But this was later substituted by an order of 25.3.1983 by which the amounts of cess were to be deposited in the High Court every quarter and then withdrawn by the State but this was on the undertaking buy the State 's Advocate General to refund the amount "if deposited, in the event the appeal succeeds".
This continued till 30.1.90 when the Counsel of the State of Orissa undertook, in view of the decision in India Cement, that the levy of the cess for the quarter ending December, 1989 onwards will not be enforced until further orders.
Presumably, therefore, there has been no collection for cess in Orissa since that period.
(iii) The position in the Orissa case of Orient Paper & Industries Ltd. is somewhat different.
It is pointed out that when the levy of cess first came into force w.e.f.
1.4.1977, the Western Coalfields Ltd. who supplied coal to the assessees had challenged the levy of cess by a writ petition and obtained an interim injunction order but eventually withdrew the writ petition.
But simultaneously, the said company wrote to the assessee that the amounts of cess (which were collected from the assessee) would be kept in a suspense account and that, after a deci 178 sion is rendered by a court of law, it will be decided whether they should be deposited with the State against cess or be refunded to the assessees.
It was made clear that, in case the levy of cess is held invalid, "there will be no hitch in refunding the amount".
This arrangement went on between 1977 and 1982.
On 21.9.1982, the assessee filed a writ petition challenging the levy as it was enahanced from 25% to 100% from 1.4.80.
An interim stay was granted by the High Court restricted to be enhanced demand but even this was vacated by the High Court on 13.5.1983 in view of the decision in Lakshmi Narain Agarwala vs State AIR 1983 Orissa 210 that the levy was valid.
Finally, the High Court by its judgement dated 22.12.1989 followed India Cement and allowed the writ but directed that the collections so far made shall be allowed to be retained by the State as was directed by the Supreme Court in the case of India Cement (supra).
This judgement is the subject matter of SLP 1479 of 1990 by the State.
The assessee thereupon file a review petition in regard to the above direction contending ; (a) that a High Court had no jurisdiction to declare provision to the unconstitutional only "prospectively"; (b) that the cess in the case had been collected only by Western Coalfields Ltd. and had not been deposited in the State coffers; and (c) that the principle of `unjust enrichment ' should equally apply to the State which should not be permitted to enrich itself by the levy of an illegal exaction.
The application for review was dismissed by the High Court on 13.7.90.
Thereupon the assessee has preferred the unnumbered SLP on 1990 and SLP 11939 on 1990 respectively against the original judgement dated 22.12.1989 and the order on the review petition dated 13.7.1990.
It is contended that the High Court, having regard to the circumstances set out earlier, should have directed a refund of the cess.
collected.
IT is stated that, subsequently, Western Coalfields have paid over the amounts of cess to the Government [vide orders of this Court referred to in sub para (v) below].
It is also submitted that the averments by the State now made that the amounts collected have been utilized by the State on objects enumerated in Part IV of the Constitution are the result of an afterthought and are being put forward to defeat the rightful entitlement of the assessee to the refund.
(iv) In the Bihar case, there was an interim order on 10.2.1986 to the following effect: 179 "On the stay application there will be no stay of recovery of cess but in case appellants succeed in appeal in this Court, the excess amount so recovered will bepaid to the appellants with interest at the rate of 12% from the date of recovery" This was modified on 30.1.90 in view of the judgement in India Cement which had been delivered by this time, and it was directed that the State of Bihar should not also enforce any demand for cess for the quarters ending December, 1989 and thereafter until further orders.
Presumably, therefore, there has been no levy of cess in Bihar from the last quarter of 1989 onwards.
Counsel for the assessees from Bihar Sri Chidambaram and Sri Shanti Bhushan stated that they seek compliance with the order dated 10.2.86 and would not insist on refund of cess collected earlier to that date.
(v) Turning to the Madhya Pradesh matters, the position is this, The High Court, by its judgement dated 28.3.1986 held the levy to be invalid.
In C.A. 1640 to 1662 of 1986, the initial order passed on 2.5.1986 was this : " There will be stay of refund of the cess already collected pending disposal of the appeals.
Learned counsel for the State states that, in the event of the appeals being dismissed the State is prepared to pay interest at 12% per annum.
There will, however, be no stay of operation of the judgement.
" As a result of the order, there should have been no collection of cess by the State subsequent to the date of the judgement and only issue could have been regarding the refund of the cess already collected from 1982 to 28.3.1986.
However, the Western Coalfields Ltd. approached the Court with an application in one of the appeals (viz. C.A. 1649/86) praying that, pending disposal of the appeals, it should be permitted to collect the amount of cess and deposit the same in a separate account in the Bank vis a vis each of its customers.
This application was ordered on 1.8.86.
When this order was passed, the State Government moved an application praying that, instead of the monies being kept in deposit in bank account by Western Coalfields Ltd., it will be conducive to public interest if the State is permitted to utilise the moneys "in mineral areas development programs" and that the State would abide by such 180 terms as the Court may impose at the time of final decision.
It was, therefore, prayed that the Western Coal fields should be directed to deposit the amounts collected by it to the State Government.
The Court found this request reasonable and passed the following order on 15.10.86 : "The order dated 1.8.86 passed in the above appeal is modified as follows : The amount deposited by the Western Coalfields Ltd. in a separate account in the Bank in accordance with the directions issued by this Court on 1.8.1986 shall be paid to the State Government of Madhya Pradesh.
In the event, of the State Government failing in this appeal, the amount received by the Madhya Pradesh Government under this order shall be refunded by that Government within three months from the date of the judgement to the Western Coalfields Ltd. with interest at 12% per annum to disburse in favour of those who had paid it, subject to such directions which this court may give in its judgement.
The amount received by the Madhya Pradesh State Government shall be spent in accordance with the provisions contained in the impugned Act." Fresh applications were filed by the State in a number of the other appeals seeking similar direction as in C.A. 1649/86 but the request does not show that any such order were passed in appeal other than C.A. 1649/86.
However, it seems that, in the case of coal, the cess is being collected by Western Coalfields Ltd. and other like public sector organisation (which are subsidiaries of Coal India Ltd.) from all their customers and passed on to the State not only in Madhya Pradesh but also in Orissa (as indicated in sub para (iii) above), apparently on the understanding that it should be refunded by the concerned State Government with interest in case the levy is ultimately held invalid.
Sri Bobde, appearing for the Western Coalfields , made it clear that this company would abide by the direction of this Court, in so far as the amounts of cess collected by it remain with it or are directed to be refunded by the State Government to it.
We have given our earned consideration to these contentions and were are of opinion that the ruling in India Cement concludes the issue.
There the Court was specifically called upon to consider an argument that, even if the statutory levy should be found invalid, the 181 Court may not give directions to refund amounts already collected and the argument found favour with the bench of seven judges.
We are bound by their decision in this regard.
It is difficult to accept the plea that, in giving these directions, the Court overlooked the provisions of Article 246 and 265 of the Constitution.
The Court was fully aware of the position that the effect of the legislation is question being found beyond the competence of the State legislature was to render it void ab initio and the collections made thereunder without the authority of law.
Yet the Court considered that a direction to refund all the cesses collected since 1964 would work hardship and injustice.
The directions, now impugned, were given in the interest of equity and justice after due consideration and we cannot take a contrary view.
In our view, we need enter into a discussion of the principles of prospective validation enunciated by at lease some of the Judges in Golaknath (supra) as the direction in India Cement can be supported on another well settled principle applicable in the area of the writ jurisdiction of Courts.
We are inclined to accept the view under on behalf of the state that a finding regarding the invalidity of a levy need not automatically result in a direction for refund of all collections thereof made earlier.
The declaration regarding the invalidity of a provision and the determination of the relief that should be granted in consequence thereof are two different things and, in the latter sphere, the Court has, and must be held to have, certain amount of discretion.
It is a well settled proportion that it is open to the Court to grant , could or restrict the relief in a inner most appropriate to the situation before it is insuch a way as to advance the interests of justice.
It will be appreciated that it is not always possible in all situations to give a logical and complete effect to a finding.
Many situations of this arise in actual practice .
For instance , there are cases where a comes to the conclusion that the termination of the services of an employee is invalid, yet in refrains from giving him benefits of "reinstatement" (i.e. continuity in service) on "back wages".
In such cases, the direction of the Court does not result in a person being denied the benefits that should flow to him as a logical consequence of a declaration inhis favour.
It may be said that, in such a case, the Court 's direction does not violate any fundamental right as happens in a case like this were an "illegal" exaction is sought to be retained by the State.
But even in the latter type of cases relief has not been considered automatic.
One of the commonest issue that arose in the context of the situation we are concerned with is where a person affected by an illegal exaction files an application for refund under the provisions of the relevant statute of files a suit to recover the taxes as 182 paid under a mistake of law.
In such a case, the Court can grant relief only to extent permissible under the relevant rules of limitation.
Even if he files an application for refund or a suit for recovery of the taxes paid for several years, the relief will be limited only to the period in regard to which the application for refund or a suit for recovery of the taxes paid for several years, the relief will be limited only to the period in regard to which the application or suit is not barred by limitation.
If even this instance is sought to be distinguished as a case where the Court 's hands are tied by limitations inherent in the form of forum in which the relief is sought, let us consider a very case where a petitioner seeks relief against an illegal exaction in a writ petition filed under Article 226.
In this situation, the question has often arisen whether the petitioner 's prayer for refund of taxes collected over an indefinite period of years should be granted once the levy is found to be illegal.
To answer the question in the affirmative would result in discrimination between persons based on their choice on the forum for relief, a classification which, prima facie is too fragile to be considered a relevant criterion for the resulting discrimination.
This is one of the reasons why there has been an understandable hesitation on the part of Courts in answering the above question in the affirmative.
The above aspect of the matter has been considered in several decisions of this Court.
In State of Madhya Pradesh vs Bhailal Bhai & ORs.
, ; the respondents who were dealers in tobacco in the State of Madhya Bharat filed a writ petition under Article 226 of the Constitution for the issue of writ of mandamus directing the refund of sales tax collected from them on the ground that the impugned tax was violative of Article 301 (a) of the Constitution and that they had paid the same under a mistake of law.
It was contended on behalf of the State that even if the provision violated the fundamental rights, the High Court should not exercise its discretionary power of issuing a writ of mandamus directing refund since there was unreasonable delay in filing the petition.
This contention of the State was rejected by the High Court but on further appeal this Court tool a different view.
While agreeing that the Courts have the power, for the purposes of enforcement of fundamental rights and statutory rights, to give a consequential relief by ordering repayment of any money realised by the government without authority of law, the Court said: "At the same time we cannot lose sight of the fact that the special remedy provided under Article 226 is not intended to supersede completely the modes of obtained relief by an action in a civil court or to deny defends legitimately open in such actions.
It has been made clear more than once that the power to give relief under Article 226 is a discretionary 183 power.
This is specially true in the case of power to issue writs in the nature of mandamus.
Among the several matters which the High Courts rightly take into consideration in the exercise of that discretion is the delay made by the aggrieved party in seeking the special remedy and what excuse there is for it.
Another matter which can be rightly taken into consideration is the nature of the facts and law that may have to be decided as regarded the availability of consequential relief.
Thus, where, as in these cases, a person comes to the Court for relief under Article 226 on the allegations that he has been assessed to tax under a void legislation and having paid it under a mistake is entitled to get it back, if it the Court, finds that the assessment was void, being made under a void provision of law, and the payment was made by mistake, it is still not bound to exercise its discretion directing repayment.
Whether repayment should be ordered in the exercise of this discretion will depend in each case of its own facts and circumstances.
It is not easy nor is it desirable to lay down any rules of universal application it may however be stated as a general rule that if there has been unreasonable delay, the Court ought not ordinarily to lend its aid to a party by this extraordinary remedy of mandamus.
" The Court further pointed out that the delay may be considered unreasonable even if it is less than the period of limitation prescribed for a civil action for the remedy but where the delay is more than this period, it will almost always be proper for the court to hold that it is unreasonable.
The relief given by the High Court was modified on this basis.
In Tilokchand Mothichand vs Munshi the petitioners had collected sales tax from their customers and paid it over to the State.
The Sales Tax Authorities directed a refund but on the condition that the amounts should be passed on to the customers.
Since the petitioner did not comply with the condition, the sales tax officer forfeited the sum under S.21(4) of the Bombay Sales Tax Act, 1953.
A writ petition was filed by the petitioner contending that S.21(4) infringed Articles 19[10(f)] and 365 of the Constitution and hence, they were not liable to repay the amount.
This was dismissed on the ground that they had defrauded their customers and, therefore, not entitled to any relief even if there was a violation of fundamental rights.
An appeal to a Division Bench was also dismissed.
Subsequently, when coercive proceedings were taken for recovering the amounts as arrears of land revenue, the petitioners paid the amounts 184 in 1959 60.
Much later, there was a decision of this Court striking down the corresponding provision of the Bombay Sales Tax Act 1946 as ultra vires.
The petitioners thereupon filed a writ petition under Article 32 of the Constitution claiming a refund of the amounts paid by them in consequence of the recovery proceedings.
It was held by four of the five learned Judges of this Court that the writ petition should be dismissed on the ground of laches.
Chief Justice Hidayatullah held that though Article 32 gives the right to move the Court by appropriate proceedings for enforcement of fundamental rights and State cannot place any hindrance in the way of an aggrieved person, once the matter reached this court, the extent or manner of interference was for the Court to decide.
The learned Chief Justice pointed out that this Court had put itself in restraint in the matter of petitions under Article 32.
For example, if a party had already moved High Court under Article 226, this court would refuse to interfere.
Similarly, in inquiring into belated and stale claims, this Court should take note of evidence of neglect of the petitioner 's own rights for a long time or of the rights of innocent parties which might have merged by reason of the delay.
It was possible for this Court to lay down any specific period as the ultimate limit of action and the case will have to be considered on its own facts.
On the facts of the case before it, the majority found that the petitioner had by his own conduct abandoned his litigation years ago and could not be permitted to resume it several years later merely because some other person had got the statue declared unconstitutional.
While Hidayatullah C.J. was of the view that the Court should not, on the facts of the case apply for analogy of the article in the Limitation Act in cases of mistake of law give relief, Bachawat and Mitter JJ.
felt that even for a writ petition the limitation period fixed for a suit would be a reasonable standard for measuring delay.
Sikri J and Hegde J. dissented.
Sikri J. was of the view that on the facts of the case there was no delay but that the period under the Limitation Act should not be applied to such cases and that a period of one year should be taken as a period beyond which the claim would be considered a stale claim unless the delay is explained.
" Such a practice" the learned Judge observed, "would not destroy the guarantee under Article 32 because the article nowhere lays down that a petition however late, should be entertained.
Only Hegde J. was emphatic that laches or limitation should be no ground to deny relief.
The learned Judge observed (for brevity, we quote from head note): "Since the right given to the petitioners under Article 32 is itself a fundamental right and does not depend on the discretionary powers of this Court, as in the case of Article 185 226, it is inappropriate to equate the duty imposed on this Court to the powers of Chancery Court in England or the equitable jurisdiction of Courts in the United States.
The facts that the petitioner have no equity in their favour is an irrelevant circumstance in deciding the nature of the right available to an aggrieved party under Article 32.
This Court is charged by the Constitution with the special responsibility of protecting and enforcing the fundamental rights, and hence laches on the part of an aggrieved party cannot deprive him of his right to get relief under Article 32.
In fact, law reports do not show a single instance of this Court refusing to grant relief on the grounds of delay.
If this Court could refuse relief on the ground of delay , the power of the Court under Article 32 would be discretionary power and the right would cease to be a fundamental right.
The provisions contained in the Limitation Act do not apply to proceedings under Articles 226 and 32 and if these provisions of the Limitation Act are brought in indirectly to control the remedies conferred by the Constitution, it would be a case of Parliament indirectly abridging the fundamental rights which this court, in Golaknath 's case.
[1967]2 S.C.R. 752 held that Parliament cannot do.
The fear that forgotten claims and discarded right against Government may be sought to be enforced after the lapse of a number of years if fundamental rights are held to be enforceable without any time limit, is an exaggerated one, for , after all, a petitioner can only enforce an existing right.
" The above principles have been applied in several subsequent cases: Ramchandra Shankar Deodhar vs State of Maharastara, ; ; Shri Vallabh Glass works Ltd. vs union of India ; ; State of M.P. vs Nandlal Jaiswal, ; ; D. Cawasji & Co. vs State of Mysore, ; and Salonah Tea Co. Ltd. vs Superintendent of Taxes.[1988] 1 SCC 401.
The above cases no doubt only list situations where directions for refund have been refused, or considered to be liable to be refused, on grounds of unreasonable delay or laches on the part of the petitioners in approaching the Court in the interests of justice and equity.
The importance of these cases, however, lies not in the grounds on which refund has been held declinable but because they lay down unequivocally that the grant of refund is not an automatic consequence of a 186 declaration of illegality.
Once the principle that the Court has a discretion to grant or decline refund is recognised, the ground on which such discretion should be exercised is a matter of consideration for the Court having regard to all the circumstances of the case.
It is possible that a direction for refund may be opposed by the State on grounds other than laches or limitation.
To give an instance, in recent years the question has often arisen whether a refund could be refused on the ground that the person who seeks the refund has already passed on the burden of the illegal tax to others and that to grant a refund to him would result in his "unjust enrichment".
Some decisions have suggested a solution of neither granting a refund nor permitting the State to retain the illegal exaction.
This issue has been referred to a larger Bench of this Court and its is not necessary for us to enter into that question here.
so far as the present cases are concerned, it is sufficient to point out that all the decided cases unmistakably show that, even where the levy of taxes is fount to be unconstitutional, the Court is not obliged to grant an order of refund.
It is entitled to refuse the prayer for good and valid reasons.
Laches and undue delay or intervention of third party rights would clearly be one of those reasons.
Unjust enrichment of the refundee may or may not be another.
But we see no reason why the vital interests of the State, taken note of by the learned judges in India Cement should not be a relevant criterion for deciding that a refund should not be granted.
We are, therefore, unable to agree with the learned counsel for the petitioners that any different criterion should be adopted and that the direction in paragraph 35 of India Cement should not be followed in those cases.
For the reasons discussed above, we are of opinion that, though the levy of the cess was unconstitutional, there shall be no direction to refund the assessees of any amounts of cess collected until the date on which the levy in question has been declared unconstitutional.
This in regard to the Bihar cases, will be the date of this judgement.
In respect of Orissa, the relevant date will be 22.12.1989 on which date, the High Court, following India Cement declared the levy by the State Legislature unconstitutional.
In respect of Madhya Pradesh, the relevant date will be the date of the judgement in Hiralal Ramswarup and connected cases (viz. M.P. 410/83 decided on 28.3.1986) in respect of the levy under State Act 15 th 1982.
Though there are the dates of the Judgement of the appropriate High Court, which may not constitute a declaration of law within the scope of Article 141 of the constitution, it cannot be gainsaid that the State cannot, on any grounds of equity, be permitted to retain the cess collected on and after the date of the High Court 's judgement.
187 Another point that was raised, was that in many of these cases the State or a Coal field Companies had given an undertaking that incase the levy is held to be invalid by this Court, they would refund the amount collection with interest.
It is submitted that the condition imposed, or undertakings given, to this effect and recorded at the time of passing interim orders in the various cases should be given implemented.
The interim undertakings or directions cannot be understood in such a manner as to conflict with out final decision on the writ petitions set out above.
But we agree that, to the extend refunds of amounts of cess collected after the relevant dates are permissible on the basis indicated by us, the State should refund those amounts to the assessees directly or to the Coalfields from whom they were collected, with interest at the rate directed by this Court or mentioned in the undertaking from the date of the relevant judgment to the actual date of repayment.
The Coalfields, when hey get th refunds, should pass on the same to their customers, the assessees.
The appeals are disposed of accordingly.
There will be no order as to costs.
T.N.A. Appeals disposed of.
| The States of Orissa, Bihar and Madhya Pradesh levied a cess which was based on the royalty derived from mining lands.
The cess was levied by these States under their respective statutes viz. Orissa Cess Act, 1962, Bengal Cess Act, 1880 (as applicable to the State of Bihar), Madhya Pradesh Upkar Adhiniyam 1981 and Madhya Pradesh Karadhan Adhiniyam, 1982.
The assesses challenged the constitutional validity of the cess by filing various petitions in the High Courts of Orissa declared the cess unconstitutional on the ground that it was beyond the legislative competence of the State Legislatures, but rejected the prayer of the assessees for a direction to the State to grant refund of the cess collected from the assessees.
Against the decision of the Orissa High Court the assessees have filed appeal in this Court whereas the State of Orissa has filed a cross appeal.
The High Court of Madhya Pradesh also declared the levy of cess unconstitutional on the ground that it was beyond the legislative competence of the State legislature.
Against the decision of the Madhya Pradesh High Court the State of Madhya Pradesh has filed an appeal in this Court.
On the other hand the High Court of Patna dismissed the writ petition of the assessee.
Against the decision of the Patna High Court the assessee has filed an appeal in this court.
In appeal to this court, it was contended on behalf of the State of Orissa; that (i) the levy of cess being referable to Entries 45, 49 and 50 of the State List of the Seventh Schedule of the Constitution the impugned legislation was within the legislative competence of the State legislature; (ii) the limitations imposed in the statute on the modes of utilisation of cess supports a view that the cess is fee on which the State legislature is competent to legislate under Entry 23 read with Entry 66 of the State List; (iii) since the impugned Act was concerned with the raising of funds to enable panchayats and Samithis to discharge their responsibilities of local administration and take steps for proper development of the area under their jurisdiction, the impugned legislation was referable to Entry 5 of State List; and (iv) the enactment of the Central Legislation viz. has not denuded the State legislation of its competence to enact the impugned legislation since the scope and subject matter of the two legislations are entirely different and the impugned State Legislation does not encroach upon the field covered by the Central Legislation i.e. 1957 Act.
107 On behalf of the assessees it was contended inter alia that (i) all the State levies were ultra vires for the reasons given by this Court in the India Cement case; (ii) the State cannot seek to sustain the levy under the Bengal Cess Act 1880 by relying on Article 277 of the Constitution; and (iii) the levy being unconstitutional the Court should direct the States to refund the cess collected from the assessees because (a) a refund is the automatic and inevitable consequence of the declaration of invalidity of tax and (b) the States have given undertakings before this Court that they would refund the amount collected in case the levy is declared invalid by this Court.
Disposing of the appeals, this Court, HELD: 1.
The levy of cess under sections 5 to 7 of the Orissa Cess Act, 1962 is beyond the competence of the State Legislature.
[169B] 1.1.
A royalty or the tax thereon cannot be equated to land revenue.
Therefore the cess cannot be brought under Entry 45 of List II.
[142D] India Cement & Ors.
vs State of Tamil Nadu & Ors., , followed.
1.2 A tax on royalties cannot be a tax on minerals and is outside the purview of Entry 50 of List II.
Even otherwise, the competence of the State Legislature under the said Entry is circumscribed by "any limitations imposed by Parliament by law relating to mineral development".
The is a law of Parliament relating to mineral development and Section 9 of the said Act empowers the Central Government to fix, alter, enhance or reduce the rates of royalty payable in respect of minerals removed from the land or consumed by the lessee, Sub Section (3) of Section 9 in terms States that the royalties payable under the Second Schedule to that Act shall not be enhanced more than once during a period of three years.
This is a clear bar on the State legislature taxing royalty so as, in effect, to amend the Second Schedule to the Central Act.
This is exactly what the impugned Act does.
Therefore the validity of the impugned Act cannot be upheld by reference to Entry 50 of List II.
And if the cess is taken as a tax falling under Entry 50 it will be ultra vires in view of the provisions of the Central ACt.
[144B, 153B D, 168D] India Cement & Ors.
vs State of Tamil Nadu & Ors.
, [1990] 1 S.C.C.12, followed.
108 Hingir Rampur Coal Co. Ltd. & Ors.
vs State of Orissa & Ors.
, [1961] 2 S.C.R.537, Justice Wanchoo 's dissent explained.
1.3 There is a difference in principle between a tax on royalties derived from land and a tax on land measured by reference to the income derived therefrom.
A tax on buildings does not cease to be such merely because it is quantified on the basis of the income it fetches.
But in the impugned legislation the levy is not measured by the income derived by the assessee from the land, as is the case with lands other than mineral lands.
The measure of the levy is the royalty paid, in respect of the land, by the assessee to his lessor which is quite a different thing.
The impugned statute only purports to levy a cess on the annual value of all land.
There is a clear distinction between tax on land and tax on income arising from land.
The former must be one directly imposed on land, levied on land as a unit and bearing a direct relationship to it.
A tax on royalty cannot be said to be a tax directly on land as a unit.
Hence the cess is outside the purview of Entry 49 List II.
[148H, 149A D] Ajay Kumar Mukherjea vs Local Board of Barpeta, [1965] 3 Ss.
C.R. 47; Ralla Ram vs The province of East Punjab, [1948] F.C.R.207; Buxa Dooars Tea Co. vs State, [1989] 3 S.C.R.211; Bhagwan Dass Jain vs Union of India, ; and R.R. Emgomeeromg Co. vs Zila Parishad, ; , referred to.
Union of India vs Bomnbay Tyre International, [1984] 1 S.C.R.347; Re: A reference under the Government of Ireland Act, 1920 and Section 3 of the Finance Act (Northern Ireland), 1934, (1963) 2 All E.R.III, cited.
If the levy in question cannot be described as a tax on land, it cannot be described as fee with regard to land either.
[169A] 2.1 Section 10 of the Orissa Cess Act, 1962 earmarks the purposes of utilisation of only fifty per cent of the proceeds of the cess and that, too, is limited to the cess collected in respect of "lands other than lands held for carrying on mining operations".
Therefore the levy cannot be correlated to any services rendered or to be rendered by the State to the class of persons from whom the levy is collected.
Accordingly the levy cannot be treated as a fee which the State legislature is competent to legislate for under entry 66 of the State List.
[153E F] 2.2 Even assuming that the levy is a fee, the State legislature can impose a fee only in respect of any of the matters in the State List.
The 109 entry relied upon for this purpose i.e. Entry 23 is itself "subject to the provisions of List I with respect to regulation and development" of mines and minerals under the control of the Union.
Under Entry 54 of List I, regulation of mines and mineral development is in the field of parliamentary legislation "to the extent to which such regulation and development under the control of the Union is declared by Parliament by law to be expedient in the public interest".
Such a declaration is contained in Section 2 of the .
The validity of the impugned Act cannot be upheld by reference to Entry 23 List II.
[153G H, 154A, 168D] 3.
There is a difference between the 'object ' of the Act and its 'subject '.
The object of the levy may be to strengthen the finances of local bodies but the Act has nothing to do with municipal or local administration.
Accordingly State 's reliance on Entry 5 of List II is plainly too tenuous.
[164D] 4.
The answer to the question whether the State Legislature was denuded of its competence to enact the impugned legislation because of the Parliament having enacted the depends on a proper understanding of the scope of the Act and an assessment of the encroachment made by the impugned State legislation into the field covered by it.
[161D] 4.1 The mere declaration of a law of Parliament that it is expedient for an industry or the regulation and development of miners and minerals to be under the control of the Union under Entry 52 or entry 54 of List I does not denude the State legislatures of their legislative powers with respect to the fields covered by the several entries in List II or List III.
Particularly, in the case of a declaration under Entry 54, this legislative power is eroded only to the extent control is assumed by the Union pursuance to such declaration as spelt out by the legislative enactment which makes the declaration.
The measure of erosion turns upon the field of the enactment framed in pursuance of the declaration.
[161E F] 4.2 In assessing the field covered by the Act of Parliament in question, one should be guided not merely by the actual provisions of the Central Act or the rules made thereunder but should also take into account matters and aspect which can legitimately be brought within the scope of the said statute.
Viewed in this light and in the Light of the provisions of the Bihar Cess Act the conclusion seems irresistible that the State Act has trespassed into the field covered by the Central Act 110 viz. Mines and Minerals (Regulation and Development)Act, 1957.[163F] 4.3 The impugned legislation which stands impaired by the Parliamentary declaration under Entry 54, can hardly be equated to the law for land acquistion or municipal adminstration which are traceable to different specific entries in List II or List III [163G H] Hingir Rampur Coal Co. Ltd. & Ors.
vs State of Orissa & Ors.
; ; State of Orissa vs M.A. Tulloch & Co., ; and Indian Cement & Ors vs State of Tamil Nadu & Ors., [1990]1 S.C.C. 12 followed.
State of Haryana vs Chanan Mal, ; ; Ishwari Khatan Sugar Mills (P) Ltd vs State of U.P. ; and Western Coalfields Ltd. vs Special Area Development Authority.
, [1982] 2 S.C.R.1,distinguished.
Indian tobacco Co. Ltd. vs Union, [1985] Supp. 1 S.C.R. 145; State of West Bengal vs Union [1964] 1.
S.C.R. 371; Central Coalfields vs State of M.P., A.I.R. (1986) M.P.33; M. Karunanidhi vs Union of India, ; ; State of Tamil Nadu vs Hind Stone etc.
; , ; I.T.C. vs State of Karnataka, ; Bharat Coking Coal vs State of Bihar, ; ; Kannan Dewan Hills Co. vs State of Kerala, [1973] 1.
S.C.R. 356; Baijnath Kedia vs State of Bihar ; ; H.R.S. Murthy vs Collection of Chittoor & Ors.
[1964] 6 S.C.R.; Ch.
Tika Ramji & Ors.
vs State of U.P.,[1956] S.C.R. 393; Laxmi Narayan Agarwala vs State, A.I.R. 919830 Ori.210; Bherulal vs State, A.I.R. (1965) Raj. 161; Sharma vs State A.I.R. (1969) P&H 79 and Saurashtra Cement & Chemical Industries Ltd. vs Union , referred to.
Trivedi & Sons vs State of Gujarat.
[1986] Suppl.
S.C.C. 20, cited.
Section 6 of the Bengal Cess Act, 1880 specifically enacts that the cess will be on royalty from mines and quarries and on the annual net profit of railways and tramways.
The further amendments to Section 6 have not changed this basic position.
Though the Section referees also to the value of the mineral bearing land, that furnishes only the maximum upto which the cess, based on royalty, could go.
Therefore, the cess is levied directly on royalties from mines and quarries.
The different notifications issued by the State of Bihar under section 6 111 of the Act determining the rate of cess on the amount of rayalty of all minerals of the State place the matter beyond all doubt.
The levy is a percentage or multiple of the royalty depending upon the kind of mineral and in the case of iron ore the method of extraction and nature of the process employed.
There are no clear indications in the statute that the amounts are collected by way of fee and not tax.
Section 9 indicates that only a small percentage goes to the district fund and the remaining forms part of the consolidated fund of the State " for the constrution and maintenance of other works of public utility".
However, the proviso does require at least ten percent to be spent for purposes relating to mineral development.
Even the assumption that the levy can be treated, in part, as a fee and, in part, as a tax will not advance the case of the respondents.
Therefore, the levy of cess sunder the Bengal Cess Act, 1880 is declared invalid.
[169C F,H,170A] Indian Cement & Ors.
vs State of Tamil Nadu & Ors., followed.
Central Coalfields Ltd. vs State (CWJC 2085/89 decided on 6.11.90 by Patna High Court, referred to.
5.1 The attempt to sustain the tax under the Bengal Cess Act 1880 on the basis of Article 277 cannot also succeed.[171C] Ramkrishna Ramanath vs Janpad Sabha, [1962]Suppl.
3.S.C.R. 70; Town Municipal Committee vs Ramachandra ; , referred to.
The levy of cess under section 11 of the Madhya Pradesh Upkar Adhiniyam, 1981 is not covered by Entry 49 or Entry 50 of List II and is therefore, ultra vires.
, [172B] M.P. Lime Manufacturers ' Association vs State, A.I.R. (1989) M.P. 264 referred to.
6.1 Under Section 9 of Madhya Pradesh Karadhan Adhiniyam, 1982 the proceeds of the cess are to be utilised only towards the general development of mineral bearing areas.
Although there is no provision for the constitution of a separate fund for this purpose as is found in relation to the cesses levied under Part II or Part III of the Act yet this consideration alone does not preclude the levy from being considered as a fee.
The clear ear marking of the levy for purposes connected with development of mineral areas was rightly considered by 112 the High Court, as sufficient to treat it as a fee.
The High Court was also right in holding that such a fee would be referable to item 23 but out of bounds for the State Legislature, after the enactment of the .
[171F H] Srinivasa Traders vs State, ; , referred to.
The grant of refund is not an automatic consequence of a declaration of illegality i.e. where the levy of taxes is found to be unconstitutional, the Court is not obliged to grant an order of refund.
Therefore a finding regarding the invalidity of a levy need not automatically result in direction for a refund of all collections thereof made made earlier.
The declaration regarding the invalidity of a provision and the determination of the relief that should be granted in consequence thereof are two deferent things and, in the latter sphere, the Court has, and must be held to have, a certain amount of discretion.
Once the principle that the Court has a discretion to grant or decline refund is recognised, the ground on which such discretion should be exercised is a matter of consideration for the Court having regard to all the circumstances of the case.
The Court can grant, would or restrict the relief in a manner most appropriate to the situation before it is such a way as to advance the interests of justice.
The Court is entitled to refuse the prayer for good and valid reasons.
Laches or undue delay or intervention of third party rights would clearly be one of those reasons.
Unjust enrichment of the refundee may or may not be another.
Also there is no reason why the vital interest of the State should not be a relevant criterion for deciding that a refund should not be granted.
[185H, 186A C, D & E 181D E] 7.1 In the instant case though the levy of the cess is unconstitutional, yet there shall be no direction to refund to the assessees of any amounts of cess collected until the date on which the levy in question has been declared unconstitutional.
This, in regard to the Bihar cases, will be the date of this judgment i.e. 4.4.1991.
In respect of Orissa and Madhya Pradesh cases the relevant date will be the date on which the concerned High Court has declared the levy unconstitutional i.e.22.12.1989 in case of Orissa and 28.3.1986 in case of Madhya Pradesh.
The dates of the judgments of the appropriate High Court, may not constitute a declaration of law within the scope of Article 141 of the Constitution, but it cannot be gainsaid that the State cannot, on any ground of equity, be permitted to retain the cess collected on and after the date of the High Court 's judgment.
Accordingly the State should refund the amounts of cess collected after the relevant dates to assesses directly or in the Coalfields from whom they were collected, with 113 interest at the rate directed by this Court or mentioned in the undertaking from the date of the relevant judgment to the actual date of repayment.
The Coalfields, when they get the refunds, should pass on the same to their customers, the assessees.
[186F G, 187B C] India Cement & Ors.
State of Tamil Nadu & Ors, [1990] 1 S.C.C.12, followed.
Linkletter, 14 L Ed.
(2d) 601; Sunburst.
77 L.Ed.310; Mahabir Kishore & Ors.
vs Stte of Madhya Pradesh, [1989] 4 S.C.C. 1; Chhotabhai Jethabhai Patel & Co. vs Union of India, ; ; State of Madhya Pradesh vs Bhailal Bhai & Ors., ; ; Tilok Chand Motichand vs Munshi, [1969] 2 S.C.R> 824; Ramchandra Shankar Deodhar vs State of Maharashtra, ; ; Shri Vallabh Glass Works Ltd. vs Union of India, [1984] 3 S.C.R> 180; State of M.P. vs Nandlal Jaiswal, [1986] 4 S.C.C.566 ' D. Cawasji & Co. vs State of Mysore, [1975] 2 S.C.R.511; Salonah Tea Co. Ltd. vs Superintendent of Taxes, ; and Lakshmi Narain Agarwala vs State, A.I.R. (1983_ Orissa 210, referred to.
Behram Khursheed Pesikaka vs State of Bombay, [1955] 1 S.C.R.613; R.M.D. Chamarbaugwala vs Union of India, ; ; M.P.V. Sundararamier & Co. vs State of Andhra Pradesh & Anr.
, ; ; West Ramnad Electric Distribution Co. vs State of Madras, ; ; M.L.Jain vs State of U.P., [1963] suppl. ; K.T. Moopil Nayar vs State of Kerala & Anr., [1961] 3 S.C.R.77; Balaji vs I.T.O. Special Investigation Circle, ; ; Raja Jagannath Bakshi Singh vs State of U.P., ; ; Prem Chand Garg vs Excise Commissioner, U.P. Allahabad, [1963] Suppl.
1 S.C.R. 885 and I.C. Golaknath & Ors.v.
State of Punjab & Ors.
,[1967] 2 S.C.R. 762, cited.
The undertaking given by the parties or interim directions given by the Court cannot be understood in such a manner as to conflict with the Court 's final decision.
|
: Criminal Appeal No.490 of 1985.
From the Judgment dated 29.5.1985 of the Judge, Special Court, Ferozepur in Case No.62/84, Trial No.23/85 and FIR No.154 of 1984.
U.R.Lalit and Prem Malhotra for the Appellants.
261 N.S.Das Behl and R.S.Suri (NP) for the Respondent.
The Judgement of the Court was delivered by K.RAMASWAMY,J.
This appeal under s.14(1) of the , 61 of 1984 for short `the Act ' the reference under s.15(3) thereof and s.366 of the Code of Criminal Procedure, 1973 for short `the Code ' for confirmation of the death sentence of Malkiat Singh, accused No. 1 in Sessions case No.62 of 1984, Trial No.23 of 1985 on the file of the Special Court, Ferozepur.
The first accused was convicted under s.302 read with s.34, I.P.C. for causing the deaths of Ram Babu, D 1, Sunder Lal, D 2, Ram Nath, D 3 and Ram Chand, D 4 of each death and sentenced to death subject to confirmation by this court.
He was also further convicted under s.307 read with s.34, I.P.C. and sentence to undergo rigorous imprisonment for 5 years for attempt to murder Ashok Kumar, PW 4.
Sukhdev Singh A 2 and Sohna Singh, A 3 were convicted under s.302 read with s.34, I.P.C. for causing deaths of D 1, to D 4 and sentenced to undergo imprisonment for life.
A 2 and A 3 were convicted under s.307 read with S.341 I.P.C. for attempt to murder of PW 4 and were sentenced to undergo rigorous imprisonment for 5 years, all the sentences to run concurrently.
Ram Avtar, PW 3 and D 3 Ram Nath, first cousin, had liquor contract in the village Kotli Ablu from 1983 and 1984.
D 2 and PW 4 were working in the liquor shop.
The wives of D 2 and D 4 are sisters.
D 4 came to see D 2.
D 1 was working in the liquor shop at Ablowbad.
Since the liquor therein had exhausted he came to Kotli Ablu to sell the liquor in the shop of D 3.
A 1 and A 2 are brothers and are residents of Kotli Ablu and Sohna Singh, A 3 is their maternal uncle (mother 's brother) and a resident of Rameana situated at a distance of 8 km.
to Kotli Ablu.
These are the admitted facts.
It is the case of the prosecution that at about 9.00 p.m. On June 4, 1984, A 1 and A 3 came to the liquor shop of D 3 wherein PW 3, D 1, D 2 and PW 4 were also present and were vending the liquor.
They sold one bottle of liquor to A 1 and A 3 on credit.
After its consumption A 1 and A 3 demanded another bottle to which D 3 refused to sell on credit.
Thereon A 1 and A 3 abused them and a quarrel ensued.
Both left the shop in anger.
D 1 and D 2 slept on a cot in front of the liquor shop.
D 3 and D 4 slept wooden takthposh in front of the liquor shop.
PW 3 and PW 4 climbed the roof of the shop and slept there.
During past midnight of June 4 5, 1984 at about 12.30 a.m. PW 3 and PW 4 heard gun shot fire and got up and saw with visibility of electric light emanating 262 from the house of one Gurbax Singh whose son was examined on DW 2 that A 1 was firing with rifle at D 1 to D 4 and A 2 and A 3 hitting them with Gandasas (sharp edged weapons).
Seeing PW 3 and PW 4 on the terrace A 1 fired at them but they escaped uninjured and they jumped down.
PW 3 jumped towards back side of the shop and ran towards the village and hid in the school.
PW 4 jumped to the front side and ran towards the village.
A 1 fired at PW 4 and A 2 hit him.
He received seven bullet injuries fired by A 1 on the backside, of right, leg, thigh and left side of the abdomen while he was running.
A 2 hit him on the right shoulder and had incised injury.
He ran to the house of Gurmail Singh, PW 3 with bleeding injuries, knocked the door and fell down unconscious.
On June 5, 1984 at about 9.00 a.m. Jit Singh, the Chowkidar of the village reached Kotli Police Station and reported to PW 5, S.H.O. who reduced Ex.P 24 into writing.
In the F.I.R. he stated that he had heard gun shot firing from the side of the liquor shop.
Due to fear and the prevailing tense situation he did not come out.
Next day morning he saw several people collected at the liquor shop and saw the dead bodies of D 1 to D 4 and PW 4 was lying unconscious in the house of DW 3 and he was asked to report the matter accordingly.
PW 5 after issuing F.I.R. to all the concerned, went alongwith police party to the spot at noon and saw the dead bodies.
He went to the house of DW 3 and found PW 4 under shock and unconscious.
He sent him for medical examination by PW 2, the Doctor as his condition was serious.
PW 3 on coming to know the arrival of the police and the military people at noon mustered courage and came out from the school and went to the shop.
He was examined at the inquest and he also attested the statement recorded by the police at the inquest.
PW 5 enclosed the copies of his statement to the inquest report Ex.P 4, P 6, P 8 and P 10 and sent the dead bodies with the reports for post mortem by PW 2 Doctor.
He also prepared rough sketch of the scene under Ex P1/A.
He recovered the blood stained earth and cots etc under exhibit
He recovered 7 empty and two live cartridges exhibit M 0/1 to M 0/9 under panchnama Ex.p 18.
He remained on the spot till 10.30 p.m. and saw the light emanating from the house of Gurbax Singh and falling at the scene of occurrence.
He sent requisition twice to the hospital to find whether PW 4 was in a fit condition for recording his statement.
On June 7, 1984 at about 7.00 a.m. he received an endorsement that PW 4 was in a fit condition to make the statement.
Accordingly he recorded the statement.
He sent M.O.S.1 to 9 cartridges and pellets recovered from body of D 4 under exhibitP 25 to ballistic expert for report.
on June 15, 1984 when he was picketing on the drain of village Chand Bhan at about 3.30 a.m. he arrested the appellants and recovered from the person of A 1.
exhibit 263 M 0/11 rifle, 351 bore (semi automatic) of U.S.A. make loaded with two cartridges M 0/12 and M 0/13 under panchnama in the presence of panch.
Pursuant to a statement made under s.27 Evidence Act by A 3 leading to discover Gandasa M 0/14 was recovered under ex.P 27 and sent them to the chemical examination and the ballistic reports.
Under exhibitP 28, the Ballistic expert found that the empties exhibit M 0/1 to M 0/9 had been fired from rifle exhibit M 0/11.
Gandasa was stained with human blood as per the report exhibit PW 2 who conducted the post mortem on D 1 and D 2 found on each of the dead bodies two gun shot entry and exit wounds.
D 3 and D 4 were found to have 4 gun shot lacerated and two incised injuries and 5 lacerated and two incised injuries respectively.
He removed M.O.S.16 and 17 pellet from the body of D 4.
He issued post mortem certificates Ex.P 3, P 5, P 7 and P 9 respectively.
He also examined PW 4.
He found as many as 7 lacerated gun shot injuries and one incised injury and issued medical certificate Ex.
Injuries and one incised injury and issued medical certificate exhibit Injuries 1 to 7 were caused by gun shot fire and injury 8 by a sharp weapon.
PW 5 sent two pellets recovered by him from the body of D 4 to the Ballistic and Chemical Examination.
The defence consented to mark F.I.R., the affidavits of panch witnesses and constables; the fire arms licence of A 1 under exhibit P 17 and also the reports of the ballistic expert and chemical examination reports without oral evidence.
PW 6, the Deputy Superintendent of Police supervised the investigation conducted by PW 5.
The prosecution examined 6 witnesses and defence examined 3 witnesses and marked the documents.
The accused were examined 3 witnesses and marked the documents.
The accused were examined under s.313 and denied their complicity and examined DW 1 to DW 3 to prove that the bulb of Gurbax Singh was not burning and PW 3 was residing at Medhak and he was brought to Kotli Ablu by the Police and PW 4 was conscious and did not disclose the names of the appellants at that time.
The lower court believed the direct evidence of PW 3 and PW 4 and the prosecution case that A 1 fired at the deceased with M 0/11 rifle, A 2 and A 3 also participated in the attack.
If also found that M 0/11, the rifle belongs to A 1 and he fired the deceased and PW 4.
Accordingly convicted them for an offences under sections 302/34 and 307/34 I.P.C. When they were asked under s.235(2), they declined to lead evidence and the Sessions Court awarded sentence to the accused as referred to earlier.
Shri Lalit, the learned senior counsel for the appellants contended that the evidence of PW 3 and PW 4 is highly artificial, unbelievable and untrustworthy; barring their evidence, there is no other evidence to connect the appellants with the commission of the crime.
The story that PW 3 and PW 4 climbed on the terrace and were sleeping is 264 false as they cannot climb to a height of 8/1/2 ft. PW 3 did not disclose his witnessing the occurrence to any one till noon.
DW 3 the Sarpanch of Madhok spoke that PW 3 alongwith the panch witnesses were brought from Madhok in a Jeep by the police, so he is a planted witness.
In support thereof he contends that the specific evidence of DW 3 in this regard was not challenged in cross examination.
PW 4 was not examined at the inquest though he was conscious.
The police requisitioned the dog squad to sniff the scene of offence to identify the unknown accused.
PW 5 and PW 2 the Doctor admitted that the omission of the names of the accused in the case diary and memos would belie the theory of witnesses.
The omission of the names of the accused in the cause title (Banam) would clearly show that PW 3 and PW 4 were not direct witnesses and PW 3 was introduced at a later stage and he was not examined at the inquest and that PW 4 did not identify the appellants.
This was also further corroborated from the fact that admittedly exhibit P 24, recited that three unknown assailants had killed the deceased.
Admittedly the dog squad was requisitioned.
The appellants were falsely implicated.
As regards PW 4, he further contended that as per the evidence of DW 2 son of Gurbux Singh and DW 3, Gurmail Singh, PW 4 was conscious at that time of his coming to the house of DW 3 and remained to be conscious.
The police did not examine him till June 7, 1984 as the assailants were not known.
There was no light in the house of DW 1 and PW 3 and PW 4 could not have identified the assailants.
The theory of liquor vending is doubtful for the reason that the entire State was under curfew on that day due to blue star operation on June 3, 1984 and no vending would take place when there is a curfew.
If really the appellants 1 and 3 had taken the liquor on credit, nothing prevented the prosecution to produce the chit admittedly taken by D 3.
The theory of burning the shop shows that it is an act of terrorists as was noted in the case diary by PW 6.
Thus the appellants were implicated by suspicion and the prosecution had not established the guilt of the appellant beyond reasonable doubt.
The conviction and sentence by the special court was on the same day, namely May 29, 1985 which contravenes the mandatory provision of s.235 of the Code.
In view of the decision of this court in Allauddin vs State of M.P., J.T.(1989) 2 SC 171 and Anguswamy vs State of Tamilnadu, J.T. the sentence of death awarded to A 1 is illegal.
A 2 had no axe to grind against the deceased.
He neither went for drinking at 9.00 p.m. on that day nor had a quarrel.
He bears no motive to kill the deceased or attack PW 4.
No recovery of Gandasa was made from him.
PW 3 and PW 4 have no prior acquaintance with him.
Therefore, it was highly doubtful whether A 2 had participated in the offence.
As regards to the third 265 appellant (A 3), it is his contention that he is a resident of Rameana.
PW 3 or PW 4 do not know A 6 at all.
Therefore, he may not be able to have participated in the crime.
It was resisted by Mr.Das Bahl, learned counsel for the State.
The acceptance of the prosecution case rests on the evidence of PW 3 and PW 4.
PW 3 and D 3 had the licence to vend liquor at Kotli Ablu.
PW 4 and D 2 were vending liquor under them.
D 4 came to see D 2 as they were married sisters.
D 1 came and was vending on the fateful day in the shop.
D 1 to D 4 were killed in the intervening night of June 4 5, 1984 is practically admitted from the evidence of DW 3.
During the course of the same transaction PW 4 sustained 7 lacerated gunshot injuries and one incised injury is also admitted through the evidence of DW 2 and DW 3, PW 2, the Doctor 's evidence conclusively established that D 1 and D 2 died due to gun shot injuries.
D 1 and D 2 each had two entry and exit wounds due to gun shots.
D 3 and D 4 also had gunshot lacerated as well as incised injuries.
They also died on the spot due to the injuries which are sufficient to cause death in the ordinary course of nature.
Seven empty and two live cartridge fired from M 0/11 rifle of 351 bore of U.S.A. make belonging to A 1 were recovered from the scene of occurrence.
Therefore, the deaths of D 1 and D 2 due to gunshot injuries and D 3 and D 4 due to gunshot and incised injuries are proved beyond doubt.
Equally PW 4 sustained injuries is also established.
The only question is whether the appellants are assailants.
The conviction of the appellants hinges upon the acceptability of the testimony of PW 3 and PW 4.
Let us first take the evidence of PW 4, the injured witness whose presence at the time of occurrence stands confirmed.
He is aged about 19 years.
He was working in the liquor shop of D 3 and PW 3 at Kotli Ablu.
He is residing in that village was not disputed.
As stated earlier he sustained 8 injuries (7 gunshot and one incised) during the course of the same transaction is also indisputable, and in fairness, was not disputed by Shri Lalit.
His serious attack is that PW 4 did not disclose the names of the assailants for two days which would show that he did not either see the assailants or the assailants were not known him.
We find it difficult to accept.
His case that he jumped from the terrace in front of the shop and he was attacked by the assailants was not disputed in the cross examination.
The suggestion that he was sleeping alongwith D 4 would show that he could see A 1 who fired at him while he was running away and it receives corroboration from medical evidence of PW 2 that the injuries are on the backside while he was chased by the accused.
So he 266 could clearly identify his own assailants as the occurrence did not take place at a fleet or glimpse.
In the F.I.R. at the earliest, it was specifically stated that PW 4 was not in a condition to speak.
It would mean that he was either under shock or unconscious.
The First Information Report given by the Chowkidar was admitted in evidence with the consent of the defence.
It is settled law that the First Information Report is not substantive evidence.
It can be used only to contradict the maker thereof or for corroborating his evidence and also to show that the implication of the accused was not an after thought.
Since the examination of first information was dispensed with by consent Ex P 24, F.I.R. became part of the prosecution evidence.
Under section 11 of the Evidence Act read with s.6 the facts stated therein namely, PW 4 was not in a speaking condition, could be used only as a relevant fact of prior existing state of facts in issue as resgestae of "the earliest information".
It is not used to corroborate the prosecution case, but can be looked into as an earliest information of the existing condition of PW 4 at 9.00 a.m. on June 5, 1984 i.e. when the report was given in exhibit p 24, PW 4 was still unconscious.
When PW 4 had stated that he became unconscious as soon as he came and tapped the door of DW 3, and fell down, by operation of section 11 of the Evidence Act it may be relevant fact of the previous existing condition that PW 4 contained to remain unconscious till the report was given.
Therefore, the F.I.R. could be used as relevant existing state of fact namely the continuous unconscious condition of PW 4 till PW 5 S.H.O.reached and saw him within the meaning of s.11 read with s.6 of the Evidence Act.
When PW 4 received 7 gun shot injuries and one incised injury and ran for life to a distance with bleeding injuries, it would be quite likely that he would be under severe shock and his evidence that after reaching the home of DW 3 and knocked the door he fell down unconscious appears to be quite natural and probable.
The evidence of PW 5, that on seeing PW 4 in critical unconscious condition he sent him to the Doctor for medical examination and the doctor administering sadation appear to be human probabilities and there is nothing intrinsic to suspect their evidence.
Thus PW 4 was not in a fit condition to give statement till June 7, 1984 at 7.00 a.m. PW 4 's evidence that he was residing at Kotli Ablu and that he knew the accused was not disputed in the cross examination.
It is not uncommon in normal human probability that he was not expected to know the names of the relations of A 3.
When A 1 and A 3 came in that very night to the shop and quarreled for non supply of liquor on credit, it would be fresh in the memory of PW 4 and as he saw the assailants he could have easily recognized A 3. 267 Undoubtedly, ocular defence evidence, if it is not subjected to critical cross examination, is entitled to the same weight as prosecution evidence.
But merely because the prosecution, as usual, made insipid cross examination, the defence evidence is not to be believed automatically.
Witnesses may be prone to speak lies but circumstances will not.
So even though the burden of the defence is not as heavy as of the prosecution, the oral evidence tendered by the defence must also be subjected to critical scrutiny and be considered in the light of the given facts and attending circumstances of the case and human probabilities.
The evidence on record is clear that PW 4 was left attended, though was lying with injuries at the house of DW 3, till the investigating officer PW 5 came and saw him in critical condition.
The normal human conduct, which is common in the country side, is to give immediate first aid and then to make inquire of the cause for injuries and the persons who caused the same.
As DW 3 betrayed such conduct, make us to suspect the credibility and veracity of his evidence and of DW 2 that PW 4 was conscious all through and that he did not disclose the assailants ' names.
Therefore, the evidence of DW 2 and DW 3 that PW 4 was professed to have disclaimed the names of the assailants is unbelievable despite no specific cross examination was directed on that aspect.
That apart they did not tender themselves to be examined by PW 5, the investigating officer.
As regards the shedding of the light from the house of Gurbax Singh is concerned, there is uncontroverted evidence of PW 5, that he remained in the village till 9.30 p.m. on June 5, 1984 to see whether the light was emanating from the house of Gurbax Singh and found to be so and sufficient for PW 3 and PW 4 to identify the assailants.
No cross examination on this aspect was directed.
Gurbax Singh, the owner of the house was not examined by the defence.
Only his son DW 2, an youngster, came into the box and perjured the evidence.
Therefore, the claim that the light was not working for three months prior to the date of occurrence, cannot be believed.
Even assuming that there was no light, even then, PW 4 could identify his own assailants when he was attacked and chased in the course of the same transaction.
Nothing worthwhile was brought out in the cross examination to disbelieve his testimony.
He had no axe to grind against any of the accused.
To motive to make false implication of the accused was even suggested.
He cannot be expected to allow his own assailants to go unpunished and would implicate innocent persons.
Moreover the medical evidence of PW 2 fully corroborated the evidence of PW 4.
It is settled law that corroboration is not a rule of law, but one of caution as an assurance.
The conviction could be made on the basis of 268 the testimony of a solitary witness.
The occasion for the presence at the time of occurrence, opportunity to witness the crime, the normal conduct of the witness after the incident, the nearness of the witness to the victim, his pre disposition towards the accused, are some of the circumstances to be kept in view to weigh and accept the ocular evidence of a witness.
It is not the quantum of the evidence but its quality and credibility of the witness that lends assurance to the court for acceptance.
Considered in this light, we have no hesitation to conclude that PW 4 is a witness of truth and inspires us to believe his evidence.
He would, even in the absence of any light have identified the accused, who had attacked him and committed the murders of sleeping, unarmed and innocent D 1 to D 4.
The evidence of PW 3, though was severely attacked by Shri Lalit, giving our anxious consideration and subjecting to careful analysis, we find that the Special Court committed no error in accepting his evidence.
It is common knowledge that the villagers during summer sleep outside the house, court yard of the house, if any, or on the terrace of the concrete houses.
No doubt there is no stairs to the terrace of the shop whose height is only 8 and 1/2 feet.
PW 4 and PW 3 being young men it is not difficult to climb up and sleep and now it was proved providential for them.
Therefore, the absence of producing, the quilts or lack of steps is not a serious infirmity to doubt the presence of PW 3 and PW 4 and that they slept on the terrace of the shop.
In view of curfew and tense condition in the State, it would be unlikely that PW 3 would have traveled in the night to Madhok at a distance of 23 km.
The evidence on record clearly shows that the defence has freely used the entries in the case diary as evidence and marked some portions of the diary for contradictions or omissions in the prosecution case.
This is clearly in negation of and in the teeth of s.172(3) of the Code.
Section 172 reads thus: "Diary of proceedings in investigation. (1) Every police officer making an investigation under this Chapter shall day by day enter his proceedings in the investigation in a diary, setting forthwith the time at which the information reached him, the time at which he began and closed his investigation, the place or places visited by him, and a statement of the circumstances ascertained through his investigation.
269 (2) Any Criminal Court may send for the police diaries of a case under inquiry or trial in such Court, and may use such diaries, not as evidence in the case, but to aid it in such inquiry or trial.
(3) Neither the accused nor his agents shall be entitled to call for such diaries, nor shall he or they be entitled to see them merely because they are referred to by the Court; but, if they are used by the police officer who made them to refresh his memory, or if the Court uses them for the purpose of contradicting such police officer, the provisions of Section 161 or Section 145, as the case may be, of the (1 of 1872) shall apply.
" It is manifest from its bare reading without subjecting to detailed and critical analysis that the case diary is only a record of day to day investigation of the Investigating Officer to ascertain the statement of circumstances ascertained through the investigation.
Under sub section(2) the Court is entitled at the trial or enquiry to use the diary not as evidence in the case, but as aid to it in the inquiry or trial.
Neither the accused, nor his agent, by operation of sub section(3), shall be entitled to call the diary, nor shall he be entitled to use it as evidence merely because the Court referred to it.
Only right given thereunder is that if the police officer who made the entries in the diary uses it to refresh his memory or if the Court uses it for the purpose of contradicting such witness, by operation of s.161 of the Code section 145 of the Evidence Act, it shall be used for the purpose of contradicting the witness, i.e. Investigation Officer or to explain it in re examination by the prosecution, with permission of the court.
It is, therefore, clear that unless the investigating officer or the Court uses it either to refresh the memory or contradicting the investigating officer as previous statement under s.161 that too after drawing his attention thereto as is enjoined under s.145 of the Evidence Act.
The entries cannot be used by the accused as evidence.
Neither PW 5, nor PW 6, nor the court used the case diary.
Therefore, the free use thereof for contradicting the prosecution evidence is obviously illegal and it is inadmissible in evidence.
Thereby the defence cannot place reliance thereon.
But even if we were to consider the same as admissible that part of the evidence does not impinge upon the prosecution evidence.
As regards the omission of the names of the appellants in the memos sent to the Medical Officer PW 2 under exhibit D 13 and 15 it is also not evidence except as record of investigation.
It is not a rule of 270 law that the memo should bear names with cause title of accused.
It is enough if the name of the injured is mentioned in the memo.
Therefore, the omission to refer their names after the word Banam in the memos sent to the Doctor would not create any doubt that the appellants were later implicated.
Equally the prosecution cannot rely on the statement of PW 3 enclosed to the inquest reports as substantive evidence, as is done and argued with vehemence by Sri Das Bahl.
Section 174 of the Code empowers a police officer to investigate in the presence of two or more respectable witnesses and report only the cause of death and the person, if known, that has committed the offence.
Section 175 empowers him to summon any person who appears to be acquainted with the facts of the case and every person so summoned shall be bound to attend the inquest and answer truely all the questions other than questions the answers to which would have a tendency to expose him to a criminal charge or to a penalty or forfeiture.
The statement made by such person is a "previous statement" within the meaning of s.162 and it shall not be signed.
So the statement made by such a person to police officer is in the course of the investigation, and when reduced to writing, it shall be used only by the accused to contradict such witness in the manner provided by s.145 of the Evidence Act or with the permission of the court the prosecution could use it for re examination only to explain the matter referred to in his cross examination.
It is settled law that s.162 was conceived to protect an accused creating an absolute bar against the previous statement made before the police office being used for any purpose whatsoever.
The obvious reason is that the previous statement under the circumstances was not made inspiring confidence.
It enables the accused to rely thereon only to contradict the witnesses in the manner provided by s.145 drawing attention of the witness of that part of the statement intended to be used for contradiction.
It cannot be used for corroboration of a prosecution or defence witness or even a court witness, nor can it be used contradicting a defence or a court witness.
The investigating officer is enjoined to forward the inquest report to the Magistrate alongwith the statement recorded at the inquest, so that the court would see the record, at the earliest of the circumstances leading to the cause of the death of the deceased and the witness examined during the inquest.
Therefore, the statement of PW 3 record during inquest is not evidence.
It is a previous statement reduced to writing under s.162 of the Code and enclosed to the inquest report and cannot be used by the prosecution for any purpose including to show the names of the accused except to contradict the maker thereof, or to explain the same by prosecution.
271 It is true that DW 1 had stated and was not effectively cross examined that PW 3 was brought by the police in a jeep alongwith the Panch.
But he was examined at the inquest is evident from the record.
PW 3 was present at 9.00 p.m. at the time of vending liquor on credit to A 1 and A 3 and the quarrel.
PW 4 stated that PW 3 and himself slept together on the terrace.
He was examined at the inquest is corroborated by doctor 's evidence that statement of PW 3 recorded under s.162 was enclosed to the inquest reports and sent to PW 2, the Doctor alongwith the dead bodies.
There is ring of truth in the evidence of PW 3.
During curfew, in the night he would not have under taken to go to Madhok at a distance of 23 km.
The attending circumstances for coming to the scene of offence appear to be natural and probable in the ordinary course of human conduct.
Having seen that four of his companions were done to death, the instinct of self preservation and the grip of fear would have made him not to stir out from the school and mustered courage only when the police and the military people arrived at the scene at noon.
Thus he came to be examined at the earliest at inquest whereat he disclosed the names and the participation of the appellants.
Thus the evidence of PW 3 would lend to corroborate PW 4 's evidence.
In addition there is a strong circumstantial evidence against A 1 and A 3.
On his arrest on June 15, 1984, M/0/11, rifle was recovered from A 1.
As per exhibit P 17 licence, it belongs to him, the ballistic report exhibit P 20 establishes that the empty cartridges exhibit M.1 to M.7 were discharged from the bore of M/0/11.
This evidence clearly established that M/0/11 was used by A 1 in the crime.
In his examination under s.313, no explanation was given as to how M/0/11 rifle could go out from his custody for being used, in committing the crime by third parties.
From its recovery from the person of A 1, it is clear that it continued to remain in his custody from the time of user in the crime till it was recovered from him.
These circumstances coupled with oral evidence of PW 4 and PW 3 clearly establish the complicity of A 1 in committing the offences of murder of D 1 to D 4.
As equally A 3 accompanied A 1 to the liquor shop and had quarrel.
When A 1 and A 3 left the shop in anger, it is clear that they left the shop in a huff smarting from humiliation at the hands of the contractor from out side the state and their staff.
To avenge the humiliation heaped upon them, they animated to finish the prosecution party.
Obviously they chose past mid night to be sure that all would be asleep and no evidence of their crime would be available.
Thus they have strong motive to kill the deceased and to make murderous attack on PW 4.
Moreover gandasa was recovered pursuant to A 3 's statement under s.27 of 272 Evidence Act leading to its discovery and it contained human blood though blood group could not be detected due to disintegration.
The two incised injuries each on the persons of D 3 and D 4 as corroborated by medical evidence clearly establishes the participation of A 3 in attacking the deceased.
He accompanied A 1 at dead of night to the liquor shop and killed D 1 to D 4 and attempted to kill PW 4.
Thus he shared with A 1 the common intention to kill the deceased D 1 to D 4 and attempt to kill PW 4.
The production of the credit chit kept on the table in the shop would have lent corroboration to the prosecution case of the sale of liquor to A 1 and A 3 on credit.
It is not the prosecution case that it was signed by either of the accused.
It is now in evidence that it was burnt out also with the shop, though no definite evidence for cause of burning is on record, except vague suggestions but denied by the prosecution witnesses that the terrosists committed the arson and killings.
From a totality of facts and circumstances it cannot be concluded that terrorists committed the offence.
As regards A 2 we have grave doubt of his participation in the crime.
Admittedly, he had no motive to kill any of the deceased or to attack PW 4.
He did not come at 9.00 p.m. on June 4, 1984 to the liquor shop for drinking.
There is no recovery of gandasa from him, though he was arrested alongwith A 1 and A 3.
The doubt whether A 2 was likely to be a participant in the commission of this grave crime of four deaths has not been removed from our minds.
It is undoubtedly true that PW 4 had stated that A 2 attacked him with the gandasa but when he was attacked while he was fleeing for life the possibility of mistaken identity of A 2 to A 3 cannot be ruled out.
We make it clear that we are not doubting the veracity of PW 4.
In these circumstances A 2 is entitled to the benefit.
Accordingly, we hold that A 1 and A 3 have shared common intention, they had motive to kill the deceased.
They came together, killed the sleeping innocent four persons D 1 to D 4 and also attempted to kill PW 4.
Accordingly, we hold that A 1 committed the offence of murder of D 1 and D 2 punishable under s.302; D 3 and D 4 's under s.302 read with s.34 I.P.C. and attempt of murder of PW 4 punishable under s.307 read with s.34, I.P.C. A 3 shared the common intention with A 1 and also committed the said offences under s.302 read with s.34; s.307 read with s.34 I.P.C. A 3 was given the minimum sentence of imprisonment of life.
The sentences were directed to run concurrently.
273 On finding that the accused committed the charged offences, s.235(2) of the Code empowers the Judge that he shall pass sentence on him according to law on hearing him.
Hearing contemplated is not confined merely to oral hearing but also intended to afford an opportunity to the prosecution as well as the accused to place before the Court facts and material relating to various factors on the question of sentence and if interested by either side to have evidence adduced to show mitigating circumstances to impose a lesser sentence or aggravating grounds to impose death penalty.
Therefore, sufficient time must be given to the accused or the prosecution on the question of sentence, to show the grounds on which the prosecution may plead or the accused may show that the maximum sentence of death may be the appropriate sentence or the minimum sentence of life imprisonment may be awarded, as the case may be.
No doubt the accused declined to adduce oral evidence.
But it does not prevent to show the grounds to impose lesser sentence on A 1.
This Court in the aforestated Alluddin and Anguswamy 's cases held that the sentence awarded on the same day of finding guilt is not in accordance with the law.
That would normally have the effect of remanding the case to the Special Court for reconsideration.
But in the view of the fact that A 1 was in incarceration for long term of six years from the date of conviction, in our considered view it needs no remand for further evidence.
It is sufficient that the sentence of death awarded to A 1 is converted into rigorous imprisonment for life.
The sentences of death is accordingly modified and A 1 is sentenced to undergo rigorous imprisonment for life for causing the deaths of all four deceased.
The conviction of A 1 for attempt to murder PW 4 and sentence of five years ' rigorous imprisonment is also upheld and all the sentences would run concurrently.
A 2 is acquitted of all charges.
The bail bonds are cancelled.
He shall be set at liberty unless he is required in any other case.
The appeal is allowed only to the above extent.
V.P.R. Appeal Partly allowed.
| The case of the prosecution was that at about 9.00 p.m. on June 4,1984, A 1 and A 3 came to the liquor shop of D 3 wherein PW 3, D 1, D 2 and PW 4 were also present and were vending the liquor.
They sold one bottle ofliquor to A 1 and A 3 on credit.
After its consumption A 1 and A 3 demanded another bottle to which D 3 refused to sell on credit.
There on A 1 and A 3 abused them and a quarrel ensued.
Both left the shop in anger.
D 1 and D 2 slept on wooden takthposh in front of the liquor shop.
PW 3 and PW 4 climbed the roof of the shop and slept there.
During past mid night of June 4 5, 1984 at about 12.30 a.m., PW 3 and PW 4 heard gun shot fire and got up and saw with the visibility of electric light emanating from the house of one Gurbax Singh, the father of DW 2 that A 1 was firing with rifle at D 1 to D 4 and A 2 and A 3 hitting them with Gandasas (sharp edged weapons).
Seeing PW 3 and PW 4 on the terrace A 1 fired at them but they escaped uninjured and they jumped down.
PW 3 jumped towards back side of the shop and ran towards the village and hid in the school.
PW 4 jumped to the front side and ran towards .
the village A 1 fired at PW 4 257 and A 2 hit him.
He received seven bullet injuries fired by A 1 on the backside, of right leg, thigh and left side of the abdomen while he was running.
A 2 hit him on the right shoulder and had incised injury.
He ran to the house of PW 3 with bleeding injuries, knocked the door and fell down unconscious.
On June 5, 1984 at about 9.00 a.m. the Chowkidar of the village reached Kotli Police Station and reported to PW 5, H.O.who reduced F.I.R. into writing.
In the F.I.R. the chowkidar stated that he had heard gun shot firing from the side of the liquor shop.
Due to fear and the prevailing tense situation he did not come out.
Next day morning he saw several people collected at the liquor shop and saw the dead bodies of D 1 to D 4 and PW 4 was lying unconscious in the house of DW 3 and he was asked to report the matter accordingly.
The defence consented to mark F.I.R., the affidavits of the panch witnesses and constables, the fire arms licence of A 1 under Ex.p 17 and also the reports of the ballistic expert and chemical examination reports without oral evidence.
The lower court believed the direct evidence of PW 3 and PW 4 and the prosecution case that A 1 fired at the deceased with MO 11 rifle, A 2 and A 3 also participated in the attack.
The first accused was convicted under s.302 read with s.34, I.P.C. for causing the deaths of D 1, D 2, D 3 and D 4 and sentenced to death subject to confirmation by this Court.
He was also further convicted under s.307 read with s.34, I.P.C. and sentenced to undergo rigorous imprisonment for 5 years for attempt to murder PW 4.
A 2 and A 3 were convicted under s.302 read with s.34, I.P.C. for causing deaths of D 1 to D 4 and sentenced to undergo imprisonment for life.
A 2 and A 3 were convicted under s.307 read with s.34 I.P.C. for attempt to murder of PW 4 and were sentenced to undergo rigorous imprisonment for 5 years, all the sentences to run concurrently, against which the accused filed appeal u/s.14(1) of the Terrorist Affected Areas (Special Court) Act, 1984.
The appellants contended that the evidence of PW 4 was highly artificial, unbelievable and untrustworthy; that barring their evidence, there was no other evidence to connect the appellants with the commission of the crime; that the omission of the names of the accused in the case diary and memos would belie the theory of witnesses; that the appellants were implicated by suspicion and the prosecution had not 258 established the guilt of the appellant beyond reasonable doubt; that the conviction and sentence by the special court was on the same day, which contravened the mandatory provision of s.235 of the Code.
Partly allowing the appeal, this Court, HELD: 1.
The First Information Report is not substantive evidence.
It can be used only to contradict the maker thereof or for corroborating his evidence and also to show that the implication of the accused was not an after thought.
[266B C] 2.
Since the examination of first information was dispensed with by consent F.I.R. became part of the prosecution evidence.
[266B C] 3.
Ocular defence evidence, if it is not subjected to critical cross examination, is entitled to the same weight as prosecution evidence.
But merely because the prosecution, as usual, made insipid cross examination, the defence evidence is not to be believed automatically.
[267A B] 4.
Witnesses may be prone to speak lies but circumstances will not.
So even though the burden of the defence is not as heavy as of the prosecution, the oral evidence tendered by the defence must also be subjected to critical scrutiny and be considered in the light of the given facts and attending circumstances of the case and human probabilities.
[267A C] 5.
Corroboration is not a rule of law, but one of caution as an assurance.
The conviction could be made on the basis of the testimony of a solitary witness.
The occasion for the presence at the time of occurrence, opportunity to witness crime the normal conduct of the witness after the incident, the nearness of the witness to the victim, his pre disposition towards the accused, are some of the circumstances to be kept in view to weigh and accept the ocular evidence of a witness.
It is not the quantum of the evidence but its quality and credibility of the witness that lends assurance to the court for acceptance.
[267H 268B] 6.
The case diary is only a record of day to day investigation of the Investigating Officer to ascertain the statement of circumstances ascertained through the investigation.
Under Section 172(2) the Court is entitled at the trial or inquiry to use the diary not as evidence in the case, but as aid to it in the inquiry or trial.
Neither the accused, nor his agent, by operation of sub section
(3), shall be entitled to call the diary, nor shall he be entitled to use it as evidence merely because the Court 259 referred to it.
Only right given thereunder is that if the police officer who made the entries in the diary uses it to refresh his memory or if the Court uses it for the purpose of contradicting such witness, by operation of s.161 of the Code and s.145 of the Evidence Act, it shall be used for the purpose of contradicting the witness, i.e., Investigation Officer or to explain it in re examination by the prosecution, with permission of the Court.
It is, therefore, clear that unless the investigating officer or the court uses it either to refresh the memory or contradicting the investigating officer as previous statement under s.161 that too after drawing his attention thereto as is enjoined under s.145 of the Evidence Act.
The entries cannot be used by the accused as evidence.
[269C G] 7.
The memos sent to the Medical Officer are not evidence except as record of investigation.
It is not a rule of law that the memo should bear names with cause title of accused.
It is enough if the name of the injured is mentioned in the memo.
[269H 270A] 8.
Section 174 of the Code empowers a police officer to investigate in the presence of two or more respectable witnesses and report only the cause of death and the person if known, that has committed the offence.
Section 175 empowers him to summon any person who appears to be acquainted with the facts of the case and every person so summoned shall be bound to attend the inquest and answer truely all the questions other than questions the answers to which would have a tendency to expose him to a criminal charge or to a penalty or forfeiture.
The statement made by such a person is a "previous statement" within the meaning of section 162 and it shall not be signed.
So the statement made by such a person to police officer is in the course of the investigation, and when reduced to writing, it shall be used only by the accused to contradict such witness in the manner provided by section 145 of the Evidence Act or with the permission of the court the prosecution could use it for re examination only to explain the matter referred to in his cross examination.[270B E] 9.
S.162 was conceived to protect an accused creating an absolute bar against the previous statement made before the police officer being used for any purpose whatsoever.
The obvious reason is that the previous statement under the circumstances was not made inspiring confidence.
It enables the accused to rely thereon only to contradict the witnesses in the manner provided by s.145 drawing attention of the witness of that part of the statement intended to be used for contradiction.
It cannot be used for corroboration of a prosecution or defence witness or even a court witness, nor can it be used contradicting a 260 defence or a court witness.
The investigating officer is enjoined to forward the inquest report to the Magistrate alongwith the statement recorded at the inquest, so that the court would see the record, at the earliest of the circumstances leading to the cause of the death of the deceased and the witness examined during the inquest.
[270E G] 10.
The statement of witness PW 3 recorded during inquest is not evidence.
It is a previous statement reduced to writing under s.162 of the Code and enclosed to the inquest report and cannot be used by the prosecution for any purpose including to show the names of the accused except to contradict the maker thereof, or to explain the same by prosecution.
[270G H] 11.
On finding that the accused committed the charged offence, s.235(2) of the Code empowers the Judge that he shall pass sentence on him according to law on hearing him.
Hearing contemplated is not confined merely to oral hearing but also intended to afford an opportunity to the prosecution as well as the accused to place before the Court facts and material relating to various factors on the question of sentence and if interested by either side to have evidence adduced to show mitigating circumstances to impose a lesser sentence or aggravating grounds to impose death penalty.
Therefore, sufficient time must be given to the accused or the prosecution on the question of sentence to show the grounds on which the prosecution may plead or the accused may show that the maximum sentence of death may be the appropriate sentence or the minimum sentence of life imprisonment may be awarded, as the case may be.
If the accused declines to adduce oral evidence, it does not prevent to show the grounds to impose lessor sentence on.
[273A D] 12.
The sentence awarded on the same day of finding guilt is not in accordance with the law.[273C D] Allauddin vs State of M.P., J.T.(1989) 2 SC 171 and Anguswamy vs State of Tamilnadu, J.T.(1989) 2 SC 184, referred to.
|
Civil Appeal No.1779 of 1991.
From the Judgment and Order dated 10 4 1990 of the Bombay High Court in W.P.No.1944 of 1987.
M.C.Bhandare, CPU Nair, Ms.
Kamini Lao and M.N.Shroff for the Appellants.
V.N.Ganpule, S.K.Agnihotri, A.S.Bhasme and Ms.
H.Wahi for the Respondents.
The Judgment of the Court was delivered by Sawant,J.
Leave granted.
Appellant No.1 is a Trust which runs and manages an Ayurveda College in Bombay.
Appellant No.2, is the Principal of the College.
There was a vacancy in the post of a lecturer in Sanskrit for the academic year 1983 84 which was admittedly reserved for a candidate from the backward classes.
The Ist respondent had applied for the said post on 19th September, 1983 even before the appellant Trust had invited applications by advertising the vacancy as it was required 286 to do.
Subsequently, on October 13, 1983, the appellant Trust issued an advertisement inviting applications for the post without mentioning for which academic year the appointment was to be made.
The parties before us agree that it was for the academic year 1983 84.
In the advertisement, it was specifically mentioned that the post was reserved for a backward class candidate and if no suitable candidate from the backward classes was available, a candidate from the non backward classes may be appointed for an year.
It appears that within a month thereafter on the 12th November, 1983, a second advertisement was issued repeating the earlier advertisement.
No application was received from any candidate from the backward classes in response even to this advertisement, and hence, the Ist respondent who had already applied as stated earlier, was appointed to the said post for the period from March 19, 1984 till April 30, 1984.
The total period of service put in by the Ist respondent for the said academic year was 41 days.
On April 28, 1984, the appellant Trust issued an advertisement for the same post repeating the contents of the earlier advertisement, but for the academic year 1984 85.
The applications were invited by 30th April, 1984.
No candidate from the backward classes applied in response to the said advertisement.
The interview was held on June 30, 1984 and the Ist respondent was appointed for the period from 21st August, 1984 to 19th April, 1985.
In the third academic year 1985 86, admittedly no advertisement was issued and no applications from the candidates including candidates from the backward classes were invited.
However, the Ist respondent was appointed to the post from July 10, 1985 to April 30, 1986.
Thereafter the Ist respondent 's services were terminated w.e.f.
30th April, 1986 by a notice dated March 12, 1986.
No appointment was made to the said post for the academic year 1986 87.
On May 1,1987, the Trust issued advertisement inviting applications to the said post from candidates belonging to all classes since, according to the Trust, the post was dereserved during the said period.
Three candidates belonging to the non backward classes including the Ist respondent and the 5th respondent applied for the post and the 5th respondent was selected and appointed to the same.
It appears that the Ist respondent was not paid salary for the summer vacations following the academic years 1984 85 and 1985 86.
She was also not paid salary from November 1985 to April 1986.
She approached the College Tribunal praying for salary for (i) November 1985 to April 1986, and (ii) for the summer vacations following 287 academic years 1984 85 and 1985 86, i.e., for the months of May and part of June 1985, and May and part of June 1986, and (iii) for setting aside her termination of service and for reinstatement.
The Tribunal allowed her claim for the salary for the relevant periods, but dismissed her claim for reinstatement holding that her appointment was purely temporary and her claim that she should be deemed to have been confirmed because she had served for two academic years was not established in the circumstances of the case.
This decision was delivered by the Tribunal on December 9, 1986.
As stated earlier, during the academic year 1986 87, no appointment was made to the said post and it was subsequent to this decision that an advertisement was issued calling for applications from candidates belonging to all classes and 5th respondent was appointment to the said post.
Against the decision of the Tribunal the Ist respondent approached the High Court under Article 226 of the Constitution, and the High Court held that notwithstanding the break in her actual appointment, she was continuously in employment from March 19, 1984 to April 30, 1986.
She was, therefore, entitled to the benefit of the resolutions of the State Government and the University of Bombay dated September 29, 1986 and February 27, 1987 respectively which, according to the High Court, laid down that an employee who was appointed for two consecutive academic years must be deemed to have been on probation right from the time of the first appointment and, therefore, confirmed in the post.
The High Court, therefore, allowed her petition and directed the appellants to reinstate her forthwith in the post and also to treat her as if she had been in continuous employment from March 19, 1984 with the benefit of full back wages, seniority etc.
The High Court also directed the University, the Director of Ayurveda, Maharashtra and the State of Maharashtra who were respondents 3,4 and 5 respectively to the petition, and who are respondents 2,3 and 4 to the present appeal respectively, to make appropriate sanctions including grant of money, if necessary.
The High Court further granted cost and directed compliance with the orders by the appellants within six weeks from the date of its order, which is April 10, 1990.
Although various contentions have been raised we find that it is not necessary to go into them.
According to us the appellant Trust has violated the directions of the Government as well as of the University in the appointments in question in two major respects, as a result of which neither the appointment of the Ist respondent nor that of the 5th respondent can be said to have been validly made.
Unfortunately, these aspects of the matter which are evident from the record 288 were lost sight of both by the Tribunal and the High Court.
The result has been that the illegalities which are patent on the face of the record have been perpetuated.
The Government of Maharashtra had issued a Govt.
resolution No.
1177/129387/XXXII (CELL) on October 25, 1977 prescribing conditions of service as shown in Appendix III to the resolution.
By a further resolution of April 3, 1978, Government made it clear that the revised scales of pay which were sanctioned by the resolution of October 25, 1977 could be implemented only after statutes had been duly made by the University.
Since the making of the statutes was to take some time and the revised scales of pay recommended of the University Grants Commission were to be effective from January 1, 1973 as laid down in the GR of October 25, 1977, the Vice Chancellor exercised his powers conferred upon him under Section 11(6)(b) of the Bombay University Act 1974 (hereinafter referred to as the "Act") and issued his direction No.192 of 1978 on 7th June, 1978.
This direction, among other things, laid down the mode of recruitment of the teachers and principals, as follows: "Futuer recruitment to posts of Teachers and Principals of colleges shall be made through a Selection Committee, the composition of which is specified in the terms and conditions (Appendix II)." Appendix II states as follows: " Terms and conditions attached to the revised scales of pay.
(i) x x x x x x x x (ii) All appointments of teachers in colleges shall be made on merit and on the basis of all India advertisement.
The qualifications prescribed for the posts should essentially be related to the academic attainment in the subject concerned and should not be linked with language or other regional consideration.
Appointment should not be made on communal or caste consideration.
The constitution of Selection Committee for recruitment to the posts of lectures in a college should be as follows: (a) Chairman, Governing Body of the College or his nominee; 289 (b) a nominee of the Vice Chancellor.
(c) one expert to be nominated by the University.
(d) one nominee of the Director of Education (Higher Education).
(e) Principal of the college; and (f) Head of the Department concerned of the college.
No selection shall be considered valid unless at least one expert is present.
The recommendations of the Selections Committee shall be subject to the approval of the Vice Chancellor.
* * * * * * * * (Emphasis Supplied) 8.
The effect of the aforesaid government resolutions and the University directions is (a) that all appointment of teachers in colleges have to be made on merit and on the basis of all India advertisement;(b) that the appointments have to be made by a Selection Committee which consists, among others, of nominee of the Vice Chancellor, an expert to be nominated by the University and a nominee of the Director of Education (Higher Education).
No selection will be considered valid unless at least one expert is present for the selection.
Admittedly, the selection of the 5th respondent was made by a committee where neither the nominee of the Vice Chancellor nor the expert nominated by the University nor the nominee of the Director of Education (Higher Education), i.e., in the present case of the Director of Ayurveda was present.
The selection so made was, therefore, not valid.
Shri Bhandare, the learned counsel for the appellant Trust Pointed out to us the letter of June 6, 1989 sent by the University of Bombay according approval to the appointment of the 5th respondent as a lecturer in Sanskrit on probation from 2nd July, 1987 and contended that in view of the said approval the invalidity of the appointment, if any, on account of the absence of the expert in the Selection Committee, should be deemed to have been condoned.
We are not impressed by this contention.
In the first instance, there is nothing on record to show whether when the appellant Trust forwarded its report on appointment of the 5th respondent, the Trust had apprised the 290 University of the absence of the expert at the time of his selection.
Secondly, the University has not reserved the power to relax the rule and permit selection without the presence of the expert.
There is nothing in the University 's letter to show why the University had condoned the absence of the expert.
It is, therefore, obvious that the approval given by the University being in ignorance of the true state of affairs and in breach of the rule is legally ineffective and cannot validate the appointment.
There is further a common illegality in the appointment of both the 1st and the 5th respondent which arises on account of the failure to follow the Government Resolutions and University directions in the matter of reservation of the seats for the backward classes, which are binding on the College.
On 30th March 1981, the Government of Maharashtra passed a resolution in exercise of the powers conferred on it under sub Section (2) of Section 77 C of the Act issuing instruction to all the non agricultural Universities in regard to the reservation of posts to be made in favour of Scheduled Castes and Scheduled Tribes while making appointments to teaching and non teaching posts in the University affiliated colleges and recognized institutions.
The reservation prescribed was as follows: (1) Scheduled Castes 13 p.c.
(2) Scheduled Tribes 7 p.c.
(3) Nomadic Tribes & Vimukta Jatis 4 p.c.
Total 24 p.c.
That resolution further says that the various orders contained in the booklet "Reservation and other concessions in Government service for backward classes" will be applicable for recruitment to the teaching and non teaching posts reserved for backward classes in the University and the affiliated colleges and recognized institutions subject to the following modifications in regard to recruitment to the teaching posts.
The modifications, among other things, were as follows: "Similarly, at any given time of recruitment to the teaching posts, only the total number of reserved vacancies and the sections from which they are to be filled in should be 291 determined.
It would be enough if the require percentage is fulfilled as a whole and not with reference to any particular post.
If the reserved vacancies cannot be filled, then so many posts as cannot be filled in may be kept vacant for six months and should be again advertised thrice.
Even after readvertising the posts 3 times if suitable candidates belonging to backward classes do not become available, they may be filled in by candidate belonging to the open category." "For giving effect to the aforesaid instructions, it will be necessary for the Universities to make statutes under Section 77C(1) under their respective Universities Acts of 1974.
For ensuring immediate implementation, the Vice Chancellors of the Universities, under clause (b) of Section 11(6) of the respective Universities Act of 1974.
" (Emphasis supplied) 12.
By its subsequent resolution of October 20, 1983, the Government of Maharashtra clarified its earlier resolution of March 30, 1981 and stated as follows: "1. x x x x x x x x 2.
After reconsideration of the above decision, it is now directed that if suitable candidates cannot be found to fill posts reserved for backward classes in Universities, affiliated colleges and recognized institutions, those posts should be temporarily filled with candidates belonging to non backward classes for one academic year.
But as mentioned in the resolution the appointment of a non backward class candidate to a reserved vacancy should be made only in the event of failure to find a backward class candidate even after the post has been advertised thrice.
x x x x x x x x" (Emphasis supplied) 13.
Thereafter a further resolution was issued by the Government on September 29,1986 on the subject stating therein that it had come to the notice of the Government that some institutions had not 292 implemented the instructions contained in the earlier resolutions of March 30, 1981 and of October 30, 1983.
The Government therefore directed that the said directions should be implemented strictly.
This resolution further directed that the non backward class candidates who were being repented for the second and third academic years when backward class candidates were not found for appointment for the first academic year, should not be called for interview every year and that the candidates belonging to the non backward classes should be appointed for the second and third academic year also, without calling them for interview.
It is further stated in the said resolution that, similarly, as soon as the reserved post is dereserved, the appointed candidate should be confirmed in that post from the date of dereservation subject to all other terms and conditions.
It was also directed that necessary statutes should be made by the University in accordance with the provisions of the Act and for ensuring immediate implementation, the vice Chancellor should issue directions under clause (b) of Section 11(6) of the Act.
Pursuant to the said resolution of the Government, the Vice Chancellor of the University issued direction on March 11, 1987 as follows: "x x x x x x x (1) That the reserved teaching post which is filled in by appointment of a suitable non backward class candidate in the first year by following the prescribed procedure of selection shall be advertised again for the second and third years for inviting applications only from persons belonging to Scheduled Castes, Scheduled Tribes, Denotified Tribes and Nomadic Tribes.
However, applications may also be invited from persons belonging to non backward class if the suitable non backward class candidate already appointed in the first year is not available for reappointment in the second or third year and or his services are required to be terminated on account of unsatisfactory performance of work in the first year; (2) That if in the second year, in response to the advertisement, a backward class candidate is not available, then the suitable non backward class candidate already appointed in the reserved post shall not be required to appear for interview before the Selection Committee again for the second 293 and: or third year (s) but that he shall be reappointed in the reserved post, if he is available for reappointment; (3) That if in response to the third advertisement in the third year, no application is received for the reserved post from candidates belonging to SC, ST, DT, or NT, the college authorities shall start the process of dereservation of the reserved post.
After the process of dereservation of the post is completed, the appointment of non backward class teacher shall be deemed to be on probation with retrospective effect from the date of his initial appointment if he has held continuous appointment for two years in the college or in any other college under the same management, and that his appointment shall be confirmed from the dates of completion of two years of continuous appointment.
The aforesaid direction shall come into force with retrospective effective from the date of the Maharashtras Government Resolution, that is, of 29 9 1986, which means that non backward class teacher who is eligible to get the benefit of the above direction shall be confirmed in his post with effect from 29 9 1986 or from any later date on which he may become eligible for confirmation in accordance with the aforesaid directions.
x x x x x x x x x" (Emphasis supplied) 14.
According to these Government resolutions and University directions (a) whenever a post is reserved to be filled in by the candidates from the backward classes, the post is to be advertise thrice within 6 months in each academic year.
The post is to be kept vacant for the said months 6 months if no suitable candidate from the backward classes is available; (b) the post is to be filled in temporarily for one academic year by a non backward class candidate only after the three advertisements have been given as above; (c) the aforesaid process is to be repeated for two more academic years; (c) the candidate from the non backward classes appointed temporarily in the first academic, year for want of a backward class candidate, is to be continued as a temporary appointee for the next two academic years without being interviewed afresh for the next two years; (d) if in spite of the third advertisement in the third academic year, no application is received from a backward class candidate, the College authorities are free to 294 start the process of dereservation of the reserved post; (e) after the process of dereservation of the post is completed, the appointment of non backward class teacher will be deemed to be on probation with retrospective effect from the date of his initial appointment and he shall be confirmed in the post on his completing two years of his continuous service.
Admittedly, as pointed out earlier, the post was reserved for the academic year 1983 84.
The Trust had not given three advertisements within six months for any of the academic years 1983 84, 1984 85 and 1985 86.
On the other hand for the academic year 1983 84, it issued only two advertisements, viz., on October 30, 1983 and November 12, 1983.
It is not known as to why even two advertisements were not issued at the beginning of the said academic year.
The academic year admittedly begins from June.
May that be, as it is.
As regards the second academic year 1984 85, it issued only one advertisement and that was on April 28, 1984.
It did not issue any advertisement for the academic year 1985 86.
The initial appointment of the 1st respondent for the academic year 1983 84 and her continuation for the subsequent academic years, viz., 1984 85 and 1985 86 was thus in breach of the Government resolutions and the University directions and, therefore, illegal.
Similarly, since the appointment of the 5th respondent was made without fallowing the procedure prior to dereservation, viz., three advertisements repeated every year for all the three academic years for which the post was to be reserved, his appointment to the post, as if the post stood legally dereserved was also illegal since in the facts and circumstances of the case, it is obvious that the post could not have been dereserved to make it available for non backward class candidate.
Shri Bhandare, however, contended that in the meanwhile the appellant Trust had taken steps to shift the reservation from the post of a lecturer in Sanskrit to the post of lecturer in Sanhita.
The Trust had written a letter on July 2, 1986 for the purpose to the Directorate had by its letter of July 11, 1986 accorded the sanction.
It may, however, be pointed out the representation made by the lecturer in Sanskrit to the post of lecturer in Sanhita had proceeded on the basis that the Trust had made efforts to fill in the said post from the candidates of the backward classes as required by the Government resolutions and the University directions.
As pointed out above, the Trust had not made the efforts as required by the said resolutions and directions.
It had not issued the advertisements 295 as it was required to do.
The sanction was obtained and granted obviously on the basis of inadequate information.
The sanction was, therefore, defective in law.
The High Court unfortunately did not notice these infirmities in the appointment of either of the respondents.
Shri Ganpule, the learned counsel appearing for the 1st respondent contended that since the 1st respondent was appointed in the first academic year, viz., 1983 84 and continued for the next two academic years, viz., 1984 85 and 1985 86 she was entitled to the benefit of the directions of the University contained in Circular No. 98 of 1987 dated March 11,1987 which had stated that if the non backward class teacher is on probation continuously for two years he would be deemed to be on probation with retrospective effect from the date of ;his initial appointment.
Although the services of the 1st respondent were terminated w.e.f.
April 30, 1986, since she was entitled to the benefit of the vacation salary following the academic year 1985 86 she would be deemed to be in service after the completion of the vacation and, therefore, she may be said to be in service on September 29, 1986 from which date the said University direction was to be effective.
The contention proceeds on the footing that her initial appointment and the continuation of service for the next two academic years was valid.
We have already pointed out above that they cannot be considered to be valid.
However, assuming that her initial appointment and subsequent continuation of service was valid, she would not be entitled to the b benefit of the University Direction of March 11, 1987 because her entitlement to the vacation salary does not extend her period of employment up to the end of the vacation.
That is a perquisite which is conferred on every teacher who has served during the academic year.
It has no connection with the continuation of the employment since even those teachers whose services are validly terminated before the beginning of the vacation period are given the benefit of the salary of the vacation period.
Statute 424 of the University which is reproduced as Annexure 'C ' to the petition makes this position clear.
The argument, therefore, has no merit.
In the view we have taken the appointments of both 1st and the 5th respondents were not valid.
The post was reserved for the academic year 1983 84.
We are now at the end of the academic year 1990 91 A fresh appointment, therefore, will have to be made for the academic year 1991 92.
In the meanwhile, several events have occurred.
The appointment of the 1st 296 respondent has already been terminated w.e.f. April 30, 1986.
The 5th respondent has been in service from July 2, 1987.
We are informed across the bar that today he has become overaged.
The 1st respondent was overaged even at the time of her initial appointment.
Although the advertisemently had stated that the candidate should not be above 32 years, at the time of her initial appointment itself, she was about 40 years old.
The advertisement had also not l;mentioned anywhere that the age was relaxable.
But that is a matter of history.
In the meanwhile.
as pointed out above, on incomplete information, the Directorate of Ayurveda has allowed the appellant Trust to shift the reservation from the post to the post of a lecturer in Sanhita.
Taking into account all the facts and circumstances, we are of the view that an opportunity should be given to the appellant Trust to cure the illegalities.
While, therefore, we maintain the order of Tribunal and set aside the order of the High Court, we direct the appellant Trust to advertise the post three times sufficient in advance and in any case within six months from the close of the present academic year, viz.
,1990 91 as a post reserved for the backward class candidate, and if no application is received from a suitable backward class candidate, the post will be deemed to have been dereserved.
The Trust will then proceed to fill in the same by a candidate belonging to non backward classes.
This fact may be made clear in all the three advertisements.
The 5th respondent will be entitled to apply for the post notwithstanding the fact that he has by this time become overaged.
If he is selected on the basis of his other qualifications, the Selection Committee shall relax in his favour the condition with regard to the maximum age.
If he is appointed to the post, his appointment will be a fresh one and his past service will not count for the probation period.
The Trust shall for the purpose constitute a proper Selection Committee according to the rules.
The appeal is allowed accordingly.
The parties will bear their own costs.
Before parting with this appeal, we must observe that our decision has proceeded on the basis of the Government resolutions and University directions placed before us.
The resolutions and directions as pointed out above require that the posts reserved for backward class candidates should be kept vacant for six months and it is only after the third advertisement during the said six months in each academic year that they should be filled in by candidates belonging to 297 the non backward classes if suitable candidate from backward classes are not available.
Literally interpreted, it would mean that in each academic year, there will be no teacher for the first six months, if the process of advertisement is to begin at the commencement of the academic year.
This is bound to cause hardship to the students.
It is, therefore, incumbent upon the institutions concerned to advertise the posts thrice within six months well before each academic year begins.
Since in the present case the academic year begins in June, the process of advertisement must begin in December of the preceding year.
This should be the normal practice.
An exception has to be made in the present case because the decision is being given today.
To overcome the hardship to the decision is being given today.
To overcome the hardship to the students, we would recommend that the 5th respondent may be permitted to teach as a purely temporary teacher during the period that the process is not completed for the academic year 1991 92.
However, the appellant Trust will take steps within two weeks from the receipt of this order to start the process of advertisement as directed above.
G.N. Appeal allowed.
| For the academic year 1983 84, there was a vacancy for the post of Lecturer in Sanskrit, in the College managed by the appellant Trust.
The said post was reserved for candidate from backward classes.
The first Respondent, not belonging to any backward class, applied for the post, even before the appellant Trust issued an advertisement.
An advertisement was issued later without mentioning the academic year for which the appointment was to be made, though admittedly it was for the academic year 1983 84.
The advertisement specifically stated that the post was reserved for a backward class candidate and if no such candidate was available, a candidate from the non backward classes may be appointed for one year.
Within a month, the advertisement was repeated and yet no application was received from any candidate from backward classes.
Hence the appellant trust appointed the First Respondent, who had earlier applied, from 19.3.84 till 30.4.1984.
Again, an advertisement was issued in 1984 for the academic year 1984 85.
And there was no response from any candidate belonging to backward classes.
The First Respondent was interviewed and appointed for one year, till 19.4.1985.
For the academic year 1985 86, no advertisement was issued.
The First Respondent was again appointment to the said post from July 10, 1985 to April 30, 1986.
Thereafter her services were terminated after issue of notice.
No appointment was made to the said post for the academic year 1986 87.
However, on 1.5.1987, an advertisement was issued inviting applications for the said post from candidates belonging to all classes, 283 dereserving the post.
Respondents 1 and 5 and another candidate, all belonging to non backward classes applied.
The 5th Respondent was selected and appointed to the said post.
Thereafter, in respect of non payment of salary for certain period and for setting aside her termination order, the First Respondent approached the College Tribunal.
The Tribunal allowed her claim for salary for the relevant periods, but dismissed her claim for reinstatement, holding that her appointment was purely temporary and her claim that she should be deemed to have been confirmed because she had served for two academic years was not established in the circumstances of the case.
Against the Tribunal 's decision, the First Respondent approached the High Court by way of a Writ Petition.
The High Court allowed the Writ Petition holding that notwithstanding the break in her actual appointment, she was continuously in employment from March 19, 1984 to April 30, 1986, and hence entitled to the benefit of the resolutions of the State Government and the University directions which, according to the High Court, laid down that an employee who was appointed for two consecutive academic years must be deemed to have been on probation right from the time of the first appointment and, therefore, she should be confirmed in the post.
The benefit of full back wages, seniority etc.
was also ordered.
Aggrieved by the Judgment of the High Court, the appellants preferred the present appeal, by special leave.
Allowing the appeal, this Court, HELD: 1.
The appellant Trust had violated the directions of the Government as well as of the University in the appointments in question as a result of which neither the appointment of the 1st respondent nor that of the 5th respondent can be said to have been validly made.
Both the appointments were made without following the Government Resolutions and the University directions in the matter of reservation of seats for backward classes which are binding on the college.
Unfortunately, these aspects of the matter which are evident from the record were lost sight of both by the Tribunal and the High Court.
[287G H;288A] 2.1.
Admittedly, the selection of the 5th respondent was made by a committee where neither the nominee of the Vice Chancellor nor the expert nominated by the University nor the nominee of the Director of 284 Education (Higher Education), i.e., the Director of Ayurveda, was present.
The selection so made was, therefore, not valid.
[289F] 2.2 There is nothing on record to show that when the appellant Trust forwarded its report on appointment of the 5th respondent, it apprised the University of the absence of the expert at the time of his selection.
The University has not reserved the power to relax the rule and permit selection without the presence of the expert.
There is nothing in the University 's letter to show why the University had condoned the absence of the expert.
The approval given by the University being in ignorance of the true state of affairs and in breach of the rule, is legally ineffective and cannot validate the appointment.
[289H,290A B] 3.
Admittedly, the post was reserved for the academic year 1983 84.
The Trust had not given three advertisements within six months for any of the academic years 1983 84, 1984 85 and 1985 86.
On the other hand, for the academic year 1983 84, it issued only two advertisements.
It is not known as to why even these two advertisements were not issued at the beginning of the said academic year.
As regards the second academic year 1984 85, it issued only one advertisement, and no advertisement was issued for the academic year 1985 86.
The initial appointment of the Ist respondent for the academic year 1983 84 and her continuation for the subsequent academic years, viz., 1984 85 and 1985 86 was thus in breach of the Government resolutions and the University direction and, therefore, illegal.
Similarly, since the appointment of the 5th respondent was made without following the procedure prior to dereservation, viz., three advertisements repeated every year for all the three academic years for which the post was to be reserved, his appointment to the post, as if the post stood legally dereserved, was also illegal since the post could not have been dereserved to make it available for a non backward class candidate.[294B E] 4.
Even assuming that her initial appointment and subsequent continuation of service was valid, the First Respondent would not be entitled to the benefit of the University direction of March 11, 1987 because her entitlement to the vacation salary does not extend her period of employment up to the end of the vacation.
That is a perquisite which is conferred on every teacher who has served during the academic year.
It has no connection with the continuation of the employment since even those teachers whose services are validly terminated before the beginning of the vacation period are given the benefit of the salary of the vacation period.
[295E F] 285 5.
The appellant Trust shall advertise the post three times sufficiently in advance and in any case within six months from the close of the present academic year, viz., 1990 1991 as a post reserved for the backward class candidate, and if no application is received from a suitable backward class candidate, the post will be deemed to have been dereserved.
The Trust will then proceed to fill in the same by a candidate belonging to non backward classes.
This fact may be made clear in all the three advertisements.
The 5th respondent will be entitled to apply for the post notwithstanding the fact that he has become overaged.
If he is selected on the basis of his other qualifications, the Selection Committee shall relax in his favour the condition with regard to the maximum age.
If he is appointed to the post, his appointment will be a fresh one and his past service will not count for the probation period.
The Trust shall constitute a proper Selection Committee according to the rules.
[296D F] 6.
To overcome the hardship to the students, the 5th respondent may be permitted to teach as a purely temporary teacher till the process is completed for the academic year 1991 92.
[297C]
|
Civil Appeal No.951 of 1977.
From the Judgment and Order dated 29.7.1976 of the Madras High Court in S.A. No.89 of 1972.
A.T.M. Sampath and P.N.Ramalingam for the Appellant.
S.Balakrishnan and S.Prasad for the Respondent.
The Judgment of the Court was delivered by THOMMEN, J.
The appellant is the defendant in a suit insti 392 tuted by the respondent to set aside a transfer of property made by the guardian of a minor and for recovery of possession of the property.
The suit was decreed, and the decree was confirmed by the first appellate court as well as by the High Court.
The plaintiff respondent purchased the suit property from an ex minor within three years after the minor attained majority.
During his minority, the property was sold by his father as his natural guardian to a person from whom the present appellant purchased the property.
All the courts found that the guardian had not obtained the permission of the Court for the sale of the property, as required by section 8 of the Hindu Minority & Guardianship Act, 1956 ("the Guardianship Act") and that the sale of the property was not for legal necessity.
Dismissing the second appeal, the High Court held that the suit was rightly instituted by the respondent as a transferee from the ex minor within three years after the minor attained majority and that the contention of the defendant that the suit by a transferee from the ex minor was hit by section 6(e) of the was unsustainable.
The only question which arises in the present appeal, as it did before the High Court, is (to quote the words of the High Court) "Whether a transferee from a minor after he attained majority, can file a suit to set aside the alienation made by the minor 's guardian or the said right is one to be exercised only by the minor?".
The relevant facts are that the suit property belonged to one Veerammal.
She had a daughter by name Kaliammal.
Veerammal died shortly after she purchased the property in 1948.
She left behind her husband Kandayya and their duaghter Kaliammal.
Subsequently, Kandayya married a second time when his daughter Kaliammal was a minor.
She thereupon left her father 's house and resided with her maternal grand father who protected and maintained her.
During her minority, Kandayya sold the property on 29.10.1959 to Jainulavudeen.
On 25.4.1966, Jainulavudeen in turn sold the property to the defendant appellant.
Subsequently, on 26.5.1966 the plaintiff obtained a deed of sale of the suit property in his favour from Kaliammal who had by then attained majority.
The Plaintiff thereafter instituted the present suit (O.S. No. 491 of 1968) against the appellant to set aside the transfer of property made by Kandayya and for recovery of its possession.
393 The question is whether the respondent in his capacity as a transferee from the ex minor was competent to bring a suit to set aside the sale effected by the minor 's guardian.
It is no longer disputed that the suit was brought within three years after the minor attained majority.
Nor is it any longer contended that the father of the minor, as her natural guardian, had obtained the permission of the Court or that the sale effected by him was one for legal necessity.
These two vital points have been concurrently found against the appellant.
The only contention which Mr. Sampath, appearing for the appellant, is in a position to urge is as regards the question whether the suit is hit by section 6(e) of the T.P. Act.
Counsel says that all that the ex minor was in a position to transfer, was her mere right to sue to set aside the sale and recover possession of the property transferred by her father as her natural guardian.
The property itself had been transferred by the father prior to its sale by the ex minor.
The minor had, therefore, no property to sell, except a right to set aside the sale.
Accordingly, whatever transfer that was effected by the minor in favour of the plaintiff was nothing more than a mere right to sue and such transfer was invalid by reason of section 6(e) of the T.P. Act.
Mr. Balakrishnan, appearing for the respondent plaintiff, contends that the ex minor was fully competent to bring a suit to set aside the sale within a period of three years after attaining majority and any person claiming under her is equally competent to institute action for the same purpose.
He refers to the provisions of section 8(3) of the Guardianship Act.
He contends that a suit to set aside a sale is not for the enforcement of any personal right, but a right in property, and is, therefore, not hit by section 6(e) of the T.P. Act.
In any view, counsel says, section 8(3) of the Guardianship Act sepcifically allows such a suit to be brought by a person claiming under a minor and, therefore, such a statutory right specially granted by an enactment dealing with the protection of the minor cannot be defeated by the general provisions of an earlier enactment.
The two provisions, counsel says, can be read harmoniously so as to avoid an artificial conflict.
What the Guardianship Act intends to protect is the right of a person claiming under a minor to sue for setting aside the sale of property sold otherwise than as permitted by section 8 of the Act.
On the other hand, the T.P. Act only prohibits suits in the the nature of champerty and maintenance based on bare or naked right of litigation.
The general provision contained in section 6(e) of the T.P. Act does not derogate from the special protection of the minor 's interest and the interest of a person claiming under him, as afforded by the Guardianship Act, which is addressed to a specific problem, In any view, counsel says a sale by the guardian 394 otherwise than as permitted by section 8 is void and is, therefore, incapable of passing a title.
For all these reasons, Mr. Balakrishna submits that the suit was competent and was rightly decreed on the facts found and the appeal by the defendant has no merits.
As concurrently found by the courts below, the sale effected by the guardian during the minority of his daughter was not in compliance with the provisions of section 18(i) of the Guardianship Act.
The property was transferred by him without obtaining the previous permission of the Court and the transfer was not for the benefit of the minor.
Such a sale by the minor 's father who is his natural guardian is, unlike in the case of transfer by a de facto guardian (Section 11), not a void sale, but only a voidable sale.
Such a sale until set aside is sufficiently effective to pass title, but being a voidable sale, what the buyer has obtained is a defeasible title which is liable to be set aside at the instance of the person entitled to impeach it.
Section 8(3) of the Guardianship Act says: "Any disposal of immovable property by a natural guardian, in contravention of sub section (1) or sub section (2), is voidable at the instance of the minor or any person claiming under him." (emphasis supplied) The effect of this sub section is that any disposal of immovable property by a natural guardian otherwise than for the benefit of the minor or without obtaining the previous permission of the Court is voidable.
A person entitled to avoid such a sale is either the minor or any person claiming under him.
This means that either the minor, or his legal representative in the event of his death, or his successor in interest claiming under him by reason of transfer inter vivos, must bring action within the period prescribed for such a suit, i.e., three years from the date on which the minor died or attained majority, as the case may be.
In the present case, the suit was brought, as found by the courts below, within three years after the minor attained majority.
Mr. Sampath, however, contends that a person claiming under a minor, referred to in section 8(3), can only be a legal representative of a deceased minor and not a person succeeding to the interests of the minor by reason of transfer inter vivos.
He refers to the decisions in Jhaverbhai Hathibhai Patel vs Kabhai Bechar Patel & Ors, ; Mon Mohan Bhattacharjee & Ors.
vs Bidhu Bhusan Dutta & Ors., ; Palani Goundan & Anr.
vs Vanjiakkal & 395 Anr., ; Premprakash Surajmal vs Maharashtra Revenue Tribunal, Nagpur & Ors., AIR 1969 Bom.361 and Ghanshyam Dass vs Dr. Shiva Shankar Lal & Ors., [1980] All.
Law Journal 130 and other cases in which certain High Courts have taken the view that the right of the minor is a personal right and it cannot be transferred otherwise than by inheritence.
The "person claiming under him" mentioned under section 8(3) of the Guardianship Act, counsel says, can only be a representative and not a purchaser or transferee inter vivos.
He refers to Article 60 of the and submits that the provision refers only to a legal representative and not any other successor.
In Jhaverbhai Hathibhai Patel vs Kabhai Bechar Patel & Ors.
, , it was held: "what was assigned by the minor to the plaintiff in that suit was not the property in question but his right to sue for it, and if he could establish his allegation, to have the sale avoided, this I think was no more than a right of suit, and if I am correct such a transfer is forbidden by section 6, Cl.
(e), T.P. Act.
" Similar reasoning was adopted in the other decisions cited by Mr. Sampath on the point.
The rationale of these decisions is that the right to impeach a sale effected by the guradian is a personal right vested in the minor and it is not transferable inter vivos.
The expression "person claiming under him", according to this line of reasoning, must, therefore, be understood as a legal representative and not an assignee.
On the other hand, a Division Bench of the Madras High Court in P. Kamaraju vs C. Gunnayya & Ors., AIR 1924 Madras 322 held that the right of the minor was not a bare right to sue and it was an assignable right.
The High Court held: ".
.By selling the property to the plaintiff on the footing that the sale by the mother was not binding on him he has chosen to avoid it, and the result of it is that from his point of view he has got a complete title.
The title no doubt will only be effective if the Court ultimately finds that the sale by the mother is not binding on him.
But contingent on that event he has got a complete title and this title is not a bare right to sue and is, therfore, assignable. . " 396 In Palaniappa Goundan vs Nallappa Goundan & Ors., AIR 1951 Madras 817, Viswanatha Sastri, J. observed: "Where an ex minor transfers property unauthorisedly sold by his guardian during his minority he transfers not a mere right to use but his interest in the property, though a suit may be necessary to avoid the transfer by the guardian & recover possession of the property from his alienee.
Conversely, the liability of the transferee from the guardian is not a liability to pay damages for the unauthorised act of the guardian, but is a liability to restore the property to the rightful owner or his transferee".
Similar view was expressed in Karnam Nagabhushana Rao vs Karnam Gowramma & Ors., [1968] 2 Andhra Weekly Reporter 57.
These decisions on which reliance was placed by the Madras High Court in the impugned judgment are to the effect that the right of the minor is not a bare or naked right to sue but a right in property which is assignable.
In Halsbury 's Laws of England, 4th edn.
, Vol. 6, paragraphs 86 87 at pages 49 50, this is what is stated "A bare right of litigation, such as a mere right to damages for a wrongful act, is not assignable, on the principle that the law will not recognise any transaction savouring of maintenance or champerty.
By way of exception to the rule stated in the previous paragraph there is nothing unlawful in the purchase of property which the purchaser can only enjoy by defeating existing adverse claims, or in the assignment (for example by mortgage) of property, being the fruits of litigation.
In every case it is a question whether the purchaser 's real object was to acquire an interest in the property, or merely to acquire a right to bring an action, either alone or jointly with the vendor . ".
In the instant case, on the facts found, the transfer of the property made by the guardian was a voidable transaction and it was, therefore, open to the minor to challenge it and seek recovery of possession.
Such a right of the minor is a right or interest in property 397 which he himself or "any person claiming under him" may enforce by instituting a suit [Section 8(3) of the Guardianship Act].
"Any person claiming under him" must necessarily include a purchaser.
Section 8(3) confers a right of suit in the special circumstances postulated in that provision.
The object of the Act being the protection of the minor, the legislature has thought it fit to confer a right of suit in certain circumstances not only on the minor, but also on a person to whom the minor has transferred his rights.
The right transferred is an interest in property which is capable of enforcement at the instance of the transferee as it was at the instance of the ex minor prior to the transfer.
Such a provision, indeed specially for the protection of the interests of the minor, must be read in harmony and consistently with the general provisions contained in section 6 of the T.P. Act.
[See The J.K. Cotton Spinning & Weaving Mills Co. Ltd. vs The State of Uttar Pradesh & Ors., ; , 194 and Ashoka Marketing Ltd. & Anr.
vs Punjab National Bank & Ors., [1990] 3 JT SC 417, 439].
The transfer made by the father during his son 's minority was voidable at the instance of his son who was the real owner, and any person purchasing such property from the natural guardian obtained only a defeasible title.
The minor retained a right in the property to defeat existing adverse claims, and such right is an assignable right.
We are in complete agreement with what has been stated on the point in Palaniappa Goundan vs Nallappa Goundan & Ors., AIR 1951 Madras 817 and in P. Kamaraju vs C. Gunnayya & Ors., AIR 1924 Madras 322.
We do not agree with the contrary view expressed on the point in Jhaverbhai Hathibhai Patel vs Kabhai Bechar Patel & Ors., ; Mon Mohan Battacharjee & Ors.
vs Bidhu Bhushan Dutta & Ors., and Palani Goundan & Anr.
vs Vanjiakkal & Anr., A construction which is unduly restrictive of the statutory provisions intended for the protection of the interest of the minor must be avoided.
This is all the more so in view of section 5(b) of the Guardianship Act which says.
Save as otherwise expressly provided in this Act (a) . . . . . . . . (b) any other law in force immediately before the com 398 mencement of this Act shall cease to have effect in so far as it is inconsistent with any of the provisions contained in this Act.
" For the reasons stated by us, we see no merit in the challenge against the judgment under appeal.
The appeal is accordingly dismissed.
We do no, however, make any order as to costs.
V.P.R. Appeal dismissed.
| The appellant purchased the suit property of the minor from a person, to whom the same was sold by the father, the natural guardian, whereas the respondent purchased the suit property from the minor within three years on his attaining majority.
The respondent plaintiff instituted a suit against the appellant defendant, to set aside the transfer of property made by the natural guardian and for recovery of possession of property.
The suit was decreed and the decree was confirmed by the appellate Court as well as by the High Court.
Dismissing the second appeal, the High Court held that the suit instituted bythe respondent as a transferee from the ex minor within three years after the minor attained majority was not hit by section 6(e) of the , against which the present appeal preferred by the appellant defendant.
The appellant contended that the suit was hit by section 6(e) of the , as all that the ex minor was in a position to transfer was the mere right to sue to set aside the sale and recover possession of the property transferred by the natural guardian; and 390 that a person claiming under a minor, referred to in section 8(3) of the Hindu Minority and Guardianship Act, 1956 can only be a legal representative of a deceased minor and not a person succeeding to the interest of the minor by reason of transfer inter vivos.
The contentions of the respondent were that the ex minor was competent to bring a suit to set aside the sale within a period of three years of his attaining majority and any person claiming under the minor was equally competent to institute action for the same purpose; that the suit to set aside a sale was not for the enforcement of any personal right, but a right in property and the suit was not hit by Section 6(e) of the T.P.Act; and that the provisions contained in Section 6 of the T.P. Act and Section 8 of the Guardianship Act were to be read together.
On the question, whether the respondent in his capacity as a transferee from the ex minor was competent to bring a suit to set aside the sale effected by the minor 's guardian, who had sold the property without obtaining the permission of the Court as required under Section 8 of the Hindu Minority and Guardianship Act 1956 and without any legal necessity.
Dismissing the appeal of the appellant defendant this Court, HELD: 1.
In the instant case, on the facts found, the transfer of the property made by the guardian was a voidable transaction and it was, therefore, open to the minor to challenge it and seek recovery of possession.
Such a right of the minor is a right or interest in property which he himself or "any person claiming under him" may enforce by instituting a suit (Section 8(3) of the Guardianship Act).
"Any person claiming under him" must necessarily include a purchaser.
[396G 397A] 2.
Section 8(3) confers a right of suit in the special circumstances postulated therein.
The object of the Act being the protection of the minor, the legislature has though it fit to confer a right of suit in certain circumstances not only on the minor, but also on a person to whom the minor has transferred his rights.[397A B] 3.
The right transferred is an interest in property which is capable of enforcement at the instance of the transferee as it was at the instance of the ex minor prior to the transfer.
Such a provision intended specially for the protection of the interests of the minor, must be read in harmony and consistently with the general provisions con 391 tained in section 6 of the T.P. Act.
[397B C].
A construction which is unduly restrictive of the statory provisions intended for the protections of the interests of the minor must be avoided.
[397F G] 5.
The transfer made by the father during his son 's minority was voidable at the instance of his son who was the real owner, and any person purchasing such property from the natural guardian obtained only a defeasible title.
The minor retained a right in the property to defeat existing adverse claims, and such right is an assignable right.
[397D E] The J.K.Cotton Spinning & Weaving Mills Co.Ltd.
vs The State of Uttar Pradesh & Ors., [1961] 3 S.C.R.185, 194 and Ashoka Marketing Ltd. & Anr.
vs Punjab National Bank & Ors., , 439, followed.
Palaniappa Goundan vs Nallappa Goundan & Ors., AIR 1951 Madras 817 and P.Kamaraju vs C.Gunnayya & Ors., AIR 1924 Madras 322, approved.
Jhaverbhai Hathibhai Patel vs Kabhai Bechar Patel & Ors., AIR 1933 Bom.42; Mon Mohan Battacharjee & Ors.
vs Bidhu Bhusan Dutta & Ors., and Palani Goundan & Anr.
vs Vanjiakkal & Anr., [1956] I.L.R. Mad.1062, over ruled.
Preprakash Surajmal vs Maharashtra Revenue Tribunal.
Nagpur &Ors., A.I.R. 1969 Bom.361; and Ghanshyam Dass vs Dr.
Shiva Shankar Lal & Ors., [1980] All Law Journal 130, referred to.
|
ivil Appeal No. 1824 of 1991.
From the Judgment and Order dated 14.5.1990 of the Orissa High Court in O.J.C. No. 4426 of 1989.
401 Shanti Bhushan and Prashant Bhushan for the Appellant.
Gobind Das, S.B. Upadhyay, Harish Salve, Ms. Kirti Misra and S.R. Grover for the Respondents.
The Judgment of the Court was delivered by SAWANT, J.
Leave granted.
The only question which falls for consideration in the present case is what is the meaning of "Implementation Machinery" within the meaning of the Code of Discipline (hereinafter referred to as the "Code") ratified by all Central Employers ' and Workers ' Organisations at the 16th session of the Indian Labour Conference held in May 1958 and which came into force from June 1, 1958.
The question assumes importance in the present case because the High Court by the impugned decision has held that since the appellant Union had addressed its application for recognition not to the Implementation Machinery but to the Implementation Officer, the same was not properly made and the Implementation Officer had no authority to initiate the process of recognition.
The admitted facts are that the appellant Rourkela Sramik Sangh had addressed a letter on October 9, 1989 to the Implementation and Evaluation Officer cum Labour Comissionner Orissa, Cuttack intimating him that as per the Code it had called upon the Rourkela Steel Plant to recognise it as the sole bargaining agent in the Plant, but that the Plant had not replied to the same.
The appellant in the said letter had further requested the Labour Commissioner to pass orders for immediate verification of the membership of all the trade unions operating in the said Plant and to recommend for recognition, the Union having majority of the membership.
On receipt of this request, the Labour Commissioner as the Implementation and Evaluation Officer authorised the Deputy Labour Commissioner on December 5, 1989 to carry out the process of verification of the membership of the registered trade unions.
In pursuance of the same, the Deputy Labour Commissioner passed an order on December 14, 1989 calling upon the different trade unions to produce the necessary records within 10 days of the receipt of the notice.
These orders passed by the Labour Commissioner and Deputy Labour Commissioner were challenged by the Ist respondent Rourkela Mazdoor Sabha which is a rival union in the Plant by way of a Writ Petition being OJC No. 4426 of 1989 in the High Court of Orissa.
At the same time, the appellant 402 Union filed a Writ Petition being OJC No. 361 of 1990 seeking a direction to the Labour Commissioner, and the Deputy Labour Commissioner to complete the verification of the membership of the Unions and to fix a time limit to complete the process and recognition and for ancillary reliefs.
Both the writ petitions were heard together by a Division Bench of the High Court and by its impuged common judgment, the Court was pleased to allow the Ist respondent 's petition and dismiss the appellant 's petition.
The decision of the Court was based only on the finding that the Implementation and Evaluation Officer was not the "Implementation Machinery" under the Code and the Implementation Officer had no authority to process the application for recognition.
The relevant provisions of the Code are as follows: Section II of the Code deals with "Implementation Machinery" and is headed as such.
It begins as follows: "2.
To implement the Code of Discipline, labour enactments, awards and agreements, a separate machinery has been set up at the Centre and in all States.
This machinery comprises: (a) implementation units in Labour Departments, and (b) tripartite implementation committees at the Central, State and local levels.
" Thereafter it proceeds to deal with Implementation Units and states as follows: "(i) Implementation Units: 3.
A Central Implementation and Evaluation Division has been set up in the Ministry of Labour and Employment under the charge of a Joint Secretary.
In the State also, Implementation Units have been set up under the charge of either a whole time officer of the Labour Department or of the State Labour Commissioners.
According to the recommendations of the Labour Ministers ' Conference held in January, 1960 the Implementation Officer in each State should, as far as possible, he whole time and of sufficient seniority.
The following functions have been assigned to 403 Implementation Units: (1) to ensure Implementation of the Code of Discipline, Code of Conduct, labour enactments, awards, agreements, etc., with a view to reducing at the source the main cause of industrial strife; (2) to supplement the work of the Industrial Relations Machinery in taking preventive action where disputes are brewing and in settling long pending disputes which could not be settled otherwise; (3) to maintain liaison with Central, State or local units, as the case may be, to ensure effective working of the implementation machinery; (4) to arrange meetings of Implementation Committees and to function as their Secretariat; (5) to bring about out of court settlement of cases pending in High Courts and the Supreme Court; (6) to ensure that cases are screened by the Screening Committees set up by the Central Employers ' and Workers ' Organisations before appeals are filed in higher courts; (7) to evaluate; (a) major strikes, lock outs and disputes in order to fix responsibility for them, and (b) the working of important Labour legislations, awards, policies, decisions, etc.
in order to see how far they have produced the results which they were intended to produce and suggest measures to improve them.
(8) to collect and maintain necessary statistics regarding implementation of the Code of Discipline, labour enactments awards etc.
X X X X X X X X X X X It then deals with Implementation Committees and states as follows: 404 "(iii) Implementation Committees: 6.
The Implementation Committees at the Centre and in the States represent both Central Employers ' and Workers ' Organisations.
The Central Implementation and Evaluation Committee consists of an equal number of employers ' and workers ' representatives four each from the Central employers ' Organisations.
They are nominated by the organisations to which they belong and not by Government .
State/Administration Implementation Committees are also required to be constituted in consultation with the Central Employers ' and Workers ' Organisations wherever they have affiliates in the States/Territories concerned.
These Committees are presided over as far as possible by respective Labour Ministers.
At the local level, the Committees comprise an equal number of representatives of employers and workers in the area and are presided over by an officer of the Labour Department of by a prominent person in the region.
The functions assigned to Implementation Committees by the Standing Labour Committee in October, 1957 and other Committees are as follows: (1) to examine the extent of implementation of agreements, awards and settlements and to advise the parties which are anxious to implement an award but are unable to do so, as to how the difficulties in implementation could be overcome.
(2) to fix responsibility for violations of the Code in cases brought to its notice by the Implementation Unit or in those enquired into by it or a sub committee appointed by it.
In doing so, the Committee may hear the parties concerned if considered necessary.
(3) To consider cases for out of court settlement with the consent of the parties, screening of cases of industrial disputes before appeals are filed, etc.
that may be brought to its notice by the Implementation Unit or such other cases that the Committee may desire, to bring about harmonious labour management relations.
405 (4) to review periodically the working of the Code in their respective spheres.
(5) to maintain a two way exchange of experience between the Committees at the lowest level and the Central Committee.
At points of importance arising at any level should be given wide circulation.
" The Code further assigns the Implementation Units among others the duty to provide the secretariat for the Implementation Committees and to ensure that their decisions are implemented promptly.
We have also seen from the enumeration of the functions of the Implementation Units above, that the Units have to arrange meetings of the Implementation Committees and to function as their secretariat.
Section IV of the Code provides for "Grievance Procedure".
It states, among other things, that it is the responsibility of the Central and State/Administration Implementation Units to ensure that a grievance procedure is set up by every management in consultation with their workers.
Section V of the Code deals with Recognition of Unions and states as follows: "11.
Except in those States where the procedure to conferrecognition on unions is governed by a statute the conditions and procedure for recognitions of unions are governed by the provisions of the Code of Discipline.
It is the responsibility of Implementation Units to ensure that recognition is granted to unions by managements wherever they satisfy the prescribed criteria.
The procedure to be followed for this purpose is at Appendix IV.
For the sake of uniformity the State Implementation Units are requested to adopt it." Appendix IV which is referred to above is headed as follows: "PROCEDURE FOR VERIFICATION OF MEMBERSHIP OF UNIONS FOR THE PURPOSE OF RECOGNITION UNDER THE CODE OF DISCIPLINE" It is not necessary to set out the entire procedure stated in the said Appendix.
A reference to only first who clauses and clause (10) of the 406 said procedure would suffice for our purpose.
They state follows: "(1) On receipt of a representation from a union for recognition under the Code of Discipline the Central/State Implementation Machinery will first ascertain: (a) the names of unions functioning in the establishment together with their number and date of registration by reference to the Registrar of Trade Unions concerned; (b) whether any of the unions functioning in the establishment was responsible for an established breach of the Code during the past one year.
(By an `established breach of the Code ' is meant a breach reported to and on enquiry established by the Implementation Machinery of the State or the Centre), (c) whether the existing recognised union, if any, has completed a period of two years of recognition.
(2) After ascertaining the above facts, the Implementation Machinery at the Centre will request the Chief Labour Commissioner to arrange verification of membership of unions entitled to recognition under the Code.
In the States, either the Implementation Officer will carry out this verification or get it done through the State Labour Commissioner, depending on the practice in each State.
X X X X X X X X X X (10) The verification officer will report his findings to the Central/State Implementation machinery which in turn will communicate its decision to the management as well as to the unions.
In his report the verification officer will also indicate the total numbers of workers in the establishment and the percentage of the verified membership to it.
" We may also mention in this context that Annexure I to the Code lays down a criteria for recognition on unions.
It will thus be apparent from the aforesaid provisions of the Code that the "Implementation Machinery" envisaged by the Code consists of two separate Organisations viz., Implementation Units in 407 the respective Labour Departments, and Tripartite Implementation Committees at the Central, State and local levels.
Each of the Organisations has been assigned different functions and they are independent of each other while carrying out the same.
While the Central Implementation and Evaluation Division is set up in the Ministry of Labour and Employment under the charge of a Joint Secretary, the Implementation Units in the States are set up under the charge of a whole time officer of the Labour Department.
It is recommended that the Implementation Officer should be a whole time officer and of sufficient seniority as far as possible.
The Implementation Units have, among other things, been entrusted with the task of ensuring that every management sets up a grievance procedure in consultation with their workers and ensuring that recognition is granted to Unions by management wherever they satisfy the prescribed criteria by following the procedure laid down for the purpose in Apendix IV.
We have already pointed out that the prescribed criteria is laid down in annexure I of the Code.
Further pre conditions for recognition are laid down in clause (1) of Appendix IV.
Thus the constitutions of the Implementation Units and Implementation Committees are different and they function in different areas.
It appears that the High Court has basically been swayed by the fact that in clause (1) of the Appendix IV it is stated that on the receipt of the representation from unions for recognition, the Central/State "Implementation Machinery" will first ascertain the facts stated in sub clauses (a), (b) and (c) thereof and thereafter, if at the Centre the "Implementation Machinery" will require the Chief Labour Commissioner to arrange the verification of membership of unions entitled to recognition and if in the States either the Implementation Officer will carry out the verification or get it done through the State Labour Commissioner depending upon the practice obtaining in each State.
The High Court also seems to have been influenced by the provisions of clause (10) of the said Appendix which requires the Verification Officer to report his findings on membership to the Centre/State "Implementation Machinery".
The High Court has obviously mistaken the whole for the part.
As we have pointed out earlier, although Section II of the Code is headed "Implementation Machinery" the "Implementation Machinery" consists of two separate Organisations, viz., Implementation Units and Tripartite Implementation Committees.
This is obvious from the language of Section II itself.
Their separate constitutions and functions also make this aspect clear.
What is further, to hold that the Implementation Unit in the respective Labour Department together with the respective Tripartite Implemen 408 tation Committee at the Central, State or Local Level would constitute the Implementation Machinery jointly and not each of them separately would run not only counter to the intention of the Code as is manifest from the clear language of Section II and their separate composition and functions, but would also be impracticable in working.
We have reproduced above the composition of the Implementation Committees at the Centre and the State Level.
These Committees consist of, at the central level, an equal number of employers ' and workers ' representation four each from the central Employers ' and Workers ' Organisations as nominated by the Organisations themselves.
At the State level, they are required to be constituted similarly and in consultation with the Central Employers ' and Workers ' Organisations wherever they have affiliates in the State concerned.
The Committees are further presided over as far as possible by respective Labour Ministers and even where it is not possible for Labour Minister to preside over them, they have to associate themselves as much as possible with the deliberation of the Committees.
At the local level, the Committees are similarly constituted of an equal number of representatives of the employers ' and Workers ' in the area and are presided over by an Officer of the Labour Department or by a prominent person in the region.
In a given case there may be more associations than one of employers and employees, and the Committees would thus consist of an unwieldy number.
To except such a Committee to carry out the work mentioned in Appendix IV is unrealistic.
That is why the Code itself has entrusted to the Implementation Units and not to the Implementation Committees the task of ensuring that recognition is granted to unions by management.
At the Centre, the Implementation Unit is kept in charge of a Joint Secretary and at the State level it is in charge of a whole time officer of the State Labour Department.
The record further shows that as early as on May 26, 1959, i.e., after about a year of the ratification of the Code, the Government of India issued a statement naming and designating Officers Incharge of Evaluation and Implementation work in all the States and further stated as follows: ".
.It is requested that all complaints of non implementation of Labour Laws, awards settlements, agreements, Code of Discipline etc., relating to undertakings in the State sphere may kindly be referred, in future, to State Implementation Officers concerned . .
" So far as the State of Orissa is concerned, the Implementation 409 Officer named by the Government of India is the Labour Commissioner of the State.
Since the Implementation Unit/Implementation Officer entrusted with the task of granting recognition to the Unions in the State of Orissa was the Labour Commissioner of the State, the appellant Sangh had rightly approached the Labour Commissioner for the purpose.
The High Court having committed the basic error of confusing the Implementation unit and Tripartite Implementation Committee together with the Implementation Machinery was misled into holding that the Implementation Unit/Implementation Officer was not the proper authority to initiate the procedure for recognition.
The High Court was further wrong in holding that clause (10) of Appendix IV which mentions that the Verification Office will report his findings to the Implementation Machinery conveyed the meaning that the Implementation Unit or the Labour Commissioner was not the "Implementation Machinery" but only a Verification Officer.
Since the State Labour Commissioner was named as the Implementation Officer who is none but the officer in charge of the Implementation Unit, the State Labour Commissioner as the Implementation Officer had an option either to carry out the verification of membership himself or entrust it to some other Officer like the Deputy Labour Commissioner as in the present case.
That was only an entrustment of a ministerial work.
The Deputy Labour Commissioner in the present case is the Verification Officer and under clause (10) of Appendix IV, he has to send his report to the Implementation Officer or Unit, i.e., the State Labour Commissioner, and the State Labour Commissioner will in turn communicate his decision as the State Implementation Machinery to the management as well as the Unions.
For the aforesaid reasons we are of the view that the High Court has erred in allowing Writ Petition No. 4426 of 1989 filed by the Ist respondent and dismissing the appllant 's Writ Petition being No. 361 of 1990.
We, therefore, set aside the decision of the High Court and direct the Deputy Labour Commissioner to complete the process of verification of membership and the Labour Commissioner to complete the proceedings of recognition as expeditiously as possible and preferably within four months from the receipt of this decision.
In the circumstances of the case, the parties will bear their own costs.
R.S.S. Appeal allowed.
| The appellant, Rourkela Sramik Sangh, is a trade union in the Rourkela Steel Plant.
It addressed a letter to the Implementation and Evaluation Officer cum Labour Commissioner, under the Code of Discipline 1958, whereby it sought recognition as the sole bargaining agent in the Rourkela Steel Plant.
For this purpose, it requrested the Labour Commissioner to pass orders for immediate verification of the membership of all the trade unions operating in the Plant and to recommend for recognition of the union having majority of the membership.
The Labour Commissioner as the Implementation and Evaluation Officer authorised the Deputy Labour Commissioner to carry out the process of verification of the membership of the registered trade unions, who in turn passed orders calling upon the different trade unions to produce the necessary records.
The Ist respondent Rourkela Mazdoor Sabha which is a rival union, challenged by way of a writ petition the orders passed by the Labour Commissioner and the Deputy Labour Commissioner.
At the same time, the appellant union filed a writ petition seeking a direction to the Labour Commissioner, and the Deputy Labour Commissioner, to complete the process of verification and recognition within a stipulated time.
The High Court by its common judgment allowed the Ist respondent 's petition and dismissed the appellant 's petition.
The High Court held that since the appellant Union had addressed its application for recognition not to the Implementation Machinery but to the Implementation Officer, the same was not properly made as the Implementation Officer had no authority to initiate the process of recognition.
The decision of the High Court was based on the finding that the Implementation and Evaluation Officer was not the "Implementation Machinery" within the meaning of the Code of Discipline.
400 Allowing the appeal and directing the Deputy Labour Commissioner and the Labour Commissioner to complete the proceedings of recognition as expeditiously as possible, this Court, HELD: (1) The "Implementation Machinery" envisaged in section 11 of the Code of Discipline consists of two separate Organisations, viz., Implementation Units in the respective Labour Departments, and Tripartite Implementation Committees at the Central, State and local levels.
Each of the Organisations has been assigned different functions and they are independent of each other while carrying out the same.
Thus, the constitutions of the Implementation units and Implementation Committee, are different and they function in different areas.
[406H 407D] (2) Since the Implementation Unit/Implementation Officer entrusted with the task of granting recognition to the union in the State of Orissa was the Labour Commissioner of the State, the appellant Sangh had rightly approached the Labour Commissioner for the purpose.
[409A] (3) Since the State Labour Commissioner was named as the Implementation Officer who is none but the officer in charge of the Implementation Unit, the State Labour Commissioner as the Implementation Officer has an option either to carry out the verification of membership himself or to entrust it to some other officer like the Deputy Labour Commissioner as in the present case.
That was only an entrustment of a ministerial work.
[409D] (4) The Deputy Labour Commissioner in the present case is the Verification Officer and under clause (10) of Appendix IV, he has to send his report to the Implementation Officer or Unit, i.e., the State Labour Commissioner, and the State Labour Commissioner will in turn communicate his decision as the State Implementation Machinery to the management as well as the Unions.
[409E] (5) The High Court was wrong in holding that the Implementation Unit or the Labour Commissioner was not the "Implementation Machinery" but only a Verification Officer.
[409C]
|
IVIL Appeal No.768 (NT) of 1977 etc.
From the judgment Order dated 9.10.1975 of the Madhya Pradesh High Court in M.C.C. No.144 of 1966.
V.A. Bobde, B.R.Aggarwala and U.A.Rana for the Appellant.
S.V.Deshpande and S.K.Agnihotri for the Respondents.
The Judgment of the Court was delivered by RANGANATH MISHRA, CJ.
These are appeals by special leave 252 and are directed against the separate decisions of the Madhya Pradesh High Court in references under the Madhya Pradesh Sales Tax Act.
Civil Appeal No.768/77 relates to the assessment period 1951 52, Civil Appeal 539/78 relates to 1950 51 and Civil Appeal 1038/78 to 1952 53.
The appellant is a manufacturer of cement in the factory located at Kymore in Madhya Pradesh.
Several cement manufacturing companies as also the appellant had entered into arrangement with the Cement Manufacturing Company of India Limited whereunder the Marketing Company was appointed as the sole and exclusive sales manager for the sale of cement manufactured by the manufacturing companies and the manufacturing companies had agreed not to sell directly or indirectly any of their cement to any person save and except through the Marketing Company.
The manufacturing companies were entitled to be paid a certain sum for every ton of cement supplied by them or at such other rate as might be decided upon by the Directors of the Marketing Company.
The Marketing Company had the authority to sell cement at such price or prices and upon such terms as it might in its sole discretion consider appropriate.
For the three periods referred to above the appellant had supplied cement manufactured by it to the Marketing Company and maintained at the assessment stage for the respective periods that these were covered by the Explanation to Article 286(1)(1) as it then stood and, therefore, the transactions were not exigible to sales tax in Madhya Pradesh.
This stand was negatived by the Assessing Officer, the First Appellate Authority and the Board of Revenue.
The Board in the statement of the case drawn up by it held that cement became a controlled commodity from 8th of August, 1942, and notwithstanding the expiry of the Defence of India Rules with effect from 30th of September, 1946, distribution of cement continued to be controlled even during the period.
The Marketing Company had its establishment at Nagpur then within Madhya Pradesh which received the orders of authorisations and managed the supply from the factory at Kymore.
The Board in its statement further stated: "The entire question in dispute hinges round the fact as to whether the sales in question are inter State in nature or should be regarded as intra State.
It is seen that the Cement Marketing Company is an independent organisation and is carrying on business as an independent entity.
It is also seen that what has actually been taxed are the sales effected by the appellant to the Cement Marketing Company 253 of India and not the sales made to the parties which obtained an authorisation from the Cement Controller.
This seems to be the crux of the matter.
" On this basis reliance was placed on the decision of this Court in the case of Rohtas Industries Limited vs State of Bihar, 12 STC 621 where, after analysing the terms of the contract between the manufacturer (appellant before the Supreme Court) and the Marketing Company, this Court held: "On a review of these terms of the agreement, it is manifest that the manufacturing companies had no control over the terms of the contract of sales by the Marketing Company and that the price at which cement was sold by the Marketing Company could not be controlled by the manufacturing companies; that the manufacturing companies were entitled, for ordinary cement, to be paid at the rate of Rs.24 per ton at works, or at such other rate as might be decided upon by the Directors of the Marketing Company, and in respect of special cement, at such additional rates as the Directors of the Marketing Company might determine; that sale by the Marketing Company was not for and on behalf of the manufacturing companies but for itself and the manufacturing companies had no control over the sales nor had they any concern with the persons to whom cement was sold.
In fine, the goods were supplied to the orders of the Marketing Company, which had the right, under the terms of the agreement, to sell on such terms as it thought fit and that the manufacturing companies had the right to receive only the price fixed by the Marketing Company.
The relationship in such cases can be regarded only as that of a seller and buyer and not of principal and agent.
" This Court in Rohtas Industries case on a detailed analysis of the terms of the contract came to hold that there was a sale between the manufacturer and the Marketing Company.
It is not in dispute that the agreement between the appellant and the Marketing Company in this case has the same terms as this Court considered in Rohtas Industries case.
It follows, therefore, that it must be held that there was a sale between the appellant and the Marketing Company.
The Marketing Company had its establishment at Nagpur within the State of Madhya Pradesh at that time.
There was, therefore, a 254 preceding local sale prior to the sales between the Marketing Company and the allottee of cement by the regulating authority.
This Court in Rohtas Industries further found that the transaction between the manufacturer and the Marketing Company had nothing to do with the Marketing Company 's sales to third parties.
There was no privity between the manufacturer and the ultimate consumer who was said to have been located outside the State of Madhya Pradesh.
The question for consideration is whether the sale that look place between the manufacturer and the Marketing Company can be taken to be covered by the Explanation.
The Explanation which was repealed by the Sixth Amendment of the Constitution in 1956 read thus: "For the purposes of sub clause (a), a sale or purchase shall be deemed to have taken place in the State in which the goods have actually been delivered as a direct result of such sale or purchase for the purpose of consumption in that State notwithstanding the fact that under the general law relating to sale of goods the property in the goods has by reason of such sale or purchase passed in another State." Rohtas Industries case was dealing with a period prior to the Constitution; therefore, without the Explanation.
The question for consideration thus is: does the presence of the Explanation make any difference? What has been found as a fact in the statement of the case is that there was preceding local sales complete in every respect within Madhya Pradesh by which title to the cement had passed from the appellant to the Marketing Company.
The concept of inter State sale as brought in by the Sixth Amendment or in the subsequent statute known as the Central Sales Tax Act was not in existence for the relevant period now under consideration.
The finding recorded by the authorities is that the delivery of the cement was not the direct result of such sale or purchase of the cement outside the State.
In the absence of such privity the Explanation is not attracted to the transactions.
An attempt was made by counsel to rely upon some of the later decisions of this Court where with reference to the provisions contained in the Central Sales Tax Act the law had been laid down.
It is unnecessary to refer to them in view of the finding recorded by the authorities that the cement in this case actually had not been delivered 255 as a direct result of such sale or purchase for the purpose of consumption outside the State.
That is a finding clinching enough and once that is taken as binding on this Court, the only conclusion that can follow is that the Explanation does not apply and the assessments are justified.
The ratio of Mohd. Serajuddin vs State of Orissa, is also against the appellant 's stand.
We accordingly dismiss the appeals and uphold the decisions of the High Court.
There would be no order for costs.
V.P.R. Appeals dismissed.
| The appellant, a manufacturer of cement, entered into an agreement with the Cement Manufacturing Company of India Limited, for sale of cement.
Under the agreement, the appellant was to sell its cement only through the marketing company, and certain sums would be paid for the cement supplied by the marketing company, which had the discretion to fix the sale price.
For the 1950 51, 1951 52 and 1952 53 periods when the appellant was assessed to sales tax for the supply of cement, it maintained at the assessment stage that the transactions were not exigible to sales tax as they were covered under the Explanation to Article 286(1)(a).
The first Appellate Authority and the Board of Revenue did not accept the stand of the appellant.
The Board of Revenue held that cement being a controlled commodity, distribution of cement continued to be controlled during the period, notwithstanding the expiry of the Defence of India Rules.
Relying on the decision of this Court in the case of Rohtas Industries Limited vs State of Bihar, 12 STC 621 the Board of Revenue held that the Cement Marketing Company was an independent organisation and was carrying on business as an independent entity and that what had actually been taxed were the sales effected by the appellant to the Cement marketing Company and not the sales made to the parties which obtained authorization from the Cement Controller.
After analyzing the terms of the contract between the manufacturer and the Marketing Company, this Court held in Rohtas Industries case that there was sale between the manufacturer and the Marketing Company.
251 Following its view taken in Rohtas Industries case as the present case had the same terms, which had been considered in the earlier case, and examining the question whether the sale that took place between the manufacturer and the Marketing Company could be taken to be covered by the Explanation to Article 286(1)(a), this Court, dismissing the appeals, HELD: 1.
There was preceding local sales complete in every respect within Madhya Pradesh by which title to the cement had passed from the appellant to the Marketing Company.
The concept of inter State sale as brought in by the Sixth Amendment or in the subsequent statute known as the Central Sales Tax Act was not in existence for the relevant period now under consideration.
The finding recorded by the authorities was that the delivery of the cement was not the direct result of such sale or purchase of the cement outside the State.
In the absence of such privity the Explanation is not attracted to the transactions.[254E G].
In view of the finding recorded by the authorities that the cement in this case actually had not been delivered as a direct result of such sale or purchase for the purpose of consumption outside the State, the only conclusion that can follow is that the Explanation does not apply and the assessments are justified.[254H 255A].
Rohtas Industries Limited vs State of Bihar, 12 STC 621, followed.
Mohmd.
Serajuddin vs State of Orissa, , distinguished.
|
N: Criminal Appeal No. 276 of 1991.
From the Judgment and Order dated 16.7.1990 of the Orissa High Court in Criminal Appeal No. 117 of 1990 And Death Reference No. 1 of 1990.
H.K. Puri (Amicus Curiae) for the Appellant.
A.D. Giri, Solicitor General and A.K. Panda for the Respondent.
The Judgment of the Court was delivered by K. JAYACHANDRA REDDY, J.
Leave granted.
This is a case of death sentence.
The fact that such a sentence is awarded even in the year 1990 would immediately suggest that the offence involved should be of a grave nature.
Yes, the offence is not only grave but heinous and inhuman.
A girl aged five years was a victim of rape and thereafter murder.
The sole appellant before us was tried, convicted and sentenced to death by the Sessions Court and confirmed by the High Court.
It is a 301 case depending entirely on circumstantial evidence and the obvious contention is that the circumstantial evidence is wholly insufficient to bring home the guilt to the accused.
No doubt the offence is a shocking one but the gravity of the offence cannot by itself overweigh as far as legal proof is concerned.
Invariable in such cases a person last seen with the victim, unless otherwise there are circumstances prima facie exonerating him, would be the prime suspect but in the ultimate judicial adjudication suspicion, howsoever strong, cannot be allowed to take the place of proof.
With that caution in mind we shall now proceed to examine the facts and circumstances as put forward and the various arguments advanced.
The deceased Disco alias Sukumari, a girl aged 5 years was the daughter of P. Ws 1 and 6, the father and the mother who were drummers by castes.
They belong to village Badachatra, an interior part of Mayurbhanj District.
They had three children and the deceased was the eldest.
In the year 1988 during Kalipuja time the accused who was the resident of Tulsibani village about one kilometre away, came to the house of P.Ws 1 and 6.
He named their newly born daughter.
He took his meals in their house and went away saying that he would come with the new dresses for the newly born daughter.
Next day i.e. on 9.11.88 he came to their house in the morning with new dresses.
He told the parents that he would take the deceased with him to Bombay Chhak to get new dresses for the other two children.
He took his lunch and went with deceased towards Bombay Chhak.
Sometime after his departure P.W 6 told her husband P.W.1 to proceed to Bombay Chhak as the deceased might be crying.
Accordingly P.W. 1 accompanied by one Sambhu proceeded towards that Chhak.
On the way they met one Babuli and asked him whether he had seen the accused and the deceased to which he replied in the negative.
P.W. 1 came back to the village and sat in the shop of P.W. 2 who informed that he had seen the accused going towards village Tulsibani alongwith the deceased.
P.W. 1 and Sambhu then went to that village but could not find them there.
Therefore they went to Jharpokharia Police Station and gave a report to the Officer in charge P.W.11 stating that the deceased.
P.W. 1 again went to the Tulshibani Village where a person informed him that he has seen the accused going towards his house.
P.W. 1 went there and enquired the accused.
He told P.W. 1 that the deceased had gone back home but P.W. 1, caught hold of him but the accused squirmed away from his grip.
P.W. 1, however, again caught him and took him to his Village and according to P.W. 1 302 on being questioned the accused confessed to have raped and committed murder of the deceased.
The accused is alleged to have pointed the place where he had thrown the dead body, whereafter P.W. 1 and others proceeded in that direction.
P.W. 11 the Police Officer also came in a jeep and took the accused into custody, drew up F.I.R. and sent the same to the Police Station for registration of a case.
The accused is alleged to have led the Police party to the spot where the dead body was lying.
P.W. 11 found the deceased lying with injuries on her vagina and other parts.
He held the inquest in the presence of P.W. 4 and others and sent the dead body for post mortem.
P.W. 7 conducted the post mortem.
He noticed abrasions all over the body.
He also found one bruise on the left side of the forehead and a lacerated wound of 2.5 cm x 1 cm x muscle deep starting from the posterior angle of vagina along the perinium upto the anus.
On internal examination he found the following injuries. "(1) Soft tissues and muscles below the external injuries to the neck were contused with extra vassation of blood into the soft tissues.
(2) Heamatoma under the scalp corresponding to external injury No. 11.
(3) The hymen was torn and the floor of the vagina i.e., vaginal channel was lacerated.
This injury corresponds to external injury No. 15.
" The Doctor opined that all the injuries were antemortem and homicidal in nature and cause of death was due to asphyxia and shock as a result of strangulation and also due to injuries to the vagina.
He also opined that the injuries on the neck suggest that the deceased was strangulated by pressure of hands.
So far injury to the vagina is concerned, he was of the opinion that the same could have been caused by forcible penetration of a male organ.
The accused also was examined on 10.11.88 itself by another Doctor P.W 8 for some abrasions on his genital.
P.W. 8, however, categorically stated that on examining the accused he could not find any recent sign of sexual intercourse.
The prosecution relied on some blood stains which were found on his dhoti but the accused explained away by saying that they were caused by the bleeding of his gums.
The accused when examined under Section 313 pleaded not guilty.
He however, admitted that he went to the house of P.W. 1 but denied the rest of the case.
303 The trial court did not accept the P.W. 1, s evidence regarding the extra judicial confession alleged to have been made by the accused.
It held that nobody else has mentioned about this extrajudicial confession and at any rate it was supposed to have been made in the presence of the police.
We have also examined the evidence of P.W. 1 as well as the evidence of the other witnesses.
The trial court has rightly rejected this part of the prosecution case regarding the alleged extra judicial confession.
As a matter of fact we do not find anywhere mentioned that such a confession was made by the accused to P.W. 1 neither in the F.I.R. nor in the evidence of other witnesses who were also said to have been present when the accused was brought to the village by P.W. 1.
P.W. 6, who is no other than the wife of P.W. 1, did not even mention about it.
The trial court, however, relying on the other circumstances convicted the accused under Sections 302 and 376 I.P.C. and sentenced him to death subject to confirmation by the High Court and for seven years ' rigorous imprisonment for the offence of rape.
The sentences are directed to run concurrently.
The High Court confirmed the conviction and sentence awarded by the trial court.
As already mentioned this case rests purely on circumstantial evidence.
It is well settled that the circumstantial evidence in order to sustain the conviction must satisfy three conditions; 1) the circumstances from which an inference of guilt is sought to be drawn, must be cogently and firmly established; ii) those circumstances should be of a definite tendency unerringly pointing towards the guilt of the accused; iii) the circumstances, taken cumulatively, should form a chain so complete that there is no escape from the conclusion that within all human probability the crime was committed by the accused and none else, and it should also be incapable of explanation on any other hypothesis than that of the guilt of the accused.
In the leading case Hanumant and Another vs The State of Madhya Pradesh, it is also cautioned thus: "In dealing with circumstantial evidence there is always the danger that conjecture or suspicion may take the place of legal proof.
It is therefore right to remember that in cases where the evidence is of a circumstantial nature, the circumstances from which the conclusion of guilt is to be drawn should in the first instance be fully established and all the facts so established should be consistent only with the hypothesis of the guilt of the accused.
Again, the 304 circumstances should be of a conclusive nature and tendency, and they should be such as to exclude every hypothesis but the one proposed to be proved.
In other words, there must be a chain of evidence so far complete as not leave any reasonable ground for a conclusion consistent with the innocence of the accused and it must be such as to show that within all human probability the act must have been done by the accused.
" Mahajan, J., as he then was, has also aptly referred to a passage containing the warning addressed by Baron Alderson to the Jury in Reg vs Hodge, which is stated as under; "The mind was apt to take a pleasure in adapting circumstances to one another and even in straining them a little, if need be, to force them to form parts of one connected whole; and the more ingenious the mind of the individual, the more likely was it, considering such matter, to over reach and mislead itself, to supply some little link that is wanting, to take for granted some fact consistent with its previous theories and necessary to render them complete.
" In Dharam Das Wadhwani vs State of Uttar Pradesh, it was held that " unlike direct evidence the indirect light circumstances may throw may vary from suspicion to certitude and care must be taken to avoid subjective pitfalls of exaggerating a conjecture into a conviction. " In Jagta vs State of Haryana, ; it was held that "The circumstances that the accused could not give trustworthy explanation about the injuries on his person and about his being present on the scene of ;occurrence are hardly sufficient to warrant conviction.
" It may not be necessary to refer to other decisions of this Court except to bear in mind a caution that in cases depending largely upon circumstantial evidence there is always a danger that the conjecture or suspicion may take the place of legal proof and such suspicion however so strong cannot be allowed to take the place of proof.
The Court has to be watchful and ensure that conjectures and suspicions do not take the place of legal proof.
The Court must satisfy that the various circumstances in the chain of evidence should be established clearly and that the completed chain must be such as to rule out a reasonable likelihood of the innocence of the accused.
Bearing these principles in mind we shall now consider the reasoning of the courts below in coming to the conclusion that the accused along has committed the offence.
305 The trial court relied on the following circumstances: "(a) 'Last seen ' theory that the accused and the deceased were last seen together.
(b) Conduct of the accused that the accused attempted to flee away when he could be seen at his village by P.W.1; (c) False explanation the accused when questioned gave false explanation regarding the whereabout of the deceased; (d) Recovery of the dead body of the deceased on the showing of the accused That the accused pointed out the place where the dead body of the deceased was lying inside a paddy field; (e) Presence of injury on the genital as well as stains of blood on the wearing apparel and nailclippings of the accused.
" The evidence of P.Ws 1, 2 and 6 are relied upon in support of the first circumstance namely that the deceased was last seen in the company of the accused.
P.W. 1 the father and P.W. 6 the mother deposed that on the day of occurrence the accused came to their house and took the deceased towards Bombay Chhak to purchase new clothes.
The accused only admitted to the extent namely that he had been to their house and denied the rest of the prosecution case.
However, we shall accept the evidence of P.Ws 1 and 6 to the effect that the accused took the deceased on that day to Bombay Chhak.
But that by itself is not enough to conclude that the deceased was last seen in the company of the accused because even according to them on being enquired, the accused told them that he sent the girl back in a truck.
Even otherwise the distance between the two villages is not much.
P.W. 2 's evidence, however, is relied upon that the deceased was going in the company of accused.
P.W. 2 is also a native of the same village to which P.Ws 1 and 6 belong.
He deposed that on a Wednesday he had been to village pond to take his bath at about 12 noon and while returning she saw the accused going towards east with a minor girl aged about 5 years but P.W. 2 does not say that the deceased was in his company.
He, however, proceeded to depose that he found P.W. 1 searching for some one and thereupon P.W. 2 told him that he has seen the accused with a minor girl going towards the paddy field.
He admitted that did not know whose daughter was in the company of the accused.
In the cross 306 examination he further admitted that he did not talk to the accused.
No. doubt P.W. 2 's evidence, to some extent, corroborates the evidence of P.Ws 1 and 6 but unfortunately even at the stage of inquest this circumstance namely that the deceased was last seen in the company of the accused, was not noted.
We will advert to this aspect at a later stage.
The important and crucial circumstance heavily relied upon by the prosecution is the alleged recovery of the dead body of the deceased on showing of the accused and the accused pointed the place where the body of the deceased was lying.
For this again the prosecution relied on the evidence of lP.Ws 1 and 11.
Having carefully gone through the evidence of P.W. 1 we find that he has improved his version from stage to stage.
As already noted both the courts below were not prepared to place any reliance on his evidence regarding the extra judicial confession about which he made no mention at any earlier stage.
As far as the recovery of the body is concerned, P.W. 1 however deposed that he managed to catch hold of the accused and brought him to the village and that the police came in a jeep and took the accused into custody.
Then all of them went towards paddy field which had been pointed by the accused and on search they found the dead body.
P.W. 11 the Investigating Officer deposed at he went to village and found the accused to have been detained.
He therefor prepared the F.R.I. and sent the same for registration of the crime.
Then he arrested the accused and his evidence and his evidence thereafter to put in his own words reads as under: "The accused pointed out the place where the dead body of the deceased was lying and thereafter led me to the paddy field wherefrom I could recover the dead body of the deceased Disco.
As there were good number of persons present apprehending danger to the accused I sent him to the police station.
During course of investigation, I examined witnesses, seized the dhoti (M.O. iii),Shirt (M.O. iv) and this chadi marked M.O.VII from the accused under the seizure list already marked Ext.
The dead body of the deceased was lying in the paddy field where there were paddy plants which had been damaged and scattered.
I held inquest over the dead body of the deceased Disco in presence of witnesses under the inquest report already marked Ext.
I noticed INJURIES on the vagina and other parts of the body of the deceased.
After inquest I sent the dead body for P.M. examination through constables.
" 307 According to this evidence the accused is alleged to have taken P.W. 11 and others to the open paddy field where the dead body was lying.
It is only thereafter that the inquest report was drawn up.
However, P.W. 11 stated in his evidence that before going to the paddy field the F.I.R. exhibit P. 10 was drawn up by him.
Surprisingly we find a mention about the discovery of the body in the F.I.R. itself.
But the same is not found in the inquest.
There is not even a reference to the accused in the column No. 9 of the inquest report where the information of witness as to the cause of death has to be noticed.
We are aware that the purpose of inquest report is only to ascertain the cause of death but in a case of this nature there should have been atleast a mention in the inquest report as to how the body was discovered.
Apart from that usually a panchanama is prepared for such a discovery made under Section 27 of the Evidence Act but strangely in this case there is no such panchanama nor there is any other evidence of P.Ws 1 and 11.
P.W. 6 does not say anything about this aspect.
As a matter of fact the trial court has noted the discrepancies in the evidence of P.Ws 1 and 11 and it is observed as under: "The Investigating Officer, P.W. 11 has stated something more about the find of the dead body.
He speaks that the accused pointed out the place where the dead body of the deceased was lying and thereafter led him to the paddy field wherefrom the dead body of the deceased could be recovered.
Though this part of this evidence has not been supported by P.W. 1,but from the evidence of both P.Ws 1 and 11 coupled with the evidence of P.W.4 I am persuaded to hold that on the showing of the accused, the dead body of the deceased was recovered from a paddy field.
" We have perused the evidence of P.W. 4.
His evidence does not in any manner incriminate the accused.
P.W. 4 deposed that the dead body of the deceased was found lying in paddy field and that the police held inquest over the dead body in his presence and that the inquest report is P. 1 in which he put his signature as a witness.
Nothing more is stated by him.
He does not even refer to the presence of the accused at the place where the dead body was found or at the time of inquest, which was held also there.
P.W. 4 does not in any manner help the prosecution case so far as this circumstance is concerned.
If ready the body has been discovered at the instance of the accused there should have been discovered at the instance of the accused there should have been a panchanama and a mention about the same in the inquest report.
P.W. 11 categorically in his evidence has stated that after sending the F.I.R. the accused was questioned and the body was discovered there 308 after at the instance of the accused and the inquest was held over the dead body and P.W. 4 was a panch witness to the inquest and he also affixed his signature in the inquest report.
But as mentioned above P.W. 4 does not say anything about the accused being present anywhere near the place where the dead body was found nor there is a reference to the accused in the inquest report.
The only two remaining witnesses P.Ws 1 and 11 namely the father of the girl and the Investigating Officer respectively have contradicted each other.
That is the type of evidence regarding this crucial circumstance.
It is highly dangerous to accept the same and hold that the dead body was discovered at the instance of the accused.
Having given our careful consideration we are of the firm opinion that the prosecution has not established this circumstance conclusively.
On the other hand there is any amount of doubt and suspicion about the accused having shown the place of occurrence.
We may also point out at this stage that the circumstance that the deceased was last seen in the company of the accused was not mentioned in the inquest report.
Therefore the first circumstance also namely that the deceased was last seen in the company of the accused is not established beyond reasonable doubt.
However, when once it is held that the crucial circumstance namely the discovery of the body at the instance of the accused is not established, then the other circumstances are hardly sufficient to establish the guilt of the accused.
The courts below have also observed that the accused gave a false explanation.
According to the prosecution case the accused is supposed to have stated to P.Ws 1 and 6 that he sent away the deceased in a truck.
The courts below held that this explanation is false mainly on the surmise that a minor girl could not have come back on her own in a truck.
We are not convinced that on this surmise alone we can hold that the accused has given a false explanation.
It is not uncommon in villages for children to go about the field and walk short distances while coming back to the village.
In any event the accused had given an explanation that he sent the girl back to the village in a truck and the same cannot be held to be not plausible and therefore false.
Then the last circumstance relied upon by the courts below is the presence of some abrasions on the genital of the accused and presence of stains blood on the wearing apparels and nail clippings.
The prosecution wanted to show that because of the penetration the accused sustained the abrasions on his penis.
The Doctor, P.W. 8 who examined the accused has stated that he found only two pin head abrasion on the genital of the accused and on examination he opined that he could not find any recent sign of sexual intercourse and he also 309 added that there was no such sign of having intercourse within one hour of his examination.
However to a court question, P.W 8 stated that as a result of forcible sexual intercourse those abrasions can be possible.
We are unable to see as to how this evidence, in any manner, is helpful to the prosecution.
When P.W. 8 stated that he couldn 't find any sign of sexual intercourse atleast within one hour of his examination then it is only a mater of conjectures as to when the accused had any intercourse.
The accused is a man aged 57 years and it is not as if he was not used to sexual intercourse.
In any event the prosecution has not established that the accused had an intercourse on the day of the occurrence.
Then the presence of blood in the nail clippings and on the underpant does not also incriminate and do not connect the accused in any manner with the alleged offences.
The accused also had given an explanation namely that his gums were bleeding and in wiping out the same he got these blood stains.
Even otherwise having given our earnest consideration, we are not able to say that this last circumstance coupled with the circumstance of last seen in the company of the accused amount to legal proof of the guilt particularly when the crucial circumstance namely that the accused showed the dead body is held to be not established.
when such a main link goes, the chain gets snapped and the other circumstances cannot in any manner establish the guilt of the accused beyond all reasonable doubts.
It is at this juncture the Court has to be watchful and avoid the danger of allowing the suspicion to take the place of legal proof for sometimes unconsciously it may happen to be a short step between moral certainty and the legal proof.
At times it can be case of 'may be true '.
But there is a long mental distance between 'may be true ' and 'must be true ' and the same divides conjectures from sure conclusions.
The least that can be said in this case is that atleast there is a reasonable doubt about the guilt of the accused and the benefit of the same should go to him.
We are conscious that a grave and heinous crime has been committed but when there is ;no satisfactory proof of the guilt we have no other option but to give the benefit of doubt to the accused and we are constrained to do so in this case.
Accordingly, the appeal is allowed.
The conviction and sentence of the accused is set aside and he shall be set at liberty forthwith if not required in any other case.
T.N.A. Appeal allowed.
| The appellant was tried for rape and murder of a girl aged five years.
The entire evidence against him was circumstantial: (a) the accused and the deceased were last seen together; (b) false explanation given by the accused regarding the whereabouts of the deceased; (c) alleged recovery of the dead body of the deceased at the instance of the accused and (d) presence of abrasions on the genital of the accused as well as blood stains on his wearing apparels and nail clippings.
Relying on the circumstantial evidence the Trial Court convicted him under Sections 302 and 376 and sentenced him to death for the offence of murder and seven years rigorous imprisonment for the offence of rape.
The High Court confirmed the conviction and the sentence awarded by the Trial Court.
In appeal to this court it was contended on behalf of the appellant that the circumstantial evidence is wholly insufficient to bring home the guilt of the accused.
Allowing the appeal, this Court, HELD: 1.
The circumstantial evidence in order to sustain the conviction must satisfy three conditions; (1) the circumstances from which an inference of guilt is sought to be drawn, must be cogently and firmly established; (ii) those circumstances should be of a definite tendency nerringly pointing towards the guilt of the accused; (iii) the circumstances, taken cumulatively, should form a chain so complete that there is no escape from the conclusion that within all human probability the crime was committed by the accused and none else, and it should also be incapable of explanation on any other hypothesis than that of the guilt of the accused [303E F].
299 Hanumant and Anr.v.
The State of Madhya Pradesh, ; Reg vs Hodfe, [1838] 2 Lew.227; Dharam Das Wadhwani vs State of Uttar Pradesh, and Jagta vs State of Haryana, ; , referred to.
2.In cases depending largely upon circumstantial evidence there is always a danger that the conjecture or suspicion may take the place of legal proof and such suspicion however so strong cannot be allowed to take the place of proof.
The Court has to be watchful and ensure that conjectures and suspicions do not take the place of legal proof for sometimes unconsciously it may happen to be a short step between moral certainty and the legal proof.
At times it can be case of 'may be true.
But there is a long mental distance between 'may be true ' and 'must be true ' and the same divides conjectures from sure conclusions.
The Court must satisfy itself that the various circumstances in the chain of evidence should be established clearly and that the completed chain must be such as to rule out a reasonable likelihood of the innocence of the accused.
[304 G, 309E F] 3.In the instant case the circumstance that the deceased was last seen in the company of the accused is not established beyond reasonable doubt.
This circumstance was not mentioned in the Inquest Report prepared by the Investigating Officer.
Further the statement of the parents of the deceased that the accused took the deceased girl by itself is not enough to conclude that the deceased was last seen in the company of accused because even according to them on being inquired the accused told them that he had sent the girl back in a truck.
[308C, 305F] 3.1 The prosecution has not conclusively proved the crucial circumstance of the recovery of the dead body of the deceased girl at the instance of the accused.
No Panchnama was prepared for such a discovery under Section 27 of the Evidence Act and there is no mention in the Inquest Report as to how the body was discovered.
On the other hand there is any amount of doubt and suspicion about the accused having shown the place of occurrence.
Once it is held that the crucial circumstances namely the discovery of the body at the instance of the accused is not established, than the other circumstance are hardly sufficient to establish the guilt of the accused.
[308B C D, 306B, 307C] 3.2 The explanation given by the accused that he sent the girl back to the village in a truck cannot be held to be not plausible and therefore false because it is not uncommon in villages for children to go about the fields and walk short distance while coming back to the village.
[308E] 300 3.3 The prosecution has also not established that the accused had an intercourse on the day of the occurrence.
When the doctor who examined the accused stated that he could not find any sign of sexual intercourse atleast within one hour of his examination then it is only a matter of conjectures as to when the accused had any intercourse.
The presence of blood in the nail clippings and on the underpant does not also incriminate and do not connect the accused in any manner with the alleged offences.
The accused also had given an explanation namely that his gums were bleeding and in wiping out the same he got these blood stains.
Even otherwise this circumstance coupled with the circumstance of last seen in the company of the accused would ;not amount to legal proof of the guilt particularly when the crucial circumstance namely that the accused showed the dead body is held to be not established.
When such a main link goes, the chain gets snapped and the other circumstances cannot in any manner establish the guilt of the accused beyond all reasonable doubts.
Therefore there is a reasonable doubt about the guilt of the accused and the benefit of the same should go to him.
Accordingly the conviction and sentence of the accused is set aside.
[309B C, F G]
|
Civil Appeal No. 722 of 1978.
From the Judgment and Decree dated 11.4.1977 of the Madhya Pradesh High Court in Second Appeal No. 315 of 1970.
S.K.Gambhir for the Appellant.
S.S. Khanduja for the Respondent .
The Judgment of the Court was delivered by K.RAMASWAMY,J.
The facts in this appeal would lie in a short compass.
The appellant appointed the respondent as Lower Division Clerk on September 22, 1966 and put him on probation for a period of two years which expired on September 21, 1968.
On December 9, 1968, the appellant served him with one month 's notice terminating the services with effect from January 9, 1969.
Calling in question the order of termination, the respondent laid the suit for declaration that the termination without enquiry and an opportunity of being heard was violative of Rule 9A of the Madhya Pradesh Civil Service Classification Control & Appeal (Rules), 1966 with consequential declaration that he became a permanent employee of the corporation with cotiuity of service and arrears of salary.
The Trial Court dismissed the suit and on appeal it was confirmed.
The High Court in Second Appeal No. 315/70 by judgment and decree dated April 11, 1977 allowed the appeal and decreed the suit as prayed for.
On leave under article 136 the Appellant filed this appeal.
Shri S.k.
Gambhir, learned counsel for the appellant contended that the respondent being a probationer, acquires permanent status only on confirmation.
Before confirmation the appellant had exercised its power, in terms of the rules, and terminated the respondent 's service.
The High Court committed manifest error of law in its finding that on expiry of two years period of probation the respondent must be deemed to have been confirmed under Rule 14 of the Municipal Officers and Servants Recruitment Rules which no longer were in force.
He further contended that rule 8 of the Madhya Pradesh Government Servants ' General Conditions of Service Rules, 1961 for short 'the Rules ' expressly provides confirmation of probation as a condition precedent.
Notice was issued terminating the service before confirmation and so it is valid in law.
Shri S.S. Khanduja, learned counsel for the respondent contended that by operation of the resolution passed 324 by the Municipal Corporation under section 25 of the Central Provinces and Berar Municipality Act 1922 the Municipal Officers and Servants are governed by recruitment rules thereunder.
Rule 14 thereof, relied on by the High Court expressly provided to put an employee on probation for a period of two years subject to being confirmed.
At the end of the probationary period, if the probationer was found unfit, the Municipal Committee shall, if he was a direct recruit, to dispense with his service and if he has been recruited by tranfer, to revert to his original post.
On expiry of the period of two years, no action was taken by the Municipal Corporation.
Therefore, the respondent must be deemed to have been confirmed.
Thereafter the only power which the Corporation had was to terminate the service of the respondednt in accordance with Classification Control and Appeal Rules after conducting an enquiry and giving him reasonable opportunity that too for misconduct.
No such procedure was adopted.
Therefore, the impugned notice was illegal and the High Court was justified in granting the decree.
The first question is, which are the relevant rules that would be applicable to the respondent? Admittedly, the Municipal Council became a Municipal Corporation on or after August 26, 1967.
A resolution was passed making a draft bye law by a Municipal Council on November 11, 1960, exercising the power under section 178(3) of the Madhya Pradesh Municipal Act, 1922 and confirmed the same under section 25 (1) of the said Act, adopting Government Rules to regulate the conditions of service of officers and servants of Municipal Committee which provides thus: "The fundamental rules and the Civil Service regulations as amended from time to time in their applications to M.P., the M.P.Government Servants Conduct Rules 1959, as amended from time to time and the General Book Circulars of the Govt.
of M.P. as in force for the time being shall apply to the officers and servants of the M.C. in the same way as they apply to Govt.
Servants".
Thus, it is clear that the Fundamental Rules, Civil Service Regulations, Govt, Servants Conduct Rules and the General Book Circulars of the Government of Madhya Pradesh as amended from time to time, etc.
shall apply to the officers and servants of the Municipal Committee.
The Previous rules were thus superseded and were no longer in force.
Reliance on Rule 14 referred to above made by the High Court is, therefore, wrong.
Rule 8 of the Rules reads thus: 325 "Probation (1) A person appointed to a service or post by direct recruitment shall ordinarily be placed on probation for such period as may be prescribed.
(2) The appointing authority may, for sufficient reasons, extend the period of probation by a further period not exceeding one year.
Note A probationer whose period of probation is not extended under this Sub Rule but who has neither been confirmed nor discharged from service at the end of the period of probation shall be deemed to have been continued in service, subject to the condition of his service being terminable on the expiry of a notice of one calender month given in writing by either side.
(3) A probationer shall undergo such training and pass such departmental examinations during the period of his probation as may be prescribed.
(4) and (5) are not relevant, hence omitted.
(6) On the successful completion of probation and the passing of the prescribed departmental examinations, the probationer shall be confirmed in the services or post to which he has been appointed." Thus, it is clear from Rule 8 of the Rules that the procedure to place a direct recruit on probation for a prescribed period was provided.
The appointing authority would be entitled to place a direct recruit on probation for a specified period and for sufficient reasons may extend the period of probation to a further period not exceeding one year.
Under the note to sub rule (2) if the probationer is neither confirmed nor discharged from service at the end of the period of probation, he shall be deemed to have been continued in service as probationer subject to the condition of his service being terminated on the expiry of a notice of one calender month given in writing by either side.
As per sub rule (6) on passing the prescribed departmental examination and on successful completion of the period of probation, the probationer shall be confirmed in the service or post to which he has been appointed.
Then he becomes an approved probationer.
Therefore, after the expiry of the period of probation and before its confirmation, he would be deemed to have been continued in service 326 as probationer.
Confirmation of probation would be subject to satisfactory completion of the probation and to pass in the prescribed examinations.
Expiry of the period of probation, therefore, does not entitle him with a right to a deemed confirmation.
The rule contemplate to pass an express order of confirmation in that regard.
By issue of notice of one calender month in writing by either side, the tenure could be put to an end, which was done in this case.
In State of Punjab vs
Dharam Singh; , considering the effect of continuing a probationer in service after the period of probation was completed, the Constitution Bench held that there was no rule for the extension of probation after October 1, 1960 and it was not possible to presume the competent authority extended it beyond October 1, 1960.Thus in the above case there was no power to extend the probation in the rules beyond the specified period.
It was held that: "The initial period of probation of the respondents ended on October 1, 1958.
By allowing the respondents to continue in their posts thereafter without any express order of confirmation, the competent authority must be taken to have extended the period of probation upto October 1, 1960 by implication.
But under the proviso to Rule 6(3), the probationary period could not extend beyond October 1, 1960.
In view of the proviso to Rule 6(3), it is not possible to presume that the competent authority extended the probationary period after October 1, 1960, or that there after the respondents continued to hold their posts as probationers".
Accordingly it was held that the respondent therein was deemed to have been confirmed.
In Om Prakash Maurya vs U.P. Co op.
Sugar Factories Federation, Lucknow & Ors.
; this Court held that U.P. Co op.
Sugar Factories Federation Service Rules, 1976 made under the U.P. Co op.
Societies Act were in force.
Regulations 17 of 1975 Regulations does not permit continuance of an employee for a period of more than two years.
One year normally was the period of probation and further being extended to a period of one more year.
Rule 5 of 1976 Rules does not prescribe any limit on the extension of the probationary period.
In the light of the operation of those rules when the probationary period was prescribed on promotion to the post of Commercial Officers with a condition that his probationary period may be extended and he could be reverted to the post of Office Superinten 327 dent without any notice, this Court held that the stipulation for extension of probationary period in the appointment order must be considered in accordance with the proviso to regulation 17(1) which means that the probationary period could be extended for a period of one year more and the probationary period was further extended to one year during which period the service of the appellant was neither terminated nor was he reverted to his substantive post, instead he was allowed to continue.
On those facts this Court held that "since under those regulations ' appellant 's probationary period could not be extended beyond the maximum period of two years, he stood confirmed on the expiry of maximum probationary period and there after he could not be reverted to lower post treating him on probation".
In M.A. Agarwal vs Gurgaon Bank & Ors., and in State of Gujarat vs Akhilesh C. Bhargav & Ors. ; this Court reiterated the same view.
Exercise of the power to extend the probation is hedged with the existence of the rule in that regard followed by positive act of either confirmation of the probation or discharge from service or reversion to the substantive post within a reasonable time after the expiry of the period of probation.
If the rules do not empower the appointing authority to extend the probation beyond the prescribed period, or where the rules are absent about confirmation or passing of the prescribed test for confirmation of probation and inaction for a very long time may lead to an indication of the satisfactory completion of probation.
But in this case Rule 8 expressly postulates otherwise.
The period of probation is subject to extension by order in writing for another period of one year.
Passing the prescribed examinations and successful completion of probation and to make an order of confirmation are condition precedent.
Mere expiry of the initial period of probation does not automatically have the effect of deemed confirmation and the status of a deemed confirmation of the probation.
An express order in that regard only confers the status of an approved probationer.
We are of the view that note to sub rule (2) read with sub rule (6) of Rule 8 manifests the legislative intent that confirmation of the probation of the respondent would be made only on successful completion of the probation and the passing of the prescribed examinations.
It is not the respondent 's case that he passed all the examinations.
He shall be deemed to be continued on probation.
Before confirmation the appointing authority is empowered to terminate the service of the probationer by issuing on calender month 's notice in writing and on expiry thereof the service stands terminated without any further notice.
Within three months from the date of expiry of original two 328 years period of probation and within one year 's period, the order of termination was made.
In this view the question of conducting an inquiry under the Classification Control and Appeal (Rules) after giving an opportunity and that too for specific charges does not arise.
The High Court, therefore, committed manifest error of law in decreeing the suit.
By an interim order passed by this court, the respondent received a sum of Rs. 5,000 from the appellant.
The appellant shall not recover the same from him.
The appeal is accordingly allowed.
The judgment and decree of the High Court is set aside and that of the Trial Court and the Ist Appellate Court are confirmed.
But in the circumstances parties are directed to bear their own costs.
N.P.V. Appeal allowed.
| The respondent was appointed in the appellant Corporation and put on probation for a period of two years.
About three month 's after the completion of two years ' period he was served with one month 's notice for termination of his service.
Challenging the termination order the respondent filed a suit for declaration that the termination without enquiry and opportunity of being heard was violative of Rule 9A of the Madhya Pradesh Civil Services Classification, Control and Appeal Rules 1966 and that he became a permanent employee of the Corporation with continuity of service and arrears of salary.
The trail court dismissed the suit, and appeal, it was confirmed.
The High Court allowed the respondent 's second appeal and decreed the suit.
In the appeal, by special leave, before this Court, on behalf of the appellant Corporation it was contended that the respondent being a probationer, would acquire permanent status only on confirmation, that the High Court had committed manifest error in law in holding that on the expiry of two years ' period of probation, the respondent must be deemed to have been confirmed under Rule 14 of the Municipal Officers ' and Servants ' Recruitment Rules, which were no longer in force, and that Rule 8 of the Madhya Pradesh Government Servants ' General Conditions of Service expressly proved confirmation of probation as a condition precedent and since notice terminating respondent 's service was issued, in terms of the rules, before confirmation, it was valid in law.
On behalf of the respondent, it was contended that by operation of the resolution passed by the Municipal Corporation under Section 25 of 321 the Central Provinces and Bearer Municipality Act, 1922, the Municipal Officers and Servants was governed by recruitment rules thereunder, that since no action was taken by the appellant Corporation to dispense with the respondent 's service, on the expiry of the period of two years, as envisaged in Rule 14 of the Municipal Officers ' and Servants ' Recruitment Rules, the respondent must be deemed to have been confirmed, and consequently, the only power the Corporation had was to terminate the respondent 's service in accordance with the classification, Control and Appeal Rules, after conducting an enquiry and giving him reasonable opportunity, that too for misconduct, but since no such procedure was adopted, the notice was illegal and the High Court was justified in granting the decree.
Allowing the appeal, this Court, HELD: 1.1 Under the Note to sub rule (2) of Rule 8 of the Madhya Pradesh Govt.
Servant 's, General Conditions of Service Rules, 1961 if the probationer is neither confirmed nor discharged from service at the end of the period of probation, he should be deemed to have been continued in service as probationer subject to the condition of his service being terminated on the expiry of a notice of one calendar month, given in writing by either side.
As per sub rule (6) on passing the prescribed departmental examination and on successful completion of the period of probation, the probationer should be confirmed in the service or post to which he has been appointed.
Then he becomes an approved probationer.
Therefore, after the expiry of the period of probation and before its confirmation, he would be deemed to have been continued in service as probationer.
[375F H] 1.2 Confirmation of probation would be subject to satisfactory completion of the probation and pass in the prescribed examinations.
Expiry of the period of probation, therefore, does not entitle him with a right to deemed confirmation.
The rule contemplates to pass an express order of confirmation in that regard.
By issue of notice of one calendar month in writing by either side, the tenure could be put to an end.
[326A B] 1.3 If the rules do not empower the appointing authority to extend the period of probation beyond the prescribed period, or where the rules are absent about confirmation or passing of the prescribed test for confirmation of probation, inaction for a very long time may lead to an indication of the satisfactory completion of probation.
[327D E] 322 1.4 Rule 8 expressly postulates otherwise.
Hence mere expiry of the initial period of probation which is subject to extension for another period of one year does not automatically have the effect of deemed confirmation, and the status of a deemed confirmation of the probation.
An express order in that regard on fulfillment of the conditions stipulated in the Rule only confers the status of approved probation.[327E F] State of Punjab vs Dharam Singh ; ; Om Prakash Maurya vs U.P. Co op.
Sugar Factories Federation, Lucknow & Ors.
; ; M.A. Agarwal vs Gurgaon Bank & Ors., and State of Gujarat vs Akhilesh C. Bhargav & Ors., ; , distinguished.
1.5 Note to sub rule (2) read with sub rule (6) of Rule 8 manifest she legislative intent that confirmation of the probation of the respondent would be made only on successful completion of the probation and the passing of the prescribed examinations.
The respondent shall, therefore, be deemed to be continued an probation.
Before confirmation the appointing authority is empowered to terminate the service of the probationer by issuing one calendar month 's notice in writing and on expiry thereof the service stands terminated without any further notice.
Within three months from the date of expiry of original two years period of probation and within th extendable period of one year the order of termination was made.
Hence, the question of conducting an inquiry under the Classification, Control and Appeal Rules after giving an opportunity and that too for specific charges does not arise.
[327G H, 328A] In the circumstances the High Court, committed manifest error of law in decreeing the suit.
[328B] 2.
By virtue of the resolution passed by the Municipal Council, which subsequently became Municipal Corporation, making a draft bye law , exercising power under section 173(2) of the Madhya Pradesh Municipal Act, 1922 and confirmed under Section 25(1) of the Act, adopting Government rules to regulate the conditions of service of officers and servants of the Municipal Committee, the Fundamental Rules, Civil Service Regulations, Government Servants ' Conduct Rules, and General Book Circulars of the State Government, as amended from time to time, etc. would apply to the officers of the Municipal Committee and the previous rules were superseded and were no longer in force.
Hence the reliance placed by the High Court on Rule 14 of the Municipal Officers ' and Servants ' Rules is wrong.
[324D E, G H] 323
|
N: Criminal Appeal No. 294 of 1991.
422 From the Judgment and Order dated 10.4.1990 of the Punjab & Haryana High Court in Crl.
No. 3635 of 1989.
R.S. Suri for the Appellant.
Brijender Chahar and Ashok Mathur for the Respondent.
The following Order of the Court was delivered We have heard the learned counsel for the parties.
The delay in filing the special leave petition is condoned and leave is granted.
The respondent who was undergoing sentence of life imprisonment, had served a period of eleven and an half years when he made an application for pre mature release.
The Punjab and Haryana High Court by the impugned order issued a direction to release the respondent on bail, observing further that if his mercy petition, which was pending, is dismissed, he will have to surrender.
The High Court has not taken into consideration the provisions of Section 433A of the Criminal Procedure Code while passing the order.
A week back we have allowed a criminal appeal against a judgment of the Punjab & Haryana High Court in another case directing pre mature release on account of good conduct of the respondent in jail serving a life sentence although he had actually been in jail for a period of nine years only.
We set aside the order as the provisions under Section 433A had not been taken into consideration, and remitted the matter to the High Court for reconsideration in accordance with the provisions of Jail Manual.
The learned counsel for the respondent in the present appeal attempted to distinguish the case on the ground that here the respondent has been only enlarged on bail and has not been finally released.
We do not think that Section 433A, which is quoted below, is inapplicable in the present case: "Restriction on powers of remission or commutation in certain cases Notwithstanding anything contained in Section 432, where a sentence of imprisonment for life is imposed on conviction of a person for an offence for which death is one of the punishments provided by law, or where a sentence of death imposed on a person has been commuted under Section 433 into one of imprisonment for life, such person shall not be released from prison unless he had 423 served at least fourteen years of imprisonment." (emphasis supplied) The respondent in his writ petition before the High Court relied upon three instructions (Annexures P 1 to P 3) in support of his claim that he is entitled to pre mature release.
Earlier the High Court had directed the mercy petition, pending before the Governor, to be decided within a period of three months.
This was not done and a reply was filed on behalf of the State explaining the circumstances under which the matter remained pending.
In this background the impugned order was passed.
The judicial proceeding dealing with the conviction and sentence of the accused had been earlier concluded, and the order of his release on bail was passed while finally disposing of the writ petition alleging delay in disposal of the mercy petition.
In other words, no case in now pending before the Court, and it cannot be suggested that the order of the respondent 's release on bail has been passed as an interim measure pending the decision of a case before the Court.
In such a situation the provisions of Section 433A are attracted.
The words in the Section quoted above and underlined by us are wide in their application and cannot be restricted as suggested by the learned counsel for the respondent.
We, therefore, allow the appeal, set aside the impugned judgment and remit the case to the High Court for reconsideration of the writ petition confined to its limited scope in accordance with law.
The respondent shall surrender without delay and only thereafter he shall be allowed to press his application before the High Court.
N.P.V. Appeal allowed.
| On the application for pre mature release, made by the respondent, who was undergoing sentence of life imprisonment and had served a period of eleven and a half years the High Court directed that the respondent 's mercy petition pending before the Governor, should be decided within three months.
Since this was not done, the High Court directed his release on bail, observing that if his mercy petition was dismissed he would have to surrender.
Against this decision the State filed an appeal before this Court.
Allowing the appeal, this Court, HELD: The High Court has not taken into consideration the provisions of Section 433A of the Criminal Procedure Code, 1973 while passing the order for the respondent 's release on bail.
The judicial proceeding dealing with the conviction and sentence of the accused had been earlier concluded, and the order was passed while finally disposing of the writ petition alleging delay in disposal of the mercy petition.
Thus, no case is now pending before the court.
The order for the respondent 's release on bail has not therefore, been passed as an interim measure pending the decision of a case before the Court.
In such a situation the provisions of Section 433A are attracted.
The words "such person shall not be released from prison" are wide in their application and cannot be restricted only to case where the person has been released finally.
The judgment in question is set aside and the case remitted to the High Court for reconsideration of writ petition confined to its limited scope.
|
ON: civil Appeal No. 4032 of 1984.
From the Judgment and Order dated 13.12.1983 of the Madras High Court in Second Appeal No. 166 and CMP No. 1714 of 1983.
U.R. Lalit and section Srinivasan for the Appellant.
Dr. Y.S. Chitale, Darshan Singh, Praveen Kumar and Sumit Sen for the Respondent.
The judgment of the Court was delivered by THOMMEN, J.
The appellant, the East India Corporation Limited, is the defendant in O.S. No. 623 of 1980, which is a suit instituted by the respondent, Shree Meenakshi Mills Limited, for recovery of possession of a building on the ground of arrears of rent, etc.
The respondent plaintiff alleged that the appellant defendant was the tenant of the building in question and that it has not paid the agreed rent of Rs. 900 per month for a long period, despite persistent demands, and has thus been in "wilful default" of payment of the agreed rent.
The appellant denied these allegations.
It specifically denied any relationship of landlord and tenant between the parties, and contended that its occupation of the building was not as a tenant of the respondent, but as one of its "associates" or "co sharers" or "co owners".
The suit was decreed.
The decree of the learned Munsif was affirmed in appeal by the First Appellate Court as well as by the High Court.
All the three courts, rejecting the appellant 's contentions 314 to the contrary, found that it was a tenant of the respondent; it questioned without bona fide the respondent 's title as landlord; it was in default of payment of rents, and, if was liable to be evicted from the building.
Against these concurrent findings, the present appeal was brought to this Court by means of a special leave petition.
Leave was granted by order of this Court dated 24.9.84.
At the time of the institution of the suit, or the grant of leave by this Court, the building in question did not come within the purview of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 ( 'the Act ') for the agreed rent, as alleged by the plaintiff respondent and as found by all the courts, was Rs. 900 per month, and as such was outside the limit prescribed under section 30(ii) of the Act for a residential building to fall within the statutory ambit.
Section 30, as it stood at the relevant time, stated: "30.
Exemption in the case of certain buildings.
Nothing contained in this Act shall apply to (i) any building for a period of five years from the date on which the construction is completed and notified to the local authority concerned; or (ii) any residential building or part thereof occupied by any one tenant if the monthly rent paid by him in respect of that building or part exceeds four hundred rupees.
" Clause (ii) of section 30 was, however, struck down by this Court in Rattan Arya & Ors.
vs State of Tamil Nadu & Anr.
, ; This Court stated: ".
Section 30(ii) of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 has to be struck down as violative of Article 14 of the Constitution.
A writ will issue declaring Section 30(ii) as unconstitutional".
As a result of this declaration of the constitutional invalidity of section 30(ii), the Act in question, according to the appellant, has to be read as if clause (ii) of section 30 was never brought into force, and consequently all residential buildings, which are older than five years (see clause (i) of section 30) and let out for whatever rent, came within the ambit of the Act.
Accordingly, although the suit was properly 315 instituted in the civil court without regard to the special provisions of the Act, it is now contended that as a result of the declaration by this Court of the constitutional invalidity of clause (ii) of section 30, which excluded from the purview of the Act any building or part thereof let out on a monthly rent of Rs. 400 the decree of the civil court, whatever be the merits of the findings on the respective contentions of the parties, has become null and void and of no effect whatever.
This contention of the appellant is based on the principle that any decree passed by an incompetent court is a nullity.
The appellant 's counsel relies on the principle reiterated by this Court in Sushil Kumar Mehta vs Gobind Ram Bohram ; and the earlier decisions referred to therein on the point.
In Kiran Singh & Ors.
vs Chaman Paswan & Ors., ; at 121, Venkatarama Ayyar, J. pointed out : ".
It is a fundamental principle well established that a decree passed by a court without jurisdiction is nullity, and that its invalidity could be set up whenever and where ever it is sought to be enforced or relied upon, even at the stage of execution and even in collateral proceedings.
A defect of jurisdiction, whether it is pecuniary or territorial, or whether it is in respect of the subject matter of the action, strikes at the very authority of the court to pass any decree, and such a defect cannot be cured even by consent of parties.
If the question now under consideration fell to be determined only on the application of general principles governing the matter, there can be no doubt that the District Court of Monghyr was coram no judice, and that its judgment and decree would be nullities." Dr Y.S. Chitale, appearing for the respondent, however, submits that the decree passed by the civil court in the present case is not a nullity for the Act has not barred the jurisdiction of the civil court, but only prohibits execution of a decree for eviction otherwise than in accordance with the relevant statutory provisions.
Such a decee, he says, is not void, but is merely under an eclipse, and will become executable as and when the bar is removed.
He refers to section 10 of the Act which reads : "section 10.
Eviction of tenants. (1) A tenant shall not be evicted whether in execution of a decree or otherwise except in accordance with the provisions of this section or sections 14 to 16: 316 . . . . . . . . .
Relying on certain observations of this Court in B.V. Patankar & Ors.
vs C.G.Sastry, ; in the context of the Mysore House Rent and Accommodation Control Order, 1948, Dr. Chitale submits that, like in that case, what is prohibited by section 10 in the present case is execution of the decree and the validity of the decree as such is not affected.
We do not agree.
Section 9 of the Mysore House Rent and Accommodation Control Order, 1948 reads : "section 9(1) A tenant in possession of a house shall not be evicted therefrom whether in execution of a decree or otherwise except in accordance with the provisions of this clause.
. . . . . . . . . " Section 16 of that Order reads: "section 16.
Nothing in this order shall prevent a landlord from filing a suit for eviction of a tenant before a competent civil court, provided that no decree for eviction of a tenant, passed by a civil court shall be executed unless a certificate to that effect is obtained from the Controller.
" Section 16 of the Mysore Order, 1948, thus specifically allows the institution of a civil suit for eviction of a tenant, although a decree passed by such a court for eviction cannot be executed without a certificate to that effect from the Controller.
Jurisdiction of the civil court is thus not only not barred but specifically preserved, except for the restriction imposed on the execution of decrees in matters of eviction.
On the other hand, such a provision is significantly absent in the enactment in question, The provisions of the Mysore Order considered by this court in B.V. Patankar & Ors.
vs C.S.Sastry, ; and those of the Act in question here are not in pari materia.
The observations of this Court relied on by Dr. Chitale are not, therefore, helpful in understanding the provisions in question in the instant case.
Section 10 of the Act, as seen above, prohibits eviction of a tenant whether in execution of a decree or otherwise except in accordance with the provisions of that section or sections 14 to 16.
These provisions as well as the other provisions of the Act are a self contained code, regulating the relationship of parties, creating special rights and liabilities, and, providing for determination of such rights 317 and liabilities by tribunals constituted under the statute and whose orders are endowed with finality.
The remedies provided by the statute in such matters are adequate and complete.
Although the statute contains no express bar of jurisdiction of the civil court, except for eviction of tenants "in execution or otherwise", the provisions of the statute are clear and complete in regard to the finality of the orders passed by the special tribunals set up under it and their competence to administer the same remedy as the civil courts render in civil suits.
Such tribunals having been so constituted as to act in conformity with the fundamental principles of judicial procedure, the clear and explicit intendment of the legislature is that all questions relating to the special rights and liabilities created by the statute should be decided by the tribunals constituted under it.
Although the jurisdiction of the civil court is not expressly barred the provisions of the statute explicitly show that, subject to the extra ordinary powers of the High Court and this Court, such jurisdiction is impliedly barred, except to the limited extent specially provided by the statute.
See in this connection the principle stated by this Court in Dhulabhai & Ors.
vs The State of Madhya Pradesh & Anr., ; See also Secretary of State vs Mask & Co., [1939 40] 1A 222 (PC): Raleigh Investment Co. Ltd. vs Governor General in Counsil.
[1946 47] IA 50 (PC) and Barraclogh vs Brown & Ors., Judged by this test, the jurisdiction of the civil court in respect of eviction of tenants is barred except to the extent and subject to the conditions prescribed under Section 10.
The second provision to section 10(1) reads: "Provided further that where the tenant denies the title of the landlord or claims right of permanent tenancy, the Controller shall decide whether the denial or claim is bona fide and if he records a finding to that effect, the landlord shall be entitled to sue for eviction of the tenant in a civil court and the Court may pass a decree for eviction on any of the grounds mentioned in the said sections, notwithstanding that the Court finds that such denial does not involve forfeiture of the lease or that the claim is unfounded".
What is stated in the second proviso to section 10(1) is the sole circumstance in which the civil court is invested with jurisdiction in matters of evictions.
But this jurisdiction cannot be invoked otherwise than as stipulated in the second proviso.
This means that the condition 318 precedent to the exercise of jurisdiction by a civil court is that the tenant should have denied the title of the landlord or claimed right of permanent tenancy and the Controller should, on such denial or claim by the tenant, reach a decision whether such denial or claim is bona fide.
Upon such decision, the Controller must record a finding to that effect.
In that event, the landlord is entitled to sue for eviction of the tenant in a civil court.
Where these conditions are satisfied, the civil court will have jurisdiction to pass a decree for eviction on any of the grounds mentioned, in section 10 or Sections 14 to 16, notwithstanding that the Court has found that the tenant 's denial of the landlord 's title does not involve forfeiture of the lease, or, his claim of right of permanent tenancy is unfounded.
Except to this limited extent, the jurisdiction of the civil court in matters of eviction of a tenant is completely barred and the jurisdiction in such matters is vested in the tribunals set up under the statute.
Significantly, the jurisdiction of the civil court can be invoked only where the controller comes to a decision, and records a finding, that the denial or claim by the tenant, as aforesaid, is bona fide.
If the Controller were to come to the opposite conclusion, no question of invoking the jurisdiction of the civil court would arise.
But the decision of the controller is concerned solely with the bona fides and not the correctness or validity, of the denial or claim, for these difficult questions of title are by the statute reserved for decision by the appropriate civil court which is the more competent forum in such matters (See the principle discussed in Magiti Sasamal vs Pandap Bissoi, In such an event, the civil court will become competent to pass a decree for eviction on any of the grounds mentioned in section 10 or sections 14 to 16.
On the other hand, if the decision of the controller is that the tenant 's denial or claim is not bona fide the jurisdiction of the civil court cannot be invoked by the landlord and the Controller will then be the competent authority to order eviction, after affording the parties a reasonable opportunity of being heard, on any one of the grounds specified under the statute, including the ground that the tenant has, without bona fide, denied the landlord 's title or claimed right of permanent tenancy.
What is significant is that the decision of the Controller, duly recorded by him, as regards the bona fide denial or claim by the tenant is the condition precedent to the invocation of power of the civil court.
Any suit instituted by the landlord for eviction of a tenant from a building falling within the ambit of the Act, otherwise.
Than as stipulated by the section, is, therefore, incompetent for lack of jurisdiction of the Court and any decree of the Court in such a suit is null and void and no effect.
319 In the present case, the procedure stipulated in the second proviso to section 10 has not been complied with.
At the time of the institution of the suit, the building in question did not come within the ambit of the Act, owing to the exclusionary provision contained in clause (ii) of section 30, but after leave to appeal was granted by this Court, the applicability of the Act was extended to the building by reason of the decision of this Court in Rattan Arya & Ors.
vs State of Tamil Nadu & Anr., ; declaring the invalidity of clause (ii) of section 30 on account of its inconsistency with Article 14 of the Constitution.
Whatever be the consequence of that declaration whether it has rendered the statutory provision null and void and of no effect.
See Behram Khurshed Pesikaka vs The State of Bombay, and Saghir Ahmed vs The State of U.P. and others; , or merely inoperative, unenforceable and dormant to be revitalised on subsequent removal of the constitutional ban.
See Bhikaji Marain Dhakras and Others vs The State of Madhya Pradesh and Another. ; and M.P.V. Sundararamier & Co. vs The State of Andhra Pradesh & Another, ; in either event, the Civil Court acting without the aid of the exclusionary provision in clause (ii) of section 30, during the period of invalidity, has become coram no judice and its proceedings resulting in the decree a nullity.
See Kiran Singh & Others vs Chaman Paswan & Others, ; at 121.
In the circumstances, we set aside the decrees of the courts below.
The appeal is allowed and the appellant is entitled to costs throughout.
R.P. Appeal allowed.
| The respondent field a suit against the appellant for recovery of possession of a building on the ground of wilful deflault in payment of rent which was Rs. 900 per ;month.
The appellant denied the relationship of landlord and tenant, claiming himself as one of the "associates" or "co sharers" or "co owners" of the building.
The Munsif decreed the suit; and the decree was affirmed in appeal by the first appellate court as also by the High Court.
Hence the present appeal.
During the pendency of the present appeal, cl.
(ii) of section 30 of Tamil Nadu Buildings (Lease and Rent Control) Act, 1960, which exempted from application of the Act premises the monthly rent in respect of which exceeded Rs. 400, and on the basis of which the suit giving rise to the present appeal emanated, was struck down in a judgment by this Court.
** The appellant contended that as a result of the declaration by this Court of the constitutional invalidity of clause (ii) of section 30, of the Act, 311 which excluded from the purview of the Act any building or part thereof let out on a monthly rent of Rs. 400, the decree of the civil court became null and void and of no effect.
On behalf of the respondent it was submitted that the decree passed by the civil court was not a nullity for the Act did ;not bar the jurisdiction of the civil court but only prohibited execution of a decree of eviction otherwise than in accordance with the relevant statutory provision; and that such a decree was not void, but was merely under an eclipse, and would become executable as and when the bar is removed.
Allowing the appeal, this Court, HELD; 1.1 Section 10 of Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 prohibits jurisdiction of the civil court in respect of eviction of a tenant whether in execution of a decree or otherwise except in accordance with the provisions of that section and sections 14 to 16.
The sole circumstance and the condition precedent to the exercise of jurisdiction by a civil court as stated in second proviso to section 10(1) is that the tenant should have denied the title of the landlord or claimed right of permanent tenancy and the Controller, on such denial or claim by the tenant, reaches a decision and duly records a finding that such denial or claim was bona fide and only when these conditions are satisfied jurisdiction of the civil court can be invoked to pass a decree for eviciton on any of the grounds mentioned in section 10 or sections 14 to 16.
Except to this limited extend the jurisdiction of the civil court is completely barred and the same is vested in the tribunals set up under the Act.
Any suit instituted by a landlord for eviction of a tenant from a building falling within the ambit of the Act,otherwise than as stipulated by the section is, therefor, incompetent for lack of jurisdiction of the court and any decree of the court in such a suit is null and void and of no effect.
[317D E, G H; 318 D,G H] Sushil Kumar Mehta vs Gobind Ram Bohra, [1990] 1 SCC page 193, referred to.
1.2 The decision of the Controller is concerned solely with the bona fides, and not the correctness or validity, of the denial or claim, for these difficult questions of title are by the statute reserved for decision by the appropriate civil court which is the more competent forum in such matters.
[318D E] Magiti Sasamal vs Pandab Bissoi,[1962] 3 SCR 673, referred to.
1.3 If the decision of the Controller is that tenant 's denial or 312 claim is not bona fide, the jurisdiction of the civil court cannot be invoked by the landlord and the Controller will then be the competent authority to order eviction, after affording the parties a reasonable opportunity of being heard, on any one of the grounds specified under the statute, including the ground that the tenant has, without bona fide denied landlord 's title or claimed right of permanent tenancy.[318E F] 1.4 Although the Act contains no express bar of jurisdiction of the civil court, its provisions explicitly show that, subject to the extraordinary powers of the High Court, and this Court, such jurisdiction is statute for eviction of tenants "in execution or otherwise".
The provision of the Act are clear and complete in regard to the finality of the orders passed by the special tribunals set up under it, and their competence to administer the same remedy as the civil courts render in civil suits.
Such tribunals having been so constituted as to act in conformity with the fundamental principles of judicial procedure, the clear and explicit intendment of the legislature is that all questions relating to the special rights and liabilities created by the statute should be decided by the tribunals constituted under it.
[317A C] Dhulabhai &Ors.
vs The State of Madhya Pradesh & Anr.
, ; ; Secretary of State vs Mask & Co., [1939 40] IA 222 (PC, Raleigh Investment Co. Ltd. vs Governor General in Council, [1946] 47 IA 50 (PC and Barraclough vs Brown & Ors., , referred to.
In the instant case, the procedure stipulated in the second proviso to section 10 had not been complied with.
At the time of institution of the suite, the building in question did not come within the ambit of the Act, owing to the exclusionary provision contained in cl.
(ii) of section 30, but after leave to appeal was granted, the applicability of the Act was extended to the building by reason of the decision of this Court, declaring the invalidity of cl.
(ii) of section 30 on account of its inconsistency with Article 14 of the Constitution.
Whatever be the consequences of that declaration whether it has rendered the statutory provision null and void and of no effect, or, merely inoperative, unenforceable and dormant to be revitalised on subsequent removal of the constitutional ban in either event, the civil court acting without the aid of the exclusionary provision in cl.
(ii) of section 30, during the period of invalidity,had become coram non judice and its proceedings resulting in the decree a nullity.
[319A D] 313 Ratan Arya & Ors.
vs State of Tamil Nadu & Anr.
, ; , referred to.
Kiran Singh & Ors.
vs Chaman Paswan & Ors., ; relied on.
V.B. Patankar & Ors.v.
C.G. Sastry, ; , held inapplicable.
Behram Khurshed Pesikaka vs State of Bombay, ; Saghir Ahmad vs State of U.P. and Ors. ; ; Bhikaji Narain Dhakras & Ors.
vs The State of M.P.
The State of A.P. & Anr., ; , referred to.
|
ivil Appeal No. 1976 of 1991.
From the Judgment and Order dated 27.7.1987 of the Central Administrative Tribunal, Delhi in Regn.
No. O.A.No. 511 of 1986.
V.C. Mahajan, C.V.S. Rao, A.K. Srivastava and P.Parmeshwaran for the Appeallants.
Dr. D.C. Vohra, P.K. Bansal and S.K. Bisaria for the Respondent.
The Judgment of Court was delivered by SINGH, J. Leave granted.
This appeal is directed against the order of the Central Administrative Tribunal, Principal Bench, Delhi, quashing the order of the Ministry of Commerce dated 6.1.1986 rejecting the respondent 's representation against remarks awarded to him.
E.G. Nambudiri respondent is a Section Officer in the office of Chief Controller of Import and Exports, Ministry of Commerce.
By a 455 memorandum dated 7th May, 1985, the Director communicated adverse remarks awarded to the respondent for the year ending 1984.
These remarks were under: "1.
That you were not associated with the important work of the section such as the open house discussions, monthly analysis of the returns received from regional offices, complaints and port Officers meetings.
That the quality of performance and application of knowledge, delegated authority and conceptual and professional skills on the jobs is very poor.
That you had a casual attitude to the work assigned.
Your devotion to duty was insufficient.
That subordinates used to complain that they could not work under you, as you could not give proper guidance.
That your job did not involve contact with the public indications and your intellectual honesty and innovative opaity are average.
That nothing adverse has come to notice regarding your integrity.
That you were given advice/warning at various levels both orally and in writing but you did not react to these.
" The respondent made representation against the adverse remarks but the same was rejected by the order dated 6.1.1986.
The respondent, thereafter, made a memorial to the President of India against the adverse remarks, as a result of which the adverse remarks as contained in Item Nos.
1 to 4 as quoted above were expunged, whereas the remaining adverse entries were maintained.
The Govt '.s decision was communicated by a memorandum dated 14.8.1986.
But before the aforesaid decision of the Government partially expunging the adverse remarks could be communicated to the respondent, he filed a petition before the Central Administrative Tribunal challenging the order of the Ministry of Commerce dated 6.1.1986 rejecting his representation made against the adverse entries.
The respondent challenged the order dated 6.1.1986 rejecting his representation on the ground that it did not contain any reasons.
Plea of mala fide was also raised against the Joint Director, Ministry of Commerce, who had awarded the adverse 456 remarks to the respondent.
The Tribunal by its order dated 27.7.1987 quashed the Government Order as contained in the communication letter dated 6.1.1986 and also subsequent order dated 14.8.1986 on the ground that those orders were vitiated in law in the absence of reasons.
The Tribunal held that it was a basic principle of natural justice of every quasi judicial process, that order should contain reasons.
Arriving at a just decision is the aim of both quasi judicial as well as administrative inquiries, an unjust decision in an administrative enquiry may have more far reaching effect than in a quasi Judicial enquiry, therefore, it was necessary that in rejecting the representation against an adverse entry, reasons must be stated and in the absence of reasons the order would be arbitrary and liable to be quashed.
Placing reliance on a number of decisions of High Courts, the Tribunal held that a bald communication rejecting the representation made against the adverse entries does not meet the requirement of law.
The Tribunal further held that in the absence of reasons it would follow that the competent authority rejected the representation without applying its mind to the grounds raised in the representation.
Learned counsel for the parties conceded that there are no statutory rules framed under Article 309 of the Constitution regulating the award of entries in the character roll of a Central Government employee or providing for filing of representation against the adverse entries, or its disposal.
The entire field in this regard is regulated by administrative directions issued from time to time.
Under these directions the character roll of Government servants is required to be maintained wherein the entries are made every year by superior competent authority regarding the work, conduct and character of the Government servant.
These entries are confidential in nature, which contain the assessment of the work and conduct of the Government servant, reflecting his efficiency or defect in his work and conduct.
The confidential reports, contain general assessment of character, conduct and qualities of a Govt.
Servant which may include comments about his good work, drive, initiative, devotion to duty and integrity.
These entries also reflect the inefficiency, delay, lack of initiative, carelessness in handling the problems, or any defect in character and integrity.
These entries contain reference to any penalty which may have been awarded to a government servant in departmental proceedings.
These entries are important in nature as on the basis of these entries, a Government servant 's suitability to the office is assessed for the purposes of his confirmation, promotion and even for retention in service.
Any adverse remark awarded against a Government servant is 457 communicated to him to afford him opportunity of explaining the correct position by means of a representation.
The competent authority is required to examine the adverse remarks in consultation, if necessary, with the reporting officer and counter signing authority.
If the competent authority finds that the remarks are justified and there are no sufficient grounds for interference, he may reject the representation and the Government servant is informed accordingly.
If, however, the competent authority finds that the adverse remarks are incorrect, unfounded or unjustified, he would expunge the same and inform the Government servant.
The competent authority may having regard to the facts and circumstances of the cast modify, or tone down the remarks.
The administrative instructions issued by the Government do not require the competent authority to record reasons either in accepting or rejecting the representation of a Government servant, made against adverse entries.
Entries made in the character roll and confidential record of a Government servant are confidential and those do not by themselves affect any right of the Government servant, but those entries assume importance and play vital role in the matter relating to confirmation, crossing of efficiency bar, promotion and retention in service.
Once an adverse report is recorded, the principles of natural justice require the reporting authority to communicate the same to the Government servant to enable him to improve his work and conduct and also to explain the circumstances leading to the report.
Such an opportunity is not an empty formality, its object, partially, being to enable the superior authorities to decide on a consideration of the explanation offered by the person concerned, whether the adverse report is justified.
The superior authority competent to decide the representation is required to consider the explanation offered by the Government servant before taking a decision in the matter.
Any adverse report which is not communicated to the Government servant, or if he is denied the opportunity of making representation to the superior authority cannot be considered against him.
See: Gurdial Singh Fijji vs State of Punjab & Ors., In the circumstances it is necessary that the authority must consider the explanation offered by the Government servant and to decide the same in a fair and just manner.
The question then arises whether in considering and deciding the representation against report, the authorities are duty bound to record reasons, or to communicate the same to the person concerned.
Ordinarily, Courts and Tribunals, adjudicating rights of parties, are required to act judicially and to record reasons.
Where an administrative authority is required to act judicially it is also under an 458 obligation to record reasons.
But every administrative authority is not under any legal obligation to record reasons for its decision, although, it is always desirable to record reasons to avoid any suspicion.
Where a statute requires an authority though acting administratively to record reasons, it is mandatory for the authority to pass speaking orders and the absence of any statutory or administrative requirement to record reasons, the order of the administrative authority is not rendered illegal for absence of reasons.
If any challenge is made to the validity of an order on the ground of it being arbitrary or mala fide it is always open to the authority concerned to place reasons before the Court which may have persuaded it to pass the orders.
Such reasons must already exist on records as it is not permissible to the authority to support the order by reasons not contained in the records.
Reasons are not necessary to be communicated to the Government servant.
If the statutory rules require communication of reasons, the same must be communicated but in the absence of any such provision absence of communication of reasons do not affect the validity of the order.
On behalf of the respondent it was contended that principles of natural justice require the superior authority to record reasons in rejecting the Government servant 's representation made against the adverse remarks as the order of rejection affected the respondent 's right.
It is true that the distinction between judicial act and administrative act has withered away and the principles of natural justice are now applied even to administrative orders which involve civil consequences, as held by this Court in State of Orissa vs Dr. (Miss) Binapani Dei & Ors., ; What is a civil consequence has been answered by this Court in Mohinder Singh Gill & Ors.
vs The Chief Election Commissioner, New Delhi & Ors., Krishna Iyer, J. speaking for the Constitution Bench observed: "But what is a civil consequence, let us ask ourselves, by passing verbal booby traps? "Civil consequences" undoubtedly cover infraction of not merely property or personal rights out of civil liberties, material deprivations and nonpecuniary damages.
In its comprehensive connotation, everything that affects a citizen in his civil life inflicts a civil consequence.
" The purpose of the rules of natural justice is to prevent miscarriage of justice and it is no more in doubt that the principles of natural justice are applicable to administrative orders if such orders affect the right of 459 a citizen.
Arriving at the just decision is the aim of both quasi judicial as well as administrative enquire, an unjust decision in an administrative enquiry may have more far reaching effect than decision in a quasi judicial enquiry.
Now, there is no doubt that the principles of natural justice are applicable even to administrative inquiries.
See: A.K. Kraipak & Ors.
vs Union of India & Ors., The question is whether principles of natural justice require an administrative authority to record reasons.
Generally, principles of natural justice require that opportunity of hearing should be given to the person against whom an administrative order is passed.
The application of principles of natural justice, and its sweep depend upon the nature of the rights involved, having regard to the setting and context of the statutory provisions.
Where a vested right is adversely affected by an administrative order, or where civil consequences ensue, principles of natural justice apply even if the statutory provisions do not make any express provision for the same, and the person concerned must be afforded opportunity of hearing before the order is passed.
But principles of natural justice do not require the administrative authority to record reasons for its decision as there is no general rule that reasons must be given for administrative decision.
Order of an administrative authority which has no statutory or implied duty to state reasons or the grounds of it decision is not rendered illegal merely on account of absence of reasons.
It has never been a principle of natural justice that reasons should be given for decisions.
See: Regina vs Gaming Board for Great Britain ex p. Benaim and Khaida ; at 431.
Though the principles of natural justice do not require reasons for decision, there is necessity for giving reasons in view of the expanding law of judicial review to enable the citizens to discover the reasoning behind the decision.
Right to reasons is an indispensable part of a sound system of judicial review.
Under our Constitution an administrative decision is subject to judicial review if it affects the right of a citizen, it is therefore desirable that reasons should be stated.
There are however, many areas of administrative activity where no reasons are recorded or communicated, if such a decision is challenged before the Court for judicial review, the reasons for the decision may be placed before the court.
The superior authority while considering the representation of a Government servant against adverse remarks, is not required by law to act judicially, it is under no legal obligation to record or communicate reasons for its decision to the Government servant.
The decision, rejecting the representation does 460 not adversely affect any vested right of the Government servant nor does it visit him with any civil consequences.
In many cases having regard to infinite variations of circumstances, it may not be possible to disclose reasons for the opinion formed about the work and conduct or character of the Government servant.
In the instant case adverse remarks as contained in item Nos. 1 to 4 were expunged but those at serial numbers 5 and 6 were not expunged and the respondent 's representation to that extent was rejected.
On a careful scrutiny of the two remarks, it would appear that observation contained in Item No. 5 "that nothing adverse has come to notice regarding your integrity" is not adverse to the respondent 's work and conduct.
These remarks are neutral in nature, and they do not adversely comment upon the respondent 's work, conduct or character, though they are no commendatory in nature.
As regards the remarks at Serial No. 6, they are self explanatory, which show that inspite of oral and written warnings the respondent the respondent did not improve.
If the superior authority was not satisfied with the explanation of the respondent as cantained in his representation, what reasons could be stated, except that the authority was not satisfied with the explanation.
The superior authority was not obliged to write detail judgment or order giving detais of the warnings or the material on which he formed opinion.
There is no dispute that there is no rule or administrative order for recording reasons in rejecting a representation.
In the absence of any statutory rule or statutory instructions requiring the competent authority to record reasons in rejecting a representation made by a Government servant against the adverse entries the competent authority is not under any obligation to record reason.
But the competent authority has no licence to act arbitrarily, he must act in a fair and just manner.
He is required to consider the questions raised by the Government servant and examine the same, in the light of the comments made by the office awarding the adverse entries and the officer counter signing the same.
If the representation is rejected after its consideration in a fair and just manner, the order of rejection would not be rendered illegal merely on the ground of absence of reasons.
In the absence of any statutory or administrative provision requiring the competent authority to record reasons or to communicate reasons, no exception can be taken to the order rejecting representation merely on the ground of absence of reasons.
No order of an administrative authority communicating its decision is rendered illegal on the ground of absence of reasons ex facie and it is not open to the court to interfere with such orders merely on the ground of absence of any reasons.
However, it does not mean that the administrative authority 461 is at liberty to pass orders without there being any reasons for the same.
In governmental functioning before any order is issued the matter is generally considered at various levels and the reasons and opinions are contained in the notes on the file.
The reasons contained in the file enable the competent authority to formulate its opinion.
If the order as communicated to the Government servant rejecting the representation does not contain any reasons, the order cannot be held to be bad in law.
If such an order is challenged in a court of law it is always open to the competent authority to place the reasons before the Court which may have led to the rejection of the representation.
it is always open to an administrative authority to produce evidence alinude before the court to justify its action.
The President was under no legal obligation to record reasons in rejecting the respondent 's representation against the adverse remarks.
Consequently, the order of the president was not vitiated in law.
The Central Administrative Tribunal committed error in quashing the order of the president as well as the order of the Ministry of Commerce dated 6.1.1986.
Assuming that there was some defect in the order rejecting the respondent 's representation, the Tribunal was not justified in holding that the adverse entries awarded to the respondent should be treated as having been expunged.
We accordingly allow the appeal, set aside the order of the Tribunal dated 27.7.1987.
There will be no order as to costs.
T.N.A Appeal allowed.
| The respondent, a Section Officer in the office of the Chief Controller of Import and Exports, was communicated adverse remarks for the year 1984.
He made a representation against the adverse remarks but the same was rejected by the Ministry of Commerce by its order dated 6.1.1986.
Thereafter he made a Memorial to the President and the Government by its order dated 14.8.86 partially expunged the adverse remarks.
The respondent filed a petition before the Central Administrative Trubunal challenging the order rejecting his representation on the ground that it did not contain any reasons.
The Tribunal by its order dated 27.7.87 quashed both the order dated 6.1.86 as well as 14.8.86 by holding that the orders were vitiated in law in the absence of reasons.
In appeal to this Court by the Union of India, it was contended on behalf of the respondent that the principles of natural justice require the superior authority to records reasons in rejecting the Government servant 's representation made against the adverse remarks as the order of rejection affected the respondent 's right.
Allowing the appeal, this Court, HELD: 1.
The superior authority while considering the represen 452 tation of a Government servant against adverse remarks, is not required by law to act judicially, it is under no legal obligation to record or communicate reasons for its decision to the Government servant.
There is no rule or administrative order for recording reasons in reacting such a representation.
In the absence of any statutory rule or statutory instructions requiring the competent authority to record reasons in rejecting a representation made by a Government servant against the adverse entries the competent authority is not under any obligation to record reasons.
The decision, rejecting such a representation does not adversely affect any vested right of the Government servant nor does it visit him with any civil consequences.
It does not mean that the competent authority has licence to act arbitrarily, he must act in a fair and just manner.
He is required to consider the questions raised by the Government servant and examine the same, in the light of the comments made by the officer awarding the adverse entries and the officer counter signing the Confidential Reports.
If the representation is rejected after its consideration in a fair and just manner, the order of rejection would not be rendered illegal merely on the ground of absence of reason.
In many cases having regard to infinite variations of circumstances it may not be possible to disclose reasons, for the opinion formed about the work and conduct or character of the Government servant.
However, it does not mean that the administrative authority is at liberty to pass orders without there being any reasons for the same.
In Governmental functioning before any orde is issued the matter is generally considered at various levels and the reasons and opinions are contained in the notes on the file.
The reasons contained in the file enable the competent authority to formulate its ipinion.
If the order as communicated to the Government servant rejecting the representation does not contain any reasons the order cannot be held to be bad in law.
If such an order is challenged in a court of law it is always open to the competent authority to place the reasons before the Court which may have led to the rejection of the representation.
It is always open to an administrative authority to produce evidence ali unde before the court to justify its action.
[459G H, 460A, E F H, 461A B] Gurdial Singh Fijji vs State of Punjab & Ors., , referred to. 2 The President was under no legal obligation to record reasons in rejecting the respondent 's representation against the adverse remarks.
Consequently, the order of the President was not vitiated in law.
The Central Administrative Tribunal committed error in quashing the order of the President as well as the order of the Ministry of Com 453 merce dated 6.1.1986.
Accordingly, the Tribunal 's order dated 27.7.1987 is set aside.
[461C E] 3.
The purpose of the rules of natural justice is to prevent miscarriage of justice and the principles of natural justice are applicable to administrative orders if such orders affect the right of a citizen.
Arriving at the just decision is the aim of both quasi judicial as well as administrative enquiry, an unjust decision in an administrative enquiry may have more far reaching effect than decision in a quasijudicial enquiry.
Generally, principles of natural justice require that opportunity of hearing should be given to the person against whom an administrative order is passed.
The application of principles of natural justice, and its sweep depend upon the nature of the right involved, having regard to the setting and context of the statutory provisions.
Where a vested right is adversely affected by an administrative order, or where civil consequences ensue, principles of natural justice apply even if the statutory provisions do not make any express provision for the same, and the person concerned must be afforded opportunity of hearing before the order is passed.
But principles of natural justice do not require the administrative authority to record reasons for its decision as there is no general rule that reasons must be given for administrative decision.
Order of an administrative authority which has no statutory or implied duty to state reasons or the grounds of its decision is not rendered illegal merely on account of absence of reasons.
It has never been a principle of natural justice that reasons should be given for decisions.
[458H, 459A D] State of Orissa vs Dr. (Miss) Binapani Dei & Ors., ; ; Mohinder Singh Gill & Ors.
vs The Chief Election Commissioner, New Delhi & Ors., ; A. K. Kraipak & Ors.
vs Union of India & Ors., and Regina vs Gaming Board for Great Britain ex.
p. Benaim and Khaida, ; , referred to.
Though the principles of natural justice do not require reasons for decision, there is necessity for giving reasons in view of the expanding law of judicial review to enable the citizens to discover the reasoning behind the decision.
Right to reasons is an indispensable part of a sound system of judicial review.
Under our Constitution an administrative decision is subject to judicial review if it affects the right of a citizen, it is therefor desirable that reasons should be stated.
[459F] 4.
Ordinarily, Courts and Tribunals, adjudicating rights of parties, are required to act judicially and to record reasons.
Where an 454 administrative authority is required to act judicially it is also under an obligation to record reasons.
But every administrative authority is not under any legal obligation to record reasons for its decision, although, it is always desirable to record reasons to avoid any suspicion.
Where a statute requires an authority though acting administratively to record reasons, it is mandatory for the authority to pass speaking orders and in the absence of reasons the order would be rendered illegal.
But in the absence of any statutory or administrative requirement to record reasons, the order of the administrative authority is not rendered illegal for absence of reasons.
If any challenge is made to the validity of an order on the ground of it being arbitrary or mala fide it is always open to the authority concerned to place reasons before the Court which may have persuaded it to pass the orders.
Such reasons must already exist on records as it is not permissible to the authority to support the order by communicated to the Government servant.
If the statutory rules require communication of reasons, the same must be communicated but in the absence of any such provision absence of communication of reasons do not affect the validity of the order.
[457H, 458A C]
|
ivil Appeal No. 3644 of 1989.
From the Judgment and Order dated 10.10.1988 of the Allahabad High Court in S.A. No. 194 of 1987.
Yoeshwar Prasad and Mrs. Shobha Dikshit for the Appellants.
471 B.D. Agarwala, Gopal Subramaniam, Ms. Bina Gupta, Arvind Verma, Ms. Monika Mohil, R.K. Srivastava and P. Misra for the Respondents.
The Judgment of the Court was delivered by THOMMEN, J.
This appeal is by defendants 1 and 2 in a suit for mandatory injunction.
The appellants are officers of Nandganj Sihori Sugar Co. Ltd., Rae Bareli, of which the third defendant, the U.P. State Sugar Corporation Ltd. (the second respondent herein) is the holding company.
The State of Uttar Pradesh (the third respondent) is the fourth defendant.
The plaintiff, Badri Nath Dixit (the first respondent), instituted the suit for mandatory injunction to enforce a contract alleged to have been entered into between the plaintiff and defendants 1 & 2 for appointment of the plaintiff to the post of Instrumentation Foreman in the defendants company and for consequential reliefs.
The plaintiff contended that he had been sponsored by the Chairman and Managing Director of the third defendant, by his letters dated 18 October, 1982 and 14 December, 1982 for appointment by defendants 1 & 2 as an Apprentice Engineer in terms of a scheme formulated by the Government of India, but such appointment was not made by defendants 1 & 2.
The plaintiff prayed for an injunction compelling defendants 1 & 2 to appoint him to the post of `Instrumentation Foreman ', which post, according to him, was at the time of the suit lying vacant.
In effect, what the plaintiff seeks is a decree to compel the specific performance of a contract of personal service.
Defendants 1 to 3 filed a joint written statement denying the allegations.
They stated that there was no contract, as alleged, and there was no vacancy for any post to which the plaintiff was qualified to be appointed.
They further stated that the plaintiff had been conditionally offered appointment as a Fitter Trade Apprentice, subject to his possessing the requisite qualifications and his selection by the Apprentice Board, Kanpur.
The plaintiff was not qualified and was, therefore, not selected.
They further contended that neither as an Apprentice nor as Instrumentation Foreman was the plaintiff qualified to be appointed.
The suit was dismised by the trial court.
However, on appeal by the plaintifif it was decreed by the learned Additional District Judge who directed defendant 1 to appoint the plaintiff to the post of Apprentice Engineer under the s cheme sponsored by the Government of India.
This decree was confirmed in appeal by the High Court by the impugned judgment.
The High Court further held 472 that the plaintiff was entitled to be appointed to the post of Instrumentation Foreman with effect from the date on which the former incumbent of that post had resigned.
Counsel for the appellants (defendants 1 & 2 ) submit that there is no evidence of the alleged contract having been entered into by the defendants with the plaintiff; nor is there any evidence of a scheme of the Government of India which entitled the plaintifif to be appointed to any post in the defendants ' company.
Counsel states that, in any view, the plaintiff was not qualified for appointment as an Apprentice and much less to the higher post of Instrumentation Foreman.
The plaintiff 's counsel, however, submits that the letters addressed by the third defendant in his capacity as Chairman and Managine Director of the holding company to defendants 1 & 2, the officers of the subsidiary company, made it obligatory on the part of the latter to appoint the plaintiff in terms of the Government of India scheme.
It was so found by the first Applleate Court and the High Court.
That finding is not liable to be impeached in the present proceeding.
He says that the defendants are, therefore, liable to be compelled by means of a mandatory injunction to honor the offer held out by them to the plaintiff, who is entitled to enforce the contract founded on such offer by seeking specific performance of it.
We are surprised that the first Appellate Court and the High Court should have proceeded on the assumption that any enforceable contract existed.
Neither from the plaint nor from the evidence is it possible to identify and concluded contract to which the plaintiff is a party or which the plaintiff can enforce.
The defendants deny the existence of any contract or any other relationships which gives the paintiff any cause of action against the defendants.
There is no specific plea or evidence as regards the particulars of the alleged scheme of the Government of India in terms of which the plaintiff seeks relief.
Whether it is a statutory scheme, and if so what are the provisions relied on by the plaintiff, and whether a duty is cast on the defendants and a benefit conferred on persons like the plaintiff, is neither pleaded nor spoken to inevidence.
Assuming that any such scheme existed or any such contract bound the parties, to have decreed a suit for specific performance of a contract of personal service on the facts alleged by the plaintiff, was to violate all basic norms of law.
Courts do not ordinarily enforce performance of contracts of a personal character, such as a contract of employment.
In the words of Jessel M.R.: 473 "The courts have never dreamt of enforcing agreements strictly personal in their nature, whether they are agreements of hiring and service, being the common relation of master and servant . " [Rigby vs Connol, , 487; see Cheshire, Fifoot and Furmston 's Law of Contract, 11th ed., p. 614].
" In the joint written statement filed by defendants 1 to 3, representing the holding and subsidiary companies, the alleged contract has been clearly denied.
We fail to see how the letters addressed by the Chairman of the holding company to the officers of the subsidiary company advising the appointment of the plaintiff to a post which he was found to be not qualified to hold could have resulted in any contract between the defendants of the one part and the plaintiff of the other part.
Assuming that the letters written by the Chairman of the holding company were in the nature of a direction which a subsidiary company was compelled to carry out, we fail to see how on the facts of this case, the plaintiff, who had no privity whatever to a contract, assuming there was a contract, could enforce any right under it.
In the first place, the letters sent by the Chairman of the holding company are merely in nature of an advise giving rise to no contractual relationship.
Even if the advise is taken to be of the character of a direction which the subsidiary company is bound to comply with, any obligation arising from such direction is not enforceable at the instance of a total stranger.
The Chairman was in no sense acting as a trustee of the plaintiff and no relationship of a fiduciary character whatever is alleged or proved to have existed between them.
Assuming that the then Chairman was personally interested in the plaintiff, that was not an interest which is legally enforceable against the defendants.
Such predilection on the part of the Chairman of a holding company, whatever be its impact on the subsidiary company, does not give rise to any actionable claim.
There is no evidence, whatsoever, as to the existence of a Government scheme, apart from a reference to it in the Chairman 's letter.
The plaintiff has not shed any light upon it.
The defendants have not admitted any such scheme.
Even if a scheme existed, there is no evidence that it was enforceable at the instance of a person seeking its benefit.
Nor has the plaintiff pleaded estoppel or adduced any evidence to support any such contention.
In the absence of any specific plea or evidence as regards the nature and other particulars of the scheme, it is preposterous that the courts below should have thought it fit to issue a mandatory injunction to compel the performance of the alleged contract of service in terms 474 of or pursuant to an unknown scheme.
Subject to certain well defined categories of exceptions, the law does not permit, and the does not contemplate, the enforcement of a contract of a personal nature by a decree for specific performance.
The facts of this case do not fall within the exceptions.
Assuming that the fact alleged by the plaintiff to be true as stated earlier, there is no evidence whatever to support them the plaintifif is not entitled to any relief other than damages in the even of his being in a position to prove that he has been damnified by reason of the defendants ' failure to carry out the obligations arising under what he calls a contract.
In Halsbury 's Laws of England, Fourth Edition, Volume 44, at page 407, it is stated: "407.
Contracts for personal work or services.
A judgment for specific performance of a contract for personal work or services is not pronounced, either at the suit of the employer or the employee.
The court does not seek to compel persons against their will to maintain continuous personal and confidential relations.
However, this rule is not absolute and without exception.
It has been held that an employer may be restrained from dismissing an employee in breach of contract if there is no loss of confidence between employer and employee or if (at least in a contract of employment to carry out a public duty) the employee has been dismissed in a manner which does not comply with statutory or contractual regulations governing dismissal.
No court may, whether by way of an order of specific performance of a contract of employment or an injunction restraining a breach or threatened breach of such a contract, compel an employee to do any work or attend at any place for the doing of any work.
This principle applies not merely to contracts of employment, but to all contracts which involve the rendering of continuous services by one person to another, such as a contract to work a railway line. " (emphasis supplied) As stated by this Court in Executive committee of Vaish Degree College, Shamli and Others vs Lakshmi and Ors., ; at 1020: 475 ". a contract of personal service cannot ordinarily be specifically enforced and a Court normally would not give a declaration that the contracts subsists and the employee even after having been removed from service can be deemed to be in service against the will and consent of the employer.
This rule, however, is subject to three well recognised exceptions; (i) where a public servant is sought to be removed from service in contravention of the provisions of Art.311 of the Constitution of India; (ii) where a worker is sought to be reinstated on being dismissed under the Industrial Law; and (iii) where a statutory body acts in breach or violation of the mandatory provisions of the statute." (emphasis supplied) A contract of employment cannot orodinarily be enforced by or against an employer.
The remedy is to sue for damages.
(See section 14 read with section 41 of the ; see Indian Contract and Specific Relief Acts, by Polock & Mulla, Tenth Edn., page 983).
The grant of specific performance is purely discretionary and must be refused when not warranted by the ends of justice.
Such relief can be granted only on sound legal principles.
In the absence of any statutory requirement, courts do not ordinarily force an employer to recruit or retain in service an employee not required by the employer.
There are, of course, certain exceptions to this rule, such as in the case of a public servant dismissed from service in contravention of Article 311 of the Constitution; reinstatement of a dismissed worker under the Industrial Law; a statutory body acting in breach of statutory obligations, and the like.
(B.N. Tiwari vs District Board, Agra, ; ; U.P. State Warehousing Corporation vs C.K. Tyagi, ; ; Executive Committee of Vaish Degree College, Shamli and Ors.
vs Lakshim Narain and Ors., ; see Halsbury 's Laws of England, Fourth Edn., Volume 44, paragraphs 405 to 420.) On the facts of this case, the High court was clearly wrong in issuing a mandatory injunction to appoint the plaintiff.
Even if there was a contract in terms of which the plaintiff was entitled to seek relief, the only relief which was available in law was damages and not specific performance.
Breach of contract must ordinarily sound in damages, and particularly so in the case of personal contracts.
Assuming that a contractual relationship arose consequent upon the letters addressed by the third defendant to the 1st defendant, the plaintiff was a total stranger to any such relationship, for, on the facts of this case, no relationship of a fiduciary character existed between the plaintiff and 476 the third defendant or other defendants.
Neither on principles of law or equity nor under any statute did the plaintiff acquire an enforceable right by reason of the letters exchanged between the first and third defendants.
The plaintiff had no privity of any kind to their relationship.
No collateral contract to which the plaintiff was a party did arise on the facts of this case.
At no time was the third defendant acting as an agent of the plaintiff.
There is no express or implied contract which is enforceable by the plaintiff.
(See Halsbury 's Laws of England., Fourth Edn., Volume 9, paragraphs 334 to 342).
The plaintiff 's counsel suggests that the claim is justifiable on the basis of legitimate expectations for appointment.
There is no specific plea or evidence to support any such contention.
Whatever expectations might have arisen from the letters of the third defendant, they could not have in law given rise to any right enforceable by specific performance.
For all these reasons we hold that the plaintiff 's suit for mandatory injunction, on the facts of the case, was rightly dismissed by the trial court and wrongly decreed by the first Appellate Court and the High Court.
We set aside the decrees of the High Court and the first Appellate Court and restore that of the trial court.
The plaintiff 's suit shall accordingly stand dismissed and the defendants ' appeal allowed with costs throughout.
N.P.V. Appeal allowed.
| The first respondent instituted a suit for mandatory injunction to enforce a contract alleged to have been entered into between him and the appellant, officers of the second respondent Corporation, for appointment to the post of Instrumentation Foreman in the appellants ' company, and for consequential reliefs.
He contended that he had been sponsored by the Chairman and Managing Director of the second respondent Corporation, which was the holding company of the appellants 'company by his two letters for appointment as an Apprentice Engineer in terms of a scheme formulated by the Government of India.
The appellants and the second respondent denied the existence of any contract.
The trial court dismissed the suit.
However, on appeal, the first appellate court decreed the suit and directed the first appellant to appoint the first respondent to the post of Apprentice Engineer under the scheme sponsored by the Government of India.
This was confirmed, in appeal, by the High Court, which held the first respondent was entitled to be appointed to the post of Instrumentation Foreman with effect from the date on which the former incumbent of that post had resigned.
In the appeal before this Court, on behalf of the appellants it was contended that there was no evidence of the contract having been entered into by the appellant with the first respondent; nor was there any evidence of a scheme of the Government of India, which entitled him to be appointed to any post in the appellants ' company, and that, in any view, he was not qualified for appointment as an Apprentice, much less to the higher post of Instrumentation Foreman.
469 On behalf of the first respondent it was contended that the letters addressed by the second respondent in his capacity as Chairman, and Managing Director of the holding company, to the appellants, the officers of the subsidiary company, made it obligatory on the part of the latter to appoint him in terms of the Government of India scheme, as so found by both the first Appellate court and the high Court.
Allowing the appeal, this Court, HELD: 1.1 A contract of employment cannot ordinarily be enforced by or against an employer.
The remedy is to sue for damages.
The grant of specific performance is purely discretionary and must be refused when not warranted by the ends of justice.
Such relief can be granted only on sound legal principles.
In the absence of any statutory requirement, courts do not ordinarily force an employer to recruit or retain in service an employee not required by the employer.
There are, of course, certain exceptions to this rule, such as in the case of a public servant dismissed from service in contravention of Article 311 of the Constitution; reinstatement of a dismissed worker under the Industrial Law; a statutory body acting in breach of statutory obligations, and the like.
[475 E] B.N. Tiwari vs District Board, Agra, ; ; U.P. State Warehousing Corporation vs C.K. Tyagi, ; and Executive Committee of Vaish Degree College, Shamli and Ors.
vs Lakshmi Narain and Ors., ; , referred to.
Indian Contract and Specific Relief Acts, by Polock & Mulla, Tenth Edn., page 983 and Halsbury 's Laws of England.
Fourth Edn., Volume 44, paragraphs 405 to 420, referred to.
1.2 In the instant case, neither from the plaint nor from the evidence is it possible to identify and concluded contract to which the first respondent is a party or which he can enforce.
There is no specific plea or evidence as regards the particulars of the scheme of the Government of India in terms of which he seeks relief whether it is a statutory scheme, and if so, what are the provision relied on by him and whether a duty is cast on the appellants and a benefit is conferred on persons like the first respondent.
Assuming that such a scheme existed or any such contract bound the parties, it would be violative of all basic norms of law to decree a suit for specific performance of a contract of personal service.[472E G] 470 1.3 Courts do not ordinarily enforce performance of contracts of a personal character, such as a contract of employment.
Subject to certain well defined categories of exceptions, law does not permit, and the does not contemplate, the enforcement of a contract of a personal nature by a decree for specific performance.
The facts of the instant case do not fall within the exceptions.
[472A, 474D] Rigby vs Connol, , 487 and Executive Committee of Vaish Degree College, Shamli and Others vs Lakshmi Narain and Ors., ; at 1020, referred to.
Cheshire, fifoot and Furmston 's Law of Contract, 11th ed., p. 614 and Halsbury 's Laws of England Fourth Edition, Volume 44, at page 407, referred to.
1.4 Even if there was a contract in terms of which the first respondent was entitled to seek relief, the only which was available in law was damages and not specific performance.
Breach of contract must ordinarily sound in damages, and particularly so in the case of personal contracts.
Assuming that a contractual relationship arose consequent upon the letters addressed by the second respondent to the first appellant, the first respondent was a total stranger to any such relationship, for no relationship of a fiduciary character existed between the first respondent and the second respondent or the appellants.
Neither on principles of law or equity nor under any statute did the first respondent acquire an enforceable right by reason of the letters exchanged between the appellant and second respondent, nor did he have private of any kind to their relationship.
No collateral contract to which he was a party did arise on the facts of this case and at no time was the second respondent acting as his agent.
There is no express or implied contract which is enforceable by him.
[475 H, 476 B] In the circumstances, the decrees of the High Court and the first appellate Court are set aside and that of the trial court is restored.[476D]
|
ition No. 505 of 1990 etc.etc.
(Under Article 32 of the Constitution of India) R.N. Sachtey, S.K. Bhattacharya, S.C. Patel, Anip Sachthey, Mahabir Singh, R.K. Agnihotri, R.K. Kapur, Ms. Anil Katyar, N.D, Garg, C.M. Nayar (NP), H.S. Munjral, V. B. Joshi, V.K. Verma, S.K. Agnihotri, Sakesh Kumar, N. Ganapathy, M. Veerappa, ,Mrs. Rani Chhabra, M.N. Shroff, Indra Makwana, Sushil Kumar Jain, S.N. Aggarwal, Ms. Vijay Lakshmi Menon, C.V.S Rao, Aruneshwar Gupta and Sushil Kumar for the appearing parties.
The Judgement of the Court was delivered by RANGANATH MISHRA, CJ.
These are applications under Article 32 of the Constitution on behalf of petitioners who hold All India Tourist Permits granted under section 63(7) of the .
corresponding to section 88(9) of the .
The respondent States in these writ petitions are Haryana, Punjab, Gujarat, Rajasthan and Madhaya Pradesh .
There is a common Act the Punjab Motor Vehicles Taxation Act, 1924 which is applicable to the States Punjab and Haryana.
In each of the other States there is a similar separate legislation.
Under the taxing power in the several Act provision has been made for taxation as also for levy of additional tax.
It is the contention of the petitioners that the demand of additional tax is neither compensatory nor regulatory and , therefore, the levy is violative of Article 10(1)(g) read with Article 301 of the Constitution.
In regard to the State of Punjab and Haryana a special contention has been raised to effect that rule 8(v) of the Punjab Motor Vehicles Taxation Rules, 1925 provide total exemption from liability of tax if the vehicle is brought into Punjab and kept for use within the State for a period not exceeding 30 days in a year and it is the contention of the petitioners that since the vehicles registered outside the State of Punjab and Haryana are not kept within State for more than 30 days a year, the demand of tax in the face of rule 8(v) is contrary to law.
In the State of Gujarat, the Bombay Motor Vehicles Tax Act, 1958 has been amended, Section 3A of the Amending Act provides that: "3A (1) On and from the first day of April 1982 there shall 527 be levied and collected.
on all ominibuses which are exclusively used or kept for use in the State as contract carriages (hereinafter in this section referred to as the omnibus) a tax (hereinafter referred to as " the additional tax") in addition to the tax levied under section 3, at the rates fixed by the State Government by notification in the official Gazettte but not exceeding the maximum rates specified in the table below: Description of Maximum rate of an omnibus additional tax.
A. ordinary (i) Monthly rate of Rs. Omnibuses 240 per passenger permitted to be carried.
(ii) Weekly rate of Rs. 80 per passenger permitted to be carried.
(iii)Daily rate of Rs. 16 per passenger permitteed to be carried.
B. Luxury or tourist(i) Monthly rate of Rs. 360 Omnibuses per passenger permitted to be carried.
(ii)Weekly rate of Rs. 120 per passanger permitted to be carried.
(iii)Daily rate of Rs. 24 per passenger permitted to be carried.
The validity of levy of this type came up for consideration before this Court in the case of the Automobile Transport (Rajasthan) Ltd.v.
The State of Rajasthan and Ors., [1963] 1 S.C.R.491.
Four learned Judges who constitued the ,majority held that the provisions of Rajasthan Motor Vehicles Taxation Act, 1951 did not violate the provisions of Article 301 of the Constitution and the taxes imposed under the Act were compensatory or regulatory in nature which did not hinder the freedom of trade, commerce and intercourse assured by that Article, At page 586 of the Report the following test was indicated: 528 "It seems to us that working test for deciding whether a tax is compensatory or not is to inquire whether the trades people are having the use of certain facilities for the better conduct of their business and paying not patently much more than what is required for providing the facilities .
It would be impossible to judge the compensatory nature of a tax by meticulous test, and in the nature of things that cannot be done.
The same question came up for consideration before a Two Judge Bench in M/s. International Tourist Corporation and Ors.
vs State of Haryana and Ors,.
, ; This Court followed the decision referred to above of the larger group and observed: "There cannot be the slightest doubt that the State of Haryana incurs considerable expenditure for the maintanance of roads and providing facilities for the transport of goods and passengers within the State of Haryana .
The maintenance of highways other than the National Highways is exclusively the responsibility of the State Government.
While the maintenance of National Highwauyys is the responsibility of the Union Government, under section 5 of the National Highways Act, that very provision empowers the Central Government to direct that any function in relation to the developement and maintenance of a National Highway shall also be exercisable by the concerened State Government.
Section 6 further empowers the Central Government to give directions to the State Government as to the carrying out of the provisions of the Act and section 8 authorises the Central Government to enter into an agreement with the State Government in relation to the developement and maintenance of the whole or part of a National Highway situated within the State including a provision for sharing of expenditure.
Therefore, the State government is not altogether devoid of responsibility in the matter of developement maintenance of National Highway, though the primary responsibility is that of the Union Government.
It is under a statutory obligation to obey the directions given by the Central government with respect to the development and maintenance of National Highways and may enter into an agreement to share the expenditure.
That part of the Highway which is within a municipal area is excluded from the definition of a National 529 highway and therfore, the responsibility for the development and maintenace of that part of the Highway is certainly on the State Government and the Municipal Committee concerned.
Since the development and maintenance of the part of the Highway which is within a municipal area is equally inportant for the smooth flow of passengers and goods along the National Highway it has to be said that in developing and maintaining the Highway which is within a municipal area, the State Government is surely facilitating the flow of passengers and goods along the National Highway.
Apart from this , other facilities provided by State Government along all Highways including National Highways, such as lighting, traffic control, amenities for passengers, halting places for buses and trucks are available for use by everyone including those travelling along the National Highways .
It cannot, therfore, be said that the State Government confers no benefits and renders no service in connection with traffic moving along National Highways and is, therfore, not entitled to levy a compensatory and regulatory tax on passengers and goods carried on National Highways.
We are satisfied that there is sufficient nexus between the tax and passengers and goods carried on National Highways to justify the imposition.
" This view has been appoved in B.A. Jayaram and Ors.v.
Union of India and Ors.
,[1984] 1 S.C.C. 168.
That case also relates to permit holders under section 63(7) of the , and challenge of the present type was negatived in the case.
Law is settled that uphold levy of a tax of this type, what is necessary is existence of a nexus between the subject and the object of the levy and it is not necessary to show that the whole or substantial part of the tax collected is utilised.
We are, therefore, satisfied that the demand of tax is not open to challenge and the plea raised against the levy, whether of tax or additional tax, is not justified.under the taxing provision a statutory outer limit has been provided and the actual amount is left to be determined by the State Government by notification.
Obviously, discretion is left with the State Government to demand at a rate which in a given situation would be justified.
Once it is held that the tax is either compensatory or regulatory that forms the guideline for the State Government to keep in view to determine the rate at which within the upper limit fixed by law the demand has to be made.
The second contention which has been raised is applicable to the 530 State of punjab and Haryana and that depends upon the scope of rule 8(v) of the Punjab Motor Vehicles Taxation Rules,1925.
We note that the provision perscribes that a motor vehicle temporarily brought into Punjab and kept for use therein for a period not exceeding 30 days is entitled to total exemption and that is not in dispute before us.
Nor is it in dispute that the rule applies to Haryana .
The words 'Kept for use ' came up for consideration in the case of International Tourist Corporation (supra) where this Court held that once a vehicle is used within the State the Taxable event occured and it must be taken for use.
In State of Mysore and Ors.v.
M/s. T.V. Sundaram Iyengar & Sons(P) Ltd., ; the meaning of 'kept 'was examined at length and this Court held that vehicle in transit through the State of Mysore, or even making a necessary halt for a short interval, during transit , cannot be said to be a vehicle 'kept ' for use on roads in the State of Mysore.
The word 'kept ' has not been defined in the Act.
It must , tharefore, be interpreted in its ordinary popular sense consistent with the context.
The ordinary dictionary meaning of the word 'kept ' is 'to retain ', 'to maintain ' or 'cause to stay or remain in place ' or 'to detrain ' or 'to stay or continue in specified condition, position etc. ' It is something different from a mere state of transit or a course of journey through the State.
It is something more than a mere stoppage or halt for rest, food or refreshment, etc.
in the course of transit through the territory of the State.
That being the position rule 8(v) which uses the terms 'kept for use ' may not cover a case of bare transit and in terms of the rule exemption is available for vehicle kept upto 30 days in a year.
In that view of the matter tourist vehicles registered outside the State of Punjab and Haryana when brought into these two States for regular use and not by way of transit and when used for more than 30 days in a year would attract taxability otherwise the exemption provision in rule 8(v) would be available .
We have settled the legal position and we leave it to the individual taxing authorities as also the operators of tourist vehilces to work out their respective rights.
We would , therefore , like to clarify that the first aspect being a challenge against the taxing provision whether by way of tax or additional tax is rejected and the question of exigibility of tax in the States of Punjab and Haryana with reference to rule 8(v) of the Punjab Motor Vehicles Taxation rules, 1925 is left to be determined in individual cases as and when raised.
There would be no order as to costs.
G.N. Petitions deposed of.
| Under the taxing power contained in the several Motor Vehicles Tax Acts in vogue in the Respondent States, provision has been made for taxation as also for levy of additional tax.
The petitioners who hold All India Tourist Permits challenged the constitution validity of the additional tax, on the ground that it was neither compensatory nor regulatory, and therefore was violative of Articles 19(1) (g) and 301 of the Constitution.
In respect of the State of Punjab and Haryana which have a common Act, an additional contention was raised to the effect that Rule 8(v) of the Punjab Motor Vehicles Taxation Rules 1925, provides total exemption from liability of tax if the vehicle was brought into the State and kept for use within the State for a period not exceeding 30 days in a year, and since the vehicles registered outside Punjab and Haryana States are not kept within the State for more than 30 days in a year, the demand of tax in the face of Rule 8(v) is contrary to law.
Disposing of the Writ Petitions, this Court, HELD : 1.
Law is settled that to uphold levy of tax as in the present case, what is necessary is existence of a nexus between the subject and 525 the object of the levy and it is not necessary to show that the whole or a substantial part of the tax collected is utilised.
Hence the demand of tax is not open to challenge and the plea raised against the levy, whether of tax or additional tax, is not justified.
Under the taxing provision a statutory outer limit has been provided and the actual amount is left to be determined by the State Government by notification.
Obviously, discretion is left with the State Government to demand at rate which in a given situation would be justified .
Once it is held that the tax is either conmpensatory or regulatory that forms the guideline for the State Government to keep in view to determine the rate at which within the upper limit fixed by law the demand has to be made.
{525E H} Automobile Transport (Rajasthan) Ltd. vs The State of Rajasthan and Ors , {1963} 1 SCR 491; M/s. International Tourist Corporation and Ors.
vs State of Haryana and Ors.
,[1981] 2 SCC 318 and B.A. Jayaram and Ors.
vs Union of India and Ors.
, [1984] SCC 168., relied on.
The word 'kept ' has not been defined in the Punjab Motor Vehicles Taxation Act, 1924.
It must , therefore, be interpreted in its ordinary popular sense consistent with the context.
The ordinary dictionary meaning of the word 'keep ' is 'to retain ', ' to maintain ' or 'cause to stay or remain in a place ' or 'to detain ' or 'to stay or continue in a specified condition , position etc.
, It is something different from a mere state of transit or a course of journey through the State .
it is something more than a mere stoppage or halt for rest, food or refreshment, etc.
in the course of transit through the territory of the State.
That being the position, rule 8 (v) which uses the term 'kept for use ' may not cover a case of bare transit and in terms of the rule exemption is available for vehicles kept upto 30 days in a year.
In that view of the matter tourist vehicles registered outside the State of Punjab and Haryana when brought into these two States for regular use and not by way of transit and when used for more than 30 days in a year would attract taxability; otherwise the exemption provision in rule 8(v) would be available [530C F] M/s. International Tourist Corporation and Ors.
vs State of Haryana and Ors.
, [ 1981] 2SCC 318 and State of Mysore and Ors.
vs M/s. T.V. Sundaram Iyengar & Sons (P) Ltd., ; , referred to.
The question of exigibility of tax in the State of Punjab and Haryana with reference to rule 8(v) of the Punjab Motor Vehicles Taxation Rules, 1925 is left to be determined in individual cases as and when raised.
[530G].
|
ivil Appeal Nos.
998 999 of 1991.
From the Judgment and Order dasted 1.3.1990 of the Allahabad 480 High Court in C.M.W.P. Nos. 11465 & 3085 of 1987.
Satish Chandra, and Prashant Bhushan for the Appellants.
V.C.Mahajan, S.D. Sharma, S.N.Terdol and Mrs.Suri for the Respondents.
The Judgment of the Court was delivered by YOGESHWAR DAYAL, J.
1.
Civil Appeal Nos.
998 and 999 of 1991 have been filed against the judgment of the Division Bench of the Allahabad High Court dated 1st March, 1990 whereby the Allahabad High Court dismissed the writ petitions filed by the District Exhibitors Association, Muzaffarnagar and others as well as some other Theatres upholding the Notification dated 30th April, 1986 issued by the Central Government under Section 5 read with sub section (1) of Section 7 of the Employees ' Provident Funds and Miscellaneous Provisions Act,1952 (hereinafter referred to as`the Provident Funds Act ').The main judgment was delivered by the High Court in the Civil Miscellaneous Writ Petition filed on behalf of Shakti Theatre, Civil Lines, Bijnore, which was followed in the petition filled by the District Exhibitors Association Muzaffarnagar and others and some other writ petitions.
Before us also the Notification dated 30th April, 1986 of the Goernment of India, Ministry of Labour, amending the Employees ' provident Funds Scheme, 1952 (For short `Scheme ') issued under the Provident Funds Act has been challenged.
2.The Provident Funds Act came into force on 14th March,1952.
The preamble of the Act states that it is an Act to provide for the institution of provident funds, family pension fund and deposit linked insurance fund for employees in factories and other establishments.
The Act by Section 1(3) makes it applicable to every factory referred to in clause (a) and also to any other establishment referred to in clause (b) employing twenty or more persons or class of such establishments which the Central Government may, by Notification in the Official Gazette, specify in that behalf.
The scheme under Section 5 alongwith other schemes were issued in 1952.
The Provident Funds Act by Notification of the Government of India issued on 31st July, 1961, under Section 1(3) was made applicable to cinema theatres employing twenty or more persons.
The (hereinafter referred to as `the Cinema 481 Theatre Workers Act) received the assent of the President on 24th December, 1981, and was published in the Gazette on the same day.
The Cinema Theatre Workers Act came into force with effect from 1st October, 1984.
The preamble of the Act says that it is to provide for the regulation of the conditions of employment of certain cine workers and cinema theatre workers and for matters connected therewith.
Section 2(a) defines `cinema theatre ' to mean a place which is licensed under of the , or under any other law for the time being in force in a State for the exhibition of cinematograph films.
Section 24 enacts: "The provisions of the Employees~ Provident Funds and Miscellaneouss Provisions Act, 1952, as in force for the time being, shall apply to every cinema theatre in which five or more workers are employed on any day, as if such cinema theatre were an establishment to which the aforesaid Act had been applied by a notification of the Central Government under the proviso to sub section (3) of section 1 thereof, and as if each such worker were an employee within the meaning of that Act." 4.
The Notification of the Government of India amending the Scheme under the Provident Funds Act was issued in conformity with Section 24 of the Cinema Theatre Workers Act.
The impugned Notification dated 30th April, 1986 is being reproduced for facility of under standing the submissions made on behalf of the appellants: `NOTIFICATION G.S.R.
In exercise of the powers conferred by Section 5 read with Sub section (1) of Section 7 of the (19 of 1952), the Central Government hereby makes the following Scheme further to further to amend the Employees ' Provident Funds Scheme, 1952 namely; 1.
This Scheme may be called the Employees ' Provident Funds (Amendment) Scheme, 1986.
In the Employees ' Provident Funds Scheme in paragraph 1, in sub paragraph (3), in clause (b) after item (XOV11) the following item shall be added, namely: 482 `(XOV11) as respect the Cinema Theatre employing 5 or more workers as specified in Section 24 of the Cine WorKers and Cinema Theatres Workers (Regulation of Employment) Act, 1981 (50 of 1981) be deemed to have come into force with effect from the 1st day of October, 1984 '.
(No. S 35016/1/86 SS11) Sd/ A.K.Bhattari Under Secretary 30.4.1986 ' 5.
A perusal of the Notification shows that the Scheme has been retrospectively made applicable in respect of cinema theatres employing five or more workers as specified in Section 24 of the Cinema Theatre Workers Act with effect from 1st October , 1984 though the Notification was issued on 30th April, 1986.
1st October, 1984 is also the date of coming into force of Cinema Theatre Workers Act.
Before the High Court the main arguments raised by the appellants were: a) that the Notification dated 30th April 1986 was ultra vires of the provisions of the provident Funds Act inasmuch as the Central Government could not extend the scheme to an establishment which is neither an industry nor a notified establishment under Section 3(b) of the Provident Funds Act; b) that there was no liability under the scheme framed by the Central Government to make contribution towards the provident fund in respect of the employees who ceased to be a cinema employee before the Provident Funds Act came into force from 30th April,1986:and c) that the demand of the Provident Funds Commissioner from the employers about the arrears of contribution even for prediscovery period i.e. the date from which the scheme became applicable to employers, who were called upon to pay contribution by notice, leads to hardship and injustice and, therefore, violates Article 14 of the Constitution.
483 7.
The High Court while dealing with these submissions took the view that Section 24 of the Cinema Theatre Workers Act has applied the provisions of the Provident Funds Act to every cinema theatre in which five or more workers were employed on any day, as if such cinema theatre were an establishment to which the provisions of the Provident Funds had been applied by a Notification of the Central Government under the proviso to clause (b) of sub section (3) of Section 1 of the Provident Funds Act.
The High Court, in view of the averments made in the counter affidavit filed on behalf of the respondent as well as on the interpretation of the scheme, took the view that only those employees who were in employment on 30th April, 1986 and had not ceased working in a cinema in respect of whom the benefit was being claimed, could be entitled to get the benefit of the scheme.
In the notice the demand of contribution was sought under the Sachem in respect of the employees working on 30th April, 1986 with effect from Ist October, 1984.
The High Court took the view that since the demand was made for the employers ' contribution in respect of the employees who were working on 30th April, 1986, it was wrong to argue that the scheme was being incorrectly applied.
Those workers who had left the cinema and had ceased to be its workers on 3oth April, 1986, would certainly not be entitled to any benefit under the scheme.
Regarding the challenge to the demand by the Provident Fund Commissioner from the employers about the arrears of contribution, the High Court felt that there was no substance in that argument.
Before us Mr. Satish Chandra, learned counsel for the appellants submitted: i) that the Provident Funds Act would not be applicable so long as the Notification as required by the proviso to Section 1(3)(b) has not been issued; ii) even if we assume that Section 24 of the Cinema Theatre Workers Act takes the place of a Notification being issued as contemplated by the proviso to Section 1(3)(b) of the Provident Funds Act, an express Notification under Section 5 is required to make the scheme applicable to those establishments and without such a Notification the scheme will not be applicable: iii) that under Section 6 of the Provident Funds Act, the liability is only fixed for employers; share of contribution towards Provident Funds and there is no liability fixed to 484 pay employees ' share, and unless paragraph 30 of the scheme is made applicable there is no inability of the employers to pay employees ' share; iv) that the Notification is very harsh and unjust as the appellants are being asked to pay the contribution of the employees share to the Provident Fund Account retrospectively without the corresponding right of employer to recover it from the wages of employees.
It may be mentioned that the vires of any of the provision of the Provident Funds Act or the Scheme has not been challenged before us.
As would be seen from the preamble of the Provident Funds Act, the Act is intended for the benefit of the employees.
It is also so clear from its objects and reasons extracted below: "The question of making some provision for the future of the industrial worker after he retires or for his dependants in case of his early death, has been under consideration for some years.
The ideal way would have been provision through old age and survivors ' pensions as has been done in the industrially advance countries.
But in the prevailing conditions in India the institution of a pension scheme cannot be visualised in the near future.
Another alternative maY be for provision of gratuities after a prescribed period of service.
The main defect of a gratuity scheme, however, is that amount paid to a worker or his dependants would be small, as the worker, would not himself he making any contribution to the fund.
Taking into account the various difficulties, financial and administrative, the most appropriate course appears to be the institution compulsorily of contributory provident funds in which both the worker and the employer would contribute.
Apart from other advantages, there is the obvious one of cultivating among the workers a spirit of saving something regularly.
The institution of a provident fund of this type would also encourage the stabilisation of a steady labour force in industrial centres".
It is a legislation for the benefit of the worker sections of the society and the beneficial legislation is made applicable to cinema theatres if it employs five or more workers.
The classification of cinema theatres as a separate class for purposes of coverage under the Provi 485 dent Funds Act has also not been challenged.
Further no challenge has been made to any of the provision of the Cinema Theatre Workers Act.
Before we deal with the submissions of learned counsel for the appellants we may notice the relevant part of provisions of the Provident Funds Act and the Scheme.
Section 1(3) of the Provident Funds Act reads as follows: "Subject to the provisions contained in Section 16, it applies (a) to very establishment which is a factory engaged in any industry specified in Schedule 1 and in which twenty or more persons are employed, and (b) to any other establishment employing twenty or more persons or class of such establishments which the Central Government may, by notification in the Official Gazette, specify in this behalf: Provided that the Central Government may, after giving not less than two months ' notice of its intention so to do, by notification in the Official Gazette, apply the provisions of this Act to any establishment employing such number of persons less than twenty as may be specified in the notification.
Section 5(1) and (2) provide as follows: "5.
Employees ' Provident Fund Schemes (1) The Central Government may, by notification in the Official Gazette, frame a Scheme to be called the Employees ' Provident fund Scheme for the establishment of provident funds under this Act for employees or for any class of employees and specify the establishments or class of establishments to which the said Scheme shall apply and there shall be established as soon as may be after the framing of Scheme, a Fund in accordance with the provisions of this Act and the Scheme.
(1 A). . . (1 B). . . 486 (2) A Scheme framed under sub section (1) may provide that any of its provisions shall take effect either prospectively or retrospectively on such date as may be specified in this behalf in the Scheme" 14.
The relevant part of Section 6 reads as follows: "6.
Contributions and matters which may be provided for in Schemes The contribution which shall be paid by the employer to the Fund shall be eight and one third per cent of the basic wages, dearness allowance and retaining allowance, if any, for the time being payable to each of the employees, whether employed by him directly or by or through a contractor, and the employee 's contributions shall be equal to the contribution payable by the employer in respect of him and may, if any employee so desires, b an amount exceeding eight and one third per cent of his basic wages, dearness allowance and retaining allowance, if any, subject to the condition that the employer shall not be under an obligation to pay any contribution over and above his contribution payable under this section.
Para 1(1) and relevant parts of paras 1(3)(a) and 1(3)(b) of the Scheme read as follows: "1.
Short title and application (1) This Scheme may be called the Employees ' Provident Funds Scheme 1952.
(2). . . (3)(a) Subject to the provisions of Sections 16 and 17 of the Act, this Scheme shall apply to all factories and other establishments to which the Act applies or is applied under sub section (3) or sub section 4(1) of Section 1 or Section 3 thereof: . . . (b) Provisions of this Scheme shall . . . . (xcviii) as respect the cinema theatres employing 5 or more workers as specified in Section 24 of the Cine Workers and Cinema Theatres Workers (Regulations of Employment) Act, 1981 (50 of 1981) be deemed to have come into force with effect from the 1st day of October, 1984." 487 16.
The relevant parts of paras 30 and 32 of the Scheme read as follows: "30.
Payment of contribution (1) The employer shall, in the first instance, pay both the contribution payable by himself in this Scheme referred to as the employer 's contribution and also, on behalf of the member employed by him directly or by or through a contractor, the contribution payable by such member 's in the Scheme referred to as the member 's contribution.
(2). . . (3) It shall be the responsibility of the principal employer to pay both the contribution payable by himself in respect of the employees directly employed by him and also in respect of the employees employed by or through a contractor and also administrative charges.
Explanation . . . . 32.
Recovery of a member 's share or contribution (1) The amount of a member 's contribution paid by the employer or a contractor shall, notwithstanding the provisions in this Scheme or any law for the time being in force or any contract to the contrary, be recoverable by means of deduction from the wages of the member and otherwise: Provided that no such deduction may be made from any wage other than that which is paid in respect of the period or part of the period in respect of which the contribution is payable: . . . .
Provided further that where no such deduction has been made on account of an accidental mistake or a clerical error, such deduction may, with the consent in writting of the Inspector, be made from the subsequent wages.
(2). . . (3). . . 17.
A combined reading of Section 6 of the Provident Funds Act 488 and paras 30 to 32 of the Scheme is that the contribution to the Provident Fund is to be 12 1/2% of the basic wages and dearness allowance, that is to be borne equally by the employer and the employee and that the employer is to pay the whole of it, half on his account, and the other half on account of the employee and he is to recoup himself by deducting it from the wages of the employee.
A bare reading of Section 24 of the Cinema Theatre Workers Act shows that it has fulfilled the purpose of the Notification which the Central Government could have issued under Section 1(3)(b) of the Provident Funds Act read with the proviso.
Therefore, no further Notification as contemplated by Section 1(3)(b) of the Provident Funds Act was necessary.
Section 24 has taken the place of the Notification contemplated by Section 1(3) (b) of the Provident Funds Act read with the proviso thereto.
Therefore the Provident Funds Act became applicable to the theatres who employ five or more workers with effect from 1st October, 1984.
Again in view of Section 6 of the Provident Funds Act, noticed earlier, the employers became liable to pay their contribution to the fund as soon as the Act came into force i.e. w.e.f. 1st October, 1984.
It is also clear from reading of Section 5 of the Provident Funds Act that before the Provident Funds Scheme can become applicable, the Central Government has to frame a Scheme and also specify the establishment to which the said Scheme shall apply.
Till the impugned Notification dated 30th April, 1986 was published the Scheme was not applicable to such cinema theatres who are employing less than 20 employees and it became applicable to cinema theatres employing five or more workers only when the impugned Notification was issued under Section 5 of the Provident Funds Act.
It is only by the impugned Notification that the scheme was amended so as to be made applicable in respect of cinema theatres employing five or more persons.
Without such a Notification the Scheme would not have became applicable.
The Notification on the face of it shows that the Scheme has been made applicable to the cinema theatres covered by the Notification with effect from 1st October, 1984.
This could be done in view of not only the provisions of Section 5(2) of the Provident Funds Act but also in view of Section 7(1) of the Provident Funds Act.
Both these provisions confer express powers of making the Scheme applicable retrospectively.
The question however, is whether by making the Scheme with retrospective operation, the employer could be saddled with the 489 liability to pay employees ' contribution w.e.f.
1st October, 1984 and if not from what other date? The answer to the question turns upon the implementation of the Scheme and in particular the giving effect to paras 30 and 32 of the Scheme.
Para 30 provides that the employer shall, in the first instance, pay both the contributions payable by himself and also the contribution payable by the employees.
It shall be the responsibility of the principal employer to pay both the contributions payable by himself and also in respect of the employees directly employed by himself and also in respect of the employees directly employed by himself and also in respect of the employees employed by him or through a contractor.
Para 32 confers upon the employer the right to recover the employees contribution that has been paid by him under para 30.
That could be recovered by the employer by means of deduction from the wage of the employees who are liable to pay.
First proviso to para 32(1) however, limits that liability in expressly stating that no such deduction may be made from any wage other than that which is paid in respect of the period of which the contribution, is payable.
It is obvious from paras 30 and 32 that the employer has to pay the contribution of the employee 's share but he has a right to recover that payment by deducting the same from the wages due and payable to the employees.
It is significant to note that the deduction is not from the wages payable for any period, but only from the wages for the period in respect of which the contribution is payable and no deduction could be made from any other wages payable to the employees.
In other words, the payment of employees contribution by the employer with the corresponding right to deduct the same from the wages of the employees could be only for the correct period during which the employer has also to pay his contribution.
In the instant case for the period from 1st October, 1984 up to the date of the impugned Notification the employer has paid the full wages to the employees since during that period, there was no scheme applicable to his establishment.
By retrospectively applying the scheme, could he be asked to pay the employees contribution for the period antecedent to the impugned notification.
We think not.
The Act and the Scheme neither permit any such payment nor deduction.
He cannot be saddled with the liability to pay the employees ' contribution for the retrospective period, since he has no right to deduct the same from the future wages payable to the employees.
Mr. Vikram Mahajan, learned counsel for the Central Government submitted that it may be possible for the employers to make deduction from subsequent wages of the workmen with the consent in writing of the Inspector as required under the third proviso to 490 para 32(1) of the Scheme.
This submission cannot be accepted since the third proviso could be taken advantage of by the employer only where no deduction has been made from the wages of the employees due to accidental mistake or clerical error when the scheme is operative.
Such deduction which has not been made by accidental mistake or clerical error, could be made from the subsequent wages with the consent in writing of the Inspector concerned.
The case with which we are concerned is not covered by the third proviso.
It is not the case of any body that the employer could not make deduction from the wages of the employees by accidental mistake or clerical error.
The employer indeed could not have made the deduction prior to the impugned notification dated 30th April, 1986 since the Scheme was not then applicable.
The Scheme has been given retrospective effect w.e.f.
1st October, 1984.
The employer therefore, cannot take the benefit of the third proviso to para 32(1) for deducting the employees contribution in their wages payable in future.
Reference was also made to the decisions of this Court in M/s. Orissa Cement Ltd. vs Union of India, [1962] (Suppl) 3 SCR 837 and in M/s. Lohia Machines Ltd., vs Union of India and Ors., [1965]2 SCR 686 by learned counsel for the appellants in support of his contentions.
It will be noticed that the Supreme Court in Orissa Cement Ltd. [1962] (Suppl) 3 SCR 837 was concerned with the validity of certain Notifications which were struck down as infringing Article 19(1)(g) of the Constitution.
The decision, has no applicability to the facts of the present case.
Equally, the decision, in Lohia Machines Ltd., has also no applicability to the facts of the present case.
In the result and for the foregoing reasons, we allow the appeals as indicated above by setting aside the judgment of the High Court.
We declare that the appellants are not liable to pay the employees contribution for the period from 1st October, 1984 to 30th April, 1986.
In the facts and circumstances of the case, however, we make no order as to costs.
G.N. Appeals partlly allowed.
| On 30.4.1986, a Notification was issued by the Government of India amending the scheme under the in conformity with Section 24 of the Cine Workers and Cinema Theatre Workers (Regulation of Employment) Act, 1981, with retrospective effect from 1.10.1984.
The effect of the amendment was to extend the benefit of the Provident Funds Act and the Scheme thereunder to the Cine Workers and Cinema theatre workers.
The appellants challenged the validity of the Notification before the High Court by way of writ Petitions, contending that the said Notification was ultra vires the provisions of the Provident Fund Act since the Central Government could not extent the scheme to an establishment which is neither an industry nor a notified establishment under Section 3(b) of the Act and there was no liability under the scheme to make contribution towards Provident Fund in respect of the employees who ceased to be Cinema workers before 30.4.1986.
It was further contended that calling upon the employers to contribute arrears from the date the scheme was made applicable led to hardship and injustice and hence violative of Article 14 of the Constitution of India.
The Writ Petitions were dismissed by the High Court.
In their appeals to this Court, the appellants contended that so long as the Notification as required by the proviso to Section 1(3)(b) of the Provident Funds Act has not been issued, the Act cannot be made applicable to them and even assuming that Section 24 of the Cinema Theatre Workers Act takes the place of the required Notification, an express notification under Section 5 would be required.
It was also contended 478 that under Section 6 of the Provident Funds Act the liability is fixed only for employers 'share of contribution and not the employees 'share, and since paragraph 30 of the Provident Fund Scheme was not made applicable, there arose no liability of the employers to pay employees 'share and as the appellants were being asked to pay the contribution of the employees ' share retrospectively without the corresponding right of employer to recover it from the wages of employees, it was harsh and unjust.
On behalf of the Respondents, it was contended that it might be possible for the appellants to make deduction from subsequent wages of workmen with the consent of the Inspector as required under the third proviso to para 32(1) of the Provident Fund Scheme.
Partly allowing the appeals, this Court, HELD: 1.
Section 24 of the Cine Workers and Cinema Theatre Workers (Regulation of Employment) Act, 1981 has fulfilled the purpose of the Notification which the Central Government could have issued under Section 1(3)(b) of the Provident Funds Act read with the proviso.
Therefore, no further Notification as contemplated by Section 1(3)(b) of the Provident Funds Act was necessary.
Section 24 has taken the place of the Notification contemplated by Section 1(3)(b) of the Provident Funds Act read with the proviso thereto.
Therfore, the Provident Funds Act became applicable to the theatres who employ five or more workers with effect from 1st October, 1984.
Again in view of Section 6 of the Provident Funds Act, the employers became liable to pay their contribution to the fund as soon as the Act came into force i.e.w.e.f.1st October, 1984.
[488B D] M/s. Orissa Cement Ltd. vs union of India, [1962] (Suppl) 3 SCR 837 and M/s. Lohia Machines Ltd.v.
Union of India and Ors., , distinguished.
It is only by the Notification dated 30.4.1986 that the Provident Funds Scheme was amended so as to be made applicable in respect of the cinema theatres employing five or more persons.
Without such a Notification the Scheme has been made applicable to the cinema theatres covered by the Notification with effect from 1st October, 1984.
This could be done in view of not only the provisions of Section 5(2) of the Provident Funds Act but also in view of Section 7(1) of the Provident Funds Act.
Both these provisions confer express powers of making the 479 Scheme applicable retrospectively.[488E G] 3.
It is obvious from paras 30 and 32 of the Provident Funds Scheme that the employer has to pay the contribution of the employee 's share, but he has a right to recover that payment by deducting the same from the wages due and payable to the employees.
It is significant to note that the deduction is not from the wages payable for any period but only from the wages for the period in respect of which the contribution is payable and no deduction could be made from any other wages payable to the employees.
In other words, the payment of employees 'contribution by the employer with the corresponding right to deduct the same from the wages of the employees could be only for the current period during which the employer has also to pay his contribution.
[489A E] 4.
In the instant case, for the period from 1st October, 1984 up to the date of the Notification i.e.30th April 1986 the employer has paid the full wages to the employees since during that period, there was no scheme applicable to his establishment.
By retrospectively applying the scheme, he could not be asked to pay the employees ' contribution for the period antecedent to the notification.
The Act and the Scheme neither permit any such payment nor deduction .
The employer cannot be saddled with the liability to pay the employees ' contribution for the retrospective period, since he has no right to deduct the same from the future wages payable to the employees.
[489F G] 5.
The third proviso to paragraph 32(1)of the Provident Funds Scheme could be taken advantage of by the employer only where no deduction has been made from the wages of the employees due to accidental mistake or clerical error when the scheme is operative.
Such deduction which has not been made by accidental mistake or clerical error, could be made from the subsequent wages with the consent in writing of the Inspector concerned.
The present case is not covered by the third proviso.
The employer could not have made the deduction prior to the notification dated 30th April, 1986 since the Scheme was not applicable then.
The Scheme has been given retrospective effect w.e.f.
1st October, 1984.
The employer, therefore, cannot take the benefit of the third proviso to para 32(1) for deducting the employees 'contribution in their wages payable in future.[489H;490A C]
|
(CRL.) No. 133 of 1991.
(Under Article 32 of the Constitution of India).
R.K. Jain, Ravi Prakash, Mrs. Swati Kapoor Ms. Abha R. Sharma and Ms. Rajni K. Prasad for the Petitioner.
464 Altaf Ahmed, Additional Solicitor General, Ms. Kusum Choudhary, C. Ramesh and Ms. A. Subhashini for the Respondents.
The Judgment of the Court was delivered by SHARMA, J.
On the basis of a letter received from a prisoner detained in Alipore Central Jail, Calcutta, drawing the attention of this Court to the long wait of Daya Singh, the petitioner convicted for the murder of late Chief Minister of Punjab Pratap Singh Kairon, lodged at present in Rohtak Jail Haryana, pending the execution of his death sentence, this case was registered as a writ petition and was listed before us on 27.3.1991.
All the relevant facts were not available from the letter but from the Office Report it appeared that the case of the condemned prisoner had earlier come to this Court.
We directed the Registry to examine the earlier files and place before us the relevant details.
In the meantime we stayed the execution of the death sentence.
The learned carousel for the State of Haryana was also informed about the case.
As directed, the case was placed before us again on Monday, the 1st April, 1991, when Ms. Kusum Chaudhary appeared on behalf of State of Haryana and orders were passed for notice to the counsel representing the Union of India.
Having heard about the case, the convict Daya Singh engaged his own counsel to represent him and to press this writ petition and accordingly Mr. R.K. Jain appeared for him on 5.4.1991.
We have, in the circumstances, treated this application as one directly by Daya Singh.
The Union of India is represented by Additional Solicitor General of India.
The case was further adjourned at the request of the counsel and was ultimately heard on 16.4.1991.
Mr. Jain has contended that if the relevant circumstances of this case are examined in the light of the decisions of this Court, the conslusion is irresistible that there has been inexcusable delay in executing the death sentence of the petitioner, and the sentence should, therefore, be quashed by this Court under Article 32 of the Constitution.
The petitioner was tried for the murder of Sardar Pratap Singh Karion which took place in 1965 and was convicted and sentenced to death by the trial court on 13.12.1978.
The sentence was confirmed by the High Court on 22.3.1980.
His Special leave petition was dismissed by this Court on 21.8.1980 and a further prayer for review was rejected on 2.9.1981.
He filed mercy petitions before the Governor and the President of India, which were also rejected.
465 Seveal orders of stay were passed from time to time, the details whereof are not very significant in view of the rejection by this Court of an earlier application under Article 32, being Writ Petition No. 191 of 1986, filed through his brother Lal Singh.
The case was dismissed on October 11, 1988 and the stay of the execution of the sentence stood vacated.
The reasoned judgment, however, was pronounced later and is resported in Smt.
Triveniben vs State of Gujarat; , The petitioner filed another mercy petition thereafter before the Governor of Haryana on 18.11.1988 and an order for stay of execution was again passed.
The matter remained pending and the petitioner has been awaiting the final outcome of his last petion since then.
On the basis of a newspaper report dated December 24, 1990 it is alleged that the attention of the Deputy Prime Minister was drawn to the petitioner 's case and the Deputy Prime Minister gave an assurance that he would examine the matter.
The report drew the attention of Alipore Jail prisoner which prompted him to send the letter which led the Registry of this Court to register the present writ petition.
The earlier writ petition of the petitioner Writ petition No. 191 of 1986, filed through his brother Lal Singh, was initially heard by a Division Bench of this Court and the matter, along with a number of other applications on behalf of other convicts was referred for the decision of the Constitution Bench.
The cases were heard at considerable length by the Constitution Bench of which one of us (Sharma,L) was a member and the leading argument at that stage was also made by Mr. R.K. Jain when all aspects of the cases were thoroughly considered.
Finally, this Court substituted the sentence of death of one convict (Harbhajan Singh) in another case by the sentence of imprisonment for life, but the other writ petitions including that of the prisoner were dismissed.
In the circumstances the petitioner cannot succeed on the basis of the earlier delay.
The operative part of the judgment, as stated earlier, was passed in October, 1988 and what is now relevant to consider is the delay subsequent to this date.
Before proceeding further we may refer to the decision in Smt.
Triveniben 's case laying down the principle which governs the present petition.
Although the cases were disposed of by two judgements, according to the opinion of the Bench, which was unanimous, undue delay in execution of the sentence of death entitles the condemned prisoner to approach this Court under Article 32, but this Court will examine only the nature of delay caused and circumstances ensued after the sentence was finally confirmed by the judicial process, and will have no jurisdiction to reopen the conclusions reached by the 466 Court while finally maintaining the sentence of death.
Further, while considering the grievance of inordinate delay this Court may consider all the circumstances of the case for deciding as to whether the sentence of death should be altered into imprisonment for life, and no fixed period of delay could be held to make to sentence of death inexecutable.
In the light of these observations the circumstances of the present case are to be examined.
It is true that while rejecting the earlier prayer of the petitioner on October 11, 1988 all the relevant considerations were taken into account and the petitioner cannot be permitted to raise the same plea once rejected, by repeated petitions.
But this does not deprive the petitioner the right to renew the prayer on fresh circumstances arising later and, therefore, not considered.
This is the position in the present case.
Although the matter was finally closed by this Court in October, 1988, the petitioner continues to remain in a state of suspense since then.
The main question is as to what is the effect of this delay.
The initial reason for the further delay has been a fresh mercy petition filed by the petitioner.
Does this fact justify keeping him under a sence of anticipation for more than two years? If the prayer was not considered fit be rejected at once it was certainly appropriate to have stayed the execution, but the matter should have been disposed of expeditiously and not kept in abeyance as has been done.
The counter affidavit filed on behalf of the Union of India states that on the receipt of the last mercy petition the Governor of Haryana immediately made a reference to the President of India seeking enlightenment on the question as to whether the Governor, while dealing with such applications, is bound by the advice of the Chief Minister of the State and whether it is open to the Governor to exercise his constitutional power in a case where an earlier application to the same effect had been rejected by the President.
Soon after the receipt of this communication, the matter was referred to the Department of Legal Affairs, Ministry of Law and Justice for advice, and the Ministry suggested that the question should be discussed with the Attorney General of India.
Since the matter remained under consideration no reply could be sent to the quarry and ultimately it was only in March this year, that the reply could be sent in the shape of a directive under Article 257(1) of the Constitution to all the Chief Secretaries of the State Governments and Union Territories.
The affidavit, however, does not furnish any fact or circumstance in justification of the delay.
In absence of any reasonable explanation by the respondents we are of 467 the view that if the concerned officers had bestowed the necessary attention to the matter and devoted the time its urgency needed, we have no doubt that the entire process of consideration of the questions referred would have been completed within a reasonable period without leaving any yawning gap rightly described by the learned Additional Solicitor General as "embarrassing gap".
There has, thus, been an avoidable delay, which is considerable in the totality of circumstances in the present case, for which the condemned prisoner in in no way responsible.
As was cautioned by this Court in Smt.
Triveniben 's case we are not laying down any rule of general application that the delay of two years will entitle a convict, sentenced to death, to conversion of his sentence into one for life imprisonment, rather we have taken into account the cumulative effect of all the circumstances of the case for considering the prayer of the petitioner.
Although the fact that the petitioner has been continuously detained in prison since 1972 was taken into account while rejecting his earlier writ petition, the same is not rendered completely irrelevant for the purpose of the present case and we have taken it into consideration merely as a circumstance assuming significance as a result of the relevant circumstances arising subsequent to the judgment rendered in October, 1988.
Having regard to all the circumstances of the case, we deem it fit to and accordingly substitute the sentence of imprisonment for life in place of the petitioner 's death sentence.
The writ petition is accordingly allowed.
In the letter from Alipore Jail a prayer has been made for the release of the petitioner.
As was indicated in Triveniben 's case, the only relief a convict awaiting execution of death sentence can get from this Court on the ground of delay is conversion of the sentence into that of life imprisonment.
However, on conversion of the death sentence to life imprisonment, the petitioner would now be governed and dealt with as a life convict for all purposes.
We are not required to say anything more in this behalf.
This prayer made in the letter is rejected.
R.P. Petition allowed.
| The petitioner was convicted of murder and was sentenced to death by the Sessions Court on 13.12.1978.
His appeal to the High Court and Special Leave petition to this Court were dismissed.
His mercy petitions to the Government and to the President of India were also rejected.
The execution of the sentence remained stayed till it stood vacated on 11.10.1988 on dismissal of a writ petition** under Article 32 of the Constitution filed by his brother for conversion of the death sentence into one of life imprisonment on the ground of delay in its execution.
On 18.11.1988 the petitioner again filed a mercy petition before the Governor and his execution was once more stayed, and since then he was awaiting the final outcome of his petition.
meanwhile, on 24.12.1990, a prisoner sent a letter praying for release of the petitioner, which was treated as a writ petition on behalf of the convict under Article 32 of the Constitution.
It was contended on behalf of the petitioner that the death sentence awarded to him should be quashed as there had been inexcusable delay in executing the same.
On consideration on nature and effect of the delay in execution of the sentence after the petitioner filed mercy petition on 18.11.1988, in the light of the principles laid down in Triveniben 's case**.
Allowing the appeal, this Court, HELD: 1.
Once a petition for conversion of death sentence into one of life imprisonment is rejected, the plea raised in the petition so 463 rejected, cannot be permitted to be raised by repeated petitions.
But this does not deprive the convict of his right to renew the prayer on fresh circumstances arising later and, therefore, not considered.
[465B C] 2.
In the instant case, the petitioner could not succeed on the basis of the delay prior to October, 1988 as it had been considered in the earlier petition which was dismissed; but the fact that the petitioner had been continuously detained in prison since 1972 was not rendered completely irrelevant and should be considered merely as a circumstance assuming significance as a result of the relevant circumstance, arising subsequent to the judgment rendered in October, 1988.
[465E F, 467C D] 3.
The initial reason for the further delay has been a fresh mercy petition filed by the petitioner.
Althought the stay of the execution was certainly appropriate in the event of not rejecting the prayer at once, yet the matter should have been disposed of expeditiously and not kept in abeyance as was done.
If the concerned officers had bestowed the necessary attention to the matter and devoted the time its urgency needed, undoubtedly, the entire process of the consideration of the questions referred would have been completed within a reasonable period without leaving any yawning or "embarrassing gap".
There had been an avoidable delay considerable in the totality of circumstances, for which the petitioner was in no way responsible.
[466D E; 467A B] 4.
The only relief a convict awaiting execution of death sentence can get from this Court on the ground of delay is conversion of the sentence into that of life imprisonment.
[467F] 5.
In view of all the circumstances of the case, the petitioner 's death sentence is substituted by imprisonment for life and he would be governed and dealt with as a life convict for all purposes.
[476E, G] **Smt.
Tribeniben vs State of Gujarat, [1989] 1 S.C.C. 678, followed.
|
ivil Appeal Nos.
232 233 of 1978.
From the Judgment and Order dated 19.7.1977 of the Patna High Court in C.W.J.C. No. 756 of 1977.
Ashok Sen, Shankar Ghosh, Tapas Ray, Ms. section Janani, Ms. Minakshi, Mrs. Urmila Kapoor, D. Goverdhan, Rakesh K. Khanna, Salman Khurshid, R.P. Singh, D.D. Mishra, Mrs. G.S. Mishra and D.P. Mukherjee for the appearing parties.
The Judgment of the Court was delievered by RAY, J.
These two appeals were filed against the common judgment and order dated 29th July, 1978 made by the Division Bench of the High Court at Patna in C.W.J.C. No. 756 of 1977 whereby the High Court quashed the orders of the government contained in Annexures 8, 9 and 10 to the writ petition.
The facts unfurled from the writ petition are as follows: The respondent Nos. 1 to 5 in these appeals (the petitioners in the writ petition) were directly appointed in the Bihar Engineering Service Class II as Assistant Engineers of the Irrrigation Department on the recommendation of Bihar Public Service Commission and were posted in River Valley Project in 1961.
The respondent Nos. 6 to 23 in C.A. No. 232 of 1978 (who are appellants in C.A. No. 233 of 1978 and respondent Nos. 5 to 22 in the writ petition) were working at that time as overseers in the Bihar Subordinate Engineering Service (Irrigation Department).
On 7th April, 1958 the the Governor took a decision under rule 2 of the Public Works Department Code that 25% of the posts in the Bihar Engineering Service, Class II shall be filled up by promotion, subject to availability of suitable hands.
Thus, out of the total vacancies in Bihar Engineering Service, Class II, 75% of the vacant posts as determined by the Government will be filled up by direct recruitment and 25% of the vacant posts will be filled up by promotion subject to availability of suitable candidates.
By notification dated 413 18th July, 1964/27th August, 1964, respondent Nos.
6 to 13 in C.A. No. 232 of 1978 (appellant Nos. 1 to 8 in C.A. No. 233 of 1978 and respondent Nos.
5 to 12 in the writ petition) who were members of the Bihar Subordinate Engineering Service (Overseers) were promoted to the post of Assistant Engineer in Class II and by another notification dated 21st July, 1969, respondent Nos.
14 to 23 in C.A. No. 232 of 1978 (appellant Nos. 9 to 18 in C.A. No. 233 of 1978 and respondent Nos. 13 to 22 in the writ petition) were also promoted to Bihar Engineering Service, Class II as Assistant Engineers.
On February 25, 1969, a seniority list of Assistant Engineers was published by the Department wherein the names of the respondent Nos. 1 to 5 (the petitioners) were mentioned at Sl.
Nos. 170, 199, 208, 211 and 226 and the names of the respondent Nos. 6 to 23 (respondent Nos. 5 to 22 in writ petition) were mentioned at Sl.
253, 254, 256 to 262, 687 to 695 and 701 respectively The respondent Nos.
6 to 23 were thus shown as juniors to the respondent Nos. 1 to 5 (the petitioners).
The respondent Nos. 6 to 23 feeling aggrieved by the said seniority list made representations claiming seniority over respondent Nos. 1 to 5.
On 3rd May, 1972 the State of Bihar constituted a Committee known as Ramanand Committee by a resolution to consider the inter se seniority of Civil Engineers including the Assistant Engineers.
On April 19, 1973 the Ramanand Committee submitted a report making certain recommendations.
It was alleged that a revised seniority list was prepared wherein the respondent Nos. 1 to 5 were shown juniors to the respondent Nos. 6 to 23.
This, of course, has been denied in affidavit in counter filed on behalf of the Government (appellants in C.A. No. 232 of 1978, respondent Nos.
6 to 9 in C.A. 233 OF 1978, and respondent Nos. 1 to 4 in the writ petition).
On 21st of July, 1975, an order was made whereby the date of promotion of respondent Nos.
6 to 13 was changed from 21st July, 1962 to 27th February, 1961 thereby making the respondent Nos. 1 to 5 juniors to respondent Nos. 6 to 13.
This order is contained in annexure 8 to the writ petition.
In other words, the respondent Nos. 6 to 13 were promoted retrospectively from the State against it but the State government instead of redressing their grievances made another order on January 20, 1976 (annexure 9 to the writ petition) re fixing the seniority of respondent Nos. 6 & 7 promoting them to the Bihar Engineering Service with effect from December 19, 1958.
Again, to the prejudice of the respondent Nos. 1 to 5, an order was passed by the State Government by which the date of promotion of respondent Nos.
14 to 23 was pushed back to February 27, 1961 making them also senior to the respondent Nos. 1 to 5.
This order is contained in annexure 10 to the writ petition.
414 The respondent Nos. 1 to 5, therefore, filed a writ petition in the High Court at Patna being Civil Writ Petition No. 756 of 1977 challenging the seniority conferred on the respondent Nos. 6 to 23 (respondent Nos. 5 to 22 in the writ petition) by annexures 8, 9 and 10 on the ground that these orders were wholly arbitrary illegal, void and inoperative and ineffective and so prayed for appropriate writ for quashing those orders.
A counter affidavit was filed on behalf of the State Government.
In Para 3(iii) of the said affidavit, it has been averred that till 1957, 25% of the vacancies in Bihar Engineering Service, Class II, were being filled up by promotion from the Bihar Subordinate Engineering Service (commonly known as `Overseers ').
Subsequently, in the year 1958, it was decided that 25% of the cadre posts in the Bihar Engineering Service, Class II Both permanent and temporary, shall be reserved for being filled up through promotion from the members of the Bihar Subordinate Engineering Service.
It has been further averred in para 3(iv) that all the posts of temporary Assistant Engineers to which the Overseers were entitled to be promoted on the basis of 25% reservation in the cadre were not filled up by promotion of Overseers, only 3 overseers were given promotion with effect from 19.12.1958 vide order No. A/P1 409 64 1 14294 dated 18.7.64/27.8.64.
In the said affidavit it has also been stated that on a careful examination of the matter it was found that on the basis of total number of posts of Assistant Engineers in the Department, the Overseers were entitled to 60 posts on the basis of 25% reservation till 1958, out of which they were already given 33 posts and 27 more posts of Assistant Engineers were still due to them and accordingly by an order dated 20th January, 1976 the 21 Overseers who had earlier been given promotion as temporary Assistant Engineers from later dates in 1960, 1961 and 1962 by the order dated 18.7.64/27.8.64.
were given promotion, with effect from 19.12.1958.
Due to this correction, respondent Nos. 6 and 7 and one Shri Mithileshwari Sahay (since retired) were promoted as temporary Assistant Engineers with effect from 19.12.1958 in partial modification of the Government order dated 18.7.64/27.8.64 and another order dated July 12, 1975.
It has been further stated that as a result of this modification in the dates of promotion as Assistant Engineer who by the order dated 20th January, 1976 were allowed promotion as temporary Assistant Engineers with effect from 19.12.1958 as against promotions from later dated in 1960, 1961 and 1962 given to them by earlier Government Order dated 27.8.1964 and order dated 21.7.1969.
It has also been stated that the respondent Nos. 6 and 7 were entitled to promotion in 1958 and respondent Nos. 8 to 23 to promotions in 415 1960 and 1961, on the basis of the reservation of 25% of the cadre post in the Bihar engineering Service, Class II, for promotion of Overseers from the Bihar Subordinate Engineering Service.
It has been further averred that as against 21 consequential vacancies, the case of only 17 Overseers was modified accordingly in supersession of the earlier Government order dated 18.7.64/27.8.64 and respondent Nos. 8 to 13 were given promotion as temporary Assistant Engineer with effect from 27.2.1961, from which date the promotion was due to them on the basis of the quota by a Government Order No. 10501 (annexure 8 to the writ petition) dated July 12, 1975 and No. 17328 dated November 8, 1975 respectively.
It has also been stated that the seniority list that was prepared and published in 1969 was tentative.
The High Court, Patna held that no person can be promoted with retrospective effect from a date when he was not born in the cadre so as to adversely effect others.
The respondent Nos. 1 to 5 were recruited to the post of Assistant Engineer, Class II before the respondent Nos. 6 to 23 were promoted to the post of Assistant Engineer, Class II in the Bihar Engineering Service, Class II.
The High Court, therefore, held that the orders contained in Annexure 8, 9 and 10 promoting the respondent Nos. 6 to 23 (respondent Nos. 5 to 22 in the writ petition) with retrospective effect are bad and so quashed those Government orders referred to in the said annexures.
Against this judgment and order made by the High Court, the instant appeals on special leave were filed.
The sole question which falls for decision in these appeals is whether the inter se seniority between the petitioners respondent Nos. 1 to 5 who are direct recruits and the Overseers belonging to the Bihar Subordinate Engineering Service (Irrigation Department) who had been promoted retrospectively in their 25% quota for the year 1958 as revised by the Government orders mentioned in annexures 8, 9 and 10 to the writ petition, is arbitrary, illegal and inoperative as those orders purport to affect prejudicial the seniority of the petitioners respondent Nos. 1 to 5 in the service of Bihar Engineering Service, Class II.
It is not disputed that in 1958 under Rule 2 of the Public Works Department Code, the Government of Bihar took a decision to the effect that 25% of the posts in the Bihar Engineering Service, Class II shall be filled up by promotion, subject to availability of suitable hands.
It also appears from the counter affidavit filed on behalf of the Government that in 1958, the the total number of posts to be filled up by promotion from the Overseers in the Bihar Subordinate Engineering Service 416 (Irrigation Department) to the post of Assistant Engineer, in Bihar Engineering Service, Class II was 60 out of which only 33 posts were filled up by promotion, leaving 27 more posts of Assistant Engineers to be filled up by promotion from the Overseers in the Bihar Subordinate Engineering Service (Irrigation Department).
It is also clear from the averments made in the said counter affidavit that the petitioners respondent Nos. 1 to 5 were appointed in Bihar Engineering Service, Class II on the recommendation of the Bihar Public Service Commission in the year 1961 and the respondent Nos. 6 to 13 who had been working in the Bihar Subordinate Engineering Service (Irrigation Department) as Overseers and having independent charge of the sub division were promoted to the post of Assistant Engineer, Class II by notification dated 18.7.64/27.8.64.
The respondent Nos.
14 to 23 were also promoted by notification dated 21.7.1969.
On the basis of these appointments and promotions in the post of Assistant Engineer in the Bihar Engineering Service, Class II, a seniority list was prepared and published in february, 1969 tentatively wherein the petitioners respondent Nos. 1 to 5 were shown as senior to respondent Nos.
6 to 23.
However, the Government by its order dated 21st July, 1962 changed the date of promotion of respondent Nos. 6 to 13 from 21.7.1962 to 27.21961 (Annexure 8 to the writ petition) thereby making the petitioners respondent Nos. 1 to 5 junior to respondent Nos. 6 to 13.
On January 20, 1976, the Government passed another order re fixing the seniority of respondent Nos. 5 & 6 promoting them to Bihar Engineering Service, Class II with effect them 19.12.1958 (Annexure 9 to the writ petition).
Again an order contained in Annexure 10 to the writ petition was passed by which the date of promotion of respondent Nos.
14 to 23 was pushed back to February 27, 1961, thus making them senior to the petitioners respondent Nos. 1 to 5.
The petitioners respondent Nos. 1 to 5 challenged these three Government orders mainly on the ground that these orders giving promotion to the respondent Nos. 6 to 23 from a date earlier to their date of promotion to the post of Assistant Engineer in Bihar Engineering Service, Class II purport to affect prejudicially the rights of the petitioners respondent Nos. 1 to 5 in as much as they were appointed to the post of Assistant Engineer in the Bihar Engineering Service, Class II earlier to the promotion to the said post of the respondent Nos. 6 to 23.
It has also been submitted in this connection that he seniority has to be reckoned amongst the officials working as Assistant Engineers in the Bihar Engineering Service, Class II from the date of their appointment on promotion to the said Service.
The petitioners respondent Nos. 1 to 5 being appointed earlier directly in the quota of direct recruits than the promoted respondents who were promoted later cannot be given 417 seniority in service to the petitioners respondent Nos. 1 to 5 and it was contended that the impugned orders are wholly illegal and unwarranted and so the High Court has rightly quashed the said orders.
It has been further urged in this connection that the State can promote its employees with retrospective effect provided such retrospective promotion does not affect the right and seniority already earned by others.
The petitioners respondent Nos. 1 to 5 who were senior to the petitioners respondents Nos. 6 to 23 were made junior to them by the said Government orders as contained in Annexure 8, 9 and 10 to the writ petition.
It has, therefore, been contended that the promotion to the respondent Nos. 6 to 23 was illegal and arbitrary as the same had prejudicially affected the petitioners respondent Nos. 1 to 5 in regard to their seniority.
The High Court while rendering its judgment relied on the decision in the case of A.K. Subraman and Ors.
vs Union of India and Ors.
, specially on the observation made therein as under: "Once the Assistant Engineers are regularly appointed to officiate as Executive Engineers within their quota they will be entitled to consideration in their own rights as Class I Officers to further promotions.
Their "birth marks" in their earlier service will be of no relevance once they are regularly officiating in the grade of Executive Engineer within their quota.
" The High Court held that no person can be promoted with retrospective effect from a date when he was not born in the cadre so as to adversely affect others.
It is the admitted position that the respondent Nos. 6 to 23 were working as Overseers in the Bihar Subordinate Engineering Service and were promoted to the post of Assistant Engineer in Bihar Engineering Service, Class II much after the petitioners respondents Nos.
1 to 5 were directly recruited and appointed on the basis of the recommendation of the Bihar Service Commission, to the post of Assistant Engineers in 1961 and as such they have been working in the grade of Assistant Engineers much before the respondent Nos.
6 to 23.
Undoubtedly, on the basis of the order of the Governor in 1958, the posts of Assistant Engineers are to be filled up from two sources i.e. by direct recruitment as well as by promotion from Overseers working in the Bihar Subordinate Engineering Service and the ratio of the vacan 418 cies to be filled up has been fixed as 75% from the direct recruits and 25% from the promotees.
It has been urged on behalf of the respondent Nos. 6 to 23 that in view of the quota rule the respondent Nos. 6 to 23 who were promoted in the quota set out for promotees in respect of the vacancies of 1958 shall be taken to be promoted in 1958 notwithstanding that they have been actually promoted long after 1958 and after the direct recruits i.e. respondent Nos. 1 to 5 were recruited directly to the post of Assistant Engineers.
In other words even though the respondent Nos. 6 to 23 have been promoted after the date of recruitment of respondent Nos. 1 to 5 to the post of Assistant Engineer, still then the promote respondent Nos. 6 to 23 should be deemed to be senior to the direct recruit respondent Nos. 1 to 5 as they were promoted in the vacancies for 1958 quota set up for promotees.
In support of this submission the decision in V.B. Badami etc.
vs State of Mysore and Ors., [1976] 1 SCR 815 as well as Gonal Bihimappa vs State of Kanataka, [1987] Supp.
SCC 207 were cited at the bar.
In both these cases the promotees occupied the quota of direct recruits as direct recruits were not available to fill up the quota meant for them.
It was held that direct recruits who were appointed within their quota subsequently were entitled to the vacancies within their quota which had not been filled up and they would become senior to the promotees The promotees would be pushed down to later years when their appointment could be regularised as a result of absorption in their lawful quota of those years.
The promotees cannot claim any right to hold promotional posts unless the vacancies fall within their quota.
These cases have no application in the instant case in as much as the direct recruits i.e. respondent Nos. 1 to 5 were recruited in their quota i.e. the quota meant for them.
This being so, the decision in these two cases has no application to the instant case.
Moreover, there is nothing to show that the respondent Nos. 6 to 23 who were promoted in 1962 and thereafter i.e. subsequent to the direct recruits i.e. respondent Nos. 1 to 5 could be deemed to be recruited in 1958 quota as there was nothing to show that these vacancies were carried forward.
The Government 's orders as contained in annexures 8, 9 and 10 which purport to give promotion to the respondent Nos. 6 to 23 retrospectively are arbitrary, illegal and inoperative in as much as these seriously affect the respondent Nos. 1 to 5.
The respondent Nos. 6 to 23 were not in the cadre of Assistant Engineers even in officiating capacity at the time when the respondent Nos. 1 to 5 were directly recruited to the post of Assistant Engineer.
As such, the said promotee respondent Nos.
6 to 23 could not be under any circumstances, given seniority over the directly recruited respondent Nos. 1 to 5.
The 419 High Court has rightly quoted the observation made by this Court in the case of A.K. Subraman & Ors.
(supra) as mentioned in the preceding paragraphs.
It is pertinent to mention in this connection, the observation of this Court in the case of D.K. Mitra and Ors.
vs Union of India and Ors., [1985] Supp.
SCC 243.
In this case the petitioners were confirmed as Assistant Medical Officers in 1962 and 1963 and they were placed in the higher scale of Assistant Divisional Medical Officers to the Indian Railways with effect from January 1, 1973.
Thereafter they were appointed as officiating Divisional Medical Officers in 1972, 1973 and 1974 and they had been continuing there uninterrupted.
Respondent Nos. 4 to 64 were given substantive appointments as Divisional Medical Officers later on but they were confirmed earlier than the petitioners because of the zone wise confirmation given by the Railway Administration.
It was held that the petitioners should be considered at par for the purpose of fixing seniority, with those appointed to permanent posts in a substantive capacity.
For the purpose of determining seniority among promotees, the petitioners should be treated as having been appointed to permanent vacancies from the respective dates of their original appointment and the "entire period of officiating service performed by them should be taken into account as if that service was of the same character as that performed by the substantive holders of permanent posts.
" In the instant case, the promotee respondent Nos.
6 to 23 were not born in the cadre of Assistant Engineer in the Bihar Engineering Service, Class II at the time when the respondent Nos. 1 to 5 were directly recruited to the post of Assistant Engineer and as such they cannot be given seniority in the service of Assistant Engineers over the respondent Nos. 1 to 5.
It is well settled that no person can be promoted with retrospective effect from a date when he was not born in the cadre so as to adversely affect others.
It is well settled by several decisions of this Court that amongst members of the same grade seniority is reckoned from the date of their initial entry into the service.
In other words, seniority inter se amongst the Assistant Engineers in Bihar Engineering Service, Class II will be considered from the date of the length of service rendered as Assistant Engineers.
This being the position in law the respondent Nos. 6 to 23 can not be made senior to the respondent Nos. 1 to 5 by the impugned Government orders as they entered into the said Service by promotion after the respondent Nos. 1 to 5 were directly recruited in the quota of 420 direct recruits.
The judgment of the High Court quashing the impugned Government orders made in annexures, 8, 9 and 10 is unexceptionable.
In the premises aforesaid, we confirm the judgment and order rendered by the High Court.
The appeals are, therefore, dismissed.
In the facts and circumstances of the case, there will be no order as to costs.
R.P. Appeals dismissed.
| Under Rule 2 of the Bihar Public Works Department Code, the Governor of Bihar took a decision on 7.4.1958 providing that 25% of the posts of Assistant Engineers in the Bihar Engineering Service, Class II (the Service) were to be filled by promotion, subject to availability of suitable hands, from Overseers in the Bihar Subordinate Engineering Service (Irrigation Department) and 75% of the posts were to be filled by direct recruitment to the Service.
Respondents No. 1 to 5 in both these appeals were appointed as Assistant Engineers in the Service on the recommendation of the Bihar Public Service Commission in the year 1961; and the appellants (in Civil Appeal No. 233 of 1978(respondents No. 6 to 23 in Civil Appeal No. 232 of 1978), who had been working as Overseers in the Bihar Subordinate Engineering Service (Irrigation Department) were promoted to the posts of Assistant Engineers in the Service in 1962 and thereafter.
However, by orders dated 12.7.1975, 20.1.1976 and 9.4.1977, the Government changed the date of promotion of the appellants to the dates prior to the appointment of respondents No. 1 to 5 in the Service, making the former Senior to the letter.
Respondents No. 1 to 5 filed writ petition before the High Court challenging the seniority conferred on the appellants from the retrospective date and contended that the orders giving promotions to the appellants from a date earlier to date of their promotion in the Service purported to affect prejudicially respondents No. 1 to 5 's right inasmuch as they were appointed to the Service earlier to the promotion of the appellants; and that the seniority had to be reckoned amongst the officials working as Assistant Engineers in the Service from the date of their appointment or promotion to the said Service.
The appellants contended that they were entitled to be promoted retrospectively on the 411 basis of reservation of 25% of the Cadre posts in the Service till 1958.
The High Court.
holding that the orders promoting the appellants with retrospective effect were bad, quashed the same and allowed the writ petition.
Hence the present appeals.
On consideration of the legality and validity of the orders of the Government giving promotions to the appellants from a date earlier to the date of their entry into the Service as Assistant Engineers, and its effect on the inter se seniority amongst the appellants and respondents No. 1 to 5, who were directly appointed as Assistant Enginers in the Service before the appellants entered in the said Service.
Dismissing the appeals, this Court, HELD: 1.
The Government Orders dated 12.7.1975, 20.1.1976 and 9.4.1977 which purported to give promotion to the appellants retrospectively were arbitrary, illegal and inoperative inasmuch as these seriously affected rspondents No. 1 to 5.
The appellants were not borne in the cadre of Assistant Engineers even in officiating capacity at time when rspondents No. 1 to 5 were directly recruited to the post of Assistant Egineer.
As such, the promotee appellants could not be under any circumstance given seniority over the directly recruited respondents No. 1 to 5.
The judgment of the High Court in quashing the impugned Government Orders was, therefore, unexceptionable.
[418F H; 420A] 2.1 No person can be promoted with retrospective effect from a date when he was not borne in the Cadre so as to adversely affect others; and amongst members of the same grade, seniority is reckoned from the date of their initial entry into the service.
[419F] 2.2 Seniority inter se amongst the Assistant Engineers in Bihar Engineering Service, Class II would be considered from the date of the length of service rendered as Assistant Engineers.
Therefore, the appellants could not be made senior to respondents No. 1 to 5 by the impugned Government Orders as they entered into the said Service in 1962 and thereafter by promotion subsequent to respondent No. 1 to 5 who were directly recruited in the quota meant for them.
There was nothing to show that the appellants could be deemed to be recruited in 1958 quota and that these vacancies were carried forward.
[419G; 418E F] A.K. Subraman and Ors.
vs Union of India and Ors., , relied on.
412 V.B. Badami vs State of Mysore and Ors., [1976] 1 SCR 815 and Gonal Bihimappa vs State of Karnataka, [1987] Supp.
SCC 207, held inapplicable.
D.K. Mitra and Ors.
vs Union of India and Ors., [1985] Supp.
SCC 243, referred to.
|
ition No. 259 of 1990.
(Under Article 32 of the Constitution of India).
Yogeshwar Prasad, R.K. Jain, Satish Chandra, A.S. Pundir, Gopal Subramanium, Mrs, S.D. Dikshit, Jitender Sharma, R. Venkataramani, Mrs. Rachna Gupta, M.P. Shorawala, D.K. Garg, Pramod Swarup, R.N. Keshwani, Mrs. Anil Katiyar, Anis Ahmed Khan and A.P. Mohanty for the Appearing parties.
The Judgment of the Court was delivered by KULDIP SINGH, J.
Before us are the members of Uttar Pradesh Higher Judicial Service (hereinafter called the `Service ') Promotees and the direct recruits, as usual, are in the fray.
This is their second round of litigation in this court.
Earlier in P.K. Dixit and Others vs State of U.P. and Others, ; this court directed the preparation of fresh seniority list in accordance with the observation made therein.
The Allahabad High Court thereafter framed and circulated final seniority list of the service of August 25, 1988.
Both promotees and direct recruits are not satisfied with the same.
They have challenged the said seniority list, inter alia on the ground that it is not in conformity with the directions of this court in Dixit 's case.
429 We may briefly state the necessary facts.
The service was initially governed by statutory rules called the Uttar Pradesh Higher Judicial Service Rules, 1953 (hereinafter called `1953 rules ').
Recruitment to the service under the said rules was from two sources, by promotion and the direct recruitment.
In Chandra Mohan vs State of Uttar Pradesh, this court struck down the 1953 rules so far as the said rules provided direct recruitment of the service.
As a consequence there was no direct recruitment to the Service till the year 1975 76.
This members of the service promoted under the 1953 rules were designated as Civil and Sessions Judges.
On May 8, 1974 the Uttar Pradesh Higher Judicial Service (abolition of cadre of the Civil and Sessions Judges) Rules, 1974 (hereinafter called `1974 rules ') came into force.
Under these rules the cadre of Civil and Sessions Judges was abolished.
Rules 2 and 3 of 1974 rules, which are relevant, are reproduced hereafter: 2.
Abolition of the Cadre of Civil and Sessions Judges.
With effect from the date of commencement of these rules, the cadre of Civil and Sessions Judges shall stand abolished and the Uttar Pradesh Higher Judicial service shall, with effect from the said date, consist of the posts of District and Sessions Judges and Additional District and Sessions Judges only.
Creation of posts and confirmation . (1) Upon the abolition of the cadre of Civil and Sessions Judges, permanent and temporary posts of Additional District and Sessions Judges equal in number of the permanent and temporary posts, respectively of Civil and Sessions Judges existing immediately before the date of commencement of these rules shall stand created with effect from the said date, and the officers holding the posts of Civil and Sessions Judges immediately before the said date shall become Additional District and Sessions Judges and be designated accordingly.
(2) An officer who is confirmed on the post of Civil and Sessions Judge before the commencement of these rules shall with effect from the date of such confirmation, be deemed to be confirmed on the post of Additional District and Sessions Judge.
430 It is, thus, obvious that the cadre of Civil and Sessions Judges stood abolished and a new cadre of Additional District and Sessions Judges, consisting of permanent and temporary posts equal in number of the permanent and temporary posts respectively of Civil and Sessions Judges, came into existence under the 1974 rules.
The Civil and Sessions Judges holding permanent or temporary posts in the Service were re designated as Additional District and Sessions Judges with effect from May 8, 1974, the date when the 1974 rules were enforce.
On that date 271 officers were working as Additional District and Sessions Judges against 235 posts (153 permanent and 82 temporary) in the Service.
The Service was reconstituted and given a freshlook by the rules framed under Article 309 read with Article 233 of the Constitution of India called the Uttar Pradesh Higher Judicial Service Rules, 1975 (hereinafter called `the 1975 Rules).
These rules came into force with effect from April 5, 1975.
The relevant rules, 5, 6, 8 and 26 are reproduced hereinafter: 5.
Source of recruitment.
The recruitment of the Service shall be made= (a) by direct recruitment of pleaders and advocate of not less than seven years standing on the first day of January next following the year in which the notice inviting applications is published; (b) by promotion of confirmed members of the Uttar Pradesh Nyayik Sewa (hereinafter referred to as the Nyayik Sewa, who have put in not less than seven years service to be computed on the first day of January next following the year in which the notice inviting applications is published; Provided that for so long as suitable officers are available from out of the dying cadre of the Judicial Magistrates, confirmed officers who have put in not less than seven years service to be computed as aforesaid shall be eligible for appointment as Additional Sessions Judges in the Service.
Explanation.
When a person has been both a pleader and an advocate his total standing in both the capacities shall be taken into account in computing the period of seven years under clause (a).
431 6.
Quota.
Subject to the provisions of Rule 8, the quota for various sources of recruitment shall be (i) direct recruitment from the Bar 15% (ii) Uttar Pradesh Nyayik Sewa 70% of the vacancies.
(iii) Uttar Pradesh Judicial Officers 15% Service (Judicial Magistrates).
Number of appointments to be made. (1) The Court, shall, from time to time, but not later than three years the last recruitment, fix the number of officers to be taken at the recruitment keeping in view the vacancies then existing and likely to occur in the next two years.
If at any selection the number of the selected direct recruits available for appointment is less than the number of recruits decided by the Court to be taken from that source, the Court may increase correspondingly the number of recruits to be taken by promotion from the Nyayik Sewa: Provided that the number of vacancies filled in as aforesaid under this sub rule shall be taken into consideration while fixing the number of vacancies to be allotted to the quota of direct recruits at the next recruitment, and the quota for direct recruits may be raised accordingly; so, however, that the percentage of direct recruits in the Service does not in any case excess 15 per cent of the total permanent strength of the service.
Provided further that all the permanent vacancies existing on May 10, 1974 plus 31 temporary posts existing on that date, if and when they are converted into permanent posts, shall be filled by promotion from amongst the members of the Nyayik Sewa; and only the remaining vacancies shall be shared between the three sources under these rules; Provided also that the number of vacancies equal to 15 per cent of the vacancies referred to in the last preceding proviso shall be worked out for being allocated in future to the Judicial Magistrates in addition to their quota of 15 per 432 cent prescribed in rule 6, and thereupon, future recruitment (after the promotion from amongst the members of the Nyayik Sewa against vacancies referred to in the last preceding proviso) shall be so arranged that for so long as the additional 15 per cent vacancies worked out as above have been filled up from out of the Judicial Magistrates, the allocation of vacancies shall be as follows: (i) 15% by direct recruitment.
(ii) 30% from out of the Judicial Magistrates.
(iii) 55% from out of the members of the Nyayik Sewa.
Seniority. (1) Except as provided in sub rule (1), seniority of members of the service shall be determined as follows.
(a) Seniority of the officers promoted from the Nyayik Sewa vis a vis the officers recruited for the Bar shall be determined from the date of continuous officiation in the service in the case of promoted officers and from the date of their joining the service in the case of direct recruits.
Where the date of continuous officiation in the case of an officer promoted from the Nyayik Sewa and the date of joining the service in the case of a direct recruit is the same, the promoted officer shall be treated as senior: Provided that in the case of a promoted officer the maximum period of continuous officiation in the service shall not, for the purpose of determining seniority exceed three years immediately preceding the date of confirmation . . .
Statement of facts filed by the High Court shows that on April 5, 1975, when the 1975 rules came into force, there were 229 permanent and 7 temporary (total 236) posts in the service.
This total included 31 temporary posts mention in second proviso to rule 8(2) of 1975 rules.
By that date these posts had become permanent.
The statement further shows that 263 officers were working as Additional District and Sessions Judges on the said date.
We take it that it that there were 236 posts in the Service on the commencement of the 1975 rules.
433 P.K. Dixit and 7 other promotee officers filed two writ petitions under Article 32 of the Constitution of India challenging the seniority assigned to them on two grounds.
It was contended that all the posts, existing on April 5, 1975 when the 1975 rules came into force should be deemed to have been filled by the officers holding the designation of Additional District and Sessions Judges on that date.
Secondly, it was contended that the promotees were entitled to the seniority from the date of their actual continuous officiation and not by limiting the said period to three years preceding the date of confirmation.
This court by its judgment dated October 8, 1987 in Dixit 's case (supra) partly allowed the writ petitions and directed the High Court to frame the seniority list afresh keeping in view the observations made in the judgment.
The promotes claim that the judgment in Dixit case is wholly in their favour on the first point.
The direct recruits, however, contest the said claim and assert that the contention of the promotees was rejected and their claim was confined to the number of posts as provided in First Proviso to rule 8(2) of the 1975 Rules.
Pursuant to the judgment in Dixit case the High Court issued a tentative seniority list on February 11, 1988.
The promotees were fully satisfied with the same as according to them the said list was drawn in conformity with the Judgment in Dixit case.
Objections were invited against the tentative seniority list and thereafter the High Court constituted a five Judge committee to finalise the list.
On the basis of the report of the committee final seniority list was issued on August 25, 1988.
O.P. Garg and 4 other promotees have filed writ petition No. 259 of 1989 challenging the final seniority list.
P.K. Dixit and others, petitioners in the original Dixit case have filed Civil Miscellaneous Petition No. 3473 of 1989 seeking clarification of the said judgment and also supporting the case of the promotees.
The direct recruits have filed writ petition No. 1304 of 1988 under Article 32 of the Constitution of India impugning the final seniority list issued by the High Court.
It is interesting that both promotees and the direct recruits are relying on the judgment in Dixit case and are contending that the final seniority list issued by the High Court is contrary to the said judgment.
The promotees, the direct recruits and the High Court have sought support from Dixit case on the basis of their own interpretation of the judgment.
Apparently there are diverse observations in Dixit case which are being stretched by the parties in support of their rival contentions.
The promotees strongly rely on the following paragraphs from Dixit case to show that the First Point argued before the Bench was decided in their favour.
434 "In the written affidavit filed by the High Court, it is not disputed that before these rules were brought into force, all the posts which were available on the date on which these rules came into force have to be filled in by promotion as till that date there was no rule requiring direct recruitment.
But unfortunately, the High Court in their return have not mentioned the exact number of vacancies existing on that date also the number of officers who were officiating on the date as Civil and Sessions Judges or Additional District and Sessions Judges who were entitled to be included in that cadre of higher judicial service under these rules." "It is not disputed that on the date on which these rules (1975 Rules) were brought into force, all the posts available were to go to the promoted officers and the only thing that the High Court is expected to do is to find out how many posts were available on that date and how many persons were officiating in the higher judicial service or equivalent posts on that date and their seniority ought to be fixed on the basis of their promotion to the posts except where an officer was not found fit or where officer concerned was reverted back to the judicial posts.
The documents do not disclose that any one of these judicial officers who were promotees have been reverted.
The documents also do not disclose that at any time the High Court considered the question of their confirmation and any one of them was not found fit for confirmation, or that it was decided to postpone the date of confirmation because the work of the officer was not upto the mark.
The record produced by the High Court only shows the date from which these petitioners were promoted and started officiating as Additional District Judges and the date on which they were ultimately confirmed.
During this period their case was considered at any time does not appear from the record produced in this case nor was the contention of the learned counsel appearing for the High Court.
It, therefore, is not disputed that these petitioners who were promoted before these rules (1975 Rules) were brought into force were never found unfit for confirmation and in this view of the matter, therefore, it is clear that all posts available on the date on which these new rules were brought into force will have to be filled in by these promoted 435 officers who were working in the officiating capacity in the post of higher judicial service on the date on which these rules were brought into force.
So far as the situation before these rules were brought into force is concerned even during the course of argument not much controversy appears to exist as it is clear that the question of direct recruitment and the quota of the direct recruits vis a vis promotees was not in existence.
" Based on the above quoted findings in Dixit case, the promotees plausibly claim that on April 5, 1975 when the 1975 rules came into force all the 236 posts in the Service had already been consumed by the existing members of the service who were working as Additional District and Sessions Judges.
Till that date the recruitment to the service was only by way of promotion and as such there was no question of allocating any post to the direct recruits who had not yet born in the service.
The direct recruits, on the other hand, assert that the Dixit case decides the controversy in their favour.
Reliance in that respect is placed on the following observations in the judgment: "This also appears to be the intention of the rules when they were framed in 1975 as is clear from the proviso to Rule 8.
It reads: "provided further that the permanent vacancies existing on May 10, 1974 plus 31 temporary posts existing on that date, if and when they are converted into permanent posts, shall be filled by promotion from amongst the members of the Nyayik Sewa; and only the remaining vacancies shall be shared between the three sources under these rules: It therefore is clear that even these rules provided that all the posts (permanent) available in the Higher Judicial Service existing on May 10, 1974 plus 31 temporary posts existing on that date which may become permanent later shall be filed by promotion from amongst the members of the Nyayik Sewa.
It is therefore clear that all the posts in the Higher Judicial Service, lying vacant on May 10 1974 plus thirty one will have to be filled in from the officers of the Nyayik Sewa.
May be that some of these posts may be occupied by promotee officers who were given promotions 436 on ad hoc basis and working on those posts or that the posts may be lying vacant.
Whatever may be the situation on the basis of what has been discussed above and also as has been clearly provided in these rules the matter will have to be gone into the High Court afresh and fill in all the posts in the Higher Judicial Service available on May 10, 1974 plus 31 posts from the officers of the Nyayik Sewa." "It has therefore to be accepted that all those who were working as Civil and Sessions Judges on 8th May, 1974 automatically became Additional District and Sessions Judges and what was left was only a consideration of their cases of confirmation and in so doing in view of the conclusions arrived at by us and also as has been provided in the proviso to Rule 8 quoted above all the posts available on 10th May, 1974 plus 31 posts (temporary) on that date will have to be filled in from the cadre of Nyayik Sewa by promotion." "But in view of what we have discussed earlier about the appointments on the posts available before these Rules were brought into force and to fill in temporary posts, we feel that the matter will have to be examined afresh by the High Court.
So far as posts available on 10th May, 1974 plus 31 posts are concerned they will have to be filled in only by promotees as we have discussed earlier and also in view of proviso to Rule 8 and after doing it examine the cases of promotion and direct recruitment after the coming into force of these Rules and the vacancies available and after consideration the cases in according with these Rules the High Court will prepare afresh the seniority list which may be notified so that if any objections are there, they may be placed for determination in according with the Rules and in the light of the discussions above.
" The precise assertion of the direct recruits, therefore,is that this court interpreting the second proviso to Rule 8(2) of the 1975 rules in Dixist case has held that the promotees as on May 10, 1974, are entitled to all the permanent posts available on that date plus 31 temporary posts and apart from that they cannot lay claim exclusively to the posts created thereafter.
The High Court accepted the contention of the direct recruits 437 and gave 153 permanent posts existing on May 10, 1974 plus 31 posts, which became permanent subsequently to the promotees.
Consequently out of the 263 Additional District and Sessions Judges who were holding the posts on April 5, 1975 only 184 (153+31) were taken to be the existing members of the Service and remaining officers were asked to enter the service through the promotion quota under the 1975 rules.
The second point in Dixit case was regarding fixation of seniority of the promotees under the 1975 rules.
Whether whole of the continuous officiation or part of it is to be counted towards seniority was the moot point.
Rule 26(1)(a) of the 1975 rules provides that seniority of the direct recruits is to be determined from the date of their joining the service whereas that of the promotees from the date of continuous officiation in the service.
But the first proviso to the said rule further limits the period of continuous officiation of a promotee for determining seniority to a maximum of three years immediately preceding the date of confirmation.
The promotees contended in Dixit case that they were entitled to the counting of their total period of continuous officiation towards seniority.
This court rejected the contention in the following words: "Having gone through these Rules it appears that the contention advanced by the petitioners in respect of proviso to Rule 26 about seniority does not appear to be justified.
" The High Court while framing the impugned seniority list did not follow the seniority rule.
The High Court determined the seniority of the promotees by giving them benefit of three years continuous officiation immediately preceding the date of availability of permanent vacancy whereas the rule provides three years preceding the date of confirmation.
Mr. Yogeshwar Prasad, learned senior advocate appearing for the promotees.
Mr. Satish Chandra, learned senior advocate for the direct recruits and Mr. Gopal Subramanium, learned advocate appearing for the High Court have addressed elaborate arguments before us.
The learned counsel have read and re read the judgment in Dixit case in support of their respective contentions.
The thrust of Mr. Yogeshwar Prasad 's arugment is twofold.
He contended that the service consisting of Additional District and Sessions Judges was constituted under the 1974 Rules which continued till April 5, 1975 when the Service was reconstituted under the 1975 rules.
According to him all 438 the posts in service, permanent and temporary, available on April 5, 1975 would be deemed to have been filled from amongst the Additional District and Sessions Judges working on that date.
Only the posts created thereafter could be filed from the three sources under the 1975 rules.
The second contention of Mr. Prasad was that the benefit of continuous officiation towards seniority cannot be confined to three years and the promotees are entitled to the fixation of their seniority on the basis of continuous length of Service.
Mr. Satish Chandra on the other hand has argued that second proviso to Rule 8(2) of the 1975 rules which is retrospective in its application, limits the number of vacancies as on May 10, 1974 to be filled by promotion from amongst the members of Nyaik Sewa.
According to him, under the said proviso, all the other posts created after May 10, 1974 are to be filled from the three sources in accordance with the 1975 rules.
Mr. Satish Chandra further argued that the High Court acted illegally and in violation of first proviso to Rule 26(1) (a) of the 1975 rules in determining the seniority of the promotees by giving them the benefit of three years officiation immediately preceding the date of availability of permanent vacancy.
According to him, such period under the above proviso can only be preceding the date of confirmation.
The judgment in Dixit case, by and large, deals with the main points raised by the learned counsel for the parties before us.
But in view of divergent view point taken by the promotees, the direct recruits and the High Court on the interpretation of the said judgment, we are of the view that it is necessary to have a fresh look into the matter to finally settle the long drawn controversy between the parties.
The service is a prestigious and sensitive service consisting of officers who form the back bone of Uttar Pradesh Judiciary.
The service is the feeder cadre for appointment to High Court Judges.
It is necessary to settle their rights in clear and unambiguous terms.
Taking an overall view of the arguments advance by Mr. Yogeshwar Prasad and Mr. Satish Chandra we pose the following three questions for our determination: 1.
What is the scope and interpretation of second proviso to rule 8(2) of the 1975 rules? Whether the Additional District and Sessions Judges, holding the posts on April 5, 1975, can claim that by operation of the 1974 rules they stood appointed to the service and as such consumed all the posts which were available 439 on April 5, 1975 or they were only entitled to vacancies under the second proviso to rule 8(2) of the 1975 rules.
Whether the period of continuous officiation in case of a promotee, for determining seniority, is to be counted in terms of First proviso to rule 26(1)(a0 of the 1975 rules or in accordance with the principle adopted by the High Court.
Isn 't it the requirement of law that a promotee is entitled to seniority in the service from the date when vacancy in his quota became available.
Seniority and appointment in the service being inter linked a further question which necessarily arises for our consideration is whether rules 22(3) and 22(4) of the 1975 rules, which provide appointments to temporary posts in the service from two sources of promotees excluding the direct recruits, can be legally sustained.
We may take up the first point for consideration.
After the decision by this court in Chandra Mohan 's case (supra), the Service consisted of only promotees with the designation of Civil and Sessions Judges.
They were promoted from the lower cadre of U.P. Civil Services (Judicial Branch) called "Nyayik Sewa".
Thereafter under the 1974 rules which came into force on May 8, 1974 the Civil and Sessions Judges, holding permanent or temporary posts, were redesignated as Additional District and Sessions Judges.
By Operation of the 1974 Rules all the newly designated Additional District and Sessions Judges became members of the Service.
Rule 2 of the 1974 Rules specifically provided that with effect from the date of commencement of those Rules "the Uttar Pradesh Higher Judicial Service shall consist of the posts of District and Sessions Judges and Additional District and Sessions Judges".
It is thus obvious that the service was reconstituted under the 1974 Rules and all the Additional District and Sessions Judges, to the extent posts were available, became members of the said service by operation of law.
There were 271 officers working in the Service on May 8, 1974 and there were 235 posts (153 permanent plus 82 temporary) available in the service.
Therefore, 235 officers out of the 271 working on May 8, 1974 for whom the posts were available in the service would be deemed to be members of the service under the 1974 rules.
The Service as constituted under the 1974 Rules continued to operate till April 5, 1975 when the 1975 rules were enforced.
Till that date the only source of recruitment to the service was by way of promotion.
On April 5, 1975 440 the service comprised of 236 posts (229 permanent plus 7 temporary).
They were 263 officers working in the service on that date.
235 posts were already occupied by the officers who had become members of the service under the 1974 rules and the one additional post available would go to the 236th officer holding the post on April 5, 1975.
The 236 posts comprising the service on April 5, 1975 have to be assigned and given to the 236 officers out of 263 who were working a Additional District and Sessions Judges and they are to be treated as existing members of the service as on April 5, 1975.
It is further axiomatic that the 236 officers including those holding temporary posts would en bloc rank senior to all those who were appointed to the service after April 5, 1975 under the 1975 rules.
The view which we have taken is also in conformity with the observations in Dixit case relied upon by the promotees which we approve.
Coming to the second proviso to rule 8(2) of the 1975 rules relied upon by the direct recruits, we are of the view that the interpretation given to the proviso by the High Court is not correct.
A bare reading of the proviso shows that it was not applicable to the Service as reconstituted under the 1974 Rules consisting of Additional District and Sessions Judges.
The proviso states that "all the permanent vacancies existing on May 10, 1974 plus 31 temporary posts existing on that date. . ., shall be filled by promotion from amongst the members of the Nyayik Sewsa; and only the remaining vacancies shall be shares between the three sources under these rules.
" The Additional District and Sessions Judges working on May 10, 1974 were not members of the Nyayik Sewa, they had already become members of the Service on May 8, 1974 under the 1974 Rules.
The proviso talks of "Nyayik Sewa" and "the three sources under the Rules", which obviously means it is visualising a situation which was to exist after the enforcement of the 1975 rules on April 5, 1975.
Rule 8 of the 1975 rules is under the heading "number of appointments to be made" and various parts of the said Rule deal with different situation for making appointments from different sources at different times.
Proviso 2 was enacted to meet a particular situation.
The proviso talks of "existing vacancies" on May 10, 1974.
On that date the posts held by the Additional District and Sessions Judges, who were members of the Service, could not be termed as "existing vacancies".
The "existing vacancies on May 10, 1974" could only be those vacancies which were left over after providing posts to all the officers who were redesignated as Additional district and Sessions Judges under the 1974 Rules.
The proviso was meant to deal with a situation which might have arisen in the event, there had been more posts and less number of officers to occupy 441 the said posts on the reconstitution of the Service under the 1974 Rules.
In that situation the balance vacancies could be the `existing vacancies ' falling within the mischief of the proviso.
Since prior to April 5, 1975 the only source of recruitment to service was by way of promotion the proviso intended to fill all those posts created before that date and available on that as "existing vacancies (surplus posts), from amongst the members of `Nyayik Sewa ' in the first instance and thereafter operate the quota from three sources under the 1975 rules.
The proviso was meant to carry the surplus vacancies as on May 10, 1974 to April 5, 1975 for the benefit of the promotees.
But since the number of officers working in the service as on May 10, 1974 and April 5, 1975 was much more than the posts available in the service the situation envisaged by the proviso did not arise.
The second proviso to rule 8(2) of the 1975 rules could not operate and since it was intended to meet one time eventually it has become redundant.
The interpretation placed on the proviso by the direct recruits and the High Court if accepted would expose the rule to an attack on the grounds of discrimination and arbitrariness.
The Additional District and Sessions Judges had not only the right to be appointed to the service but they were so appointed by the operation of 1974 rules.
The proviso, even though retrospective, could not have taken away the vested rights of the officers who had already become members of the service.
This could not be the intention of the framers of the 1975 rules.
We, therefore, reject the contention of Mr. Satish Chandra.
Third proviso to Rule 8(2) which is dependent on second proviso must obviously meet the same fate.
The net result is that on April, 5, 1975 all the 236 officers working against 236 posts (229 permanent+7 temporary) as Additional District and Sessions Judges in the Service, shall be deemed to be existing members of the Higher Judicial Service as constituted under the 1975 Rules and they shall en bloc rank senior to all other officers appointed to the service thereafter from the three sources in accordance with their quota under the Rules.
We may now take up the second point as to how the seniority of the promotees, who have rendered continuous officiating service, be fixed under the 1975 rules.
Mr. Satish Chandra, learned counsel for the direct recruits has taken us through Rule 3(d) which defines "member of the service", 4(3), 13 and 19(2) of the 1953 Rules and has contended that temporary posts cannot form part of the cadre of the Service.
According to him service rendered in or against a temporary post is outside the pale of the 1975 rules and cannot be counted for seniority.
He has further relied upon clauses (13) and (19) of rule 9 of the U.P. Fundamental Rules which define "lien" and "officiate" and 442 contended that an officiating appointment can only be made against a permanent post and as such the continuous officiation immediately prior to the date of confirmation provided in the first proviso to rule 26(1)(a) of the 1975 rules can only be the officiation against a permanent post.
It is not necessary for us to go into this question because the point is not res integra.
It is not disputed that the service consists of permannt and temporary posts.
This Court in Dixit 's case after taking into consideration the scheme of the 1975 rules held as under: "In Rule 22 of phrase used is "to make appointment to the Service on the occurrence of substantive vacancies" and it was contended on the one side that substantive vacancies does not mean permanent vacancies whereas on the other hand it was contended that if only means permanent vacancies.
The substantive vacancy has not been defined in the Rules but proviso to Rule 8 which has been quoted above speaks of permanent vacancies and temporary posts.
In fact the scheme of the Rules clearly indicates that there are permanent posts and temporary also which are created to meet contigency and it may in due course be made permanent.
It therefore could not be doubted that when appointment under Rule 22 is contemplated in the service of substantive vacancies, it may be both temporary or permanent but the vacancy must be in the cadre.
" We agree with the above findings and accept the position that the Service consists of permanent as well as temporary posts.
The substantive vacancy has not been defined under the 1975 rules but as held by this Court in Dixit case there can also be a substantive vacancy in a temporary post which is part of the cadre.
All temporary posts created under rule 4(4) of the 1975 rules are additions to the permanent strength of the cadre and as such form part of cadre.
Appointments under rule 22 of the 1975 rules can be made to a permanent post as well as to a temporary post.
So long as the temporary post has an independent existence and is a part of the cadre strength the appointment against the said post has to be treated as substantive appointment.
There is no dispute that the seniority of a direct recruit, appointment to the post in service, has to be determined from the date of continuous officiation in the service.
The question for our determination is whether the seniority of a promoted officer is to be counted from the date of countinuous officiation giving him benefit of full 443 period of officiation as claimed by Mr. Yogeshwar Prasad or only for a maximum period of three preceding the date of confirmation as provided by first proviso to Rule 26(1)(a) as agrued by Mr. Satish Chandra.
The High Court has not followed either of the methods and has determined the seniority by giving benefit to a promotee of three years officiation preceding the date of availability of a permanent post.
We have given our thoughtful consideration to the arguments of the parties.
This Court has time and again held that when an incumbent is appointed to a post in accordance with the Service Rules his seniority has to be counted on the basis of continuous length of service and not in reference to the date of confirmation.
Even in present case the promotees have been confirmed long after the availability of permanent vacancies.
This Court in S.B. Patwardhan & Others etc.
vs State of Maharashtra & Others, ; observed that "confirmation is one of the inglorious uncertainties of Government service depending neither on efficiency of the incumbent nor on the availability of substantive vacancies".
A Constitution Bench of this Court in Direct Recruit Class II Engineering Officers ' Association vs State of Maharashtra and Others, ; approved Patwardhan 's case and laid down the following propositions in this respect: (A) Once an incumbent is appointed to a post according to rule, his seniority has to be counted from the date of his appointment and not according to the date of his confirmation.
The Corollary of the above rule is that where the initial appointment is only ad hoc and not according to rules and made as a stop gap arrangement, the officiation in such post cannot be taken into account for considering the seniority.
(B) If the initial appointment is not made by following the procedure laid down by the rules but the appointee continues in the post uninterruptedly till the regularisation of his service in accordance with the rules, the period of officiating service will be counted.
(C) When appointments are made from more than one source, it is permissible to fix the ratio for recruitment from the different sources, and if rules are framed in this regard 444 they must ordinarily be followed strictly.
" Keeping in view the scheme of the 1975 rules, we are of the view that first proviso to rule 26(1)(a) of the 1975 rules which links the seniority with the date of confirmation is on the face of it arbitrary and as such violative of Article 16 of the Constitution of India.
Since the recruitment to the service is from three sources the existence of a vacancy either permanent or temporary is the sine quo non for claiming benefit of continuous length of service towards seniority.
The period of officiation/service which is not against a substantive vacancy (permanent or temporary) cannot be counted towards seniority.
While striking down first proviso to rule 26 (1)(a) of the 1975 rules we hold that the continuous officiation/service by a promotee shall be counted for determining his seniority only from the date when a substantive vacancy against a permanent or temporary post is made available in his quota under the 1975 rules.
Finally we take up the third point.
Recruitment to the service under the 1975 rules is from three sources and is based on quota as provided therein.
The cadre consists of permanent as well as temporary posts.
We have already interpreted the seniority rule to the mean that the seniority of the direct recruit is to be determined from the date of his joining the service and that of promotee on the basis of continuous officiation/service from the date when a vacancy whether permanent or temporary, becomes available in his quota.
With these characteristics of the service it is obligatory that there should be equality of opportunity to enter the service for all the three sources of recruitment.
The seniority in the service is consequential and dependent on appointment.
If the recruitment rule gives unjustifiable preference to one source of recruitment the seniority rule is bound to become unworkable.
The object of having recruitment from different sources is to have a blended service to create healthy competition and in the process achieve efficiency.
If one of the sources of recruitment is dealt with unevenly under the Service Rules the said objective cannot be fulfilled.
The 1975 rules permit appointment to temporary vacancies in the service by promotion and from the judicial service.
No direct recruitment to the temporary vacancies is provided under the said rules.
Rule 18 of the 1975 rules provides procedure for selection of the direct recruits.
Rule 20 lays down the procedure for recruitment by promotion and Rule 22 provides for appointment.
These Rules are reproduced as under: 445 "18.
Procedure of selection (1) The Selection Committee referred to in Rule 16 shall scrutinize the applications received and may thereafter hold such examination, as it may consider necessary for judging the suitability of the candidates.
The Committee may call for interview such of the applicants who in its opinion have qualified for interview after scrutiny and examination.
(2) In assessing the merits of a candidate the Selection Committee shall have due regard to his professional ability, character, personality and health.
(3) The Selection Committee shall make a preliminary selection and submit the record of all candidates to the Chief Justice and recommended the names of the candidates in order of merit who, in its opinion, are suitable for appointment to the service.
(4) The Court shall examine the recommendations of the Selection Committee and, having regard to the number of direct recruits to be taken, prepare a list of selected candidates in order of merit and forward the same to the Governor.
Promotion of members of the Nyayik Sewa.
(1) Recruitment by promotion of the members of the Nyayik Sewa shall be made by selection on the basis of seniority cum merit.
(2) The field of eligibility for recruitment by promotion shall be confined to four times the number of vacancies to be filled by promotion.
The Selection Committee shall prepare a list in order of seniority of the officers eligible under Rule 5(b) of these rules.
(3) The Selection Committee shall, after examining the record of the officers included in the list prepared under sub rule(2) of this rule make a preliminary selection of the officers who in its opinion are fit to be appointed on the basis of seniority cum merit.
In assessing the merits of a candidate, the Selection Committee have due regard to his service record, ability, character and seniority.
The list shall contain the names of officers twice the number of 446 vacancies required to be filled by promotion of the members of the Nyayik Sewa.
(4) The Selection Committee shall forward the list of the candidates chosen at the preliminary selection to the Chief Justice along with the names of the officers who, if any, in the opinion of the Committee have been passed over for promotion to the service.
(5) The Court shall examine the recommendations of the Selection Committee and make a final selection for promotion and prepare a list in order of seniority of the candidates who are considered fit for promotion and forward the same to the Governor.
The list shall remain operative only till the next recruitment.
Appointment.
(1) Subject to the provisions of sub rules (2) and (3), the Governor shall on receipt from the Court of the lists mentioned in Rules 18,30 and 21 make appointments to the service on the occurrence of substantive vacancies by taking candidates from the lists in the order in which they stand in the respective list.
(2) Appointments to the service shall be made on the rotational system, the first vacancy shall be filled from the list of officers of the Nyayik Sewa, the second vacancy shall be filled from the list of direct recruits (and so on), the remaining vacancies shall thereafter be filled by promotion from the list of the officers of the Nyayik Sewa.
Provided that for so long as suitable officers are available from the cadre of the Judicial Magistrates, appointments to the service shall be made in such a way that the second fifth and eighth (and so on), vacancy shall be filled from the list of Judicial Magistrates.
(3) Appointment for temporary vacancies or in officiating capacity shall be made by the Governor in consultation with the Court from amongst the members of the Nyayik Sewa.
Provided that for so long as suitable officers are available from the cadre of the Judicial Magistrate appoit 447 ments on temporary vacancies or in officiating capacity shall be made in consultation with the Court from amongst the Judicial Magistrate according to the quota fixed for that source under these rules: Provided further that for so long as such members of the Judicial Service as are considered suitable for appointments on temporary vacancies or in officiating capacity, are not available in sufficient number, the Governor in consultation with the Court may fill in not more than 50 per cent of such vacancies from amongst the officers of the cadre of Judicial Magistrates.
(4) The appointments shall be made or rotational system the first vacancy shall be filled from the list of officers of the Nyayik Sewa, the second vacancy shall be filled from the list of Judicial Magistrates (and so on).
Is obvious from Rules 22(3) and 22(4) reproduced above that appointments to the temporary vacancies are to be made from amongst the members of the Nyayik Swea and the Judicial Magistrates.
Under Rule 20 the Selection Committee has to prepare a merit list in order of seniority of the officers of Nyayik Sewa twice the number of vacancies and the said list remains operative till the next recruitment.
Similarly, a merit list of eligible officers from the Judicial Magistrates is prepared.
Whenever temporary posts are created, appointments to the said posts under Rule 22(3) and 22(4) are made from out of the lists so prepared.
Rule 18 on the contrary is silent about the preparation of a similar merit list obviously because Rule 22 does not permit any appointment to the temporary posts from amongst the direct recruits.
We see no justification is not applying the quota rule to the temporary posts in the service and confining appointments to said posts to the two sources of promotees.
This Court in A.Ks Subraman vs Union of India, [1975] 2 S.C.R. 979 held as under: "The quota rule will be enforced with reference to vacancies in all posts, whether permanent or temporary included in the sanctioned strength of the cadre (except such vacancies as are purely of a fortuitous of adventitious nature) . . " This court in P.s.
Mahal vs Union of India, ; held as under: 448 "It is therefore obvious that if a vacancy arises on account of an incumbent going on leave or for training or on deputation for a short period, it would be a fortuitous or adventitious vacancy and the quota rule would not be attracted in case of such a vacancy.
But where a vacancy arises on account of in incumbent going on deputation for a reasonably long period and there is no reasonable likelihood of the person promoted to fill such vacancy having to revert, the vacancy would be subject to the quota rule.
" It is, therefore, apparent that what has to be considered for the applicability of the quota rule is a vacancy in a post included in the sanctioned strength of the cadre. ." It is thus clear that the vacancies in the posts of Executive Engineer arising on account of deputation of Executive Engineers to other departments, organisations and public undertakings for a period of one or more years were long term vacancies and they could not be regarded as fortutitous or adventitious in character and hence they were subject to the quota rule".
When temporary posts under rule 4(4) of the 1975 Rule are created as addition to the cadre we see no justification to deny the direct recruits their share of the quota as provided under rule 6 of the said rules.
Rules 5 of the 1975 rules specifically lays down that recruitment to the service shall be made from three sources including the direct recruits.
Rule 6 fixes the quota for various sources of recruitment to the service and allocates 15 per cent of the posts in the service to the direct recruits.
Rules 5 and 6 read with Rule 22(2) provide for appointments to the service in accordance with quota.
These rules have to be read homogeneously and as a part of the same scheme.
The service having comprised of three sources including the direct recruitment there is no justification to deprive the direct recruits of their share in the temporary posts in the service.
Unless the direct recruits are given their due quota in the temporary posts the seniority rule cannot operate equitably.
We see no justification whatsoever in having rule 22(3) and 22(4) of the 1975 rules which deprive one of the sources of recruitment the benefit of appointment to the temporary posts.
The rules on the face of it are discriminatory.
There is no nexus with the object sought to be achieved by framing the abovesaid rules.
We, therefore, strike down rules 22(3) and 22(4) of the 1975 rules being 449 discriminatory and violative of Articles 14 and 16 of the Constitution of India.
We, however, direct that the appointments already made under these rules (22(3) and 22(4) shall not be invalidated on this ground.
We further direct that while selecting candidates under rule 18 the Committee shall prepare a merit list of candidates twice the number of vacancies and the said list shall remain operative till the next recruitment.
We further direct that the appointments under rules 22(1) and 22(2) of the Rules shall be made to permanent as well as temporary posts from all the three sources in accordance with the quota provided under the 1975 rules.
Before parting with the judgment we make it clear that the findings and observations in Dixit case to the extent those are contrary to this judgment, shall be deemed to have been over ruled.
We allow the writ petitions and the Civil Miscelleneous petition, quash the final seniority list dated August 25, 1988 and direct the High Court to prepare, circulate, invite, objections and finalise the seniority list of the service in the light of the findings given and the observations made by us in this judgment.
We reiterate our findings hereunder: 1.
All the 236 promotee officers against 236 posts (229 permanent plus 7 temporary) as Additional District and Sessions Judges on April 5, 1975 shall be deemed to be existing members of the Service as constituted under the 1975 rules and they shall en bloc senior to all other officers appointed to the service thereafter from three sources in accordance with their quota under the 1975 rules.
We strike down (first proviso to rule 26(1) of the 1975 rules and direct that the continuous officiation/service by a promotee appointed under the Rules shall be counted for determining his seniority from the date when a substantive vacancy in permanent or temporary post is made available in his quota under the 1975 rules.) 3.
(We also strike down rules 22(3) and 22(4) of the 1975 rules but the appointments already made under these rules shall not be invalidated.
We further direct that while selecting candidates under rule 18 of the said Rule the committee shall prepare a 450 merit of candidates twice the number of vacancies and the said list shall remain operative till the next recruitment.
We further direct that the appointments under rules 22(1) and 22(2) of the 1975 rules shall be made to permanent as well as temporary posts from all the three sources in accordance with the quota provided under the said rules.) There shall be no order as to costs.
R.S.S. Petition allowed.
| The appellants as well as the respondents are members of the Uttar Pradesh Higher Judicial Service; while the appellants are the promotees, the respondents have been appointed direct to that service.
This is their second round of litigation in this Court concerning their inter se seniority in the service.
The Higher Judicial Service was initially governed by statutory rules called the Uttar Pradesh Higher Judicial Service Rules, 1953.
Recruitment to the service under the said rules was from sources, by promotion and by direct recruitment.
This Court in Chandra Mohan vs State of Uttar Pradesh, struck down the 1953 Rules in so far as the said Rules provided for direct recruitment of the service.
As a consequence, there was no direct recruitment to the service till 1975 76, and the service consisted of only promotees with the designation of Civil and Sessions Judges.
On May 8, 1974 the Uttar Pradesh Higher Judicial Service (abolition of Cadre of the Civil and Sessions Judges) Rules, 1974 came into force.
Under Rules 2 and 3 of the 1974 Rules, the existing cadre of Civil and Sessions Judges stood abolished and a new cadre of Additional District and Sessions Judges came into existence, the Civil and Sessions Judges holding permanent or temporary posts in the Service were re designated as Additional District and Sessions Judges with effect from the date when the 1974 Rules came into force.
On that date, 271 officers were working as Additional District and Sessions Judges against 235 posts (153 permanent and 82 temporary) in the service.
The Service was reconstituted and given a fresh look by the rules framed under Article 309 read with Article 233 of the Constitution of India, called the Uttar Pradesh Higher Judicial Service Rules, 1975 which came into force on April 5, 1975.
On that date 263 officers were 425 working as Additional District and Sessions Judges, against 236 posts in the service.
Recruitment to the service under the 1975 Rules is from three sources and is based on quota as provided therein.
The three sources of recruitment are (i) direct recruitment from the Bar, (ii) Uttar Pradesh Nyayik Sewa, and (iii) Uttar Pradesh Judicial Service (Judicial Magistrates).
In the first round of litigation P.K. Dixit and other promotee officers filed two writ petitions under Article 32 of the Constitution Challenging the seniority assigned to them under the 1975 Rules.
This Court by its judgment dated October 8, 1987 in P.K. Dixit vs State of U.P., ; partly allowed the writ petitions and directed the High Court to frame the seniority list afresh keeping in view the observations made in that judgment.
In pursuance to the directions of this Court in Dixit case a five Judge committee of the High Court finalised the seniority list on August 25, 1988.
The High Court accepted the contention of direct recruits and gave 153 permanent posts existing on May 10, 1974 plus 31 posts, which became permanent subsequently, to the promotees.
Consequently, out of the 263 Additional District and Sessions Judges who were holding the posts on April 5, 1975 only 84 (153 + 31) were taken to be the existing members of the Service and the remaining officers were asked to enter the service through the promotion quota under the 1975 rules.
In the second round, the promotees have filed writ petition challenging the final seniority list.
P.K. Dixit and others, petitioners in the original Dixit case have filed Civil Miscellaneous Petition seeking clarification of the said judgment.
The direct recruits have filed writ petition under Article 32 impugning the final seniority list issued by the High Court.
Before this Court, the promotees, the direct recruits as well as the High Court have sought support from Dixit case on the basis of their own interpretation of that judgment.
The promotees claim that on April 5, 1975 when the 1975 rules came into force all the 236 posts in the Service had already been consumed by the existing members of the service who were working as Additional District and Sessions Judges; till that date the recruitment to the service was only by way of promotion and as such there was no question of allocating any post to the direct recruits who had not yet been born in the service.
426 On the other, hand, the direct recruits contend that this court interpreting the second proviso to Rule 8(2) of the 1975 rules in Dixit case had held that the promotees as on May 10, 1974 are entitled to all the permanent posts available on that date plus 31 temporary posts, and apart from that they cannot lay claim exclusively to the posts created thereafter.
In this connection it was contended that temporary posts could not form part of the cadre of the Service, and service rendered in or against a temporary post was outside the pale of the 1975 rules and could not be counted for seniority and as much the continuous officiation immediately prior to the date of confirmation provided in the first proviso to rule 26(1)(a) of the 1975 rules could only be the officiation against a permanent post.
Allowing the Writ Petition and the Civil Miscellaneous Petition, quashing the seniority list and directing the High Court to prepare fresh seniority list, this Court, HELD: (1) The interpretation given by the High Court to the second proviso to rule 8(2) of the 1975 Rules is not correct.
The proviso was not applicable to the Service as reconstituted under the 1974 Rules consisting of Additional District and Sessions Judges.
Proviso 2 was enacted to meet a particular situation.
The proviso was meant to deal with a situation which might have arisen in the event there had been more posts and less number of officers to occupy the said posts on the reconstitution of the Service under the 1974 Rules.
But since the number of officers working in the service as on May 10, 1974 and April 5, 1975 was much more than the posts available in the service the situation envisaged by the proviso did not arise.
The second proviso to rule 8(2) of the 1975 rules could not operate and since it was intended to meet one time eventuality it has become redundant.
[440D 441C] (2) The Service as constituted under the 1974 Rules continued to operate till April 5, 1975 when the 1975 rules were enforced.
On April 5, 1975 the Service comprised of 236 posts (229 permanent plus 7 temporary)> There were 263 officers working in the service on that date.
The 236 posts comprising the service on April 5, 1975 have to be assigned and given to the 236 officers out of 263 who were working as Additional District and Sessions Judges and they are to be treated as existing member of the service as no April 5, 1975.
It is further axiomatic that the 236 officers including those holding temporary posts would en bloc rank senior to all those who were appointed to the service after April 5, 1975, under the 1975 rules.
[439H 440C] 427 (3) The Additional District and Sessions Judges had not only the right to be appointed to the service but they were so appointed by the operation of 1974 rules.
The second proviso to Rule 8(2) even though retrospective could not have taken away the vested rights of the officers who had already become members of the service.
This could not be the intention of the farmers of the 1975 rules.
[441D] (4) The substantive vacancy has not been defined under the 1975 rules but there can also be a substantive vacancy in a temporary post which is part of the cadre.
All temporary posts created under rule 4(4) of the 1975 rules are additions to the permanent strength of the cadre and as such form part of the cadre.
[442F] (5) Appointments under rule 22 of the 1975 Rules can be made to a permanent post as well as to a temporary post.
So long as the temporary post has an independent existence and is a part of the cadre strength the appointment.
[442G] (6) Recruitment to the service under the 1975 rules is from three sources and is based on quota as provided therein.
The cadre consists of permanent as well as temporary posts.
The seniority of the direct recruit is to be determined from the date of his joining the service and that of promotee on the basis of continuous officiation/service from the date when a Vacancy whether permanent or temporary, becomes available in his quota.
With these characteristics of the service it is obligatory that there should be equality of opportunity to enter the service for all the three sources of recruitment.
If the recruitment rule gives unjustifiable preference to one source of recruitment the seniority rule is bound to become unworkable.
[444E F] (7) When temporary posts under rule 4(4) of the 1975 rules are created as addition to the cadre there is no justification in not applying the quota rule to the temporary posts in the service and confining appointments to said posts in the service to the two sources of promotees.
[448E] A.K. Subraman vs Union of India, referred to.
(8) There is no justification whatsoever in having rules 22(3) and 22(4) of the 1975 rules which deprive one of the sources of recruitment the benefit of appointment to the temporary posts.
The rules on the face 428 of it are discriminatory.
There is no nexus with the object sought to be achieved by framing these rules.
[448G H] (9) Rules 22(3) and 22(4) of the 1975 rules are discriminatory and violative of Articles 14 and 16 of the Constitution and are accordingly struck down.
However, the appointments already made under these rules 22(3) and 22(4) shall not be invalidated on this ground.
Further, while selecting candidates under rule 18 the Committee shall prepare a merit list of candidates twice the number of vacancies and the said list shall remain operative till the next recruitment.
Further, the appointments under rules 22(1) and 22(2) of the Rules shall be made to permanent as well as temporary posts from all the three sources in accordance with the quota provided under the 1975 rules.
[449H 450B] (10) The findings and observations in Dixit case to the extent those are contrary to this judgment shall be deemed to have been over ruled.
[449C]
|
ivil Appeal No. 8613 of 1983.
From the Judgment and Order dated 21.1.1981 of the Delhi High Court in Civil Writ No. 41 of 1981.
P.K.Goswamy and Kailash Vasudev for the Appellant.
V.C. Mahajan, Ashok Bhan and C.V. Subba Rao for the Respondent.
This appeal was earlier heared by a Division Bench and was referred to a Constitution Bench for examining the question whether a candidate whose name appears in the merit list on the basis of a competitive examination, acquires indefeasible right of appointment as a Government servant if a vacancy exists.
Reference was made to the decision in State of Haryana vs Subhash Chander Marwaha and Others, ; ; Miss Neelima Shangla, Ph.D.v.
State of Haryana and Others, ; and Jitendra Kumar and Others vs State of Punjab and Others.
[1985] 1SCR 899.
570 2.
The appellant was selected in the combined Civil Services Examination held by the Union Public Service Commission for appointment to several services including the Indian Police Service (in short `the IPS ') and the Police Services Group `B '.
The examination had been held in October, 1977 and the result was announced in May 1978.
A combined merit list for the IPS and the Police Services Group `B ' was announced which included the name of the appellant.
Out of the total number of 70 vacancies in the IPS announced to be filled up, 54 were of general category and the remaining 16 reserved for Scheduled Castes/Scheduled Tribes candidates.
The position of the appellant in the merit list was not high enough to be included in the IPS and he was offered appointment to the Delhi Andaman and Nicobar police Service (hereinafter referred to as the `DANIP ')in Police Service Group `B ' which he accepted.
On account of several candidates, allotted to Police Services Group `B 'not Joining, the position of the appellant improved and ultimately he was on the top of the list.
In June, 1979, 14 Vacancies arose in the IPS due to selected candidates not joining the service.
Out of the same, 11 were in the general category and 3 in the reserved category.
Three vacancies in the reserved category were filled up by the candidates who had been earlier appointed in DANIP Service, but no appointments were made to general category vacancies.
The appellant, by a representation, prayed that these vacancies also should be filled up.
The request was turned down, and the appellant moved the Delhi High Court by a writ application under Article 226 of the Constitution, which was dismissed in limine by the impugned order.
The case of the appellant is that since ultimately several vacancies in the general category of the IPS remained unfilled, he was entitled to be appointed in one of them, and the authorities were not right in rejecting his representation.
It has been contended that after calculating the number of vacancies in the IPS, it was announced that appointments would be made in 54 vacancies of general category, and steps for recruitment were accordingly taken.
The appellant along with others appeared at the elaborate test held for the purpose and he was found qualified for the appointment .In that situation the respondent could not refuse to fill up the vacancies and proceed to appoint the appellant in the Police Services Group `B '.
It has been argued that the correct procedure in similar situation was followed with respect to the reserved category and the three vacancies arising in identical situation were filled up from the candidates selected for DANIP Service, and 571 there was no justification to refuse similar benefit to the appellant in the general category.
According to the case of the Union of India, the process for the recruitment in question started in 1977, and the tentative service allocation for IPS was completed before the commencement of the foundational course in July, 1978.
All the candidates selected for IPS, excepting those who were eligible to appear at the examination for the Indian Administrative Service scheduled to be held in October November, 1978, and such other candidates who had not been finally cleared on account of pending medical examination or character verification had to attend the foundational course.
Candidates allocated to Police Services Group `B ' were not required to undergo this course.
By June, 1978, 7 more vacancies arose on account of candidates not joining IPS due to various reasons, and 7 persons in order of merit from the joint list of the IPS and the Police Services Group `B ' were allowed to fill up these vacancies.
The last one in this list of 7 candidates was Shekhar Singh at serial No. 94.
The appellant could not get a chance as his position was 100th.
This process of final service allocation was closed on 24.10.1978 or at the latest by 4.11.1978, in view of the process for recruitment for the year 1978, which had already started.
The additional vacancies arising later,therefore, remained unfilled.
The entire procedure which is followed for recruitment to the Services has been given in several affidavits of the respondent, and detailed information in this regard was supplemented by a further affidavit during the hearing of the hearing of the appeal filed in the light of observations of the Bench.
6.Dealing with the appointments to reserved category,it has been stated in the counter affidavit that the process which was followed in connection with the general category and which was being earlier followed for the reserved category also, was relaxed in pursuance of a policy decision taken after examining all relevant circumstances and materials in regard to this category including the strength of the reserve category in the IPS, the result of the examinations for the year 1975,1976 and 1977.
The procedure which was being followed in the past was not relaxed in regard to the general category on account of vital differences obtaining in the relevant conditions in the two categories and the appellant 's plea of alleged discrimination does not have any merit.
Similarly the case of one Km.
Vandana Srivastava cited by the appellant has also been distinguished and Mr. Goswami, therefore , did not pursue this plea any further in his final reply.
572 7.
It is not correct to say that if a number of vacancies are notified for appointment and adequate number of candidates are found fit, the successful candidates acquire an indefeasible right to be appointed which cannot be legitimately denied.
Ordinarily the notification merely amounts to an invitation to qualified candidates to apply for recruitment and on their selection they do not acquire any right to the post.
Unless the relevant recruitment rules so indicate, the State is under no legal duty to fill up all or any of the vacancies.
However, it does not mean that the State has the licence of acting in an arbitrary manner.
The decision not to fill up the vacancies has to be taken bona fide for appropriate reasons.
And if the vacancies or any of them are filled up, the State is bound to respect the comparative merit of the candidates, as reflected at the recruitment test, and no discrimination can be permitted.
This correct position has been consistently followed by this Court, and we do not find any discordant note in the decisions in State of Haryana vs Subhash Chander Marwaha and Others, ; ; Miss Neelima Shangla vs State of Haryana and Others, ; and Jitendra Kumar and Others vs State of Punjab and Others, 8.
In State of Haryana vs Subhash Chander Marwaha and Others, (supra) 15 vacancies of Subordinate Judges were advertised, and out of the selection list only 7, who had secured more than 55% marks, were appointed, although under the relevant rules the eligibility condition required only 45% marks.
Since the High Court had recommended earlier, to the Punjab Government that only the candidates securing 55% marks or more should be appointed as Subordinate Judges, the other candidates included in the select list were not appointed.
They filed a writ petition before the High Court claiming a right of being appointed on the ground that vacancies existed and they were qualified and were found suitable.
The writ application was allowed.
While reversing the decision of the High Court, it was observed by this Court that it was open to the Government to decide how MANY appointments should be made and although the High Court had appreciated the position correctly, it had ``somehow persuaded itself to spell out a right in the candidates because in fact there were 15 vacancies ' '.
It was expressly ruled that the existence of vacancies does not give a legal right to a selected candidate.
Similarly, the claim of some of the candidates selected for appointment, who were petitioners in Jitendra Kumar and Others vs State of Punjab and Others, was turned down holding that it was open to the Government to decide how many appointments would be made.
The plea of arbitrariness was rejected in view of the facts of the case and it was had that the candi 573 dates did not acquire any right merely by applying for selection or even after selection.
It is true that the claim of the petitioner in the case of Miss Neelima Shangla vs State of Haryana was allowed by this Court but, not on the ground that she had acquired any right by her selection and existence of vacancies.
The fact was that the matter had been referred to the Public Service Commission which sent to the Government only the names of 17 candidates belonging to the general category on the assumption that only 17 posts were to be filled up.
The Government accordingly made only 17 appointments and stated before the Court that they were unable to select and appoint more candidates as the Commission had not recommended any other candidate.
In this background it was observed that it is, of course, open to the Government not to fill up all the vacancies for a valid reason, but the selection cannot be arbitrarily restricted to a few candidates notwithstanding the number of vacancies and the availability of qualified candidates; and there must be a conscious application of mind by the Government and the High Court before the number of persons selected for appointment is restricted.
The fact that it was not for the Public Service Commission to take a decision in this regard was emphasised in this judgment.
None of these decisions, therefore, supports the appellant.
Mr. Goswami appearing in support of the appeal has contended that in view of the relevant statutory rules, the authorities were under a duty to continue with the process of filling up all the vacancies until none remained vacant.
Reference was made to r. 4 of the Indian Police Service (Cadre) Rules, 1954, rr.
3,4,6 and 7 of the Indian Police Service (Recruitment) Rules, 1954 and rr., 2(1)(a), 2(1)(c), 8 and 13 of the Indian Police Service (Appointment by competitive Examination) Regulations, 1965.
We do not think any of these rules comes to the aid of the appellant.
Rule 3 of the Cadre Rules directs constitution of separate cadres for States or group of States, and r. 4 empowers the Central Government to determine the strength in consultation with the State Governments.
The strength has to be re examined at intervals of 3 years.
Rule 3 of Recruitment Rules deals with the constitution of the Service, and r. 4 the method of recruitment.
Rules 6 and 7 give further details in this regard.
The learned counsel could not point out any provision indicating that all the notified vacancies have to be filled up.
Similar is the position with respect to the Competitive Examination Regulations.
Regulation 2(1)(a) defines available vacancies as vacancies determined by the Central Government to be filled on the results of the examination, described in Regulation 2(1)(a).
Regulation 8 prescribes that the candidates would be considered for appointment to the available 574 vacancies subject to provisions 9 to 12 and Regulation 13 clarifies the position that a candidate does not get any right to appointment by mere inclusion of his name in the list.
The final selection is subject to satisfactory report on the character, antecedent and suitability of the candidates.
We, therefore, reject that the claim that the appellant had acquired a right to be appointed against the vacancy arising later on the basis of any of the rules.
The main contention on behalf of the appellant has been, however, that the authorities in keeping the vacancies arising later unfilled, acted arbitrarily.
Mr. Goswami referred to several documents annexed to the special leave petition and affidavits filed on behalf of the parties and contended that although appointments of many candidates in the other services were made in the later vacancies, the vacancy in the Indian Police Service which subsequently became available to the appellant was refused without any just cause, resulting in illegal discrimination.
This was emphatically denied on behalf of the respondent.
Since the matter did not appear to be free from ambiguity on the basis of the affidavits before us, we decided to examine the factual aspects more thoroughly by examining the other available materials on the records of the Union of India, and accordingly the learned counsel for the respondent got the relevant departmental files called.
Two further affidavits were also filed along with photostat copies of a large number of documents, which we examined at some length with the aid of the learned advocates for both sides.
From the materials produced before us it is fully established that there has not been any arbitrariness whatsover on the part of the respondent in filling up the vacancies in question or the other vacancies referred to by the learned counsel for the appellant.
The process of final selection had to be closed at some stage as was actually done.
A decision in this regard was accordingly taken and the process for further allotment to any vacancy arising later was closed.
Mr. Goswami relied upon certain appointments actually made subsequent to this stage and urged that by those dates the further vacancies in the Indian Police Service had arisen to which the appellant and the other successful candidates should have been adjusted.
We do not find any merit in this contention.
It is not material if in pursuance of a decision already taken before closing the process of final selection, the formal appointments were concluded later.
What is relevant is to see as to when the process of final selection was closed.
Mere completing the formalities cannot be of any help to the appellant.
We do not consider it necessary to mention all the details in this connection available from the large number of documents which we closely examined during the hearing at considerable length and do not 575 have any hesitation in rejecting the argument of the learned counsel in this regard based on the factual aspect.
So far the decision to adopt a different policy with respect to filling up of the reserved vacancies is concerned the same is justified on account of the special circumstances mentioned in the respondent 's affidavits.
The decision to depart from the confirmed policy was taken after a consideration by the authorities of the position in regard to unavailability of qualified candidates from year to year adversely affecting the desired strength of the reserved candidates in the services and cannot be condemned on the grounds of arbitrariness and illegal discrimination.
In the result, we do not find any merit in the appeal which is accordingly dismissed, but, in the circumstances, without costs.
N.P.V. Appeal dismissed.
| On the basis of the results of the combined Civil Services Examination held by the Union Public Service Commission for appointment to several Services and the position in the combined merit list for the Indian Police Service and Police Services, Group `B ' the appellant was appointed to the Delhi Andaman and Nicobar Police Service,also Known as DANIP.
Subsequently when certain vacancies arose in the Indian Police Service, due to selected candidates not joining the Service, and only the reserved category vacancies were filled up by the candidates, who had been earlier appointed in DANIP Service, the appellant who came to occupy top position, represented to the authorities for filling the general vacancies also, but his request was turned down .Hence the appellant filed writ application before the High Court, which was dismissed in limine .
In the appeal before this Court, on behalf of the appellant it was contended that since ultimately several vacancies in the general category of the IPS remained unfilled, he was entitled to be appointed in one of them, that since 54 vacancies were notified for general category and he was found qualified for the appointment, the respondent could not refuse to fill up the vacancies, and there was no justification to refuse to follow the procedure adopted in similar situation with respect to the reserved category, in regard to the general category vacancies also and that in view of the relevant statutory rules, the authorities were under a duty to continue with the process of filling up the vacancies until nonremained vacant, and by keeping the posts unfilled, they had acted arbitrarily.
568 On behalf of the respondent Union of India it was contended that the tentative service allocation for IPS was completed before the commencement of the foundational course for the IPS, and the process of final service allocation was closed after filling up certain vacancies, which had arisen, since the process for recruitment for the next year had already started, and hence the additional vacancies arising later remained unfilled, that the process followed in connection with the reserved category, was not followed in regard to the general category vacancies on account of vital differences obtaining in the relevant conditions in the two categories, and hence there was no discrimination or arbitrariness, in keeping the general category vacancies unfilled.
Dismissing the appeal, this Court HELD: 1.1 Even if vacancies are notified for appointment and adequate number of candidates are found fit, the successful candidates do not acquire an indefeasible right to be appointed.
Ordinarily, the notification merely amounts to an invitation to qualified candidates to apply for recruitment and on their selection they do not acquire any right to the post.
Unless the relevant recruitment rules so indicate, the State is under no legal duty to fill up all or any of the vacancies.
However, it does not mean that the State has the licence of acting in an arbitrary manner.
The decision not to fill up the vacancies has to be taken bona fide for appropriate reasons.
And if the vacancies or any of them are filled up, the State is bound to respect the comparative merit of the candidates, as reflected at the recruitment test, and no discrimination can be permitted.
[572A C] State of Haryana vs Subhash Chander Marwaha and Others,[1974] 1 SCR 165; Miss Neelima Shangla vs State of Haryana and Others, ; and Jitendra Kumar and Others vs State of Punjab and others, , referred to.
1.2 The appellant had not acquired a right to be appointed against the vacancy arising later on the basis of any of the rules, namely, Rule 4 of the Indian Police Service (Cadre) Rules, 1954, Rules 3,4,6 and 7 of the Indian Police Service (Recruitment) Rules, 1954 and Regulations 2(1)(a) and (c), 8 and 13 of the Indian Police Service (Appointment by Competitive Examination) Regulations, 1955.These Provisions do not indicate that all the notified vacancies are to be filled up.[573G,574B] 1.3 From the materials placed before the Court it is fully estab 569 lished that there has not been any arbitrariness whatsoever on the part of the respondent in filling up the vacancies in question or other vacancies.
The process of final selection had to be closed at some stage as was actually done.
A decision in this regard was accordingly taken and the process for further allotment to any vacancy arising later was closed.
It is not material if in pursuance of a decision already taken before closing the process of final selection, the formal appointments were concluded later.
What is relevant is to see as to when the process of final selection was closed.
Mere completing the formalities dose not give any right to appointment.
[574E G] 1.4 The decision to adopt a different policy with respect to filling up of the reserved vacancies is justified on account of the special circumstances.
The decision to depart from the confirmed policy was taken after consideration by the authorities of the position in regard to unavailability of qualified candidates from year to year adversely affecting the desired strength of the reserved candidates in the services and cannot be condemned on the grounds of arbitrariness and illegal discrimination.
[575B]
|
ivil Appeal No. 2123 of 1991.
From the Judgment and Order dated 20.12.1988 of the Bombay High Court in Appeal No. 1649 of 1988.
WITH WRIT PETITION NO.
1287 OF 1989.
(Under Article 32 of the Constitution of India).
Rajinder Sachhar, R.K. Agnihotri and S.C. Paul for the Appellant/Petitioner.
K.N. Bhat, Vineet Kumar, Lalit Bhasin and Ms. Nina Gupta for the Respondents.
The Judgment of the Court was delivered by K. JAGANNATHA SHETTY, J.
Nagaraj Shivarao Karjagi, the petitioner in SLP No. 4415 of 1989 has challenged his compulsory retirement and in Writ Petition No. 1287 of 1989 he has questioned the validity of the direction dated 21 July 1984 issued by the Finance Ministry, Government of India.
Since the questions raised in both the cases are inter looked, we grant special leave in the SLP and proceed to dispose of the same along with the writ petition.
The events leading to these cases may briefly be stated.
In 1982, the petitioner was a Manager of the Syndicate Bank (`the Bank ') at East Patel Nagar Branch at New Delhi.
He discounted a cheque of the sum of Rs. 50,000 drawn on Punjab National Bank, Madras, after obtaining, by phone prior approval of the Regional Divisional Manager of the Bank.
The cheque was sent for realisation to the Punjab National Bank at Madras, but it was returned unpaid.
The petitioner did not take prompt action to recover the amount from the person in whose favour he discounted the cheque.
He kept the cheque 580 with him even without reporting to the higher authorities.
In 1983, the Assistant General Manager of the Bank called upon him to explain why the amount due under the discounted cheque has not been recovered.
The petitioner in his reply explained the circumstances under which the cheque was discounted.
He has stated that the credit was given to the account of one Dr. N. Ramakrishnan who was a Senoir Scientist in Indian `Agricultural Research Institute, New Delhi but the amount was withdrawn by another person called A. Chandrashekhar who is an officer of the Bank.
He has further stated that A. Chandrashekhar has promised to pay the amount and therefore, he has retained the instrument with him hoping that A. Chandrashekhar would keep up his promise.
On 6 July 1984 a sum of Rs.52,167.15 was deposited with the Bank.
A sum of Rs.36,000 towards principal sum and Rs.16,167.15 towards interest.
A suit was filed to recover a sum of Rs.14,000 out of the principal amount.
And later on, this principal amount was also recovered and credited to the Bank.
However, in 1985 there was a departmental inquiry against the petitioner.
The Commissioner for Vigilance Inquiry from the Central Vigilance Commission conducted the inquiry.
The first charge against the petitioner was that when he was functioning as Manager, he discounted under his discretionary jurisdiction a cheque for Rs.50,000 drawn in the name of Dr. N. Ramakrishnan in order to accommodate A. Chandrashekhar an officer of the Bank or others known to him.
The second charge framed against him, related to the retention of the discounted instrument with him from December, 1982 till January 1984 without taking/causing to be taken any action to realise the amount due under the unpaid cheque.
It was also alleged that the petitioner made available undue financial accommodation to A. Chandrashekhar or others to the detriment of the interests of the Bank.
He was charged with lack of the integrity, honesty devotion to duty, diligence and conduct unbecoming of the status of Bank Officer in contravention of Regulation No. 3(1) of the Syndicate Bank Officer Employees ' (Conduct) Regulations, 1976.
The inquiry was held as per the procedure prescribed by Syndicate Bank Officer Employees ' (Discipline & Appeal) Regulations, 1976, (`the Regulations ').
On 16 October 1986, the Inquiry Officer submitted his report holding that the charges were proved against the petitioner.
He has held that the petitioner has failed to take any effective steps for recovery of the amount paid under the discounted instrument.
He has kept the instrument with himself for unduly long period without even surrendering the same to the custody of the Bank.
It was 581 Only after the Additional General Manager reminded him by letter dated 15 December 1983, the petitioner assured him that he would return the cheque which he finally did on 18 January 1984.
The Inquiry Officer has finally concluded that the transaction connected with the unpaid instrument was of an accommodative nature with a view to assist A. Chandrashekhar by using another person as benami and it was in clear violation of the rules of the Bank.
It is said and indeed not disputed that the Bank referred the matter to the Central Vigilance Commission for advice and the Commission has recommended that the petitioner may be compulsorily retired from service by way of punishment.
The disciplinary authority after considering the inquiry report and affording an opportunity to the petitioner passed an order dated 7 October 1987 imposing on the petitioner the penalty of compulsory retirement.
The petitioner appealed to the General Manager challenging the punishment.
On 27 August 1988 the General Manager dismissed the appeal concurring with the findings recorded and the punishment imposed by the disciplinary authority.
The petitioner thereupon moved the Bombay High Court for relief under Article 226 of the Constitution.
The High Court has also dismissed the writ petition.
He has now appealed to this Court.
before us that the punishing authorities did not apply their mind and did not exercise their power in considering the merits of his case.
They have imposed on him the penalty of compulsory retirement in obedience to the advice of the Central Vigilance Commission which has been made binding on them by the direction dated 21 July 1984 issued by the Ministry of Finance, Department of Economic Affairs (Banking Division).
They have blindly followed the advice given by the Central Vigilance Commission without regard to the merits of the matter and contrary to the statutory Regulations governing the departmental inquiries.
The subject matter of inquiry was only regarding irregularities in the banking practice and the action complained of has not affected the interests of the Bank.
The petitioner by his own efforts has recovered the money due under the discounted cheque and credited the same with interest to the Bank.
The findings recorded by the Inquiry Officer on the alleged misdemeanour does not warrant any major penalty like the compulsory retirement.
Reference was also 582 made to certain representations said to have been made by the Bank to the Central Vigilance Commission for approval to impose a lesser punishment.
It is said that the Bank pleaded in the representations that the punishment of compulsory retirement advised by the Commission was too harsh.
SYNDICATE BANK OFFICER EMPLOYEES ' (DISCIPLINE AND APPEAL) REGULATION 1976 These Regulation have been framed under Section 19 of the Banking Companies (Acquisition and Transfer Undertakings) Act, 1970.
They were framed by the Board of Directors of the Syndicate Bank in consultation with the Reserve Bank of India and with the previous sanction of the Central Government.
Regulation 4 prescribes penalties for acts of misconduct.
Regulation 5 specifies the authority to institute disciplinary proceedings and impose penalties.
Regulation 6 lays down procedure for imposing major penalties and Regulation 7 provides for action on the inquiry report.
Regulation 7 confers power to the disciplinary authority either to agree or disagree with the findings of the inquiry authority on any article of charge.
The disciplinary authority may reach its own conclusion on the material on record and impose any penalty prescribed under Regulation 4.
Or if it is of the opinion that no penalty should be imposed on the delinquent officer, it may pass an order exonerating the delinquent officer.
Regulation 17 provides for appeals against the order imposing any of the penalties specified in Regulation 4.
The appellate authority has been given the power to pass any order of penalty or remitting the case to the disciplinary authority or to any other authority for fresh disposal.
Regulation 19 provides for consultation with the Central Vigilance Commission.
It states that "that the Bank shall consult the Central Vigilance Commission wherever necessary, in respect of all disciplinary cases having a vigilance angle.
" There is no other Regulation requiring consultation with Central Vigilance Commission, or providing that the advice given by the Commission is binding on the punishing authorities.
The Central Vigilance Commission, however, appears to have framed guidelines for Banks to consult the Commission in respect of cases where major penalty is prescribed under the Regulation.
Article 22 of the Central Vigilance Commission Manual reads : "The Scheme of consultation with the Commission in respect of major penalty cases pertaining to such officers envisages consultation with the Commission at two stages.
583 The first stage of consultation arises when initiating disciplinary proceedings while the second consultation is taken at the conclusion of the proceedings.
" Article 23.2 of the C.V.C. Manual Chapter 10 reads: "In all cases where C.V.C. advises initiation of major penalty proceedings, it also nominates simultaneously a Commissioner for Departmental Inquiries to whom the inquiry should be entrusted." THE DIRECTION OF THE MINISTRY OF FINANCE, DEPARTMENT OF ECONOMIC AFFAIRS (BANKING DIVISION) On 21 July 1984 Joint Secretary, Ministry of Finance, Department of Economic Affairs (Banking Division) has written a letter to all Banking Institution thus : "Recently a case been reported where a bank has revised the punishment awarded to an officer in a disciplinary case contrary to the advice of the Central Vigilance Commission.
The case has figured in the Annual Report of the CVC as a case of non consultation with the Commission and thus created an embarrassing situation.
You will, perhaps, be aware of the Annual Reports of the CVC, which contain cases where the disciplinary authorities had not accepted its recommendations or had not consulted it, are laid on the Tables of both the Houses of Parliament.
This may, thereafter be discussed in the Parliament also.
You will agree that under no circumstances the advice of the CVC should be modified except with the prior concurrence of the commission and this Ministry.
I may mention here that revision of the penalty imposed on a delinquent officer as a result of an appeal filed by him before the appellate authority against the decision of the original disciplinary authority also amounts to non consultation/non acceptance of the advice of the CVC and is included in CVC 's Annual Report.
Kindly circulate these instructions to the concerned officers in your bank for strict compliance.
The receipt of this D.O. letter may please be acknowledged.
A copy of this D.O. letter is being marked to CVO in your bank separately.
" 584 CIRCULARS OF THE BANK On 27 July 1984, A. Krishna Rao, Chairman and managing Director of the Bank, issued a circular to all branches of the Bank as follows : "I am enclosing herewith a photostat copy of the DO letter No.41/3/84 Vig.
dated 21.7.1984 received by me from Shri Ashok Kumar, joint Secretary, ministry of Finance, Department of Economic Affairs, (Banking Division), Vigilance Cell, New Delhi, in the above connection for strict compliance of the instructions contained therein.
As the advice in vigilance cases received from Central Vigilance commission is communicated to the authorities concerned by the Chief Vigilance Officer, I advise, that the Chief Vigilance Officer 's advice, as explained in my above referred to DO letter, should be complied with.
Even when a revision of the penalty imposed on a delinquent officer at the advice of the Chief Vigilance Officer by of Original Disciplinary Authority were to be considered as a result of an appeal filed by him before the appellate/high authorities, such revision shall be effected only after consulting the Chief Vigilance Officer.
Please acknowledge receipt of this and ensure compliance of the instructions contained herein.
" On 8 September 1986 P.S.V. Mallya, the succeeding Chairman and Managing Director of the bank issued another circular letter to all branches of the bank in the following terms: "All vigilance cases in bank are being investigated/ processed at Vigilance Cell at the HO, under the administrative control of the Chief Vigilance Officer, who is reporting directly to me.
After processing of the reports is concluded, the cases are referred to Central Vigilance Commission as per the existing procedure and the advice received from the commission is being communicated to the Disciplinary/Appellate Authority by the Chief Vigilance Officer.
585 If the advice tendered by the Commission is not accepted/acted upon, it will amount to non acceptance of the advice of the Commission and such instance will figure in the Annual Report of the Central Vigilance Commission placed before the Parliament.
This apart the non acceptance of the advice in vigilance cases is likely to lead to a situation, in which, different types of decisions are possible to be taken in similar cases, which is sure to result in a voidable complications and injustice to certain sections of the Officers/employees community.
Again in such a situation, ensuring uniform stantards in finalising action on vigilance cases will also become a very difficult phenomenon, which is not a desirable trend and does not augur well for the healthy functioning of the vigilance machinery in the Bank.
I therefore, advice all Disciplinary /Appellate Authorities to see that they refer as hitherto all vigilance cases to Chief Vigilance Officer and consult him on such cases and act upon his advice.
xxxxx xxxxx xxxxx xxxxx If for any reasons, the authorities concerned feel that the advice needs to be reconsidered or a departure is called for, they may refer back the matter to Chief Vigilance Officer for reconsideration of the advice, with the reasons for such disagreement and the Chief Vigilance Officer will see whether and to what extent such reconsideration is desirable or feasible and will tender advice again on reconsideration.
If the authority concerned is still not disposed to act on the advice, the disinclination on the part of the authority concerned will have to be brought to my notice and the advice given by me in respect of such cases shall be treated as final.
It is also necessary that the authorities concerned should for obvious reasons keep the advice in strict confidence and see that no reference thereof is made in any of the correspondence communication, whether emanating from their end.
" 586 The petitioner being aware of the directions of the Ministry of Finance and the circulars issued by the Bank has in his memo of appeal before the appellate authority inter alia complained that the system and procedure adopted by the Bank in dealing with vigilance cases, is totally against the principles of natural justice.
The Bank has no control over such cases.
The Disciplinary Authority and Appellate Authority are required to carry into effect the punishment advised by the Central Vigilance commission without change.
He has also pointed out that his appeal could be nothing but an empty formality as the appellate authority would be also bound by the decision of the Central Vigilance commission.
The petitioner has also added post script to his appeal Memo stating thus "This appeal has been filed without prejudice to my contention that this appeal is an exercise in futility as the appellate authority also is not the deciding authority and this appeal also will be decided by the CVO/CVC, who has already decided and whose decision is binding on you.
There is in fact no effective right of appeal.
" Counsel for the Bank however, submits that notwithstanding the advice of the Central Vigilance Commission and the directive dated 21 July 1984 of the Ministry Finance, Department of Economy Affairs (Banking Division), the case of the petitioner has received the fullest consideration from the disciplinary and appellate authorities.
They have independently considered the material on record both on the articles of charges and also on the appropriate punishment of compulsory retirement imposed on the petitioner.
The orders of the authorities do not refer to the circulars of the Bank, nor to the punishment proposed by the Central Vigilance Commission.
It is therefore, illegitimate, to contend that the punishment imposed on the petitioner has been vitiated by extraneous influences.
We are not even remotely impressed by the arguments of counsel for the Bank.
Firstly, the Bank itself seems to have felt as alleged by the petitioner and not denied by the Bank in its counter that the compulsory retirement recommended by the Central Vigilance Commission was too harsh and excessive on the petitioner in view of his excellent performance and unblemished antecedent service.
The Bank appears to have made two representations; one in 1986 and another in 1987 to the Central Vigilance Commission for taking a lenient view of the matter and to advise lesser punishment to the petitioner.
Apparently, those representations were not accepted by the Commission.
The disciplinary authority and the appellate authority therefore have no choice in the matter.
They had to impose the punishment of com 587 puslory retirement as advised by the Central Vigilance Commission.
The advice was binding on the authorities in view of the said directive of the Ministry of Finance, followed by two circulars issued by the successive Chief Executive of the Bank.
The disciplinary and appellate authorities might not have referred to the directive of the Ministry of Finance or the Bank circulars.
They might not have stated in their orders that they were bound by the punishment proposed by the Central Vililance Commission.
But it is reasonably foreseeable and needs no elaboration that they could not have ignored the advice of the Commission.
They could not have imposed a lesser punishment without the concurrence of the Commission.
Indeed, they could have ignored the advice of the Commission and imposed a lesser punishment only at their peril.
The power of the punishing authorities in departmental proceedings is regulated by the statutory Regulations.
Regulation 4 merely prescribes diverse punishment which may be imposed upon delinquent officers.
Regulation 4 does not provide specific punishments for different misdemeanours except classifying the punishments as minor or major.
Regulations leave it to the discretion of the punishing authority to select the appropriate punishment having regard to the gravity of the misconduct proved in the case.
Under Regulation 17, the appellate authority may pass an order confirming, enhancing, reducing or completely setting aside the penalty imposed by the disciplinary authority.
He has also power to express his own views on the merits of the matter and impose any appropriate punishment on the delinquent officer.
It is quasi judicial power and is unrestricted.
But it has been completely fettered by the direction issued by the Ministry of Finance.
The Bank has been told that the punishment advised by the Central Vigilance Commission in every case of disciplinary proceedings should be strictly adhered to and not to be altered without prior concurrence of the Central Vigilance Commission and the Ministry of Finance.
We are indeed surprised to see the impugned directive issued by the Ministry of Finance, Department of Economic Affairs (Banking Division).
Firstly, under the Regulation, the Bank 's consultation with Central Vigilance Commission in every case is not mandatory.
Regulation 20 provides that the Bank shall consult the Central Vigilance Commission wherever necessary, in respect of all disciplinary cases having a vigilance angle.
Even if the Bank has made a self imposed rule to consult the Central Vigilance Commission in every disciplinary matter, it does not make the Commission 's advice binding on the punishing authority.
In this context, reference may be made to Article 588 320(3) of the Constitution.
The Article 320 (3) like Regulation 20 with which we are concerned provides that the Union Public Service Commission or the State Public Commission, as the case may be, shall be consulted on all disciplinary matters affecting a civil servant including memorials or petitions relating to such matters.
This Court in A.N. D 'Silva vs Union of India, [1962] Suppl; 1 SCR 968 has expresed the view that the Commission 's function is purely advisory.
It is not an appellate authority over the inquiry officer or the disciplinary authority.
The advice tendered by the Commission is not binding on the Government.
Similarly, in the present case, the advice tendered by the Central Vigilance Commission is not binding on the Bank or the punishing authority.
It is not obligatory upon the punishing authority to accept the advice of the Central Vigilance Commission.
Secondly, the Ministry of Finance, Government of India has no jurisdiction to issue the impugned directive to Banking institutions.
The government may regulate the Banking institutions within the power located under the banking Companies (Acquisition and Transfer of Undertakings) Act, 1970.
So far as we could see, Section 8 is the only provision which empowers to the Government to issue directions.
Section 8 reads: "Every corresponding new bank shall, in the discharge of its function, be guided by such directions in regard to matters of policy involving public interest as the Central Government may, after consultation with the Governor of the Reserve bank, give." The corresponding new bank referred to in Section 8 has been defined under Section 2(f) of the Act to mean a banking company specified in column 1 of the First Schedule of the Act and includes the Syndicate Bank.
Section 8 empowers the Government to issue direction in regard to matters of policy but there cannot be any uniform policy with regard to different disciplinary matters and much less there could be any policy in awarding punishment to the delinquent officers in different cases.
The punishment to be imposed whether minor or major depends upon the nature of every case and the gravity of the misconduct proved.
the authorities have to exercise their judicial discretion having regard to the facts and circumstances of each case.
They cannot act under the dictation of the Central Vigilance Commission or of the Central Government.
No third party like the Central Vigilance Commission or the Central Government could dictate the disciplinary authority or the appellate authority as to how they should exercise 589 their power and what punishment they should impose on the delinquent officer.
(See: De Smith 's Judicial Review of Administrative Action, Fourth Edition, p. 309).
The impugned directive of the Ministry of Finance, is therefore, wholly without jurisdiction, and plainly contrary to the statutory Regulations governing disciplinary matters.
For the foregoing reasons, we allow the appeal and the writ petition quashing the directive issued by the Finance Ministry, Department of Economic Affairs, (Banking Division) dated 21 July 1984.
We also issue a direction to the Chairman of the Syndicate Bank to withdraw the circular letters dated 27 July 1984 and 8 September 1986.
We further set aside the impugned orders of the disciplinary authority and appellate authority with a direction to the former to dispose of the petitioner 's case in accordance with law and in the light of the observation made.
The petitioner is entitled to costs which we quantify in both the cases at Rs. 15,000 which shall be paid by the Central Government.
G.N. Appeal and petition allowed.
| The appellant was a Manager in one of the branches of the Respondent Bank.
In 1985, there was a departmental enquiry against him on the charges that he discounted a cheque for Rs.50,000 drawn in the name of some other person to accommodate one of his colleagues and when the cheque returned unpaid, he retained the same for about two months without taking action for realisation of the amount.
An enquiry was conducted by the Commissioner for Vigilance Inquiry from the Central Vigilance Commission, following the procedure prescribed by the Syndicate Bank Officer Employees ' (Disciplinary & Appeal) Regulations.
The Inquiry Officer submitted his report holding that the charges were proved against the appellant.
The Respondent Bank referred the matter to the Central Vigilance Commission for advice and the Commission recommended the punishment of compulsory retirement.
After considering the Inquiry Report and after affording opportunity to the appellant, the Disciplinary Authority imposed on him the 577 penalty of compulsory retirement.
On appeal, the appellate authority concurred with the findings recorded and the punishment imposed.
The appellant filed a Writ Petition before the High Court challenging the order of his compulsory retirement.
The High Court declined to interfere with the order.
Hence the present appeal, by special leave.
The appellant also filed a Writ Petition before this Court challenging the validity of the direction dated 21.7.1984 issued by the Finance Ministry, following which the Respondent Bank has imposed on him the penalty of compulsory retirement.
On behalf of the appellant/petitioner it was contended that the advice given by the Central Vigilance Commission was blindly followed by the Respondent Bank as it was made binding on it by virtue of the directions dated 21.7.84 issued by the Ministry of Finance and in that process the merits of the case and the statutory regulations governing departmental inquiries were ignored.
It was also contended that the subject matter of the inquiry was only regarding irregularities in banking practice and since the interest of the Bank was not affected as he had the money recovered and credited to the Bank with interest thereon, the alleged misdemeanour did not warrant any major penalty like compulsory retirement, which even according to the Respondent Bank, was too harsh.
On behalf of the Respondent Bank it was contended that it had independently considered the material on record notwithstanding the advice given by the Central Vigilance Commission and since the orders did not refer to the circulars or to the advice of Central Vigilance Commission, the punishment imposed on the appellant/petitioner was not vitiated by extraneous influences.
Allowing the matters, this Court HELD: 1.
The Respondent Bank itself felt that the compulsory retirement recommended by the Central Vigilance Commission was too harsh and excessive on the appellant/petitioner in view of his excellent performance and unblemished antecedent service.
The Bank made two representations, one in 1986 and another in 1987 to the Central Vigilance Commission for taking a lenient view of the matter and to advise lesser punishment.
Apparently, those representations were not accepted by the Commission.
The disciplinary authority and the appellate authority therefore had no choice in the matter.
They had to impose the punishment of compulsory retirement as advised by the Central Vigi 578 lance Commission.
The advice was binding on the authorities in view of the directive of the Ministry of Finance issued on 21.7.1984, followed by two circulars issued by the successive Chief Executives of the Bank.
The disciplinary and appellate authorities might not have referred to the directive of the Ministry of Finance or the Bank circulars.
They might not have stated in their orders that they were bound by the punishment proposed by the Central Vigilance Commission.
But it is reasonably foreseeable and needs no elaboration that they could not have ignored the advice of the Commission.
They could not have imposed a lesser punishment without the concurrence of the Commission.
Indeed, they could have ignored the advice of the Commission and imposed a lesser punishment only at their peril.
[586F H; 587 A C] 2.1 But for the Finance Ministry 's directive dated 21.7.1984, the advice tendered by the Central Vigilance Commission is not binding on the Bank or the punishment authority; it is not obligatory upon the punishing authority to accept the advice of the Central Vigilance Commission.
[588C] 2.2 The Ministry of Finance has no jurisdiction to issue such a directive to Banking institutions.
The Government may regulate the Banking institutions within the power located under the .
Even though Section 8 thereof empowers the Government to issue directions in regard to matters of policy, there cannot be any uniform policy with regard to different disciplinary matters and much less there could be any policy in awarding punishment to the delinquent officers in different cases.
The punishment to be imposed depends upon the nature of every case and the gravity of the misconduct proved.
The authorities have to exercise their judicial discretion having regard to the facts and circumstances of each case.
They cannot act under the dictation of the Central Vigilance Commission or of the Central Government in the exercise of their power and the imposition of punishment on the delinquent officer.
Therefore the directive of the Ministry of Finance is wholly without jurisdiction and contrary to the statutory Regulations governing disciplinary matters and is quashed.
[588D H; 589A] A.N.D 'silva vs Union of India, [1962] Suppl.
S.C.R. 968, relied on.
De Smith 's Judicial Review of Administrative Action, 4th Edn.
p. 309, referred to.
579 3.
the Chairman of the Respondent Bank is directed to withdraw the circular letters dated 27.7.1984 and 8.9.1986 issued in furtherance of the Finance Ministry 's directive dated 21.7.1984.
[589C] [Setting aside the orders of the disciplinary authority and the appellate authority, this Court directed the disciplinary authority to dispose of the case in accordance with law and observations made in the judgment.]
|
ivil Appeal Nos.
2486 87 (N) of 1978.
From the Judgment and Order dated 17.3.1978 of the Bombay High Court in Second Appeal Nos. 293 and 361 of 1972.
P.H. Parekh for the Appellant.
section Padumanabhan, Amicus Curiae, R.A. Perumal and G. Narasimhulu for the Respondents.
The Judgment of the Court was delivered by R.M. SAHAI, J.
Litigation, between two sisters, by way of cross suits, one, for permanent injunction by the appellant basing her claim on gift deed executed in 1954 by her mother, a Hindu widow, of the entire estate inherited by her from her husband, and another for declaration and partition by respondent assailing validity of the gift deed and claiming reversioner 's right after death of the mother in 1968, has reached this Court by grant of special leave against judgment of the Bombay High Court in Second Appeal raising a legal issue of seminal importance as to nature of right and title of female donee of Hindu widow 's estate after coming into force of Hidnu Succession Act (hereinafter refferred to as the Act).
Facts are simple.
Stakes, also, are not substantial, but the issue is of far reaching consequence.
Could a Hindu widow alienate by gift the entire estate inherited from the husband, in favour of one of the female reversioners prior to enforcement of Act 20 of 1956.
In case answer to issue is in the affirmative then what was the nature of right that the donee got under law? Did she become an owner of a widow 's 605 estate, a limited owner, an owner with some right or title, so as to acquire rights of absolute ownership under section 14 of Act or a trespasser and if trespasser then whether she acquired rights by adverse possession by perfecting her rights against the donor only or it was essential to prescribe rights against reversioners as well? Shorn of details, and various issues raised in the suits, suffice it to mention that even though the trial court found the gift deed to have been duly attested and executed after obtaining permission from the appropriate authority the claim of appellant, for permanent injunction, was decreed not on Section 14 of the Act as the widow who had executed the gift deed in 1954 was, `incompetent to alienate widow 's estate by gift permanently ' under Hindu Law but on adverse possession and estoppel.
The appellate court while affirming the finding on section 14 of the Act allowed the appeal and dismissed the suit as `adverse possession against the widow is not adverse against reversioners, and the next reversioner is entitled to recover the possession of the property or his share in it within 12 years from the date of the death of the widow '.
It was further held that the appellant could not acquire, any right by, `estoppel under section 41 of the Transfer of Property Act against the reversioners by reason of the widow 's conduct '.
In view of the concurrent findings of two courts below on section 14 of the Act the High Court appears to have been invited to adjudicate, only, on the question if the appellate court was justified in reversing the finding on adverse possession wich it disposed of, treating it as finding of fact, and observing that possession of appellant, `must be deemed to be on behalf of other co sharers in the absence of any evidence before ouster of the other sisters '.
Wheher the High Court was justified in not examining the question of adverse possession is not necessary to be gone into as the appellant can succeed, only, if the finding recorded by the first appellate court that the appellant could not acquire any rights against reversioners during lifetime of the widow is found to be erroneous in law.
But before doing so the claim of the appellant that she became an absolute owner under section 14 of the Act, reiterated, once again, in this Court, may be examined as it is a question of law.
A full bench of the Delhi High Court in Smt.
Chinti vs Smt.
Daultu, AIR 1968 Delhi 264 held that possession of a female donee in pursuance of gift deed executed by her mother could not be characterised as illegal or of trespasser, therefore, she being a female Hindu `possessed ' of the property on the date came into force became an absolute owner under section 14 of the Act.
When more or less similar 606 matter came up before Patna High Court in Sulochana Kuer vs Doomati Kuer, AIR 1970 Patna 352 the court, held that, "a Hindu woman 's estate as such is not capable of transfer either by sale or gift.
The mere concept of such an estate is not transferred on the transfer of properties attaching to the estate".
In Anath Bandhu vs Chanchala Bala, AIR 1976 Calcutta 303 the Calcutta High Court, specifically, dissented from the Delhi decision and held that, "Section 14 wanted to benefit those female Hindus who were limited owners in then existing Hindu Law before the commencement of the Act.
In the present case the limited owner Motibala having transferred the limited interest to Chanchala before the passing of the Act, it cannot be said that Chanchala 's limited interest,if any, ripened into absolute interest in terms of section 14 of the Act".
A full bench of Punjab and Haryana High Court in Parmeshwari vs Santokhi, AIR 1977 Punjab 141 too, did not agree with Delhi High Court.
It went into the background of legislation, the original form of the bill, ambit of the explanation, anomalies that would result if, even, female alienee was deemed to be a limited owner and held, " that section 14 of the Act was not intended to benefit the alienees of a limited Hindu owner".
Similar view was taken by Andhra Pradesh and Madras, High Court in AIR 1957 AP 280 and AIR 1958 Madras, Gaddam Venkayama vs Gaddam Veeryya, and Marudakkal vs Arumugha.
Thus according to Delhi Court a donee of even entire Hindu widow 's estate became absolute owner under section 14 of the Act whereas according to Patna, Calcutta, Punjab, Madras and Andhra Pradesh High Courts, rights of a female donee under Hindu Law, prior to coming into force of the Act did not get enlarged under section 14 of the Act and it did not preclude reversioners from assailing validity of the gift deed.
To ascertain which view accords more to the objective sought to be achieved by the Act it appears necessary to extract section 14 which reads as under: (1) Any property possessed by a female Hindu,whether acquired before or after the commencement of this Act, shall be held by her as full owner thereof and not as a limited owner.
Explanation In this sub section, "property" includes both movable and immovable property acquired by a female Hindu by inheritance or devise, or at a partition, or in lieu of maintenance, or arrears of maintenance, or by gift from any person, whether a relative or not, before, at or after her marriage, or by her own skill or exertion, or by purchase or by prescription, or in any other manner what 607 soever, and also any such property held by her as Stridhana immediately before the commencement of this Act.
(2) Nothing contained in sub section (1) shall apply to any property acquired by way of gift or under a will or any other instrument or under a decree or order of a civil court or under an award where the terms of the gift, will or other instrument or the decree, order or award prescribe a restricted estate in such property.
Needless to emphasise that the section was a step forward towards social amelioration of women who had been subjected to gross dis crimination in matter of inheritance.
Even when the Hindu Women 's Rights to Property Act XVIII of 1937 was enacted it succeeded partially only.
While providing for inheritance and devolution to widow and even widow of predeceased son the Act could not go beyond creating limited interest or a Hindu woman 's estate.
Absolute ownerships or female heir by effacing inequality and putting male an female heirs at par in matter of inheritance was achieved by the Succession Act.
A female Hindu inheriting property under the Act, also, became a stock of descent.
In Eramma vs Verrupana, , this Court observed, "The object of the section is to extinguish the estate called `limited estate ' or `widow 's estate ' in Hindu Law and to make a Hindu woman, who under the old law would have been only a limited owner, a full owner of the property with all powers of disposition and to make the estate heritable by her own heirs and not revertible to the heirs of the last male holder".
But did the legislature intend to extend same benefit, namely, enlarge the estate, held, on the date the Act came into force by any or every female Hindu into full and absolute estate irrespective of whether she was a limited owner or not.
According to learned counsel for appellant the answer should be given in affirmative.
He urged that since the age long traditional limitation on inheritance and disposition by a female was removed and the section was widely worded by using broad and comprehensive expressions such as, `and property, `possessed ', `acquired before or after the commencement of the Act ' and each of these expressions have received expansive of the Act ' and each of these expressions have received expansive interpretations by the Court there was no reason not to give similar interpretation to the word female Hindu.
The learned counsel submitted that there was no warrant to confine scope of the section to limited owners.
He argued that if the argument of the respondent was accepted it shall result in substitution of the word ` female Hindu ' with `limited owner ' which 608 would be contrary to legislative intention, the social philosophy on which the section was founded and the principle of interpretation.
Relying on the explanation, to the section, it was urged that it not only explained meaning of the word `property ' but it left no room for doubt that a female Hindu possessed of any property, which satisfied the extended meaning on the date the Act came into force, became an absolute owner.
It was further argued that the expression `limited owner ' has been used in the section not to whittle down the otherwise simple and plain meaning of the words `female Hindu ' by introducing narrow concept of widows ' estate or limited owner but to put beyond doubt the nature and status of rights of females after the Act.
Support was also drawn from the marginal note of the section and it was urged that the words, `property of a female Hindu to be her absolute property ', was yet another indication to interpret the word `female Hindu ' widely, so as to include in its ambit a donee from a limited owner.
That the section is not very happily worded, does not admit of any doubt.
It was commented upon by this Court in V. Tulsamma vs Shesha Reddy, ; and it was observed that the section was, "a classic instance of statutory provision which, by reason of its inapt draftsmanship has created endless confusion for litigants".
May be so but the answer to the issue must emerge from the section, its background, purpose of its enactment and the reason for use of such wide expression.
Nothing turns on the marginal note as it is usually not restored to for construing meaning of a section, particularly, when the language is plain and simple.
It is well settled that a section has to be read in its entirely as one composite unit without bifurcating it or ignoring any part of it.
Viewed from this perspective the section, undoubtedly, comprises of two parts, one descriptive, specifying the essential requirements for applicability of the section, other consequences arising out of it.
One cannot operate without the other.
Neither can be read in isolation.
Both are integral parts of the section.
Mere provision that any property possessed by a female Hindu on the date the Act came into force shall be held by her would have been incomplete and insufficient to achieve the objective of removing inequality amongst male and female Hindus unless it was provided that the otherwise limited estate of such a female would become enlarged into full or absolute estate.
Any other construction would result in not only ignoring the expression, `and not as a limited owner ' which would be against principle of interpretation but also against the historical background of enactment of the section.
Whereas if it is read in its entirety with one part throwing light on another then the conclusion is irresistible that a limited owner became a full owner provided she was 609 in possession of the property on the date of enactment of the Act.
Property acquired by a female Hindu before the Act came into force comprised, broadly, of inherited property or stridhana property acquired by her from a male or female.
Nature of her right in either class of property, unlike males, depended on the school by which she was governed as well as whether it came to her by devolution or transfer from a male or female.
This invidious discrimination was done away with after coming into force of 1956 Act and the concept of Hindu widows ' estate or limited estate or stridhana ceased to exist by operation of section 14 read with section 4 of the Act which has an overriding effect.
A female Hindu who but for the Act would have been a limited owner become full owner.
But the section being retrospective in operation the meaning of female Hindu prior to 1956 has to be understood in the light of Hindu Law as it prevailed then.
The section enlarged the estate of those female Hindu who otherwise would have been limited owners.
This result follows by reading the first part with the last which uses the expression, 'held by her as full owner thereof and not as a limited owner '.
To put it differently a limited owner become a full owner provided she was a female Hindu who was possessed of any property acquired before the commencement of the Act.
Therefore, mere being female Hindu was not sufficient.
She should have been of that class of female Hindus who could on existence of other circumstances were capable of becoming full owners.
Further the Act being applicable by virtue of section 2 to not only Hindus by religion but also to Buddhists, Jains or Sikhs and to any person who was not a Muslim, Christian, Parsi or Jew it was but necessary to use an expression of such wide connotation as female Hindu because by virtue of sub section (3) of the section the word `Hindu ' in any portion of the Act, which includes section 14, the word had to be understood as including not only a person who was Hindu by religion but even others.
However, the objective being to remove disparity and injustice to which females were subjected under Hindu Law the section limits its operation to such female Hindus who were limited owners.
Reference to the explanation by the learned counsel was also not very apposite.
It was appended to widen the meaning of property by adding to it the inherited property, and the property which came to be possessed by a female Hindu in manner mentioned in it.
Its effect was that a female Hindu became absolute owner not only in respect of inherited property but even of property received by way of gift or on partition or in lieu of maintenance etc.
provided she was a limited owner.
And not that it enlarged the estate of even those who were not limited owner.
Any other construction would militate against the, otherwise, clear meaning of sub section (1).
610 Although this section has come up for interpretation, by this Court, on various occasions in different context but in none of these cases the Court had occasion to examine the ambit of expression female Hindu and whether it extended to females other than limited owner.
Since in every case whether it was decided for or against it was the widow who was alive on the date the Act came into force and she being a limited owner the decision turned on if she was `possessed ' of the property so as to become full owner.
For instance in Gummalapura Taggina Matada Kotturuswami vs Setra Veeravva & Ors., [1959] Supp. 1 SCR 968=AIR the widow was held to have acquired rights as the adoption made by her having been found to be invalid she was deemed to be in constructive possession and thus `possession ' of the property on the date the Act came into force.
Mangal Singh vs Smt.
Rattno, ; was another case where widow 's constructive possession enured to her benefit as she having been dispossession by her collaterals in 1954 and filed a suit for recovery of possession before the Act came into force was held to be `possession ' of the property so as to entitle her to become full owner.
Munna Lal vs Raj Kumar, AIR 1962 SC 1495 was a case where the share of the widow was declared in preliminary decree.
No actual division of share had taken place, yet the court held that it was property `possessed ' by her on the date the Act came into force.
In Sukhram vs Gauri Shankar, ; it was held that a widow was full owner in joint Hindu family property as she became entitled to the interest which her husband had by virtue of Hindu Women Right to Property Act.
The Court ruled that even though a male was subject to restrictions qualienation on his interest in joint Hindu family property, but a widow acquiring an interest by virtue of the Act did not suffer such restriction.
V. Tulsamma vs Shesha Reddy; , and Bai Vijia vs Thakorbhai Chelabhai, were cases where the widow was `possessed ' of the property in lieu of maintenance, and therefore, she was held to be full owner.
In all these cases since the widow was in possession, actual or constructive, on the date the Act came into force she was held to be a female Hindu `possessed ' of the property, and consequently, her limited ownership stood converted into full ownership by operation of law.
Even in Eramma vs Verupana (supra) and Kuldeep Singh vs Surain Singh, [1988] Andhra law Times, where the benefit was denied under section 14 the female Hindu were widows but they were not held to be `possessed ' of the property because their possession was not backed by even the remotest vestige of title.
in Eramma 's case (supra) the benefit was denied as Hindu Women 's Right to Property Act being not applicable on the date the succession opened she could not be held to be possessed of the property.
And in 611 Kuldeep Singh 's case (supra) she had been divested of her interest as a result of transfer made by her.
Contest in all these cases was between reversioner and the widow herself or the person claiming through her.
Review of these decisions indicates that this Court has consistently taken the view as stated in Bai Vijia vs Thakorbhai Chelabhai,: "For the applicability of sub section, two conditions must co exist, namely, (i) The concerned female Hindu must be possessed of property; and (ii) Such property must be possessed by her as a limited owner.
" mention is necessary to be made in this connection about observation in Gulwant Kaur vs Mohinder Singh, ; that the Court in Bai Vijia 's case did not support, to lay down, that, "what was enlarged by sub section (1) of section 14 into a full estate was the Hindu woman 's estate known to Hindu Law.
When the Court uses the word, `limited estate ', the words are used to connote a right in the property to which possession of the female Hindu may be traced, but which is not a full right of ownership".
Gulwant Kaur 's case was concerned with acquisition of right by wife, on entrustment of property in lieu of maintenance, after 1956, when the concept of widows ' estate or limited estate or even stridhana had ceased to exist.
Therefore, what was necessary was being possessed of property, actual or constructive, by female Hindu under some right or title.
Whereas Bai Vijia 's case was concerned with acquisition of right in property held in lieu of maintenance before 1956.
Therefore a female Hindu could become absolute owner only if she was limited owner.
Sub section of section 14 deals with right of female Hindu both before and after the Act came into force.
Female Hindu could become absolute owner of property possessed by her on the date the Act came into force only if she was a limited owner whereas she would become absolute owner after 1956 of the property of which she would otherwise have been a limited owner.
Reference may be made to Maharaja Pallai Lakshmi Ammal vs Maharaja Pillai T. Pilllai, ; where this Court while examining right of wife put in exclusive possession of the property with the right to take the income for her maintenance was held to have become full owner under section 14(1) as she entered into possession after the death of her husband in 1955 and was in possession in 1956.
612 The Court held that the right to utilise income for her maintenance must be "presumed to have resulted in property being given to her in lieu of maintenance".
On this finding the property being possessed on the date the Act came into force as contemplated in the explanation, the widow being a limited owner became a full owner and the gift executed by her in favour of her daughter after 1956 was unexceptionable.
The Court, however, while repelling the submission advanced on superficial conflict in Gulwant Kaur and Bai Vijia reiterated what was observed in Gulwant Kaur 's case.
As already discussed Gulwant Kaur 's case related to acquisition of property after 1956 whereas in Bai Vijia it was acquired before 1956.
The observations made in the two decisions must be understood in that context.
Moreover in Gulwant Kaur 's case the ratio was founded on Jagannathan Pillai vs Kunjithapadam Pillai, ; a decision which shall be adverted to later.
But it too was concerned with acquisition after 1956.
And the bench while discussing scope of section 14(1) observed.
"that the limited estate or limited ownership of a Hindu female would enlarge into an absolute estate or full ownership of the property in question in th following fact situation: `Where she acquired the limited estate in the property before or after the commencement of the Act provided she was in possession of the property at the time of the coming into force of the Act on June 17, 1956 '.
" None of these decisions, namely, Gulwant Kaur (supra) or Maharaja Pillai (supra ) or Jagannathan Pillai purported to lay down that the Section 14(1) contemplated enlargement of estate prior to 1956 of even those females who were not limited owners.
According to Mulla 's Hindu Law (sixteenth edition, paragraph 174) every female who took a limited or restricted estate was known as limited heir.
And according to every school except Bombay every female who succeed as an heir whether to a male or female took a limited estate in the property.
Even in Bombay a female who by marriage entered into Gotra (family) of the deceased male inherited a limited estate only.
And in paragraph 176 it is stated that incident of estate taken by every limited owner was similar to incident of widow 's estate.
Mayne 's Hindu Law, (12th edition, paragraph 671) too brings out the same by stating that the typical form of estate inherited by a woman from a male was compendiously known as the widow 's estate.
And the limitation which applied to such estate applied to all estate derived by a female by 613 descent from a male or female whether she inherited as daughter, mother, grandmother, sister or as any other relation.
Even stridhana property according to Mulla created limited interest in its successors, except in Bombay in certain circumstances and a female inheriting stridhana took a limited interest in it and on her death it passed not to her heirs but to the next stridhan heirs of the female from she inherited.
Thus on plain reading of the Section, and its interpretation by this Court in various decisions a female possessed of the property on the date the Act came into force could become absolute owner only if she was a limited owner.
This being the legal position it may now be seen if a Hindu widow could transfer or alienate widow 's estate by way of gift prior to 1956 and if so to what extent.
And in such alienation what right or interest was created in the alienee.
Did she become a limited owner so as to become a full owner under Section 14 of the Act? A Hindu widow succeeding or inheriting any property from her husband or as widow of predeceased son, held limited interest known as Hindu women 's estate, prior to coming into force of 1956 Act, under the Hindu Women 's Right to Property Act, 1937.
Since such an estate could not be alienated under Hindu Law except in certain circumstances and for specific purpose the holder of the estate was known as limited owner.
The expression `limited owner ' thus could not be understood, except as it was interpreted and understood in Hindu Law.
Could the same be said of a female donee or alienee? The Delhi High Court assumed that a female donee was a limited owner, consequently, of she was possessed of the property on the date the Act came into force and her possession was not `without title ', she became an absolute owner.
Basis for the decision was construction of the word `possessed ' by this Court in Gummalapura Taggina 's case (supra) wherein it was held that the word was used in widest connotation so that a widow, even if in constructive possession, was entitled to absolute ownership under Section 14 of the Act.
Support was also drawn from converse case of Eramma (supra) this Court negatived the claim of widow under Section 14 as her possession on the date the Act came into force was not legal but that of a trespasser.
What the High Court lost sight of was that the claim of widow in Gummalapura 's case (supra) was upheld because the adoption made by her having been found to be invalid she was deemed to be in constructive possession on the date the ACt came into force.
And Eramma 's case (supra) was concerned with a widow, who claimed to have inherited through son in State of Hyderabad where Hindu Women 's Rights to Property Act did not apply on the date the son died.
Consequently, it was held that ``the 614 provisions of Section 14 of the Act cannot be attracted in the case of a Hindu female who is in possession of the property of the last male holder on the date of the commencement of the Act when she is only a trespasser without any right to property ' '.
The High Court overlooked the vital observation made in earlier part of the judgment to the effect.
``In other words, Section 14(1) of the Act contemplates that a Hindu female who in absence of this provision, would have been limited owner of the property, will now become full owner of the same by virtue of this Section. ' ' Limited owner commonly means a person with restricted rights as opposed to full owner with absolute rights.
In relation to property absolute, complete or full ownership comprises various constituents such as the right to posses, actual or constructive, power to enjoy, that is to determine manner of use extending even to destroying, right to alienate, transfer or dispose of etc.
Any restriction or limitation on exercise of these rights may result in limited or qualified ownership.
For instance restriction on enjoyment of property or its alienation.
Such restriction or limitation may arise by operation of law or by deed or instrument.
The limited ownership of female Hindu in Hindu Law arose as a matter of law.
A Hindu widow, according to different schools, Banaras, Bengal or Mithila and even in Bombay inherited or succeeded to property whether of male or female as a limited owner and held a limited estate only.
Nature of such estate was explained by the Privy Council in Janki Ammal vs Narayanaswami, [1916] p. 43 I. A. p. 207 to be, ``her right is of the nature of a right to property, her powers in that character are limited ' '.
In Jaisri vs Raj Diwan Dubey, it was observed by this Court that ``when a widow succeeds as heir to her husband the ownership in the property both legal and beneficial vests in her ' '.
And the restriction on her power to alienate except for legal necessity is imposed, ``not for the benefit of reversioners but is an incident of estate ' '.
Thus a Hindu widow prior to 1956 held the property fully with right to enjoy or even destroy or dispose it of or alienate it but such destruction or alienation should have been impressed with legal or for religious or charitable purposes or for spiritual welfare of the husband.
Necessary consequences that flowed from an alienation for legal necessity was that the property vested in the transferee or alienee, and the reversioners were precluded from assailing its validity.
In Kamala Devi vs Bachu Lal Gupta, this Court after reviewing various authorities extended this principle to female donee.
A gift made within reasonable limits, in favour of daughter even two years after the marriage but in pursuance of promise made at time of the marriage was upheld and 615 the reversioners claim was repelled on permissible alienation under Hindu Law.
But what right or title is acquired by the alienee if transfer is against legal necessity or contrary to law? The authorities appear to be at one that such transfer being not void but voidable could be avoided by reversioners including Govt.
taking by escheat Collector of Masulipatam vs Cavaly Vencata, [1861] 8 M.I.A. 529.
But the widow was held bound by the transfer.
In Natwalal Punjabhai & Anr.
vs Dadubhai Manubhai & Ors., ; , the Court held as under: "The Hindu Law certainly does not countenance the idea of a widow alienating her property without any necessity merely as a mode of enjoyment as was suggested before us by Mr. Ayyangar.
If such a transfer is made by a Hindu widow it is not correct to say that the transferee acquires necessarily and in law an interest commensurate with the period of the natural life of the widow or at any rate with the period of her widowhood.
Such transfer is invalid in Hindu Law, but the widow being the grantor herself, cannot derorate from the grant and the transfer cannot also be impeached so long as a person does not come into existence who can claim a present right to possession of the property." Thus if prior to 1956 any alienation was made by a Hindu widow of widow 's estate prohibited by law or being beyond permissible limits, it stripped the widow of her rights and she could not acquire any rights under section 14.
And so far as alienees were concerned it could utmost create temporary and transitory ownership precarious in nature and vulnerable in character open to challenge if any attempt was made to cloud reversioner 's interest.
Her possession may be good against the world, her right in property may not be impeachable by the widow but her interest qua the reversioner was to continue in possession at the maximum till the lifetime of her donor of transferor.
It was life interest, loosely, as the duration of interest created under invalid transfer came to an end not on death of donee or transferee but donor or transferor.
So far as the male alienees from limited owners, that is female Hindu prior to 1956, are concerned, it was held by this Court in Radhey Krishan Singh & Ors.
vs Shiv Shankar Singh & Ors., that, the alienation could be challenged by the reversioner as there was nothing in the which has taken away such a right.
A female alienee did not enjoy better or different status as the Hindu Law applied universally and uniformaly 616 both to male and female alienees.
She did not become limited owner or holder of a limited estate as understood in Hindu Law.
And the alienation without legal necessity could be assailed by the reversioner.
No change was brought about in this regard by the Act.
If the alienation was valid i.e., it was for legal necessity or permitted by law then the donee became an owner of it and the right and title in the property vested in her.
But if it was contrary to law, as in this case the gift being of entire widow 's estate, then it did not bind the reversioner who could file a suit after the death of the widow.
And the appellant cannot claim to have acquired title to the property under the gift deed.
Nor had she become a limited owner under Hindu Law which could mature into full ownership when the Act came into force.
In fact such possession was not backed any title as against reversioner which could preclude her from bringing the suit for declaration.
Reliance was placed on observations in Jagannathan Pillai vs Kunjithapadam Pillai & Ors., ; that, ``To obviate hair splitting, the legislature has made it abundantly clear that whatever be the property possessed by a Hindu female, it will be of absolute ownership and not of limited ownership notwithstanding the position under the traditional Hindu Law ' ', and it was submitted that the appellant satisfied the criteria to entitle her to claim that her estate irrespective of its nature Hindu Law got enlarged under section 14 of the Act.
An observation without reference to facts discloses neither the law nor the ratio de cedindi which could be taken assistance of.
Factually, the issue was the effect of re transfer by the alienee in favour of the widow after 1956.
And the answer was that, ``When the transaction was reversed and what belonged to her was retransmitted to her, what the concerned Hindu female acquired was a right which she herself once possessed namely, a limited ownership (as it was known prior to the coming into force of the Act) which immediately matures into or enlarges into a full ownership in view of Section 14(1) of the Act on the enforcement of the Act.
The resultant position on the reversal of the transaction would be that the right, title and interest that the alienee had in the property which was under `eclipse ' during the subsistance of the transaction had re emerged on the disappearance of the eclipse ' '.
Truely speaking, the interpretation of sub section (1) of section 14 was no different from the other decisions as is clear from the extracts quoted earlier.
It is thus clear that an alienee from a Hindu widow prior to 1956 did not acquire limited estate or widow 's estate nor she was a limited owner who could get any benefit under section 14 of the Act.
It was not even a life estate except loosely, as the right to continue in possession was not related with her span of life but of the 617 transferor that is the Hindu widow.
The decision of Delhi High Court, therefore, does not lay down the law correctly.
The other view taken by Patna, Calcutta and Punjab and Haryana Courts that sub section (1) of section 14 did not extend the benefit of full ownership to female alienees brings out the objective of the section appropriately and correctly.
Nor is the decision in Badri Pershad vs Smt.
Kanso Devi, ; of any assistance.
It was a case where the widow entitled to the interest of her husband got certain property prior to 1956 as a result of arbitration with specific stipulation and she shall have only life interest.
This was ignored asnd she was held, rightly, to be the absolute owner whose rights were governed by section 14(1) and not 14(2).
Further did not obliterate Hindu Law.
What has ceased to be operative after coming into force of the Act under section 4 is text or rule etc.
for which privision is made in the Act.
And under section 4(2) any law in force immediately before the commencement of the Act ceased to have effect if it was inconsistent with any provision of the Act.
Therefore except to the extent provision has been made in section 14, that is, enlargement of the estate of limited owner, the Hindu Law in other regards remained opearative.
There is no provision in the Act which deprives reversioners of their rights except to the extent mentioned in section 14.
In Radha Rani vs Hanuman Prasad, AIR 1966 SC 216 this Court overruled the decisions of the Allahabad and Patna High Courts that there were no reversioners or reversionary rights after 1956 and held, ``it is open to reversioner to maintain a suit for declaration that an alienation made by a Hindu female limited owner before the coming into force of was without legal necessity and was not binding upon reversioners ' '.
Coming now to the issue of adverse possession the High Court was not justified in concluding that it was a question of fact.
Possession under a gift deed which was found to be invalid, as it was not permitted under Hindu Law was on general principle contrary to law, and as such could be adverse.
When did it become adverse to the donor and what circumstances constitute adverse possession against the donor is an aspect which does not arise for consideration as, even assuming in favour of the appellant, the question is, if adverse possession against donor was sufficient to clothe her with right or title in the property so as to deprive the reversioners of their right to claim the property after the death of the widow? In Radha Rani 's case (supra) this Court held.
618 ``In the case of an alienation by Hindu widow without legal necessity, the reversioners were not bound to institute a declaratory suit during the lifetime of the widow.
They could wait till her death and then sue the alienee for possession of the alienated property trating the alienation as a nullity. ' ' Therefore, it is obvious that the appellant could not acquire any right by adverse possession against reversioner during lifetime of her mother.
Her claim was rightly negatived.
Before parting with this case, we express our thanks to Sri Padmanabhan, Senior Advoacate who, on our request rendered valuable assistance.
We are thankful to Sri Parekh and Sri Narasimhulu also for their assistance.
The result is that this appeal fails and is dismissed.
But there shall be no order as to costs.
R.P. Appeal dismissed.
| A Hindu widow executed a gift deed in 1954 of the entire estate inherited by her from her husband in favour of the appellant, one of her daughters.
This led to the filling of two cross suits one by the appellant for permanent injunction basing her claim on the gift deed and the other by the respondent, another daughter of the widow 's for declaration and partition assailing the validity of the gift deed and claiming reversioners ' right after death of the mother in 1968.
The trial court decreed appellant 's suit on adverse possession and estoppel, but not on section 14 of the , as in its view the widow who executed the gift deed in 1954, was incompetent to alienate widow 's estate by gift permanently.
The appellate court affirmed the finding of the trial court on section 14 of the Act, but opined that the appellant could not acquire any right by `estoppel under section 41 of Transfer of Property Act, against the reversioners by reasons of the widow 's conduct '.
It allowed the appeal of the respondent and dismissed the suit of the appellant holding that adverse 600 possession against the widow was not adverse against reversioners, and the next reversioner was entitled to recover the possession of the property or his share in it within 12 years from the date of the death of the widow.
In second appeal the High Court, treating the finding of the trial court on adverse possession as a finding of fact, held that possession of the appellant must be deemed to be on behalf of the other co sharers in the absence of any evidence before ouster of the other sister.
Aggrieved, the appellant filed the appeals by special leave to this Court.
On the questions whether: (1) a Hindu widow could alienate by gift the entire estate inherited by her from her husband in favour of one of the female reversioners prior to enforcement of Act 30 of 1956, and if so, what was the nature of right that the donee got under law? and (2) the donee became an owner of the widow 's estate, a limited owner, an owner with some right or title so as to acquire rights of absolute ownership under section 14 of the Act or a trespasser and acquired rights for adverse possession by perfecting her rights against the doner only or it was essential to prescribe rights against reversioners as well? Dismissing the appeals, this Court HELD: 1.1 Prior to the coming into force of Act 30 of 1956 a Hindu widow succeeding or inheriting any property from her husband or as widow of predeceased son, held limited interest known as Hindu women 's estate, under the Hindu Women 's Right to Property Act, 1937.
However, she had the right to enjoy or even destroy or dispose of the property or alienate it but such destruction or alienation should have been impressed with legal necessity or for religious or charitable purposes or for spiritual welfare of the husband.
Necessary consequences that flowed from an alienation for legal necessity was that the property vested in the transferee or alienee, and the reversioners were precluded from assailing its validity.
Since such an estate could not be alienated under Hindu Law except in certain circumstances and for specific purpose, the holder or the estate was known as limited owner.
{613C D;614F G] 1.2 The expression `limited owner ' could not be understood except as it was interpreted and understood in Hindu Law.
The term commonly means, a person with restricted rights as opposed to full owner with absolute rights.
In relation to property, absolute or complete or full ownership comprises various constituents such as the right to 601 possess, actual or constructive, power to enjoy, that is, to determine manner of use extending even to destroying, right to alienate, transfer or dispose of etc.
Any restriction or limitation on exercise of these rights may result in limited or qualified ownership.
For instance restriction on enjoyment of property or its alienation.
Such restriction or limitation may arise by operation of law or by deed or instrument.
The limited ownership of female Hindu in Hindu law arose as a matter of law.
A Hindu widow, according to different schools, Benaras, Bengal or Mithila and even in Bombay inherited or succeeded to property whether of male or female as a limited owner and held a limited estate only.
[613D; 614B D] Janaki Ammal vs Karayanaswami, [1916] p. 43 I.A. p. 207 and Jaisri vs Raj Diwan Dubey,, [1961] 2SCR 559, referred to.
1.3 Prior to 1956, any alienation made by a Hindu widow or widow 's estate prohibited by law or being beyond permissible limits could utmost create in the alienee temporary and transitory ownership precarious in nature and vulnerable in character open to challenge if any attempt was made to cloud reversioners ' interest.
The alienee 's possession may be good against the world and her right in property may not be impeachable by the widow, but her interest qua the reversioner was to continue in possession at the maximum till the lifetime of her donor or transferor.
It was life interest, loosely, as the duration of interest created under invalid transfer came to an end not on death of donee or transferee but donor or transferor.
Such transfer stripped the widow of her rights and she could not acquire any rights under section 14, and being voidable, and not void, could be avoided by reversioners including government taking by escheat; but the widow was bounded by it.
[615A, E F] Kamala Devi vs Bachu Lal Gupta, ; Collector of Masuli Patam vs Cavoly Venoata, [1861] 8 M.I.A. 529; Natwalal Punjabhai & Anr.
vs Dadubhai Manubhai & Ors., ; and Radhey Krishan Singh & Ors.
vs Shiv Shankar Singh & Ors., , referred to.
2.1 An alienee from a Hindu widow prior to 1956 did not acquire limited estate or widow 's estate, nor was she a limited owner who could get any benefit under section 14 of the Act.
It was not even a life estate except loosely, as the right to continue in possession was not related with her span of life but of the transferor that is the Hindu widow.
[616G H;617A] Smt.
Chinti vs Smt.
Daultu, AIR 1968 Delhi 264, disapproved.
602 Sulochana Kuer, vs Doomati Kuer, AIR 1970 Patna 352; Anath Bandhu vs Chanchala Bala, AIR 1976 Calcutta 303; Parmeshwari vs Santokhi, AIR 1977 Punjab 141; Gaddam Vankayama vs Gaddam Veerayya, AIR 1957 AP 230 and Marudakkal vs Arumugha., AIR 1958 Madras, referred to.
Badri Pershad vs Smt.
Kanso Devi, ; held inapplicable.
2.2 In the instant case the alienation by gift of entire widow 's estate being contrary to law did not bind the reversioner who could file a suit after the death of the widow.
The appellant could not claim to have acquired title to the property under the gift deed.
Nor had she become a limited owner under Hindu Law which could mature into full ownership when the Act came into force.
In fact such possession was not backed by any title as against reversioner which could preclude her from bringing the suit for declaration.
[616B] 3.
As regards the adverse possession, the High Court was not justified in concluding that it was a question of fact.
Possession under a gift deed which was found to be invalid as it was not permitted under Hindu Law was on general principle contrary to law and as such could be adverse.
The appellant could not acquire any right by adverse posession against reversioner during life time of her mother.
Her claim was rightly negatived by the first appellate court.
Even assuming that the alienee had perfected adverse possession against the donor, it was not sufficient to clothe her with right or title in the property so as to deprive the reversioners of their right to claim the property after the death of the widow, inasmuch as in the case of an alienation by Hindu widow without legal necessity, the reversioners were not bound to institute a declaratory suit during the lifetime of the widow.
They could wait till her death and then sue the alienee for possession of the alienated property treating the alienation as a nullity.
[617F H;618A B] Radha Rani vs Hanuman Prasad, AIR 1966 SC 216, relied on.
4.1 Being retrospective in operation section 14(1) deals with rights of female Hindus both before and after the Act came into force, and the meaning of female Hindu prior to 1956 has to be understood in the light of Hindu Law as it prevailed then.
The section enlarged the estate of those female Hindus who would otherwise have limited owners.
This result flows by reading the first part with the last which uses the expression `held by her as full owner thereof and not as a limited 603 owner '.
A limited owner became a full owner provided she was a female Hindu who was possessed of any property acquired before the commencement of the Act.
Therefore, mere being female Hindus was not sufficient.
She should have been of that class of female Hindus who could on existence of other circumstances were capable of becoming full owners.
Female Hindu could become absolute owner of property possessed by her on the date the Act came into force only if she was a limited owner whereas she would become absolute owner 1956 of the property of which she would otherwise have been a limited owner.
[609B E;611F] Bai Vijia vs Thakorbhai Chelabhai, ; , relied on.
4.2 On a reading of section 14(1) the conclusion is irrisistible that a limited owner became a full owner provided she was in possession of the property on the date of enactment of the Act.
Effect of Explanation appended to the section was that a female Hindu became absolute owner not only in respect of inherited property but even of property received by way of gift or on partition or in lieu of maintenance etc.
provided she was a limited owner.
And not that it enlarged the estate of even those who were not limited owner.
Any other construction would militate against the otherwise clear meaning of sub section (1).
[608G H;609F H] 5.
did not obliterate Hindu Law.
What has ceased to be operative after coming into force of the Act under section 4 is text or rule etc.
for which provision is the Act.
And under section 4(2) any law in force immediately before the commencement of the Act ceased to have effect if it was inconsistent with any provision of the Act.
Therefore, except to the extent provision has been made in section 14, that is, enlargement of the estate of limited owner, the Hindu Law in other regards remains operative.
There is no provision in the Act which deprives reversioners of their rights except to the extent mentioned in section 14.[617C D] 6.
Marginal note is usually not resorted to for construing meaning of a section, particularly, when the language is plain and simple.
A section has to be read in its entirety as one composite unit without bifurcating or ignoring any part of it.
[608D E] V. Tulsamma vs Shesha Reddy, ; , referred to.
Eramma vs Verrupana, ; Gummalapura Taggina 604 Matada Kotturuswami vs Setra Veeravva & Ors., [1959] Supp ; 1 SCR 968, ; Mangal Singh vs Smt.
Rattno, ; Munna Lal vs Raj Kumar., AIR 1962 SC 1495 Sukhram vs Gauri Shankar, ; ; Kuldeep Singh vs Surain Singh, [1988] Andhra Law Times, Gulwant Kaur vs Mohinder Singh; , ; Maharaja Pillai Lakshmi Ammal vs Maharaja Pillai T. Pillai, ; and Jagannathan Pillai vs Kunjithapadam Pillai.
, ; , referred to.
Mulla 's Hindu Law, 16th Edn.
para 174, and Mayne 's Hindu Law, 12th Edn. para 671, referred to.
|
.A. Nos.
4,5,6 and 7 in Civil Appeal Nos.
1401 & 1402 of 1990.
From the Judgment and Order dated 22.5.1987 of the Delhi High Court in C.W.P No. 2687 of 1986.
Kapil Sibal, V.B. Saharya and R.K. Khanna for the Appellant.
Rajiv Sawhney, Sanjay Anand, Deepak Kumar Thakur, Mrs. Ameeta Rathore, Kapil Chandra for J.B. Dadachanji & Co. and R.K. Maheshwari for the Respondents.
The following Order of the Court was delivered: PUNCHHI, J. These are applications for directions in Civil Appeal Nos. 1401 and 1402 of 1990 decided by us on March 13, 1990.
For facility of fact situation resort be had to our judgment dated March 13, 1990.
Direction given by to the D.D.A was meaningful and clear that it shall grant to the Delhi Cloth Mills conditional approval subject to the removal of the objections enumerated and extracted in the judgment, as raised, or such of them as were valid and tenable in law, after the Delhi Cloth Mills is heard by the Municipal Corporation of Delhi, the author of the objections, and which the D.D.A. had adopted, and the matter to be formalised forthwith by the D.D.A. and the authorities connected therewith within a time frame.
This has reportedly met with hurdles necessitating these applications.
The objections may broadly be divided in three parts: (i) objections which are within the exclusive domain of the Municipal Corporation of Delhi 593 (ii) objections which are exclusively within the domain of the D.D.A.; and (iii) objections which are lendingly common to both, the D.D.A. and the Municipal Corporation of Delhi overseeing and safeguarding the interests of each other.
And these objections can also be divided as surmountable and insurmountable.
The objections, to begin with, as raised by the Municipal Corporation of Delhi and later adopted by the D.D.A., presently requiring smoothening before us relate to those which are within the exclusive domain of the D.D.A. for it is asserted by the applicant Delhi Cloth Mills that the objections relating to the Municipal Corporation of Delhi are not insurmountable and those can for the present, be left alone to be tackled by the applicant without the intervention of the Court.
For this reason neither any direction is asked at this stage nor is one necessary to the Municipal Corporation of Delhi.
The D.D.A. has broadly three objections: (i) To further the resolution of the D.D.A., dated February 1, 1983, the Delhi Cloth Mills should file an amended or modified plan so as to conform to the Master Plan of the year 2001; (ii) Since the matter before the Delhi High Court, as also in this Court, had proceeded on the assumption that the entire 63 acres of land involved in the re development for flatted factories and residential complex was owned by the Delhi Cloth Mills, which assumption was wrong, the Delhi Cloth Mills should confine its plan to about 52 acres of land as owned by it as the balance about 11 acres of land is owned by the D.D.A. which is either on varied termed leases or in trespass with the Delhi Cloth Mills.
The plan would require rectification accordingly; and (iii) The fact of grant of permission vide resolution of 1 2 1983 did not ipso facto mean that the D.D.A. had given up its rights on lease hold lands in accordance with the terms thereof or the tittle to it or to regularize possession of the trespassed upon land with the Delhi Cloth Mills.
594 On that basis it is required of the Delhi Cloth Mills to confine its plans within those 52 acres as owned by it and by a process of reasoning it is hinted that after providing for recreational and other necessary facilities, as required by law, there hardly would remain any land to further the project.
It has been maintained on behalf of the Delhi Cloth Mills that the posture of the D.D.A. is obstructive in nature and a step to flout or undermine the orders of this Court.
It has on the other hand been maintained on behalf of the retrenched workers that since the settlement arrived at by them with the Delhi Cloth Mills was beneficial to them in nature, as a price for closure of the Mill, the posture of the D.D.A. was indirectly against their interests.
They have prayed for suitable directions so that the benefits accruing to them by lapse of time may not go dry.
At the outset, we put it beyond any doubt and re affirm that the D.D.A. stands directed by this Court to grant to the D.C.M. approval, even though conditional, and the D.C.M. stands impliedly directed and is duty bound to remove the objections as were valid and tenable in law as raised by the D.D.A. within its domain.
Having gone thus far there is no retreat of it contemplated.
It is further to be understood that this Court had endorsed by means of this directive the already known views of the Delhi High Court towards restoring resolution of the D.D.A. dated February 1, 1983, whereby the scheme as given by the Delhi Cloth Mills was approved in terms thereof.
And obviously the approval came from the D.D.A. at a time when the Master Plan of the year 1962 was operative and the one of the year 2001 was not existant, and if at all existant in an embryonic stage.
The law governing the object and the rules and regulations then in vogue and applicable were deemingly kept in view and applied by the D.D.A. in the approval of the scheme.
To whittle down the effect of that resolution on the emergence of the new Master Plan of the year 2001, made applicable after the orders of this Court would, at the present stage, if insisted upon be spelled out as a step to undermine the orders of this Court.
Such an objection by the D.D.A. when raised before March 13, 1990, the day when we passed judgment, was untenable in law and the D.D.A. should have known it before putting such an objection to use.
For this reason, we repel the first objection of the D.D.A. and require of it to stick to the position as per Master Plan as existing on February 1, 1983.
This objection is thus surmounted.
The second objection of the D.D.A. with regard to the wrong 595 impression of the ownership of the land appears to us to be valid substantially.
It is the admitted case of the parties that the scheme pertains to 63 acres of land which the Delhi Cloth Mills while applying for sanction claimed to own and one of the considerations in passing the resolution dated February 1, 1983 ex facie was the D.D.A. being impressed by a private entrepreneur coming forward with a scheme with such a large chunk of land.
It is significant that nowhere at that stage, even remotely, or at any stage during the litigation before the Delhi High Court or this Court, was the Delhi Cloth Mill 's claim of owning 63 acres of land been given a serious thought or refuted or put to proof or testing.
One way of looking at it now can be that the Delhi Cloth Mills misled the D.D.A. in that regard and had the D.D.A. known that the Delhi Cloth Mills owned only about 52 acres of land the D.D.A. might have resolved differently.
The other view as suggested by the Delhi Cloth Mills is that the D.D.A. of its own should have counter checked the extent of the ownership of the land of the Delhi Cloth Mills at the time of granting sanction.
Learned counsel on both sides have dwelt upon this matter a great deal.
We cannot assume that by upholding resolution dated February 1,1983, the Delhi High Court, or for that matter this Court, had made or acknowledged Delhi Cloth Mills as the owner of 63 acres of land involved in the scheme or that the right of ownership of the D.D.A. over about 11 acres of land stood extinguished by such exercise.
The D.D.A. when engaged in examining and sanctioning the proposal was justified on proceedings on the supposition of facts given by the Delhi Cloth Mills as true, and in processing the same cannot be said to have surrendered its ownership rights qua land measuring 11 acres.
Thus we are clear in arriving at the view that the said resolution cannot trample the right of D.D.A. as owner over about 11 acres of land when the respective leases reserve to the D.D.A. the right of resumption, and in leases expiring by efflux of time the option not to renew.
The scheme approved must thus of necessity be dented to that effect as the objection of the D.D.A. in that regard and to that extent is valid and tenable.
Reservation in that regard appears also to have been made by the Delhi High Court in its judgment in C.W.P. No. 1281 of 1985 decided on July 22,1988.
While dealing with possibility of a law and order problem, the court relied on the Delhi Cloth Mill 's management 's affidavit towards granting statutory compensation to the workers as well as its undertaking to pay, in some event, additional compensation.
The Delhi Cloth Mills had in the affidavit stated that the additional compensation shall be payable on expiry of two years from the date the Delhi Cloth Mills is allowed by all the concerned authorities 596 including the D.D.A. and Municipal Corporation of Delhi to redevelop its entire 63 acres of land at Bara Hindu Rao and Krishan Ganj, in accordance with the user stipulated therefore under the Master Plan for Delhi dated September 1962.
The High Court in judging the stand taken by the delhi Cloth Mills made the following significant observations: "No assurance is extended by any competent authority to the workmen that the authorities shall not enforce the Master Plan or shall not insist for due compliance of the provisions of the Act and the regulations in the matter of the Mill.
It is also doubtful if any one could opt out of the statutory provisions.
" These observations make it clear that the D.D.A. cannot be said to have abandoned its right either as a statutory body or that of the lessor of land on leases held by the Delhi Cloth Mills by mere passing of the resolution afore mentioned, or correspondingly to have given any right to the workers.
We have been given the break up of those leases numbering 10.
One of them pertains to 36425 sq.
yards(about 7 acres) which is perpetual in nature and is not required to be renewed except that the rent is revisable after every 25 years.
The remaining leases are in comparison short durated, some of which have expired and others are expiring in the year 2001.
The unexpired period of leases is not long enough in the context of the project.
besides there is an area which is said to be trespassed upon by the Delhi Cloth Mills.
this area under durated leases and trespass totals about 4 acres.
the Delhi Cloth Mills cannot be permitted to lay hands on this area as of right to further the scheme.
there a common term in each respective lease reserving right to the lessor to determine the lease at any time if the land is required for public purpose in consideration of the land having been demised free of any premium.
To involve this four acres of land in the scheme the D.C.M may have to work it out under a different shade and premise and not from this Court.
The objection is thus insurmountable on this plain.
So far as the perpetual lease is concerned, its purpose covenants for residential, cultural and recreational purposes of staff and workers of the lessee and purposes ancillary thereto, in accordance with the rules and regulations in force in Delhi under the Municipality Act or any bye laws framed by the lessor.
It is further covenanted that for 597 purposes of construction of building the approval of the lessor in writing is a pre condition before the start of the construction, and further no alteration or addition in the building as approved by the lessor either externally or internally can be made without first obtaining the permission of the lessor in writing.
Besides that if during the period of lease, it is certified by the Central Government that the premises are required for the purposes of the Central Government or any other public purpose, the lessor shall be entitled to take possession of the land together with all building structures etc.
with certain consequences.
It is thus plain and evident that even in the case of perpetual lease enormous residual control is left with the lessor who alone can accord permission to construct building for the specified purpose for residential, cultural and recreational purpose of the staff and workers of the Mill and purposes ancillary thereto, and on frustration of such purpose has the further right to treat the lease to have become void if the land is used for any purpose other than for which the lease was granted, not being the purpose subsequently approved by the lessor.
Thus unless the D.D.A. grants approval to the change of user as asked and reconstruction, the Delhi Cloth Mills has no such deemed right or privilege ignoring the covenants and the terms of the lease.
Thus it cannot be suggested that the resolution afore mentioned has the automatic effect of the D.D.A. having granted change of user, consciously or impliedly, or vesting any right in that regard to the Delhi Cloth Mills.
Here as well the D.C.M. would have to work out its plans with the D.D.A. under the terms of the lease without any further mandate from this Court in this regard.
This objection also is insurmountable in the presence of the void clause.
Yet all is not lost for the Delhi Cloth Mills.
It can still steer through its project in its owned 52 acres, even though in a truncated from and submit an amended plan.
On the other hand its relationship with the D.D.A. being that of a lessee and lessor permits a meaningful dialogue seeking extensions of lease periods, and change of permissive user in respect of 11 acres of land.
It can make attractive suggestions to the D.D.A. for setting up cultural, educational, recreational and other facilities etc.
at the expense of the Delhi Cloth Mills, if the project is to remain of the 63 acre size.
It is the case of Delhi Cloth Mills that if it is allowed to involve the said 11 acres of land, the project would be better and it is prepared to pay any charges as are known to law to keep it as part of the project of the original size.
Be that as it may we are no experts to opine whether a 52 acre project would be more viable or better or a 63 acre one.
But since the project has in terms of our order dated March 13, 1990 to go on, the D.D.A. 598 may if asked examine the suggestions.
That is their field and not ours to decide.
Before concluding this Order, we cannot help remarking that both parties, i.e., the D.C.M. and the D.D.A. have to share mutually the blame for the present situation.
The D.C.M. for its cavalier away in having asserted to own 63 acres of land and the D.D.A. in casually, without consulting its records, passing its Resolution No. 26 dated February 1, 1983 and communicating the same to the D.C.M. on 31 3 1983.
Should the D.C.M. now confine its scheme and project to its owned 52 acres of land, abandoning any effort to have included the remaining D.D.A. owned 11 acres of land by negotiations, and the D.D.A. in not offering on its own, or otherwise, the said land to the D.C.M., the project as originally conceived would have to be spruced.
It is evident from the proceedings of the Resolution that as per Master Plan, 23.14 acres have been earmarked for flatted factories and 43.39 acres as residential, though the sum total goes to more than 63 acres.
Both these areas include areas set apart for facilities and amenities enumerated therein.
The respective areas in that event would have to be reduced keeping in view the ground realities of ownership and the earmarking in the Master plan.
Cuts inevitably may have to be employed in either area or both.
Be that as it may, the scheme in the modified from would have to be brought in, not a new but as a substitute for the original scheme and that scheme would register its birth, legitimacy and binding force as of the original scheme.
The mandate in this regard should be clearly understood by the parties concerned for they are under obligation to responsibly carry out the directions of this Court dated March 13, 1990, in all events, and share the burden of it, indeed as doing the blame.
With these observations, these applications are disposed of.
No Costs.
T.N.A. Applications disposed of.
| By an order dated 13.3.1990 the Supreme Court directed the Delhi Development Authority (D.D.A.) to grant conditional approval to the respondent Company 's (D.C.M.) scheme pertaining to the development of mills land measuring 63 acres for construction of flatted factories and residential complex subject to removal of objections raised by Municipal Corporation of Delhi and Delhi Development Authority.
The matter could not be finalised by the parties since the DDA took certain objections to the scheme:(a) that the Delhi Cloth Mills should file a modified plan so as to conform to the Master Plan of the year 2001; (b) the legal proceedings before the High Court and the Supreme Court proceeded on the wrong assumption that the entire 63 acres of land was owned by the Delhi Cloth Mills whereas the DCM owns only 52 acres of land while the balance 11 acres was owned by the DDA which is partly on lease and partly in trespass with the Delhi Cloth Mills; and (c) the grant of permission by the DDA vide its resolution No. 26 dated 1.2.83 does not ipso facto mean that it had given up its rights or title to the lease hold lands or that it had regularised the possession of the trespassed upon land with the Delhi Cloth Mills.
The respondent Company filed applications for direction in this Court.
Disposing the applications, this Court, HELD: 1.
The D.D.A. stands directed by this Court to grant to the D.C.M. approval, even though conditional, and the D.C.M. stands impliedly directed and is duty bound to remove the objections raised by the D.D.A.
This Court had endorsed by means of this directive the already known views of the Delhi High Court towards restoring resolu 591 tion of the D.D.A. dated February 1, 1983, whereby the scheme as given by the Delhi Cloth Mills was approved in terms thereof.
The approval came from the D.D.A. at a time when the Master Plan of the year 1962 was operative and the one of the year 2001 was not existent, and if at all existent in an embryonic stage.
The law governing the subject and the rules and regulations then in vogue and applicable were deemingly kept in view and applied by the D.D.A. in the approval of the scheme.
To whittle down the effect of that resolution on the emergence of the new Master Plan of the year 2001, made applicable after the orders of this Court would, at the present stage, if insisted upon be spelled out as a step to undermine the orders of this Court.
Such an objection by the D.D.A. when raised before March 13, 1990, the day when the Supreme Court passed its judgment, was untenable in law and the D.D.A. should have known it before putting such on objection to use.
Therefore, the first objection of the D.D.A. is repelled and it is directed to stick to the position as per Master Plan as existing on February 1. 1983.
[594 D G] 2.
The objection of the D.D.A. with regard to the wrong impression of the ownership of the land is valid substantially.
It is the admitted case of the parties that the scheme pertains to 63 acres of land which the Delhi Cloth Mills while applying for sanction claimed to own and one of the considerations in passing the resolution dated February 1,1983 ex facie was the D.D.A. being impressed by a private entrepreneur coming forward with a scheme with such a large chunk of land.
The D.D.A. when engaged in examining and sanctioning the proposal was justified on proceeding on the supposition of facts given by the Delhi Cloth Mills as true, and in processing the same cannot be said to have surrendered its ownership rights qua land measuring 11 acres.
It cannot be assumed that by upholding the resolution dated February 1, 1983, the Delhi High Court, or Supreme Court, had acknowledged Delhi Cloth Mills as the owner of 63 acress of land involved in the scheme or that the right of ownership of the D.D.A. over about 11 acres of land stood extinguished by such exercise.
Therefore, the said resolution cannot trample the rights of D.D.A. as owner over 11 acres of land when the respective leases reserve to the D.D.A. the right of resumption, and in lease expiring by efflux of time the option not to renew.
The scheme approved must thus of necessity be denoted to that effect as the objection of the D.D.A. in that regard and to that extent is valid and tenable.
But the Delhi Cloth Mills can still steer through its project in its owned 52 acres, even though in a truncated form and submit an amended plan.
The scheme in the modified form would have to be brought in, not a new but as a substitute for the original scheme and that scheme would register its birth, legitimacy and binding force as of the original 592 scheme.[594H, 595 A D, E F, D] 3.
Respondent Company 's relationship with the D.D.A. is that of a lessee and lessor.
Out of 10 leases one is perpetual in nature and the remaining leases are short durated.
Under the terms of the perpetual lease unless the D.D.A. grants approval to the change of user as asked and reconstruction, the Delhi Cloth Mills has no such deemed right or privilege ignoring the covenants and the terms of the lease.
Therefore, it cannot be said that the resolution has the automatic effect of the D.D.A. having granted change of user, consciously or impliedly, or vesting any right in that regard to the Delhi Cloth Mills.
[597 D F, 596 E]
|
ivil Appeal Nos.
931/77 & 200/78.
Appeals by Certificate from the Judgment and Decree dated 1.4.76 and from the Judgment and Decree dated 19.6.1975 of the Andhra Pradesh High Court in A.S. NO. 71/73 and Appeal No. 259 of 1972.
B. Kanta Rao for the Appellants.
C. Sitaramiah, and B. Parthasarthi for the Respondents.
The Judgment of the Court was delivered by: K.RAMASWAMY, J.
Civil Appeal Nos. 931 of 1977 and 200 of 1978 relate to the same dispute though arose from two suits and separate judgements.
The Bench that heard Civil appeal No. 931 of 1977 directed on January 24, 1991 to list Civil Appeal No. 200 of 1978 for common disposal.
Civil Appeal No. 200 of 1978 arose out of O.S. No 118 of 1968 on the file of the Court of Add.
Subordinate Judge.
Guntur and Appeal No. 259 at 1972 dated June 19, 1975 of the A.P. High Court.
The suit for possession and mesne profits was laid by the descendants of Nori Lakshmipathi Somayaajulu of Vatticherukuru, Guntur Taluq and District, for short `N.L.S. '.
The dispute relates to the tank known as `Nori Lakshmipathi Somayajulu 's Western Tank ' ``Vooracheruva ' ' (Village Tank).
It consists of 100 acres of which roughly 30 acres is covered by water spread area marked A ' Schedule `B ' Schedule consists of 70 acres (silted up area).
The tank was dug in Fasli 1190 (1700 A.D.) Zamindar, Raja Mainikya Rao made a grant of the land for digging the tank and its preservation, maintenance and repairs.
It is the descendants ' case that it is a private tank enjoyed by the `grantee ', N.L.S. as owner and thereafter the descendants and perfected the title by prescription.
It was found as a fact by the High Court and the descendants are unable to persuade us from the evidence to differ from the findings that the tank is a ``public tank ' ' dug by 541 the village.
The descendants ' plea and evidence adduced in support thereof that it is their private tank, was negated by both the courts.
The Trial Court found that the tank is a `public trust ', the appellants would be hereditary trustees and could be removed only by taking action under section 77 of the A.P. Hindu Charitable and Religious Institutions and Endowments Act, 1966 for short `the Endowments Act '.
It also held that the descendants acquired title by adverse possession.
Accordingly the suit for possession was decreed relegating to file a separate application for meesne profits.
On appeal the High Court reversed the decree and held that the tank is a public tank and the tank and the lands stood vested in the Gram Panchayat under A.P. Gram Panchayat Act 2 of 1964 for short `the Act '.
Since the Gram panchayat was in possession from July 7, 1965, though dispossessed the descendants forcibly and as the suit is not under section 6 of the but one based on title, it called for no interference.
It dismissed the suit.
This Court granted leave to appeal under Article 136.
Civil Appeal No. 931 of 1977 arose out of the suit for possession in O.S. No. 57 of 1966 on the file of the court of Subordinate Judge at Guntur filed by the Gram Panchayat against the descendants.
The suit was dismissed by the Trial Court and was confirmed by the High Court in A.S. No. 71 of 1973 and the High Court granted leave under article 133 on Dec. 10. 1976.
The pleadings are the same as in the other suit.
In addition the descendants further pleaded in the written statement that the Gram Panchayat unlawfully took possession of the tank on July 7, 1965.
They also acquired title by grant of ryotwari patta under section 3 of the A.P. Inams (Abolition and Conversion into Ryotwari) Act (Act XXXVII of 1956), for short `the Inams Act '.
The Gram Panchayat had no manner of right to interfere with their possession and enjoyment.
They also pleaded and adduced evidence that they were leasing out the fishery rights and grass and trees grown on the land.
The income was being utilized for the repairs of tank.
The Trial Court and the High Court found that the lands were endowed to N.L.S. for the maintenance of the tank and the descendants obtained ryotwari patta under Inams Act and are entitled to remain in possession and enjoyment as owners subject to maintain the tank.
Accordingly the suit was dismissed.
On appeal in A.S. No. 71 of 1973 by judgment dated April 1, 1976 the High Court confirmed the decree on further finding that by operation of section 14 of the Inams Act, Civil Suit was barred.
Thus both the appeals are before this Court.
542 In Civil Appeal No. 200 of 1978, Shri Seetharamaiah learned Senior Counsel for the descendants N.L.S. have no exclusive personal right title or interest in the tank and the appurtenant total land of 100 acres.
In view of the entries of the Inams Fair Register for short `I.F.R., ' it is a public trust and not a public tank.
Unless recourse is had to remove them from trusteeship under section 77 of the Endowments Act, the appellants cannot be dispossessed.
Since admittedly N.L.S. and the descendants were enjoying the property till date of dispossession, presumption of the continuance of the enjoyment anterior thereto as owners could be drawn.
The High Court thereby committed error of law in holding that the lands stood vested in the Gram Panchayat under the Act and that it is a public tank.
In Civil Appeal No. 931 of 1977, it was further contended that since the grant of Ryotwari patta under the Inams Act had became final section 14 thereof bars the jurisdiction of the Civil Court to entertain the suit.
Shri B.Kanta Rao, learned counsel for the Gram Panchayat contended that the finding of the High Court that the tank and the appurtenant land, namely, the plaint schedule property, as `public tank ', is based on evidence that the tank was dug by the villagers and that they have been using for their drinking purposes and the cattle is a finding of fact.
By operation of sections 85 and 64 of the Act, the land and the tank stood vested in the Gram Panchayat.
Entries in the I.F.R. establishes that the grant of the land was for preservation, maintenance and repairs of the tank.
Therefore, the grant should be in favour of the institution, namely, the tank.
The pattas obtained by the descendants should be for the benefit of the tank, though granted in individual names.
By operation of section 85 of the Act, the descendants acquired no personal title to the property.
Ryotwari patta is only for the purpose of land revenue.
The Gram Panchayat acquired absolute right title and interest in the land.
The Civil Suit is not a bar on the facts in this case.
Before appreciating the diverse contentions, the facts emerged from the findings in both the appeals could be gathered thus.
Admittedly the Zamindar.
Raja Manikya Rao granted 100 acres of land in Inam village to dig the tank and the grant was for its preservation and maintenance, the grant was in favour of N.L.S.
In 1700 A.P., i.e. 1190 Fasli, the tank was dug by the villagers and ever since the villagers have been using the fresh water tank for their drinking purposes and of the cattle and perfected their right by prescription.
In course of time the tank was silted up and in and around 30 acres the water spread area, fresh water is existing.
No. repairs were effected by the descendants.
The rest of the land was silted up.
Grass and trees have been 543 grown thereon and was being enjoyed.
On July 7, 1965, the Gram Panchayat took unilateral possession of the tank and ever since was exercising possession, supervision and control over it.
After expiry of three years from the date of dispossession, the descendants filed O.S. No.57 of 1966 for possession based on title.
Earlier thereto the Gram Panchayat field the suit for possession.
Under the Inams Act, Ryotwari patta under section 3 was granted to the descendants in individual capacity and on appeal the Revenue Divisional Officer, Guntur confirmed the same.
It became final as it was not challenged by filing any writ petition.
Both the suits now stood dismissed.
The counsel on other side have taken us through the evidence and we have carefully scanned the evidence.
From these facts the first question emerges is whether the tank and the appurtenant land stood vested in Gram panchayat.
Section 64 of the Act reads thus: ``Vesting of common property or income in Gram Panchayat Any property or income which by custom belongs to or has been administered for the benefit of the villagers is common, or the holders in common of village land generally or of land of a particular description or of lands under a particular source of irrigation, shall vest in the Gram Panchayat and be administered by it for the benefit of the villagers or holders aforesaid ' '.
Section 85 reads thus: ``Vesting of water works in Gram Panchayat (1) All public water courses, springs, reservoirs, tanks, cisterns, fountains, wells, ponds an other water works (including those used by the public to such an extent as to give a prescriptive right to their use) whether existing at the commencement of this Act or afterwards made, laid or erected and whether made, laid or erected at the cost of the Gram Panchayat or otherwise for the use or benefit of the public, and also any adjacent land, not being private property, appertaining thereto shall vest in the Gram Panchayat and be subject to its control ' '.
Provided that nothing in this sub section shall apply to any work which is, or is connected with, a work of irrigation or 544 to any adjacent land appertaining to any such work.
(2) Subject to such restrictions and control as may be prescribed, the Gram Panchayat shall have the fishery rights in any water work vested in it under sub section (1), the right to supply water from any such work for raising seed beds on payment of the prescribed fee, and the right to use the adjacent land appertaining thereto for planting of trees and enjoying the usufruct thereof or for like purpose.
(3) The Government may, by notification in the Andhra Pradesh Gazettee, define or limit such control or may assume the administration of any public source of water supply and public land adjacent and appertaining thereto after consulting the Gram Panchayat and giving due regard to its objections, if any ' '.
(emphasis supplied) A bird 's eye view of the provisions brings out vividly that any property or income which belongs to or has been administered for the benefit of the villagers in common or the holders in any of the village land generally or of land of a particular description or of lands under particular source of irrigation shall vest in the Gram Panchayat and be administered by it for the benefit of the villagers or holders aforesaid.
The lands or income use for communal purpose shall either belong to the GRam Panchayat or has been administered by the Gram Panchayat.
It is not the case of the Gram Panchayat nor any finding recorded by the courts below to the effect.
So section 64 is not attracted, though the villagers acquired prescriptive right to use the water from the tank for their use and of their cattle.
All public water courses, springs, reservoirs, tanks cisterns, etc.
and other water works either existing on the date of the Act or made thereafter by the Gram Panchayat, or otherwise including those use by the public ripened into prescriptive right for the use and benefit of the public and also adjacent or any appurtenant land not being private property shall vest in the gram Panchayat under section 85(1) and be subject to its control.
The proviso is not relevant for the purpose of this case.
Under sub s (2), the Gram Panchayat shall have fishery rights therein subject to any restriction or control prescribed by the Govt.
by rules.
The Gram Panchayat also shall have the right to use the adjacent land appertaining thereto for planting trees and enjoying the usufruct thereof or for like purposes.
Sub section (3) gives over riding power to 545 the Govt., by a notification published in the A.P. Gazettee to define or limit the control or supervision by the Gram Panchayat or the Govt.
may assume administration of any public source of water supply and public land adjacent and appertaining thereto.
The only condition precedent thereto is prior consultation of the Gram Panchayat and to have due regard to any objections.
If raised, by the Gram Panchayat and issue notification published in the Gazette resuming the water sources or the land etc.
The word `vest ' clothes varied colours from the context and situation in which the word came to be used in a statute or rule.
In Chamber 's Mid Century Dictionary at p. 1230 defined ``vesting ' ' in the legal sense `to settle, secure, or put in fixed right of possession; to endow, to descend, devolve or to take effect, as a right '.
In Black 's Law Dictionary, 5th Edition at p. 1401, the word, `vest ', to give an immediate, fixed right of present or future enjoyment, to accure to, to be fixed, to take effect, to clothe with possession, to deliver full possession of land or of an estate, to give seisin to enfeoff.
In Stroud 's Judicial Dictionary, 4th Edition, Vol. 5 at p. 2938, the word `vested ' was defined in several senses.
At p. 2940 in item 12 it is stated thus `as to the interest acquired by public bodies, created for a particular purpose, in works such as embankments which are vested in them by statue, see Port of London Authority vs Canvey Island Commissioners, in which it was held that the statutory vesting was to construct the sea wall against inundation or damages etc.
and did not acquire fee simple.
Item 4 at p. 2939, the word `vest ', in the absence of a context, is usually taken to mean vest in interest rather than vest in possession '.
In item 8 to `vest ',. ``generally means to give the property in ' '.
Thus the word `vest ' bears variable colour taking its content from the context in which it came to be used.
Take for instance, the land acquired under the Land Acquisition Act.
By operation of sections 16 & 17 thereof, the property so acquired shall vest absolutely in the Government free from all encumbrances.
Thereby, absolute right, title and interest is vested in the Government without any limitation divesting the pre existing rights of its owner.
Similarly, under section 56 of the , the estate of the insolvent vests in the receiver only for the purpose of its administration and to pay off the debts to the creditors.
The receiver acquired no personal interest of his own in the property.
The receiver appointed by the court takes possession of the properties in the suit on behalf of the court and administer the property on behalf of the ultimate successful party as an officer of the court and he has no personal interest in the property vested thereunder.
In Fruit and Vegetable Merchants Union vs Delhi 546 Improvement Trust, [1957] SCR p. 1 the question was whether the Delhi Improvement Trust was vested of the Nazul land belonging to the Government with absolute right, when the property was entrusted under the scheme for construction of the markets etc.
It was held by this court that placing the property at the disposal of the trust did not signify that the Government had divested itself of its title to the property and transferred the same to the trust.
The clauses in the agreement show that the Government had created the Trust as its agent not on permanent basis but as a convenient mode of having the scheme of improvement implemented by the Trust subject to the control of the Government.
The word `vesting ' in section 85 would signify that the water courses and tanks, lands etc.
used by the public to such an extent as to give a prescriptive right to their use, are vested in the Gram Panchayat, and placed them under the control and supervision of the Gram Panchayat.
It confers no absolute or full title.
It was open to the Government, even after vesting, to place restrictions upon the Gram Panchayat in the matter or enjoyment and use of such tanks, and appurtenant lands etc.
Sub section (3) of section 85 expressly makes the matter clear.
It empowers the Government to assume the administration of any such tank or lands or to define or limit the control which is vested in the Gram Panchayat.
Gram Panchayat being a statutory body is bound by the restrictions imposed by sub S3 (3) The assumption of management by the Govt.
would be subject to the prescriptive right of the villagers if any.
The Division Bench in Gram Panchayat, mandapaka & Ors.
V. Distt.
Collector Eluru & Ors., AIR 1981 AP 15 considered the meaning of the word `vesting and correctly laid the law in its interpreting section 85 of the Act.
Anna Narasimha Rao & Ors.
V. Kurra Venkata Narasayya & Ors., [1981] 1 AWR p. 325 relied on by Shri Kanta Rao, though supports his contention that the vesting of the tanks etc.
in the Gram panchayat was with absolute eights and the village community rights would over ride against rights of the Government, in our view the law was not correctly laid down.
Under A.P. Land Encroachment Act, 1905; Talengana Area Land Revenue Act, relevant Abolition Act like A.P. Estates (Abolition and Conversion into Ryotwari) Act, 1948, Inams Abolition Act etc.
give absolute rights of vesting in the State over the forest land, tanks, rivers, mines, poramboke, land, etc.
free from all encumbrances and the pre existing rights in the other land stood abolished and will be subject to the grant of Ryotwari patta etc.
It is also settled law that grant of Ryotwari patta is not a title but a right coupled with possession to remain in occupation and enjoyment subject to payment of the land revenue to the State.
Therefore, we 547 agree with the High Court that the tank is public tank and not a public trust and that under section 85(1) and section 64, the vesting of the tanks, the appurtenant land and the common land is only for the purpose of possession, supervision, control and use thereof for the villagers for common use subject to the over riding title by the Government and its assumption of management should be in terms of sub section
(3) of section 85 of the Act and subject to the prescriptive right in the water; water spread tank for common use.
Admittedly, N.S.L. or the descendants used the plaint schedule property till July 7, 1965.
The question then is what rights the descendants acquired therein.
Admittedly within six months from the date of dispossession no suit under section 6 of the was laid.
Therefore, though the Gram Panchayat was not justified to take law into its own hand to take unilateral possession without due course of law, since the suit filed by the descendants was based on title the descendants in Civil Appeal No.200 of 1978 have to establish their better title.
Their claim was based on the Ryotwari patta granted under section 3 of the Inams Act.
Therefore, entries in I.F.R. bear great evidenciary value to ascertain their rights.
In Arunachalam Chetty vs Venkatachalpathi Garu Swamigal, AIR 1919 PC.
p. 62 at 65 the Judicial Committee of the Privy Council considered the effect of the columns in the I.F.R. and held thus : ``It is true that the making of this Register was for the ultimate purpose of determining whether or not the lands were tax free.
But it must not be forgotten that the preparation of this Register was a great act of State, and its preparation and contents were the subject of much consideration under elaborately detailed reports and minutes.
It is to be remembered that the Inam Commissioners through officials made enquiry on the spot, heard evidence and examined documents, and with regard to each individual property, the government was put in possession not only of the conclusion come to as to whether the land was tax free, but of a statement of the history and tenure of the property itself.
While their Lordships do not doubt that such a report would not displace actual and authentic evidence in individual cases, yet the board, when such is not available, cannot fail to attach the utmost importance, as part of the history of the property, to the information set forth in the Inam Register ' '.
548 Construction of the relevant entries in the I.F.R. is a question of law.
Col. 2, the general class to which the land belongs, described as `Dharmadayam ' endowment for a charitable ``institution ' ', Col. 7, description of tenure for the ``preservation and repairs ' ' of Nori Lakshmipathi Somayajulu Western Tanks at Vatticherkuru, Col. 9 tax free, Col. 10, nature of the tenure, permanent, Col. 11, guarantor of the land Raja Manikya Rao in 1190 Fasli (1700 A.D.), Col 13, name of the original grantee `Nori Lakshmipathi Somayajulu ', Col. 21 to be confirmed under usual conditions of service and Col. 22, confirmed.
In the survey and settlement record of the year 1906 of the same columns have been repeated.
The land in the tank were classified as Village `Poramboke ' and the tank as `village tank '.
In the village map also the same remarks were reiterated.
Therefore, the entries in the I.F.R. are great acts of the State and coupled with the entries in the survey and settlement record furnishes unimpeachable evidence.
On construction of these documents, it would clearly emerge that the original grant was made for the preservation and maintenance of the tank and tax free Inam land was granted for that purpose through it was in the name of the individual granted.
We are of the view that the grant was for the preservation and maintenance of the tank.
In K.V. Krishna Rao vs Sub Collector, Ongole, ; this court held under the Inam Act that the tank is a charitable institution.
Thereby we conclude that the grant was for the institution.
Under section 3 of the Inams Act, the enquiry should be whether (1) a particular land is Inam land; (2) Inam land in a Ryotwari, Zamindar or Inam Village; and (3) is held by any institution.
In view of the finding that the grant was for the preservation and maintenance of tank, the Inam, land in an inam village was held by the institution, namely, the tank.
Ryotwari patta shall, therefore, be in favour of the institution.
Undoubtedly the ryotwari patta was granted in favour of the descendants.
In Nori Venkatarama Dikshitulu & Ors.
vs Ravi Venkatappayya & Ors., [1959] 2 A.W.R.357 in respect of the tope dedicated to the public benefits in the same village, namely Vatticherukuru, one of the question that arose was whether the patta granted in the individuals ' names, would be their individual property or for the endowment.
The Division Bench held that though the pattas were obtained in the individuals ' name, the trustees of an institution cannot derive personal advantage from the administration of the trust property.
It was held that the grant of patta was for the maintenance of the trust.
We approve that the law was correctly laid down.
In Krishan Nair Boppudi Punniah & Ors.
vs Sri Lakshmi Narasimhaswamy Varu, by its trustees & Ors.
, [1963] 1 A.W.R. 214 549 relied on by Shri Sitaramaiah, on the basis of the entries in I.F.R., the finding was that the grant was in favour of the individual burdened with service and not to an institution.
Therefore, the ratio therein does not assist us to the facts in this case.
Moreover, in view of the stand taken by Shri Sitaramaiah that the lands are not the private property of N.L.S. or his descendants but held by them as trustees, the grant of Ryotwari patta to the individuals by necessary implication, as a corollary, is of no consequence.
The question then is whether the enjoyment of the usufruct by the descendants would clothe them with any right as owners of the land.
In view of the concurrent finding that descendants did not acquire title by prescription, the passage in Tagore Law Lecture, `Hindu Religious Endowment and Institutions ' at p. 6 relied on by Shri Sitaramaiah to the effect `dedication of tanks and trees ' as private property also renders no assistance to the descendants.
Undoubtedly, a presumption of an origin in lawful title could be drawn, as held in Syed Md. Mazaffaralmusavi vs Bibi Jabeda & Ors., AIR (1930) P.C. 1031 that the court has so often readily made presumption in order to support possessory rights, long and quietly enjoyed, where no actual proof of title is forth coming.
It is not a mere branch of the law of evidence.
It was resorted to because of the failure of actual evidence.
The matter is one of presumption based upon the policy of law.
It was also further held that it is not a presumption to be capriciously made nor is it one which a certain class of possessor is entitled to, de jure.
In a case such as the one in question where it was necessary to indicate what particular kind of lawful title was being presumed, the Court must be satisfied that such a title was in its nature practicable and reasonably capable of being presumed without doing violence to the probabilities of the case.
It is the completion of a right to which circumstances clearly point where time had obliterated any record of the original commencement.
The longer the period within which and the remoter the time when first a grant might be reasonably supposed to have occurred the less force there is an objection that the grant could not have been lawful.
In Bhojraj vs Sita Ram & Ors., AIR (1936) P.C. 60 it was further held that the presumption, not to supplement but to contradict the evidence would be out of place.
A presumption should be allowed to fill in gaps disclosed in the evidence.
But the documentary evidence in the I.F.R. and the survey and settlement records furnish the unerring evidence.
Though the original grant was not produced, the grant was for the institution and not to the individuals.
Therefore, the colour of title though enabled them to enjoy the usufruct for personal use, once the tank and the appurtenant land was found to be public tank, the descendants acquired no personal right over it.
The decision in Bhupathiraju 550 Venkatapathiraju & Ors.
vs The President, Taluq Board, Naraspur & Ors., [1913]19.I.C.727(Mad.) (D.B.) relied by Shri Sitaramaiah the finding was that the grant was to the plaintiffs ' family subject to conditions of service.
Their right to take the usufruct of the trees therein was held to be for the benefit of the grantee.
In that view its ratio cannot be applied to the facts in this case.
In M. Srinivasacharyulu & Ors.
vs Dinawahi Pratyanga Rao & Ors., one of the contentions raised was that since the produce was being enjoyed by the trustees for over many years for personal use, it must be construed that the trust was for personal benefit of archakas.
It was repelled holding that it would be a dangerous proposition to lay down that if the trustees of the religious trusts have for many years being applying the income to their own personal use, the trust deed must be construed in the light of such conduct.
The decree of the trial court that the enjoyment was for the institution was upheld.
The finding in Civil Appeal No. 931 of 1977, that since the endowment was the dashabandam the descendants are entitled to the Ryotwari patta cannot be upheld.
Dashabandam grant of land burdened with the service of a public nature was made at a time when maintenance of water sources and water courses to the benefits of the villagers was left to the villagers.
In Ravipati Kotayya & Anr.v.
Ramansami Subbaraydu & Ors., it was held that in the case of dashabandam inams situated in Ryotwari villages, the government has the right of resumption on default of service.
The lands burdened with dashabandam service which is service of public nature, are inclinable as being against public policy.
We, therefore, hold that the descendants, though enjoyed the income from the properties, did not effect the repairs and neglected the maintenance and upkeep of the tank.
They rendered the tank disused and abandoned.
By operation of s.85 of the Act the lands and tank stood vested in the Gram Panchayat for control, management and supervision.
Undoubtedly, a hereditary trustee is entitled to be the Chairman of a Board of Trustees, if any, constituted under the Endowment Act or else be in exclusive possession and management of the public trust registered thereunder until he is removed as per the procedure provided therein.
Since the tank always remained a public tank and not being a public trust, the Endowment Act does not apply.
therefore, the question of initiating action under section 77 of the Endowment Act for removal of the descendants as trustees does not arise.
In the suit of the descendants the High Court did not consider the effect of grant of ryotwari patta under Inams Act and in the suit of the 551 Gram (Village) Panchayat the effect of vesting under s.85 of the Act on the grant of ryotwari patta was not considered.
Only section 14 i.e. the bar of civil suit was focussed.
Consequently both the suits were dismissed by different division benches.
The question is whether the suit is maintainable.
All communal lands, porambokes, tanks, etc., in inam villages shall vest in the government under s.2A of Inams Act free from all encumbrances.
Section 3 determines the inam lands whether held by the individual or the institution, provides procedure for determination and s.3(4) gives right of appeal.
Section 4 converts those lands into ryotwari lands and accords entitlement to grant of ryotwari patta.
Section 5 gives power to restitute the lands to the tenants in occupation though were ejected between specified dates.
Section 7 gives power to grant ryotwari patta to the tenants to the extent of two thirds share in the land and one third to the land holder.
If it was held by the institution, two third share would be to the institution and one third to the tenants.
Section 3 grants right of permanent occupancy to the tenants in inam lands held by institutions.
Section 9 prescribes procedure for eviction of the tenants having right of permanent occupancy.
Section 10 A provides right to ryotwari patta to tenants in Ryotwari or Zamindari village with the right of permanent occupancy, even in the lands, held under customary right etc.
Section 12 fastens liability on the ryotwari pattadars to pay land assessment.
Section 13 gives exclusive power of jurisdiction to Tehsildar, the Revenue court and the collector to try the suit as per the procedure as of a Civil Court under the Code of Civil Procedure.
Section 14 of the Inams Act reads thus: 14.
" Bar of jurisdiction of Civil Courts: No suit or other proceedings shall be instituted in any Civil Court to set aside or modify any decision of the Tahsildar, the Revenue Court, or the Collector under this Act, except where such decision is obtained by misrepresentation, fraud or collusion of parties.".
Section 14 A and Section 15 provides that: "14 A Revision (1) Notwithstanding anything contained in this Act, the Board of Revenue may, at any time either suo moto or on application made to it, call for and examine the records relating to any proceedings taken by the Tahsildar, the Revenue Court or the Collector under this act for the purpose of satisfying itself as to the regularity of 552 such proceeding or the correctness, legality or propriety of any decision made or order passed therein; and if, in any case, it appears to the Board of revenue that any such decision or order should be modified, annulled, reserved or remitted for consideration, it may pass order accordingly.
(2) No order prejudicial to any person shall be passed under sub section (1) unless such person has been given an opportunity of making his representation.
Act to override other laws: "Unless otherwise expressly provided in this Act the provision of this act and of any orders and Rules made thereunder shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or any instrument having effect by virtue of any such law".
The Constitution intends to herald an egalitarian social order by implementing the goals of socio economic justice set down in the Preamble of the Constitution.
In that regard the Constitution created positive duties on the State in Part IV towards individuals.
The Parliament and the State legislatures made diverse laws to restructure the social order; created rights in favour of the citizens; conferred power and jurisdiction on the hierarchy of Tribunals or the authorities constituted thereunder and given finality to their orders or decisions and divested the jurisdiction of the established civil courts expressly or by necessary implication.
The Inam Act is a step in that direction as part of Estate Abolition Act.
Therefore, departure in the allocation of the judicial functions would not be viewed with disfavour for creating the new forums and entrusting the duties under the statutes to implement socio economic and fiscal laws.
We have to consider, when questioned, why the legislature made this departure.
The reason is obvious.
The tradition bound civil Courts gripped with rules of pleading and strict rules of evidence and tardy trial, four tier appeals, endless revisions and reviews under C.P.C are not suited to the needed expeditious dispensation.
The adjudicatory system provided in the new forums is cheap and rapid.
The procedure before the Tribunal is simple and not hide bound by the intricate procedure of pleadings, trial, admissibility of the evidence and proof of facts according to law.
Therefore, there is abundant flexibility in the discharge of the functions with greater expedition and inexpensiveness.
In order to find out the purpose in creating the Tribunals under 553 the statutes and the meaning of particular provision in social legislation, the Court would adopt the purposive approach to ascertain the social ends envisaged in the Act, to consider scheme of the Act as an integrated whole and practical means by which it was sought to be effectuated to achieve them.
Meticulous lexographic analysis of words and phrases and sentences should be subordinate to this purposive approach.
The dynamics of the interpretative functioning of the Court is to reflect the contemporary needs and the prevailing values consistent with the constitutional and legislative declaration of the policy envisaged in the statute under consideration.
In Denna vs Union of India, ; this Court held that the "Law is a dynamic science, the social utility of which consists in its ability to keep abreast of emerging trends in social and scientific advance and its willingness to readjust its postulates in order to accommodate those trends.
Law is not static.
The purpose of Law is to serve the needs of life".
The law should, therefore, respond to the clarion call of social imperatives evolve in that process functional approach as means to subserve "social promises" set out in the Preamble, directive principles and the fundamental Rights of the Constitution.
It is seen that the Inam 's Act is an integral part of the scheme of the Andhra Pradesh Estates (Aboilition and Conservation into Ryotwari) Act, 26 of 1984 for short 'Estate Abolition Act ' to cover the left over minor Inams.
It determined the pre existing rights of the Inamdars and the religious institutions; envisages grant of ryotwari patta afresh to the concerned and seeks to confer permanent occupancy rights on the tenants.
It also regulates the relationship between institutions and its tenants.
It created appellate and revisional and forums and declared finality to the orders passed by the tribunals and expressly excluded the jurisdiction of the Civil Court, notwithstanding anything contained in any other law or inconsistent therewith the Inams Act shall prevail.
The exception engrafted was that a suit would lie to challenge the decision obtained by fraud, misrepresentation and collusion by parties.
Section 9 of the Civil Procedure Code, 1908 provides that whenever a question arises before the Civil Court whether its jurisdiction is excluded expressly or by necessary implication, the Court naturally feels inclined to consider whether remedy afforded by an alternative provision prescribed by special statute is sufficient or adequate.
In cases where exclusion of the Civil Court 's jurisdiction is expressly provided for, the consideration as to the scheme of the statute in question 554 and the adequacy or sufficiency of the remedy provided for by it may be relevant, but cannot be decisive.
Where exclusion is pleaded as a matter of necessary implication such consideration would be very important and in conceivable circumstances might become even decisive.
The jurisdiction of a Tribunal created under statute may depend upon the fulfilment of some condition precedent or upon existence of some particular fact.
Such a fact is collateral to the actual matter which the Tribunal has to try and the determination whether it existed or not is logically temporary prior to the determination of the actual question which the tribunal has to consider.
At the inception of an enquiry by a Tribunal of limited jurisdiction, when a challenge is made to its jurisdiction, the Tribunal has to consider as the collateral fact whether it would act or not and for that purpose to arrive at some decision as to whether it has jurisdiction or not.
There may be Tribunal which by virtue of the law constituting it has the power to determine finally, even the preliminary facts on which the further exercise of its jurisdiction depends; but subject to that, the Tribunal cannot by a wrong decision with regard to collateral fact, give itself a jurisdiction which it would not otherwise had.
Except such tribunals of limited jurisdiction when the statute not only empowers to enquire into jurisdictional facts but also the rights and controversy finally it is entitled to enter on the enquiry and reach a decision rightly or wrongly.
If it has jurisdiction to do right, it has jurisdiction to do wrong.
It may be irregular or illegal which could be corrected in appeal or revision subject to that the order would become final.
The questions to be asked, therefore, are whether the Tribunal has jurisdiction under Inam Act to decide for itself finally; whether the institution or the Inamdar or the tenant is entitled to ryotwari patta under sections 3,4 and 7 and whether the Tribunal is of a limited jurisdiction and its decision on the issue of patta is a collateral fact.
The consideration as to exclusion of the jurisdiction of Civil Court is no longer res integra.
This Court in bead roll of decisions considered this question in diverse situations.
In Kamala Mills Ltd. vs State of Bombay; , the questions arose were whether an assessment made in violation of the Bombay Sales Tax Act could claim the status of an assessment made under that Act, and whether the nature of the transactions was a decision of collateral fact.
A Bench of seven Judges of this Court held that if it appears that a statute creates a special right or liability and provides for the determination of the right or liability to be dealt with by tribunals specially constituted in that 555 behalf would be considered whether all questions of said right and liability shall be determined by the tribunals so constituted and it becomes pertinent to enquire whether remedies normally associated with actions in Civil Courts are prescribed by the said statute or not.
It was held that the Court was satisfied that the Act provided all the remedies associated with actions in Civil Courts and the remedy for refund of the tax illegally collected was provided and it was not collateral.
Section 20 prohibits such a claim being made before an ordinary Civil Court and held that the civil suit was not maintainable.
The leading decision of the Privy Council in Secretary of State vs Mask & C0.
, [1940] L.R. 67I.A.222; Raleigh Investment Co. Ltd. vs Governor General in Council, L.R. 74 I.A. 50 and the ratio in Firm and Illuri Subbayya Cheety & Sons vs State of Andhra Pradesh, ; were approved.
In Desika Charyulu vs State of A.P. , AIR 1964 SC 807 a Constitution Bench was to consider whether the jurisdiction of the Settlement Officer and the Tribunal created under the Estates Abolition Act to determine whether Shotrium Village was an inam estate was exclusive and the Civil Court 's jurisdiction to try the dispute was barred.
Despite the fact that no express exclusion of the Civil Court 's jurisdiction was made under the Act it was held that very provision setting up an hierarchy of judicial tribunals for the determination of the questions on which the applicability of the Act depends was sufficient in most cases to infer that the jurisdiction of the Civil Courts to try the same was barred.
Accordingly it was held that the jurisdiction of the Settlement Officer and the Tribunal by necessary implication was exclusive and that the Civil Courts are barred from trying or retrying the question once over.
The decisions of the Settlement Officer and of the Tribunal were held final and conclusive.
In Dhulabhai & Ors.
vs State of M.p. & Anr. ; another Constitution Bench reviewed the entire case law on the question of maintainability of civil suit and laid down seven propositions.
Propositions 1 and 2 are relevant, which read thus: "(1) Where the statute gives a finality to the orders of the special tribunals the Civil Court 's jurisdiction must he held to be excluded if there is adequate remedy to do what the Civil Courts normally do in a suit.
Such provision, however, does not exclude those cases where the provisions of the particular Act have not been complied with or the statutory tribunal has not acted in conformity with the fundamental principles of judicial procedure.
556 (2) Where there is an express bar of the jurisdiction of the Court, an examination of the scheme of the particular Act to find the adequacy or the sufficiency of the remedies provided may be relevant but is not decisive to sustain the jurisdiction of the civil court.
Where there is no express exclusion the examination of the remedies and the scheme of the particular act to find out the intendment becomes necessary and the result of the inquiry may be decisive.
In the latter case it is necessary to see if the statute creates a special right or a liability and provides for the determination of the right or liability and further lays down that all questions about the said right and liability shall be determined by the tribunals so constituted, and whether remedies normally associated with actions in Civil Courts are prescribed by the said statute or not.
" It was held therein that the civil suit was not maintainable to call in question of assessment made under the Madhya Bharat Sales Tax Act.
In hatti vs Sunder Singh, [1971]2 SCR 163 the tenant had a declaratory relief before the authorities under Delhi land Reforms Act that he was Bhoomidar.
When it was challenged in the civil suit as not being binding, this Court held that the civil suit was not maintainable.
In Muddada Chayana vs Karam Narayana and Anr.
; , under section 56(1) (c) of the Estates Abolition Act, the dispute whether who the lawful ryot in respect of any holding is, shall be decided by the Settlement Officer.
Whether it is liable to be questioned in the Civil Court.
Chinnappa Reddy, J., who had intimate knowledge as an Advocate and the Judge on the subject reviewed the law and held that the Act is a self contained code in which provision was also made for the adjudication of various types of disputes arising, after an estate was notified, by specially constituted tribunals.
On the general principles it was held that the special tribunals constituted by the Act must necessarily be held to have exclusive jurisdiction to decide dispute entrusted by the statute to them for their adjudication.
Dealing with the object of the Act it was held at p. 207 C D that the Act intended to protect ryots and not to leave them in wilderness.
When the Act provides machinery in section 56(1)(c) to discover who the lawful ryot of a holding was, it was not for the Court to denude the Act of all meaning and by confining the provision to the bounds of sections 55 and 56(1)(a) and (b) on the ground of contextual interpretation.
Interpretation of a statute, contextual or otherwise must further and 557 not frustrate the object of the statute.
It was held that the civil suit was not maintainable and approved the Full Bench judgment of 5 judges of the High Court of Andhra Pradesh in T. Munuswami Naidu vs R. Venkata Reddy., AIR 1978 A.P. 200.
The same view was reiterated in O. Chenchulakshmamma & Anr.
D. Subramanya Reddy; , and held that the order of the Addl.
Settlement Officer was final in so far as the dispute between the rival claimants to the ryotwari patta was concerned and not liable to be questioned in any court of law.
In A. Bodayya & Anr.
L. Ramaswamy (dead) by Lrs. [1984] (Suppl).
SCC 391 while reiterating the ratio in both the judgments, Desai, J. Speaking for a Bench of 3 Judges held that under Estate Abolition Act, who the lawful ryot was decided.
Self same question directly and substantially raised in the suit cannot be decided by the Civil Court as it had no jurisdiction to decide and deal with the same but Settlement Officer had the exclusive jurisdiction to decide and deal with it.
In Doe vs Bridges, at p. 859 the oft quoted dictum of Lord Tenerden, C.J. reads that: "where an act creates an obligation and enforces the performance in a specified manner, we take it to be a general rule that performance cannot be enforced in any other manner." In Premier Automobiles Ltd. vs Kamlakur Shantaram Wadke and Ors., ; a Bench of three Judges after reviewing the case law held that if a dispute was not industrial dispute, not does it relate to enforcement of any right under the Industrial Dispute Act, the remedy lies only in the civil court.
If the dispute arises out of the right or liability under the general common law and not under the Act, the jurisdiction of the civil court is always alternative, leaving it to the election of the suitor to choose his remedy for the relief which is competent to be granted in a particular remedy.
If the dispute relates to the enforcement of a right or obligation of the Act,the only remedy available to the suitor is to get an application adjudicated under the Act.
In that view, it was held that the civil suit was not maintainable.
In State of Tamil Nadu vs Ramalinga Samigal Madam, ; strongly relied on by Shri Kanta Rao, the question therein was whether the jurisdiction of the civil court was ousted to redetermine the nature of the land rendered by the settlement officer under section II of the Estate Abolition Act, Tulzapurkar, J. speaking for the Division Bench proceeded on three fundamental postulates namely that the decision of the Settlement authorities under section 11 of the Act was for (I) 558 revenue purposes '," that is to say for fastening the liability on him to pay the assessment and other dues and to facilitate the recovery of such revenue from him by the Government; and therefore, any decision impliedly rendered on the aspect of nature and character of the land on that occasion will have to be regarded as incidental to and merely for the purpose of passing the order of granting or refusing to grant the patta and for no other purpose".
(II) only revision against the order and not an appeal; and (III) that by Madras Amendment, section 64 c was deleted.
It was unfortunate that it was not brought to the notice of the court that the purpose of Estate Abolition Act was not solely for the purpose of collecting the revenue to the State.
The Act had its birth from a long drawn struggle carried on by the ryots in Madras Presidency for permanent ryotwari settlement of tenures and grant of permanent occupancy rights and the Indian National Congress espoused their rights and passed resolution at Arvadi Session to make a legislation in that regard.
The recovery of revenue was only secondary.
In Syamala Rao vs
Sri Radhakanthaswami Varu a division Bench of the Andhra Pradesh High Court to which one of us (K.R.S.,J) was a member considered the historical background, the purpose of the Act and the scheme envisaged therein in extenso and held that the preamble of the Estate Abolition Act was to repeal the permanent settlements, the acquisition of the rights of the land holders in the Estates and introduction of the ryotwari settlement therein; under section 1(4) by issuance of the notification the prexisting rights shall cease and determined; shall vest in the State free from all encumbrances and declared that all rights and interests created in particular over the State 'shall cease and determine as against the Government ' protected only dispossession of a person in possession of the ryoti land who was considered prima facie entitled to a ryotwari patta.
Section 11 envisaged to enquire into "the nature of the land" and whether "ryotwari land immediately before the notified dates" to be properly included or ought to have been properly included in the holding of the ryot".
The enquiry under the Act was entrusted to the Revenue Authorities who have intimate knowledge of the nature of the lands and the entries in the revenue records of the holders, etc.
Act created hierarchy of the tribunals, namely Asstt.
Settlement Officer; Settlement Officer; Director of Settlements and Board of Revenue; provided revisional powers to those authorities and ultimately the order is subject to the decision of the High Court under article 226.
In that view it was held that by necessary implication the jurisdiction of the civil court was ousted, the decision of settlement authorities under section 11 was made final and no civil suit was maintainable.
The legislature having made the Act to render economic justice to the ryots and 559 excluded the dispute between land holders and the ryots covered under sections 12 to 15 and the ryots inter se under section 56(1)(c), from the jurisdiction of the Civil Court, it would not be the legislative intention to expose the ryots to costly unequal civil litigation with the state of the dispute under section 11.
It is not necessary in this case to broach further but suffice to state that unfortunately this historical perspective and the real purpose and proper scope and operation of Estate Abolition Act was not focussed to the notice of this court.
In Jyotish Thakur & Ors.
vs Tarakant.
Jha & Ors.
,[1963] Suppl. 1 SCR 13 section 27 of regulation III of 1872 provides that in respect of transfer of ryoti interest in contravention of the regulation revenue courts shall not take cognizance of such a transfer.
It was contended that by necessary implication the civil suit was not maintainable.
In that context this Court held that provisions therein were not intended to be exhaustive to bar the relief in Civil Court.
In Sri Athmanathawami Devasthanam vs K. Gopalaswami Aiyangar, ; the question was whether the civil suit to recover damages and for ejectment of the ryoti lands belonging to the temple was barred.
The findings were that the lands were ryoti lands and that the tenant acquired the occupancy rights, but the lease was granted in excess of 5 years.
It was contended that it was a transfer without permission of the Endowment department.
While upholding that the lands were ryoti lands and the tenant acquired occupancy rights, this Court disagreeing with the High Court, held that there was no transfer and that the tenant is liable to pay the arrears of rent and the suit was maintainable.
In Sri Vedagiri Lakshmi Narasimha Swami Temple vs Induru Pattabhirami Reddy, ; the contention raised was that section 93 of the Madras Hindu Religious and Charitable Endowments Act, 1951 was a bar to maintain suit for rendition of accounts and recovery thereof against the ex trustees.
This Court repelled the contention and held that the suit for rendition of accounts was not expressly or by necessary implication barred the jurisdiction of the civil court under section 93.
In Shree Raja Kandregula Srinivasa Jagannadha Rao Panthulu Bahadur Garu vs State of Andhra Pradesh; , it was conceded that the question whether Kalipathnam village is an Inam estate was to be adjudicated before the tribunals appointed under the Rent Reduction Act.
It was contended that the tribunals have no jurisdiction to decide the validity of the notification reducing the rent by operation of section 8(1) thereof.
It was held that there was no statutory prohibition to determine the nature of the land contemplated by the Rent Reduction Act.
Accordingly the suit was held to be maintainable.
In Dr. Rajendra Prakash Sharma vs Gyan Chandra & Ors.,[1980] 3 SCR 207 it was found that under s, 7 of the , no proceedings were taken to 560 declare the suit house as on evacuee property.
No notification under sub section
(3) of 7 was published in the gazette.
Under those circumstances it was held that section 46 did not bar the civil suit.
In Anne Besant National Girls High School vs Dy.
Director of Public Instruction & Ors.
this Court held that the Civil Court has jurisdiction to examine whether action or decision of an administrative authority was ultra vires the relevant rules of Grant in Aid Code and Rule 9 (vii) was held to be ultra vires.
Accordingly the suit was held to be maintainable.
In Raja Ram Kumar Bhargava(dead) by Lrs.
vs Union of India, [1988] 2 SCR 352 two questions were raised, firstly the validity of the assessment and secondly recovery of the tax paid under Excess Profit Tax Act, 1940.
On the first question it was held that the suit was not maintainable.
On the second question, without going into the technicalities of the maintainability of the suit, this Court granted the relief.
In Pabbojan Tea Co., etc.
vs The dy.
Commissioner Lakhimpur, etc.[1968] 1 SCR 260 the questions were whether the workmen were ordinary unskilled labour or skilled labour; whether the jurisdiction of the authorities under section 20 of the is exclusive and whether the jurisdiction of the Civil Court was barred.
This court held that the authorities did not hold any inquiry nor received any evidence for determining that issue.
No proper hearing was given to the parties to tender evidence.
Section 20 is not a complete Code as there was no provision for appeal or revision against the orders passed under s.20(3).
There was no further scrutiny by any higher authority against the imposition of penalty.
The Act in terms does not bar the employers from instituting a suit.
In those circumstances, it was held that the legislature did not intend to exclude the jurisdiction of the civil court.
The ratio in K. Chintamani Dora & Ors.
vs G. Annamnaidu & ors.
; also does not assist Gram Panchayat for the reason that the decree therein originally granted became final.
Subsequently it was sought to be reopened in a later suit.
Under those circumstances the civil suit was held to be maintainable notwithstanding the provisions contained under the Estate Abolition Act.
Thus we have no hesitation to hold that the ratio in all these case are clearly distinguishable and render little assistance to the Gram Panchayat.
The scope, ambit and operation of the Inams Act was considered by P. Jaganmohan Reddy,J. (as he than was) in D.V. Raju vs B.G. Rao & Anr.
and held that the paramount object of the legislature was to protect the tenant in occupation and is sought to be achieved by making effective orders of eviction made by the Civil Court either in execution or otherwise.
It further prohibits the institution of any suit or proceeding in a Civil 561 Court under section 14 to set aside or modify any decision of the Tehsildar, Collector or Revenue Court except where such decision has been obtained by misrepresentation, fraud or collusion.
Section 15 enjoins that the provisions of the Act and orders made thereunder shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or any instrument having effect by virtue of absolute jurisdiction on the Tehsilder, Revenue Court or the Collector, as the case may be, notwithstanding any provision of law or any suit or decree of a Civil Court or for that matter even where evictions have taken place in pursuance of such decrees, the evicted tenants can be restored to occupation provided the requirements for the protection of the possession of the tenants are satisfied.
In that case the occupant in possession laid proceeding before the Tehsildar for injunction restraining the writ petitioner from ejecting him from the lands.
The Tehsildar in exercise of the power under Rule 16 of the Rules granted injuction pending consideration of his right to Ryotwari patta.
The order of injunction was challenged firstly on the ground of ultra vires of Rule 16 and secondly on the ground of jurisdiction.
While upholding the order on both the grounds the learned Judge held that Tehsildar, Revenue Court and the Collector have exclusive jurisdiction and the civil suit is barred.
We respectfully approve it as correct law.
The Inams Act did not intend to leave the decisions of the revenue courts under section 3 read with section 7 to retry the issue once over in the Civil Court.
Undoubtedly the decision of the division Bench in P. Pedagovindayy vs Subba Rao, is in favour of the contention that the civil suit is maintainable.
It is not good law.
Thus the glimpse of the object of the Inames Act, scheme, scope and operation thereof clearly manifest that Inames Act is a self contained code, expressly provided rights and liabilities, prescribed procedure; remedies of appeal and revision, excluded the jurisdiction of the civil court, notwithstanding anything contained in any law, given primacy of Inams Act though inconsistent with any law or instrument having force of law.
The jurisdictional findings are an integral scheme to grant or refuse ryotwari patta under section 3, read with s.7 and not collateral findings.
It was subject to appeal and revision and certiorari under article 226.
The decision of the Revenue Tribunal, are final and conclusive between the parties or persons claiming right, title or interest through them.
The trick of pleadings and the camouflage of the reliefs are not decisive but the substance or the effect on the order of the tribunal under the Inams Act are decisive.
The civil suit except on grounds of fraud, misrepresentation or collusion of the parties is not maintainable.
The necessary conclusion would be that the civil suit 562 is not maintainable when the decree directly nullifies the ryotwari patta granted under section 3 of the Inams Act.
Under the Gram Panchayat Act the statutory interposition of vesting the tank and the appurtenant land in the Gram Panchayat made it to retain possession, control and supervision over it, though the Gram Panchayat unlawfully took possession.
The need to grant decree for possession in favour of the Gram Panchayat is thus redundant.
The suit of the descendants normally to be decreed on the finding that ryotwari patta under section 3 of the Inams Act was granted in their favour and that they were unlawfully dispossessed.
Since the grant of ryotwari patta, though in the name of individuals, was to maintain the public tank which stood vested under section 85 of the Act in the Gram Panchayat, the descendants are divested of the right and interest acquired therein.
Thus the suit of the descendants also is liable to be dismissed.
Accordingly, the decrees of dismissal of both the suits are upheld and the appeals dismissed.
But in the circumstances, parties are directed to bear their own costs.
V.P.R. Appeals dismissed.
| Civil Appeal Nos. 931 of 1977 and 200 of 1978 relate to the same dispute though arose from, two suits and separate judgements.
Civil Appeal No. 931 of 1977 arose out of the suit for possession by the Gram Panchayat against the descendants of the grantee of inam.
The suit was dismissed by the Trial Court and was confirmed by the High Court and the High Court granted leave under Art.133.
Civil Appeal No. 200 of 1978 arose out of the suit for possession and mesne profits which was laid by the descendants of the grantee of inam.
The pleadings are the same in both cases.
A Zamindar granted 100 acres of land inam to dig, preserve 532 and maintain a tank in favour of the predecessors of the respondents of C.A. No. 931/77.
In 1700 A.D.i.e.
, 1190 Fasli, the tank was dug by the villagers and ever since, the villagers were using the tank for their drinking purpose and perfected their right by prescription.
In course of time the tank was silted up and fresh water existed only in and around 30 acres.
The grantee 's descendants respondents did not make any repairs, Grass and trees had been grown in the rest of the area and was being enjoyed.
Under section 3 of the A.P.Inams ( Abolition and Conversion into Ryotwari) Act, ( Act XXXVII of 1956) Ryotwari Patta was granted to the respondents in individuals capacity and on appeal the Revenue Divisional Officer confirmed the same and it became final, as it was not challenged any further.
On 7.7.1965, the Gram panchayat the appellant in C.A. No. 931/77 took unilateral possession of the tank and ever since , it was exercising possession, supervision and control over it.
After the expiry of three year from the date of dispossession, the respoondents filed a suit for possession based on title.
Earlier thereto the appellant Gram Panchayat had filed a suit for possession.
The Trial Court found that the tank was a 'public trust ', the appellants would be hereditary trustees and could be removed only by taking action under section 77 of the A.P. Hindu Charitable and Religious Institutions and Endowments Act, 1966 and that the respondents had acquired title by adverse possession.
Accordingly the suit for possession was decreed relegating the filing of separate application for mesne profit.
On appeal, the High Court reversed the decree and held that the tank was a public tank, and the tank and the lands stood vested in the Gram Panchyat under A.P. Gram Panchayat Act,1964.
Since, the Gram Panchayat was in possession from July 7, 1966, though dispossessed the respondents forcibly and as the suit was not under section 6 of the , but one based on title, it called for interference and dismissed the suit.
This court granted leave to appeal under article 136.
533 The respondents in C.A. No. 931/77 (the appellants in C.A. No. 200/78) contended that in view of the entries of the Inam Fair Register, the tank was a public trust and not a public tank; they could not be dispossessed until recourse made under section 77 of the A.P. Charitable and Religious Institutions and Endowments Act; that under the Gram Panchayat Act, the lands did not vest in the gram Panchayat; and that since the grant of ryotwari patta under the Inams Act had become final, section 14, thereof barred the jurisdiction of the Civil Court to entertain the suit.
The appellant Gram Panchayat in C.A. No. 931/77 (the respondents in C.A. No. 200/78) contended that the tank and the appurtenant land was correctly held as public tank by the High Court that by operation of sections 85 and 64 of the Gram Panchayat Act, the land and the tank stood vested in the Panchayat, that the entries in the Inam Fair Register established that the grant of land was for preservation, maintenance and repairs of the tank and therefore, the grant should be in favour of the institution, i. e., the tank and the respondents thereby did not acquire any title, that ryotwari patta was only for the purpose of land revenue; that the Gram Panchayat acquired absolute right, title and interest in the land; and the suit was not a bar in the facts of the case.
Dismissing both appeals, this Court HELD: 1.01.
Any property or income, which belongs to or has been administered for the benefit of the villagers in common or the holders in any of the village land generally or of land of a particular description or of lands under particular source of irrigation shall vest in Gram Panchayat and be administered by it for the benefit of the villagers or holders.
The lands or income used for communal purpose shall either belong to the Gram Panchayat or has been administered by the Gram Panchayat.
It is not the case of the Gram Panchayat nor any finding recorded by the courts below to that effect.
section 64 is not attracted though the villagers acquired prescriptive right to use the water from the tank for their use and of their cattle.
[554D F] 1.02.
All public water courses, springs, reservoirs, tanks, cisterns, etc.
and other water works either existing on the date of the Act or made thereafter by the Gram Panchayat, or otherwise including those used by the public ripened into prescriptive right for the use and benefit of the public and also adjacent or any appurtenant land not being private property shall vest in the Gram Panchayat under section 85(1) and be subject to its control.
[554F G] 534 2.01.
The word`vesting ' in section 85 would signify that the water courses and tanks, lands etc.
used by the public to such an extent as to give a prescripvtive right to their use, are vested in the Gram Panchayat, and placed them under the control and supervision of the Gram Panchayat.
It confers no absolute or full title.
It was open to the Government, even after vesting, to place restriction upon the Gram Panchayat in the matter of enjoyment and use of such tanks, and appurtenant lands etc.
The assumption of management by the Government would be subject to the prescriptive right of the villagers, if any.
The vesting of the tanks etc.
in the Gram Panchayat was with absolute rights and the village community rights would over ride against rights of the Government.
[546C F] 2.02.
The tank is a public tank and not a public trust and that under section 85(1) and section 64, the vesting of the tanks, the appurtenant land and the common land is only for the purpose of possession, supervision, control and use thereof for the villagers for common use subject to the over riding title by the Government and its assumption of management should be in terms of sub section
(3) of section 85 of the Act and subject to the prescriptive right in the water, water spread tank for common use.
[547A B] Gram Panchayat, Mandapaka & Ors.
V. Distt.
Collecctor, Eluru & Ors. , approved.
Anna Narasimha Rao & Ors.
vs Kurra Venkata Narasayya & Ors., , OVER RULED. 3.01.
Under A.P. Land Encroachment Act, 1905; Talengana Area Land Revenue Act, relevant Abolition Acts like A.P. Estates (Abolition and Conversion into Ryotwari) Act, 1948, Inams Abolition Act etc.
give absolute rights or vesting in the State over the forest land, tanks, rivers, mines, poramboke, land, etc.
free from all encumbrances and the preexisting rights in the other land stood abolished and will be subject to the grant of Ryotwari Patta etc.
[546F H] 3.02 Grant of Ryotwari patta is not a title but a right coupled with possession to remain in occupation and enjoyment, subject to payment of the land revenue to the State.
[546H] 3.03.
The entries in the Inam Fair Register are great acts of the State and coupled with the entries in the survey and settlement record 535 furnishes unimpeachable evidence.
On construction of these documents, it would clearly emerge that the original grant was made for the preservation and maintenance of the tank and tax free Inam land was granted for that purpose, though it was in the name of the individual grantee.
The grant was for the preservation and maintenance of the tank.
[548C D] 3.04.
The grant was for the institution.
Under section 3 of the Inams Act, the enquiry should be, whether (1) a particular land is Inam land; (2) Inam land in a Ryotwari, Zamindar or Inam Village; and (3) is held by any institution.
In view of the finding that the grant was for the preservation and maintenance of tank, the Inam land in an inam village was held by the institution, namely, the tank.
Ryotwari patta shall, therefore, be in favour of the institution.
Undoubtedly the ryotwari patta was granted in favour of the descendants.
[548D F] 3.05.
The pattas were obtained in the individuals name, the trustees of an institution cannot derive personal advantage from the administration of the trust property.
The grant of patta was for the maintenance of the trust.
[548G] 3.06.
The descendants, though enjoyed the income from the properties, did not effect the repairs and neglected the maintenance and upkeep of the tank.
They rendered the tank disused and abandoned.
By operation of section 85 of the Act the lands and tank stood vested in the Gram Panchayat for control, management and supervision.
[550E F] 3.07.
A hereditary trustee is entitled to be the Chairman of a Board of Trustees, if any, constituted under the Endowment Act or else be in exclusive possession and management of the public trust registered thereunder until he is removed as per the procedure provided therein.
Since the tank always remained a public tank and not being a public trust, the Endowment Act does not apply.
Therefore, the question of initiating action under section 77 of the Endowment Act for removal of the descendants as trustees does not arise.
[550F G] Arunachalam Chetty vs Venkatachalpathi Garu Swamigal, AIR 1919 P.C. 62 at P. 65; Syed Md. Mazaffaral Musavi vs Bibi Jabeda & Ors., AIR 1930 Pc 1031; Bhojraj vs Sita Ram & Ors, AIR 1936 P.C. 60; M. Srinivasacharyulu & Ors.
V. Dinawahi Pratyanga Rao & Ors., ; Ravipati Kotayya & Anr.
vs Ramaswamy Subbaraydu & Ors., , referred to.
536 K.V. Krishna Rao vs Sub Colletor, Ongole, ; , followed.
Nori Venkatarama Dikshitulu & Ors.
vs Ravi Venkatappayya & Ors., , approved.
Krishan Nair Boppudu Punniah & Ors.
vs Sri Lakshmi Narasimhaswamy Varu, ; Bhupathiraju Venkatapathiraju & Ors.
V. The President Taluq Board, Narsapur & Ors.; [1913] 19 1.C. 727 (Mad.) (D.B.), distinguished.
Tagore Law Lecture, ``Hindu Religious Endowments and Institutions at p. 6, distinguished.
In the laws made to restructure the social order creating rights in favour of the citizens and conferring power and jurisdiction on the hierarchy of Tribunals or the authorities constituted thereunder and giving finality to their orders or decisions and divested the jurisdiction of the established civil courts expressly or by necessary implication Departure in the allocation of the judicial functions would not be viewed with disfavor for creating the new forums and entrusting the duties under the statutes to implement socio economic and fiscal laws.
Courts have to consider, when questioned, why the legislature made the departure.
The reason is obvious.
The tradition bound civil courts gripped with rules of pleading and strict rules of evidence and tardy trial, four tier appeals, endless revisions and reviews under C.P.C. are not suited to the needed expeditious dispensation.
The adjudicatory system provided in the new forums is cheap and rapid,.
The procedure before the Tribunal is simple and not hide bound by the intricate procedure of pleadings, trial, admissibility of the evidence and proof of facts according to law.
Therefore, there is abundant flexibility in the discharge of the functions with greater expedition and inexpensiveness.
{552D H] 4.02.
In order to find out the purpose in creating the Tribunals under the statues and the meaning of particular provisions in social legislation, the Court would adopt the purposive approach to ascertain the socials ends envisaged in the Act, to consider scheme of the Act as an integrated whole and practical means by which it was sought to be effectuated to achieve them.
Meticulous lexographic analysis of words and phrases and sentences should be subordinate to this purposive approach.
The dynamics of the interpretative functioning of the Court is to reflect the contemporary needs and the prevailing values consistent with the constitutional and legislative declaration of the policy envisa 537 ged in the statute under consideration.
[552H 553B] 4.03.
The law should, therefore, respond to the clarion call of social imperatives evolve in that process functional approach as means to subserve ``social promises ' ' set out in the Preamble, Directive Principles and the Fundamental Rights of the Constitution.
[553d] 4.04.
Section 9 of the Civil Procedure Code, 1908 provides that whenever a question arises before the Civil Court whether its jurisdiction is excluded expressly or by necessary implication, the court naturally feels inclined to consider whether remedy afforded by an alternative provision prescribed by special statute is sufficient or adequate.
In cases where exclusion of the civil court 's jurisdiction is expressly provided for, the consideration as to the scheme of the statue in question and the adequacy of sufficiency of the remedy provided for by it may be relevant, but cannot be decisive.
Where exclusion is pleaded as a matter of necessary implication such consideration would be very important and inconceivable circumstances might become even decisive.
[553G 554B] 4.05.
The jurisdiction of a Tribunal created under statute may depend upon the fulfilment of some condition precedent or upon existence of some particular fact.
Such a fact is collateral to the actual matter which the Tribunal has to try and the determination whether it existed or not is logically temporary prior to the determination of the actual question which the Tribunal has to consider.
At the inception of an enquiry by a Tribunal of limited jurisdiction, when a challenge is made to its jurisdiction, the Tribunal has to consider as the collateral fact whether it would act or not and for that purpose to arrive at some decision as to whether it has jurisdiction or not.
There may be Tribunal which by virtue of the law constituting it has the power to determine finally, even the preliminary facts on which the further exercise of its jurisdiction depends; but subject to that, the Tribunal cannot by a wrong decision with regard to collateral fact, give itself a jurisdiction which it would not otherwise have except such tribunals of limited jurisdiction when the statue not only empowers to enquire into jurisdictional facts but also the rights and controversy finally it is entitled to enter on the enquiry and reach a decision rightly or wrongly.
If it has jurisdiction to do right, it has jurisdiction to do wrong.
It may be irregular or illegal which could be corrected in appeal or revision subject to that the order would become final.
[554B F] 4.06.
The Inams Act did not intend to leave the decisions of the revenue courts under section 3 read with section 7 to retry the issue once over in the civil court.
[561D E] 538 4.07.
The glimpse of the object of the Inams Act, scheme, scope and operation thereof clearly manifest that Inams Act is a self contained code, expressly provided rights and liabilities; prescribed procedure; remedies; of appeal and revision, excluded the jurisdiction of the civil court, notwithstanding anything contained in any law, given primacy of Inams Act though inconsistent with any law or instrument having force of law.
The jurisdictional findings are an integral scheme to grant or refuse ryotwari pattta under section 3, read with section 7 and not collateral findings.
It was subject to appeal and revision and certiorari under Art 226.
The decision of the Revenue Tribunal, are final and conclusive between the parties or persons claiming right, title or interest through them.
The trick of pleadings and the camouflage of the reliefs are not decisive but the substance or the effect on the order of the tribunal under the Inams Act are decisive.
The civil suit except on grounds of fraud, misrepresentation or collusion of the parties is not maintainable.
The necessary conclusion would be that the civil suit is not maintainable when the decree directly nullifies the ryotwari patta granted under section 3 of the Inams Act.
[561E 562A] Deena vs Union of India, [1984] ISCR, referred to.
Kamala Mills Ltd. vs State of Bombay, ; ; Secretary of State vs Mask & Co., [1940] L.R. 67 I.A. 222; Raleigh Investment Co. Ltd. V. Governor General in Council, L.R. 74 I.A. 50; Firm and Illuri Subbayya Chetty & Sons vs State of Andhra Pradesh; , ; Deesika Charyulu vs State of A.p., AIR 1964 SC 807; Dhulabhai & Ors vs State of M.P. & Anr., ; ; Hati vs Sunder Singh, ; ; Muddada Chayana vs Karam Narayana and Anr.
; , ; T. Munuswami Naidu vs R. Venkata Reddy, AIR 1978 A.P. 200; O. Chenchulakshmamma & Anr.
vs D. Subramanya Reddy; , ; A. Bodayya & Anr.
V. L. Ramaswamy(dead) by Lrs., ; Doe vs Bridges, at p. 359; Premier Automobiles Ltd. vs Kamlakar Shantaram Wadke and Ors., ; ; State of Tamil Nadu vs Ramalinga Samigal Madam, ; ; Syamala Rao vs Sri Radhakanthaswami Varu, ; Jyotish Tahakur & Ors.
vs Tarakant Jha & Ors., [1963] Suppl.
1 SCR 13; Sri Athmanathaswami Devasthanam vs K. Gopalaswami Aiyangar, {1964] 3 SCR 763; Sri VEdagiri Lakshmi Narasimha Swami Temple vs Induru Pattabhirami Reddy, ; ; Shree Raja Kandragula Srinivasa Jagannadha Rao Panthulu Bahadur Garu vs State of Andhra Pradesh, ; ; Dr. Rajendra Prakash Sharma vs Gyan Chandra & Ors., ; ; Anne Basant National Girls High School vs Dy.
539 Director of Public Instruction & Ors., ; Raja Ram Kumar Bhargava (dead) by Lrs.
vs Union of India, [1988] 2 SCR 352; Pabbojan Tea Co., Ltd., etc.
vs the Dy.
Commissioner, Lakhimpur, etc.
; , and K. Chintamani Dora & Ors.
vs G. Annamnaidu & Ors., ; , distinguished.
D.V. Raju vs B.G. Rao & Anr., , approved.
P.pedagovindayy vs Subba Rao, , over ruled.
The word `vest ' clothes varied colours from the context and situation in which the word came to be used in a statue of rule.
[545B C] 5.02.
The word [vest '], means, to give an immediate, fixed right of present or future enjoyment, to accrue to, to be fixed, to take effect, to clothe with possession, to deliver full possession of land or of an estate, to give seisin to enfeoff.
[545C D] 5.03.
The word, `vest ', in the absence of a context, is usually taken to mean, `vest ' in interest rather than vest in possesion '.[545E F] 5.04.
`Vest '.
``generally means to give the property in ' '.
[545E F] 5.05.
The word, `vested ' was defined, `as to the interest acquired by public bodies, created for a particular purpose, in works, such as embankments, whcih are `vested ' in them by statute. ' {545D E] 5.06.
``Vesting ' ' in the legal sense means, to settle, secure, or put in fixed right of possession; to endow, to descend, devolve or to take effect, as a right '.
[545C] Chamber 's Mid Century Dictionary at P. 1230; Blacks Law Dictionary, 5th Edition at P. 1401; Stroud 's Judicial Dictionary, 4th Edition Vol, 5 at P. 2938, Item 12, at P 2940, Item 4 at P. 2939; Port of London Authority vs Canvey Island Commissioners, {1932] 1 Ch.
446; Fruit and Vegetable Merchants Union vs Delhi Improvement Trust, ; , referred to.
Under the Gram Panchayat Act the statutory interposition of vesting the tank and the appurtenant land in the Gram Panchayat made it to retain possession, control and supervision over it, though the Gram Panchayat unlawfully took possession.
The need to grant decree for possession in favour of the Gram Panchayat is thus redundant.
The suit 540 of the descendants normally to be decreed on the finding that ryotwari patta under section 3 of the Inams Act was granted in their favour and that they were unlawfully dispossessed.
Since the grant of ryotwari patta, though in the name of individuals, was to maintain the public tank whcih stood vested under section 85 of the Act in the Gram panchayat, the descendants are divested of the right and interest acquired therein.
Thus the suit of the descendants also is liable to be dismissed.
[562A C]
|
ivil Appeal Nos.
1454 63 & 1642 45 of 1981.
From the Judgment and Order dated 10.4.1981 of the Andhra Pradesh High Court in Writ Petition No. 3720 of 1979.
G. Ramaswamy, M.S Ganesh, section Murlidhar, Sanjeev Ahuja and B. Parthasarthy for the Appellants.
C. Sitaramaiya, T.V.S.N. Chari and Mrs. B. Sunita Rao for the Respondents.
The Judgment of the Court was delivered by OJHA, J.
These appeal are directed against the judgment of the Andhra Pradesh High Court dated 10th April, 1981 rendered in a batch of writ petitions, reported in M/s. Poddar Projects Ltd. (Multi Steels) vs A.P.S.E. Board, AIR 1982 Andhra Pradesh 189.
For the sake of convenience, these appeals are being decided by a common judgment.
In order to appreciate the respective submissions made by learned counsel for the parties necessary facts may be stated in brief.
The appellants are some of the mini steel plants of Andhra Pradesh.
Revised terms and conditions of electricity supply were notified by the Andhra Pradesh State Electricity Board (for short the Electricity Board) in B.P. Ms. No.690 (Coml.) on 17.9.75 to be effec 628 tive from 20 October, 1975, Subsequently, G.O. Ms. No. 832 dated 2nd November, 1977 was issued by the State Government whereby concessional tariff of 0.11 p. per unit for the period of three years commencing from 1st November, 1977 and endings with 31st October, 1980 was applied in respect of the following five consumers: 1.
Andhra Pradesh State Corporation Limited 2.
Poddar Projects Limited 3.
A.K. Corporation Limited 4.
Andhra Steels, Vishakapatnam 5.
A.K. Corporation, Vishakapatnam.
This concessional tariff was subsequently enhanced to 12.5 p. by the State Government vide G.O. Ms. No. 876 dated 26th November, 1977.
The concessional tariff referred to above, however, was not extended to M/s. Andhra Steel Corporation by the Electricity Board by passing a resolution in its meeting held on 26th November, 1977 inasmuch as the Andhra Steel Corporation had already filed a writ petition inter alia claiming that the agreement which it had entered into with the Electricity Board for availing high tension electric supply was no longer in force.
In respect of the remaining four steel plants referred to above the Electricity Board extended the concessional tariff of 12.2 p. subject to escalations and other terms and conditions of supply and fixed minimum consumption of 403.325 units/KVA.
This was done by issuing B.P. Ms. No. 78 dated 20th January, 1978.
These four mini steel plants were, however, subsequently directed by the Electricity Board vide B.P. Ms. No. 436/Coml.
dated 3rd May, 1978 to be charged at a tariff rate of 16 p. per unit instead of 12.2 p. without reference to the maximum demand charges from 1st March, 1978.
The Electricity Board also sought clarification from the State Government vide its letter No. DE (Coml.) 1205 1/76 32 dated 27 November, 1978 with regard to fixation of minimum consumption of 403.325 units/KVA and fixation of concessional tariff at 0.16 p. per unit in view of the new levy of central excise duty and in view of the increased cost of generation.
The State Government vide G.O. Ms. No. 697 dated 5th December, 1978 issued a clarification that the aforesaid G.O. Ms.
Nos. 832 and 876 did not preclude the Electricity Board from applying the normal terms and conditions of supply and prescribing the monthly minimum charges and the working out of the escalated rate from time of time.
Subsequently the State Government vide G.O. Ms. No. 146 dated 12th March, 1979 withdrew the concessional tariff contemplated by G.O. Ms. Nos. 832 and 876 referred to above.
This was done on the representation of the Electricity Board which in its turn through its B.P. Ms. No. 830 dated 2nd April, 1979 cancelled B.P.Ms.
Nos. 78 and 436 with effect from 12th March, 1979.
The State Government 629 subsequently also issued G.O. Ms. No. 10 dated 16th January., 1980 whereby it was clarified that its intention in issuing the earlier G.O. Ms. No. 697 dated 5th December, 1978 was to allow the concessional tariff rate notified in G.O. Ms. no 876 without limiting the concession by imposition of minimum consumption charges till the end of March, 1979.
The Electricity Board felt aggreived by this G.O. and requested the Government to cancel it for the reasons set out in its letter dated 28th January, 1980.
One of the grievances of the Andhra Steel Corporation in its writ petition before the High Court was that the Electricity Board while applying the concessional tariff to the other mini steel plants was not justified in refusing the said concession to it merely because it had filed a writ petition.
The action of the Electricity Board is singling it out was, according to the Andhra Steel Corporation, discriminatory and mala fide.
This plea has been reiterated before us also and is confined to the appeal preferred by the Andhra Steel Corporation.
The pleas common to all the appellants which were raise before the High Court as also before us may now be enumerated.
It has been asserted that in view of the direction issued by the State Government fixing concessional tariff for the appellants it was not open to the Electricity Board to have levied minimum charges and it was bound to supply electricity to the appellants on the concessional tariff alone as fixed by the state Government.
As regards the order of the State Government dated 5th December, 1978 which clarified that its earlier orders fixing concessional tariff did not preclude the Electricity Board from levying inter alia minimum charges it has been asserted that the said order is illegal.
In the alternative, it is asserted that if clarificatory orders could be issued by the State Government with regard to its orders fixing concessional tariff the subsequent clarification made by order dated 16th January, 1980 had to prevail over the earlier clarification dated 5th December, 1978.
The order of the State Government dated 12th March, 1979 withdrawing the concessional tariff with effect from that date had also been assailed on the ground that it was passed on the representation of the Electricity Board without giving any opportunity to the appellants to show cause against the said representation and consequently the said order was in violation of principles of natural justice.
Pleas of promissory estoppel and right based on the doctrine of legitimate expectation have also been raised.
630 As regards the submission made on behalf of the Andhra Steel Corporation about singling it out in the matter of grant of concessional tariff on the basis of the order issued by the State Government for the period ending 12th March, 1979 Shri Shanti Bhushan, learned counsel for the Electricity Board has very fairly stated that the Electricity Board would extend to the Andhra Steel Corporation also the same benefit which was extended to the other four mini steel plants in the matter of grant of concessional tariff for the said period ending 12th March, 1979.
In this view of the matter it is not now necessary to deal with this plea.
As regard the plea that in view of the direction issued by the State Government fixing concessional tariff for the appellants it was not open to the Electricity Board to have levied minimum charges as it was bound to supply electricity to the appellants on the concessional tariff alone as fixed by the State Government it was submitted by learned counsel for the appellants that not only it was specifically stated in the G.O. dated 26th November, 1977 that the directions contend there were issued under section 78A of the Act, it was accepted even by the Electricity Board to be a direction under Section 78A of the Act as is apparent from its proceedings dated 20th January, 1978.
According to learned counsel for the appellants a direction issued under Section 78A of the Act was of a compulsive nature and was binding on the Electricity Board.
The only dispute which the Electricity Board could raise was as envisaged and in the manner provided by Sections 78A(2) of the Act about the direction being a matter of policy.
The Electricity Board according to learned counsel not having taken raucous to the procedure contained in Section 78A(2) of the Act was precluded from asserting before the High Court that the Government orders granting concessional tariff to the appellants did not fall within the purview of Section 78A of the Act.
The contention of the learned counsel for the Electricity Board on the other hand has been that a direction under Section 78A of the Act can be only with regard to a matter of policy vis a vis the consumers generally or of a particular class or category as distinguished from individual consumers and even such a direction does not have a binding force and is calculated only to guide the Electricity Board in the discharge of its statutory functions.
Learned counsel for the parties were at variance even on the question as to whether the power of fixing tariff under Section 49 of the Act could be regulated by a direction under Section 78A thereof.
In support of the submission that a direction issued by the Government is compulsive in nature learned counsel appearing for the appellants and the State of Andhra Pradesh drew or attention to 631 certain decisions and principles of administrative laws laying down the scope of a direction.
Having considered the respective submissions of learned counsel for the parties on this point we are of the opinion thaton the facts of the instant appeals it is not necessary to go into the rival contentions referred to above on this point.
Here, the Electricity Board as is apparent from its proceedings dated 20th January, 1978 proceeded to implement the directions with regard to fixation of concessional tariff issued by the State Government and resolved to realise electricity charges from the appellants only at the concessional tariff of 12.2 p. as fixed in the Government Order dated 26th November, 1977.
It, however, took the further view in the said proceedings that the directions issued by the Government did not have any bearing on the obligation of the appellants to pay minimum charges which they were bound to pay under the agreements executed by them even though such minimum charges were to be calculated at the rate of 12.2 p. per unit subject to escalation as indicated in the Government Orders in question.
Such minimum charges were payable even if no electricity was consumed by the appellants for any reason whatsoever.
It is in this context that we are of the opinion that the question with regard to the nature of a direction issued under section 78A of the Act is only of academic value in these appeals.
The basic question which falls for our consideration, however, is as to whether the obligation of the appellants to pay minimum charges under the agreement executed by them ceased to be operative on account of the directions issued by the State Government fixing concessional tariff as has been asserted by learned counsel for the appellants.
As indicated earlier the case of the electricity Board in this behalf has been that the directions in question did not have any bearing on the obligation of the appellants to continue to pay minimum charges, of course, to be calculated on the basis of the concessional tariff of 12.2 p. per unit.
A plain reading of the Government Orders dated 2nd Movement, 1977 and 26th November, 1977 makes it clear that there is no specific direction contained therein that the appellants would not be bound to pay minimum charges or that the obligation to pay minimum charges under the agreements executed by them would remain suspended during the period when the concession tariff would be operative.
What was, however, urged by learned counsel for the appellants was that the very purpose of fixing concessional tariff by the State Government would be frustrated if the appellants are held to be bound to continue to pay minimum charges in pursuance of the agreements entered into by them.
With regard to this submission it is at the outset necessary to appreciate the genesis of 632 prescription of minimum charges.
To put it succinctly the purpose of prescribing minimum charges is to ensure that no undue loss is caused to the Electricity Board because the absence of minimum charges is likely to create a tendency in a prospective consumer to have connection for an inflated requirement and having agreed to meet such requirement the Electricity Board would be under an obligation to maintain the supply upto that requirement even if no or very little energy is consumed.
In Amalgamated electricity Co. vs Jalgaon Borough Municipality, [1975] 2 SCC Page 508 it was held in paragraph 9 of the Report: "Moreover it is obvious that if the plaintiff company was to give bulk supply of electricity at a concessional rate of 0.5 anna per unit it had to lay down lines and to keep the power ready for being supplied as and when required.
The consumers could put their switches on whenever they liked and therefore the plaintiff had to keep everything ready so that power is supplied the moment the switch was put on.
In these circumstances it was absolutely essential that the plaintiff should have been ensured the payment of the minimum charges for the supply of electrical energy whether consumed or not so that it may be able to meet the bare maintenance expenses.
" In Bihar State Electricity Boara vs Green Rubber Industries, [1990] 1 S.C.C. Page 731 while dealing with the question whether the stipulation to pay minimum guarantee charges irrespective of whether energy was consumed or not is reasonable and valid it was inter alia held that considered by the test of reasonableness it cannot be said to be unreasonable inasmuch as the supply of electricity to consumer involves incurring of overhead installation expenses by the Board which do not very with the quantity of electricity consumed and the installation has to be continued irrespective of whether the energy is consumed or not.
The purpose of prescribing minimum charges being, as stated above, can it be said that while issuing the direction to the Electricity Board to supply electricity to the five mini steel plants at concessional rate the State Government was oblivious of the said purpose and required the Electricity Board not only to supply electricity on the concessional rate but also incur undue loss in maintaining the required bulk of energy stipulated in the various agreements even if the concerned mini plants either used no energy or used very little energy.
633 In our opinion, on the material placed before us it is not possible to take the view that such was the intention of the State Government in directing supply to be made to the appellants on concessional tariff.
That it was not the intention of the State Government to do so was subsequently clarified by the State Government itself vide Government Order dated 5th December, 1978.
In this view of the matter the submission made on behalf of the appellants that with the grant of concessional tariff the agreements in so far as they required the appellants to pay minimum charges ceased to be operative or that the purpose of granting concessional tariff was likely to be frustrated if they were required to continue to pay minimum charges cannot, therefore, by accepted.
In granting concessional tariff obviously it does not appear to be the purpose to compel the Electricity Board to maintain the supply of the contracted load of electricity to the appellants by incurring losses in the manner stated above.
The only purpose in directing supply of energy at concessional rates was reduce the charges of actual energy consumed by the appellants and this purpose could not be frustrated till the Electricity Board complied with the direction of supplying electricity to them at the concessional rate.
In this view of the matter it is apparent that the direction of the State Government to the Electricity Board to supply electricity to the appellants at concessional rate did not either expressly or by necessary implication grant immunity to the appellants from payment of of minimum charges.
In support of the plea that the order of the State Government dated 5th December, 1978 which clarified that its earlier orders fixing concessional tariff did not preclude the Electricity Board from levying minimum charges and the subsequent order dated 12th March, 1979 withdrawing the concessional tariff were invalid it was submitted by learned counsel for the appellants that those orders were in violation of principles of natural justice as also the doctrine of promissory estoppel.
In so far as this submission is concerned what is of significance is that by the Government Order dated 2nd November, 1977 and 26th November, 1977 concession was granted to the appellants.
This is manifest from the aforesaid Government Orders themselves which expressly used the expression "concessional power tariff" or "concessional tariff.
At no stage, does it appear to have been disputed by the appellants that what was extended to them by the said Government Orders was by way of concession.
In the context of granting exemption from sales tax certain observations were made by this Court in Shri Bakul Oil Industries vs State of Gujarat, [1987] 1 S.C.C. Page 31 which would, keeping in view the principle laid down therein with regard to 634 the grant of concession, be, in our opinion, useful in considering the above stated submission made by the learned counsel for the appellants.
It was held: "Viewed from another perspective, it may be noticed that the State Government was under no obligation to grant exemption from sales tax.
The appellants could not, therefore, have insisted on the State Government granting exemption to them from payment of sales tax, What consequently follows is that the exemption granted by the government was only by way of concession.
Once this position emerges it goes without saying that a concession can be withdrawn at any time and no time limit can be insisted upon before the concession is withdrawn.
The notifications of the government clearly manifest that the State Government had earlier granted the exemption only by way of concession and subsequently by means of the revised notification issued on July 17, 1971, the concession had been withdrawn.
As the State Government was under no obligation, in any manner known to law, to grant exemption it was fully within its powers to revoke the exemption by means of a subsequent notification.
This is an additional factor militating against the contentions of the appellants.
" It was further held: "The exemption granted by the government as already stated, was only by way of concession for encouraging entrepreneurs to start industries in rural and undeveloped areas and as such it was always open to the State Government to withdraw or revoke the concession.
We must, however, observe that the power of revocation or withdrawal would be subject to one limitation viz. the power cannot be exercised in violation of the rule of promissory estoppel.
In other words, the government can withdrawn an exemption granted by it earlier if such withdrawal could be done without offending the rule of promissory estoppel and depriving an industry entitled to claim exemption from payment of tax under the said rule.
If the government grants exemption to a new industry and if on the basis of the representation made by the government an industry is established in order to avail the benefit to exemption, it may then follow that the new industry can legitimately raise a grievance that 635 The exemption could not be withdrawn except by means of legislation having regard to the fact that promissory estoppel cannot be claimed against a statute.
" This being the law with regard to grant of concession we are of the opinion that neither of the two orders mentioned above can be said to be illegal on the ground that they were passed in violation of principles of natural justice.
Who only question in this connection which survives is that of promissory estoppel.
With regard to this plea it would be seen that it is not the case of the appellants that they established their mini plants after the grant of concessional tariff by the two Government Orders referred to above and but for the grant of such concessional tariff they would not have established their mini plants.
The necessary facts so as to sustain the plea of promissory estoppel are not, in our opinion, to be found to have been either pleaded or established by the appellants.
To take it by way of an illustration reference may be made to the special leave petition giving rise to Civil Appeal Nos.
1454 1463 of 1981 filed by M/s. Andhra Steel Corporation Ltd. The plea with regard to promissory estoppel is to be found in ground no.(i) which reads : "Whether in view of the fact that the Petitioner had acted upon the Government orders dated 2.11.1977 and 26.11.1977 and thus altered its position (as without the concessions being granted to the Petitioner they would not have possibly run the industry, since it was bound to suffer huge (losses) is the State Government stopped from revoking, or modifying the same before the full period of concession had run out of efflux of time that is, by 31 10 1980?" (emphasis supplied) Almost identical is ground no.(i) in the special leave petition giving rise to Civil Appeal Nos. 1642 1645 of 1981.
The use of the word "possible" is obviously indicative of lack of specific averment with regard to principle of estoppel.
Even such an averment has not been made qua the Electricity Board.
With regard to the plea based on the doctrine of legitimate expectation suffice if to say that except invoking the said doctrine nothing substantial was brought to our notice on the basis of which the appellants could be held entitled to any relief.
In so far as the Government Order dated 16th January, 1980 on which reliance has been placed by learned counsel for the appellants in 636 The alternative is concerned it may be pointed out that the said order even though in substance amounts to a clarification of the earlier order of clarification dated 5th December, 1978, states nothing as to why the clarification contained in the order dated 5th December, 1978 in categorical terms did not express the real intention of the State Government in issuing the earlier Government Orders granting concessional tariff.
As already indicated above, the orders granting concessional tariff, in our opinion, did not either expressly or by necessary implication grant immunity to the mini steel plants from their obligation to pay minimum charges and this having been categorically stated by the State Government in its clarificatory order dated 5th December, 1978 there was apparently no basis for issuing the second clarificatory order dated 16th January, 1980.
Further, the said order dated 16th January, 1980 had been issued on some representation made on behalf of the mini steel plants at a point of time when writ petitions on their behalf had already been filed in the High Court and the matter was subjudice.
In such a situation , apart from the propriety of issuing the second clarificatory order datd 16th January, 1980 it is obvious that what was contained in this order is analogous to an averment made by the State Government in replay to the writ petitions filed on behalf of the appellants.
In our opinion, in the circumstances poinited out above the order dated 16th January, 1980 has no bearing in finding out the true import of the orders of the State Government granting concessional tariff.
In view of the foregoing discussion, we do not find any substance in these appeals.
They are accordingly dismissed.
No. costs.
| The appellants owning mini steel plants have been getting supply of electricity from the Respondent Board.
The Board revised its terms and conditions for supply of electricity, and concessional tariff of 11 paise per unit for 3 years from 1.11.1977 was applied to five steel plants.
This tariff was subsequently enhanced to 12.5 paise per unit.
However, the concessional tariff was not extended to one of the appellants viz. M/s. Andhra Steel Corporation since a Writ Petition had been filed by it claiming that the agreement entered into with the Respondent Board for availing high tension electric supply was no longer in force.
In respect of the other steel plants, the Bard extended the concessional tariff subject to escalations and other terms and conditions and fixed a certain minimum consumption.
However, the tariff was revised to 16 paise without reference to the maximum demand charges from 1.3.1978.
In reply to a clarification sought by the Respondent Board, the State Government clarified that the Government order did not preclude the Board from applying the normal terms and conditions of supply and prescribing the monthly minimum charges and the working out of the escalated rate from time to time.
Subsequently the State Government withdrew the concessional tariff.
The State Government made a further clarification that its intention was to allow the concessional tariff without limiting the concession by imposition of minimum 625 consumption charges till the end of March, 1979.
Aggreived by the withdrawal of the concessional tariff, the mini steel plants filed Writ Petitions before the High Court contending that it was not open to the Electricity Board to have levied minimum charges and it was bound to supply electricity to them at the concessional tariff fixed by the State Government.
It was also contended that State Government 's subsequent clarification should prevail over the earlier one.
Violation of principales of natural justice, doctrine of promissory estoppel and right based on doctrine of legitimate expectation were also contended.
It was further contended that the directions were issued under section 78A of the Electricity Supply Act and hence they were of a compulsory nature and binding on the Board.
The Andhra Steel Corporation contended that while applying the concessional tariff to other mini steel plants, the Electricity Board was not justified in refusing the same to it thereby singling it out and hence its action was discriminatory and male fide.
The High Court rejected the various contentions and dismissed the Writ Petitions.
Aggrieved by the dismissal of their Writ Petitions, the mini steel plants filed appeal before this Court, raising the same contentions as were advanced before the High Court.
Dismissing the appeals, this Court, HELD: 1.
In granting concessional tariff obviously it does not appear to be the purpose to compel the Electricity Board to maintain the supply of the contracted load of electricity to the appellants by incurring loses.
The only purpose in directing supply of energy at concessional rates was to reduce the charges of actual energy consumed by the appellants and this purpose could not be frustrated till the Electricity Board complied with the direction of supplying electricity to them at the concessional rate.
Though the order dated 16.1.80 in substance amounts to a clarification of the earlier order of clarification dated 5th December,1978, it states nothing as to why the clarification contained in the order dated 5th December, 1978 in categorical terms did not express the real intention of the State Government in issuing the earlier Government orders granting concessional tariff.
The orders 626 granting concessional tariff, did not either expressly or by necessary implication grant immunity to the mini steel plants from their obligation to pay minimum charges and this having been categorically stated by the State Government in its clarificatory order dated 5th December, 1978 there was apparently no basis for issuing the second clarificatory order dated 16th January, 1980.
It was issued on some representation made by the mini steel plants at a point of time when Writ Petition on their behalf had already been filed in the High Court and matter was sub judice.
In such a situation, apart from the propriety of issuing the second clarificatory order on 16th January, 1980 it is obvious that what was contained in this order is analogous to an averment made by the State Government in reply to the Writ Petitions filed on behalf of the appellants and it has no bearing in finding out the true import of the orders of the State Government granting concessional tariff.
[633C D;636A E] Amalgamated Electricity Co. vs Jalgaon Borough Municipality, ; and Bihar State Electricity Board vs Green Rubber Industries, [1990] 1 SCC 731, referred to.
By the Government Orders dated 2nd November, 1977 and 26th November, 1977 concession was granted to the appellants.
This is manifest from the government Orders themselves which expressly used the expression "concessional power tariff" or "concessional tariff".
At no stage, the appellants disputed that what was extended to them by the said Government Order was by way of concession.
In view of the settled law.
Neither of the two orders viz., order dated 5.12.78 and 12.3.79 can be said to be illegal on the ground that they were passed in violation of principles of natural justice.[633F H] Shri Bakul Oil Industries vs State of Gujarat, ; ; relied on.
With regard to the plea of promissory estoppel, it is not the case of the appellants that they established their mini plants after the grant of concessional Tariff by the said two Government Orders and but for the grant of such concessional tariff they would not have established their mini steel plants.
The necessary facts so as to sustain the plea of promissory estoppel are not pleaded or established by the appellants.
[635B D] 4.
There is nothing on record to substantiate the plea of doctrine of legitimate expectation on the basis of which the appellants could be held entitled to any relief.[635G] 627 5.
On the facts of the present appeals it is not necessary to go into the question whether the power of fixing tariff under section 49 of the Electricity Supply Act could be regulated by a direction under section 78A thereof.
The electricity Board proceded to implement the directions with regard to fixation of concessional tariff issued by the State Government and resolved to realise electricity charges from the appellants only at the concessional tariff of 12.2 p. as fixed in the Government Order dated 26th November, 1977.
It, however, took the further view that the directions issued by the Government did not have any bearing on the obligation of the appellants to pay minimum charges which they were bound to pay under the agreements executed by them even though such minimum charges were to be calculated at the rate of 12.2 p. per unit subject to escalation as indicated in the Government Orders in question.
Such minimum charges were payable even if no electricity was consumed by the appellants for any reason whatsoever.
[631B D]
|
Civil Appeal Nos.
1450 1458 of 1990.
From the Judgment and Order dated 21.11.1988 of the Madras High Court in W.A. Nos. 864 to 870 of 1988 and W.P. Nos. 1600 and 1601 of 1986.
Narayanswamy, N. Balasubramaniam and A.T.M. Sampath for the Appellant.
M. Ramamurthy, Mrs. C. Ramamurthy, M.A. Krishnamoorthy, 639 for the Respondents.
R.C. Paul appeared in person.
These are appeals by special leave and are directed against a common judgment of the Madras High Court delivered in a group of writ appeals and a writ petition.
E.I.D. Parry (India) Ltd. (hereinafter referred to as `the employer ') has one of its units located at Ranipet in Tamil Nadu State where sanitary ware, super phosphate and insecticides are manufactured.
Some of its retiring employees filed applications under section 33 C(2) of the (`1947 Act ' for short) before the Labour Court at Madras claiming pension by alleging that payability of pension was a condition of service and the employer had stopped it without any justification and without giving notice under section 9 A of the .
The President Officer of the 2nd Additional Labour Court, Madras, allowed the same by his order dated 30th May, 1983, after computing the amounts.
The employer preferred six writ petitions.
In the meantime the same dispute had been referred to the Industrial Tribunal and it answered the reference against the employees by award dated 13th February, 1985.
The award was assailed before the High Court by the Union by filing of the seventh writ petition.
All the seven writ petitions were heard by a learned Single Judge who allowed the writ petitions of the management against the order of the Labour Court and dismissed the writ petition preferred by the labour union challenging the award of the Industrial Tribunal.
Writ appeals were carried against the Single Judge 's decision.
The main controversy before the Division Bench was as to whether pension, or as is referred to by the parties, "retiring allowance" was payable to the employees.
This dispute has a historical backdrop to which we may now advert.
Under General Office Order No. 26 dated Ist December, 1943 "retiring allowances" were provided for.
The Office Order provided that normally only employees with thirty years ' service or more would be eligible to receive "Retiring Allowance".
The Board reserved the right to alter the scale of "retiring allowance".
either generally or in respect of individual employees and had the authority to sanction `retiring allowance ' when first granted and subsequent payment became a routine matter subject to annual review.
640 Gratuities were also provided under the Office Order by saying that all permanent employees (other than workers who qualify for gratuities as per Factory Certified Standing Order) who were in the Company 's service prior to 1.1.1947 and who do not qualify for Retiring Allowance on retirement, will be eligible for gratuity on finally leaving the Company 's service subject to one or other of the prescribed conditions being fulfilled.
In all four alternatives were provided.
Clause (4) indicated that employees recruited on or after 1.1.1947 would not be entitled to any gratuity.
There was a Memorandum of Settlement between the parties which may be referred to as the settlement of 1956.
Clause (6) thereof related to gratuity and provided: "Gratuity shall in future be payable by the company in accordance with the following rules: (a)(i) Where, irrespective of the length of his past service, an employee dies in service, or is retired on a medical certificate acceptable to the company, or is retired by the company on reaching the age of superannuation, he shall be entitled to gratuity calculated at the rate of one month 's basic salary for each completed year of service, and pro rata for any partly completed year of his service ,subject to a maximum of 15 months ' basic salary if his service is less than 30 years, together with half of one month 's basic salary for each completed year of service in excess of 30 years and pro rata for any partly completed year of service in excess of 30 years. . . (d) Employees in service prior to Ist January, 1947 may opt, at the time of leaving service, either for: (i) Gratuity calculated in accordance with these rules or in accordance with the current provisions of General Office Order No. 26, whichever he prefers, or (ii) in lieu of gratuity, a retiring allowance calculated in accordance with the current provisions of General Office Order No. 26.
" This settlement as a fact incorporated the relevant part of the Office Order.
641 The came into force with effect from September, 1972 and payment of gratuity became statutory.
When that Act came into force, the Employer and the Employees ' Union jointly applied to the Government for exemption from the provisions of the statute.
The exemption was, however, not granted.
Payability of gratuity is no longer in dispute.
What is challenged is the claim of the workmen to retiring allowance (pension) under Office order No. 26.
The stand of the employees has been that the retiring allowance under General Office Order No. 26 has not been substituted by the 1956 settlement and they are, subject to being qualified, entitled to the benefit of pension and the statutory advantage of gratuity.
It is a fact that the settlement does not provide for payment of pension except to pre 1947 employees and making the benefit liable to exercise of option under clause 6(d) above.
It is not in dispute that the retiral benefit (pension) was payable to all qualified employees as a matter of practice.
If under the settlement that was not done away with, the benefit arising out of General Office Order No. 26 would still be available and gratuity contemplated under the settlement would not be a substitute of the retiral benefit of pension.
The Appellate Bench of the High Court has found that gratuity provided under the settlement was not a substitute of pension.
Mr. Narayanaswamy, learned senior counsel appearing in support of the appeals took us through the various documents and placed the matter at considerable length and with lucidity.
He even relied on what he described as the prevailing practice between 1956 and 1972 the settlement and the Gratuity Act when no retiral benefit was either claimed or paid.
We have, however, not been able to see any defect in the reasoning of the Division Bench decision of the High Court where it has ultimately come to the conclusion that the settlement had not substituted gratuity for pension.
We find that by way of an interim measure this Court by an order dated 5th May, 1989 had directed the employer to pay the pension to the employees in accordance with the order of the High Court with effect from Ist May, 1989 and that from the record appears to have been paid.
A petition had been filed in this Court on 23rd April, 1990 by the employer for modification of the condition indicated in the order granting special leave and we had heard counsel for both the sides on the said petition.
We had made it clear at the hearing of the petition for modification of the order granting special leave that the question as to payability of retirement benefit after the 1956 settlement would be examined.
The total number of employees involved in this dispute was 642 about 347.
Many of them had not only retired but had also died and in respect of those who were dead it would be a question of the benefits up to the date of death of the respective employees to be paid to their legal representatives.
Mr. Narayanaswamy had emphatically contended that what was being decided was not a claim of 347 employees but it had its repercussion on the industrial peace between the employer and the employee at other places.
We would like to make it clear that we have gone into the question confined to the claim to the employees of the Ranipet factory and not the liability of the employer generally, Besides, Mr. Narayanaswamy had also told us at the hearing that there are special features in the arrangement in regard to employees elsewhere.
We are satisfied that the Appellate Bench of the High Court was right in holding that the entitlement to pension had not been substituted by the settlement of 1956 and, therefore, the claim to pension subject to qualification being satisfied was available to be maintained notwithstanding the settlement of 1956, The High Court rightly came to the conclusion that the Labour Court had justifiably worked out the dues and the claim petitions under section 33 C(2) of the .
We uphold the judgment of the High Court and dismiss these appeals.
The employees had asked for award of interest on their dues.
The challenge of the employer was not groundless and we do not think in the facts of these cases the employees or their legal representatives would be entitled to interest.
We hope and trust that the employer would not liquidate its liability without delay by satisfying the orders of the Labour Court and the claims of the workmen or their legal representatives as and when made.
A sum of Rs. 10,000 had been given by the employer to Sri Pant for the Union to contest these matters and he has been paid the amount under this Court 's order.
No order for further courts.
T.N.A. Appeals dismissed.
| The General Office Order No. 26 dated 1.12.1943 of the Appellant Company provided that employees with 30 years ' service or more would be eligible to receive "Retiring Allowance" (pension).
The said office order also provided that all permanent employees who were in the Company 's service prior to 1.1.1947 and who do not qualify for retiring allowance on retirement, will be eligible for gratuity on finally leaving the Company 's service subject to the prescribed conditions being fulfiled.
In 1956 a memorandum of settlement was signed by the appellant company and the Employees ' Union under which the employees in service prior to 1.1.47 were required to opt at the time of leaving service either for gratuity or in lieu of the gratuity the retiring allowance.
Later the came into force and the payment of gratuity became statuory.
The employer and the Employees ' Union jointly applied to the Government for exemption from the provisions the statue which was refused.
Some of the retiring employees of company filed applications under Section 33 C(2) of the before the Labour Court claiming pension by alleging that payability of pension was a condtion of service and the employer had stopped it without any Justification.
The Labour Court allowed the applications.
Against the 638 order of the Labour Court the employer preferred six writ petitions.
In the meantime the same dispute was referred to the Industrial Tribunal and by an award the Tribunal answered the reference against the employees.
The Employees ' Union challenged the award by filling a writ petition in the High Court.
All the writ petitions were heard by a learned single judge of the High Court who allowed the writ petitions of the management against the order of the Labour Court and dismissed the writ petition preferred by the Labour Union challenging the award of the Tribunal.
Writ appeals were carried against the single Judges ' decision.
The Appellate Bench of the High Court held that gratuity provided under the settlement was not a substitute of pension and the claim of pension was available to employees notwithstanding the settlement.
Hence this appeal by the employer company.
Dismissing the appeals, this Court, HELD: The 1956 settlement between the parties does not provide for payment of pension except to pre 1947 employees and making the benefit liable to exercise of option under clause 6(d) of the settlement.
The retiral benefit (pension) was payable to all qualfied employees as a matter of practice.
If under the settlement that was not done away with, the benefit arising out of General Office order No. 26 would still be available and gratuity contemplated under the settlement would not be a substitute of the retiral benefit of pension.
The Appellate Bench of the High Court was right in holding that the entitlement to pension had not been substituted by the settlement of 1956 and, therefore, the claim to pension subject to qualification being satisfied was available to be maintained notwithstanding the settlement of 1956.
The High Court rigtly came to the conclusion that the Labour Court had justifiably worked out the dues and the claim petition under section 33 C(2) of the 1947 Act.
[641C D, 642C D]
|
ivil Appeal No. 2225 of 1991.
From the Judgment and Order dated 12.10.1990 of the Himachal Pradesh High Court in R.S.A. No. 134 of 1979.
692 C.K. Mahajan and Ashok Grover for the Appellants.
J. Special leave is granted.
The appeal is directed against the judgment of the High Court setting aside the decree passed by the trial court and the first appellate court in favour of the plaintiffs appellants, and dismissing their suit, on the ground of being barred by limitation.
The subject matter of the present case is agricultural land in Himachal Pradesh belonging to one Sham Sunder, the original plaintiff since dead, who was the father of the appellant No. 1 and the grand father of the appellants No.2 and 3.
The defendant respondent, Moti, alleging to be a sub tenant cultivating the land, claimed the benefits under Section 27(4) of the Himachal Pradesh Abolition of Big Landed Estates and Land Reforms Act, 1953, hereinafter referred to as the Act.
Notice was issued to Sham Sunder which according to his case was not served on him.
The claim of Moti was accepted, amount of compensation payable under Section 27(4) of the Act was determined by the Compensation Officer and consequential orders were passed in his favour.
The present suit was filed by Sham Sunder challenging the aforesaid orders on the allegation that Moti was merely a labourer employed by him and he never cultivated the disputed land and he, therefore, was not entitled to the acquisition of the proprietory right under Section 27 (4) of the Act.
The Suit was resisted by the defendant.
Both the trial court and the appellate court, accepted the plaintiff 's case and concurrently held that Moti was not a sub tenant and hence, the order passed by the Revenue Officer in his favour under Section 27(4) of the Act was without jurisdiction.
The plea of limitation was rejected and the suit was decreed holding that Sham Sunder being the tenant in possession was entitled to the right under Section 27(4) of the Act.
In a further appeal under Section 100 of the Code of Civil Procedure, the defendant contended before the High Court that the suit having been filed after a period of more than three years from the day of the order under Section 27(4) of the Act, was barred by limitation.
The Court agreed with him and dismissed the suit by the impugned judgment.
The High Court did not deal with any other aspect in the case, stating that the defendant had not urged any other point in support of the second appeal.
693 4.
In the impugned judgment the High Court has held that "as a consequence of the Order of the Compensation Officer under Section 27(4), the title in the land stood vested in the appellant", and merely because a longer period of limitation is provided for recovery of possession under Article 65 of the , the suit can not be said to be within the period of limitation.
Accordingly either one year period under Article 100 or in the alternative the three years ' rule under Article 113 has been held applicable.
We do not think that the High Court is right.
The principle for deciding the question of limitation in a suit filed after an adverse order under a Special Act is well settled.
If the order impugned in the suit is such that it has to be set aside before any relief can be granted to the plaintiff the provisions of Article 100 will be attracted if no particular Article of the is applicable the suit must be governed by the residuary Article 113, prescribing a period of three years.
Therefore, in a suit for title to an immovable property which has been the subject matter of a proceeding under a Special Act if an adverse order comes in the way of the success of the plaintiff, he must get it cleared before proceeding further.
On the other hand if the order has been passed without jurisdiction, the same can be ignored as nullity, that is, non existent in the eye of law and it is not necessary to set it aside; and such a suit will be covered by Article 65.
In the present case the controversial facts have been decided in favour of the plaintiff appellant and the findings were not challenged before the High Court.
The position, thus, is that the plaintiff was the owner in cultivating possession of the land and the defendant Moti was merely a labourer without any right of a tenant or sub tenant.
The question is as to whether in this background it is necessary to set aside the order passed in favour of the respondent under Section 27(4) of the Act before the suit can be decreed or whether the plaintiff can get a decree ignoring the said order as void, in which case the suit undoubtedly will be governed by Article 65. 6.
The provisions of Section 27(4) of the Act as also the other provisions are limited in their scope.
The preamble indicates that the object of the Act is to provide for the abolition of the big landed estates and to reform the law relating to tenancies in the Himachal Pradesh.
The expressions 'tenant ', 'sub tenant ' as also other similar expressions have to be understood in the sense they have been used in the other statutes dealing with the relationship of landlord and tenant in agricultural lands.
Section 27 of the Act provides for a transfer by the law of the right title and interest of the land owner to the State 694 Government under sub section (1) Sub section (2) is by way of an exception with respect to land under the personal cultivation of the land owner.
Sub section (4) directs that the right, title and interest of the land owner thus acquired, shall be transferred by the State, On payment of compensation, to the tenant who cultivates such land.
Under this provision, the order in the present case was passed in favour of Moti.
If Moti was not a tenant or sub tenant he was not entitled to the benefits under the sub section.
If the land was in cultivating possession of the plaintiffs, as held in the present suit, the Compensation Officer did not have the jurisdiction to pass any order in defiance of sub Section (2) and the land did not vest in the State at all.
Further, for the additional reason that Moti was not a tenant of the land the order passed in his favour under Section 27(4) was again without jurisdiction.
In absence of the conditions necessary for the exercise of power under Section 27(4) the Officer lacked jurisdiction to act and it was not necessary for the civil court to formally set aside his order before passing a decree.
What necessitated the plaintiff to come to the civil court was the challenge to his title, and the suit must be held to be covered by Article 65, and, therefore, not barred by shorter periods of limitation either under Article 100 or Article 113. 7.
The cases relied upon by the High Court do not support the impugned judgment.
In State vs Sadh Ram, I.L.R. (Himachal Pradesh) 1973 (2) 235, the Compensation Officer had passed an order under Section 27(4) of the Act, transferring the proprietory right to the cultivating tenants of the land, excluding the trees standing thereon.
The transferee tenants filed a suit in respect of the trees, and the High Court held that the suit was barred by limitation either under Article 100 or Article 113.
The grievance of the tenant was not against the exercise of the power of the Compensation Officer under Section 27 (4) of the Act, rather he relied upon the same.
The observations, mentioned below, from the judgment of Pathak, C.J. (as he then was) are enlightening and supporting the view expressed by us.
"This is not a case where the order made by the Compensation Officer is a nullity.
If the Compensation Officer had ab initio no jurisdiction to take the proceeding and make an order therein, he would have no jurisdiction to make any order at all.
In that event, the entire order made by him, including that part of it which is in favour of the plaintiffs, would be a nullity.
" In the full Bench judgment of the Lahore High Court in Gangu and 695 Others vs Mahanraj Chand and Others, A.I.R. 1934 Lahore 384 the decision on the question of limitation went against the plaintiff on account of the special facts an circumstances of the case, as is clear from the enunciation of the proposition (at page 389, column 2) to the effect that if it is necessary for a plaintiff to get rid of an order made by an Officer of the Government, which stands in his way before he can obtain a certain relief and in order to obtain that relief he does not specifically ask for the setting aside of the order but merely for a declaratory decree still the suit should be deemed to be one to set aside an order falling within the ambit of Article 14.
It is material to note that in that case, it was essential for the plaintiff to have got the order of the Collector set aside, before asking for a decree.
Two cases of this Court, although not identical in facts nor governed by the present Act, support the view which we are taking.
In Sheo Lal and Ors.
vs Sultan & Ors.
, ; the plaintiff filed a suit for a decree for redemption after unsuccessfully moving the Assistant Collector for similar relief under the Redemption of Mortgages (Punjab Act 2 of 1913) 1913, and a plea of limitation by virtue of Article 14 of the Limitation Act, 1908, was raised.
Agreeing with the High Court this Court rejected the defence argument based on Article 14 on the ground that in the facts of the case it was not necessary to set aside the order of the Assistant collector before granting a redemption decree.
The other decision in Mohd. Murtiza Khan vs state of M.P. and Others, [1966] M.P.L.J. 933 arose out of a suit in which the interpretation of the provisions of the Bhopal Land Revenue Act was involved.
In similar situation as in the present appeal before us, this Court held that Article 14 of the Limitation Act, 1908, had no application to the suit as the order under the Bhopal Land Revenue Act had been passed without jurisdiction and could be ignored without getting it set aside.
Article 142 of the Limitation Act was applied.
For the reasons mentioned above we set aside the impugned judgment of the High Court and restore the decree passed by the first appellate court.
the appeal is accordingly allowed with costs through out.
T.N.A. Appeal allowed.
| The respondent defendant claimed the benefits under Section 27(4) of the Himachal Pradesh Abolition of Big Landed Estates and Land Reforms Act, 1953 alleging that he was a sub tenant cultivating the disputed land.
The Compensation Officer accepted his claim and passedan order in his favour under Section 27(4).
The appellants ' father, Plaintiff, challenged the order of Compensation Officer contending that the defendant was not entitled to the acquisition of the proprietary right under section 27(4) because he was merely a labourer employed by him and he had never cultivated the disputed land.
Both the Trial and the Appellate court accepted the plaintiff 's case and concurrently held that the defendant was not a sub tenant and consequently the order passed in his favour under Section 27(4) was without jurisdiction.
The plea of Limitation was rejected and the plaintiff 's suit was decreed by holding that he being the tenant in possession was entitled to the right under section 27(4) of the Act.
On further appeal the High Court dismissed the plaintiff suit on the ground that the suit having been filed after a period of more than three years from the date of the order under section 27(4) it was barred by limitation.
Hence this appeal against the decision of the High Court.
Allowing the appeal and setting aside the judgment of the High court, this Court, HELD: 1.
The principle for deciding the question of limitation in 691 a suit filed after an adverse order under a Special Act is well settled.
If the order impugned in the suit is such that it has to be set aside before any relief can be granted to the plaintiff the provisions of Article 100 will be attracted and if no particular Article of the is applicable the suit must be governed by the residuary Article 113, prescribing a period of three years.
therefore, in a suit for title to an immoveable property which has been the subject matter of a proceeding under a Special Act if an adverse order comes in the way of the success of the plaintiff, he must get it cleared before proceeding further.
On the other hand if the order has been passed without jurisdiction, the same can be ignored as nullity, that is, non existent in the eye of law and it is not necessary to set it aside; and such a suit will be covered by Article 65 [693C D] 1.1 In the instant case the concurrent findings were that the plaintiff was the owner in cultivating possession of the land and the defendant was merely a labourer without any right of the tenant or a sub tenant.
If the land was in cultivating possesion of the plaintiff, the compensation Officer did not have the jurisdiction to pass any order in defiance of section 27(2) and the land did not vest in the State at all.
Further, for the additional reason that defendant was not a tenant of the land the order passed in his favour under Section 27(4) was again without jurisdiction.
Therefore, in absence of the conditions necessary for the exercise of power under Section 27(4) of Officer lacked jurisdiction to act and it was not necessary for the Civil Court to formally set aside his order before passing a decree.
What necessitated the plaintiff to come to the civil court was the challenge to his title, and the suit must be held to be covered by Article 65, and, therefore, not barred by shorter period of limitation either Article 100 or Article 113.
[693E, 694B C D] Sheo Lal and Ors.
vs Sultan & Ors.
, ; and Mohd. Murtiza Khan vs State of M P. and Ors., [1966] M.P.L.J., referred to.
State vs Sadh Ram, I.L.R. (HP) 1973 (2) 235 and Gangu and Ors.
vs Mahanraj Chand and Ors., A.I.R. 1934 Lahore 384, held inapplicable.
|
: Criminal Appeal No. 67 of 1991.
From the Judgement and Order dated 27.11.1987 of the Delhi High Court in Crl.
W. No. 527 of 1987.
N.N. Gupta and Rajiv Dutta for the Appellant.
J.D. Jain, Maninder Singh and Ms. Sushma Suri for the Respondents.
The Judgement of the Court was delivered by K. JAYACHANDRA REDDY, J.
This appeal, pursuant to the special leave granted, is directed against the order of the High Court of Delhi dismissing the writ petition filed by the appellant summarily.
The appellant was serving as a Jawan in the Indian Army.
On 17th September, 1985, he applied for leave and it was granted.
He was going to his home town, a village in Rajasthan.
He purchased 11 bottles of sealed rum and one bottle of brandy from his Unit Canteen as he required the same to celebrate the marriage of one of his close relations at his home town.
Admittedly, the appellant was entitled to carry 4 bottles of rum and one bottle of brandy as per the Unit Regulations/leave certificate when he was proceeding on leave.
According to the appellant, the remaining 7 bottles of rum he was able to purchase from the Unit Canteen over and above his entitlement on the orders of its Company Commander and Commanding Officer on compassionate grounds and that there was a written order to that effect which was retained by the Salesman of the Unit Canteen at the time of delivery of the extra 7 bottles of rum.
Enroute to his home 679 town he had to pass through Surendra Nagar which was under prohibition.
The local Civil Police at Surendra Nagar intercepted him and confiscated the bottles of liquor and handed over the appellant alongwith the liquor bottles to the City Police Station, Surendra Nagar.
The City Police in turn handed over him to his Unit authorities for action.
The 6th respondent, the Officer Commanding, 98 Field Regiment, ordered a summary court martial during which the witnesses including the Civil, Police Officer of Surendra Nagar were examined.
Ultimately the summary court martial sentenced the appellant to three months ' R.I. and dismissed him from service with effect from 9th October, 1985 by which time the appellant had already put in 10 years of service.
His plea throughout has been that he had purchased the liquor for the marriage of his brother in law on the basis of the permit issued to him and the chits issued by his superiors enabling him to draw the extra 7 bottles of rum and that he had no other bad intention in carrying the liquor bottles.
He preferred an appeal to the Army Commander mentioning several irregularities in the summary trial.
He also pleaded that he was having unblemished record of service in the Army, but his appeal was rejected.
Thereafter he filed a writ petition in the Delhi High Court which was summarily rejected.
In this appeal the learned counsel for the appellant submitted that several irregularities have been committed in conducting the summary trial.
But from the records we find that the evidence has been duly recorded and further it is an admitted fact that the appellant was carrying extra 7 bottles of rum without the necessary permit.
Therefore we are unable to agree with the counsel that the trial is vitiated and we are of the view that no prejudice has been caused.
The main submission and perhaps the only submission, if we may say so, in this appeal is that the sentence awarded to the appellant is wholly disproportionate to the offence committed by him.
According to the learned counsel the extreme punishment of imprisonment for 3 months and dismissal from the service under the circumstances is uncalled for.
We find considerable force in this submission.
Admittedly the appellant was granted leave when he was proceeding to his home town and unfortunately enroute to his home town he had to pass through Surendra Nagar where there was prohibition in force.
However, he had a valid permit to carry 5 bottles, the extra 7 bottles of rum, according to the appellant, were purchased from the Army Canteen itself and there is no dispute about the same.
Unless he had some permits or chits given by some higher authorities permitting him to purchase these bottles, he could not have purchased the same from the Canteen 680 over and above the bottles for which he had a valid permit.
He was taking this liquor to his home town to celebrate his brother in law 's marriage, but to his bad luck, the Civil Police of Surendra Nagar checked his baggage and confiscated the bottles as he had no valid permit to carry the extra bottles.
Under these circumstances the question is whether such a severe penalty is called for.
In the chargesheet it is merely stated that the action of the appellant in carrying 11 bottles of sealed rum and one bottle of sealed brandy when he was proceeding to his home town is "contrary to the existing orders on the subject".
In the counter affidavit it is stated that such an act of the appellant comes within the meaning of Section 63 of Chapter VI of the (`Act ' for short) which enumerates various types of offences.
Section 63 lays down as under: "63.
Violation of good order and discipline Any person subject to this who is guilty of any act or omission which, though not specified in this , is prejudicial to good order and military discipline shall, on conviction by court martial, be liable to suffer imprisonment for a term which may extend to seven years or such less punishment as is in this act mentioned".
The Section may cover various types of misconducts committed by a person by way of an act or omission.
This Section also provides for awarding any other lesser punishment mentioned in the .
Therefore such depends on the nature of the act or omission of which the person is found guilty.
The provisions in Chapter VII enumerate various punishments that can be awarded.
Section 71 of the deals with punishments awardable by court martial and reads as under: "71.
Punishments awardable by courts martial Punishments may be inflicted in respect of offences committed by persons subject to this and convicted by courts martial, according to the scale following, that is to say (a) death; (b) transportation for life or for any period not less than seven years; (c) imprisonment, either rigorous or simple, for any period not exceeding fourteen years; 681 (d) cashiering, in case of officers; (e) dismissal from the service; (f) reduction to the ranks or to a lower rank or grade or place in the list of their rank, in the case of warrant officers.
; and reduction to the ranks or to a lower rank or grade, in the case of non commissioned officers; Provided that a warrant officer reduced to the ranks shall not be required to serve in the ranks as a sepoy; (g) forfeiture of seniority of rank, in the case of officers, junior commissioned officers, warrant officers and non commissioned officers; and forfeiture of all or any part of their service for the purpose of promotion, in the case of any of them whose promotion depends upon length of service; (h) forfeiture of service for the purpose of increased pay, pension or any other prescribed purpose; (i) severe reprimand or reprimand, in the case of officers, junior commissioned officer, warrant officers and non commissioned officers; (j) forfeiture of pay and allowances for a period not exceedind three months for an offence committed on active service; (k) forfeiture in the case of a person sentenced to cashiering or dismissal from the service of all arrears of pay and allowances and other public money due to him at the time of such cashiering or dismissal; (l) stoppage of pay and allowances until any proved loss or damage occasioned by the offence of which he is convicted is made good.
" It can be seen that Sections 71(a) to 71(e) and Section 71(k) provide for extreme punishments and are severe in nature.
Sections 71(f) to 71(j) and Section 71(l) provide for comparatively lesser punishments.
Section 72 of the is the next relevant Section which reads as under: 682 "72.
Alternative punishments awardable by court martial Subject to the provisions of this , a Court Martial may, on convicting a person subject to this to any of the offences specified in Sections 34 to 68 inclusive, award either the particular punishment with which the offence is stated in the said sections to be punishable, or, in lieu thereof, any one of the punishments lower in the scale set set out in Section 71, regard being had to the nature and degree of the Offence." (emphasis supplied) Section 73 of the deals with combination of punishments and it reads as under: "73.
Combination of punishments A sentence of a court martial may award in addition to, or without any one other punishment, the punishment specified in clause (d) or clause (e) of Section 71 and any one or more of the Punishments specified in clauses (f) to (l) of that section.
" It can be seen that under Section 73 of the , the court martial may award more than one punishments as mentioned therein.
In the instant case Section 63 also is not mentioned in the chargesheet.
Assuming that the offence committed by the appellant is covered by the residuary Section 63 but in awarding the punishment the court martial has to keep in view the spirit behind Section 72 of the and it has to give due regard to the nature and degree of the offence.
It can be seen that Section 63 provides for awarding any of the lesser punishments enumerated in Section 71 of the .
In view of these provisions of law and having regard to the nature and degree of the offence, we are firmly of the view that the punishments awarded to the appellant namely, three months ' R.I. and dismissal from service are severe and are also violative of Section 72.
In Council of Civil Service Unions vs Minister for the Civil Service, ; , 950 Lord Diplock said: "Judicial review has I think developed to a stage today when, without reiterating any analysis of the steps by which the development has come about, one can conveniently classify under three heads the grounds on which administrative action is subject to control by judicial review.
The first ground I would call `illegality ', the second `irrationa 683 lity ' and the third 'procedural impropriety ! This is not to say that further development on a case by case basis may not in course of time add further grounds.
I have in mind particularly the possible adoption in the future of the principle of 'proportionality ' which is recognised in the administrative law of several of our fellow members of the Eurpoean Economic community,. ." This principle was followed in Ranjit Thakur vs Union of India and Others, where this Court considered the question of doctrine of proportionality in the matter of awarding punishment under the and it was observed thus: "The question of the choice and quantum of punishment is within the jurisdiction and discretion of the court martial.
but the sentence has to suit the offence and the offender.
It should not be vindictive or unduly harsh.
It should not be so disproportionate to the offence as to shock the conscience and amount in itself to conclusive evidence of bias.
The doctrine of proportionality, as part of the concept of judicial review, would ensure that even on an aspect which is, otherwise, within the exclusive province of the court martial, if the decision of the court even as to sentence is an outrageous defiance of logic, then the sentence would not be immune from correction.
Irrationality and perversity are recognised grounds of judicial review.
" In Bhagat Ram vs State of Himachal Pradesh, [1983] 2 SCC 442 this Court held as under: "It is equally true that the penalty imposed must be commensurate with the gravity of the misconduct, and that any penalty disproportionate to the gravity of the misconduct would be violative of Article 14 of the Constitution.
" Applying these principles to the instant case, We are also constrained to say that there is an element of arbitrariness in awarding these severe punishments to the appellant.
We have heard both the learned counsel on this aspect elaborately and we are satisfied that an interference is called for and the matter has to be remanded on the question of awarding any of the lesser punishments.
Having given our earnest consideration to the 684 facts and circumstances of this case and in view of the submissions made by both the counsel, we feel that ends of justice will sufficiently be met if a lesser punishment as provided under Section 71(f) is awarded to the appellant.
Accordingly, we set aside the punishments of three months ' R.I. and dismissal from service and remand the matter to the court martial which shall award any of the lesser punishments having due regard to the nature and circumstances of the case and in the light of the above observations made by us.
Since we are setting aside the sentence of three months ' R.I. any detention suffered by the appellant after the orders of the court martial shall not be treated as a disqualification for being reinstated into service which shall, however, be subject to any of the minor punishments to be awarded by the court martial.
Already much time has lapsed, therefore, we hope the court martial would dispose of the matter as expeditiously as possible preferably within three months.
The appeal is thus disposed of subject to the above directions.
N.P.V. Appeal disposed of.
| The appellant, who had put in 10 years of service as Jawan in the Army, was sentenced to 3 months ' R.I. and dismissed from service by the Summary Court Martial, on the charge that his action in carrying 12 bottles of liquor while proceeding on leave to his home town was contrary to the orders on the subject.
The appeal preferred by the appellant, pointing out the irregularities committed in the summary trial, and pleading that he had unblemished record of service, was also rejected by the higher authority.
The writ Petition filed by the appellant was also summarily rejected by the High Court.
In the appeal before this Court, on behalf of the appellant it was contended that the summary trial was vitiated on account of several irregularities committed in conducting the trial, and the sentence awarded to him was wholly disproportionate to the offence committed by him.
Disposing of the appeal, and remanding the case to the Summary Court Martial on the question of sentence, this Court HELD 1.
The trial is not vitiated and no prejudice has been caused to the appellant, inasmuch as from the records it is found that the evidence has been duly recorded and, admittedly, the appellant was carrying extra seven bottles of liquor without the necessary permit.
However, there is an element of arbitrariness in awarding severe punishments and, therefore, an interference is called for and the matter has to be remanded on the question of awarding any of the lesser punishments provided in the .
[679E. 683G H] 677 2.1 Section 72 of the provides that the court martial may, on convicting a person subject to the Act, of any offences specified in Sections 34 to 68 inclusive, award either the particular punishment with which the offence is stated in the said sections to be punishable, or, in lieu thereof, any one of the punishments lower in the scale set out in Section 71, regard being had to the nature and degree of offence.
[680C D] 2.2 In the instant case, in the charge sheet it is merely stated that the action of the appellant in carrying 12 bottles of liquor when he was proceeding to home town was against the orders on the subject.
But in the counter affidavit it is stated that such an act of the appellant came within the meaning of Section 63 of the Act.
This Section may cover various types of misconducts committed by way of an act or omission.
It also provides for awarding any other lesser punishment mentioned in the Act.
Therefore, much depends on the nature of the act or omission of which the person is found guilty.
[680B,E] 2.3 Admittedly, the appellant was granted leave when he was proceeding to his home town.
Enroute he had to pass through a place where prohibition was in force.
He had a valid permit to carry 5 bottles of liquor and the extra 7 bottles were purchased from the Army Canteen itself.
Unless he had some permits or chits given by some higher authorities, he could not have purchased these extra bottles from the Canteen.
He was taking this liquor to his home town to celebrate his brother in law 's marriage, but the local Civil Police checked his baggage and confiscated the bottles as he had no valid permit to carry the extra bottles.
[679G H, 680A] 2.4 Assuming that the offence committed by the appellant is covered by the residuary Section 63, but in awarding the punishment, court martial has to keep in view the spirit behind Section 72 and it has to give due regard to the nature and degree of the offence.
Section 63 provides for awarding of any of the lesser punishments enumerated in Section 71.
In view of these provisions of law and having regard to the nature and degree of the offence, the punishments awarded to the appellant, namely, three months ' R.I. and dismissal from service are severe and are also violative of Section 72.
Ends of justice will be sufficiently met if a lesser punishment as provided under Section 71(f) is awarded to the appellant.
[682E F, 684F] 2.5 Accordingly, the punishments are set aside and the matter remanded to the court martial which shall award any of the lesser 678 punishments having due regard to the nature and circumstances of the case.
Any detention suffered by the appellant after the orders of the court martial will not be treated as a disqualification for being rein stated into service.
[648B] Ranjit Thakur vs Union of India and Others, and Bhagat Ram vs State of Himachal Pradesh, [1983] 2 SCC 442, relied on.
Council of Civil Service Unions vs Minister for the Civil Service, [1984]3 AII ER 935, 950, referred to
|
ivil Appeal No. 2272 of 1991.
From the Judgment and Order dated 12.11.1990 of the Allahabad High Court in C.M.W.P. No. 11192 of 1990.
Sunil Gupta and S.Sukumaran for the Appellant.
Dr. Anand Prakash, B.K. Prasad and S.N. Sikka for the Respondents.
698 The Judgment of the Court was delivered by SHARMA, J.
Special Leave is granted.
In response to a notice inviting tenders by the Diesel Locomotive Works.
Indian Railways, in connection with disposal of one lot of Ferrous Scrap, a number of tenders were submitted by the appellant, the respondent No. 1 and other intending purchasers.
The tenders of the respondent No. 1 and some other bidders were rejected as defective and the appellant 's offer being the highest was accepted, and accordingly the appellant deposited a sum of about Rs.15 lacs.
The respondent no .1 challenged the decision by a writ petition before the Allahabad High Court contending that there was no defect in its tender and that the tender of the appellant could not have been validly accepted as the necessary condition of payment of Rs. 50,000 as earnest money with the tender had not been complied with.
The application was resisted on the grounds (i) that the respondent No. 1 having not deposited the earnest money at all was not entitled to a consideration of its tender and has no locus standi in the present matter; and (ii) that the appellant had substantially complied with the requirement by sending with its tender a Banker 's Cheque marked and certified by the Union Bank of India as good for payment.
The High Court accepted the appellant 's first ground, holding that the tender of the respondent had been rightly rejected for failure to deposit the earnest money, but allowed the writ petition on the finding that the appellant also did not satisfy the condition no.6 of the tender notice as the earnest money was offered by the Banker 's Cheque of a bank other than the State Bank of India mentioned in the said clause.
The High Court directed the authorities to consider the other valid tenders and further observed that should the other tenders be found to be unacceptable it would be open to the authorities to invite fresh tenders.
the present appeal is directed against this judgment.
The case of the appellant has been that its tender mentioned the highest amount of one and a half crores rupees for the 2000 M.T. of Ferrous Scrap which was a very fair price, and the authorities were absolutely right in accepting the same.
With respect to the alleged deficiency in the matter of deposit of the earnest amount, the stand is that a Banker 's Cheque is as good as cash and especially so when a verification from the bank in question about its authenticity was made and the Bank 's assurance to honour the same was obtained.
Admittedly, the Tender Committee had taken the precaution of getting the matter confirmed from the appellant 's bank before deciding to accept his tender.
699 4.
The relevant clause 6 of the notice required the tender to be accompanied by earnest money calculated at 5% of the offer under the tender subject to a maximum of Rs 50,000 and in terms permitted the deposit by cash or by demand draft drawn on the State Bank of India.
the defect pointed out by the respondent No. 1 and accepted by the High Court is in the appellant sending the cheque of the Union Bank of India drawn on its own branch and not on the State Bank.
By the impugned judgment it has been held that in view of this defect the authorities had no power to accept the appellant 's tender.
the learned counsel for the appellant has contended that having regard to the circumstances in the case it must be held that the Tender Committee had the power to accept the appellant 's tender.
Referring to the books "Bills of Exchange" by Byles, and "Cheques in Law and Practice" by M.S. Parthasarathy, it has been argued that certified cheques are as good as cash and the irregularity relied upon in the appellant 's submitting his tender could be validly waived by the Diesel Locomotive Works.
Reliance was also placed on M/s B.D. Yadav and M.R. Meshram vs Administrator of the City of Nagpur, and T.V Subhadra Amma vs Kerala Board of Revenue and Others, 6.
It is true that in submitting its tender accompanied by a cheque of the Union Bank of India and not of the State Bank the clause No. 6 of the tender notice was not obeyed literally, but the question is as to whether the said non compliance deprived the Diesel Locomotive Works of the authority to accept the bid.
As a matter of general proposition it cannot be held that an authority inviting tenders is bound to give effect to every term mentioned in the notice in meticulous detail, and is not entitled to waive even a technical irregularity of little or no significance.
The requirements in a tender notice can be classified into two categories those which lay down the essential conditions of eligibility and the others which are merely ancillary or subsidiary with the main object to be achieved by the condition.
In the first case the authority issuing the tender may be required to enforce them rigidly.
In the other cases it must be open to the authority to deviate from and not to insist upon the strict literal compliance of the condition in appropriate cases.
This aspect was examined by this Court in GJ Fernandez vs State of Karnataka 7 Ors.
; , a case dealing with tenders.
Although not in an entirely identical situation as the present one, the observations in the judgment support our view.
The High Court has, in the impugned decision, relied upon Ramana Dayaram Shetty vs International Airport Authority of India & 700 Ors.; , but has failed to appreciate that the reported case belonged to the first category where the strict compliance of the condition could be insisted upon.
The authority in that case, by not insisting upon the requirement in the tender notice which was an essential condition of eligibility, bestowed a favour on one of the bidders, which amounted to illegal discrimination.
The judgment indicates that the Court closely examined the nature of the condition which had been relaxed and its impact before answering the question whether it could have validly condoned the shortcoming in the tender in question.
This part of the judgment demonstrates the difference between the two categories of the conditions discussed above.
However it remains to be seen as to which of the two clauses, the present case belongs.
The nature of payment by a certified cheque was considered by this Court in Sita Ram Jhunjhunwala vs Bombay Bullion Association Ltd. & Anr., Several objections were taken there in support of the plea that the necessary condition in regard to payment was not satisfied and in that context this Court quoted the observations from the judgment in an English decision (vide Spargo 's case: 1873 L.R. & Ch.
407) that it is a general rule of law that in every case where a transaction resolves itself into paying money by A to B and then handing it back again by B to A, if the parties meet together and agree to set one demand against the other, they need not go through the form and ceremony of handing the money backwards and forwards.
This Court applied that the observations to a transaction requiring payment by one to another.
The High Court 's decisions in B.D. Yadav 's case and T.V. Subhadra Amma 's case are also illustrations where literal compliance of every term of the tender notice was not insisted upon.
In the instant case the certified cheque of the Union Bank of India drawn on is own branch must be treated as sufficient for the purpose of achieving the object of the condition and the Tender Committee took the abundant caution by a further verification from the bank.
In this situation it is not correct to hold that the Diesel Locomotive Works had no authority to waive the technical literal compliance of clause 6, specially when it was in its interest of not to reject the said bid which was the highest.
We, therefore, set aside the impugned judgment and dismiss the writ petition of the respondent No. 1 filed before the High Court.
The appeal is accordingly allowed with costs through out.
R.P. Appeal allowed.
| The Diesel Locomotive Works, Indian Railway, invited tenders for disposal of one lot of Ferrous scrap.
One of the conditions mentioned in the tender notice was that the earnest money should be deposited by cash or by demand draft drawn of the State Bank of India.
The appellant, one of the intending purchasers, submitted his tender accompanied by a cheque of Union Bank of India drawn on its own branch.
The tender of the appellant, being the highest, was accepted and tenders of respondent No. 1 and some others were rejected.
The Tender Committee had verified from Union Bank of India the bona fide of appellant 's cheque and then only decided to accept its tender.
Respondent No. 1 filed writ petition in the High Court challenging the rejection of its tender, and acceptance of appellant 's tender on the ground that the latter did not comply with the necessary condition for payment of earnest money with the tender.
The appellant contended that it had substantially complied with the requirement by sending with its tender a banker 's cheque marked and certified by the Union Bank of India as good for payment.
The High Court opined that respondent 's tender was rightly for failure to deposit the earnest money, but allowed the writ petition holding that the appellant also did not satisfy the condition regarding payment of the earnest money since the cheque sent was from a bank other than the State Bank of India as stipulated, and as such the authorities had no power to accept appellant 's tender.
Aggrieved, the appellant preferred the appeal by special leave to this Court.
Allowing the appeal, this Court 697 HELD: 1.
As a matter of general proposition it cannot be laid down that an authority inviting tenders in bound to give effect to every term mentioned in the notice in meticulous detail, and is not entitled to waive even a technical irregularity of little or no significance.
The requirement in a tender notice can be classified into two categories those which lay down the essential conditions of eligibility, and the other which are merely ancilliary or subsidiary with the main object to be achieved by the condition.
In the first case the authority issuing the tender may be required to enforce them rigidly.
In the other case it must be open to the authority to deviate from and not to insist upon the strict literal compliance of the condition in appropriate case.
[699E G] 2.
In the instant case, in submitting the cheque drawn on the Union Bank of India and not on the State Bank of India, the relevant condition of the tender notice was not obeyed literally; but the said cheque must be treated as sufficient for the purpose of achieving the object of the condition and the Tender Committee took the abundant caution by a further verification from the bank.
In the situation it could not be said that the Diesel Locomotive Works had no authority to waive the technical literal compliance of the clause, regarding manner of payment of earnest money especially when it was in its interest not to reject the said bid which was the highest.
[699D E; 700F G] GJ Fernandez vs State of Karnataka & Ors., ; and Sita Ram Jhunjhunwala vs Bombay bullion Association Ltd. & Anr., , relied on.
Ramana Dayaram Shetty vs International Airport Authority of India & Ors., ; ; Spargo 's Case, ; M/s B.D Yadav and M.R. Meshram vs Administrator of the City of Nagpur, and T.V. Subharda Amma vs Kerala Board of Revenue and Others, , referred to.
|
Special Leave Petition No. 13560 of 1983.
From the Judgment and Order dated 27.6.1983 of the Himachal Pradesh High Court in C. W. P. No. 86 of 1983.
P.P. Rao and H. J. Zaviri for the Petitioner.
V.K. Kanth and C.P. Pandey for the Respondents.
The following Order of the Court was delivered by K. JAYACHANDRA REDDY, J.
The petitioner was directly appointed as an Accountant in the Himachal Pradesh Tourism Development Corporation Ltd. ( 'Corporation ' for short) on 28.8.78 He was on probation in the Transport Wing of the Corporation.
After 704 training he was transferred to the Office of the Area Manager, Simla and was posted as an Accountant.
His conditions of service were governed by the Regulations made by the Board of Directors of the Corporation.
The petitioner detected certain irregularities in the Transport Wing and wrote a letter dated 19.6.1980 to the Transport Officer pointing out the financial irregularities and embezzlements committed by the then Cashier.
The employees ' Union took up the matter and demanded the Management to take necessary action and also made some demands on behalf of the Union.
The petitioner was the General Secretary of the Union.
In April 1980, the respondent No. 2 was posted as the new Managing Director.
According to the petitioner he was annoyed with the petitioner because of his union activities.
It is stated that the petitioner actively participated in highlighting the demands.
On 13.5.1981 an order transferring the petitioner to Dalhousie was passed, even though the petitioner had been earlier granted permission on 23.7.79 to do his 3 years Law course as an evening student.
the petitioner made a representation for cancellation of the transfer on the ground that he was already half way through his legal study and that the transfer was mala fide.
Respondent No. 2 got more annoyed.
The petitioner submitted a study leave application for one year.
But he was granted only 90 days leave in the first instance with full pay and allowances and later on half pay and subsequently without pay he was granted extra ordinary leave.
Meanwhile, a chargesheet was issued on 21st August, 1981 framing certain charges.
The gravamen of the charges is that while working in the Transport Wing of the Corporation the petitioner facilitated and abetted the embezziment of Rs. 100 by notensuring that the amount found was in excess and that he failed to serve the Corporation honestly and faithfully.
The other charge is that he made some fictitious entries in the Cash Book and the fourth charge is that he made certain information public without the permission of the Managing Director.
To this the petitioner submitted a reply stating that all the charges are fake and false.
It is stated that the petitioner 's leave was cancelled and the petitioner challenged the same in the High Court of Himachal Pradesh but the case was adjourned.
Meanwhile the petitioner 's services were terminated with effect from 8th January, 1982 stating that they are no longer required and one month 's pay in lieu of notice would be paid in terms and conditions of his appointment letter and provisions of Staff Regulations of the Corporation.
The petitioner challenged the same before the High Court, but the Writ Petition was dismissed in limine.
In this Court it is urged that the termination is only a camouflage and that though the petitioner was still a temporary servant yet the termination amounted to punishment because of the manner in which it was 705 passed and the background behind it.
It is not in dispute that the Corporation has power to terminate the services by giving one month 's notice or pay in lieu thereof, in the case of a temporary employee who have completed one month 's service.
Regulation 19(3) reads thus: Termination of service by notice "19(3) The Corporation may terminate the services of any employee by giving him: (a) xx xx xx (b) one month 's notice, or pay in lieu thereof, in the case of temporary employees who have completed one months service and one day 's notice or pay in lieu thereof in the case of temporary employees in the first month of their service.
" Regulation 39 prescribes various penalties that can be awarded and termination of service is one of them.
Now the only question that arises for consideration in this case is whether the termination of the petitioner 's services is simply one as per the Regulation 19(3) or in the nature of a camouflage and, therefore, amounts to punishment as contended by the petitioner.
In Anoop Jaiswal vs Government of India & Anr., p[1984] 2 SCR 453, it is held as under: "Where the form of the order is merely a camouflage for an order of dismissal for misconduct it is always open to the Court before which the order is challenged to go behind the form and ascertain the true character of the order.
If the Court holds that the order though in the form is merely a determination of employment is in reality a clock for an order of punishment, the Court would not be debarred, merely because of the form of the order, in giving effect to the rights conferred by law upon the employee.
" In Nepal Singh vs State of U.P. & Ors., [1985] 2 SCR it is held as under: 706 "Where allegations of misconduct are levelled against a Government Servant, and it is a case where the provisions of Article 31(2) of the Constitution should be applied, it is not open to the competent authority to take the view that holding the enquiry contemplated by the clause would be a bother or a nuisance and that therefore it is entitled to avoid the mandate of that provision and resort to the guise of an ex facie innocuous termination order.
The Court will view with great disfavour any attempt to circumvent the constitutional provision of article 311(2) in a case where that provision comes into play." In Jarnail Singh & Ors., etc.
vs State of Punjab & Ors.
, ; it is, held thus: "When an allegation is made by the employee assailing the order of termination as one based on misconduct though conched in innocuous terms, it is incumbent on the court to lift the veil and to see the real circumstances as well as the basis and foundation of the order complained of.
In other words, the Court, in such a case, will lift the veil and will see whether the order was made on the ground of misconduct, inefficiency or not." From the above decisions it can be seen that it is well settled that in a case of an order of termination even that of a temporary employee the Court has to see whether the order was made on the ground of misconduct if such a complaint was made and in that process the Court would examine the real circumstances as well as the basis and foundation of the order complained of and if the Court is satisfied that the termination of services is not so innocuous as claimed to be and if the circumstances further disclose that it is only a camouflage with a view to avoided an enquiry as warranted by Article 311(2) of the Constitution, then such a termination is liable to be quashed.
In the above mentioned decisions, the impugned termination order was accordingly quashed.
It is not in dispute that a regular chargesheet was served on the petitioner, as mentioned above, on 21st August, 1981 and to the said chargesheet a list of documents also was appended on the basis of which the articles of charge were framed.
The petitioner replied to these charges on 7th September, 1981.
Without reference to any of the charges or the reply the order of termination was passed on 8th 707 January, 1982 as already mentioned.
In the counter affidavit at more than one place it is admitted about the framing of the charges etc.
regarding the news item which refers to the information given out by the petitioner.
It is stated in the counter affidavit that services of the petitioner were terminated as a probationer and not on the basis of the enquiry report which came after the services of the petitioner had been terminated.
It can therefore be seen that an enquiry, in fact, was contemplated and was held but the report came into light after termination of the services of the petitioner.
It is also submitted on behalf of the petitioner that the audit report would show many irregularities as pointed out by the petitioner and that the petitioner acted honestly in pointing out the irregularities.
It is not necessary for us to go into this question.
Having gone through the various records and also the admissions made in he counter affidavit, we are satisfied that the termination order, though appears to be innocuous, was only intended to punish the petitioner for the misconduct, in respect of the allegations which are mentioned in the charges that were served on him.
After serving the chargesheet, as a matter of fact, the enquiry was conducted.
But before the conclusion of the enquiry the termination order was passed.
Therefore it is not difficult to see that the form of the termination order is only a cloak for an order of punishment.
In this context, the learned counsel also questioned the termination order from another angle.
In that order it is mentioned that the services of the petitioner are no longer required, therefore they are terminated.
But from the record it is clear that juniors to the petitioner are retained and they are continuing in service.
In the affidavit it is clearly mentioned that juniors whose names are given there are retained in service in violation of Article 14 and 16 of the Constitution.
In the counter affidavit only a vague reply is given simply stating that the averments made by the petitioner are not correct.
In K.C. Joshi vs Union of India and Ors., It is observed that 'If it is discharge simpliciter, it would be violative of Article 16, because a number of store keepers junior to the appellant are shown to have been retained in the service '.
Likewise in Jarnail Singh 's case it was observed as under: "In the instant case, ad hoc services of the appellants have been arbitrarily terminated as no longer required while the respondents have retained other surveyors who are juniors to the appellants.
Therefore, on this ground also, the impugned order of termination of the services of the appellants are illegal and bad being in contravention of the 708 fundamental rights guarantee under Article 14 and 16 of the Constitution of India." After a careful perusal of the record we are satisfied that the juniors to the petitioners are retained.
Therefore on this ground also the termination order is liable to be quashed.
Admittedly the petitioner has been practising as a lawyer ever since his services were terminated.
In the rejoinder filed by him he merely stated that he was not earning much in that profession and that he has incurred debts.
The learned counsel for the Corporation, however, submitted that since the petitioner was admittedly practising as a lawyer the question of granting him back wages is any event does not arise and that even otherwise there cannot be a roving enquiry to the earning he has made as a lawyer at this distance of time.
The petitioner, however, at this juncture filed a further affidavit that his total income from 1985 onwards uptilnow was only Rs.15,550 and that he has not received any other income during all these years.
It is also submitted on his behalf that in similar circumstances this Court awarded back wages even in a case of an employee who practised as a lawyer from the date of dismissal till his reinstatement.
In section M. Saiyad vs Baroda Municipal Corporation, the employee was directed to be reinstated in service by the labour court.
Then ultimately on the question of back wages it was urged before this Court that though the appellant was practising as a lawyer after enrolment during that period still he was entitled for back wages.
This Court accepted this plea and observed as under: "The appellant seeks back wages for the period December 12, 1969 to October 26, 1976.
This period according to the respondent has to be divided in two parts; (1) from December 12, 1969 to Jan. 20, 1972 when the appellant was enrolled as an advocate, and (2) for the period Jan. 21, 1976 to October 26, 1976 from which date he has already been awarded back wages, it was submitted on behalf of the respondent that the appellant himself has admitted that since his being enrolled as an advocate he was earning Rs. 150 per month which aspect must be borne in mind while considering the submission of the appellant for the award of back wages.
" Partly accepting this plea this Court ultimately observed that the appellant therein must have atleast stated earning after a lapse of one 709 year from the date on which he was enrolled as an advocate.
Ultimately this court directed that: "We, accordingly, allow this appeal and set aside the decision of the High Court refusing the back wages for the period December 12, 1969 to October 26, 1976 and directed that the appellant shall be entitled to back wages including salary and allowances and other benefits to which he would be entitled as if the has continued the service.
While making the payment of back wages as per this order the respondent is entitled to deduct the amount of Rs. 150 p.m. from January 20, 1973 to October 26, 1976 from the amount which becomes payable to the appellant.
The respondent must compute the amount payable as herein directed and pay what becomes payable to the appellant within a period of two months from today.
" It can therefore be seen that this Court did not refuse to grant back wages on the simple ground that the employee was a practicing lawyer during the relevant period.
But on the other hand it took into account the probable income and after deducting the same the balance of back wages was directed to be computed.
In the instant case in the affidavit filed by the petitioner it is stated that he was practising as an income tax advocate ever since his enrolment in October, 1982.
But, however, he asserted that he got his first brief in the year 1985.
These averments are contradicted by the other side.
Under these circumstance we cannot make a roving enquiry nor would it be possible for the corporation to unearth the income which the petitioner would have derived as a practising advocate.
There are many imponderables and conjectures too.
Under these circumstances we asked both the counsels to suggest a solution.
We have heard both the sides on this aspect elaborately.
Shri P. P. Rao, learned counsel for the petitioner submitted that if the relevant period is to be treated as one of suspension pending enquiry the petitioner would have been entitled to the subsistence allowance till his reinstatement.
That atleast should be the criteria in granting the back wages in a situation like this.
We think this is a reasonable and fair suggestion.
In the result the termination order is quashed and consequently the petitioner shall be reinstated in service.
However, he shall be entitled to the full back wages upto the date of his enrolment as a 710 lawyer which was in the month of October, 1982.
From the date of his enrolment upto the date of reinstatement he shall be entitled to the back wages at the rate of half of the subsistence allowance per month and the total amount shall be computed on that basis.
Out of that the income of Rs.15,550 admittedly earned by him as a practising lawyer shall be deducted and the balance amount shall be paid to the petitioner.
The amount so paid to him shall for the purpose of income tax, be spread over as if derived during those financial years from the date of his dismissal till the date of reinstatement.
However, we would like to make it clear that it is open to the Corporation to proceed with the disciplinary enquiry if it so chooses.
The special leave petition is accordingly disposed of.
In the circumstances of the case there will be no order as to costs.
N.P.V SLP disposed of.
| A charge sheet was issued to the petitioner, a directly recruited Accountant in the respondent Corporation alleging that while working in the Transport Wing of the Corporation, he facilitated and abetted the embezzlement of Rs.100 by not ensuring that the amount found was in excess, and thus he failed to serve the Corporation honestly and faithfully, that he made some fictitious entries in the Cash Book and that he made certain information public without the permission of the Managing Director.
The petitioner replied that all the charges were fake and false.
the leave sanctioned to the petitioner earlier for prosecuting legal study was canceled and the petitioner challenged the same in the High Court but the case was adjourned.
Meanwhile, the petitioner 's services were terminated on the ground that he was no longer required and that one month 's pay in lieu of notice would be paid in terms and conditions of his appointment letter and provisions of Staff Regulations of the Corporation.
The petitioner challenged the same before the High Court, but the Writ Petition was dismissed in limine.
702 In the appeal before this Court it was contended that the termination was only a camouflage and that though the petitioner was still a temporary servant, yet the termination amounted to punishment, because of the manner in which it was passed and the background behind it.
It was also contended that though the termination order stated that the petitioner 's services were no longer required, his juniors were retained and were continuing in service, in violation of Articles 14 and 16 of the Constitution.
Disposing of the Special Leave Petition, this Court HELD: 1.1 In a case of an order of termination, even that of a temporary employee, the Court has to see whether the order was made on the ground of misconduct if such a complaint was made and in that process the Court would examine the real circumstances, as well as the basis and foundation of the order complained of and if the Court is satisfied that the termination of services is not so innocuous as claimed to be and if the circumstances further disclose that it is only a camouflage with a view to avoid an enquiry as warranted by Article 311(2) of the Constitution, then such a termination is liable to be quashed.
[706E F] Annop Jaiswal vs Government of India & Anr., ; ; Nepal Singh vs State of U.P. & Ors., ; and Jarnail Singh & Ors.
vs State of Punjab & Ors.
, ; , relied on. 1.2 In the instant case, the termination order, though appears to be innocuous was only intended to punish the petitioner for the misconduct, in respect of the allegations which are mentioned in the charges that were served on him.
As a matter of fact, the enquiry was conducted, but before the conclusion of the enquiry, the termination order was passed.
Therefore, it is not difficult to see that the form of the termination order is only a clock for an order of punishment.
[707C D] 1.3 Besides, the termination is also liable to be quashed on the ground that it is violative of Articles 14 and 16 of the Constitution, as it is clear from the records that while the petitioner 's juniors are retained in service, the petitioner 's services are terminated as no longer required.
[708F, 709A B] Jarnail Singh & Ors.
vs State of Punjab & Ors., [1986]2 SCR 1022 and K.C. Joshi vs Union of India and Ors., [1985]3 SCR 869, relied on.
703 1.4 In the circumstances, the termination order is quashed and the petitioner is directed to be reinstated in service.
However, it shall be open to the respondent Corporation to proceed with the disciplinary enquiry if it so chooses.
[709H] 1.5 As regards the backwages, admittedly the petitioner has been practising as a lawyer since his termination.
But this Court has not refused to grant background that the employee has been practicing as lawyer during the relevant period, but has taken into consideration the probable income that would have been earned him, while granting backwages.
However, a roving enquiry cannot be made by this Court nor would it be possible for the respondent Corporation to unearth the income which the petitioner would have derived as practising advocate.
Undoubtedly, the petitioner would have been entitled to subsistence allowance till his reinstatement, even if the relevant period is treated as one of suspension pending enquiry.
Therefore, the petitioner shall be entitled to the full back wages upto the date of his enrollment as a lawyer and from that date upto the date of reinstatement at the rate of half of the subsistence allowance per month.
Out of the total income, the income admittedly earned by him as a practising lawyer shall be deducted and the balance paid to the petitioner.
The amount so paid shall, for the purpose of income tax, be spread over as if derived during those financial years from the date of his dismissal till date of reinstatement.
[708B, 709D G, 710A B] S.M. Saiyad vs Baroda Municipal Corporation, relied on.
|
N: Criminal Appeal No. 194 of 1979.
From the Judgment and Order dated 4.7.1978 of the Andhra Pradesh High Court in Crl.
A. No. 576 of 1977.
K. Madhava Reddy, and G. Narasimhulu for the Appellants.
B. Parthasarthi for the Respondent.
The Judgment of the Court was delivered by FATHIMA BEEVI, J.
The appellants are Bollavaram Pedda Narsi Reddy (A 1), Bollavaram Chinna Narsi Reddy (A 2), Kavalakuntla Rama Subba Reddy (A 3), Duddula Venkata Subba Reddy (A 5) and Mala Prakasam (A 6) before this Court.
These appellants along with accused No. 4 Duddela Ramana Reddy, were tried for the 726 murder of one Chandrasekhara Reddy on the night of August 15, 1974.
The trial court acquitted all the accused.
On appeal by the State, the High Court convicted these appellants under sections 302 read with 149, I.P.C., and sentenced them to undergo imprisonment for life and also imposed short term imprisonment for minor offence to run concurrently.
Chandrasekhara Reddy, the deceased, and the accused were residents of village Jeereddy Kotharpallai.
In 1970, Accused No. 3 was elected as a Sarpanch of the village with active support of the deceased.
However, differences arose between them as they supported rival groups in the election in the neighbouring village.
10 days before the incident, the deceased is stated to have openly declared that he would get Accused 3 removed by moving a no confidence motion.
This according to the prosecution is the motive for the crime.
On the date of occurrence, Chandrasekhara Reddy met PW 1 (Guddeti Balaveera Reddy) and PW 2 (Donthireddi Subba Reddy) in the hotel of Subbamma (PW 8) in the neighbouring village Proddatur.
The deceased along with the two witnesses attended a cinema show at Anwar Talkies.
They came out of the theatre 10 minutes earlier around 9.30 P.M. and were walking along the road towards the bus stand.
When they reached near the old telephone exchange about 50 metres away from Anwar Talkies, there was an explosion of crackers.
The accused persons suddenly surrounded the deceased.
They were armed with daggers.
They attacked him after one of them pushing aside PW 1.
PW 1 fell on the barbed wire fence of the transformer and received scratches on his thigh.
The deceased was stabbed indiscriminately and simultaneously by all the assailants who retreated in two different directions and the deceased died on the spot instantaneously.
Besides PWs 1 and 2, who witnessed the occurrence, PW 3 Donthireddi Narayana Reddy, and PW 4 Poreddi Subba Reddy.
had also seen the attack.
These witnesses were passing along the road.
PW 5, Mekkamalla Balireddi, reached the scene attracted by the crowd and had seen the accused persons running away.
The street light besides the electric light at a petrol bunk and the light in the bunk on the side of the road were burning at the time of the occurrence.
The assailants had been identified by the witnesses in that light.
The assailants were strangers to the PWs 1 and 2 but A 2, 3 and 5 were known to PWs 3 and 4 and 5 who had also acquaintance with the deceased PW 5 informed PW 7 (Polagiri Siva Reddy), the brother of the deceased, about the occurrence, while PWs 3 and 4 left the place after seeing the deceased lying at the scene.
This in short is the prosecution case.
727 The Town Police Station is situated about two furlongs away from the place of occurrence.
PW 1 along with PW 2 went to the police station and lodged the first information report.
A crime ws registered against six unidentified persons.
PW 16 (Sri section Khasim Sab, Sub Inspector of Police), recorded the statement exhibit P 1.
The Circle Inspector visited the scene.
PW 2 was referred to the Medical Officer at 4 A.M.
The inquest on the dead body was held on the next morning.
The post mortem examination revealed that deceased had sustained 54 injuries all except one being incised wounds.
At the time of the inquest, the statements of PWs 2 and 7 were recorded.
PW 7 suspected the involvement of Accused 2, 3 and 5.
On 17.8.1974, the police dogs were pressed into service.
It is stated that the sniffer went to the village of the deceased and thereafter to the houses of Accused 2 and 3.
Statements of PWs 3, 4 and 5 were recorded on 18.8.1974.
Accused No. 6 was arrested on 25.9.1974.
A test identification parade was conducted by PW 9 (Sri G.V. Raghavaiah, Judicial Second Class Magistrate) on 31.10.1974.
A 6 was identified by PWs 1, 2, 3 and 4 at the parade as recorded in exhibit P 2 proceeding.
The other accused persons were arrested on 1.11.1974.
PW 10 (Sri D. Sreeramulu, Judicial Second Class Magistrate), conducted the test identification parade in which as per exhibit P 3 proceeding, PWs 1,and 2 identified accused 1, 2, 3 and 5.
The investigation was completed and the charge was laid against the six persons.
The learned sessions judge analysed the prosecution evidence meticulously and discarded the testimony of PWs 1 to 5.
He considered PWs 3, 4 and 5 as chance witnesses, found their conduct in not disclosing the involvement of the accused persons known to them until their statements were recorded on 18.8.1974 as suspicious and strange when they had acquaintance with the deceased.
PWs 3 and 4 when examined by PWs 9 and 10 for the purpose of test identification parade had given statement which vary with their earlier statement and their evidence before court was contradictory to their prior statements.
It was, doubtful whether they could have seen the occurrence or identified any of the assailants.
Their evidence was, therefore, rejected as untrustworthy.
The testimony of the two eye witnesses PWs 1 and 2 who claimed that they were in the company of the deceased at the time of the occurrence was also not accepted by the trial court for various reasons.
They were strangers to the accused persons.
Their evidence regarding the identification of the assailants as the accused did not impress the trial court which pointed out that the prosecution had no consistent case regarding the source of light at the scene that these witnesses even if present at the scene when the assailants mounted the 728 attack on the deceased could not have remained there to observe and memorize the features of the assailants and identify them after a long lapse of time.
PW 1 rushed to the police station in utter confusion even without his dhoti.
The witnesses were frightened and ran away.
In this situation in the meagre light available, they could not have identified the assailants as the accused.
The learned judge on a consideration of the medical evidence was also of the view that the occurrence could not have happened at the time mentioned by these witnesses and, said there were several suspicious features which render their version doubtful.
The learned judge also pointed out that the identification parade was perfunctory and was of no assistance to the prosecution.
The learned sessions judge analysed the entire evidence and considered it unsafe to accept the testimony of the two witnesses to record a conviction.
In that view of the matter, he acquitted all the accused persons.
The High Court considered the reasoning as perverse and on a reappraisal of the evidence, took a contrary view.
In the opinion of the High Court, PWs 1 to 4 are truthful witnesses and their evidence could be accepted.
In its view, there was no serious infirmity in the prosecution evidence.
Accordingly, the High Court accepted the testimony of PWs 1 and 2, corroborated by the evidence of test identification parade and the testimony of PWs 3 and 4 to find the appellants guilty.
Since accused No.4 was not identified by PWs 1 to 4, he was given the benefit of doubt and his acquittal was confirmed.
The learned counsel for the appellants has taken us through the entire evidence in the case.
The appeal is one under Section 2 of the .
It is, no doubt, open to this Court to re examine the evidence for the purpose of satisfying itself whether the High Court was justified in reversing the order of acquittal in the facts and circumstances of the case.
It is well settled proposition of law that in an appeal against acquittal, the Appellate Court is empowered to evaluate the evidence and arrive at its own conclusion.
It is equally settled law that where the view taken by the trial court or an appreciation of the evidence is also a plausible view, the Appellate Court shall be slow to interfere with it even when a different view is possible on a reappraisal of the evidence.
The learned counsel for the appellants pointed out that the High Court in reversing the order of acquittal in this case had departed from these established principles and had thus erred grievously in convicting the appellants.
It was submitted that the conviction recorded by the High Court essentially rests on the testimony of PWs 1 and 2.
When the 729 serious infirmities in the evidence of the other two eye witnesses PWs 3 and 4 had been brought to the notice of the High Court, it has eschewed that evidence and has placed reliance only on the testimony of PWs 1 and 2 in arriving at the conclusion that the appellants are guilty of the offence.
The appellants ' learned counsel, therefore, contended that if the view taken by the trial court on the testimony of PWs 1 and 2 cannot be characterised as perverse or wholly unreasonable, there is no justification for the High Court to accept that evidence as the basis of a conviction even if in its opinion the evidence of these two witnesses could have been relied on.
The main plank of the argument of the learned counsel is that the witnesses being strangers to the assailants when there are circumstances to show that they did not have the opportunity to identify the assailants, their evidence involving these appellants is not free from doubt and, therefore the trial court had taken the reasonable view that it is unsafe for the court to accept that evidence to convict the accused persons.
We see considerable force in the contention of the learned counsel for the appellants.
The evidence given by the witnesses before the court is the substantive evidence.
In a case where the witness is a stranger to the accused and he identifies the accused person before the court for the first time, the court will not ordinarily accept that identification as conclusive.
It is to lend assurance to the testimony of the witnesses that evidence in the form of an earlier identification is tendered.
If the accused persons are got identified by the witness soon after their arrest and such identification does not suffer from any infirmity that circumstance lends corroboration to the evidence given by the witness before the court.
But in a case where the evidence before the court is itself shaky, the identification before the magistrate would be of no assistance to the prosecution In the present case, the appellants are admittedly persons with whom the two witnesses had no previous acquaintance.
The occurrence happened on a dark night.
When the crime was committed during the hours of darkness and the assailants are utter strangers to the witnesses, the identification of the accused persons assumes great importance.
The prevailing light is a matter of crucial significance.
The necessity to have the suspects identified by the witnesses soonafter their arrest also arises.
According to the prosecution, the attack on the deceased was sudden and simultaneous and the assailants slipped away in no time.
Both PWs 1 and 2 had deposed that they were attracted by the explosion and when they turned back, the assailants surrounded the deceased and inflicted the stab injuries.
PW 1 was pushed aside.
730 He fell on the fence of the barbed wire of the transformer, received scratches.
His dhoti stuck to the wire.
He left it there and ran to the police station in utter confusion.
His P 1 does not disclose that PW 2 accompanied him, though PWs 1 and 2 stated before court that they went together.
The possibility of the companions of the deceased having been scattered and gone in different directions cannot be ruled out.
Even in Ex.
P 1 statement what PW 1 said is that six persons attacked the deceased; they were villagers; they were wearing dhoti and kurta.
One was about 45 years of age and of dark complexion, another was 30 years of age lean and yet another was also a lean person.
These may be the vague impression the witness had on seeing the assailants suddenly.
It is not however in evidence that the description given by PW 1 in exhibit p 1 fits in with the description of any one of the appellants.
When the magistrates recorded the statements of the witnesses, they could not give any characteristic feature of any one of the assailants.
The entire case depends on the identification of the appellants and the identification is founded solely on the test identification parades.
Therefore, in the absence of cogent evidence that PWs 1 and 2 by reason of the visibility of the light at the place of occurrence and proximity to the assailants had a clear vision of the action of each one of the accused persons in order that their features could get impressed in their mind to enable them to recollect the same and identify the assailants even after a long lapse of time, it would be hazardous to draw the inference that the appellants are the real assailants.
There is no whisper in exhibit P 1 that there was some source of light at the scene.
The omission cannot be ignored as insignificant.
When the Investigating Officer has visited the scene, he made reference to the street lights, petrol bunk light etc.
Whether the street lights and the petrol bunk/ light had been burning at the time of the occurence and the spot where the incidence happened was so located as to receive the light emanating from these sources are required to be made out by the prosecution.
When this significant fact is left out in the earliest record, the improvement in the course of the investigation and trial could be of no avail.
The fact that there had been no proof regarding the identity of the assailants until 18.8.1974 would suggest that even persons who collected at the scene in the course of the incidence or soon thereafter were not in a position to identify any one of the assailants.
Since the Investigating Officer arrived at the scene the same night and the inquest ws held in the next morning, it would have been possible for the investigating agency to collect information regarding the identity of the assailants earlier to 18.8.1974, if they had been really identified by any one of the witnesses examined in the case.
When no natural 731 light was available and the street light was at a distance it is unlikely that the eye witnesses by momentary glance of the assailants who surrounded the victim had a lasting impression and the chance of identifying the assailants without mistake.
The credibility of the evidence relating to the identification depends largely on the opportunity the witness had to observe the assailants when the crime was committed and memorize the impression.
This aspect of the matter had been stressed by the trial court in appreciating the evidence of PWs 1 and 2.
The High Court has ignored the inherent infirmity and failed to deal effectively with every important circumstance in the evidence which weighed with the trial court to disbelieve the prosecution case.
We have noticed that the magistrates in conducting the test identification parade have committed a grave error.
In the case of Accused No.6 PW 9 had mixed up along with PWs 1 and 2 a person, Gulati who knew the accused.
Similarly, in the identification of the other accused, PW 4 who claimed acquaintance with Accused Nos.2, 3 and 5 was mixed up with PWs 1 and 2.
When persons who have already known the accused persons to be identified are mixed up with the witnesses, the test identification is clearly vitiated and is futile.
Value of identification parade depends on the effectiveness and the precautions taken against the identifying witness having and opportunity of seeing the persons to be identified before they are paraded with others and also against the identifying witness being provided by the investigating authority with other unfair aid or assistance so as to facilitate the identification of the accused concerned.
Therefore, the evidence of the earlier identification in this case is unacceptable.
The testimony of PWs 1 and 2 before court is also unsafe to be acted upon.
Thus we do not consider that the view taken by the learned sessions judge on the whole was erroneous.
The overall view of the evidence taken by the learned sessions judge is reasonable and plausible, while it is true that some of the reasons given if taken individually do not appear to be substantial.
Even when two evenly balanced views of the evidence are possible one must necessarily concede the existence of a reasonable doubt.
Thus on a careful and anxious consideration of the evidence in the light of the reasoning adopted by the trial court as well as the High Court, we are of the opinion that the High Court was not justified in interfering with the order of acquittal when the identity and involvement of the appellants had not been established beyond reasonable doubt.
We accordingly allow the appeal, set aside the conviction and sentence and maintain the order of acquittal.
The bail bonds of the appellants shall stand cancelled.
TNA Appeal allowed 731 light was available and the street light was distance it is unlikely that the eye witnesses by monetary glance of the assailants who surrounded the victim had a lasting impression and the chance of identifying the assailants without mistake.
The credibility of the evidence relating to the identification depends largely on the opportunity the witness had to observe the assailants when the crime was committed and memorize the impression.
This aspect of the matter had been stressed by the trial court in appreciating the evidence of PWs 1 and 2.
The High Court has ignored the inherent infirmity and failed to deal effectively with the important circumstance in the evidence which weighted with the trial court to disbelieve the prosecution case.
We have noticed that the magistrates in conducting the test identification parade have committed a grave error.
In the case of Accused No. 6 PW 9 had mixed up along with PWs 1 and 2 a person, Gulati who knew the accused.
Similarly, in the identification of the other accused, PW 4 who claimed acquaintance with Accused Nos. 2, 3 and 5 was mixed up with PWs 1 and 2.
When persons who have already known the accused persons to be identified are mixed up with the witnesses, the test identification is clearly vitiated and is futile.
Value of identification parade depends on the the effectiveness and the precautions taken against the identifying witness having an opportunity of seeing the persons to be identified before they are paraded with others and also against the identifying witness being provided by the investigating authority with other unfair aid or assistance so as to facilitate the identification of the accused concerned.
Therefore, the evidence of the earlier identification in this case is unacceptable.
The testimony of PWs 1 and 2 before court is also unsafe to be acted upon.
Thus we do not consider that the view taken by the learned sessions judge on the whole was erroneous.
The overall view of the evidence taken by the learned sessions judge is reasonable and plausible, while it is true that some of the reasons given if taken individually do not appear to be substantial.
Even when two evenly balanced views of the evidence are possible one must necessarily concede the existence of a reasonable doubt.
Thus on a careful and anxious consideration of the evidence in the light of the reasoning adopted by the trial court as well as the High Court, we are of the opinion that the High Court was not justified in interfering with the order of acquittal when the identity and involvement of the appellants had not been established beyond reasonable doubt.
We accordingly allow the appeal, set aside the conviction and sentence and maintain the order or acquittal.
The bail bonds of the appellants shall stand cancelled.
TNA Appeal allowed.
| The appellants (A 1 to A 3 and A 5 6), along with Co accused (A 4), were prosecuted under sections 302/149 of the Indian Penal Code.
Test identification parades were conducted by the Magistrates in which A 6 was identified by PWs 1, 2, 3 and 4 and A 1, 2,3,and 5 were identified by PWs 1 and 2.
The trial court held that the identification parade was perfunctory and was of no assistance to the prosecution.
It also rejected the testimony of PWs 1 to 5 by holding that the evidence of PWs 3, 4, and 5 was untrust worthy and that it was unsafe to accept the testimony of other two eye witnesses, PWs 1 and 2 for recording a conviction.
Accordingly the trial court acquitted all the accused persons.
Against the order of acquittal, the State preferred an appeal before the High Court.
The High Court accepted the testimony of PWs 1 and 2, corroborated by the evidence of test identification parade and the testimony of PWs 3 and 4 to find the appellants guilty.
Accordingly the High Court reversed the order of acquittal and convicted the appellants.
Since A 4 was not identified by the PWs 1 to 4, he was given the benefit of doubt and the High Court confirmed his acquittal.
724 In appeal to this court under section 2 of the , it was contended on behalf of the appellants that PWs (1 and 2) were strangers to the assailants and in the circumstances of the case they did not have the opportunity to identify the assailants and consequently their testimony was not free from doubt; the trial court was right in rejecting the testimony of these witnesses but the High Court erred in reversing the order of acquittal and convicting the appellants by accepting the testimony of these witnesses.
Allowing the appeal and setting aside the order of conviction and sentence, this Court, HELD: 1.It is open to Supreme Court to re examine the evidence for the purpose of satisfying itself whether the High Court was justified in reversing the order of acquittal in the facts and circumstances of the case.
In an appeal against acquittal, the Appellate Court is empowered to evaluate the evidence and arrive at its own conclusion.
But where the view taken by the trial court on an appreciation of the evidence is also a plausible view, the Appellate Court shall be slow to interfere with it even when a different view is possible on a reappraisal of the evidence.
[728F G] 1.1 Even when two evenly balanced views of the evidence are possible one must necessarily concede the existence of a reasonable doubt.
[731F] 2.The evidence given by the witnesses before the Court is the substantive evidence.
In a case where the witness is a stranger to the accused and he identifies the accused person before the court for the first time, the court will not ordinarily accept that identification as conclusive.
It is to lend assurance to the testimony of the witnesses that evidence in the form of an earlier identification is tendered.
If the accused persons are got identified by the witness soon after their arrest and such identification does not suffer from any infirmity that circumstance lends corroboration to the evidence give by the witness before the Court.
But in a case where the evidence before the court is itself shaky, the identification before the magistrate would be of no assistance to the prosecution.
[729D E] 2.1 The credibility of the evidence relating to the identification depends largely on the opportunity the witness had to observe the assailants when the crime was committed and memorize the impression.
725 In the instant case at the scene of the crime when no natural light was available and the street light was at a distance it is unlikely that the eye witnesses by momentary glance of the assailants who surrounded the victim had a lasting impression and the chance of identifying the assailants without mistake.
Therefore the testimony of PWs 1 and 2 is unsafe to be acted upon.
The overall view of the evidence taken by the Trial Court is reasonable and plausible.
The High Court was not justified in interfering with the order of acquittal when the identity and involvement of the appellant was not established beyond reasonable doubt.[731A B, E F G, 730H] 3.
Value of identification parade depends on the effectiveness and the precautions taken against the identifying witness having an opportunity of seeing the persons to be identified before they are paraded with others and also against the identifying witness being provided by the investigating authority with other unfair aid or assistance so as to facilitate the identification of the accused concerned.
When persons who have already known the accused persons to be identified are mixed up with the witnesses the test identification is clearly vitiated and is futile.
In the instant case the magistrates in conducting the test identification parade have committed a grave error because in the case of Accused No. 6 he had mixed up along with PWs 1 and 2 a person known to the accused.
Similarly, in the identification of the other accused, PW 4 who claimed acquitance with Accused Nos. 2, 3 and 5 was mixed up with PWs 1 and 2.
[731C E]
|
ivil Appeal Nos.
2567 70 of 1985.
From the Judgment and Order dated 3.4.1985 of the Hyderabad High Court in Writ Petition No. 9403 of 1984.
Kapil Sibal, Additional Solicitor General, G.L. Sanghi, Anil B. Diwan, G. Ramaswamy, P.A. Choudhary, Kailash Vasudev, Naunit Lal, M.J. Paul, C.S. Vaidyanathan, U.K. Khaitan, Praveen Kumar, section Murlidhar, Vineet Kumar, Vinod Bhagat and Mukul Mudgal for the Appellants.
Shanti Bhushan, V.R. Reddy, Rajendra Choudhary, section Thananjayan, K. Ram Kumar for the Respondents.
V.B. Sharya for the Intervenor.
The Judgement of the Court was delivered by VERMA, J.
These appeals by special leave are by several industrial concerns against the Andhra Pradesh State Electricity Board (hereinafter called 'the Board ') challenging the common judgment of the Andhra Pradesh High Court in writ petitions filed by these concerns challenging the revision of the electricity tariffs by the Board by its proceedings contained in B.P. Ms. No. 1014 (Commercial) dated 649 13.12.1983 which came in to force on 15.1.1984.
Prior to this revision, the tariffs were governed by B.P. Ms. No. 418 (Commercial) dated 12.1.1981.
On 13.12.1983, two separate orders were issued by the Board revising the various tariffs.
By one of them, namely, B.P. Ms. No. 1014, the tariffs for various categories of consumers including H.T. categories I and II were revised.
By the other order of the same date, namely, Memo No. DE/COML/IV/2250/83/I, the tariffs for highly power intensive industries were also revised upwards.
Out of the appellants it was applicable to five units, namely, (1) Nav Bharat Ferro Alloys Ltd., (2) Andhra Sugars Ltd., (3) Ferro Alloys Corporation Ltd., (4) Grindwell Norton Ltd., and (5) A.P. Carbides Ltd. This upward revision of tariffs made by the Board by its two orders dated 13.12.1983 which were made effective from 15.1.1984, was challenged by the appellants in writ petitions filed in the Andhra Pradesh High Court on various grounds.
The High court rejected all the grounds and dismissed the writ petitions by its common judgment now reported in A.I.R. 1985 A.P. 299.
These appeals by special leave are against the High Court Judgment.
The appellants are all H.T. power consumers of one category or other.
The tariffs consist of three parts: Part A, Part B and Part C. Part A provides for H.T. tariffs; Part B for L.T. supply; and Part C provides, inter alia, for miscellaneous and general charges.
H.T. consumers in Part A are broadly classified into three categories: H. T. Category I (Industrial); H.T. Category II (Non Industrial); and H.T. Category III comprising of power intensive consumers and some others.
The Board retained the power to decide in accordance with the guidelines as to which industries were power intensive and which were not.
This was the position in the tariffs of 1975.
Subsequently, the Board began to deal with the power intensive industries by notifying tariffs for them separately from time to time.
In effect, there were four classes of consumers availing H.T. supply; (1) H.T. consumers falling under H.T. Category I (Industrial); (2) H.T. consumers falling under H.T. Category II (Non Industrial); (3) H.T. consumers falling under the category 'power intensive industries '; and (4) H.T. consumers availing supply of electricity for irrigation and agricultural purposes included in Part B.
The tariffs for these different categories of H.T. consumers were enhanced from time to time.
For H.T. Category I (Industrial), it was 21 paise in 1975, increased to 30 paise in 1979, 33 paise in 1980, 40 paise in 1981 and 48 paise in 1984.
Likewise, there was corresponding increase in the energy rates for H.T. Category II (Non Industrial), being 28 paise, 37 paise, 40 paise, 47 paise and 56 paise.
The tariffs for power intensive industries were, however, 650 increased by separate notifications issued by the Board from time to time.
It was 11 paise prior to 1975, raised to 12.2 paise in 1977, 16 paise in 1978, 18.5 paise in September 1979, 21 paise in November 1979, 25 paise in 1980, 32 paise in 1981 and 45 paise in 1984.
The H.T. consumers grouped in Part B were required to pay 15 paise under the 1975 tariffs and 16 paise thereafter.
Besides the energy charges as stated above, the H.T. consumers were also required to pay at different rates effective from 1.9.1982 an additional charge levied as 'fuel cost adjustment charges '.
The H.T. consumers were also required to pay some amount as 'voltage surcharge ' in accordance with the terms of the agreement entered into by the individual consumers with the Board.
The comparison of the aforesaid tariffs shows that the tariffs for power intensive industries to begin with were much less than the tariffs for H.T. Category I (Industrial) and H.T. Category II (Non Industrial).
In course of time, the concession in tariffs for the power intensive industries was progressively withdrawn.
The concessions were, however, continued in respect of consumers availing H.T. or L.T. supply for purposes of irrigation and agriculture or L.T. supply for domestic, cottage industries, public lighting and small poultry farming units.
It is the admitted position that the power generation in the State of Andhra Pradesh is both hydro and thermal, each source contributing almost equally to the total power generation in the State.
The H.T. categories have been consuming more than one half of the total power generated in the State against the much larger number of individual L.T. consumers availing the remaining power.
The main attacks to the upward revision of the tariffs for H.T. consumers in the writ petitions before the High Court were: (1) The Board, as a public utility undertaking, is expected to function in the most efficient and economical manner; (2) It cannot plan its activities with a view to drive any sizeable profits on its undertaking except in accordance with Section 59 of the (hereinafter referred to as 'the Supply Act '); (3) The Board Could not generate a surplus in excess of that specified under Section 59 of the Supply Act which it had been doing; (4) The Board was preparing its financial statement incorrectly in a manner contray to section 59 of the Supply Act by improperly taking into account expenses chargeable to capital by showing such expenses as charged to revenues; (5) The steep upward revision to tariffs from 1980 made by the Board is invalid, being arbitrary and in contravention of Section 49 and 59 of the Supply Act; and (6) There was no justification for the Board to have revised the tariffs either in 1981 or in 1984 or to have levied any 651 fuel surcharge in terms of Section 49 and 59 of the Supply Act.
It was also contended that the tariffs revision was made without prior consultation with the State Electricity Consultative Council as required by Section 16(5) of the Supply Act which also rendered it invalid.
Prior to 30.7.1982, it was usual for the Board to take into account various escalation charges such as pay revisions and increases in the cost of fuel and revise its tariffs from time to time.
This was done in 1975 and 1981.
Thereafter, the Board took the view that to avoid making frequent tariff revisions necessitated by frequent escalations in the cost of fuels like coal and diesel oil, the formula known as "fuel cost adjustment" be evolved.
Accordingly, the Board in its proceedings contained in B.P. Ms. No. 589 dated 30.7.1982, set out the formula known as "fuel cost adjustment".
This formula was introduced as condition No. 11 in H.T. tariffs Part A.
Ever since September 1982, all categories of H.T. consumers in Part A including the power intensive consumers are subject to this condition.
Immediately after 30.7.1982, the fuel cost adjustment was fixed as 2.74 paise per unit, which was increased gradually to 2.95 paise, 3.79 paise and 11.68 paise.
Thereafter, 3.79 paise was absorbed as part of the tariffs applicable to these H.T. consumers and the remaining increase of 7.89 paise alone was indicated as the fuel cost adjustment charges.
The grievance made by all H.T. consumers before the High Court was that: (1) the fuel cost adjustment could not be recovered as part of the tariffs; (2) there is discrimination in recovering the entire fuel cost adjustment from H.T. consumers alone; (3) fairness demands that a reasonable proportion of the burden should be shared also by Part B consumers; and (4) that fuel cost adjustment charge is excessively computed.
The High Court rejected all these contentions.
It held that this was a matter of policy which could be changed from time to time and it was permissible to gradually withdraw the pre existing concessional tariffs given to the power intensive industries for which the tariffs earlier were much lower as compared to the other consumers and even after the increase , they were not excessive.
It was held that electricity was a raw material for power intensive industries and no grievance could be made against the increase of its cost just as such a grievance was untenable against increase in the cost of any other raw material.
The challenge on the ground of discrimination was rejected on the ground that H.T. consumers including power intensive industries formed a separate class and the reason which justified grant of concession to them earlier also justified the gradual withdrawal of that 652 concession.
It held that prior consultation with the State Electricity Consultative Council according to Section 16(5) of the Supply Act was not obligatory before revising the tariffs.
The High Court held that the Board was justified in adjusting its tariffs to ensure progressive minimizing of losses and the failure of the State Government to specify the surplus it could generate in accordance with Section 59 of the Supply Act, did not detract from the Board 's power to adjust its tariffs and generate a surplus on principles of commercial expediency applicable to a public utility undertaking.
Fixation of tariffs was held to be a matter of major policy in respect of which the Government can effectively issue directions under Section 78 A of the Act.
It was held that the H.T. consumers including power intensive industries were bound to pay according to the revised higher tariffs fixed from time to time under the agreement as contemplated by Section 49 of the Supply Act.
The condition of fuel cost adjustment, introduced as condition No. 11 in H.T. tariffs Part A, was held applicable to power intensive consumers also.
An additional argument that this added burden became unbearable for the power intensive consumers was rejected on the ground that such inability of the industry to survive is not a compelling consideration for deciding the Board 's power in adjusting it tariffs.
Accordingly, the High Court dismissed the writ petitions and upheld the revision of tariffs made by the Board by the impugned B.P. Ms. No. 1014 (Commercial) dated 13.12.1983 w.e.f. 15.1.1984.
The High Court having refused to grant a certificate of fitness to appeal to this Court, the appellants have preferred these appeals by special leave.
It may be mentioned at this stage that the controversy raised in these appeals was also the controversy in another bunch of civil appeals arising out of a judgment of the Kerala High Court wherein a similar challenge had been upheld and the Kerala State Electricity Board had come in an appeal to this Court.
In those matters, the contention of the Kerala State Electricity Board which would be the same as that of the Andhra Pradesh State Electricity Board before us, was accepted and the judgment of the Kerala High Court taking the view contrary to that of the Andhra Pradesh High Court was reversed (Kerala State Electricity Board vs M/s. S.N. Govinda Prabhu and Bros. and Others.
, [1986] 4 S.C.C. 198.) All the hearing before us, it was contended by Shri Shanti Bhushan, learned counsel for the Andhra Pradesh State Electricity Board that the Kerala decision concludes these points against the present appellants.
On the other hand, Shri G. Ramaswamy and other learned counsel, appearing for the appellants, made an attempt to 653 distinguish the decision in the Kerala case.
The question, therefore, is: Whether any ground has been made out by the present appellants to persuade us to take a view different from the one taken by this Court in the Kerala case? Before considering the arguments in these appeals, we would refer to the controversies in the Kerala case and the view taken therein.
The decision in Kerala State Electricity Board vs M/s. Govinda Prabhu and Bros. and Others, ; arose out of the decision of the Kerala High Court in a similar situation.
The Kerala High Court struck down the upward revision of tariffs made by the Kerala State Electricity Board unlike the Andhra Pradesh High Court which has upheld the upward revision of tariffs in the present appeals.
The main question in the Kerala case also related to the extent of authority of the Kerala Board to increase the electricity tariffs under the .
The principal ground of challenge which was accepted by the Kerala High Court was that the Kerala State Electricity Board acted outside its statutory authority by formulating a price structure intended to yield substantial revenue to offset not merely the expenditure properly chargeable to the revenue account for the year as contemplated by Section 59 of the Supply Act but also expenditure not so properly chargeable.
The Kerala High Court had held that in the absence of a specification by the Government, the Board was not entitled to generate a surplus at all and it acted entirely outside its authority in generating a surplus to be adjusted against items of expenditure not authorised to be met from revenue receipts.
this view of the Kerala High Court was based primarily on the construction made of section 59 of the .
Accordingly, the Kerala High Court struck down the upward revision of tariffs made by the Kerala State .
Accordingly, the Kerala High Court struck down the upward revision of tariffs made by the Kerala State Electricity Board in the years 1980, 1982 and 1984.
It may here be mentioned that Section 59 of the Supply Act, as it stood prior to 1978, was amended by Act No. 23 of 1978 and thereafter, by Act No. 16 of 1983, which came into effect from April 1, 1985 only.
The Kerala case also was decided on the basis of Section 59 as it stood amended by the 1978 (Amendment) Act, prior to its amendment w.e.f.
April 1, 1985 by Act No. 16 of 1983.
For our purposes also, Section 59 as it stood amended by the 1978 Act, prior to the 1983 amendment, is relevant.
This Court expressly rejected the submission which had found favour with the Kerala High Court that in the absence of a specification by the State Government, the position would be as it was before the 1978 amendment, that is, the Board was to carry on its affairs and 654 adjust the tariffs in such a manner as not to incur a loss and no more.
While rejecting the submission, this Court held as under: "We are of the view that the failure of the government to specify the surplus which may be generated by the Board cannot prevent the Board from generating a surplus after meeting the expenses required to be met.
Perhaps, the quantum of surplus may not exceed that a prudent public service undertaking may be expected to generate without sacrificing the interests it is expected to serve and without being obsessed by the pure profit motive of the private entrepreneur.
The Board may not allow its character as a public utility undertaking to be changed into that of a profit motivated private trading or manufacturing house.
Neither the tariffs nor the resulting surplus may reach such heights as to lead to the inevitable conclusion that the Board has shed its public utility character.
When that happens the court may strike down the revision of tariffs as plainly arbitrary.
But not until then.
Not, merely because a surplus has been generated, a surplus which can by no means be said to be extravagant.
The court will then refrain from touching the tariffs.
After all, as has been said by this Court often enough 'price fixation ' is neither the forte nor the function of the court.
" Further, it said: "Turning back to Section 59 and reading it along with Section 49, 67, 67 A etc.
We notice that the Electricity Supply Act requires the Electricity Board to follow a particular method of accounting and it is on the basis of that method of accounting that the Board is required to generate a surplus.
Broadly, Section 59 requires that a surplus should be left from the total revenues, in any year of account, after meeting all expenses properly chargeable to revenues.
It has to be remembered that apart from subventions which may be received from the State Government, which depend entirely on the bounty of the government, the only revenues available to the Board are the charges leviable by it from consumers.
Bearing this in mind, we may now consider what expenses are properly chargeable to revenues under the Electricity Supply Act.
For this purpose, we may not be justified in having recourse to the principles of corporate 655 accounting or the rules which determine what is revenue expenditure under the Income Tax Act.
It appears to us that the Electricity Supply Act prescribes its own special principles of accounting to be followed by the Board. " This Court also held that the prescribing of different tariffs for high and low tension consumers and for different classes of consumers, such as industrial, commercial, agricultural and domestic, appears to be reasonable and far from arbitrary and is based on an intelligent and intelligible differentia.
Accordingly, the judgment of the Kerala High Court upholding challenge to the validity of the upward revision of tariffs was set aside.
Broadly speaking, the substance of the main arguments advanced before us in these matters was repelled by this Court in the Kerala case.
However, learned counsel for the appellants attempted to distinguish the Kerala decision and also tried to advance some additional arguments.
We shall refer to those arguments presently.
It would be appropriate at this stage to quote the relevant provisions of the , with reference to which the arguments advanced have to be considered.
Section 2 of the act relates to interpretation and give the meaning of the expressions defined therein.
Section 3 deals with the constitution of the Central Electricity Authority.
Section 4 B contains the rule making power of the Central Government.
Section 5 provides for the constitution and composition of State Electricity Boards.
Section 12 provides for the incorporation of the Board.
Section 12 A relates to the capital structure of the Board.
Section 78 contains the rule making power of the State Government.
Section 79 contains the power of the Board to make regulations.
Some of the provisions of the Act which may be quoted in extenso are as under: "4A. Directions by Central Government to the Authority.
(1) In the discharge of its functions, the Authority shall be guided by such directions in matter of policy involving public interest as the Central Government may give to it in writing.
(2) If any question arises as to whether any such direction relates to a matter of policy involving public interest, the decision of the Central Government thereon shall be final." xxx xxx xxx 656 "16.
State Electricity Consultative Council.
(1) The State Government shall constitute a State Electricity Consultative Council for the State, and in cases to which Section 6 and 7 apply, the State Government concerned shall constitute such one or more State Electricity Cousultative Council or Councils and for such areas as they may by agreement determine.
(2) The State Electricity Consultative Council shall consist of the members of the Board and, if there are any Generating Company or Generating Companies operating in the State, one representative of the Generating Company or each of the Generating Companies, to be nominated by the Generating Company concerned, and such other persons being not less than eight and not more than fifteen as the State Government or the State Governments concerned may appoint after consultation with such representatives or bodies of representative of the following interests as the State Government or the State Governments concerned thinks or think fit, that is to say, local self government, electricity supply industry, commerce, industry, transport, agriculture, labour employed in the electricity supply industry and consumers of electricity, but so that there shall be at least one member representing each such interest in the Council.
(3) The Chairman of the Board shall be ex officio Chairman of the State Electricity Consultative Council.
(4) The State Electricity Consultative Council shall meet at least once in every three months.
(5) The functions of the State Electricity Consultative Council shall be as follows: (i) To advise the Board and the Generating Company or Generating Companies, if any, operating in the State on major questions of policy and major schemes; (ii) to review the progress and the work of the Board and the Generating Company or Generating Companies, if any, operating in the State from time to time; 657 (iii) To consider such other matters as the Board or the Generating Company or Generating Companies, if any, operating in the State may place before it; and (iv) To consider such matters as the State Government may by rules prescribe.
(6) The Board shall place before the State Electricity Consultative Council the annual financial statement and supplementary statement, if any, and shall take into consideration any comments made on such statement in the said Council before submitting the same to the State Government under Section 61." xxx xxx xxx "49.
Provision for the sale of electricity by the Board to persons other than licensees.
(1) Subject to the provisions of this Act and of regulations, if any, made in this behalf, the Board may supply electricity to any person not being a licensee upon such terms and conditions as the Board thinks fit and may for the purposes of such supply frame uniform tariffs.
(2)In fixing the uniform tariffs, the Board shall have regard to all or any of the following factors, namely: (a) The nature of the supply and the purposes for which it is required; (b) The co ordinated development of the Supply and distribution of electricity within the State in the most efficient and economical manner, with particular reference to such development in areas not for the time being served or adequately served by the licensee; (c) the simplification and standardisation of methods and rates of charges for such supplies; (d) The extension and cheapening of supplies of electricity to sparsely developed areas.
658 (3) Nothing in the foregoing provisions of this section shall derogate from the power of the Board, if it considers it necessary or expedient to fix different tariffs for the supply of electricity to any person not being a licensee, having regard to the geographical position of any area, the nature of the supply and purpose for which supply is required and any other relevant factors.
(4) In fixing the tariff and terms and conditions for the supply of electricity, the Board shall not show undue preference to any person." xxx xxx xxx Section 59 prior to 1978 "General principles for Board 's finance.
The Board shall not, as far as practicable and after taking credit for any subventions from the State Government under Section 63, carry on its operations under this Act at a loss, and shall adjust its charges accordingly from time to time: Provided that where necessary any amounts due for meeting the operating, maintenance and management expenses of the Board or for the purposes of clauses (i) and (ii) of Section 67 may, to such extent as may be sanctioned by the State Government, be paid out of capital.
" Section 59 as amended by Act No. 23 of 1978 "General principles for Board 's finance.
(1) The Board shall, after taking credit for any subvention from the State Government under Section 63, carry on its operations under this Act and adjust its tariffs so as to ensure that the total revenues in any year of account shall, after meeting all expenses properly chargeable to revenues, including operating, maintenance and management expenses, taxes (if any) on income and profits, depreciation and interest payable on all debentures, bonds and loans, leave such surplus, as the State Government may, from time to time, specify.
(2) In specifying the surplus under sub section (1), 659 the State Government shall have due regard to the availability of amounts accrued by way of depreciation and the liability for loan amortization and leave.
(a) a reasonable sum to contribute towards the cost of capital works; and (b) where in respect of the Board, a notification has been issued under sub section (1) of Section 12 A, a reasonable sum by way of return on the capital provided by the State Government under sub section (3) of that section and the amount of the loans (if any) converted by the State Government into capital under sub section (1) of Section 66A." Section 59 as further amended by Act No. 16 of 1983 "General principles for Board 's finance.
(1) The Board shall, after taking credit for any subvention from the State Government under Section 63, carry on its operations under this Act and adjust its tariffs so as to ensure that the total revenues in any year of account shall, after meeting all expenses properly chargeable to revenues, including operating, maintenance and management expenses, taxes (if any) on income and profits, depreciation and interest payable on all debentures, bonds and loans, leave such surplus as is not less than three per cent, or such higher percentage, as the State Government may, by notification in the Official Gazette, specify in this behalf, of the value of the fixed assets of the Board in service at the beginning of such year.
Explanation.
For the purposes of this sub section, "value of the fixed assets of the Board in service at the beginning of the year" means the original cost of such fixed assets as reduced by the aggregate of the cumulative depreciation in respect of such assets calculated in accordance with the provisions of this Act and consumers ' contribution for service lines.
(2) In specifying any higher percentage under sub section (1), the State Government shall have due regard to 660 the availability of amounts accrued by way of depreciation and the liability for loan amortization and leave (a) a reasonable sum to contribute towards the cost of capital works; and (b) where in respect of the Board, a notification has been issued under sub section (1) of Section 12 A, a reasonable sum by way of return on the capital provided by the State Government under sub section (3) of that section and the amount of the loans (if any) converted by the State Government into capital under sub section (1) of Section 66 A." xxx xxx xxx "61.
Annual financial statement.
(1) In February of each year the Board shall submit to the State Government a statement in the prescribed form of the estimated capital and revenue receipts and expenditure for the ensuing year.
(2) The said statement shall include a statement of the salaries of members and officers and other employees of the Board and of such other particulars as may be prescribed.
(3) The State Government shall as soon as may be after the receipt of the said statement cause it to be laid on the table of the House, or as the case may be, Houses of the State Legislature; and the said statement shall be open to discussion therein, but shall not be subject to vote.
(4) The Board shall take into consideration any comments made on the said statement in the State Legislature.
(5) The Board may at any time during the year in respect of which a statement under sub section (1) has been submitted, submit, to the State Government a supplementary statement, and all the provisions of this section shall apply to such statement as they apply to the statement under the said sub section.
" xxx xxx xxx 661 "63.
Subventions to the Board.
The State Government may, with the approval of the State Legislature, from time to time make subventions to the Board for the purposes of this Act on such terms and conditions as the State Government may determine." XXX XXX XXX "65.
Power of Board to borrow. (1) The Board may, from time to time, with the previous sanction of the State Government and subject to the provisions of this Act and to such conditions, as may be prescribed in this behalf, borrow any sum required for the purposes of this Act.
(2) Rules made by the State Government for the purposes of this section may empower the Board to borrow by the issue of debentures or bonds or otherwise and to make arrangements with bankers, and may apply to the Board with such modifications as may be necessary to be consistent with this Act, the provisions of the (9 of 1914), and the rules made thereunder as if the Board were a local authority.
(3) The maximum amount which the Board may at any time have on loan under sub section (1) shall be ten crores of rupees, unless the State Government, with the approval of the State Legislative Assembly, fixes a higher, maximum amount.
(4) Debentures or bonds issued by the Board under this section shall be issued, transferred, dealt with and redeemed in such manner as may be prescribed." XXX XX XXX "67.
Priority of liabilities of the Board.
The Board shall distribute the surplus referred to in sub section (1) of section 59 to the extent available in a particular year in the following order, namely: (i) repayment of principal of any loan raised (including redemption of debentures or bonds issued) under Section 65 which becomes due for payment in the 662 year or which became due for payment in any previous year and has remained unpaid; (ii) repayment of principal of any loan advanced to the Board by the State Government under Section 64 which becomes due for payment in the year or which became due for payment in any previous year and has remained unpaid; (iii) payment for purposes specified in sub section (2) of Section 59 in such manner as the Board may decide.
67 A. Interest on loans advanced by State Government to be paid only after other expenses.
Any interest which is payable on loans advanced under Section 64 or deemed to have been advanced under Section 60 to the Board by the State Government and which is charged to revenues in any year may be paid only out of the balance of the revenues, if any, of that year which is left after meeting all the other expenses referred to in sub section (1) of Section 59 and so much of such interest as is not paid in any year by reason of the provisions of this section shall be deemed to be deferred liability and shall be discharged it, accordance with the provisions of this section in the subsequent year or year, as the case may be.
Charging of depreciation by Board (1) The Board shall provide each year for depreciation such sum calculated in accordance with such principles as the Central Government may, after consultation with the Authority, by notification in the Official Gazette, lay down from time to time.
(2) Omitted (3) The provisions of this section shall apply to the charging of depreciation for the year in which the Electricity (Supply) Amendment Act, 1978, comes into force." XXX XXX XXX "68 A. Directions by the State Government. (1) In 663 the discharge of its functions, the Board shall be guided by such directions on questions of policy as may be given to it by the State Government.
(2) If any dispute arises between the Board and the State Government as to whether a question is or is not a question of policy, it shall be referred to the Authority whose decision thereon shall be final. ' ' We shall first consider the common arguments advanced by the learned counsel for the appellants in all these matters before taking up some additional arguments advanced in some of these matters.
The first argument is that the requirement of consultation with the State Electricity Consultative Council before the revision of tariffs in accordance with Section 16 of the , not having been made, the upward revision of tariffs is invalid on account of non compliance of Section 16 of the Supply Act.
It was urged that revision of tariffs being a major question of policy as envisaged by clause (i) of Sub section (5) of Section 16, it is one of the functions of the Consultative Council to advise the Board on this question and without such advice of the Consultative Council, the revision in tariffs could not be made.
It was argued that the consumers ' interest is also represented on the Consultative Council as indicated by Sub section (2) of Section 16 providing for its constitution, and therefore, it was necessary to know the viewpoint of the consumers through their representative in the Consultative Council before deciding upon an upward revision of the tariffs for H.T. consumers.
Though the Board may not be bound by the advice of the Consultative Council, yet it was urged, such consultation with the Council was a condition precedent.
It was suggested that Section 16 must be read with Section 61 of the Supply Act which requires the Board to submit to the State Government the annual financial statement in February each year.
It is unnecessary in the present case to decide whether the revision of tariffs falls within the ambit of `major questions of policy ' occurring in Section 16(5)(i) of the Supply Act since the arguments from both sides proceeded on the basis that revision of tariffs for the purpose of this case may be treated as a `question of policy ' which expression finds place also in Section 78 A of the Supply Act.
The question, therefore, reduces itself to this: Whether the failure of the Board to place the matter before and seek the advice of the Consultative Council on this question renders the revision of tariffs made by it 664 invalid? The common premise for the purpose of this case that revision of tariffs by the Board is a question of policy may indicate that it would be open to the Consultative Council to advise the Board also on the question of revision of tariffs, and if such advice is given, then the Board must consider the same before taking the final decision.
That, however, does not necessarily mean that where no such advice was taken from the Consultative Council or was rendered on account of the absence of any meeting of the Consultative Council during the relevant period, it would necessarily render invalid the revision of tariffs made by the Board.
The consequence of non compliance of Section 16 is not provided and the nature of function of the Consultative Council and the force of its advice being at the best only persuasive.
it cannot be said that revision of tariffs without seeking the advice of the Consultative Council renders the revision of tariffs invalid.
It is also significant that the annual financial statement containing all particulars relating to revision of tariffs is required to be submitted to the State Government in February each year and the State Government is required after receipt of such statement to cause it to be laid on the table of the House or Houses of the State Legislature and the said statement is open to discussion therein.
The Board is bound to take into consideration any comments made on the said statement in the State Legislature.
Thus, there is ample provision for discussion on the revised tariffs in the State Legislature with the Board being bound to take into consideration any comments made thereon.
Shri Shanti Bhushan sought to make a distinction between the provisions of sub section (5) of section 16 pertaining to the functions of the `Consultative Council ' empowering or enabling the Council to advice the Board on `major questions of policy ' and the provision in sub section (6) as to the obligation of the Board to place certain matters before the `Council ' to emphasise his point that sub section (6) does not envisage any obligation on the part of the `Board ' to place before the Council the proposal for revision of tariffs.
He sought to distinguish between the functions of the `Council ' to tender advice and the obligation of the Board to specifically seek and invite such advice.
Shri Shanti Bhushan said that the very concept of consultation does imply mandatory obligation or duty attaching the pain of nullity to the transaction.
Provisions of the Electricity Act 1947 in England contain certain express statutory stipulations as to the scope of the Consultative Council 's functions which do not, in terms, obtain in the Indian statute.
For instance, Section 7 of the English Act which contemplates 665 the establishment of `Consultative Council ' specifically provides in Section 7(4) : ``(4) Each of the said Councils shall be charged with the duties (a) of considering any matter affecting the distribution of electricity in the area, including the variation of tariffs and the provision of new or improved services and facilities within the area, . . . (b) xxx xxx xxx (c) of considering any matter affecting the variation of any tariff regulating the charges for the provision of bulk supplies of electricity by the Generating Board for distribution in the area, being a matter which is either the subject of a representation made to them by consumers or other persons requiring supplies of electricity in the area, or which appears to them to be a matter to which consideration ought to be given apart from any such representation, and, where after consultation with the Area Board action appears to them to be requisite as to any such matter, of notifying their conclusions to the Generating Board; (d) xxx xxx xxx (rest of the Section omitted as unnecessary) Section 37(1) of the English statute again provides: ``37 Fixing and variation tariffs (1) The prices to be charged by the Generating Board for the supply of electricity by them to Area Boards shall be in accordance with such tariffs as may be fixed from time to time by the Generating Board after consultation with the Electricity Council; the different tariffs may be fixed for different Area Boards. ' ' (rest of the Section omitted as unnecessary) The pattern of the provisions in the Indian statute is quite different.
666 The `laying procedure ' before the legislature effectively controls the exercise of the delegated power of the Board.
We are of the opinion that though advisable yet failure to seek advice of the Consultative Council before revision of the tariffs does not result in invalidation of the revised tariffs.
This consequence appears to us to be the logical and reasonable view to take of the requirement of Section 16 along with other provisions of the Supply Act.
One of the arguments addressed at length before us relates to Section 78 A of the Supply Act.
It was urged on behalf of the appellant that any direction of the State Government relating to tariffs was on a question of policy within the meaning of Sub section (1), and, therefore, the Board is bound by such direction subject only to the adjudication, if any, in accordance with Sub section (2), if any dispute is raised by the Board in that behalf.
It was urged that in the present case the Board was, therefore, bound by the directions of the State Government granting the concession to the power intensive consumers since no dispute was raised by the Board in accordance with Sub section (2), of Section 78 A. Learned counsel for the Board did not for the purpose of this case, dispute this position, but contended that all directions of the State Government were obeyed by the Board and, therefore, the question does not really arise.
The Board 's contention is that it has acted according to the directions of the State Government and, therefore, the question of non compliance with any such directions giving rise to the argument based on Section 78 A does not arise.
For consideration of the main controversy, it is advisable at this stage to deal with Sections 49 and 59 of the Supply Act.
Section 49 makes provision for the sale of electricity by the Board to persons other than licensees.
Sub section (1) starts with the words `Subject to the provisions of this Act and of regulations, if any, made in this behalf '.
This means that the provision made therein is subject to other provisions of the Supply Act and the regulations.
It then proceeds to say that the Board may supply electricity to any person not being a licensee upon `such terms and conditions as the Board thinks fit ' and may for the purposes of such supply supply frame `uniform tariffs '.
Sub section (2) then enumerates several factors which the Board is required to `have regard to ' in fixing the uniform tariffs.
The meaning of the expression `have regard to ' is well settled.
It means that the factors specifically enumerated shall be taken into account while performing the exercise which in this case is the fixation of uniform tariffs.
Ordinarily, therefore, uniform tariffs are required to be framed by the Board for making such supply.
Sub section (3) then proceeds to 667 say that nothing in the earlier enacted provisions shall derogate from the power of the Board, `if it considers it necessary or expedient to fix different tariffs for the supply of electricity to any person ', having regard to the geographical position of any area, the nature of the supply and purpose for which supply is required and `any other relevant factors '.
Sub section (4) then says that in fixing the tariffs and terms and conditions for the supply of electricity, `the Board shall not show undue preference to any person '.
In other words, Sub section (4) provides against any unreasonable discrimination in fixing the tariffs and terms and conditions for supply of electricity.
The power of fixation of tariffs in the Board is provided in this manner by Section 49 of the Supply Act which requires the fixation of uniform tariffs ordinarily having regard particularly to the specified factors and enables fixation of such tariffs for any person having regard to the factors expressly stated and any other relevant factors, providing further that no unreasonable or undue preference shall be shown to any person by the Board in exercise of its powers of fixing the tariffs.
The next important provision is Section 59 of the Supply Act.
For appreciating the argument based on Section 59, it is necessary to bear in mind the distinction in Section 59 as it stood prior to 1978, as amended by Act No. 23 of 1978 and finally as amended by Act No. 16 of 1983, quoted earlier.
Prior to 1978, Section 59 required the Board, as far as practicable and after taking credit for any subventions from the State Government under Section 63, not to carry on its operations under this ACt at a loss and for this purpose, it was empowered to adjust its charges accordingly from time to time.
Under the provision as it then existed, the main thrust was to avoid the Board incurring any loss and for that purpose, it could adjust its charges accordingly from time to time.
Section 59 as amended by Act No. 23 of 1978 required the Board, after taking credit for any subventions from the State Government under Section 63, to carry on its operations under this Act and to adjust its tariffs so as to ensure that the total revenues in any year meeting all expenses properly chargeable to revenue including those specified, left such surplus as the State Government specified from time to time.
The shift was, therefore, towards having a surplus as the State Government specified from time to time.
Sub section (2) then provided guidelines for the State Government in specifying the surplus under Sub section (1) and mentioned the factors to which regard was to be had for this purpose.
The effect of the amendment made in Section 59 by Act No. 16 of 1983, which came into effect from 1.4.1985, was to provide for a 668 minimum surplus of three per cent or such higher percentage as the State Government is to specify in this behalf.
In other words, prior to 1978 amendment, the requirement from the Board was to avoid incurring any loss, after the 1978 amendment the shift was towards ensuring a surplus as specified by the State Government, and after the 1983 amendment the Board is required to ensure a surplus of at least three per cent unless the State Government specifies a higher surplus.
This is the scheme of Section 59 and it is Section 59 as amended by 1978 Act but prior to its amendment by the 1983 Act, with which we are concerned in the present case.
It cannot be doubted that Section 59 requiring the Board to adjust its tariffs for the purpose of Board 's finance is to be read along with Section 49 which provides specifically for fixation of tariffs and the manner in which that exercise has to be performed while dealing with any question relating to the revision of tariffs.
It was argued on behalf of the appellants that Section 59 as amended by the 1978 Act did not empower the Board to adjust its tariffs to generate any surplus unless the surplus had been specified by the State Government and when specified, the surplus generated could not exceed the specified surplus.
In other words, it was argued that when the State Government did not specify any surplus, the Board had no power to adjust its tariffs in a manner which resulted in generating any surplus.
We are unable to construe Section 59 in this manner.
The general principle for the Board 's finance indicated by Section 59 is that prior to the 1978 amendment, tariffs could be adjusted to avoid any loss, but as a result of the shift made by the 1978 amendment, the power could be exercised to generate a surplus and when the State Government specified the amount of surplus then the Board was bound to adjust the tariffs to ensure generation of the specified surplus.
However, generation of a reasonable surplus in any year of account without specification of the surplus amount by the State Government was not contra indicated in the provision inasmuch as the duty to generate a surplus was implicit with the added obligation to ensure generating surplus to the extent specified by the State Government when it was so specified by the State Government.
It cannot be accepted as a reasonable view that in the absence of specification of the surplus by the State Government, the Board could not adjust its tariffs to generate even a reasonable surplus in any year of account.
The effect of 1983 amendment, which came into force from 1.4.1985, is that the Board is entitled to adjust its tariffs to ensure generating a surplus of not less than three per cent even without such specification 669 by the State Government and when the State Government specifies a higher surplus, then the Board must ensure generating the higher specified surplus.
This is, of course, subject to the accepted norm of the Board acting in consonance with its public utility character and not entirely with a profit motive like that of a private trader.
The pre 1978 concept of the Board 's functioning to merely avoid any loss is replaced by the shift after 1978 amendment towards the positive approach of requiring a surplus to be generated, the quantum of surplus being specified by the State Government, with a minimum of three per cent surplus in the absence of the specification by the Government of a higher surplus, after the 1983 amendment.
This construction made of Section 59, as it stood at different times in Govinda Prabhu 's case (supra) indicated earlier, cannot be faulted in any manner.
In Govinda Prabhu 's case (supra) the same argument which is advanced before us was expressly rejected.
We are of the same view.
It is , therefore, obvious that mere generation of surplus by the Board as a result of adjusting its tariffs when the quantum of surplus has not been specified by the State Government after the 1978 amendment of Section 59 of the Supply Act, cannot invite any criticism unless it is further shown that the surplus generated as a result of the adjustment of tariffs by the Board has resulted in the Board acting as a private trader shedding off its public utility character.
In other words, if the profit is made not merely for the sake of profit, but for the purpose of better discharge of its obligations by the Board, it cannot be said that the public enterprise has acted beyond it authority.
The Board in the present case has shown that the surplus resulting from upward revision of tariffs applicable to the H.T. consumers made in the present case, was for the purpose of better discharge of its other obligations under the Supply Act and in effect, it has merely resulted in a gradual withdrawal of the concessional tariffs provided earlier to the power intensive consumers which do not in its opinion require continuance of the concessional tariffs any longer.
In fact, no material has been placed before us to indicate that this assertion of the Board is incorrect or there is any reasonable basis to hold that the upward revision of tariffs applicable to H.T. consumers is merely with a desire to earn more profits like a private trader and not to generate surplus for utilisation of the funds to discharge other obligations of the Board towards more needy consumers, such as agriculturists or to meet the need of expansion of the supply to deserving areas.
The argument with reference to statistics that the upward revision of tariffs for the H.T. consumers results in earning amounts in excess of the cost of generation does not, therefore, merit a more detailed consideration.
670 It was also contended on behalf of the appellants that the generation of electricity by the Andhra Pradesh Electricity Board is both thermal as well as hydro, the quantity from each source being nearly equal and the entire electricity generated is fed into a common grid, from which is supplied to all categories of consumers.
On this basis, it was argued that the rise in the fuel cost which led to the fuel cost adjustment applicable only to the H.T. consumers was unreasonable and discriminatory since the burden of rise in fuel cost was placed only on the H.T. consumers.
In our opinion, this argument has no merit.
The H.T. consumers, including the power intensive consumers, are known power guzzlers and in power intensive industries, electricity is really a raw material.
This category of consumers, therefore, forms a distinct class separate from other consumers like L.T. consumers who are much smaller consumers.
There is also a rational nexus of this classification with the object sought to be achieved.
Moreover, the power intensive consumers have been enjoying the benefit of a concessional tariff for quite some time, which too is a relevant factor to justify this classification.
Placing the burden of fuel cost adjustment on these power guzzlers, who had the benefit of concessional tariff for quite some time and have also a better capacity to pay, cannot, therefore, be faulted since the consumption in the power intensive industries accounts for a large quantity.
Shri Sibal submitted that the prescription and imposition of disparate tariffs, unrelated to the production cost, on a particular section of consumers would be a case of misplaced philanthrophy on the part of the statutory authority.
The Board, Shri Sibal says, cannot use its powers in order to confer "social or economic benefits on particular sections of the community" at the cost of the other sections.
Shri Sibal contended that while it may be permissible for the Board to supply electricity to the weaker and under privileged sections of the society at prices which may even be lower than the costs of generation and distribution, however subsidies for such social objectives must come from subventions from Government and should not be made good by unjustifiable higher charges on other sections of electricity consumers.
Shri Sibal read to us the following passage in Wade 's Administrative Law (6th Edn.): "Statutory authorities have sometimes made use of their wide general powers in order to confer social or economic benefits on particular sections of the community.
In several such cases they have gone beyond the true limits of their powers.
The policy of the courts is in general hostile to the 671 use of public funds, such as rates, for new social experiments.
Local authorities are subject to a fiduciary duty to use their revenues with due restraint.
" (at p. 424) After referring to decided cases on the point, the learned author says: ".
The idea that runs through these cases is that public money must be administered with responsibility and without extravagance.
This appears to mean it is not available for charity.
The generosity of local authorities, in particular, is restrained by the doctrine that they owe a fiduciary duty to their ratepayers analogous to that of trustees.
This means that, in deciding upon their expenditure, they must hold a balance fairly between the recipients of the benefit and the ratepayers who have to bear the cost." (at p.426) Shri Sibal contends that in the case of class of consumers respecting which the tariff is enhanced, the enhancement is not justified on the ground of making good the loss on supply to others at cheaper rates.
The increase is attributable to higher costs of generation of thermal power.
It is not unreasonable to take the view that the thermal power has become costlier on account of the increase in fuel cost and could nationally be allocated to the consumption by H.T. and power intensive consumers, and, therefore, the fuel cost adjustment is made applicable to them alone.
In our opinion, the argument on behalf of the Board in this behalf is not unreasonable.
It was argued on behalf of the appellants with considerable force that the upward hike of tariff for the H.T. consumers including power intensive was arbitrary and discriminatory inasmuch as it was not related to the cost of generation and was based on irrelevant factors.
It was argued that the L.T. tariffs and agricultural tariffs were relieved of this burden and the liabilities of the Board even of a capital nature were taken into account for increasing the tariff applicable to power intensive units.
The contention is that these factors are irrelevant and do not permit exercise of the power to increase the tariffs.
This arguments was considered at length in Govinda Prabhu 's case before it was 672 negatived.
We agree with the reasons given in that decision to repel this contention.
In Govinda Prabhu, it was pointed out that the Court would not strike down the revision of tariff as arbitrary unless the resulting surplus reaches such a height as to lead to the inevitable decision that the Board has shed its public utility character and is obsessed by the profit motive of private entrepreneur in order to generate a surplus which is extravagant.
The limited power of judicial review in the field of price fixation was also indicated.
This limited scope of judicial review in striking down revision of tariffs resulting in generation of surplus applied in Govinda Prabhu cannot be faulted in view of the long line of decisions of this Court on the point and reiteration of the same principle by a Constitution Bench in Shri Sitaram Sugar Company Limited and Another.
vs Union of India and Others, ; The surplus generated by the Board as a result of revision of tariffs during the relevant period cannot be called extravagant by any standard to render it arbitrary permitting the striking down of the revision of tariffs on the ground of arbitrariness.
We have already indicated that it is not also discriminatory as was the view taken in Govinda Prabhu.
It has been pointed out on behalf of the Board that the Board 's action is based on the opinion of Rajadhyaksha Committee 's Report submitted in 1980 and the formula of fuel cost adjustment is on a scientific basis linked to the increase in the fuel cost.
This is a possible view to take and, therefore, the revision of tariffs by the Board does not fall within the available scope of judicial review.
One of the contentions of Shri G. Ramaswamy, on behalf of the appellant was that the G.Os. issued in respect of the power intensive units amounted to a special tariff for them resulting in their exclusion from the category of H.T. consumers and, therefore, the clause relating to fuel cost adjustment inserted by amendment to the H.T. tariffs did not apply to the power intensive consumers without insertion of a similar clause in the special tariff applicable to them.
It was urged that for this reason the power intensive consumers could not be governed by the clause of fuel cost adjustment made applicable to H.T. tariffs.
Shri Ramaswamy advanced elaborate arguments to distinguish "terms and conditions of supply" from "terms and conditions of tariff".
According to the learned counsel, B.P. Ms. No. 778 dated 18.10.1975 excluded the power intensive units from applicability of the Notification date 17.9.1975 to it.
It is unnecessary to repeat the history of the H.T. tariffs by which power intensive tariffs were separated.
It would be sufficient in this context to quote the relevant portion of Memo.
dated 18.11.1975 which, in our opinion, negatives this argument.
It was provided in this Memo.
, inter alia as under: 673 "With regard to other charges, such as Miscellaneous charges, terms and conditions of supply, not mentioned specifically herein, those applicable to normal H.T. consumers will apply".
The expression "other charges" is wide enough to include within its ambit the fuel cost adjustment admittedly made applicable to all H. T.consumers as a result of the escalation in fuel prices.
The method adopted was to prescribe a formula linking it to the increase in fuel cost so that it was not necessary to revise the tariffs each time as a result of increase in fuel prices, the same being taken care of by the relevant factors in the formula for fuel cost adjustment.
It was in this context that Shri Ramaswamy contended that the `terms and conditions of supply ' are different from the `terms and conditions of tariff ' and fuel cost adjustment being a term or condition of tariff and not a term or condition of supply, the above provision in the Memo dated 18.11.1975 did not have the effect of applying the term relating to fuel cost adjustment to the power intensive tariff.
It is sufficient to state that the Memo dated 18.11.1975 did not merely extend the non specified `terms and conditions of supply ' applicable to normal H.T. consumers to the power intensive consumers but also "other charges" which were merely illustrated by the words following, namely, "such as Misc.
charges, terms and conditions of supply not mentioned herein".
In other words, this express provision in the Memo, dated 18.11.1975 clearly provided that except for the provisions specifically made for power intensive consumers, in respect of all other provisions the power intensive consumers were to be governed by the provisions, by whatever name called, applicable to the normal H.T. consumers.
A further discussion of this distinction sought to be made by Shri G. Ramaswamy of the `terms and conditions of supply ' and `terms and conditions of tariff ' is, therefore, unnecessary.
Shri Ramaswamy also urged that there was no communication to the appellant of the applicability of the term relating to fuel cost adjustment during the relevant period which also relieves the power intensive consumers of this liability.
On the view we have already taken about the applicability of the term relating to fuel cost adjustment to the power intensive tariffs this point is not material.
However, it has also been shown that in the bills issued to the power intensive consumers the same was specifically indicated.
If any communication was needed, this indication in the bills issued to the power intensive consumers satisfied that requirement.
We are, therefore, unable to accept the contention that the term relating to fuel cost adjustment made applicable to H.T. consumers 674 had no application to the power intensive consumers during the relevant period.
Shri Kapil Sibal appearing on behalf of some of the appellants confined the challenge to the mode of exercise of power by the Board.
He laid great emphasis on the effect of absence of consultation with the Consultative Committee under Section 16 of the .
He also claimed that the quantum of increase could at best be justified only to the extent of one half and no more.
Shri Sibal claimed that certain extraneous factors had been taken into account for the purpose of revising the tariffs.
The irrelevant considerations, according to Shri Sibal, taken into account are the capital sums owed by the Board and the overall losses incurred by the Board which according to him is impermissible under Section 59 of the .
He also argued that the upward revision of H.T. tariffs is intended to subsidise another class of consumers which is not permissible.
His arguments are already covered by our earlier discussion.
Similarly, the arguments of Shri K.N. Bhat, for the appellant in C.A. No. 5379 of 1985 to the same effect, need to further discussion.
The details of the several factors taken into account for the revision in tariffs, to the limited extent they can be gone into within the permissible scope of judicial review in such a matter also do not require any further consideration.
Shri Anil Divan, on behalf of the appellant in C.A No. 2569 of 1985, submitted that the increase in tariffs for the power intensive unit in his case was 47 per cent as against 15 per cent for ordinary H.T. consumers.
According to him, even ignoring the FCA, the increase is 40 per cent from 32 paise to 45 paise.
This is disputed on behalf of the Board.
In our opinion, it is unnecessary to go into this question any further for the reasons already given by us.
Shri Divan also contended that the Electricity Board 's stand has been conflicting at different stages.
In our opinion, any detailed decision on this aspect also is unnecessary on the view taken by us about the Board 's power to revise tariffs, no case for striking down the same as arbitrary and discriminatory having been made out.
In view of the earlier decision of this Court in Govinda Prabhu, with the conclusion as well as reasoning of which we respectfully concur and reiteration of the Court 's limited power of judicial review in Shri Sitaram Sugar Company Limited recently decided by a Constitution Bench, we do not find any reason to accept any of the arguments advanced on behalf of the appellants by their learned counsel.
In fact, the decision in Govinda Prabhu con 675 cludes the controversy against the appellants and some detailed discussion by us has become necessary only on account of an attempt on behalf of the appellants to distinguish the decision and the emphasis placed on the requirements of Sections 16, 49 and 59 of the .
We find no merit in these appeals/special leave petition and the same are dismissed.
All interim orders in favour of the appellants/petitioner stand vacated.
No costs.
R.P. Appeals dismissed.
| The appellants are H.T. electricity consumers of various categories in the State of Andhra Pradesh.
The respondent State Electricity Board (the Board), by its orders B.P. Ms. No. 1014 dated 13.12.1983 revised upwards the tariffs for various categories of consumers including H.T. categories 1 (Industrial) and II (Non Industrial); and by Memo No. DE/COML/IV/2250/83/I of the same date it revised upwards the electricity tariffs for highly power intensive industries falling under 644 H.T. Category III.
Tariffs consisted of three parts.
The said three categories of H.T. consumers fell in Part A. H.T. consumers availing supply of electricity for irrigation and agricultural purposes were included in part B. provided for miscellaneous and general charges.
Tariffs were not revised for consumers availing H.T. supply for purposes of irrigation and agriculture falling in part B or L.T. supply for domestic cottage industries, public lighting and small poultry farms units.
Besides the energy charges, the H.T. consumers included in Part A were also required to pay at different rates effective from 1.9.1982 an additional charge levied as `fuel adjustment charges '; and some amount as `voltage surcharged ' in accordance with the terms of the agreement entered into by the individual consumers with the Board.
The writ petitions filed by the appellants challenging the said upward revision of the Electricity Tariffs were dismissed by the High Court upholding the revision of tariffs made by the respondent Board.
Aggrieved the appellants preferred appeals by special leave to this Court.
It was contended on behalf of the appellants that: (1) the upward revision of tariffs by the State Electricity Board was invalid being made without prior consultation with the State Electricity Consultative Council as envisaged by section 16 of the ; (2) without specification of any surplus by the State Government the Board had no power to adjust its tariffs in a manner which resulted in generating any surplus; (3) there is discrimination in recovery of the entire full cost adjustment from the H.T. consumers alone; (4) the upward hike of the tariffs for the H.T. consumers including power intensive consumers was arbitrary and discriminatory inasmuch as it was not related to the cost of generation and was based on irrelevant factors; and (5) and the Board had acted with profit motive losing its public utility character.
Learned counsel representing the power intensive consumers also contended that in the absence of a clause relating to fuel cost adjustment in the G.Os.
issued in respect of the power intensive units, they could not be governed by the clause of fuel cost adjustment made applicable to the H.T.tariffs.
Dismissing the appeals, this Court, HELD: 1.1 The power of fixation of tariffs in the Board is provided by section 49 of this Supply Act which requires the fixation of uniform 645 tariffs ordinarily having regard particularly to the specified factors and enables fixation of such tariffs for any person having regard to the factors expressly stated and any other relevant factors providing further that no unreasonable or undue preference shall be shown to any person by the Board in exercise of its powers of fixing the tariffs.
section 59, requiring the Board to adjust the tariffs for the purpose of its finance is to be read along with section 49.
[667B C; 668B C] 1.2.
The common premise for the purpose of the instant case that the revision of tariffs by the State Electricity Board is a question of policy may indicate that it would be open to the Consultative Council to advise the Board also on the question of revision of tariffs, and if such advice is given, then the Board must consider the same before taking the final decision.
That, however, does not necessarily mean that where no such advice was taken from the Consultative Council or was rendered on account of the absence of any meeting during the relevant period, it would necessarily render invalid the revision of tariffs made by the Board.
[664A B] Though it is advisable to seek advice of the Consultative Council before revision of the tariffs yet failure to do so does not result in invalidation of the revised tariffs.
This consequence appears to be the logical and reasonable view to take of the requirement of section 16 alongwith other provisions of the Act.
[666A B] 1.3 The consequence of non compliance of section 16 is not provided, and the nature of function of the Consultative Council and the force of its advice being at the best only persuasive, it cannot be said that revision of tariffs without seeking the advice of the Consultative Council renders the revisions of tariffs invalid.
[664B C] 1.4 It is also significant that the annual financial statement containing all particulars relating to revision of tariffs is required to be submitted to the State Government in February each year and the State Government is required after receipt of such statement to cause it to be laid on the table of the House or Houses of the State Legislature and the said statement is open to discussion therein.
The Board is bound to take into consideration any comments made on the said statement in the State Legislature.
The 'laying procedure ' before the legislature effectively controls the exercise of the delegated power of the Board.
Thus there is ample provision for discussion on the revised tariffs in the State Legislature with the Board being bound to take into consideration any comments made thereon.
[664C D; 666A] 646 Kerala State Electricity Board vs M/s. S.N. Govinda Prabhu & Bros. & Ors.
, ; , relied on.
2.1 Mere generation of surplus by the Board as a result of adjusting its tariffs when the quantum of surplus has not been specified by the State Government after the 1978 amendment of section 59 of the Act, cannot invite any criticism unless it is further shown that the surplus generated as a result of the adjustment of tariffs by the Board has resulted in the Board acting as a private trader shedding off its public utility character.
If the profit is made not merely for the sake of profit, but for the purpose of better discharge of its obligations by the Board, it cannot be said that the public enterprise has acted beyond its authority.
[669C E] 2.2 The general principle for the Boards finance indicated by section 59 is that prior to the 1978 amendment, tariffs could be adjusted to avoid any loss, but as a result of the shift made by the 1978 amendment the power could be exercised to generate a surplus and when the State Government specified the amount of surplus then the Board was bound to adjust the tariffs to ensure generation of the specified surplus.
However, generation of a reasonable surplus in any year of account without specification of the surplus amount by the State Government was not contra indicated in the provision inasmuch as the duty to generate a surplus was implicit with the added obligation to ensure generating surplus to the extent specified by the State Government when it was so specified by it.
It cannot be accepted as a reasonable view that in the absence of specification of the surplus by the State Government, the Board could not adjust its tariffs to generate even a reasonable surplus in any year of account.
[668E G] 2.3 In the instant case the Board showed that the surplus resulting from upward revision of tariffs applicable to the H.T. consumers was for the purpose of better discharge of its other obligations under the Supply Act and in effect the same has merely resulted in a gradual withdrawal of the concessional tariffs provided earlier to the power intensive consumers which did not in its opinion require continuance of the concessional tariffs any longer.
It was not proved that this assertion of the Board was incorrect or there was any reasonable basis to hold that the upward revision of tariffs applicable to H.T. consumers was merely with a desire to earn more profits like a private trader and not to generate surplus for utiliasation of the funds to discharge other obligations of the Board towards more needy consumers, such as agriculturists, or to meet the needs of expansion of the supply to deserving areas.
[669E G] 647 3.1 The H.T. consumers, including the power intensive consumers, are known power guzzlers and in power intensive industries, electricity is really a raw material.
This category of consumers, therefore, forms a distinct class separate from other consumers like L.T. consumers who are much smaller consumers.
There is also a rational nexus of this classification with the object sought to be achieved.
Moreover, the power intensive consumers have been enjoying the benefit of a concessional tariff for quite some time, which too is a relevant factor to justify this classification.
Placing the burden of fuel cost adjustment on these power guzzlers, who had the benefit of concessional tariffs, for quite some time and have also a better capacity to pay, cannot, therefore, be faulted since the consumption in the power intensive industries accounts for a large quantity.
[670B C] 3.2 It is not unreasonable to take the view that the thermal power has become costlier on account of the increase in fuel cost and could notionally be allocated to the consumption by H.T. and power intensive consumers and, therefore, the fuel cost adjustment is made applicable to them alone.
[671E F] 4.1 The Court would not strike down the revision of tariffs as arbitrary unless the resulting surplus reaches such a height as to lead to the inevitable decision that the Board has shed its public utility character and is obsessed by the profit motive of private entrepreneur in order to generate a surplus which is extravagant.
[672A B] 4.2 The surplus generated by the Board as a result of revision of tariffs during the relevant period cannot be called extravagant by any standard to render it arbitrary permitting the striking down of the revision of tariffs on the ground of arbitrariness nor is it discriminatory.
It was pointed out on behalf of the Board that its action was based on the opinion of Rajadhyaksha Committee 's report submitted in 1980 and the formula of fuel cost adjustment was on a scientific basis linked to the increase in the fuel cost.
This is a possible view to take and, therefore, the revision of tariffs by the Board does not fall within the available scope of judicial review.
[672C D] Kerala State Electricity Board vs M/s. S.N. Govinda Prabhu and Bros. & Ors., ; , relied on.
Shri Sitaram Sugar Company Limited & Anr.
vs Union of India & Ors.
, ; , followed.
648 5.
It cannot be said that the term relating to fuel cost adjustment had no application to the power intensive consumers during the relevant period.
The Memo dated 18.11.1975 did not merely extend the non specified 'terms and conditions of supply ' applicable to normal H.T. consumers to the power intensive consumers but also "other charges" which were merely illustrated by the words, "such as Misc.
charges, terms and conditions of supply not mention herein".
This express provision in the said Memo clearly provided that except for the provision specifically made for power intensive consumers, in respect of all other provisions the power intensive consumers were to be governed by the provisions, by whatever name called, applicable to the normal H.T. consumers.
However in the bills issued to the power intensive consumers the terms relating to fuel cost adjustment was specifically indicated.
[673D H; 674A] Nav Bharat Ferro Alloys Ltd. vs A.P.S.E. Board Hyderabad, AIR 1985 A.P. 299, approved.
|
N: Criminal Appeal Nos.
345 346 of 1991.
From the Judgement and Order dated 14.6.1990 of the Madras High Court in Referred Trial Nos. 4/89 and 5/89 and Crl.
Appeal Nos.
593/89 and 594 of 1989.
715 Raju Ramachandran, Jaga Rao, Alok Agarwal, Ms. Malini Bhat and section Ravindra Bhatt for the appellants.
V.R. Karthikeyan and V. Krishnamurthy for the respondent.
The Judgment of the Court was delivered by K. RAMASAWAMY, J.
Special leave to appeals granted.
Heard the learned counsel, Sri Raju Ramachandran amicus curiae for the appellants and Sri V. Krishnamurthy, the learned Standing Counsel for the State.
The appellants Sevaka Perumal and Isakkimuthu for short 'A 1 ' and 'A 2 ' in Appeal arising out of S.L.P. (Crl.) No. 1842/90 are accused in Sessions Case No. 283 of 1986 on the file of the Addl.
Sessions Judge, Tirunelveli Sessions Division and appellants in Criminal Appeal No. 594 of 1989 and R.T. No. 4 of 1989 by judgment, dated June 14, 1990 of the High Court of Madras.
Criminal Appeal arise out of S.L.P. (Crl.) No. 1841/90; Sessions Case No. 284 of 1986 of the same Sessions Division and Criminal Appeal No. 593 and R.T. No. 5 of 1989 dated June 14, 1990 of the Madras High Court respectively, A 1 is the appellant.
In each case the Sessions Court convicted them under sections 120B, 364, 392 read with section 397; section 302 read with section 34 I.P.C. and sentenced to death.
In Crl.
Appeal No. 594 of 1989 and R.T. No. 4 of 1989, the High Court confirmed the conviction and sentence of death of both the appellants.
In Crl.
Appeal No. 593 of 1989 and R.T. No. 5 of 1989, the High Court confirmed the conviction and sentenced of death of the A 1 and acquitted A 2 of all the charges.
The case of the prosecution in brief is that the appellants and PW 1, the approver belonged to kidarakulam village and became friends.
A 1 used to bring money form the timber shop of his brother in law (PW 4) in Sessions Case No. 284/86 in whose shop A 1 had worked.
They used to go to various places.
A 1 used to purchase ganja from chenglapatai and other places and A 1 and A 2 used to sell them.
Yet they did not have enough money to spend lavishly.
They attempted to commit theft in the localities but became impracticable.
Therefore, they conspired to entice boys from affluent families to bring cash and jewellery from their houses; take them to far away places; take their money or jewellery and to murder them for gain.
Pursuant thereto in 1978 they murdered one Athippan; in 1981 one Chelladurai; in March, 1982 one Hariramachandran and in 1983 one Christodas.
In Sessions Case No. 283/86, the deceased boy is Athiappan.
In 716 Sessions Case No. 284/86, the deceased boy is Hariramachandran.
Sessions Case No. 282/86 on the file of the Sessions Court.
Madurai Division relates to deceased Chelladurai.
Therein also we are informed that the appellants were convicted but on appeal they were acquitted.
In sessions Case relating to the death of Christodas, it also ended in conviction and sentence of death was imposed on the appellants and is pending confirmation in the High Court.
It is sufficient to set out the material fact leaving out the minor details in Sessions Case No. 284/86 to meet the points raised by the counsel for the appellants.
A 1 enticed the deceased, Hariramachandran, his nephew (elder sister PW 2 ' son) to bring jewellery from the house of PW 2 and PW 4.
The appellants and PW 1 took him to Madurai.
On the way the deceased went to the house of PW 3 and handed over one chain to be delivered to his mother and took M.O. 1 chain with him.
A 1 had taken a room in the lodge at Madurai run by PW 16.
On coming to know that they were staying in Madurai, PW 2, PW 4, her husband and PW 3 went to the lodge and the deceased was found threat.
He informed them that the chain was with A 1 and he would come in the evening at 8.00 p.m. After waiting for some time and when it was getting dark, the ladies went away asking PW 4 to get the chain and the deceased after A 1 's arrival.
While PW 4 was waiting the deceased went down stairs and after A 1 's arrival told him of his mother 's coming etc.
and from there they went away to Madras, and having come to know that they left the place PW 4 left to his village.
On the next day they returned to Madurai.
From there they went to Usilampatti and A 1 then purchased a knife at the Bus Stand without the knowledge of the deceased and proceeded to Peraiyar road.
They sat near a jungle stream.
While A 1 and the deceased Harirmachandran were sitting near a stone on the southern side of the road, A 2 and PW 1 were standing at a distance, A 1 stabbed Harirmachandran in his stomach with a knife and the deceased collapsed on the stone.
A 1 threw away the knife in the river.
He threw the deceased in the nearby well and washed his hands and legs in the stream.
They returned to Usilampatti Bus Stand.
From there they came to Madurai.
A 1 sold M.O. 1 chain to PW 24 and gave one hundred rupees each to PW 1 and A 2.
This evidence of PW 1 received sufficient corroboration from the evidence of prosecution witnesses.
Sri Raju Ramachandran contended that the dead body was admittedly found in a highly decomposed condition.
There is no proper identification of the dead body to be of the deceased.
The 717 mother PW 2 identified only with reference to the photograph taken of the dead body.
There is evidence that the deceased wrote a letter of leaving to unknown destination.
Unless there is proof that the dead body belongs to Hariramachandran, it is not safe to convict to A 1 to a capital punishment of death sentence.
We find no force in the contention.
In a trial for murder it is not an absolute necessity or an essential ingredient to establish corpus delicti.
The fact of death of the deceased must be established like any other fact.
Corpus delicti in some cases may not be possible to be traced or recovered.
Take for instance that a murder was committed and the dead body was thrown into flowing tidal river or steam or burnt out.
It is unlikely that the dead body may be recovered.
If recovery of the dead body, therefore, is an absolute necessity to convict an accused, in many a case the accused would manage to see that the dead body is destroyed etc.
and would afford a complete immunity to the guilty from being punished and would escape even when the offence of murder is proved.
What, therefore, is required to base a conviction for an offence of murder is that there should be reliable and acceptable evidence that the offence of murder, like any other factum, of death was committed and it must be proved by direct or circumstantial evidence, although the dead body may not be traced.
In this case the evidence of PWs. 7 to 10 would establish that they have seen the dead body of the deceased Hariramachandran in the well and brought it out and the photograph was taken at the time of inquest.
It was identified to be that of the deceased by no other than his mother, PW 2.
Thus we have no hesitation to hold that there is no doubt as regards the identity of the dead body and that the medical evidence establishers that the deceased died due to stabbing with sharp edged weapon like knife.
It is next contended that PW 1 being an approver, his evidence must be reliable and must receive corroboration on all material particulars from independent evidence.
PW 1 is neither a reliable witness nor did his evidence receive such corroboration.
Therefore, his evidence cannot form the basis to convict the appellants.
It is his contention that in Hariramachandran 's death case the evidence of PW 1 was not accepted as regards the complicity of A 2 and he was acquitted.
Therefore, PW 1 is not a reliable witness.
This contention too is devoid of any force.
PW 1 had given wealth of details of commission of the crimes.
Under section 133 of the Evidence Act 1 of 1872, an accomplice shall be a competent witness against an accused person; and a conviction is not illegal merely because it proceeds upon the uncorroborated testimony of an accomplice.
Section 114 illustration (b) postulates that an accomplice is unworthy of credit, unless he is corroborated in mate 718 rial particulars.
In King vs Baskervilli, Lord Reading, CJ, laid the test that the corroboration need not be direct evidence that the accused committed the crime.
It is merely circumstantial evidence of his connection with the crime.
The nature of the corroboration will depend and vary according to the particular circumstances of each case.
What is required is some additional evidence rendering it probable that the story of the accomplice is true and that it is reasonably safe to act upon.
In Mahadeo vs The King AIR 1936 P. C. 242 the judicial committee held that the evidence of an accesory must be corroborated in some material particulars not only bearing upon the facts of the crime but upon the accused 's implication in it.
This Court in Rameshwar vs The State of Rajasthan, ; held that it is not necessary that there should be independent confirmation of every material circumstance in the sense that the independent evidence of the case, apart from the testimony of the complainant or its accomplice should in itself be sufficient to sustain conviction.
All that is necessary is that there should be independent evidence which will make it reasonably safe to believe that the witness 's story that the accused was the one that committed the offence could be acceptable.
The corroboration need not be direct evidence that the accused committed the crime.
It is sufficient if it is merely circumstantial evidence of his connection with the crime.
In section Swaminathan vs State of Madras, AIR 1957 SC 340 this Court held that corroboration of approver 's evidence need not be of a kind which prove the offence against the accused.
It is sufficient if it connects the accused with the crime when the accused had been charged for the offences of conspiracy and of cheating, a specific instance of cheating proved beyond doubt against one of the accused would furnish the best corroboration of the offence of the conspiracy.
In Sarwan Singh vs The State of Punjab, ; relied by Shri Raju Ramachandran, this Court held that the approver must be a reliable witness and the evidence must receive sufficient corroboration.
In that case the corroboration of minor particulars was accepted to be sufficient to hold the approver to be reliable witness.
In B.D. Patil vs State of Maharashtra, this Court held that the conviction of an accused on the testimony of an accomplice cannot be said to be illegal, yet the courts will, as a matter of practice do not accept the evidence of such a witness without corroboration in material particulars.
There should be corroboration of the approver in material particulars and must be qua each accused.
In Md. Hussain Umar Kochra etc.
vs K.S. Dalipsinghji & Anr., [1970] 1 S.C.R. 130 it was held that the combined effect of sections 133 and 114(b) is that though a conviction based upon accomplice evidence is legal the court will not accept such evidence unless it is 719 Corroborated in material particulars.
The corroboration must be from an independent source.
If several accomplices simultaneously and without previous concert giving consistent account of the crime implicating accused, the court may accept the several statements as corroborating each other.
In Ram Narain vs State of Rajasthan, ; this Court held that section 114(b) strikes a note of warning, cautioning the court that an accomplice does not generally deserve to be believed unless corroborated in material particulars.
In other words, the rule is that the necessity of corroboration is as matter of prudence except when it is safe to dispense with such corroboration must be clearly present to the mind of the Judge.
In Abdul Sattar vs Union Territory, Chandigarh, [1985] (Suppl.) S.C.C. 599 this Court further held that it is not safe to convict an accused on the charges like murder upon the evidence of uncorroborated testimony of the approver.
Thus the settled law is that an approver is a competent witness against the accused person.
But the court, to satisfy its conscience, insists as caution and prudence to seek, as a rule, corroboration to the evidence of the approver, a particips criminis from independent evidence occular or circumstantial, of general particulars regarding the story spoken off by the approver of the commission of the crime and the part played by the accused therein to find whether it is true and worthy of acceptance.
The reliability of the evidence of an approver should be considered from totality of the facts and circumstances.
In the trial of Athiappan murder there is no dispute that such a corroborative evidence connecting both the appellants is available which was minutely considered by the trial court and the High Court and was accepted.
We find no infirmity in that regard.
In the trial of the death of Hariramachandran, A. 2 was acquitted on the ground that his extra judicial confession made to P.W. 23, the only corroborative evidence,was disbelieved by the High Court.
Both the courts below gave categorical finding that P.W. 1 is a reliable witness.
the evidence of the approver received corroboration from independent evidence on general prosecution case, namely, P.W. 16 spoke that the deceased was brought by the accused and stayed in the lodge.
P.Ws 2 to 4 spoke of A 1 working in their shop, previous theft by A 1 and M.O. 1 being missing, their attempt to take back the deceased and M.O, 1, the deed body was found in the well and was taken out as spoke to by P. Ws.
7to 10.
The medical evidence establishes the stabbing with the knife and death was due to it.
P.W. 24 corroborates A. 1 of selling M.O. 1 chain and taking the money.
The canopy of the material evidence from independent sources sufficiently corroborates the approver ' evidence.
720 PW 1 is a reliable witness.
No infirmity has been pointed out to disbelieve his evidence.
It is next contended that the courts below were not justified in imposing the extreme penalty of death sentence under section 302, I.P.C. and strongly relied upon the judgment of Bachan Singh 's case.
It is contended that the acquittal of A. 2 giving the benefit of doubt in Hariramachandran 's death trial introduces an element of doubt which should be extended to convert the death sentence of A. 1 to life imprisonment.
We find no susbstance in the contention.
The doctrine of benefit of doubt only would operate in proof of the commission of the offence.
If there is any reasonable doubt, not the doubt of vacillating mind of a Judge, the accused is entitled to the benefit and acquitted.
The benefit of doubt again does not enter in the area of consideration of imposing sentence.
The law regulates social interest, arbitrates conflicting claims and demands.
Security of persons and property of the people is an essential function of the State.
It could be achieved through instrumentality of criminal law.
Undoubtedly, there is a cross cultural conflict where living law must find answer to the new challenges and the courts are required to mould the sentencing system to meet the challenges.
The contagion of lawlessenss would undermine social order and lay it in ruins.
Protection of society and stamping out criminal proclivity must be the object of law which must be achieved by imposing appropriate sentence.
Therefore, law as a corner stone of the edifice of order should meet the challenges confronting the society.
Friedman in his "Law in Changing Society" stated that, "State of criminal law continues to be as it should be a decisive reflection of social consciousness of society".
Therefore, in operating the sentencing system, law should adopt the corrective machinery or the deterrence based on factual matrix.
By deft modulation of sentencing process be stern where it should be, and tempered with mercy where it warrants to be.
The facts and given circumstances in each case, the nature of the crime, the manner in which it was planned and committed, the motive for commission of the crime, the conduct of the accused and all other attending circumstances are relevant facts which would enter into the area of consideration.
For instance a murder committed due to deep seated personal rivalry may not call for penalty of death.
But an organised crime or mass murders of innocent people would call for imposition of death sentence as deterrence.
In Mahesh vs State of M.P., this Court while refusing to reduce that death sentence observed thus: 721 `It will be a mockery of justice to permit the accused to escape the extreme penalty of law when faced with such evidence and such cruel acts.
To give the lesser punishment for the accused would be to render the justicing system of the country suspect.
The common man will lose faith in courts.
In such cases, he understands and appreciates the language of deterrence more than the reformative jargon '.
Therefore, undue sympathy to impose inadequate sentence would do more harm to the justice system to undermine to public confidence in the efficacy of law and society could not long endure under serious threats.
If the courts did not protect the injured, the injured would then resort to private vengeance.
It is, therefore, the duty of every court to award proper sentence having regard to the nature of the offence and the manner in which it was executed or committed etc.
It is clear from the evidence that the accused indulged in illegal business of purchase and sale of ganja.
They conspired to entice innocent boys from affluent families took them to far flung places where the dead body could not be identified.
The letters were written to the parents purporting to be by the deceased to delude the parents that the missing boy would one day come home alive and that they would not give any report to the police and the crime would go undetected.
Four murders in a span of five years were committed for gain in cold blooded , pre meditated and planned way.
It is undoubted that if the trial relating to Athiappan murder had taken place and concluded earlier to the trial and conviction of other three murders, the subsequent murders are not relevant facts to be considered.
But in this case the trial of the murder relating to Athiappan and Hariramachandran practically took place simultaneously by which date the appellants were convicted for the murder of Chelladurai and Christodas.
Therefore ,the reference of conviction and sentence by the Sessions Court to those two cases also are relevant facts.
The deceased Hariramachandran is no other than the nephew (elder sister 's son) of A 1.
This would establish his depravity and hardened criminality.
No regard for precious lives of innocent young boys was shown.
They adopted the crime of murder for gain as a means to living.
Undoubtedly under section 235(2) of Code of Criminal Procedure, the accused is entitled to an opportunity to adduce evidence and if need be the case is to be adjourned to another date.
It is illegal to convict, an accused and to impose sentence on the same day.
It is true 722 as contended for the State that under section 309, third proviso brought by Amendment Act, 1978 that no adjournment should be granted for the purpose only of enabling the accused person to show cause against sentence to be imposed upon him.
Under section 235(2) when the accused has been given right to be heard on the question of sentence it is a valuable right.
To make that right meaningful the procedure adopted should be suitably moulded and the accused given an opportunity to adduce evidence on the nature of the sentence.
The hearing may be on the same day if the parties are ready or be adjourned to a next date but once the court after giving opportunity propose to impose appropriate sentence again there is no need to adjourn the case any further thereon.
No doubt the Sessions Judge needed to adjourn the case under section 235(2) to next date but in the High Court the counsel was directed to show any additional grounds on the question of sentence .
The High Court observed that the counsel was unable to give any additional ground.
It is Further contended that the appellants are young men.
They are the bread winners of their family each consisting of a young wife.
minor child and aged parents and that, therefore, the death sentence may be converted into life.
We find no force.
These compassionate grounds would always be present in most cases and are not relevant for interference.
Thus we find no infirmity in the sentence awarded by the Sessions Court and confirmed by the High Court warranting interference.
The appeals are accordingly dismissed.
G.N. Appeal dismissed.
| According to the Prosecution, appellants 1 and 2 have been friends and were in the habit of selling ganja and spending money lavishly.
They attempted to commit theft in their locality, but were no successful.
Therefore, they hatched a conspiracy to entice boys from affluent families to bring cash and jewellery and murder them after taking away the cash and jewellary.
Likewise, they killed 4 boys, in a span of about 5 years.
Both of them were charged with offences under section 120B read with section 34 IPC, section 364 and 392 read with section 397 IPC in all the four cases filed against them, and were convicted by the Sessions Court.
However, in one case, on appeal, they were acquitted by the High Court.
In another case, the death sentence imposed by the Sessions Court is pending confirmation by the High Court.
In the other two cases, both the appellants were sentenced to 712 death by the Sessions Court and on appeal the High Court confirmed the sentence in one case and in the other, the High Court confirmed the death sentence passed against appellant No. 1 and acquitted appellants No. 2 of all the charges.
The appellants preferred the present appeals challenging the said order of the High Court confirming the sentences against them by contending that there was no proper identification of the dead body and that the approver was not a reliable witness and since his evidence did not receive corroboration, it cannot form the basis for convicting the appellants.
It was also contended that the extreme penalty of death sentence imposed was not justified.
Dismissing the appeals, this Court, HELD: 1.1 In a trial for murder it is not an absolute necessity or an essential ingredient to establish corpus delicti.
The fact of death of the deceased must be established like any other fact.
Corpus delicti in some cases may not be possible to be traced or recovered.
If a murder was committed and the dead body was thrown into flowing tidal river or stream or burnt out, it is unlikely that the dead body may be recovered.
If recovery of the dead body, therefore, is an absolute necessity to convict an accused, in many a case the accused would manage to see that the dead body is destroyed etc.
and that would afford a complete immunity to the guilty from being punished and the accused would escape even when the offence of murder is proved.
What, therefore, is required to base a conviction for an offence of murder is that there should be reliable and acceptable evidence that the offence of murder, like any other factum, of death was committed and it must be proved by direct or circumstantial evidence, although the dead body may not be traced.
[717A D] 1.2 In the instant case, the evidence of PWs.
7 to 10 would establish that they have seen the dead body of the deceased in the well and brought it out and the photograph was taken at the time of inquest.
It was identified to be that of the deceased by no other than the mother of the deceased.
Thus there is no doubt as regards the identity of the dead body.
Also the medical evidence establishes that the deceased died due to stabbing with sharp edged weapon like knife.
[717E] 2.
Law is settled that an approver is a competent witness against the accused person.
But the court, to satisfy its conscience, insists as caution and prudence to seek, as a rule, corroboration to the evidence 713 of the approver, a particips criminis from independent evidence occular or circumstantial, of general particulars regarding the story spoken of by the approver of the commission of the crime and the part played by the accused therein to find whether it is true and worthy of acceptance.
The reliability of the evidence of an approver should be considered from totality of the facts and circumstances.
In one of the two trials there is no dispute that such a corroborative evidence connecting both the appellant is available which was minutely considered by the trial court and the High Court and was accepted.
There is infirmity in that regard.
In the other trial appellant No. 2 was acquitted on the ground that his extra judicial confession made to PW 23, the only corroborative evidence, was disbelieved by the High Court.
Both the Courts below gave categorical finding that PW 1 is a reliable witness.
The evidence of the approver received corroboration from independent evidence.
The canopy of the material evidence from independent sources sufficiently corroborates the approver 's evidence.
He is a reliable witness.
No infirmity has been pointed out to disbelieve his evidence.
[719D H; 720A] Rameshwar vs The State of Rajasthan, ; ; section Swaminathan vs State of Madras, AIR 1957 SC 340; Sarwan Singh vs The State of Punjab, , ; ; B.D. Patil vs State of Maharashtra, ; Md. Hussan Umar Kochra etc.
vs K.S. Dalipsinghji & Anr., [1970] 1 SCR 130; Ram Narain vs State of Rajasthan, ; and Abdul Sattar vs Union Territory, Chandigarh, [1985] (Suppl.) SCC 599, relied on.
King vs Baskervilli, and Mahadeo vs The King, AIR 1936 P.C. 242, referred to.
In the instant case, it is clear from the evidence that the accused indulged in illegal business of purchase and sale of ganja.
They conspired to entice innocent boys from affluent families, took them to far flung places where the dead body could not be identified.
The letters were written to the parents purporting to be by the deceased to delude the parents that the missing boy would one day come home alive and that they would not give any report to the police and the crime would go undetected.
Four murders in a span of five years were committed for gain in cold blooded, premeditated and planned way.
In this case the trial of the murder relating to the two deceased practically took place simultaneously by which date the appellants were convicted for the murder of two other boys.
Therefore, the reference of conviction and sentence by the Sessions Court to those two cases also are relevant facts.
One of the deceased is no other than the nephew of appellants No. 1.
This 714 would establish his depravity and hardened criminality.
No regard for precious lives of innocent young boys was shown.
They adopted the crime of murder for gain as a means to living.
As such there is no infirmity in the sentence awarded by the Sessions Court and confirmed by the High Court.
[721D G] 4.
The doctrine of benefit of doubt only would operate in proof of the commission of the offence.
If there is any reasonable doubt, not the doubt of vacillating mind of a Judge, the accused is entitled to that benefit and be acquitted.
The benefit of doubt again does not enter in the area of consideration of imposing sentence.
[720C] 5.1.
Undue sympathy to impose inadequate sentence would do harm to the justice system to undermine the public confidence in the efficacy of law and society could not long endure under serious threats.
If the courts did not protect the injured the injured would then resort to private vengeance.
It is, therefore, the duty of every court to award proper sentence having regard to the nature of the offence and the manner in which it was executed or committed etc.
[721C] 5.2.
The compassionate grounds such as the accused being young bread winners of the family etc.
would always be present in most casts and are not relevant for interference with the sentence.
[722D] 6.
Under section 235(2) when the accused has been given right to be heard on the question of sentence it is a valuable right.
To make that right meaningful the procedure adopted would be suitably moulded and the accused given an opportunity to adduce evidence on the nature of the sentence.
The hearing may be on the same day if the parties are ready or to a next date but once the court after giving opportunity, proposes to impose appropriate sentence again there is no need to adjourn the case under section 235(2) to next date.
In the present matters the counsel was directed by the High Court to show any additional grounds on the question of sentence, but the counsel was unable to give any additional ground.
[722B C]
|
ivil Appeal No. 2279 of 1991.
From the Judgment and Order dated 27.9.1989 of the Bombay High Court in C.R.A. No. 500 of 1985.
S.C. Birla for the Appellant.
V.N. Ganpule, S.V. Deshpande and Ms. Priya Gupta for the Respondent.
The Judgment of the Court was delivered by RAY, J.
We have heard learned counsel for the parties and we grant special leave.
This appeal on special leave is directed against the judgment and order passed in Civil Revision Application No. 500 of 1985 by the High Court of Judicature at Bombay, Aurangabad Bench allowing the Revision, setting aside the judgment and decree passed by the District Judge in Rent Appeal No. 5 of 1984 confirming and allowing the judgment and order of the Additional Rent Controller, Aurangabad in R.C. No. ARC/71/3.
The matrix of the case is as follows: The appellant landlord, Chandmal, S/o Sumermal Surana as plaintiff filed a suit for eviction of the respondent defendent Firm Ram Chandra & Vishwanath, a commission agent firm from his shop bearing Municipal No. 4 16 101 situated a Mondha, Taluka, District Aurangabad (maharashtra) under section 15(3)(a)(iii) of the Hyderabad House (Rent, Eviction and Lease) Control Act, 1954 to be hereinafter to be referred to as the said Act on the ground inter alia that the respondent was the tenant of the said shop attached to the said house of the appellant landlord on the monthly rent of Rs.50 per month and the tenancy commences from the Ist day of every month according to the English calendar, that the landlord appellant required the suit shop for his own personal use as he intended to start commission agency and other business in the said shop, that he terminated the tenancy of the respondency of the respondent by serving the two notices dated 28.3.1969 and 8.12.1970 and that the respondent did not vacate the suit premises, hence the suit has been filed for eviction of the tenant respondent from the said premises.
Shankarrao Marutirao Sonawane, 735 one of the partners of respondent firm filed his written statement before the Additional Rent Controller accepting the ownership of the appellant and tenancy of the respondent at the rate of Rs. 50 per month.
He, however, denied the appellant 's allegation that he required the suit premises for his personal use.
According to the respondent, the appellant is a member of Hindu joint family comprising of his father, Sumermal, his real brothers and appellant and as one of the partners of registered firm runs a kirana of commission agency shop under the name and style of M/s Rajmal Sumermal Surana.
It has been further submitted that the appellant owns many houses and shops at Aurangabad and also runs a very big shop at Bhaji Bazar, Aurangabad and is not entitled to evict.
In the additional written statement it has been further stated that the appellant purchased the house from Balkrishna and brothers, the firm Ramchandra and Vishwanath is a partnership firm registered under the Partnership Act, one of the partners of the firm Ramchandra and Vishwanath is occupying the house as a permanent tenant since Samwat 2002.
It has also been contended that the partners of the firm are not made parties to the eviction proceedings and hence the suit was not tenable.
An additional issue was framed at the request of the appellant which was to the following effect: "Do defendant prove that he is permanent tenant and his claim is bona fide.
" The trial court considering the evidences adduced on behalf of the defendant respondent held that the defendant failed to prove the claim of permanent tenancy of Ramchandra Madhavrao since Samvat 2002 over the suit premises and that the claim of permanent tenancy is not bona fide.
This issue was thus answered in the negative.
The Additional Rent Controller, therefore, held that the appellant is entitled to evict the respondent from the suit premises in view of the provisions of Section 15(2) (vi) of the said Act and, therefore, Made an order directing the tenant respondent to hand over vacant and peaceful possession of the said shop to the landlord appellant within a period of 30 days of the order though he negatived the plea of bona fide requirement of suit premises for his own occupation.
The order was made on February 14, 1984.
Against this judgment and order, the tenant respondent filed an appeal being Rent Appeal No. 5 of 1984 under section 25 of the said Act in the court of 736 District Judge at Aurangabad.
The learned District Judge confirmed the judgment and order of the Additional Rent Controller holding that the landlord failed to prove that he bona fide required the premises for personal use, for starting new business.
It was further held that so far as the claim of permanent tenancy, there was no iota of evidence to support the tenant respondent 's claim of permanent tenancy.
It also held that the tenant respondent has put forth the claim of permanent tenancy to defeat the landlord appellant 's right to claim possession of the premises and had there been any substance in the claim, the tenant respondent would have produced evidence in support of it.
Complete absence of evidence indicated that the claim is fake and not put forth bona fide.
The learned District Judge, therefore, held that the tenant 's claim of permanent tenancy was not bona fide and so upheld the finding of the Additional Rent Controller and granted three months ' time to the tenant respondent to deliver possession of the suit premises to the landlord appellant.
The tenant respondent feeling aggrieved filed an application for Revision under Section 26 of the said Act in the High Court at Bombay (Aurangabad Bench) being Civil Revision Application No. 500 of 1985.
The said Revision Application was allowed by the learned Single Judge setting aside the concurrent finding of the courts below holding inter alia that in the reply of the tenant to the notices sent by the landlord, there was no semblance of a claim for permanent tenancy.
It was further held that in the written submission there was no whisper about the claim of permanent tenancy.
It is for the first time that in the additional written statement filed on behalf of the tenant the claim of permanent tenancy by one of the partners, Ramchandra Madhavrao since Samwat 2002 was made.
It has also been held that during the trial, Shankarrao Marutirao Sonawane, one of the partners of the respondent firm who has signed the written statement has not uttered a word in his examination in chief with regard to the question of permanent tenancy.
It was, therefore, held that in these circumstances "it is the duty of the Court in the interest of justice to interfere even with a concurrent finding of fact because on the record, I find that there is not a single factor to come to the conclusion that the claim was mala fide or was not bona fide as is required by the statute.
" The learned Single Judge, therefore, set aside the judgments of the courts below and allowed the Revision Application with costs throughout.
It is against this judgment and order, the instant appeal on 737 special leave has been filed by the landlord.
It is convenient to set out hereinbelow the relevant provisions of Section 15(2)(vi) of the said Act before proceeding to consider whether the High Court was justified in setting aside the judgment and order of the courts below: Section 15(2)(vi): A tenant shall not be evicted, whether in execution of a decree or otherwise except in accordance with the provisions of this section (vi) that the tenant has denied the title of the landlord or claimed a right of permanent tenancy and that such denial or claim was not bona fide the Controller shall make an order directing the tenant to put the landlord in possession of the house, and if the Controller is not so satisfied he shall make an order, rejecting, rejecting the application.
" It is also pertinent to set out in this connection the provisions of Section 26 of the said Act: Section 26: "Notwithstanding anything contained in this Act or any other law for the time being in force, an application for revision shall lie to the High Court from any final order passed on appeal by an appellate authority on the following grounds: (a) that the original or appellate authority exercised a jurisdiction not vested in it by law, or (b) that the original or appellate authority failed to exercise a jurisdiction so vested, or (c) in following the procedure or passing the order, the original or appellate authority acted illegally or with material irregularity.
" There is no dispute regarding the submission made in para 9 of the additional written statement which is a part of the same written statement, filed on behalf of the respondent by one of its partners, Shankarrao Marutirao Sonawane to the effect that one of the partners 738 of the said firm, Ramachandra Madhavrao is occupying the house as a permanent tenant since Samvat 2002.
Admittedly, on the basis of this additional written statement, an additional issue No. 1 was framed at the request of the landlord appellant whether the claim of permanent tenancy of Ramchandra Madhavrao was bona fide.
It is evident from the provisions of Section 15(2)(vi) as set out hereinbefore that if the tenant has claimed a right of permanent tenancy and that such claim was not bona fide the Controller shall make an order directing the tenant to put the landlord in possession of the house.
The Additional Rent Controller as well as the District Judge considered carefully and minutely the evidences adduced on behalf of the tenant respondent and found that claim of permanent tenancy was not bona fide.
Accordingly, the courts below held that the tenant respondent was liable to be evicted from the suit premises on this ground alone and passed order for eviction from the suit premises.
The jurisdiction of the High Court in revision against the order passed on appeal by the District Judge is a limited one and it is almost pari materia with the provisions of Section 115 of the Code Procedure.
The High Court while exercising the revisional jurisdiction can interfere with the order passed on appeal by the appellate authority only on three grounds i.e. (i) where the original or appellate authority exercised a jurisdiction not vested in it by law, or (ii) where the original or appellate authority failed to exercise a jurisdiction so vested, or (iii) where in following the procedure or passing the order, the original or appellate authority acted illegally or with material irregularity.
It is evident from the averments made in para 9 of the additional written statement that one of the partners of the respondent firm, Ramchandra Madhavrao occupied the said premises as a permanent tenant since Samvat 2002.
This claim of permanent tenancy was held to be not bona fide by the original court as well as by the appellate authority on a consideration and appraisement of the evidences adduced on behalf of the tenant respondent and as such both the courts below passed order of eviction of the tenant respondent from the suit premises.
These are admittedly concurrent findings of fact arrived at by the original and the appellate authority.
Moreover, these findings in any view of the matter whatsoever, cannot be held to be either without jurisdiction nor it can amount to a failure to exercise jurisdiction vested with them, nor it can be held to be made by the original or appellate authority illegally or with material irregularity.
The revisional jurisdiction of the High Court under Section 26 of the said Act is confined strictly to the jurisdictional error or illegal exercise of jurisdiction.
The finding of the High Court to the effect 739 that it was the duty of the Court in the interest of justice to interfere even with the concurrent finding of facts because on the records, High Court found that there was not a single factor to come to the conclusion that the claim was mala fide or was not bona fide as required by the statute, is entirely baseless and not in accordance with the provisions of Section 26 of the said Act which confers revisional jurisdiction on the High Court.
It is pertinent to mention in this connection the decision in J. Pandu vs R. Narsubai, It is a case under the A.P. Buildings (lease, Rent and Eviction) Act, 1960.
Sub section 2(vi) of Section 10 of A.P. Buildings (Lease, Rent and Eviction) which is similar to Section 15(2)(vi) of the Hyderabad Houses (Rent, Eviction and Lease) Control Act, 1954 sets out two grounds of eviction viz. (1) denial of title of the landlord without bona fides and (2) claim of permanent tenancy rights without bona fides.
It was held that "consequently, either denial of title or claim of permanent tenancy without bona fides will itself be enough to attract Section 10(2)(vi).
The order of eviction on this ground, has therefore, to be sustained.
By reason of this conclusion alone the appeal can be dismissed.
" In the case of Majati Subbarao vs P.V.K.Krishna Rao (deceased) by Lrs., it has been observed that the denial of title of the landlord by the tenant must be made in clear and in unequivocal terms.
It was further observed that it is well settled that the court hearing a suit or appeal can take into account events which are subsequent to the filing of the suit in order to give appropriate relief or mould the relief appropriately.
As we have stated hereinbefore that the claim of permanent tenancy by one of the partners, Ramchandra Madhavrao has been clearly and unequivocally made in the additional written statement filed on behalf of the respondent.
In such circumstances, the provisions of Section 15(2)(vi) of the said Act are applicable and an order of eviction can very well be passed on this ground alone.
In the premises aforesaid, the judgment and order passed in revision by the High Court is contrary to law as the High Court in exercise of its revisional jurisdiction interfered with the concurrent finding of fact arrived at by the original court as well as the appellate authority.
The High Court should not have reversed the same in excise of its revisional jurisdiction under Section 26 of the said Act.
We, therefore, set aside the judgment and order of the High Court and uphold the orders of the court below.
The respondent is given three 740 months ' time to vacate the suit premises on filing the usual undertaking that they will not induct anybody or transfer the same to any other person and they will go on paying the rent of the premises at the usual rate and will deliver vacant and peaceful possession of the suit premises on or before the expiry of the said period to the landlord appellant.
In the facts and circumstances of the case, the parties will bear their own costs.
V.P.R. Appeal allowed.
| The appellant landlord filed a suit for eviction of the respondent firm defendant commission agent firm, from his shop under section 15(3)(a)(iii) of the Hyderabad House (Rent, Eviction and Lease) Control Act, 1954 on the ground that the appellant required the suit shop for his own personal use as he intended to start commission agency and other business; and that the respondent did not vacate the premise inspite of his two notices, terminating the tenancy.
The respondent filed written statement before the Additional Rent Controller accepting the ownership of the appellant and tenancy of the respondent and denied the appellant 's allegation that he required the premises for his personal use, as the appellant was a member of Hindu Joint family comprising of his father, and his brothers, and his brothers and appellant; the appellant as one of the partners of registered firm runs a kirana of commission agency shop under the name and style of M/s Rajmal Sumermal Surana and the appellant owned many houses and shops and as such was not entitled to an order of eviction.
In the additional written statement it was further stated that the appellant purchased the house from one registered partnership firm and one of the partners of the firm was occupying the house as a permanent tenant since Samwat 2002.
It was also contended that the partners of the firm were not made parties to the eviction proceedings and hence the suit was not tenable.
The Trial Court considering the evidence allowed the suit holding that the appellant was entitled to evict the respondent in view of the provisions of Section 15(2)(vi) of the Act, though the plea of bona fide requirement was negatived.
The tenant respondent filed an appeal under section 25 before the 733 District Judge, which was dismissed though it was held that the landlord failed to prove that he required the premises for personal use.
The tenant respondent 's revision petition under section 26 to the High Court, was allowed by a Single Judge.
Allowing the landlord 's appeal, this Court HELD: 1.
The jurisdiction of the High Court in revision against the order passed on appeal by the District Judge is a limited one and it is almost pari materia with the provisions of Section 115 of the Code of Civil Procedure.
The High Court while exercising the revisional jurisdiction can interfere with the order passed on appeal by the appellate authority only on three grounds, i.e. (i) where the original or appellate authority exercised a jurisdiction not vested in it by law, or (ii) where the original or appellate authority failed to exercise a jurisdiction so vested, or (iii) where in following the procedure or passing the order, the original or appellate authority acted illegally or with material irregularity.
[738C E] 2.
The findings in any view of the matter whatsoever cannot be held to be either without jurisdiction vested with them, nor it can be held to be made by the original or appellate authority illegally or with material irregularity.
[738G] 3.
The revisional jurisdiction of the High Court under Section 26 of the said Act is confined strictly to the jurisdictional error or illegal exercise of jurisdiction.
The finding of the High Court to the effect that it was the duty of the Court in the interest of justice to interfere even with the concurrent finding of facts because on the record, High Court found that there was not a single factor to come to the conclusion that the claim was mala fide or was not bona fide as required by the statute, is entirely baseless and not in accordance with the provisions of Section 26 of said Act which confers revisional Jurisdiction on the High Court.
[738H 739B] 4.
The claim of permanent tenancy by one of the partners has been clearly and unequivocally made in the additional written statement filed on behalf of the respondent.
In such circumstances, the provisions of Section 15(2) (vi) of the said Act are applicable and an order of eviction can very well be passed on this ground alone.
[739F] 734
|
N: Criminal appeal No. 383 of 1991.
From the Judgment and Order dated 17.7.1990 of the Orissa High Court in Crl.
Rev. No. 382 of 1986.
Janaranjan Das for the Appellants.
A.K. Panda for the Respondent.
The Judgment of the Court was delivered by RAY, J.
Special leave granted.
Arguments heard.
This appeal by special leave is directed against the judgment and order dated July 17, 1990 passed by the High Court of Orissa in Criminal Revision No. 382 of 1986 dismissing the revision and affirming the concurrent findings of the courts below.
The prosecution case in short is that on 19th March, 1983 at about 7.p.m.
while the victim girl Srimanthini Samal (P.W. 2) was going to the house of Rama Samal, for study, the appellant Gagan informed her that the other appellant Prafulla and others had tied her tutor Rabi Babu in a nearby mango grove and her father was present there.
Having believed the version of the appellant Gagan, her agnatic uncle, she accompanied him and ultimately the appellants forcibly took her to a lonely house in hills where she was made to sit on a chair and the appellant Gagan forcibly thrushed in her mouth a liquor bottle and she was made to drink the liquor.
Thereafter both the appellants after having undressed her committed sexual assault on her.
Then she was brought to expression highway from where she was bodily lifted to a truck standing there and left her in the truck.
While the said truck was unloading materials near village Kurujanga, the victim girl stealthily left the truck and concealed her presence near a fence.
Subsequently, one Purusottam Mohanty rescued her and brought her to his house and then she was left to the house of one Niranjan Rout (P.W. 8), who was distantly related to her and took shelter till her father took her back on being 842 informed.
On the information lodged by her father (P.W. 1) in the police station of Badachana a case under sections 363 and 376 read with section 34 of the I.P.C. was registered against the accused appellants and after investigation the I.O. sent the victim girl as well as the appellants for medical examination and after completion of the investigation a charge sheet was submitted against the appellants to stand their trial.
The pleas of the appellants were a total denial of the prosecution case.
The appellant Prafulla took the plea the there was a marriage proposal of the victim girl with him but when it was disclosed that she had illicit relationship with her tutor Rabi, he refused to marry her for which this false case was foisted against him.
The plea of the other appellant Gagan as suggested to the informant, was that due to his previous enmity he was falsely implicated with the alleged crime.
The appellants were committed to the Court of Sessions.
The learned Assistant Sessions Judge after considering the evidences on record rejected the defence pleas, and found that the accused appellants committed rape on the victim girl without her consent relying on the provisions of Section 114(A) of the Evidence Act, and convicted them under section 376(2)(g) I.P.C. and sentenced each of the accused appellants to rigorous imprisonment for three years considering the young age of the appellants.
The Assistant Sessions Judge, however, acquitted the appellants from the charge under section 366 I.P.C. as the victim girl was more than 16 years of age at the time of occurrence.
Against this judgment and order of conviction the appellants filed an appeal being Criminal Appeal No. 153 of 1984 in the Court of First Additional Sessions Judge, Cuttack.
The Additional Sessions Judge considered the pleas of the appellants as well as duly scrutinized and appraised the evidences on record and found that the accused appellants committed rape on the victim girl without her consent and affirmed the conviction and sentence imposed by the Trial Court dismissing the appeal.
The appellants thereafter filed a Revision Case being Criminal Revision No. 382 of 1986 in the High Court of Orissa at Cuttack against the said judgment and order passed by the First Additional Sessions Judge, Cuttack.
The High Court duly considered and appraised the evidences of all the 9 P. Ws. including the deposition of the victim girl Srimanthni Samal (P.W. 2), the evidence of her father (P.W. 1) as well as the evidence of her mother (P.W. 3) and the evidences of the two Doctors (P.W. 4) and P.W. (5) and held that the accused persons committed rap on P.W. 2 forcibly without her con 843 sent.
It has been further found from the reliable evidences of P.Ws. 1 and 3 that as soon as P.W. 2 met her mother, P.W. 3, P.W. 2 told her mother about both the accused persons committing rape on her in a solitary house and also about the accused persons taking her away to the highway and keeping her in a truck, and corroborate the version of P.W. 2 regarding the occurrence of rape committed n her by both the accused persons.
It has been further observed that even though the P.Ws. 7 and 8 became hostile still then their evidences can be safely relied on as the same fully corroborates the version of P.W. 2 that on the relevant night the she, with the help of P.W. 7 had taken shelter in the house of P.W. 8 P.W. 6 who the driver of the truck No. ORG 4839 also stated in his evidence that the accused persons and two others took the victim girl and left her in the truck.
P.W. 6 further admitted that as he stopped the truck at village Ambura for unloading the boulders, the girl had stealthily left his truck and inspite of his searching her, he could not trace her.
This fully supports the version of P.W. 2 that she left the truck and concealed herself near a fence in darkness.
The learned Judge, therefore, held "Hence, on a careful scrutiny of the evidences of the hostile witnesses P.Ws. 6 and 8 it is seen that even they corroborate the evidence of the victim gild, P.W. 2 on material aspects of the prosecution case.
" In cases of rape, generally it is difficult to find any corroborative witnesses except the victim of the rape.
It has been observed by this Court in Bharwada Bhoginbhai Hirjibhai vs State of Gujarat, ; as follows: "Corroboration is not the sine qua non for a conviction in a rape case.
In the Indian setting, refusal to act on the testimony of a victim of sexual assault inthe absence of corroboration as a rule, is adding insult to injury.
Why should the evidence of the girl or the woman who complains of rape or sexual molestation be viewed with the aid of spectacles fitted with lenses tinged with doubt, disbelief or suspicion? To do so is to justify the charge of male chauvinism in a male dominated society.
A girl or a woman in the tradition bound non permissive society of India would be extremely reluctant even to admit that only incident which is likely to reflect on her chastity had ever occurred.
She would be conscious of the danger of being ostracized by the society or being looked down by the society including by her own family members, 844 relatives, friends, and neighbours.
She would face the risk of losing the love and respect of her own husband and near relatives, and of her matrimonial home and happiness being shattered.
If she is unmarried, she would apprehend that it would be difficult to secure an alliance with a suitable match from a respectable or an acceptable family.
In view of these and similar factors, the victims and their relatives are not too keen to bring the culprit to book.
And when in the face of these factors the crime is brought to light there is a built in assurance that the charge is genuine rather than fabricated.
" The above observation has been made by this Court relying on the earlier observations made by this Court in Rameshwar vs The State of Rajasthan, with regard to corroboration of girl 's testimony and version.
Vivian Bose, J, who spoke for the Court observed as follows: "The rule, which according to the case has hardened into one of law, is not that corroboration is essential before there can be a conviction but that the necessity of corroboration, as a matter of prudence, except where the circumstances make it safe to dispense with it, must be present to the mind of the judge, . . . .The only rule of law is that this rule of prudence must be present to the mind of the judge or the jury as the case may be and be understood and appreciated by him or them.
There is no rule of practice that there must, in very case, be corroboration before a conviction can be allowed to stand.
" In the instant appeal as had been stated hereinbefore that P.W. 2, the victim girl has clearly stated in her evidence that she had been taken to a solitary house in the hills by the appellant No. 1 Gagan Bihari Samal and there she was made to drink liquor and thereafter she was undressed and forcibly subjected to sexual intercourse by both the accused appellants one after the other.
He uncontroverted testimony has been accepted by all the courts and the courts concurrently found that she was raped without her consent.
It has been tried to be contended on behalf of the appellants that the amended section 114(A) was brought into the Evidence Act after the commission of the offence for which the appellants were charged and as such no assumption can be made on the basis of this provision.
This submission is of no avail in as much as it is clearly evident that the victim girl protested and 845 struggled while she was subjected to sexual assault forcibly by the accused persons and this clearly evinces absence of consent on part of the victim girl in such sexual intercourse apart from the legal presumption that follows from the provisions of Section 114(A) of the Evidence Act.
The learned counsel on behalf of the appellants further tried to argue on the basis of some minor discrepancies in the evidences of P.W. 2 that the prosecution case was a false one and it has been foisted on the appellants due to enmity and also due to accused Prafulla, one of the appellants, having disagreed to marry the victim girl.
The courts below have clearly found that the defence case was not at all sub stantiated by any cogent evidence.
So this contention is not at all tenable.
It is apropos to mention here the observation made by this Court in the case of State of Orissa vs Nakula Sahu and Ors., ; which are set out herein: "Although the revisional power of the High Court under Section 439 read with section 435 is as wide as the power of Court of appeal under Sec.
423 of the Code, it is now well settled that normally the jurisdiction of the High Court under Section 439 is to be exercised only in exceptional cases when there is a glaring defect in the procedure or there is a manifest error on a point of law which has consequently resulted in flagrant miscarriage of justice.
Inspite of the wide language of Section 435, the High Court is not excepted to act under Section 435 or Section 439 as if it is hearing an appeal.
" The High Court of Orissa referred to the said observation and rightly held that the High Court cannot be expected to re appraise the evidence as a court of appeal.
This Court hearing an appeal by special leave cannot consider and re appraise the evidences once again in the face of concurrent findings of facts arrived at by all the courts below.
For the reasons aforesaid we dismiss the appeal and uphold the conviction and sentence as found by the High Court.
R.P. Appeal dismissed.
| The appellants forcibly took P.W. 2 to a lonely place on 19.3.1983, made her to drink liquor and committed sexual assault on her.
Thereafter they left her in a truck.
While the said truck was unloading materials near a village, the victim stealthily left the truck and concealed herself near a fence.
P.W. 7 rescued her and took her to the house of P.W. 8, one of her distant relative, from where her father P.W. 1 took her back and lodged the report at the police station.
A case under sections 363 and 376 read with section 341.I.P.C. was registered against both the appellants.
After completion of the investigation, a charge sheet was submitted and the appellants were tried for the aforesaid offences.
The appellants denied the prosecution allegations and pleaded that they were falsely implicated because of refusal by one of them to marry the girl and previous enmity with the other.
The Assistant Sessions Judge rejected the defence pleas, and found that the appellants committed rape on the victim without her consent, and relying on section 114A of the Evidence Act, convicted the appellants under section 376(2)(g), I.P.C. and sentenced each of them to rigorous imprisonment for three 840 years.
Since the victim was more than 16 years of age, the appellants were acquitted of the charge under section 363, I.P.C. On dismissal of their appeal against the conviction and sentence by the Addl.
Session Judge, the appellants filed a revision application before the High Court.
The High Court duly considered and appraised the evidence and held that the appellants committed rape on PW 2 forcibly without her consent.
Ultimately the appellants came in appeal by special leave to this Court.
Dismissing the appeal, this Court, HELD: 1.
In cases of rape, generally it is difficult to find any corroborative witnesses except the victim of the rape.
However, corroboration is not the sine que non for a conviction in a rape case.
In the Indian setting, refusal to act on the testimony of a victim of sexual assault in the absence of corroboration as a rule, is adding insult to injury.
[843D F] Bharwada Bhoginbhai Hirjibhai vs State of Gujarat, ; and Rameshwar vs The State of Rajasthan, ; , relied on.
In the instant case, the victim girl clearly stated in her evidence that she had been taken to a solitary house in the hills by appellant No. 1 where she was made to drink liquor and thereafter she was undressed and forcibly subjected to sexual intercourse by both the accused appellants one after the other.
Her uncontroverted testimony was accepted by all the courts and they concurrently found that she had been raped without her consent.
[844F G] 3.
Apart from the legal presumption that flows from the provisions of section 114A of the Evidence Act, it is clearly evident in the instant case, that the victim girl protested and struggled while she was subjected to sexual assault forcibly by the accused persons and this clearly evinces absence of consent on her part in such sexual intercourse.
[844H; 845A] 4.
The High Court rightly held that it cannot be expected to re appraise the evidence as a court of appeal while exercising its revisional power under section 401 Cr.
P.C. [845E F] 841 State of Orissa vs Nakula Sahu and Ors., ; , relied on.
This Court hearing an appeal by special leave cannot consider and re appraise the evidence once again in the face of concurrent findings of facts arrived at by all the courts below.
[845F]
|
1 of 1991.
IN Writ Petition No. 491 of 1991.
WITH Writ Petition Nos. 541 & 560 of 1991 etc.
(Under Article 32 of the Constitution of India).
G. Ramaswamy, Attorney General, Shanti Bhushan, Ashok Desai, Hardev Singh, Ms. Indira Jaisingh, P.S. Poti, Rajinder Sachhar, M.K. Ramamurty, R.K. Garg, S.K. Garg, S.K. Dholakia, Santosh Hedge, V.N. Ganpule, Tapas Ray, N.B. Shetye, P.P. Rao, Kapil Sibal, D.S. Tewatia, Hari Swarup, Jayant, Jayant Bhushan, Prashant Bhushan, Ms. Madhoo Moolchandani, Ms. Kamini Jaiswal, A.K. Srivastava, E.M.S. Anam, N.D. Garg, A.M. Khanwilkar and Ms. A. Subhashini for the Appearing Parties.
The following Order of the Court was delivered: This writ petition is by a body of advocates styled "Sub Committee on Judicial Accountability" and raises certain questions as to the validity and implementation of the action of the Speaker of the Lok Sabha admitting a notice of motion moved by 108 Members of Parliament under Article 124(5)read with the and constituting an Inquiry Committee consisting of a Judge of the Supreme Court, Chief Justice of a High Court and a jurist to investigate into the allegations of misconduct made against a sitting 743 Judge of the Supreme Court pertaining to his conduct as the erstwhile Chief Justice of the Punjab and Haryana High Court.
The main prayers in the writ petition are that the Union Government be directed to afford facilities to the Inquiry Committee to discharge its constitutional and statutory functions; and for directions to the Hon 'ble Chief Justice of India to abstain from allocating any judicial work to the concerned Judge during the pendency of the proceedings before the Committee.
In regard to the latter prayer that notice should go to the Hon 'ble Chief Justice of India, we think that aspect of the matter should be deferred for the present and considered at the appropriate stage of the final hearing.
In regard to the directions to the Union Government, the Union Government by means of an affidavit subscribed to by the Joint Secretary, Ministry of Law and Justice, has made manifest its stand that in its view the motion initiated by the 108 Members of Parliament on which the Speaker took the decision to constitute a Committee had lapsed with the dissolution of the Lok Sabha and that nothing further remains to be done in the matter.
It is in that view, as averred in the affidavit, that the Government of India did not advise the President to issue any notification as required by Para 9 read with Para 11(b)(i), of Second Schedule to the Constitution enabling the sitting Judge of this Court and the Chief Justice of High Court to reckon the time spent by them in functioning as members of the Committee as part of their `actual service '.
The contention of the petitioner is that having regard to the constitutional and statutory of the sitting Judges who function in the Committee, the time spent by them in performance of such function is to be reckoned as part of their `actual service ' as judges and no notification under the concerned provisions by the President is necessary.
It is relevant to mention here that some of the interveners who seek to oppose the writ petition have, in addition to their stand against the writ petition, also filed individual writ petitions of their own in which, more or less, they seek to endorse the stand taken by the Government raising the question as to whether the motion survives the dissolution of the Lok Sabha or not.
Shri Shanti Bhushan, learned counsel for the petitioner made an impassioned plea that having regard to the dire need of maintaining public confidence in the apex institution and its reputation it is necessary that the concerned Judge should abstain from discharging judicial functions during the pendency of the enquiry against him.
In the alternative, it is submitted that if a direction to that effect is not issued, 744 it should at the least necessarily be directed that pending disposal of the writ petition on merits, the Union of India shall afford to the Committee such facilities as may be necessary for its effective and prompt functioning.
Shri Shanti Bhushan submitted that even if ultimately the writ petition fails no loss or injury would be caused to anybody and what would have resulted would only be that the eminent body of Judges would have Occasion to look into the allegations against a sitting Judge and if they found the allegations to be baseless, the concerned Judge would be cleared of the imputations and cloud against his conduct.
He urged, if such a direction or interim mandamus is not issued it would seriously impair the image of the Court as the apex Court in the country and affect the confidence of the people in the quality of justice dispensed by it.
We have given our anxious consideration to the matter and having regard to the nature and importance of the issues involved it is appropriate that the main matter along with the connected writ petitions is heard as expeditiously as possible.
We, therefore, direct that his matter be listed on July 9, 1991 with a direction that hearing of the matters be proceeded with day to day until conclusion.
We also indicated that arguments on all sides should be completed within a period of ten working days and the learned counsel for all the parties and interveners should file their written arguments in advance latest by July 1, 1991.
The actual hearing time to each of the counsel will be appointed at the commencement of the hearing on July 9, 1991.
In this view of the matter, we think it appropriate not to embark upon an examination of the contentions in support of and the prayer for interlocutory relief.
We, however, make it clear that our disinclination to issue any interlocutory orders at this stage shall not be construed as an expression of opinion on the merits of the merits of the issues either way and shall not also be construed as an interdiction of the functioning of the Committee if the Committee otherwise considers appropriate to proceed with the matter.
We also make it clear that during the pendency of these matters before this Court no proceeding pending or filed hereafter in any other court shall be heard or any order passed therein relating to the issues involved in these matters.
NVP Petition dispose of.
| A Writ Petition filed by the Petitioner Committee, a body of Advocates, praying for directions to be issued to the Union government and the Chief Justice of India, in connection with the enquiry into allegation of misconduct made against a sitting Judge of the Supreme Court, pertaining to his conduct as Chief Justice of a High Court, raised certain questions as to the validity and implementation of the action of the Speaker of the Lok Sabha in admitting a notice of motion moved by the Members of Parliament under Article 124(5) of the Constitution of India, 1950 read with .
Some intervention applications, opposing the Writ Petition, and some other Writ Petitions more of less endorsing the Government 's stand raising the question as to whether the motion in question survived the dissolution of the Lok Sabha or not, were also filed.
Praying for interim direction, which was identical with the prayer in main Writ Petition, it was urged on behalf of the Petitioner Committee that having regard to the dire need of maintaining public confidence in the institution and its reputation as apex Court, it was necessary that the concerned Judge should abstain from discharging judicial functions during the pendnecy of the enquiry, and a direction should be issued accordingly, or pending disposal of the Writ Petition, the Union Government should be directed to afford all necessary facilities to the Committee for smooth and efficient functioning.
Directing expeditious hearing of the Writ Petition and connected matters, this Court, 742 HELD: 1.1 Having regard to the nature and importance of the issues involved, it is appropriate that the main matter along with the connected writ petitions is heard as expeditiously as possible.
Accordingly, this matter should be listed on July 9, 1991 and hearing of the matters proceeded with day to day until conclusion.
[744D] 1.2 In the circumstances, it is not appropriate to embark upon an examination of the prayer for interlocutory relief.
However, the Court 's disinclination to issue any interlocutory orders at this stage should not be construed as an expression of opinion on the merits of the issues either way and as an interdiction of the functioning of the Committee, if the Committee otherwise considers appropriate to proceed with the matter.
[744E F]
|
ivil Appeal No. 2378 of 1977.
804 From the Judgment dated 3.2.1977 of the Gujarat High Court in Special Civil Application No. 551 of 1972.
B. Datta, L.B. Kolekar, Ms. Chetna Anand and P.H. Parekh (NP) for the Appellant.
S.K. Kholakia, R.B. Haribhakti and P.C. Kapoor (NP) for the Respondents.
The Judgment of the Court was delivered by K. RAMASWAMY, J.
The facts relevant to the controversy are as under: The appellant had taken on lease, about 55 years ago, an extent of 2 acres, 6 gunthas of agricultural lands situated in Akote village from Vishwas Rao.
The Bombay Tenancy and Agricultural Lands Act 67 of 1948 for short `the Act ' applies to the lease.
By operation of section 32(1) the appellant became a deemed purchaser from tillers ' day i.e., April 1, 1957.
Section 32 G provides the procedure to determine purchase price.
Since the landlord was insane, the right to purchase was statutorily deferred under section 32 F till date of its cessation or one year after death.
Under section 88(1)(b) of the Act certain areas abutting Baroda Municipality were notified as being reserved for non agricultural or industrial purpose with effect from May 2, 1958.
By another notification published in the Gujarat State Gazette dated July 2, 1964, certain lands including those situated in Akote and of the appellant 's lease hold lands were reserved for industrial purpose.
Consequently Ss. 1 to 87 of the Act do not apply to the exempted area.
While the landlord was continuing under disability, his son Vasant Rao sold the land to the respondent under registered sale deed dated August 19, 1964.
By another notification under Section 88(1)(b) published in the Gazette dated October 29, 1964, the Government restricted the operation of the exemption to the area originally notified on May , 1958 i.e., Ss. 1 to 87 do not apply to the lands in question.
This notification was rescinded by further notification published in the Gazette dated August 23, 1976.
The Bombay Tenancy and Agricultural Lands(Gujarat) Amendment Act 36 of 1965, section 18(1) and 18(2) thereof introduced two provisos to section 88(1)(b) of the Act which was published in the Gazette on December 29, 1965 which are relevant for purpose of the case.
Section 88(1)(b) with amendments reads thus: "(1) Save as otherwise provided in sub section (2) 805 nothing in the following provisions of this Act shall apply (a) to lands belonging to, or held on lease form the Government; (aa) to lands held or leased by a local authority; (b) to any area which the State Government may, from time to time, by notification in th official Gazette, specify as being reserved for non agricultural or industrial development; Provided that if after a notification in respect of any area specified in the notification is issued under this clause, whether before or after the commencement of the Bombay Tenancy and Agricultural Lands (Gujarat Amendment) Act, 1965, the limits of the area so specified are enlarged on account of the addition of any other area thereto, then merely by reason of such addition, the reservation as made by the notification so issued shall not apply and shall be deemed never to have applied to the area so added, notwithstanding anything to the contrary contained in any judgment, or order of any court, Tribunal or any other authority.
Provided further that if any land in the area so added has been transferred or acquired after the issue of notification referred to in the first proviso but before the 9th day of October, 1964, such transfer or acquisition of land shall have effect as if it were made in an area to which this clause applies".
Vishwash Rao died in September 1965.
The appellant became entitled to purchase the land on and from August 19, 1966.
He filed an application before Mamlatdar to fix the price.
He fixed on enquiry at Rs.4,925.65 paise which was paid by the appellant.
In the enquiry, the respondent contended that he purchased the property from Vasantrao, son of the landlord.
By operation of second proviso to section 88(1)(b) the lands stood exempted from operation of Ss. 1 to 87 of the Act.
So the Mamlatdar had no jurisdiction to decide the 806 price of the land.
The appellant raised the contention that Vasantrao has no right to sell during the life time of the father, the Karta of the Hindu Joint Family.
The sale is invalid and does not bind him.
He acquired statutory right of deemed purchaser and its exemption under section 88(1)(b) does not divest his statutory right.
The Mamlatdar accepted the appellant 's contention and allowed the petition.
On appeal to the Collector and revision to the Revenue Tribunal the decision was reversed.
The Division Bench of the High Court by order dated February 3, 1977 dismissed the writ petition.
The appellant had leave of this Court by article 136.
Thus this appeal.
From these admitted facts the question emerges whether the operation of the second proviso to section 88(1)(b) has retrospective effect depriving the appellant of the statutory right of `deemed purchaser '.
section 88 of the Act empowers the government to exempt certain other lands from the purview of Ss. 1 to 87 of the Act.
The State Government exercised their power from time to time under section 88(1)(b) and issued notification and published in the official Gazette specifying certain areas as being reserved for non agricultural or industrial development i.e., urban development.
Consequently the first proviso gets attracted which say that notwithstanding any judgment or order of any court, tribunal or any other authority under the Act to the contrary, once the notification was issued either before or after commencement of the Amendment Act reserving the area so added for non agricultural or industrial development i.e. expansion for urbanisation, to the extent of the area covered under the first proviso, the provisions of Ss. 1 to 87 were not applied and shall be deemed never to have been applied.
The second proviso which is material for the purpose of the case further postulates that: "Provided further that if any land in the are so added has been transferred or acquired after the issue of the notification referred to in the first proviso but before the 29th day of October, 1964, such transfer or acquisition of the land shall have effect as if it was made to an area to which this clause applies".
(emphasis supplied) What is the effect of the second proviso to the facts is the question? Mr. Dutta, the learned counsel for the appellant contended that the first proviso has the effect of excluding Ss. 1 to 87 of the Act only to those areas which were initially reserved for non agricultural or industrial development and has no application to the land added to it by a 807 subsequent notification though it would become part thereof.
Any alienation in violation of the Act would not attract the operation of the second proviso.
The Act is an agrarian reform which created a vested right in the tenant as a deemed purchaser with effect from Tillers ' day which cannot be divested retrospectively.
The proviso should be construed to inhere in the tenant the vested rights created under the Act.
The Withdrawal of the notification dated Oct. 29, 1964 renders the right of the appellant uneffected.
It is a cardinal rule of interpretation that a proviso to a particular provision of a statute only embraces the filed, which is covered by the main provision.
It carves out an exception to the main provision to which it has been enacted by the proviso and to no other.
The proper function of a proviso is to except and deal with a case which would otherwise fall within the general language of the main enactment, and its effect is to confine to that case.
Where the language of the main enactment is explicit and unambiguous, the proviso can have no repercussion on the interpretation of the main enactment, so as to exclude from it, by implication what clearly falls within its express terms.
The scope of the proviso, therefore, it to carve out an exception to the main enactment and it excludes something which otherwise would have been within the rule.
It has to operate in the same field and it the language of the main enactment is clear, the proviso cannot be torn apart from the main enactment nor can it be used to nullify by implication what the enactment clearly says nor set at naught the real object of the main enactment, unless the words of the proviso are such that it is its necessary effect.
The effect of the notification issued under section 88(1)(b) was the subject of consideration in several decisions of this Court.
In Sukharam @ Bapusaheb Narayan Sanas & Anr.
vs Manikchand Motichand Shah and Anr., [196] SCR 59 Sinha, CJ., held that the provisions of section 88 are entirely prospective and apply to such lands as are described in clauses (a) to (d) of section 88(1) from which the Act came into operation, namely, December 28, 1948 and are not a confiscatory in nature so as to take away from the tenant the status of a protected tenant already accrued to him.
In Mohanlal Chunilal Kothari vs Tribhovan Haribhai Tamboli, ; a Constitution Bench speaking through Sinha, CJ. held that Clauses (a) to (c) of section 88(1) applies to things as they were on the date of the commencement of the Act of 1948 whereas clause (d) authorised the State Govt.
to specify certain areas as being reserved for urban non agricultural or industrial development, by notification in the official Gazette, from 808 time to time.
It was specifically provided in clauses (a) to (c) that the Act, from its inception, did not certain areas then identified, whereas clause (d) has reference to the future.
The State Govt, could take out of the operation of the Act such areas as in its opinion should be reserved for urban non agricultural or industrial development.
Clause (d) would come into operation only upon such a notification being issued by the State Govt.
In Sukhram 's case, this Court never intended to lay down that the provisions of clause (d) are only prospective and have no retrospective operation.
Unlike clauses (a) to (c) which are clearly prospective, clause (d) has retrospective operation in the sense that it would apply to land which would be covered by the notification to be issued by the government from time to time so as to take that land out of the operation of the Act of 1948, granting the protection.
(emphasis supplied) So far as clauses (a) to (c) are concerned, the Act of 1948 would not apply at all to lands covered by them, but that would not take away the rights covered by the Act of 1939 which was repealed by the Act of 1948.
Therefore, it was held that by operation of section 89(2) the rights acquired under the Act of 1939 would be available to the tenant.
When a doubt was expressed of the correctness of the above views on reference, another Constitution Bench in Sidram Narsappa Kamble vs Sholapur Borough Municipality & Anr., ; , held at p. 65 thus: "New there is no doubt that section 88 when it lays down inter alia that nothing in the foregoing provisions of the 1948 Act shall apply to lands held on lease from a local authority, it is an express provision which takes out such leases from the purview of sections 1 to 87 of the 1948 Act.
One of the provisions therefore which must be treated as non existent where lands given on lease by a local authority is in section 31. .but the effect of the express provision contained in section 88(1)(a) clearly is that section 31 must be treated as non existent so far as lands held on lease from a local authority are concerned and in effect therefore section 88(1)(a) must be held to say that there will be no protection under the 1948 Act for protected tenants under the 1939 Act so far as lands held on lease from a local authority are concerned . . 809 the appellant cannot claim the benefit of section 31; nor can it be said that his interest as protected tenant is saved by section 89(2)(b).
This in our opinion is a plain effect of the provisions contained in section 31, section 88 and section 89(2)(b) of the 1948 Act".
In Parvati & Ors.
vs Fatehsinhrao Pratapsinhrao Gaekwad, ; the facts were that the Government issued a notification on May 21, 1958 under section 88(1)(b) of the 1948 Act reserving the land within the municipal limits of the city of Baroda for non agricultural and industrial development.
The appellant 's husband had taken possession of certain lands situated in the city of Baroda on lease from the respondent trustee.
The respondent laid the suit against the appellant for recovery of arrears of rent.
The defence was that the suit was not maintainable.
Dealing with the effect of the notification issued under section 88(1)(b), this Court held that the notification had retrospective operation and subject to certain exceptions provided in sub section (2) of section 88 all rights, title, obligations etc.
Accrued or acquired under the said Act ceased to exist.
Therefore, section 89(2)(b) was inapplicable to protect such right, title or interest, acquired under the Act except as provided in s 89A owing to express provision made in section 88 of the Act.
Accordingly it was held that the Civil Court was legally competent to determine the reasonable rent payable by the tenant.
In Navinchandra Ramanlal vs Kalidas Bhudarbai & Anr., ; this court was to consider a case that the notification under section 88(1)(b) was issued on May 30, 1959 by which date the tenant acquired the statutory right of a deemed purchaser with effect from April 1, 1957.
This Court held that the tenant cannot be divested of his deemed purchase by a subsequent notification issued thereunder.
It would be seen that the effect of the second proviso was not considered therein.
The above interpretation would equally apply to the interpretation of the notification issued under the proviso to section 88(1)(b) adding to the area reserved for non agricultural or industrial development.
Its effect is that notwithstanding any judgment or order of any court or Tribunal or any other authority, the provisions of Ss. 1 to 87 shall not apply and shall be deemed never to have applied to such added area as well.
If any land in the newly added area has been transferred or acquired between the date of the notification issued under first proviso and October 9, 1964, such transfer or acquisition of land shall have the effect as if it was made in an area to which the main part of the proviso and section 88(1)(b) would apply.
The necessary consequence would be that the provisions of sections 1 to 87 shall not apply and shall be 810 deemed never to have applied to such added area.
It is implicit that such transfer or acquisition made, to bring within the net of second proviso, must be valid and bona fide one and not colourable, fraudulent, fictitious or nominal.
The Legislature appears to relieve hardship to the bona fide purchasers.
The title acquired by such transfer is not effected by the provisions of the Act.
The Legislature advisedly used the words `acquired or transferred '.
The respondent 's own case is that Vishwesh Rao, Karta of the Hindu Joint Family was under disability due to lunacy.
The tenant acquired statutory right as deemed purchaser under section 32.
The Act, by necessary implication, divests the landlord of his right to alienate the land held by the tenant.
The statutory right topurchase the land under section 32 as deemed purchaser was postponed by operation of section 32 F of the Act till the cessation of the disability or one year after the death of the landlord.
In such situation can the son during the life time of the father, has right to sell the same property to the respondents, and whether such a sale made on August 19, 1964 to the respondents was valid and binds the appellant.
In Raghavachariar 's Hindu Law Principles and Precedents, Eighth Ed., 1987 in section 275 at p. 39 stated thus: "So long as the joint family remains undivided, the senior member of the family is entitled to manage the family properties, and the father, and in his absence, the next senior most male member of the family, as its manager provided he is not incapacitated from acting as such by illness or other sufficient cause.
The father 's right to be the manager of the family is a survival of the patria potastas and he is in all cases, naturally, and in the case of minor sons necessarily the manager of the joint family property.
In the absence of the father, or if he resigns, the management of the family property devolves upon the eldest male member of the family provided he is not wanting in the necessary capacity to manage it".
Regarding the management of the Joint Family Property or business or other interests in a Hindu Joint Family, the Karta of the Hindu Joint Family is a prima inter pares.
The managership of the Joint Family Property goes to a person by birth and is regulated by seniority and the Karta or the Manager occupies a position superior to that of the other members.
A junior member cannot, therefore, deal with the joint family property as Manager so long as the Karta is available except where the Karta relinquishes his right expressly or by necessary impli 811 cation or in the absence of the Manager in exceptional and extra ordinary circumstances such as distress or calamity effecting the whole family and for supporting the family or in the absence of the father whose whereabouts were not known or who was away in remote place due to compelling circumstances and that is return within the reasonable time was unlikely or not anticipated.
No such circumstances are available here to attract the facts of the case.
Vasantrao, the vendor, son of the Karta of the Hindu Joint Family per se has no right to sell the property in question as Manager so long as the father was alive.
When father was under disability due to lunancy, an order from the Court under Indian Lunancy Act IV of 1912 was to be obtained to manager the joint family property.
No proceedings were taken under sections 39, 43 and 45 of the Indian Lunacy Act to have the inquisition made by a competent District Court to declare him as insane and to have him appointed as Manager of the Joint Family.
In P.K. Gobindan Nair & Ors.
vs P. Narayanan Nair & Ors., [1912] 23 M.L.J. 706=17 Indian Cases 473 a division Bench of the Madras High Court held that a guardian cannot be appointed as Manager under the Guardian and Wards Act on an adjudication of Karnavan of an undivided Malabar Tarwad as a lunacy.
In A. Ramacharlu vs Archakan Ananthacharlu & Anr., A.I.R. 1955 A.P. 261 a division Bench consisting of Subba Rao, C.J. and Satyanarayana Raju, J. (as they were) considered the question of appointment of a son as the Manager of the Mitakshara family whose father was alleged to be a lunatic.
Subba Rao, C.J. speaking for the Bench, held that in view of the finding that the Karta, though was mentally not sound, but was capable to manage the property, the application for appointment of a son as manager of the joint family property was not be ordered.
Since Vasantrao did not obtain any order from the competent court under the Lunacy Act to have him appointed as Manager of the joint family to alienate the property, the sale is per se illegal.
The sale, therefore, appears to be to defeat the statutory right of the appellant.
The rigour of the second proviso to section 88(1)(b) is thus inapplicable.
Thereby the right and interest as a deemed purchaser acquired by the appellant has not been effected by a subsequent notification issued under section 88(1)(b).
The High Court, therefore, committed manifest error in holding that the appellant is not entitled to the relief.
The appeal is accordingly allowed and the orders of the High court, The Tribunal and District Collector are set aside and that of the Mamlatdar is confirmed, but in the circumstances parties are directed to bear their own costs.
Y.Lal.
Appeal Allowed.
| The appellant took on lease some agricultural lands from one Viswas Rao and by operation of Section 32(1) of the Bombay Tenancy and Agricultural Lands Act 67 of 1948, which was applicable to the lease, he became a deemed purchaser from tillers ' day i.e. 1.4.1957.
Since the landlord was insane, the right to purchase was statutorily deferred under section 32 F till date of its cessation or one year after death.
Pursuant to the notification issued under Section 88(1)(b) of the Act, certain lands including those of the appellant 's lease hold lands were reserved for industrial purpose; thereby making sections 1 to 87 of the Act inapplicable to the exempted area.
During the subsistence of disability of the landlord, his son Vasant Rao sold the land to the respondent under registered sale deed.
Vishwas Rao died in September 1965.
The appellant became entitled to purchase the land on and from August 19, 1966.
He therefore filed an application before Mamlatdar to fix the price.
He fixed on enquiry at Rs.4,95/65 P. which was paid by the appellant.
In the enquiry, the respondent contended that he purchased the property from Vasantrao, son of the landlord and by operation of the second proviso to Section 88(1)(b), the lands stood exempted from the operation of Section 1 to 87 of the Act.
So the Mamlatdar had no jurisdiction to decide the price of the land.
The appellant 's contention was that Vasantrao had no right to sell the lands during the life time of his father, the Karta of the Hindu Joint Family.
The sale was invalid and did not bind him.
He had acquired statutory right of `deemed purchaser ' and its exemption under section 88(1)(b) did not divest his statutory right.
The Mamlatdar accepted the appellant 's contention and allowed the petition.
On appeal to the Collector and revision to the Revenue Tribunal, the decision of Mamlatdar was reversed.
The Division Bench of the High Court dismissed the writ petition.
Hence this appeal by the appellant, after obtaining special leave.
On the question: whether the operation of the second proviso to Section 88(1)(b) of the tenancy Act, 1948 has retrospective effect depriving the appellant of the statutory right? 803 Allowing the appeal, this Court HELD: Section 88 of the Act empowers the government to exempt certain other lands from the purview of Sections 1 to 87 of the Act.
The State Governments exercised their power from time to time under Section 88(1)(b) and issued notification and punished in the official Gazette specifying certain areas as being reserved for non agricultural or industrial development i.e., urban development.
[806C D] It any land in the newly added area has been transferred or acquired between the date of the notification issued under first proviso and October 9, 1964, such transfer or acquisition of land shall have the effect as if it was made in an area to which the main part of the proviso and Section 88(1)(b) would apply.
The necessary consequence would be that the provisions of Sections 1 to 87 shall not apply and shall be deemed never to have applied to such added area.
It is implicit that such transfer or acquisition made, to bring within the net of second proviso, must be valid and bona fide one and not colourable, fraudulent, fictitious or nominal.
[809G 810B] In the instant case, since Vasantrao did not obtain any order from the competent court under the Lunacy Act to have him appointed as Manager of the joint family to alienate the property, the sale is per se illegal, The sale, therefore, appears to be to defeat the statutory right of the appellant.
The rigour of the second proviso to Section 88(1)(b) is thus inapplicable.
Thereby the right and interest as deemed purchaser acquired by the appellant has not been affected by subsequent notification issued under section 88(1)(b).
[811F G] Sukharam @ Bapusaheb Narayan Sanas & Anr.
vs Manikchand Motichand Shah & Anr., [196] 2 S.C.R. 59; Mohanlal Chunilal Kothari vs Tribhovan Haribhai Tamboli, ; ; Sidram Narsappa Kamble vs Sholapur Borough Municipality & Anr., ; ; Parvati & Ors vs Fatehsinhrao Pratapsinghrao Gaekwad, ; ; Navinchandra Ramanlal vs Kalidas Bhudarbai & Anr., ; ; P.K. Gobindan Nair & Ors.
vs P. Narayanan Nair & Ors., Indian Cases 743; and A. Ramacharlu vs Archakan Ananthacharlu & Anr., A.I.R. 1955 A.P. 261, referred to.
|
vil Appeal Nos. 179 189 of 1991 etc.
From the Judgment and Order dated 3.9.1990 of the Gauhati High Court in Election Petition No. 7 of 1989.
A.M. Mazumdar, Dr. L.M. Singhvi, S.K. Nandy, section Parekh and Ms. Lira Goswami for the Appellants.
Dr. B.L. Wadehra and M.K.D. Namboodiri for the Respondents.
The Judgment of the Court was delivered by AHMADI, J.
Special granted in all SLPs.
Mizoram acquired Statehood on February 20, 1987.
At the general election held on January 21, 1989, the respondents of this batch of appeals contested the State Assembly elections as candidates of the Mizo National Front (MNF) from different constituencies.
The 759 results of the election were declared on January 23, 1989.
They lost to candidates fielded by the Indian National Congress (I).
The unsuccessful MNF mainly on the ground that they had indulged in and were guilty of corrupt practices.
As many as fifteen such election petitions came to be filed in the Gauhati High Court on one single day, March 9, 1989.
Although fifteen petitions were filed, one Congress (I) candidate had succeeded from two constituencies and one candidate belonged to the Mizo National Front (Democratic) Party.
On service of notice of the filing of the election petitions, the returned candidates entered appearance and raised certain preliminary objections regarding the maintainability of each petition.
On the basis thereof two preliminary issues were raised for consideration.
The returned candidates moved for striking off the pleadings.
Thereupon the original petitioners applied for amendment of their election petitions which was strongly opposed by the returned candidates.
The preliminary objections, the applications for striking off the pleadings and the amendment applications were heard together.
The two preliminary issues raised by the learned Judge hearing the election petitions were (i) whether the election petitions were in conformity with the requirements of Sections 81 and 83 of the Representation of the People Act, 1951 (R.P. Act), and the Rules framed thereunder by the Gauhati High Court and (ii) whether rule 1 and the other related rules and notes thereto enabling the filing of the Election Petition before the Stamp Reporter assigned to the election court by the learned Chief Justice were ultravires Article 329 of the Constitution and Section 169 read with Sections 80, 80A and 81 of the R.P. Act.
so far as the first objection was concerned, the returned candidates contended that the election petitions were photo copies and could not, therefore, be treated as election petitions as contemplated by law, the copies of petitions served on the returned candidates were not attested to be true copies of the original petitions as required by Section 81(3), the copies served on them with the annexures were not true copies of the original; the election petitions were not signed and verified in the manner laid down by the Code of Civil Procedure inasmuch as the source of information had not been disclosed in the verification or the affidavit in Form 25 as required by rule 94A of the Conduct of Election Rules, 1961 (the Rule) and no schedule of material particulars of corrupt practice had been annexed to the affidavit purporting to be under Form 25.
In regard to the second objection the contention was that the presentation of the election petitions before the Stamp Reporter was inconsistent with Sections 80, 80A and 81 of 760 the R.P. Act and Article 329 of the Constitution inasmuch as the law requires that an election petition shall be presented to the High Court.
The learned Judge in the High Court overruled both the preliminary objections holding, in the case of the first, that there was substantial compliance with the requirements of the relevant provisions and on the second point he ruled that the presentation of the election petition to the Stamp Reporter appointed or authorised under the Rules was presentation in accordance with the Rules and the same did not conflict with Article 329(b) of the Constitution.
Thus both the preliminary objections stood rejected.
The returned candidates had applied under Order VII Rule 16 of the Code of Civil Procedure.
(the Code), for striking out certain averments from the memo of the election petitions on the ground of failure to disclose a cause of action.
A prayer was also made for dismissal of the petitions on that ground.
The learned Judge in the High Court rejected this contention observing that under the election law the High Court is empowered to permit amendment of the election petition with a view to amplifying the averments bearing on the question of corrupt practice which it considers necessary for ensuring a fair and effective trial of the election dispute.
In this view of the matter the learned Judge examined the averments of each paragraph in detail and directed the deletion or modification of certain paragraphs, the averments wherein were vague of benefit of necessary particulars.
He directed that paragraphs 6, 9, 12, 13, 21, 22, 38 and 40 shall stand deleted whereas paragraphs 3, 4, 5, 8, 14 to 20, 25 to 27, 30 to 37, 39 and 45 of the petition giving rise to CA No. 179 of 1991 shall stand modified.
All allegations against the election agent or other agents of the returned candidates were ordered to be struck off.
In other words he directed that the allegations of corrupt practice shall be confined to the returned candidates only.
Similar orders were passed in the other election petitions subject to the variation in number of paragraphs, etc.
For convenience we will take the pleadings of C.A. No. 179/91 as representative since we are told that the averments in each election petition are identical except for some variations here and there.
Thus the learned Judge rejected the preliminary objections and partly allowed the application for striking off the averments in the election petitions and partly permitted certain amendments to the election petitions.
It is against the said order that the returned candidates have approached this Court under Article 136 of the Constitution.
At the time of admission of these appeals two questions were formulated for examination and we will confine ourselves to them in 761 the course of this Judgment.
These two questions are as under: (1)``The Election Petitions are liable to be dismissed in limine under Section 83 of the Representation of the People Act, 1951 as the affidavit filed by the Election Petitioner in each case is not strictly in conformity with Form 25, inasmuch as the verification as regards the averments based on knowledge and the averments based on information has not been made separately as required by the said Form prescribed under Rule 95 A of the Representation of the People Rules, 1951; and (II) The copies of the Election petitions served on the petitioners herein (the respondents in the Election Petitions) not being true copies of the Election Petitions , the Election Petitions were not maintainable and were liable to be dismissed in limine in view of Section 81 read with Section 86 of the Representation of the People Act, 1951. ' ' The appellants herein are the returned candidates.
Election Petitions were filed against them challenging their election on more or less identical grounds.
Since the Election Petitions are stated to be based on a single master copy, we would refer to the averments of E.P. No. 7 of 1989 filed against the appellant F. Sapa of Civil Appeal No. 179 of 1991.
On a perusal of the cause title of the petition it becomes evident that the name of the constituency and the particulars of the petitioner and the respondents are left blank and filled in hand.
The petition is stated to be under Sections 80 and 81 of the R.P. Act.
Paragraph 1 furnishes the dates concerning the election programme and the particulars regarding the petitioner.
In paragraph 2 the particulars regarding the total votes, votes pulled by each candidate, etc., have been set out.
While the various heads are typed, the figures are hand written.
The various typed heads would show that particulars upto five respondents figure.
That is why the columns regarding three respondents have been filled in while serial Nos. 6 and 7 meant for respondents 4 and 5 have been left blank.
This supports the appellant 's say that one master copy of the election petition were prepared and thereafter particulars in respect of each petitioner were filled in hand.
In paragraph 3 it is averred that the M.P.C.C. (I) had with the consent and knowledge of the returned candidate conceived and 762 executed the entire election campaign of the returned candidate between December 31, 1988 and January 19, 1989.
So also the returned candidate had on his own and with the help of M.P.C.C. (I), its functionaries and workers organised and addressed public meetings and undertook door to door canvassing to promote his chances for success.
Thereafter the list of towns and villages where he held such meetings, etc., are written in hand in the blank space left for that purpose.
This is also indicative of that fact that a master copy was prepared to challenge all the fifteen elections.
In paragraphs 4 and 5 the details regarding the campaign literature or material, such as stickers, hand bill, pamphlets, press publications etc., have been furnished.
These have been produced with their English translations at Annexures I to VI(a).
It is averred that this campaign literature was widely distributed throughout the length and breadth of the entire constituency between the aforestated dates and was also air dropped by helicopter on January 20, 1989 throughout the constituency.
These were also read out and explained to the voters in the constituency during the aforesaid period.
After making this averment in paragraph 6, the petitioner proceeds to add in paragraph 7 as under: ``That by publishing printing, circulating, distributing and by reading out and explaining to the audiences including the electors and their family members throughout the length and breadth of the constituency as indicated above, Respondent No. 1 (returned candidate) has been guilty of corrupt practices under Section 123. . . ' ' The details in regard to the M.P.C.C. (I) 's Election Manifesto produced at Annexure I (English translation Annexure 1A) have been set out in paragraphs 8 to 22 along with comments, inferences, etc.
In paragraph 23 there is a mention of Annexure II which is merely a repeat of Annexure I dealt with in the aforesaid paragraphs 8 to 22.
In paragraph 24 reference is to Annexure III which is merely the summary of the Election Manifesto dealt with in the preceding paragraphs.
Paragraphs 25 to 29 refer to the leaflet Operation Josna Annexure IV and submission thereon.
The next two paragraphs 30 and 31 contain reference is to a sticker Annexure V which appeals to the religious sentiments of those following the Christian faith and states: ``Let us vote Mizoram Congress(i) for Mizos and Christians ' ' which, it is contended, constitutes corrupt practice.
Then come paragraphs 32 to 40 which relate to a leaflet Annexure VI entitled ``what our vote will bring about ' ' and then proceeds to add ``Christian Government ' ' and ``promise of visit of the holy land (Israel) ' '.
Then, 763 after referring to the activities aforestated, it is alleged in paragraph 41 that this has materially affected the election prospects of the other contesting candidates also.
Paragraphs 42, 43 and 44 refer to Press publications in `India Today ', `Statesman and the Assam Tribune and Sentinals '.
Paragraph 45 enumerates the grounds on which the election of the returned candidate is liable to be set aside.
Paragraphs 45A to 47 deal with sundry items.
This in brief is the nature of the Election Petition.
The petition is verified as under: ``I. SANGURA the petitioner herein verify that the facts mentioned in paragraphs 1, 2, 4, 5, 18, 19, 28, 35, 30, 33, 36, 38, 41, 42, 43, 44, 45, 45A, 46 & 47 are true to my knowledge and facts mentioned in paragraphs 7, 8, 9, 10, 11, 12, 13, 14, 15, 20, 21, 22, 23, 24, 26, 27, 29, 32, 34, 3 35, 37, 40 & 41 are based on information received and believed to be true.
Grounds A, B & C and the legal submissions are based on legal advice.
Verified at Guwahati on 7th March, 1989. ' ' The verification is typed but the petitioner 's name and the paragraph numbers at both the places are hand written.
It will be seen from the above verification clause that paragraphs 3, 16, 17, 25, 31 & 39 have not been verified at all either as true to knowledge or on information and/or belief whereas paragraph 41 is mentioned at both the places.
It may also be noted at this stage that in regard to the second part of the verification based on `information received ' and believed to be true ' it is not clarified which of the paragraphs are based on `information received ' (nor is the source of information disclosed) and which are founded on `believed to be true '.
Appended to the petition is the petitioner 's typed affidavit, which runs into six paragraphs.
The name of the petitioner, his age and address appear to be filled in on a typewriter.
In paragraph 2 of the affidavit it is stated that the petitioner (unsuccessful candidate) has alleged several corrupt practices on the part of the Respondent No. 1 (the returned candidate), his election agent and other agents and virtually the same phrase is repeated in paragraph 3.
The in paragraph 4 it is stated: `for brevity the details of the corrupt practices alleged by me which have been given in the Election Petition and are not being repeated in this affidavit and the same may be treated and read as part of this affidavit ' and then the deponent proceeds to add `The said particulars and details of corrupt practices and contained in paragraphs 4 to 40 of the said election petition '.
The word and figures `4 to 40 ' are 764 written in hand after scoring out the words and figures `7 to 47 '.
Then comes paragraph 5 which may be reproduced: ``That I solemnly state and affirm that all that has been stated in the election petition by way of corrupt practices as a correct to the best of my knowledge and to the information received by me and believed by me to be true ' '.
It will be seen from the above that according to the election petitioner the particulars and details of the corrupt practices are contained in paragraphs 4 to 40 which also omits paragraph 3 which is, according to the returned candidate/appellant crucial.
Then in paragraph 5 extracted above the election petitioner states that all that he has stated in regard to corrupt practices in his election petition (which according to paragraph 4 are contained in paragraphs 4 to 40) is `correct to the best of my knowledge and to the information received by me and believed by me be true '.
It is not stated which of the particulars contained in paragraphs 4 to 40 are true to his knowledge, which are based on information received (apart from disclosure of source of information) and which he believes to be true.
The affidavit is totally silent in regard to paragraphs 1 to 3, and 41 to 47 of the election petition.
The returned candidate/the appellant herein, therefore, contends that paragraph 3 which is the most crucial paragraph in the entire election petition inasmuch as it discloses the names of towns and villages as well as the period during which the alleged corrupt practices were committed has been carefully, deliberately and scrupulously omitted both from the verification clause and the affidavit referred to hereinabove for reasons best known to the election petitioner and, contends the appellant, once this paragraph 3 is kept out of consideration, the Election Petition is, rendered `a theoretical and unimaginative essay ' on corrupt practice of appeal to religion.
It is, therefore, contended that failure to mention paragraph 3 of the election petition in both the verification clause of the petition and the affidavit filed in support thereof is fatal and cannot be cured particularly after the expiry of the limitation period of 45 days.
The appellant further contends that the affidavit is not in Form No. 25 prescribed under Rule 94A of the Rules and hence the affidavit is no affidavit at all.
Since Section 83 of the R.P. Act is mandatory and strict compliance thereof is expected of an election petitioner failure to adhere to Form No. 25 is fatal as the doctrine of substantial compliance has no place in election law but even if that doctrine could be 765 invoked to rescue the election petitioner out of the situation in which he was placed himself, it was absolutely essential for him to clearly state in his affidavit which paragraphs of the Election Petition are based on his knowledge, which are based on information received and which are based on his belief.
Since even this is missing it is difficult to say that there is substantial compliance assuming the doctrine has application.
Counsel for the appellant fairly stated that if the averments in the election petition had been sworn to in the above manner it could perhaps be argued that failure to strictly follow Form 25 could be excused on the doctrine of substantial compliance and the procedural defect could be cured by an appropriate amendment.
But, argued counsel, the doctrine could never be pressed into service where the petitioner has failed to disclose which part of the allegations regarding corrupt practice are based on knowledge, which on information received and which on belief.
Where there is failure to comply with even the basic requirements of an affidavit, there can be no question of substantial compliance; this being a case of non compliance, whatsoever.
Where several paragraphs of the election petition remain unaffirmed under the verification clause as well as the affidavit, the unsworn allegation can have no legal existence and the election court cannot take cognizance thereof.
The further allegation was that the election petitions being photocopies could not be entertained as valid election petitions; that copies of the election petitions served on the returned candidates were not attested as true copies of the original as required by Section 81(3) and that the election petitions and the schedule and annexures were not signed and verified as required by the Code.
An election dispute founded on the allegation of corrupt practice being quasi criminal in nature calls for strict adherence to the requirements of election law as is evident from Section 86(1) of R.P. Act which provides for dismissal of an election petition which fails to comply with the requirements of Sections 81, 82 or 117 on the said statute.
Before we set out of the relevant provisions of the R.P. Act, reference may be made to Order VI Rule 15 of the Code which deals with verification of pleadings.
This rule is divided into three parts: the first part begins with `save as otherwise provided by any law for the time being in force ' and then proceeds to add that every pleading shall be verified by the party or by one of the parties or by some other person acquainted with the facts of the case; the second part posits that every person verifying shall specify what he verifies of his own knowledge and what he verifies upon information received or believed to be true by reference to paragraph numbers and the third part states that the 766 verification shall be signed by the party making it.
It was however, pointed out that by virtue of sub section (3) of Section 1, the Code extends to the whole of India except (a) the State of Jammu and Kashmir and (b) the State of Nagaland and the tribal areas.
The explanation defines the expression `tribal areas ' as territories which, immediately before January 21, 1972 were included in the tribal areas of Assam as referred to in paragraph 20 of the Sixth Schedule to the Constitution.
Paragraph 20 says that the areas specified in Parts I,II and III of the table shown below shall respectively be the tribal areas within the State of Assam, the State of Meghalaya, and the Union Territory of Mizoram.
Part III which is relevant for our purpose comprises (1) the Chakma District (2) the Lakher District and (3) the Pawi District.
During the British period the area was divided into North Lushai Hills and South Lushai Hills but was later amalgamated into a single District of Lushai Hills and was made part of Assam and was placed under the administrative charge of a Superintendent.
On our attaining independence, the Superintendent was replaced by a Deputy Commissioner but the District of Lushai Hills continued to be part of Assam.
The Lushai Hill District was renamed Mizo District in 1954 by an Act of Parliament and was placed under a District council.
After a spell of disturbances on the implementation of the North Eastern Reorganisation Act, 1971, the Mizo District was upgraded into a Union Territory and was renamed Mizoram.
It was divided into three districts, namely, (i) Aizawal ( i) Lunglei and (iii) Chhimtuipui.
The Mizo Hill District was replaced by Chakma, Lakher and Pawi Districts which find a mention in Part III of the Table to paragraph 20 of the Sixth Schedule to the Constitution.
It was, therefore, argued that the provisions of the Code did not and do not apply to the State of Mizoram.
In support of this contention reliance is placed on three decisions of this Court namely (1) Gurumayam section Sarma V.K. Ongbi Anisija Devi, Civil Appeal No. 659 of 1957 dated February 9, 1961 (2) State of Nagaland V. Rattan Singh, ; and (iii) V.L. Rohlus V. Deputy Commissioner, Aizawal, It is unnecessary to notice these decisions in detail because Dr. Singhvi does not seriously question this proposition.
But, contends Dr. Singhvi, if the Code did not apply to Mizaoram in view of the above, it applied to an election petition because Section 83(1)(c) obligates that an election petition `shall be signed by the petitioner and verified in the manner laid down in the Code for the verification of pleadings '.
Therefore, even though the provisions do not extend to Mizoram by virtue of Section 1(3) of the Code, counsel submitted they are applicable by incorporation to election petitions by the thrust of Section 83(1)(c) of the R.P. Act to the extent indicated therein.
767 And now to the relevant provisions of the R.P. Act and the Rules framed thereunder.
The expression `corrupt practice ' defined in Section 1(c) means any of the practices specified in Section 123.
The various corrupt practices enumerated in Section 123 are (1) bribery, (2) undue influence, (3) an appeal by a candidate or his agent or by another other person with the consent of the candidate or his election agent to vote or refrain from voting for any person on the ground of his religion, race, caste, community or language or the use of, or appeal to religious symbols, etc., (3A) the promotion of, or attempt to promote, feelings of enmity or hatred between different classes of the citizens of India on grounds of religion, race, caste, community, or language, (4) the publication of any statement of fact which is false and which he either believes to be false or does not believe to be true, in relation to another candidate, (5) the hiring or procuring of any vehicle or vessel or the use of such vehicle or vessel for the free conveyance of any elector to or from any polling station, (6) the incurring or authorising of expenditure in contravention of Section 77, (7) the obtaining or procuring of any assistance from any Government servant of the class specified and (8) booth capturing.
Sections 8 and 8A lay down that any person convicted for practising any corrupt practice by an order made by the High Court under Section 99 shall be disqualified for a period of six years in the case of the former in addition to being punished on conviction and for a period not exceeding six years in the case of the latter.
Counsel for the appellant, therefore, contended that proof of allegations of corrupt practice would visit the returned candidate with certain serious consequences and must, therefore, be viewed seriously.
Being quasi criminal in nature courts have and must always insist on strict compliance with the provisions of law in that behalf and failure to do so must prove fatal.
Laying this background, counsel for the appellants invited our attention to Sections 80 to 86 of the R.P. Act.
The R.P. Act is divided into XI parts.
We are essentially concerned with Part VI entitled `Disputes Regarding Elections ' which is divided into V chapters.
Chapter I is a single section chapter comprising section 79 which defines certain expressions used in Part VI and Part VII dealing with corrupt practices and electoral offences.
Chapter II entitled `Presentation of election petitions to Election Commission ' comprises Sections 80 to 85 having since been repealed.
Section 80 says no election shall be called in question except by an election petition presented in accordance with the provisions contained in that part.
Section 80A, inserted by Act 47 of 1966, confers jurisdiction on the High Court to try an election petition.
Section 81 768 deals with the presentation of such petitions.
It reads under: ``81.
Presentation of petitions. (1) An election petition calling in question any election may be presented on one or more of the grounds specified in sub section (1) of section 100 and section 101 to the High Court by any candidate at such election or any elector within forty five days from, but not earlier than, the date of election of the returned candidate, or if there are more than one returned candidate at the election and the dates of their election are different, the later of those two dates.
Explanation.
In this sub section, `elector ' means a person who was entitled to vote at the election to which the election petition relates, whether he has voted at such election or not.
(3) Every election petition shall be accompanied by as many copies thereof as there are respondents mentioned in the petition, and every such copy shall be attested by the petitioner under his own signature to be a true copy of the petition. ' ' Sub section (2) of this section was omitted by Act 47 of 1966 when by the same statute the words `Election Commission ' were substituted by the expression `High Court ' with effect from December 14, 1966.
Even though by the said Amendment Act jurisdiction was conferred on the High Court in place of the Election Commission, surprisingly the title of Chapter II continues to read `Presentation of election petitions to Election Commission '.
Parliament will do well to correct this slip by substituting the words `High Court ' for the expression `Election Commission ' to bring it in conformity with the changes introduced by Act 47 of 1966.
Section 82 indicates the parties to be joined as respondents.
Then comes Section 83 which reads thus: ``83.
Contents of petition. (1) An election petition (a) shall contain a concise statement of the material facts on which the petitioner relies; (b) shall set forth full particulars of any corrupt practice that the petitioner alleges, including as full a statement as possible of the means of the parties alleged to have com 769 mitted such corrupt practice and the date and place of the commission of each such practice; and (c) shall be signed by the petitioner and verified in the manner laid down in the Code of Civil Procedure, 1908 (5 of 1908) for the verification of pleadings: Provided that where the petitioner alleges any corrupt practice, the petition shall also be accompanied by an affidavit in the prescribed form in support of the allegation of such corrupt practice and the particulars thereof.
(2) Any schedule or annexure to the petition shall also be signed by the petitioner and verified in the same manner as the petition. ' ' On a plain reading of this provision it is manifest that it is incumbent on the petitioner to set forth `full particulars of any corrupt ' he alleges against the returned candidate.
This should be accompanied by `as full a statement as is possible ' of the names of those who have indulged in such corrupt practice and the date and place of the commission thereof.
Clause (c) of sub section (1) enjoins that the election petition shall not only be signed but also verified in the manner laid down in the Code.
The proviso then prescribes an additional safeguard in cases where corrupt practice is alleged, as in the present case, namely, that the election petition shall be accompanied by an affidavit in the prescribed form in support of the allegation of such corrupt practice and the particulars thereof.
This provision reflects the anxiety of the legislature to ensure that allegations of corrupt practice are not lightly made; not only that but it ensures that the responsibility thereof is fixed on the petitioner himself by asking him to swear an affidavit in support thereof.
`Prescribed ' says Section 2(g) means prescribed by rules made under the said Act.
Form 25 is the form of the affidavit prescribed by Rule 94A of the Rules.
Next sub section (2) of this section provides that any schedule or annexure to the petition shall also be signed and verified in the same manner as the petition itself.
Section 84 sets out what relief the petitioner can claim in such an election petition.
That brings us to chapter III entitled `Trial of election petitions '.
Only two sections from this chapter require to be noticed.
The first is section 86, the relevant part whereof reads: ``86.
Trial of election petitions. (1) The High Court shall dismiss an election petition which does not comply with the 770 provisions of section 81 or section 82 or section 117.
Explanation.
An order of the High Court dismissing an election petition under this sub section shall be deemed to be an order made under clause (a) of section 98.
(2) As soon as may be after an election petition has been presented to the High Court.
It shall be referred to the Judge or one of the Judges who has or have been assigned by the Chief Justice for the trial of election petitions under sub section (2) of section 80A. ' ' The rest of the sub sections are not germane to the controversy before us.
Section 87 outlines the procedure to be followed by the High Court in the trial of an election petition.
It says that it shall be tried `as nearly as may be ', in accordance with the procedure applicable under the Code to the trial of suits.
Since sub section (1) of the Section 86 refers to Section 117 we may notice it at this stage.
It provides for a deposit of Rs. 2,000 as security for the petition with which we are now concerned.
Dr. Singhvi, therefore, emphasised that the law for the trial and resolution of election disputes found in the aforesaid provisions of this Act and the Rules made thereunder offers a self contained Code and it is not necessary to look elsewhere except where provisions of any other law are incorporated in this statute by reference.
He further submitted that since some of the election disputes could be quasi criminal in nature, e.g., where corrupt practice is alleged, strict compliance with the provisions of the statute and Rules is expected by the legislature in such cases and even if the provisions are treated as directory as held by the learned Judge in the High Court, the degree of non compliance which the Court will tolerate to ensure substantial compliance will not be the same as in an ordinary civil proceeding.
He submitted that tested on this touchstone, this Court should hold that there is no substantial compliance for otherwise the election law would loss its sanctity and seriousness and vague charges of corrupt practice would be lightly made to vex the returned candidates and when faced with an objection attempts to cure the defects through applications for amendment of the pleadings would become the order of the day thereby defeating the very object of expeditious disposals of election petitions envisaged in Section 86(7) of the R.P. Act.
Dr. Singhvi took strong exception to the approach of the learned Judge in the High Court when he ruled that strict compliance with the provisions of Sections 81 and 83 of R.P. Act was not necessary and 771 that the procedural requirements thereunder were to be treated in the same manner as a suit or any other proceedings of a civil nature.
He submitted that this approach of the learned Judge betrays an erroneous understanding that election petitions are also to be treated on par with ordinary proceedings, notwithstanding the quasi criminal character of such proceedings, and it is this approach of the learned Judge which has led him to reach a conclusion unknown to election law.
In particular he invited our attention to the following observations of the learned Judge which according to counsel betrays his fallacious approach: ``I am not prepared to hold that simply because a petition before the court happens to be an election petition, the procedural requirements should be construed in a mechanical or pedantic manner without any regard to the object sought to be achieved thereby.
The law does not require the court, while dealing with an election petition, to construe the pleadings in such a hyper technical manner and to make a microscopic examination thereof with a view to finding out a slip here or a deviation there which may be used as a ground for the rejection of the petition in limine in the name of maintaining the democratic process or the purity of election.
In any opinion, the procedural requirements in an election case also should be construed in the same manner as in cases under the C.P.C. The approach of the court should not be to reject the election petition, in limine on every possible pretext of non compliance with one more of the procedural requirements unless the law itself, in clear terms, mandates it to do so. ' ' It is manifest from the above observations that the learned Judge took the view that the procedural requirements are intended to serve the object of providing a mechanism to reach the ultimate objective of dispensing justice in election disputes.
According to him these provisions were merely adjectival and must, therefore, be construed liberally so as to advance the cause of justice and not to stifle it at the threshold.
In support of this line of thought the learned Judge placed reliance on the observations of this Court in Raj Narain vs Indira Gandhi, AIR 1973 SC 1302 at 1307 wherein this Court has observed as under: ``Rules of pleadings are intended as aids for fair trial and for reaching a just decision.
An action at law should not be 772 equated to a game of chess.
Provisions of law are not mere formulae to be observed as rituals.
Beneath the words of a provision of law, generally speaking, there lies a justice principle.
It is the duty of the Court to ascertain that principle and implement it. ' ' Let us examine if the criticism of the learned counsel to the approach of the learned Judge is well founded.
It is fairly well settled that our election law being statutory in character must be strictly complied with since an election petition is not guided by ever changing common law principles of justice and notions of equity.
Being statutory in character it is essential that it must conform to the requirements of our election law.
But at the same time the purity of election process must be maintained at all costs and those who violate the statutory norms must suffer for such violation.
If the returned candidate is shown to have secured his success at the election by corrupt means he must suffer for his misdeeds.
The mode for calling in question the election of a returned candidate is by presenting an election petition `in accordance with the provisions of this Part ' (Section 80).
Such a petition has to be presented within 45 days from the date of election of the returned candidate.
Sub section (3) of section 81 provides that such an election petition must be accompanied by as many copies thereof as there as there are respondents and every such copy shall be attested by the petitioner under his own signature to be a true copy of the petition.
This provision which explains how a copy of an election petition shall be attested, emphasises that such attestation will be under the petitioner 's own signature.
What the contents of an election petition shall be is enumerated in Section 83.
It must contain a concise statement of material facts on which the petitioner relies but where a petition is founded on the allegation of corrupt practice, it shall set forth full particulars of the corrupt practice alleged by the petitioner, including as full a statement as possible of the names of the parties who have indulged in such corrupt practice together with the date and place of the commission thereof.
Such an election petition as well as every schedule or annexure thereto must be signed by the petitioner and verified in the manner provided by the Code for the verification of pleadings.
But, in cases where the petitioner has alleged corrupt practice that is not enough, the proviso demands that the petition shall be accompanied by an affidavit in the prescribed from supporting the allegation of such corrupt practice and the particulars thereof.
Therefore, an election 773 petition in which corrupt practice is alleged stands on a different footing from an election petition which does not carry such an allegation.
The legislature has taken special care to ensure that ordinary verification will not suffice, it must be supported by an affidavit in the prescribed form.
Form 25 has been prescribed for such an affidavit under rule 91A of the Rules.
That rule says that the affidavit referred to in the proviso to Section 83(1) shall be in Form 25.
The form of the affidavit requires the deponent to state which of the paragraphs of the election petition in which allegations of corrupt practice are made are based on his own knowledge and which are based on this information.
Section 86(1) then mandates that the High Court `shall ' dismiss an election petition which does not comply with the provisions of Section 81 or Section 82 or Section 117 of the R.P. Act.
The language of this sub section is quite imperative and commands the High Court, in no uncertain terms, to dismiss an election petition which does not comply with the requirements section 81 or section 82.
This mandate is, however, qualified by sub section (5) referred to earlier.
Election of a returned candidate can be rendered void on proof of the alleged corrupt practice.
In addition thereto he would incur a subsequent disqualification also.
This harshness is essential if we want our democratic process to be clean, free and fair.
Eradication of corrupt practice from our democratic process is essential if we want it to thrive and remain healthy.
Our democratic process will collapse if unhealthy corrupt practices like appeals to voters on basis of caste, creed, community, religion, race, language, etc., are allowed to go unchecked and unpunished.
Use of corrupt practices in elections to secure short term gains at the cost of purity of our democratic process must be frowned at by every right thinking citizen.
It is for that reason that the law has provided for double jeopardy to deter candidates, their agents and others from indulging in such nefarious practices.
But while there is sufficient justification for the law to be harsh with those who indulge in such practices, there is also the need to ensure that such allegations are made with a sense of responsibility and concern and not merely to vex the returned candidate.
It is this in view that the law envisages that the particulars of such allegations shall be set out fully disclosing the name of the party responsible for the same and the date and place of its commission.
A simple verification was considered insufficient and, therefore, the need for an affidavit in the prescribed form.
These procedural precautions are intended to ensure that the person making the allegation of corrupt practice realises the seriousness thereof as such a charge would be akin to a criminal charge since it visits the party indulging in such practice with a two fold penalty.
That 774 is why this Court described it as quasi criminal in nature in Manphul Singh vs Surinder Singh, [1973] 2 SCC 599 at 608 and reiterated the same in K.M. Mani vs P.J. Antony, ; Hence the insistence that each ingredient of the charge must be satisfactorily proved before a verdict of guilt is recorded by the Court.
In Mani 's case this Court held that the allegations must be established beyond reasonable doubt and not merely by a preponderance of probability.
It is, therefore, equally essential that the particulars of the charge or allegation are clearly and precisely stated in the election petition to afford a fair opportunity to the person against whom it is leveled to effectively counter the same.
The law in regard to the adjudication of an election dispute has been set out, as stated earlier, in Part VI of the R.P. Act, the provisions whereof constitute a self contained Code.
Therefore, an election petition calling in question the election of a returned candidate must be made in accordance with the provisions of this part of the statute.
Under the provisions of this part an election petition calling in question the election of a returned candidate must be founded on one or more of the grounds specified in Sections 100 and 101 for any of the reliefs specified in Section 84 thereof.
Section 100 specifies several grounds, one of them being commission of a corrupt practice by the returned candidate.
Section 83(1)(a) stipulates that every election petition shall contain a concise statement of the "material facts" on which the petitioner relies.
That means the entire bundle of facts which would constitute a complete cause of action must be concisely stated in an election petition.
Section 83(1)(b) next requires an election petitioner to set forth full 'particulars ' of any corrupt practice alleged against a returned candidate.
These 'particulars ' are obviously different from the 'material facts ' on which the petition is founded and are intended to afford to the returned candidate an adequate opportunity to effectively meet with such an allegation.
The underlying idea in requiring the election petitioner to set out in a concise manner all the 'material facts ' as well as the 'full particulars ', where commission of corrupt practice is complained of, is to delineate the scope, ambit and limits of the inquiry at the trial of the election petition.
Before the amendment of the R.P. Act by Act 27 of 1956, section 83(3) provided for an amendment of an election petition insofar as 'particulars ' of corrupt practice were concerned.
By the 1956 amendment this provision was replaced by Section 90(5) which in turn came to be deleted and transferred as sub section (5) of section 86 by the Amendment Act 47 of 1966.
Section 86(5) as it presently stands 775 empowers the High Court to allow the `particulars ' of any corrupt practice alleged in the petition to or amplified the amendment does not have the effect of widening the scope of the election petition by introducing particulars in regard to a corrupt practice not previously alleged or pleaded within the period of limitation in the election petition.
In other words the amendment or amplification must relate to particle already pleaded and must not be an effort to expand the scope of the inquiry by introducing particulars regarding a different corrupt practice not earlier pleaded.
Only the particulars of that corrupt practice of which the germ exists in the election petition can be amended or amplified and there can be no question of introducing a new corrupt practice.
It is significant to note that section 86(5) permits `particulars ' of any corrupt practice `alleged in the petition ' to be amended or amplified and not the `material facts '.
It is, therefore, clear from the trinity of clauses (a) and (b) of 83 and section sub section (5) of section 86 that there is a distinction between `material facts ' referred to in clause (a) and `particulars ' referred to in clause (b) and what Section 86(5) permits is the amendment/amplification of the latter and not the former.
Thus the power of amendment granted by section 86(5) is relatable to clause (b) of section 83(1) and is coupled with a prohibition, namely, the amendment will not relate to a corrupt practice not already pleaded in the election petition.
The power is not relatable to clause (a) of section 83(1) as the plain language of section 86(5) confines itself to the amendments of `particulars ' of any corrupt practice alleged in the petition and does not extent to `material facts '.
This becomes crystal clear on the plain words of the closely connected trinity of Section 83(1)(a), 83(1)(b) and 86(5) and is also supported by authority.
See Samant N. Balkrishna vs George Fernandez, ; and D.P. Mishra vs Kamal Narayan Sharma, ; In Balwan Singh vs Lakshmi Narain, this Court held that it full particulars of an alleged corrupt practice are not supplied, the proper course would be to give an opportunity to the petitioner to cure the defect and if he fails to avail of that opportunity that part of the charge may be struck down.
We may, however, hasten to add that once the amendment sought falls within the purview of section 86(5), the High Court should be liberal in allowing the same unless, in the facts and circumstances of the case, the Court finds it unjust and prejudicial to the opposite party to allow the same.
Such prejudice must, however, be distinguished from mere inconvenience, vide Raj Narain vs Indira Gandhi, ; This much for the provisions of section 83(1)(a) and (b) and section 86(5) of the R.P. Act.
776 The brings us to clause (c) of sub section (1) of section 83, which provides that an election petition shall be signed by the petitioner and verified in the manner laid down by the Code for the verification of the pleadings.
Under section 83(2) any schedule or annexure to the pleading must be similarly verified.
Order 6 Rule 15 is the relevant provision in the Code.
Sub rule (2) of Rule 15 says that the person verifying shall specify with reference to the numbered paragraphs of the pleading, what he verifies on his own knowledge and what he verifies upon information received and believed to be true.
The verification must be signed by the person making it and must state the date on and the place at which it was singed.
The defect in the verification can be (i) of a formal natural and not very substantial (ii) one which substantially complies with the requirements and (iii) that which is material but capable of being cured.
It must be remembered that the object of requiring verification of an election petition is clearly to fix the responsibility for the averments and allegations in the petition on the person signing the verification and at the same time discouraging wild and irresponsible allegations unsupported by facts.
Then comes the proviso which provides that in cases where corrupt practice is alleged in the petition, the petition shall also be supported by an affidavit in the prescribed form i.e. From No. 25 prescribed by Rule 94A of the Rules.
Lastly sub section (2) of section 83 lays down that any schedule or annexure to the petition shall also be similarly signed and verified.
Two question arise: (i) what is the consequence of a a defective or incomplete verification and (ii) what is the consequence of a defective affidavit? It was also said that the verification clause in regard to averments or allegations based on information ought to disclose the source of information which had not been done in this case.
It must at the outset be realised that section 86(1) which lays down that the High court `shall ' dismiss an election petition which does not comply with the provisions of section 81 or section 8 or section 117 does not in terms refer to section 83.
It would, therefore, seem that the legislature did not view the non compliance of the requirement of section 83 with the same gravity as in the case of sections 81, 82 or 117.
But it was said that a petition which does not strictly comply with the requirements of section 83 cannot be said to be an election petition within the contemplation of section 81 and hence section 86(1) was clearly attracted.
In Murrka Redhey Shyam vs Roop Singh Rathore, ; one of the defects pointed out was that though the verification stated that the averments made in some of the paragraphs of the petition were true to the personal knowledge of the petitioner and the averments in in some other paragraphs were verified 777 to be true on advice and information received from legal and other sources, the petitioner did not in so may words state that the advice and information received was believed by him to be true.
The Election Tribunal held that this defect was a matter which came within section 83(1)(c) and the defect could be cured in accordance with the principles of the Code.
This Court upheld this view in the following words: "It seems clear to us that reading the relevant sections in Part VI of the Act, it is impossible to accept the contention that a defect in verification which is to be made in the manner laid down in the Code of Civil Procedure, 1908, for the verification of pleadings as required by cl.
(c) of sub section
(1) of section 83 is fatal to the maintainability of the petition.
" It is thus clear from this decision which is binding on us that mere defect in the verification of the election petition is not fatal to the maintainability of the petition and the petition cannot be thrown out solely on that ground.
As observed earlier since section 83 is not one of three provisions mentioned in section 86(1), ordinarily it cannot be construed as mandatory unless it is shown to an integral part of the petition under section 81.
The proviso to section 83(1) was inserted by section 18 of Amendment Act 40 of 1961.
It is attracted where the petitioner alleges any corrupt practice.
In that case the election petition must be accompanied by an affidavit inthe prescribed form i.e. Form No. 25.
The affidavit is intended to support the allegation of corrupt practice and the particulars thereof pleaded in the election petition.
Order 19 Rule 3 of the Code provides that affidavits should be confined to such facts as the deponent is able on his own knowledge to prove.
Here again the submission was that the affidavit to be sworn in Form No. 25 prescribed by Rule 94A must be sworn consistently with Order 19 Rule 3 of the Code.
The submission, therefore, was that the affidavit must disclose the source of information for otherwise it will be no affidavit at all.
In this connection reliance is placed on the decision of this Court in State of Bombay vs Purushottam Jog Naik; , wherein at page 681 this Court while dealing with the verification of the affidavit of the Home Secretary observed that when the matter deposed to is not based on personal knowledge the source of information should be clearly disclosed.
Again in The Barium Chemicals Ltd. vs The Company Law Board, [1966] Supp.
SCR 311 Shelat, J. at page 352 reiterated that where allegations of mala fides are not grounded on personal knowledge but only on `reason to believe ', the source of 778 information must invariably be disclosed.
Same was the view expressed in the case of K.K. Nambiar vs Union of India, ; at 125.
Based on the law laid down in the aforesaid three cases the learned counsel for the appellants submitted that an affidavit which on its to disclose the source of information has no efficacy in law and is not worth the paper on which it is written, more so in an election petition alleging corrupt practice, for otherwise it will fail to achieve the purpose, namely, to give an opportunity to the returned candidate to counter the allegation.
According to the learned counsel, the affidavit contemplated by the proviso to section 83(1) is intended to be an integral part of the petition under section 81 and failure to comply with the requirement of disclosing the source of information renders the petition liable to summary dismissal under section 8(1) of the R.P. Act.
Reliance was placed on Jadav Gilua vs Suraj Narain Jha, AIR 1974 Patna 207; M/s Sunder Industries Ltd. vs G.E. Works, AIR 1982 Delhi 220; K.K. Ramachandran, AIR 1988 Kerala 259; Kamalam vs Dr. syed Mohamad; , and M/s Sukhwinder Pal vs State of Punjab, ; , which support this view.
In the case of Murarka Radhey Shyam, (supra) two election petitions were filed challenging his election to the House of the People.
In those two petitions certain preliminary objections were raised touching on the maintainability of the petitions on the ground that there was failure to comply with the mandatory requirements of the R.P. Act.
One of the preliminary objections with which we are presently concerned was non compliance with section 83 inasmuch as the affidavit in respect of corrupt practices which accompanied the petition was neither properly made nor in the prescribed form.
The further submission was that an election petition under section 81 must comply with the requirements of section 83 for otherwise it cannot be rightly described as an election petition under section 81 of the R.P. Act.
This Court referred to the observation of the Election Tribunal, which reads as under: "The verification of the affidavit of the petitioner is apparently not in the prescribed form but reading as a whole the verification carries the same sense as intended by the words mentioned in the prescribed form.
The mistake of the Oaths Commissioner in verifying the affidavit cannot be a sufficient ground for dismissal of the petitioner 's petition summarily, as the provisions of section 83 are not necessarily to be complied with in order to make a petition valid and such 779 affidavit can be allowed to be filed at a later stage also." and expressed its agreement therewith.
It also held that the defect in the time and place of verification cannot be a fatal defect and can be remedied.
In Virendra Kumar Saklecha vs Jagjiwan and Others, Rule 7 of the M.P. High Court Rules Provided that every affidavit should cleraly express how much is a statement and declaration from knowledge and how much is based on information or belief and must also state the source of information or belief.
This Court held that the requirements of Form 25 were not consistent with Rule 7 which purported to give effect of Order 19 of the Code.
In that case the affidavit accompanying the petition did not disclose the source of information in respect of certain speeches alleged to have been made by the appellant which constituted corrupt practice nor were the notes thereof allegedly made by certain persons therewith.
This Court while stating that it was not necessary to express any opinion on the question whether the non disclosure of the source or ground of information in the affidavit can prove fatal, nevertheless observed that the grounds or sources of information are required to be stated since section 83 states that an election petition shall be verified in the manner laid down by the Code and affidavit was, therefore, required to be modelled as required by Order 19 of the Code.
This decision is not an authority for the proposition that failure to disclose the source or ground of information would result in dismissal of the petition under section 86(1) of the R.P. Act.
In Krishan Chand vs Ram Lal, ; the appellant, a voter questioned Ram Lal 's election on the allegation that he, his election agent and some others with his consent, had committed various acts of corrupt practices detailed in paragraphs 11 and 12 of the petition.
The petition was verified by the appellant and was accompanied by an affidavit wherein he stated that paragaphs 11 12 were based on information received and believed to be true.
The respondent raised a preliminary objection that the petition was liable to be dismissed for non compliance with the provisions of the R.P. Act read with the Code as the sources of information were not disclosed.
In support of this contention reliance was placed on the decisions rendered under Order 6 Rule 15 and Order 19 Rule 2 of the Code.
Dealing with this submission, this Court observed in paragraph 6 of the judgment as under: 780 "At the outset it may be stated that the provision for setting out the sources of information where the allegations have been verified as having been made on information and knowledge of the petitioner is not a requisite prescribed under Rule 94 A of the Conduct of Election Rules, 1961, which are applicable to the filing of an election petition.
Under sub section (1) of Section 83 an election petition has to contain a concise statement of the material facts on which the petitioner relies; it has to set forth full particulars of any corrupt practice that the petitioner alleges, including as full a statement as possible of the names of the parties alleged to have committed such corrupt practice and the date and place of the commission of each such practice and shall be signed by the petitioner and verified in the manner laid down in the Code of Civil Procedure, 1908, for the verification of the pleadings, provided that where the petitioner alleges any corrupt practice, the petition shall also be accompanied by an affidavit in the prescribed form in support of the allegation of such corrupt practice and the particulars thereof." Setting out Form 25 prescribed under Rule 94A, this Court proceeded to further observe: "There is nothing in this form which requires the petitioner to state under clause (b) of Form 25 the source or sources of his information.
The appellant has referred us to Order XI, Rule 13 of the Supreme Court Rules as also to Rule 1(A) of the Punjab High Court Rules, in which when the deponent in the affidavit filed in support of the petition states that he has made the allegations in the paragraph or paragraphs specified on information, he is required also to disclose the sources of information.
But when there are specific rules made under the Act which govern the election petitions, no other rules are applicable.
Nor is the disclosure of the source of information a requisite under Order VI, Rule 15(2) C.P.C.
On this ground alone the submission of the appellant can be rejected.
" Thus this Court came to the conclusion that the election petition under section 83(1)(b) must itself contain all the necessary material facts and in the affidavit in support the petitioner is required to say which of the allegations are based on personal knowledge and which are based on 781 information received and believed to be true.
If the source of information has not been set out and the opposite party finds it difficult to answer the allegations regarding corrupt practice, he can always apply for better particulars.
In other words the failure to disclose or divulge the source of information was not considered fatal to the petition.
This Court, therefore, concluded that the election petition did not suffer from any defect on that score.
Similar was the view taken by this Court in Z. B. Bukhari vs Brij Mohan, while dealing with the contention that the affidavit in support of the election petition founded on allegations of corrupt practice falling under sub section (3) and (3A) of section 123 was not in proper form.
Repelling this contention the Court held that a petition can only be dismissed for a substantial defect.
In taking this view reliance was placed on Prabhu Narayan vs A.K. Srivastava, ; wherein this Court had negatived the contention that failure to disclose the sources of information would render the affidavit defective.
However, strong reliance was placed on this Court 's decision in Kamalam vs Dr. Syed Mohamad, ; In that case the respondent 's election to the Lok Sabha was challenged alleging corrupt practice.
The election petition was duly signed and verified by the appellant and was accompanied by the requisite affidavit in support of the allegations of corrupt practice and their particulars.
The election petition and the affidavit were tied together as on document.
The appellant 's signature appeared at the foot of the affidavit but there was no such signature at the foot of the election petition itself.
In this backdrop of facts this Court held that both the election petition and the affidavit constituted one single document.
This Court after referring to section 81(3), 83 and 86(1) observed as under: "The context in which the proviso occurs clearly suggests that the affidavit is intended to be regarded as part of the election petition.
Otherwise, it need not have been introduced in a section dealing with contents of an election petition nor figured as a proviso to a sub section which lays down what shall be the contents of an election petition.
Sub section (2) also by analogy supports this inference.
It provides that any schedule or annexure to an election petition shall be signed by the petitioner and verified in the same manner as an election petition.
It is now established by the decision of this Court in Sahodrabai Rai vs Ram 782 Singh Aharwar; , that sub section (2) applied only to a schedule or annexure which is an integral part of the election petition and not to a schedule or annexure which is merely evidence in the case but which is annexed to the election petition merely for the sake of adding strength to it.
" After quoting from the decision in Sahodrabai 's case at pages 19 20, this Court proceeded to state: "It would, therefore, be seen that if a schedule or annexure is an integral part of the election petition, it must be signed by the petitioner and verified, since it forms part of the election petition.
The subject matter of sub section (2) is thus a schedule or annexure forming part of the election petition and hence it is placed in section 83 which deals with contents of an election petition.
Similarly, and for the same reasons, the affidavit referred to in the provisos to Section 83 sub section (1) also forms part of the election petition.
The election petition is in truth and reality reality one document consisting of two parts, one being the election petition proper and the other being the affidavit referred to in the proviso to section 83, sub section (1).
The copy of the election petition required to be filed under the first part of sub section (3) of section 81, would, therefore, on a fair reading of that provision along with section 83, include a copy of the affidavit.
" The above observations have, however, to be read in the context on the controversy before the Court.
The dispute between the parties was limited to the fulfilment of the last part of section 81(3), viz., the requirement that every such copy of the election petition `shall be attested by the petitioner under his own signature to be a true copy of the petition '.
As pointed out earlier it was found as a fact that the signature was at the foot of the affidavit tied to the petition and not at the foot of the petition itself.
The Court, therefore, came to the conclusion that since the affidavit constituted an integral part of the election petition, the requirement of the latter part of section 81(3) was satisfied.
The decision clearly turned on the special facts of that case.
From the text of the relevant provisions of the R.P. Act, Rule 94A and Form 25 as well as Order 6 Rule 15 and Order 19 Rule 3 of the 783 Code and the resume of the case law discussed above it clearly emerges (i) a defect in the verification, if any, can be cured (ii) it is not essential that the verification clause at the foot of the petition or the affidavit accompanying the same should disclose the grounds or sources of information in regard to the averments or allegations which are based on information believed to be true (iii) if the respondent desire better particulars in regard to such averments or allegations, he may call for the same in which case the petitioner may be required to supply the same and (iv) the defect in the affidavit in the prescribed Form 25 can be cured unless the affidavit forms an integral art of the petition, in which case the defect concerning material facts will have to be dealt with, subject to limitation, under section 81(3) as indicated earlier.
Similarly the Court would have to decide in each individual case whether the schedule or annexure referred to in section 83(2) constitutes an integral part of the election petition or not; different considerations will follow in the case of the former as compared to those in the case of the latter.
A charge of corrupt practice has a two dimensional effect; its impact on the returned candidate has to be viewed from the point of view of the candidate 's future political and public life and from the point of view of the electorate to ensure the purity of the election process.
There can, therefore, be no doubt that such an allegation involving corrupt practice must be viewed very seriously and the High Court should ensure compliance with the requirements of section 83 before the parties go to trial.
This is quite clear from the observations of this Court in the case of K.M. Mani vs P.J. Anthony, ; While defective verification or a defective affidavit may not be fatal, the High Court should ensure its compliance before the parties go to trial so that the party required to meet the charge is not taken by surprise at the actual trial.
It must also be realised that delay in complying with the requirements of section 83 read with the provisions of the Code or the omission to disclose the grounds or sources of information, though not fatal, would waken the probative value of the evidence ultimately lead at the actual trial.
Therefore, an election petitioner can afford to overlook the requirements of section 83 on pain of weakening the evidence that he may ultimately tender at the actual trial of the election petition.
That is because as held in Mani 's case the charge of corrupt practice has to be proved beyond reasonable doubt and not merely by preponderance of probabilities.
Allegation of corrupt practice being quasi criminal in nature, the failure to supply full particulars at the earliest point of time and to disclose the source of information promptly may have an adverse bearing on the probative value to be 784 attached to the evidence tendered in proof thereof at the trial.
Therefore, even though ordinarily a defective verification can be cured and the failure to disclose the grounds or sources of information may not be fatal, failure to place them on record with promptitude may lead the court in a given case to doubt the veracity of the evidence ultimately tendered.
If, however, the affidavit or the schedule or annexure forms an integral part of the election petition itself, strict compliance would be insisted upon.
The next objection is based on the language of section 81 of the R.P. Act.
This section deals with the presentation of an election petition.
Sub section (1) thereof says that an election petition may be presented by any candidate at such election or any elector within 45 days from, but not earlier than, the date of the election of the returned candidate or if there are more than one returned candidate at the election and the dates of their election are different, the late of those dates.
This sub section specifies on what ground or grounds the election of the returned candidate can be challenged, who can challenge the election and imposes a period of limitation for filing sucha petition.
Sub section (2) of this section was omitted by Act 47 of 1966.
Then comes sub section (3) which stipulates that every election petition shall be accompanied by as many copies thereof as there are respondents mentioned in the petition, and every such copy shall be attested by the petitioner under his own signature to be a true copy of the petition.
This sub section enjoins (i) supply of such number of copies of the petition as are respondents and (ii) every such copy must be attested by the petitioner under his own signature to be a true copy of the petition.
There is no controversy regarding the first aspect, the controversy centres round the second part.
It must the remembered that non compliance with the requirement of sub section (1) or (3) of section 81 can prove fatal in view of section 86(1) of the R.P. Act.
See Satya Narain vs Dhuja Ram, ; ; M. Karunanidhi vs Dr. H.V. Hande, ; Mithilesh Kumar Pandey V. Baidyanath Yadav, [1984] 2 SCR 278; Rajender Singh vs Usha Rani, [1984] 3 SCC 339 and U.S. Sasidharan vs K. Karunakaran, ; It is quite obvious from these decisions that the requirements of section 81(3) are mandatory and failure to comply with them would render the petition liable to summary dismissal under section 86(1) of the R.P. Act.
The objection raised in the context of section 81 is that the election petition in every case is a mere photocopy prepared from a typed one and the copy of the election petition served on the returned candi 785 date in each case was not duly attested to be a true copy of the original as required by section 81(3) and hence the petition was liable to be dismissed in limine under section 86(1) of the R.P. Act.
Section 81(1) does not debar photo copying but Rule 1 of the Rules says that is shall be "type written or printed".
There is not dispute that a model election petition was prepared and got typed and prints thereof were taken out by the process of photocopying.
These prints were used both as original election petitions as well as copies.
The particulars in regard to each petition, e.g., the names of the parties, the voting pattern, the towns and villages where utterances amounting to corrupt practice were made, etc., were filled in and the court fee was fixed on one of them which constituted the original and photocopies thereof were filed before the Stamp Reporter in accordance with the Rules.
The photocopy bearing the court fee stamps was indisputably signed by the election petitioner and was presented with sufficient copies to the Stamp Reporter.
The original election petition is, therefore, a photocopy of the typed model and the copies are also photocopies prepared from the original petition.
Evidently the underlying idea in providing that the election petition shall be type written or printed is to ensure that the document is legible.
There is no complaint that the document which is admitted as an election petition and the copies thereof are not legible.
It that be so it is difficult to appreciate the objection that the photocopy should not be treated as an original petition even if it otherwise complies with the requirement of law.
The High Court was, therefore, justified in treating the same as the original election petition.
The next objection raised by the appellants is that the copy of the petition served on each one of them is not attested to be a true copy of the original petition as required by section 81(3) of the R.P. Act and Rule 1 of the Rules.
Each copy is attested as `certified true copy ' and the petitioner has put his signature thereunder.
This, contend the appellants, is not in conformity with section 81(3) and, therefore, it is obvious that the mandatory requirement of section 81(3) read with section 86(1) is not satisfied.
On a plain reading of section 81(3) it become clear that the requirement of that provision is (i) the election petition should be accompanied by as many copies thereof as there are respondents mentioned in the petition and (ii) every such copy shall be attested by the petitioner under his own signature to be a true copy of the petition.
There is no dispute in regard to the compliance of the first part.
So far as the second part is concerned, all that the section requires is that the copy should be attested by the petitioner to be a true copy of the petition under his own signature.
The requirement of this part of the provision is met by each copy having been signed at the 786 foot thereof by the concerned petitioner.
What is essential is that the petitioner must take the responsibility of the copy being a true copy of the original petition and sign in token thereof.
No particular form of attestation is prescribed; all that the sub section enjoins is that the petitioner must attest the copy under his own signature to be a true copy of the petition.
By certifying the same as true copy and by putting his signature at the foot thereof, the petitioner of each election petition had clearly complied with the letter and spirit of section 81(3) of the R.P. Act.
In fact in Ch.
Subba Rao vs Member.
E.T. Hyderabad, which was followed in Kamalam 's case (supra) this Court had accepted the mere signature without the words like true copy, sufficient attestation under section 81(3) of the R.P. Act.
We are, therefore, in agreement with the finding recorded in this behalf by the High Court.
The next grievance of the appellants is that they were not served with a true copy of the election petition inasmuch as the annexures served therewith were not true copies of the original.
Section 83(2) lays down that any schedule or annexure to the petition shall be signed by the petitioner and verified in the same manner as a petition.
The grievance under this head is not that there is no compliance with section 83(2) but that the annexure which was an integral part of the election petition was not a true copy of the original, inasmuch as certain pages found in the annexure produced with the petition were missing from the copies supplied to the returned candidates/appellants.
It was strongly submitted that an annexure which is an integral part of the election petition is an important and vital document and failure to supply a true copy thereof clearly violates the mandatory requirement of section 81(3) and renders the petition liable to be dismissed by virtue of section 86(1) of the R.P. Act.
As held in Sahodrabai ' case (supra) where details of averments too compendious for inclusion in the petition are included inthe schedule or annexure, the schedule or annexure in that case must be treated as integrated with the election petition and must comply with the requirement of Section 83(2) and section 81(3) failing which the provision of section 86(1) would stand attracted.
But this does not apply to a schedule or annexure which produces a document as evidence in support of the allegation in the election petition.
Such a schedule or annexure cannot be described as integrated with the election petition and defect in verification thereof would not prove fatal.
In Sasidharan 's case (supra) the same principle has been reiterted.
In the case the election petitioner referred to a video cassette showing progress of the constituency which also contained speeches of government servants.
A copy 787 of the document was not served on the opposite party alongwith the election petition.
It was held that the said document formed part of the election petition and failure to supply a copy thereof along with the election petition was fatal.
If a document does not form an integral part of the election petition but is merely referred to in the petition of filed in the proceedings as evidence of any fact, failure to supply a copy thereof will not prove fatal.
Therefore, the maintainability of an election petition, in the context of the point on hand will depend on whether the schedule or annexure to the petition constitutes an integral part of the election petition or not.
If it constitutes an integral part it must satisfy the requirements of section 81(3) and failure in that behalf would be fatal.
But if it does not constitute an integral part of the election petition, a copy thereof need not be served along with the petition to the opposite party.
Much would, therefore, depend on whether the schedule or annexure was an integral part of the election petition or not; if the former, failure to serve it along with the petition to the returned candidate would be fatal but not so in the latter case.
The appellants contend that it was an integral part of the election petition but the High Court didnt not go into this question; it solely relied on the Stamp Reporter 's report.
It then emphasised that no defect was noticed by the Stamp Reporter in the following words: "The stamp reporter, in the instant case, found the copies in order and made his endorsement accordingly.
I do not find any reason not to rely upon the endorsement of the stamp reporter.
" Therefore, the criticism that the High Court which was duty bound to apply its mind and decide the question judicially had abdicated in favour of the Stamp Reporter 's decision extracted earlier.
We are afraid this criticism is not wholly correct because the High Court has also observed that `no specific omission or deviation in the copy from the original was pointed out ' nor was it shown that the respondents were misled on that account.
We have also closely scrutinised the application made by the returned candidate in the High Court and except for a general allegation that the annexure served along with the petition was not a true copy, no specific allegation is found.
However, in the special leave petition filed in this Court question No. (vi) states that certain pages were missing from the copy of the annexure served on the returned candidate.
Then in paragraph 11 it is averred that pages 15 and 16 of Annexure II were missing.
Since no such specific allegation was made in the application filed by the returned candidate, the High Court had no occasion to go into this allegation and to ascer 788 tain if the missing pages contained material forming an integral part of the election petition.
We would not like to embark upon an inquiry in this behalf and would leave it to the appellants to agitate the question before the High Court.
We would request the High Court to examine the contention on merits, if raised, and answer the same in accordance with law.
Although we have come to the conclusion that the defect in verification is not fatal and can be cured, no attempt has been made by the election petitioners to cure the same nor has the High Court directed the petitioners to do so.
By way of a sample our attention was drawn to the election petition No. 7 of 1989 which has given rise to Civil Appeal No. 179 of 1991.
The said petition had 47 paragraphs besides the prayer clause.
The verification clause shows that paragraphs 1, 2, 4, 5, 18, 19, 28, 35, 30, 33, 36, 38, 41 to 47 of the election petition are on knowledge whereas paragraphs 7 to 15, 20, to 24 , 26, 27, 29, 32, 34, 37, 40 and 41 are on information received and believed to be true.
It will be seen from the above that paragraphs 3, 6, 16, 17, 25, 31 and 39 are not verified at all.
It was submitted by counsel for the appellants that paragraph 3 contained vital allegations regarding corrupt practice and since that paragraph has not been verified at all, the appellant is likely to be handicapped at the trial.
It was contended that such was the position in as many as six petitions if not more.
Further some of the paragraphs, e.g., 41 are verified under both heads of the verification clause, thereby causing confusion.
In the affidavit sworn in compliance of the proviso to section 83(1) it is stated that particulars and details of corrupt practice are contained in paragraphs 4 to 40 of the election petition.
Then the petitioner states that what he has alleged by way of corrupt practice in the election petition is correct `to the best of my knowledge and to the information received by e and believed by me to be true '.
It is thus not clear which allegation of corrupt practice is based on his knowledge and which information he believes to be true.
Besides when this affirmation is compared with the verification clause of the election petition, the confusion is worst confounded.
Similar is the case with the verification of the annexures.
There, therefore, considerable force in the submission of the learned counsel for the appellants that even if the High Court concluded that the defect in verification/affirmation was not fatal, the High Court ought to have directed the petitioners to cure the defects within the time stipulated by it so that the appellants would know the exact position before the trial and would not be taken by surprise.
We think the High Court committed an error in failing to give appropriate directions in the matter.
More or less similar defects are 789 also found in the verification/affirmation clause in the other election petitions/affidavits.
We would, therefore, request the High Court to issue directions to the election petitioner of each petition to remove the defects within such time as it may allow and if they or any of them fail to do so, pass appropriate consequential orders in accordance with law.
The High Court has applied the correct test while permitting the amendments.
The High Court has rightly pointed out that the power conferred by section 86(5) cannot be exercised to allow and amendment which will have the effect of introducing a corrupt practice not previously alleged in the petition.
If it is found that the proposed amendments are not in the nature of supplying particulars but raise new grounds, the same must be rejected but if the amendments are sought for removing vagueness by confining the allegations to the returned candidate only such an amendment would fall within the parameters of section 86(5) of the R.P. Act.
It was on this correct understanding of the legal position that the High Court scrutinised the amendment application.
It was not shown at the hearing of these appeals that any particular averment introduced by way of an amendment had the effect of introducing a totally new allegation of corrupt practice not previously pleaded in the election petitions.
Yet, if the appellants can point out any inconsistency, the High Court will remove the same.
These were all the submissions made before us.
We have dealt with them in extenso and have clarified the legal position.
We have suggested certain modifications in the impugned orders and have indicated the course of action to be adopted by the High Court.
We need not recapitulate the modifications and the future course of action.
The impugned order of the High Court in each petition will stand modified to the extent it is inconsistent with the legal position explained hereinabove.
The High Court will pass appropriate orders to remove the inconsistencies.
The appeals will stand allowed only to the extent of the modifications/directions made by this order with no order as to cost in each election petition.
V.P.R. Appeals partly allowed.
| The respondents, who lost the State Assembly elections as candidates of the Mezo National Front(MNF) from different constituencies of Mizoram, challenged the election of the Congress (I) candidates on the ground of corrupt practices in the High Court.
The appellants the returned candidates raised certain preliminary objections regarding the maintainability of each petition.
On the basis therefore two preliminary issues were raised for consideration.
The appellants moved for striking off the pleadings.
Thereupon, the original petitioners the respondents applied for amendment of their election petitions which was strongly opposed by the appellants.
The preliminary objections, the applications for striking off the pleadings and the amendment applications were heard together.
The two preliminary issues raise were (i) whether the election petitions were in conformity with the requirements of Section 81 and 83 753 of the Representation of the Peoples Act, 1951 and the Rules framed thereunder by the High Court and (ii) whether rule 1 and the other related rules and notes thereto enabling the filing of the Election Petition before the Stamp Reporter assigned to the election court by the Chief Justice were ultra vires Article 329 of the Constitution and Section 169 read with Sections 80, 80A and 81 of the R.P. Act.
The appellants contended that the election petitions being photo copies, could not be treated as election petitions as contemplated by law; that the copies of petitions served on them were not attested to be true copies of the original petitions as required by Section 81(3); that the election petitions were not signed and verified in the manner laid down by the Code of Civil Procedure inasmuch as the source of information had not been disclosed in the verification or in the affidavit in Form 25 as required by rule 94A of the Conduct of Election Rules, 1961 (the Rules); that no schedule of material particulars of corrupt practice had been annexed to the affidavit purporting to be under Form 25, and that the presentation of the election petitions before the Stamp Reporter was inconsistent with Sections 80, 80A and 81 of the R.P. Act and Article 329 of the Constitution.
The averments in each election petition were identical.
The High Court rejected the preliminary objections and party allowed the applications for striking off the averments in the election petitions and partly permitted certain amendments to the election petitions, against which order the present appeals are filed in this Court under Article 136 of the Constitution.
The returned candidate the appellant contended that paragraph 3 of the election petition was the most crucial paragraph inasmuch as it disclosed the names of towns and villages as well as the period during which the alleged corrupt practices were committed had been deliberatedly omitted from the verification clause and the affidavit; that failure to mention paragraph 3 of the election petition in both the verification clause of the petition and the affidavit was fatal and cannot be cured after the expiry of the limitation period of 45 days; that the affidavit was not in Form No. 25 prescribed under Rule 94A of the Rules and since Section 83 of the R.P. Act is mandatory and failure to adhere to Form No. 25 was fatal, as the doctrine of substantial compliance had no place in election law but even if that doctrine could be invoked, the respondent failed to make substantial compliance; that the election petitions being photocopies could not be entertained as valid 754 election petitions; that copies of the election petitions served on the returned candidates were not attested as true copies of the original as required by Section 81(3); that the election petitions and the schedule and annexures were not signed and verified as required by the Code; that an election dispute founded on the allegation of corrupt practice being quasi criminal in nature calls for strict adherence to the requirements of election law as was evident from Section 86(I) of R.P. Act which provided for dismissal of an election petition which failed to comply with the requirements of Section 81, 82 or 117 of the statute; and that if the Code did not apply to Mizoram, it applied to an election petition because section 83(I)(c) obligates that an election petition `shall be signed by the petitioner and verified in the manner laid down in the Code for the verification of pleadings '.
This Court partly allowing the appeals, HELD: 1.
Our election law being statutory in character must be strictly complied with since an election petition is not guided by ever strictly complied with since an election petition is not guided by ever changing common law principles of justice and notions of equity.
Being statutory in character it is essential that it must conform to the requirements of our election law.
But at the same time the purity of election process must be maintained at all costs and those who violate the statutory norms must suffer for such violation.
If the returned candidate is shown to have secured his success at the election by corrupt means he must suffer for his misdeeds.
[772B D] 2.
A charge of corrupt practice has a two dimensional effect; its impact on the returned candidate has to be viewed from the point of view of the candidate 's future political and public life and from the point of view of the electorate to ensure the purity of the election process.
There can, therefore, be no doubt that such an allegation involving corrupt practice must be viewed very seriously and the the High Court should ensure compliance with the requirements of Section 83 before the parties go to trial.
[783D E] 3.
What is essential is that the petitioner must take the responsibility of the copy being a true copy of the original petition and sign in token thereof.
No particular form of attestation is prescribed; all that the sub section enjoins is that the petitioner must attest the copy under his own signature to be a true copy of the petition.
By certifying the same as true copy and by putting his signature at the foot thereof, the petitioner of each election petition had clearly complied with the letter and spirit of section 81(3) of the R.P. Act.
[786A B] 755 4.
Section 86(I) mandates that the High Court `shall ' dismiss an election petition which does not comply with the provisions of Section 81 or Section 82 or Section 117 of the R.P. Act.
The language of this sub section is quite imperative and commands the High Court, in no uncertain terms, to dismiss an election petition which does not comply with the requirements of section 81 of section 82.
[773B D] 5.
Election of a returned candidate can be rendered void on proof of the alleged corrupt practice.
In addition thereto he would incur a subsequent disqualification also.
This harshness is essential if we want our democratic process to be clean, free and fair.
Eradication of corrupt practice from our democratic process is essential if we want it to thrive and remain healthy.
Our democratic process will collapse if unhealthy corrupt practices like appeals to voters on basis of caste, creed, community religion, race, language, etc., are allowed to go unchecked and unpunished.
Use of corrupt practices in elections to secure short term gains at the cost of purity of our democratic process must be frowned at by every right thinking citizen.
[773D F] 6.
It is for that reason that the law has provided for double jeopardy to deter candidates, their agents and others from indulging in such nefarious practices, their agents and others from indulging in such nefarious practices.
But while there is sufficient justification for the law to be harsh with those who indulge in such practices, there is also the need to ensure that such allegations are made with a sense of responsibility and concern and not merely to vex the returned candidate.
It is with this in view that the law envisages that the particulars of such allegations shall be set out fully disclosing the name of the party responsible for the same and the date and place of its commission.
A simple verification was considered insufficient and, therefore, the need for an affidavit in the prescribed form.
These procedural precautions are intended to ensure that the person making the allegation of corrupt practice realises the seriousness thereof as such a charge would be akin to a criminal charge since it visits the party indulging in such practice with a two fold penalty.
[773E H] 7.
If full particulars of an alleged corrupt practice are not supplied, the proper course would be to give an opportunity to the petitioner to cure the defect and if he fails to that opportunity that part of the charge may be struck down.
[775F G] 8.
Once the amendment sought falls within the purview of section 86(5), the High Court should be liberal in allowing the same unless, in the facts and circumstances of the case, the Court finds it unjust and 756 prejudicial to the opposite party to allow the same.
Such prejudice must, however, be distinguished from mere inconvenience.
[775G H] 9.
The power conferred by section 86(5) cannot be exercised to allow any amendment which will have the effect of introducing a corrupt practice not previously alleged inthe petition.
If it is found that the proposed amendments are not in the nature of supplying particulars but raise new grounds, the same must be rejected but if the amendments are sought for removing vagueness by confining the allegations to the returned candidate only such an amendment would fall within the parameters of section 86(5) of the R.P. Act.
[789B D] 10. Clause(c) of sub section 83 provides that an election petition shall be signed by the petitioner and verification of the pleadings.
Under section 83(2) any schedule or annexure to the pleading must be similarly verified.
Order 6 Rule 15 is the relevant provision in the Code.
Sub rule (2) of Rule 15 says that the person verifying shall specify with reference to the numbered paragraphs of the pleading, what he verifies on his own knowledge and what he verifies upon information received and believed to be true.
The verification must be signed by the person making it and must state the date on and the place at which it was signed.
The defect in the verification can be (i) of a formal nature and not very substantial (ii) one which substantially complies with the requirements and (iii) that which is material but capable of being cured.
[776A C] 11.
The object of requiring verification of an election petition is clearly to fix the responsibility for the averments and allegations in the petition on the person signing the verification and at the same time discouraging wild and irresponsible allegations unsupported by facts.
[776C D] 12.
In cases where corrupt practice is alleged in the petition, the petition shall also be supported by an affidavit in the prescribed form, i.e. Form No. 25 prescribed by Rule 94A of the Rules.
[776D E] 13.
While defective verification or a defective affidavit may not be fatal, the High Court should ensure its compliance before the parties go to trial so that the party required to meet the charge is not taken by surprise at the actual trial.
[783E F] 14.
The charge of corrupt practice has to be proved beyond reasonable doubt and merely preponderance of probabilities.
757 Allegation of corrupt practice being quasi criminal in nature, the failure to supply full particulars at the earliest point of time and to disclose the source of information promptly may have an adverse bearing on the probative value to be attached to the evidence tendered in proof thereof at the trial.
Therefore, even though ordinarily a defective verification can be cured and the failure to disclose the grounds or sources of information may not be fatal, failure to place them on record with promptitude may lead the court in a given case to doubt the veracity of the evidence ultimately tendered.
If, however, the affidavit of the schedule or annexure forms an integral part of the election petition itself, strict compliance would be insisted upon.
[783G 784B] 15.
The requirements of section 81(3) are mandatory and failure to comply with them would render the petition liable to summary dismissal under section 86(I) of the R.P. Act.
[784G] 16.
If a document does not form an integral part of the election petition but is merely referred to in the petition or filed in the proceedings as evidence of any fact, failure to supply a copy thereof will not prove fatal.
Therefore the maintainability of an election petition will depend on whether the schedule or annexure to the petition constitutes an integral part of the election petition or not.
If it constitutes an integral part it must satisfy the requirements of section 81(3) and failure in that behalf would be fatal.
But if it does not constitute an integral part of the election petition, a copy thereof need not be served along with the petition to the opposite party.
[787A C] 17.
The High Court is directed to issue directions to the election petitioner of each petition to remove the defects within such time as it may allow and if they or any of them fail to do so, pass appropriate consequential orders in accordance with law.
[789A B] Gurumayam section Sarma vs K. Ongbi Anisija Devi, Civil Appeal No. 659 of 1957 dated 9.2.1961; State of Nagaland vs Rattan Singh; , ; V.L.Rohlus vs Deputy Commissioner, Aizawal, ; Raj Narain vs Indira Gandhi; , at 1307: ; ; Manphul Singh vs Surinder Singh, [1973] 2 SCC 599 at 608; K.M. Mani vs P.J. Antony, ; ; Samant N. Bal Krishna vs George Fernandez, ; ; D.P. Mishra vs Kamal Narayan Sharma, ; ; Balwan Singh vs Lakshmi Narain, ; Murarka Radhey Shyam vs Roop Singh Rathore; , ; State of Bombay vs Purushottam Jog Naik; , ; The Barjum Chemicals Ltd. The Company Law 758 Board, [1966] Supp.
SCR 311; K.K. Nambiar vs Union of India, ; at 125; Jadav Gilua vs Suraj Narain Jha, AIR 1974 Patna 207; M/s Sunder Industries Ltd. vs G.E. Works, AIR 1982 Delhi 220; K.K. Somanathan vs K.K. Ramachandran, AIR 1988; Kerala 259; Kamalam vs Dr. Syed Mohammad, ; ; M/s. Sukhwinder Pal vs State of Punjab, ; ; Z.B. Bukhari vs Brij Mohan, ; Prabhu Narayan vs K.K. Srivastava, ; ; Satya Narain vs Dhuja Ram, ; ; M. Karunanidhi vs Dr. H.V. Hande, ; Mithlesh Kumar Pandey vs Baidyanath Yadav, [1984] 2 SCR 278; Rajender Singh vs Usha Rani, [1984] 3 SCC 339; U.S. Sasidharan vs K. Karunakaran; , and Ch.
Subba Rao vs Member, E.T. Hyderabad, Referred to.
When by the same statute the words `Election Commissioner ' were substituted by the expression `High Court ' with effect from December 14, 1966.
Even though by the said Amendment Act jurisdiction was conferred on High Court in place of the Election Commission, surprisingly the title of chapter II continues to read `Presentation of election petitions to Election Commission '.
Parliament will well to correct this slip by substituting the words `High Court ' for the expression `Election Commission ' to bring it in conformity with the changes introduced by Act 47 of 1966.
[768E F]
|
ivil Appeal No. 526 (NT) of 1979.
From the Judgment dated 16.12.1976 of the Kerala High Court in I.T.R. No. 101 of 1974.
Dr. V. Gauri Shankar, section Rajappa and Ms. A. Subhashini for the Appellant.
Santosh N. Hegde, E.M.S. Anam and K.L. Mehta for the Respondents.
The Judgment of the Court was delivered by K. JAGANNATHA SHETTY, J.
This appeal by special leave is against the decision of the High Court of Kerala in Income Tax Reference No. 101/1974 and it raises an important issue concerning the requirements of a gift made "in contemplation of death" within the meaning of Section 5(1)(xi) of Gift Tax Act, 1958 (`The Act ').
That reference was made under Section 26(1) of the Gift Tax Act, 1958 by the Income Tax Appellate Tribunal Cochin Bench.
The Tribunal referred to the High Court two questions for its opinion, out of which we are concerned only with the first question which reads: "Whether on the facts and circumstances of the case the 850 Tribunal was right in holding that the gift of movables valued at Rs.67,578 is not a gift made in contemplation of death within the meaning of section 5(1)(xi) of ?" The facts of the case as found by the Tribunal are simple and not unusual.
Abdul Karim Mohammed a businessman in Cochin executed a document styled as "settlement will" gifting certain movables to the assessee respondent inthe shape of business assets valued by the Gift Tax Officer at Rs.67,578.
The document was executed on 4 April 1964 and at the time of execution, the donor was seriously ill.
He died of the illness after about six weeks.
In gift tax assessment proceedings the assessee claimed exemption for this gift under section 5(1)(xi) of the Act which provides that a gift shall not be charged under the in respect of a gift made by any person in contemplation of death.
The Gift Tax Officer rejected the claim of the assessee and brought the said amount to tax.
But on appeal the Appellate Assistant Commissioner held to the contrary.
He allowed the exemption sought for on the ground that the gift was in contemplation of death.
He has relied upon the circumstances under which the gift was made and the events followed thereafter to reach his conclusion.
He has described the facts and circumstances as follows: "Now I agree with Sri Karunakaran, that the absence of any reference in the deed of settlement to the illness from which the donor was suffering does not lead to the conclusion that there was no illness, or that the donor was nor apprehensive of death resulting from the same.
There is ample evidence to show that he was seriously ill at the time when he made the gift.
He was aged about 72 at the time and he was also suffering from paralysis, diabetes, hernia etc.
In fact, in view of the seriousness of the condition he could not proceed to the Sub Registrar 's office for registration of the document; on the other hand the sub registrar ws brought to his residence for the purpose of effecting the registration.
In an affidavit filed by him before the Gift Tax Officer on the 3rd August, 1969, the sub registrar has affirmed that at the time of execution of the document the settler was in sick bed and was unable to move out of the same.
He has also stated that the settler as well as his children showed anxiety and haste in the matter of registration on account of the serious nature of the illness.
At that time, according to the sub registrar the settler was in his proper sense, but soon after the execution of the deed, further complications set in and his power of speech and movements became impaired.
Dr. V.B. Mohammed who was treating him has certified that 851 on 4th June 1964 patient was unable to recognise the surroundings properly, and that his mental condition was impaired to a great degree.
On 9th June, 1964 i.e. within about six weeks from the date of the settlement he died.
In these circumstances, I am satisfied that the donor, an aged gentleman who seriously ill at the time of the settlement entertained no hope of recovery, and that it was in such a state of mind, that he made the settlement.
Hence the gifts must be taken to have been made in contemplation of death.
" The Gift Tax Officer appealed to the Tribunal against the decision of the Appellate Assistant Commissioner.
The Tribunal has affirmed the finding of the Appellate Assistant Commissioner that the donor at the time of gift was ill and expected to die shortly of his illness.
The Tribunal observed "But we are satisfied that the Appellate Assistant Commissioner was on the facts and circumstances of the case right in his conclusion that the donor, an aged gentleman, who was seriously ill at the time of the settlement entertained no hope of recovery and that it was in such a state of mind that he made the settlement.
The materials referred, relied on and discussed by the Appellate Assistant Commissioner in the appellate order are sufficient enough to lead to a reasonable conclusion that the donor was, at the time of execution of the document, ill and that he expected to die shortly of his illness." The Tribunal however, did not agree with the exemption allowed to the assessee.
It has stated that the finding recorded by the Assistant Commissioner that the donor was ill at the time of gift and he died thereafter out of the illness alone is not sufficient to hold that the gift was made in contemplation of gift death.
In order to satisfy the requirements of gift in contemplation of death there must be two other conditions to be satisfied; (i) There must be delivery of possession of the gifted movables to the donee; (ii) that a gift is entitled to take effect only in the event of the donor 's death and that if the donor recovers from the illness the property should revert back.
On the first condition the Tribunal found on facts that there was delivery of possession of the gifted movables.
On the second condition, the Tribunal observed that the gift was unconditional and it was in nature of settlement deed, pure and simple.
It was executed to settle absolutely forever the property of the donor without any condition.
It is just like any other settlement executed by a person without the contemplation of death.
It has not been expressly specified or impliedly present in the deed that the gift must revert back in the event of the donor recovering from illness.
The gifted property has to be kept as a gift in case the donor shall die of his illness has also not been satisfied in the case.
With these findings, the Tribunal allowed the appeal of the Gift Tax Officer.
852 Thereafter, at the instance of the assessee the question set out earlier was referred to the High Court for its opinion.
The High Court has answered the question in the negative and in favour of the assessee.
The High Court expressed the view that it is not necessary that there must be recital in the deed stating that the property would revert to the donor in the event of his recovery from the illness, or the donor surviving the donee.
Such a condition could be inferred from the attending circumstances of the gift.
The High Court has referred to the affidavits filed by the sub registrar who registered the document and the Doctor who treated the donor to come to the conclusion that the donor was seriously ill at the time of execution of the deed and expected to die shortly of that illness.
The factum of delivery of the gifted assets to the donee at a time when the donor was seriously sick and the donor 's death shortly thereafter were also relied upon.
It was then stated that in as much as the donor was actually sick at the time of execution of the deed and died of the same illness without recovery, after a short period, the gift in question was made in contemplation of death and therefore, entitled to exemption from tax under Section 5(1)(xi) of the Act.
The legality of the view expressed by the High Court is under challenge in this appeal.
First, we may refer to the relevant statutory provisions bearing on the question.
Section 3 of the Act is the charging section and it provides that in respect of gifts there shall be charged tax referred to as the gift tax at the rate specified in the schedule.
Section 5 provides exemption in respect of certain gifts.
Section 5 sub section (1)(xi) provides that gift tax shall not be charged under the Act in respect of gifts made by any person in contemplation of death.
Explanation (d) to sub section (2) of Section 5 states "that gifts made in contemplation of death" has the same meaning as in Section 191 of the .
Section 191 of the deals with the requirements of gifts made in contemplation of death.
It reads as follows: "191.
Property transferable by gift made in contemplation of death.
(1) A man may dispose, by gift made in contemplation of death, of any movable property which he could dispose of by will.
(2) A gift said to be made in contemplation of death where a man, who is ill and expects to die shortly his illness, 853 delivers to another the possession of any movable property to keep as a gift in case the donor shall die of that illness.
(3) Such a gift may be resumed by the giver; and shall not take effect if he recovers from the illness during which it was made; nor if e survives the person to whom it was made.
The requirements of a gift in contemplation of death as laid down by Section 191 of the are: (i) the gift must be of movable property; (ii) it must be made in contemplation of death; (iii) the donor must be ill and he expects to die shortly of the illness; (iv) possession of the property should be delivered to the donee; and (v) the gift does not take effect if the donor recovers from the illness or the donee predeceases the donor.
There is nothing new in the requirements provided under Section 191 of the Succession Act.
They are similar to the constituent elements of a valid donatio mortis causa.
The essential conditions of a donatio mortis causa may be summarised thus: "For an effectual donatio mortis causa three things must combine: firs, the gift or donation must have been made in contemplation, though not necessarily in expectation of death; secondly, there must have been delivery to the donee of the subject matter of the gift; and thirdly.
the gift must be made under such circumstances as shew that the thing is to revert to the donor in case he should recover.
This last requirement is sometimes put some what differently, and it is said that the gift must be made under circumstances shewing that it is to take effect only if the death of donor follows; it is not necessary to say which way of putting it is the better." (See Cain vs Moon, at 286).
Now, all the conditions of a valid gift in contemplation of death except perhaps the last condition prescribed under section 191 of the are found present in this case by the fact finding authorities.
The gift was made when the donor was seriously ill and apprehending his death.
The donor died within six weeks after the execution of the deed.
The possession of the property gifted has been delivered to the donee before the death.
But it is said that there is nothing to show in the document expressly or impliedly that the gift was made under such circumstances that the thing was to revert to the donor in case he should recover.
Dr. Gauri Shankar learned counsel for the Revenue contends that the gift in contemplation of death should be conditional that is, on the term that if the donor would not 854 die he should be entitled to remain complete dominion of the property, the subject matter of the gift.
There should be indications in the document to that effect without which, counsel states that the gift becomes inter vivos and absolute.
It seems to us that the recitals in the deed of gift are not conclusive to determine the nature and validity of the gift.
The party may produce evidence aliunde to prove that the donor gifted the property when he was seriously ill and contemplating his death with no hope of recovery.
These factors in conjunction with the factum of death of the donor may be sufficient to infer that the gift was made in contemplation of death.
It is implicit in such circumstances that the donee becomes the owner of the gifted property only if the donor dies of the illness and if the donor recovers from the illness, the recovery itself operates as a revocation of the gift.
It is not necessary to state that in the gift deed that the donee becomes the owner of the property only upon the death of the donor.
Nor it is necessary to specify that the gift is liable to be revoked upon the donor 's recovery from the illness.
The law acknowledges these conditions from the circumstances under which the gift is made.
Reference may be made to the following passage from Halsbury 's Laws of England (4th ed.
20 p. 41 para 67): "There is an implied condition that the gift is to be retained only in the event of death, even though the donor does not expressly say so.
The death may take place some time afterwards, or the donor may actually die from some other illness, but if the donor recovers from illness, during which the gift is made the donee has no title, and can only hold what was delivered to him in trust for the donor." Jerman on Wills (8th ed.
1 p. 46 47) also lends light on this aspect: "The conditional nature of the gift need not be expressed: It is implied in the absence of evidence to the contrary.
And even if the transaction is such as would in the case of a gift inter vivos confers a complete legal title, if the circumstances authorise the supposition that the gift was made in contemplation of death, mortis causa is presumed.
It is immaterial that the donor in that dies from some disorder not contemplated by him at the time he made the gift.
" Similar is the statement of law in Williams on "Executors and 855 Administrators" (14 ed.
p. 315): "542.
Conditional on death: "The gift must be conditioned to take effect only on the death of the donor.
But it is not essential that the donor should expressly attach this condition to the gift; for if a gift is made during the donor 's last illness and in contemplation of death, the law infers the condition that the donee is to hold the donation only in case the donor dies.
" The principles in the Corpus Juris Secundum (vol. 38 p. 782) are not quite different: ".
A gift causa mortis differs from a gift inter vivos in that it is made in view of expected or impending death, as appears infra $$ 75,78.
The vital distinction between a gift inter vivos and a gift causa mortis is that the former is irrevocable, while the latter may be revoked at any time before the donor 's death, and may be defeated by the recovery or survival of the donor.
More fully, a gift causa mortis is liable to revocation by the donor and does not pass an irrevocable title until the death of the donor, while a gift inter vivos vests an irrevocable title on delivery; in the case of a gift inter vivos the title is not only transferred and vested in the donee at once, but the gift is immediately completed and is absolute and irrevocable, while in the case of a gift causa mortis the transfer is subject to be defeated by the happening of any one of the conditions implied by the law.
" It is further stated (at p. 917 para 110): "A gift causa mortis is revoked by the recovery of the donor, from the particular illness, or his survival of the peril, which existed at the time of the gift and in contemplation of which the gift was made.
The recovery of the donor from the particular illness, or his survival of the peril, which existed at the time of the gift and in contemplation of which the gift was made will of itself operate as a revocation of the gift.
" 856 In the light of these principles and in view of the findings recorded by the Tribunal about the serious sickness of the donor and his state of mind at the time of making the gift in question, it can be reasonably concluded that the gift was not absolute and irrevocable.
On the contrary, it will be legitimate to infer that the gift was in contemplation of death.
Any other view in this case would be inappropriate.
No account in this regard would be complete unless it is held that marz ul maut gift with which we are concerned is also entitled to exemption from gift tax under Section 5(1)(xi) of the Act.
Counsel for the Revenue argues that the exemption provided under Section 5(1)(xi) of the Act is not available to the assessee since Section 191 of the is not applicable to marz ul maut gift.
We do not find much substance in this submission.
The exemption to gift in contemplation of death is provided under Section 5(1)(xi) of the Act and not under Section 191 of the .
Section 191 furnishes only the meaning or requirements of gift in contemplation of death.
If a gift in contemplation of death is recognised by the personal law of parties satisfying the conditions contemplated under Section 191 of the , it cannot be denied exemption under Section 5(1)(xi) of the act even assuming that Section 191 as such will not be applicable to the parties.
Under Mohammedan Law gift made during marz ul maut (death bed illness) is subject to very strict scrutiny for its validity.
Marz ul maut is a malady which induces an apprehension of death in the person suffering from it and which eventually results in his death.
There are three tests laid down to determine whether illness is to be regarded as marz ul maut.
They are: (1) Proximate danger of death so that there is a preponderance of Khauf or apprehension that at the given time death must be more probable than life.
(2) There must be some degree of subjective apprehension of death in the mind of the sick person.
(3) There must be external indicia chief among which would be the inability to attend to ordinary avocations.
(See: Rashid Karmalli and Anr.
vs sherbanoo, The gift made during marz ul maut is subject to all other conditions necessary for the validity of a hiba or gift, including delivery of possession by the donor to the donee.
(See: Mulla 's Mohammedan Law pp.
109, 111 Section 135 & 136).
Syed Ameer Ali in his book on "Mohammedan Law" throws some more light on the principles of `gift of the sick '.
It is stated: "In the chapter in the "Fatawai Alamgiri" dealing with "the gift of the sick" the principles are set forth at some length.
In the first place it is stated from the Asal that neither a gift nor a sadakah by a mariz a person suffering from 857 marz ul maut of which the definition is given later on is effective without possession: and if possession is taken, it is valid inrespect of a third.
If the donor were to die before delivery (taslim) the whole disposition would be invalid.
It is, therefore, necessary to understand that a gift by a mariz is a contract and not a wasiat, and the right of disposition is restricted to a third on account of the right of the heirs which attaches to the property of the mariz.
And as it is an act of bounty it is effective so far only as the law allows and that is a third.
And being a contractual disposition it is subject to the conditions relating to gifts, among them the taking of possession by the donee before the death f the donor." (Vol.
14th ed.
1985 p. 59 60).
From these principles of Mohammedan Law it will be clear that the gift made in marz ul maut could be regarded as gift made in contemplation of death since it has all the requisites prescribed under Section 191 of the .
The only limitation under Mohammedan Law is that the disposition is restricted to a third on account of the right of the heirs.
Marz ul maut gift cannot therefore take effect beyond a third of the estate of the donor after payment of funeral expenses and debt unless heirs give their consent after the death of the donor, to the excess taking effect.
Whether there is any such consent given in this case by his heirs is the subject matter of enquiry to be made by the Tribunal.
It may be stated that the second question refered to the High Court relates to the validity of the gift beyond a third of the estates of the donor.
On that question the High Court has not expressed any view and it has directed the Tribunal to consider that issue afresh.
We, therefore, refrain from expressing any views on that matter.
From the foregoing discussion, the view taken by the High Court is correct and it does not call for interference.
We accordingly dismiss the appeal with costs.
N.P.V. Appeal dismissed.
| Gift to certain movable assets was made to the respondent assessee by a Muslim businessman, when he was seriously ill, and died of the illness after six weeks of the execution of the document.
In gift tax assessment proceedings, the assessee claimed exemption for this gift under Section 5(1)(xi) of the Gift Tax Act, 1958, on the ground that the gift was made in contemplation of death.
The Gift Tax Officer rejected the claim.
But, on appeal, the Appellate Assistant Commissioner allowed the exemption relying on the circumstances under which the gift was made and the events followed thereafter and the evidence of the Sub Registrar, who was brought to residence for effecting registration, and the doctor, who was treating the donor.
On appeal by the Gift Tax Officer, the Tribunal affirmed the finding of the Appellate Assistant Commissioner regarding the donor 's illness but did not allow the exemption on the ground that, though there was delivery of possession of the gifted movables, the gift was unconditional and absolute, since it had not been specifically expressed or impliedly present in the deed that the gift must revert back in the event of the donor recovering from illness and that the gifted property had to be kept as a gift in case the donor died of his illness.
However, on a reference made at the instance of the assessee for opinion, the High Court held that such a condition need not be mentioned in the deed and 847 it could be inferred from the attending circumstances of the gift, and since the donor was actually sick at the time of execution of the deed and died of the same illness without recovery, after a short period, the gift in question was made in contemplation of death and therefore, entitled to exemption from tax under Section 5(1)(xi) of the Act.
In the appeal before this Court, on behalf of the Department it was contended that the gift in contemplation of death should be conditional, and in the absence of indications in the document to the effect that if the donor did not die, he should be entitled to remain in complete domination of the gifted property, the gift would become inter vivos and absolute, and that the exemption under Section 5(1)(xi) of the Gift Tax Act was not available to the assessee, since Section 191 of the Indian Succession Act was not applicable to marz ul maut gift.
Dismissing the appeal by the Department, this Court HELD: 1.1 Explanation (d) to sub section (2) of Section 5 of the Gift Tax Act, 1958 states that a gift made in contemplation of death has the same meaning as in Section 191 of the .
The requirements of a gift in contemplation of death as laid down by Section 191 are: (i) the gift must be of movable property; (ii) it must be made in contemplation of death; (iii) the donor must be ill and he expects to die shortly of the illness; (iv) possession of the property should be delivered to the done; and (v) the gift does not effect if the donor recovers from the illness or the donee predeceases the donor.
These requirements are similar to the constituent elements of a valid donatio martis causa.
[853C E] Cain vs Moon, @ 286, referred to. 1.2.
In the instant case, all the conditions prescribed, except perhaps the last one are found present by the fact finding authorities.
[853G] 1.3.
The recitals in the deed of gift are not conclusive to determine the nature and validity of the gift.
The party may produce evidence aliunde to prove that the donor gifted the property when he was seriously ill and contemplating his death with no hope of recovery.
These factors in conjunction with the factum of death of the donor may be sufficient to infer that the gift was made in contemplation of death.
It is implicit in such circumstances that the donee becomes the owner of the gifted property only if the donor dies of the illness and if the donor recovers from the illness, the recovery itself operates as a revocation of the gift.
[854B C] 848 1.4 It is not necessary to state in the gift deed that donee becomes owner of the property only upon the death of the donor.
Nor it is necessary to specify that the gift is liable to be revoked upon the donor 's recovery from the illness.
The law acknowledges these conditions from the circumstances under which the gift is made.
[854C D] Halsbury 's Laws of England, 4th Edn.
20 p. 41 para 67; Jerman on Wills, 8th Edn.
Vol, 1 p. 46 47; Williams on "Executors and Administrators", 14th Edn.
p. 315, and Corpus Juris Secundum, vol.
38 p. 782 and p. 917 para 110, referred to.
1.5 In the light of this and in view of the findings recorded by the Tribunal about the serious sickness of the donor and his state of mind at the time of making the gift in question, it can be reasonably concluded that the gift was not absolute and irrevocable.
On the contrary, it would be legitimate to infer that the gift was in contemplation of death.
any other view would be inappropriate.
[856A B] 2.1 Marz ul maut is also entitled to exemption from gift tax under Section 5(1)(xi) of the Gift Tax Act, 1958.
[856B] 2.2 The exemption to gift in contemplation of death is provided under Section 5(1)(xi) of the Gift Tax Act, and not under Section 191 of the , Section 191 furnishes only the meaning or requirements of gift in contemplation of death.
It a gift in contemplation of death is recognised by the personal law of parties satisfying the conditions contemplated under Section 191 of the , cannot be denied exemption under Section 5(1)(xi) of the Act, Even assuming that Section 191 as such will not be applicable to the parties.
[856C D] 2.3 Under Mohammedan Law gift made during marz ul maut (death bed illness) is subject to very strict scrutiny and subject to all other conditions necessary for the validity of a hiba or gift, including delivery of possession of the donor to the donee.
[856D] Mulla 's Mohammedan Law, pp. 111 Sections 135 & 136, referred to.
2.4 Marz ul maut is a malady which induces an apprehension of death inthe person suffering from it and which eventually results in his death.
There are three tests laid down to determine whether illness is to be regarded as marz ul maut.
They are; (i) Proximate danger of death 849 so that there is preponderance of khauf or apprehension that at the given time death must be more probable than life.
(2) There must be some degree of subjective apprehension of death in the mind of the sick person.
(3) There must be external indicia chief among which would be the inability to attend to ordinary avocations.
[856E F] Rashid Karmalli and anr.
vs Sherbanoo, [1907] 31 ILR Bombay 2641, referred to.
2.5 Therefore, under the Principles of Mohammedan Law, the gift made in marz ul maut could be regarded as gift made in contemplation of death, since it has all the requisites prescribed under Section 191 of the .
The only limitation is that the disposition is restricted to a third on account of the right of the heirs.
[857C D] Syed Ameer Ali: Mohammedan Law, Vol. 1, 4th Edn.
1985 p. 59 60, referred to.
|
Special Leave Petition (Civil) No. 5383 of 1990.
From the Judgment and Order dated 9.3.1990 of the Bombay High Court in Appeal No. 231 of 1990 in W.P. No. 3016 of 1989.
747 K.K. Venugopal, G.L. Sanghi, Sudhir Shah and P.N. Misra for the Petitioners.
K.K. Singhavi, N.B. Shetye, D.N. Mishra and A.S. Bhasme for the Respondents.
The Judgment of the Court was delivered by KASLIWAL, J.
This petition under Article 136 the Constitution of India is directed against the order of Bombay High Court dated 9th March, 1990.
Facts necessary and shorn of details are given as under.
Pratibha Cooperative Housing Society Ltd. (hereinafter referred to as `the Housing Society ') made some unauthorised constructions in a 36 storeyed building in a posh and important locality of the city of Bombay.
The Bombay Municipal Corporation issued a showcause notice dated 7th August, 1984 calling upon the Housing Society to showcause within 7 days as to why the upper right floors of the building should not be demolished so as to limit the development to the permissible Floor Space Index (F.S.I.).
In the notice it was gained by the Housing Society and that the construction work had already reached 36 floors and that on the basis of the actual area of the building, the upper eight floors were beyond the permissible F.S.I. limit and as such were required to be removed.
The Housing Society submitted a reply to the showcause notice by their letter 13th August, 1984.
The Administrator of the Bombay Municipal Corporation made an order on 21st September, 1984 requiring the Housing Society to demolish 24,000 sq.
on the eight upper floors of the building on the basis of 3000 Sq.
on each floor.
The Housing Society made a representation but the same was dismissed by the Administrator by order dated 31st October, 1984.
An appeal submitted by the Housing Society was also dismissed by the State Government on 7th October, 1985.
The Housing Society then filed a writ petition No. 4500 of 1985 in the High Court.
A Division Bench of the High Court dismissed the writ petition on 28th October, 1985.
However, the High Court while dismissing the writ petition also observed as under: "It would, however, be fair and just in the circumstances of the case to give a choice to the society to reduce the construction up to permissible limit or whatever other method they can think of.
It is of course for the society to come 748 forward with a proposal in that behalf.
We therefore direct that in case the society comes with any such alternative proposal within the four corners of the rules and regulations within one month from today the Municipality may consider.
" The case of the Housing Society is that in pursuance to the said order it submitted application to the Municipal Corporation giving several alternative proposals on 21st November, 1985.
It may be noted at this stage that the Housing Society had preferred a special leave petition No. 17351 of 1985 before this Court against the judgment of the High Court dated 28th October, 1985 and the said special leave petition was dismissed by this Court on 17th january, 1986.
Further allegation of the Housing Society was that it submitted another proposal to the Municipal Corporation on 17th February, 1986 and thereafter wrote to the Municipal Council on 14th August, 1986 to consider their alternative proposals.
A similar letter was also written to the Chief Minister of Maharashtra.
On 29th August, 1986 the Municipal Commissioner fixed up a meeting for hearing the alternative proposals of the Housing Society.
It has been alleged that in the said meeting the Housing Society had put forward its case in support of the new proposals and the Municipal commissioner had thereafter informed the Housing Society that he would consider the said proposals and take decision.
However, no decision was taken till the filing of the present special leave petition before this Court.
it has been further alleged that on 27th December, 1988 the Housing Society wrote a letter to the Municipal Commissioner to consider the alternative proposals mainly of vertical demolition of the building instead of demolishing the eight upper floors.
It had been alleged that a meeting took place between the architects of the Housing Society as well as the officers of the Municipal Corporation in January, 1989 wherein the officers of the Corporation agreed that instead of demolishing eight upper floors, demolition can be made vertically so as to bring the entire construction within the permissible F.S.I.
It has been further alleged that immediately thereafter the Housing Society was informed that henceforth it should contact the Municipal Commissioner directly and not any officers of the Corporation.
It has been further alleged that the Corporation without considering the proposals of the Housing Society entrusted the work of demolition of the upper eight floors of the building to a company.
In these circumstances the Housing Society filed writ petition No. 3016 of 1989 in the High Court.
Learned Single Judge dismissed the writ petition by order dated 19th December, 1989 and the appeal preferred against the said order was dismissed by the Division Bench of the High 749 Court by order dated 9th March, 1990.
In view of the fact that the main grievance of the Housing Society was that its alternative proposal of demolishing the building vertically instead of eight upper floors was not considered on merits by the Corporation, a serious effort was made by this Court to get the feasibility of such proposal examined by the Corporation.
Orders in this regard were passed by this Court on several occasions but ultimately no agreeable solution could fructify.
The proposal was got examined at the highest level by the Municipal Corporation and ultimately the Commissioner rejected the proposal on 13th November, 1990 and submitted a detailed report in writing for the perusal of this Court.
In the above report it has been stated that in pursuance to the order of this Court dated 22nd October, 1990, the proposals submitted by the Housing Society on 27th October, 1990 and 29th October, 1990 in supersession of all alternative proposals, to demolish vertically one bedroom and servant quarters on all the floors to bring the building in tune with the F.S.I. was considered but on the grounds stated in the report the proposal submitted by the Housing Society cannot be approved.
In the circumstances mentioned above on the request of learned counsel for both the parties to decide the case on merits, we heard the arguments in detail on 23.4.1991.
Thereafter, in order to clarify some points we directed the Chief Engineer cum Architect and the Municipal Commissioner to remain present on the next date namely, 1.5.1991 and to keep the record of the case also ready for our perusal.
We have heard learned counsel for the parties at great length and have thoroughly perused the record.
It may be noted that the Housing Society had made illegal constructions in violation of F.S.I. to the extent of more than 24,000 sq.
and as such an order for demolition or eight floors was passed by the Administrator, Municipal Council as back as 21st September, 1984.
The writ petition filed against the said order was dismissed by the High Court on 28th October, 1985 and special leave petition against the said order of the High Court was also dismissed by this Court.
The High Court in its order dated 28th October, 1985 had granted an indulgence to the Housing Society for submitting an alternative proposal within the four corners of the rules and regulations within one month and the municipality to consider the same.
The proposal was submitted on 21st November, 1985 but in the said proposal there was no mention of any vertical demolition of the building.
The proposal with regard to the demolition vertically of one 750 bedroom and servant quarters on all the floors was submitted for the first time on 27th December, 1988.
During the pendency of the special leave petition before this Court, this proposal was got examined by the Municipal corporation.
The Municipal commissioner submitted a report on 13th November, 1990 giving detailed reasons for rejecting such proposal.
It is well settled that the High Court under Article 226 of the Constitution is not an Appellate Court on the administrative decisions taken by the authorities.
It cannot be said that the decision taken by the Municipal Commissioner suffers from any want of jurisdiction or is violative of any law or rules.
The proposal submitted by the Housing Society was got examined by the architects and engineers and thereafter the order was passed by the Municipal Commissioner.
It cannot be said that the action of the Municipal Corporation is tainted with mala fides.
It was submitted by the learned counsel for the Corporation that the Corporation has entrusted the matter for investigation by the CBI and suitable action is being processed against the guilty officers of the Corporation with whose connivance these illegal constructions were made by the Housing Society.
It is an admitted position that six floors have been completely demolished and a part of seventh floor has also been demolished.
It was pointed out by Mr. K.K. Sighvi, learned counsel for the Corporation that the tendency of raising unlawful constructions by the builders in violation of the rules and regulations of the Corporation was rampant in the city of Bombay and the Municipal Corporation with its limited sources was finding it difficult to curb such activities.
We are also of the view that the tendency of raising unlawful constructions and unauthorised encroachments is increasing in the entire country and such activities are required to be dealt with by firm hands.
Such unlawful constructions are against public interest and hazardous to the safety of occupiers and residents of multistoreyed buildings.
The violation of F.S.I. in the present case was not a minor one but was to an extent of more than 24,000 sq.
Such unlawful construction was made by the Housing Society in clear and flagrant violation and disregard of F.S.I. and the order for demolition of eight floors had attained finality right upto this Court.
The order for demolition of eight floors has been substantially carried out and we find no justification to interfere in the order passed by the High Court as well as in the order passed by the Municipal Commissioner dated 13th November, 1990.
In the result we find no force in the petition and the same is dismissed with no order as to costs.
Before parting with the case we would like to observe that this case should be a pointer to all the 751 builders that making of unauthorised constructions never pays and is against the interest of the society at large.
The rules, regulations and bylaws and made by the Corporations or development authorities taking in view the larger public interest of the society and it is the bounden duty of the Citizens to obey and follow such rules which are made for their own benefits.
S.B. Petition dismissed.
| The appellant Co operative Housing Society Ltd. made some unauthorised constructions in a 36 storeyed building.
The Bombay Municipal Corporation issued a show cause notice calling upon the society to show cause as to why the upper eight floors of the building should not be demolished so as to limit the development to the permissible Floor Space Index (F.S.I.) since the additional Floor Space Index to the extent of 2773 sq.
was gained by the appellant.
The appellants submitted a reply to the show cause notice.
The Administrator of the Municipal Corporation made an order on 21st Septmber, 1984 requiring the appellant to demolish 24,000 sq.
on the eight upper floors of the building on the basis of 3000 sq.
on each floor.
The Administrator as well as the State Government dismissed the representation and appeal by the appellant.
So the appellant filed a writ petition in the High Court which also dismissed with the observation that the appellant be given a choice to reduce the construction upto permissible limit by any alternative proposal within the four corners of the rules and regulations within one month from 28th October 1985 the Municipality may consider.
The appellant made application to the Municipal Corporation giving several alternative proposals on 21st November 1985.
But it also preferred a special leave petition before this court against the High Court Judgment.
The special leave petition leave petition was dismissed on January 17, 1986.
The appellants alleged that they submitted another proposal to the Municipal Corporation on 17th February, 1986 and a meeting for hearing alternative proposals was fixed up by the Municipal commissioner and put forward its case in support of the new proposals and the Municipal Commissioner said he would consider the proposals and take decision.
On 27th December 1988 the appellant wrote a letter to the Municipal Commissioner to consider the alternative proposal i.e. of 746 vertical demolition of the building instead of demolishing the eight upper floors.
In January, 1989 the officers of the corporation agreed that demolition can be made vertically so as to bring the entire construction within the permissible Floor Space Index where as the work of demolition of upper eight floors of the building were entrusted to a company by the Municipal Commissioner.
So the appellant again filed a writ in the High Court.
It was dismissed by the Single Judge as well as by the Division Bench dated 5th March, 1990.
The appellants came by Special Leave Petition in this Court; The main grievance of the appellant being that vertical demolition proposal was not considered.
Inspite of orders of this Court in this regard to the Municipal Corporation no agreeable solution could fructify.
The proposal was examined by the Municipal Commissioner but rejected on 13th November, 1990 and submitted the detailed report to this Court.
Dismissing the petition the Court HELD: The appellant had made illegal constructions in violation of Floor Space Index to the extent of more than 24000 sq.
The decision taken by the Municipal Commissioner does not suffer from any want of jurisdiction nor is violative of any law or rules.
It is well settled that the High Court under Article 226 of the Constitution is not an appellate Court on the administrative decision taken by the authorities.
Since the tendency of raising unlawful constructions and unauthorised encroachments is increasing in the entire country and such activities are required to be dealt with by firm hands.
Such unlawful constructions are against public interest and hazardous to the safety of occupiers and residents of the multistoreyed buildings.
[749F, 750B, E F] This case should be a pointer to all the builders that making of unauthorised construction never pays and is against the interest of the society at large.
The rules, regulations and by laws are made by the corporations or development authorities taking in view the larger public interest of the society and it is the bounden duty of the citizens of obey and follow such rules which are made for their own benefits.
[750H 715B]
|
ivil Appeal Nos. 657 of 1979 & 2117 21 of 1977.
From the Judgment and Order dated 20.1.1978 & 6.5.1976 of Allahabad High Court in Income Tax Rule No. 502/74 and Income Tax Reference No. 827 of 1973.
S.B.L. Srivastava, Manoj Swarup and Lalita Kohli for the Appellants.
J. Ram Murthy, K.P. Bhatnagar and Ms. A. Subhashini for the Respondent.
The Judgment of the Court was delivered by K. JAGANNATHA SHETTY, J.
The common question which arises for decision in these appeals by special leave is whether the interest paid on a debit balance of Rs. 1,75,310 taken over by the assessee firm from the erstwhile Hindu Undivided Family (HUF), would be an allowable deduction under Section 36(1) (iii) of the Income Tax Act, 1922.
922 The partners of the firm were members of the HUF which carried on business at Varanasi in the name of M/s Badal Ram Laxmi Narain.
The family had no capital of its own and had been running business with the help of borrowed money.
On 20 October 1951, there was partial partition in the family.
As a result whereof the business of the family was partitioned between the members of the family.
The members formed themselves into partnership and continued the same business.
On the date of partition, there was a debit balance of Rs. 1,75,310 in the capital account of the family.
This debit balance was transferred in equal proportion to the personal accounts of the three partners of the firm.
The newly formed firm took over the business assets as well as liabilities of the HUF.
The question arose as to whether the interest paid by the firm on the said debit balance was an allowable deduction in the computation of its income? One of the contentions urged for the firm was that the debit balance was taken over by the firm in consideration of the goodwill of the business.
The Appellate Assistant Commissioner had held that the HUF business had no goodwill.
The Tribunal did not agree with the Appellate Assistant Commissioner.
It has observed that the business of the HUF was of a very long standing and the previous years returns and assessment of income prior to the date of partition indicated that the HUF had flourishing business.
Since the running business was taken over by the assessee with the debit balance, the Tribunal expressed the view that the firm could be deemed to have taken the liability of Rs. 1,75,310 in consideration of the sale of goodwill and the interest paid thereon was an allowable deduction.
The following question of law was referred to the High Court.
"Whether on the facts and in the circumstances of the case, the assessee was entitled to the deduction of interest on a debit balance of Rs.1,75,310 taken over from the erstwhile Hindu Undivided Family?" The High Court examined the facts of the case to find out whether there was any sale of the goodwill.
It observed that the goodwill of the HUF business was never sold or purchased.
Had there been any such transaction, appropriate entries in the books of account of the HUF would have been made.
The HUF should have credited the amount in its account in respect of the price paid for the goodwill and since there was no such entries, there could not be any inference that the firm has taken over the liability of Rs. 1,75,310 for the sale of goodwill.
The High Court also has observed that the partners of the 923 firm were bound to take over the liability of HUF because, the liability was that of the family of which they were members and on partition every member became liable to discharge the debt according to his share.
Clause (iii) of Section 36(1) applies only where capital has been borrowed for the purposes of the business or profession.
The amount of interest paid on the borrowed capital is an allowable deduction.
It is not in dispute and indeed cannot be disputed that if the goodwill is purchased out of the borrowed capital, the interest paid on the borrowed capital is an allowable deduction.
The Tribunal has correlated the debit balance to the purchase of goodwill since the firm has taken over the running business.
The High Court has held that there was no sale of goodwill by the HUF to the firm in view of the absence of related entries in the books of account of HUF.
The conclusion of the High Court seems to be as much an inference as that of the Tribunal on the same set of facts and circumstances.
It is important to point out that there was only a partial partition in the family, particularly with regard to HUF business.
It was not necessary for the firm to have taken over the debit balance of the HUF since the HUF had other properties.
The conclusion of the Tribunal that the firm has taken over the debit balance of Rs.1,75,310 in consideration of the sale of the goodwill, in the premises, stands to reason.
Indeed, it seems to be neither unreasonable or unwarranted, nor arbitrary or unjust.
The High Court ought not to interfere with such conclusion even if another view is possible.
The second reason given by the High Court is also not acceptable.
we are concerned with the rights of the assessee and not the liability of the individual members of the HUF.
The claim of the assessee for allowable deduction of the interest paid cannot be defeated by the existence of personal liability of the members of the HUF.
That is wholly beside the point.
We are therefore, unable to sustain the order of the High Court.
In the result, the appeal are allowed and the decision of the High Court is set aside.
The question referred to the High Court in each case is answered in favour of the assessee and against the revenue.
The assessee shall be entitled to one set of costs in this Court.
N.P.V. Appeals allowed.
| The partners of the assays firm were members of a HUF, which was carrying on business with borrowed capital.
Consequent on partial partition in the family and partition of the family business, the members formed the assays firm.
There was a debit balance in the capital account of the family which was transferred to the personal accounts of the partners of the firm.
The firm, which continued the family business and took over the business assets and the liabilities of the HUF, claimed that the interest paid on the debit balance was an allowable deduction in the computation of income since it had taken over the debit balance in consideration of the goodwill of the business.
The Appellate Assistant Commissioner held that the HUF business had no goodwill.
On appeal, the Tribunal held that the HUF had a very long standing and flourishing business, and hence the firm could be deemed to have taken over the liability in consideration of the sale of goodwill and the interest paid thereon was an allowable deduction.
On a reference made by the Tribunal the High Court held that the goodwill of the HUF business was never sold or purchased, and that the partners of the firm were bound to take over the HUF 's liability, since it was that of the family of which they were members, and became liable to discharge their share of the debt.
Allowing the appeals preferred by the assessee, this Court HELD: 1.1 Clause (iii) of Section 36(1) of the Income Tax Act, 1922 applies only where capital has been borrowed for the purposes of the business or profession.
The amount of interest paid on the borrowed capital is an allowable deduction.
It cannot be disputed that if the goodwill is purchased out of the borrowed capital, the interest paid on the borrowed capital is an allowable deduction.
[923B] 921 1.2 In the instant case, there was only a partial partition in the family, particularly with regard to HUF business and it was not necessary for the firm to have taken over the debit balance of the HUF, since the HUF had other properties.
[923D] 1.3 The Tribunal has correlated the debit balance to the purchase of goodwill since the firm had taken over the business.
The High Court has held that there was no sale of goodwill by the HUF to the firm in view of the absence of related entries in the books of account of HUF.
The conclusion of the High Court is as much an inference as that the Tribunal on the same set of facts and circumstances.
The Tribunal was right in holding that the firm had taken over the debit balance in consideration of the sale of the goodwill and this conclusion is neither unreasonable or unwarranted, nor arbitrary or unjust.
The High Court ought not to interfere with such conclusion even if another view is possible.
Besides, the relevant point to be considered is the rights of the assessee and not the liability of the individual members of the HUF.
The claim of the assessee for allowable deduction of the interest paid cannot be defeated by the existence of personal liability of the members of HUF.
[923C, E, F]
|
rl.) Petition No. 96 of 1989.
(Under Article 32 of the Constitution of India).
Nand Lal, S.K. Bagga and Mrs. S.K. Bagga for the Petitioner.
V.C. Mahajan Mrs. Indra Sawhney, Ms. A. Subhashini, Aruneshwar Gupta, Surya Kant and I. Makwana for the Respondents.
The Judgment of the Court was delivered by AHMADI, J.
Liberty is the life line of every human being.
Life without liberty is `lasting ' but not `living '.
Liberty is, therefore, considered one of the most precious and cherished possessions of a human being.
Any attempt to take liberties with the liberty of a human being is visited with resistance.
Since no human being can tolerate fetters on his personal liberty it is not surprising that the petitioner Ashok Kumar alias Golu continues to struggle for his liberty, premature release, not fully content with the enunciation of the law in this behalf 864 by this Court in Maru Ram vs Union of India, {1981] 1 SCR 1196.
The questions of law which are raised in this petition brought under Article 32 of the Constitution arise upon facts of which we give an abridged statement.
On the basis of a FIR lodged on October 21, 1977, the petitioner was arrested on the next day and he along with others was chargesheeted for the murder of one Prem Nagpal.
The petitioner was tried and convicted for murder on December 20, 1978 in Sessions Case No. 32 of 1978 by the learned Sessions Judge, Ganganagar, and was ordered to suffer imprisonment for life.
His appeal, Criminal Appeal No. 40 of 1979, was dismissed by the High Court of Rajasthan.
Since then he is serving time.
It appears that he filed a Habeas Corpus Writ Petition No. 2963 of 1987 in the High Court of Rajasthan at Jodhpur for premature release on the plea that he was entitled to be considered for such release under the relevant rules of Rajasthan Prisons (Shortening of Sentences) Rules, 1958, (hereinafter alluded to as `the 1958 Rules ') notwithstanding the insertion of Section 433A in the Code of Criminal Procedure, 1973 (hereinafter called `the Code ') with effect from December 18, 1978, just two days before his conviction.
His grievance was that he was being denied the benefit of early release under the 1958 Rules under the garb of the newly added Section 433A, on the ground that it places a statutory embargo against the release of such a convict `unless he has served atleast 14 years of imprisonment '.
He contended that the said provision could not curtail the constitutional power vested in the Governor by virtue of Article 161 of the Constitution which had to be exercised on the advice of the Council of Ministers which advice could be based on a variety of considerations including the provisions of the 1958 Rules.
The writ petition was, however, dismissed by the High Court on October 31, 1988, on the ground that it was premature inasmuch as the petitioner 's two representations, one to the Governor and another to the State Home Minister, were pending consideration.
The High Court directed that they should be disposed of within one month.
In this view of the matter the High Court did not deem it necessary to consider the various questions of law raised in the petition on merits.
After the rejection of his writ petition by the High Court, the petitioner through his counsel addressed a letter dated November 28, 1988 to the Governor inviting his attention to the earlier representation dated August 29, 1988 and requesting him to take a decision thereon within a month as observed by the High Court.
Failing to secure his early release notwithstanding the above efforts, the petitioner has invoked the extraordinary jurisdiction of this Court under Article 32 of the Constitution. 865 The petitioner 's case in a nutshell is that under the provisions of the 1958 Rules, a `lifer ' who has served an actual sentence of about 9 years and 3 months is entitled to be considered for premature release if the total sentence including remissions works out to 14 years and he is reported to be of good behaviour.
However, the petitioner contends, his case for premature release is not considered by the concerned authorities in view of the newly added section 433A of the Code on the interpretation that by virtue of the said provision the case of a `lifer ' cannot be considered for early release unless he has completed 14 years of actual incarceration, the provisions of sections 432 and 433 of the Code as well as the 1958 Rules notwithstanding.
According to him, even if the provisions of sections 432 and 433 of the Code do not come into play unless a convict sentenced to life imprisonment has completed actual incarceration for 14 years as required by section 433A, the authorities have failed to realise that section 433A cannot override the constitutional power conferred by Articles 72 and 161 of the Constitutional on the President and the Governor, respectively, and the State Government i.e., the Council of Ministers, could advise the Governor to exercise power under Article 161 treating the 1958 Rules as guidelines.
Since the petitioner had already moved the Governor under Article 161 of the Constitution it was incumbent on the State Government to consider his request for early release, notwithstanding section 433A, and failure to do so entitled the petitioner to immediate release as his continued detention was, wholly illegal and invalid.
In support of this contention the petitioner has placed reliance on the ratio of Maru Ram 's decision.
The petitioner brands section 433A of the Code to be a `legislative fraud ' inasmuch as the said provision was got approved by the Parliament on the assurance that the said provision is complementary to the various amendments proposed in the Indian Penal Code.
In the alternative it is contended that in any case this Court should by a process of interpretation limit the scope of section 433A of the Code to those cases only to which it would have been limited had the legislation proposing amendments in the Indian Penal Code gone through.
In any case after the decision of this Court in Maru Ram 's case, the efficacy of section 433A is considerably reduced and the petitioner is entitled to early release by virtue of the power contained in ARticle 161 read with the 1958 Rules even if guidelines are not formulated notwithstanding the subsequent decision of this Court in Kehar Singh vs Union of India, ; Counsel submitted that after the decision of this Court in Bhagirath vs Delhi Administration, ; whereunder this Court extended the benefit of section 428 of the Code even 866 to life convicts, the ratio in Gopal Godse vs State of Maharashtra, ; had undergone a change.
On this broad approach, counsel for the petitioner, formulated questions of law which may be stated as under: 1.
Whether the insertion of section 433A in the Code was a legislative fraud inasmuch as the connected legislation, namely, the Indian Penal Code (Amendment) Bill XLII of 1972 did not become law although passed by the Rajya Sabha as the IPC (Amendment) Act, 1978, on November 23, 1978? 2.
Whether on the ration of Maru Ram 's decision, in the absence of any guidelines formulated by the State under Article 72 of 161 of the Constitution, section 433A of the Code would not apply to life convicts and the 1958 Rules will prevail for the purpose of exercise of power under Article 72 of 161 of the Constitution? Inter connected with this question, the following .l questions were raised: a) Whether Maru Ram 's decision is in conflict with Kehar Singh 's Judgment on the question of necessity or otherwise of guidelines for the exercise of power under Article 7 and 161 of the constitution? b) Whether the use of two expressions "remission" and "remit" in Articles 72 and 161 convey two different meanings and if yes, whether the content f power in the two expressions is different? c) Whether the persons sentenced to death by Court, whose death sentence has been commuted to life imprisonment by executive clemency, form a distinct and separate class for the purpose of application of section 433A of the Code as well as for the purpose of necessity (or not) of guidelines for premature release in exercise of power under Articles 72 and 161, from the persons who at the initial stage itself were sentenced to life imprisonment by court verdict? And whether in the latter case guidelines are mandatory under Article 72 and 161 and a well designed scheme of remission must be formulated if the constitutional guarantee under Articles 14 and 21 is to be preserved? d) Whether the whole law of remission needs to be reviewed after Bhagirath 's case wherein this Court held that imprisonment 867 for life is also an imprisonment for a term and that a life convict is entitled to set off under section 428 Cr.
P.C.? e) Whether it is permissible in law to grant conditional premature release to a life convict even before completion of 14 years of actual imprisonment notwithstanding section 433A of the Code? If yes, whether the grant of such conditional release will be treated as the prisoner actually serving time for the purpose of section 433A of the Code? First the legislative history.
The Law Commission had in its 42nd Report submitted in June, 1971 suggested numerous changes in the Indian Penal Code (IPC).
Pursuant thereto an Amendment Bill No. XLII of 1972 was introduced in the Rajya Sabha on December 11, 1972 proposed wide ranging changes in the IPC.
One change proposed was to bifurcate section 302, IPC into two parts, the first part providing that except in cases specified in the second part, the punishment for murder will be imprisonment for life whereas for the more heinous crimes enumerated in clauses (a) to (c), of sub section (2) the punishment may be death or imprisonment for life.
A motion for reference of the Bill to the Joint Committee of both the Houses was moved in the Rajya Sabha on December 14, 1972 by the then Minister of State in the Ministry of Home Affairs and was adopted on the same day.
The Lok Sabha concurred in the motion of the Rajya Sabha on December 21, 1972.
The Joint Parliamentary Committee presented its report to the Rajya Sabha on January 29, 1976 recommending changes in several clauses of the Bill.
While retaining the amendment proposed in section 302, IPC, it recommended inclusion of one more clause (d) after clause (c) in sub section (2) thereof and at the same time recommended deletion of section 303, IPC.
It also recommended substitution of the existing section 57, IPC, by a totally new section, the proviso whereto has relevance.
The proposed proviso was as under: "Provided that where a sentence of imprisonment for life is imposed on conviction of a person for a capital offence, or where a sentence of death imposed on a person has been commuted into one of imprisonment for life, such person shall not be released from prison unless he had served at least fourteen years of imprisonment.
" The reason which impelled the Committee to introduce the above proviso was "That sometimes due to grant of remission even murderers sentenced or commuted to life imprisonment were released at the end 868 of 5 to 6 years.
" The Committee, therefore, felt that such a convict should not be released unless he has served atleast 14 years of imprisonment.
It is evident from the scheme of the aforesaid recommendations that the proviso was intended to apply to only those convicts who were convicted for a capital offence (this expression was defined by clause 15 of the Bill recommending substitution of section 40, IPC, as `an offence for which death is one of the punishments provided by law ') or whose sentence of death was commuted into one of imprisonment for life and not to those who were governed by the first part of the proposed section 302, IPC.
It was pointed out by counsel that similar benefit would have accrued to offenders convicted for offences covered under section 305, 307 or 396 if the proposed sections 305, 307(b) and 396(b) had come into being.
That, contends the petitioner 's counsel, would have considerably narrowed down the scope of the proposed proviso to section 57, IPC, and consequently the rigour of the said provision would have fallen on a tiny minority of offenders guilty of a capital offence.
Pursuant to the recommendations made by the Committee, two bills, namely, the IPC (Amendment) Bill, 1978, came to be introduced, the former was passed with changes by the Rajya Sabha on November 23, 1978 while the latter was introduced in the Lok Sabha on November 8, 1978, and in the Rajya Sabha on December 5, 1978.
The proposal to add a proviso to the proposed section 57, IPC did not find favour as it was thought that the said subject matter appropriately related to Chapter XXXII of the Code and accordingly the said provision was introduced as section 433A in the Code.
While the amendments to the Code became law with effect from December 18, 1978, the IPC amendments, though passed by the Rajya Sabha could not be got through the Lok Sabha and lapsed.
It may here be mentioned that the IPC Bill as approved by the Rajya Sabha contained the proposal to divide section 302 into two parts, in fact an additional clause was sought to be introduced in the second part thereof and sections 305, 307 and 396 were also sought to be amended as proposed by the Committee.
This in brief is the legislative history.
In the backdrop of the said legislative history, counsel for the petitioner argued that a legislative fraud was practised by enacting section 433A of the Code and failing to carry out the corresponding changes in sections 302, 305, 307, 396, etc., assured by the passing of the Indian Penal Code (Amendment) Act, 1978, by the Rajya Sabha on November 23, 1978.
According to him it is evident from the scheme of the twin Amendment Bills that the legislative intent was to apply the rigour of section 433A of the Code to a small number of heinous 869 crimes which fell within the meaning of the expression capital offence.
It was to achieve this objective that section 302, IPC was proposed to be bifurcated so that a large number of murders would fall within the first part of the proposed provision which prescribed the punishment of life imprisonment only and thus fell beyond the mischief of section 433A of the Code.
To buttress his submission our attention was invited to Annexure II to the petition which is a copy of the letter dated July 10, 1979, written by the Joint Secretary in the Ministry of Home Affairs to Home Secretaries of all the concerned State Governments explaining the purport of the newly added section 433A. After explaining that section 57, IPC, had a limited scope, namely, calculating fractions of terms of imprisonment only, he proceeds to state in paragraph 3 of the letter as under: "The restrictions imposed by section 433A applies only to those life convicts who are convicted for offences for which death is one of the punishments prescribed by law.
In the Indian Penal Code (Amendment) Bill, 1978 as passed by the Rajya Sabha and now pending in the Lok Sabha, section 302 is proposed to be amended so as to provide that the normal punishment for murder shall be imprisonment for life and that only in certain cases of aggravating circumstances will the court have discretion to award death sentences.
" Then in paragraph 4 he proceeds to clarify as under: "Even regarding these convicts the restriction imposed by section 433A is not absolute for, the Constitutional power of the Governor under Article 161 to commute and remit sentences remains unaffected and can be exercised in each case in which the exercise of this power is considered suitable.
" Then in paragraph 4 he proceeds to clarify as under: "Even regarding these convicts the restriction imposed by section 433A is not absolute for, the Constitutional power of the Governor under Article 161 to commute and remit sentences remains unaffected and can be exercised in each case in which the exercise of this power is considered suitable.
" In paragraph 6 of the detailed note appended to the said letter, the legal position was explained thus: "It may be pointed out that the restriction introduced by section 433A does not apply to all life convicts.
It applies only to those prisoners who are convicted of a capital offence i.e. an offence for which death is one of the punishments prescribed by law.
Once the Indian Penal Code (Amendment) Bill becomes the law, offenders sentenced 870 under proposed section 302(i) will not be covered by this provision as the offence will not be a capital offence.
Thus in future the restriction introduced by section 433A will not be applicable to them and will, in effect, cover only a very small number of cases.
Even in this small number of cases the restriction will not in any way curb the Constitutional power to grant remission and commutation vested in the President or the Governor by virtue of Articles 72 and 161.
" There can be no doubt that by this letter it was clarified that section 433A of the Code will apply to only those convicted of a capital offence and not to all life convicts.
It is equally clear that the said provision was expected to apply to exceptionally heinous offences falling within the definition of `capital offence ' once the Indian Penal Code (Amendment) Bill became law.
Section 433A was, therefore, expected to deny premature release before completion of actual 14 years of incarceration to only those limited convicts convicted of a capital offence, i.e., an exceptionally heinous crime specified in the second part of the proposed section 302, IPC.
Lastly it clarifies that section 433A cannot and does not in any way affect the constitutional power conferred on the President/Governor under ARticle 72/161 of the Constitution.
It cannot, therefore, be denied that this letter and the accompanying note does give an impression that certain provisions of the Indian Penal Code (Amendment) Boll were interlinked with section 433A of the Code.
Assuming the Criminal Procedure Code (Amendment) Bill and the Indian Penal Code (Amendment) Bill were intended to provide an integrated scheme of legislation, can it be said that the failure on the part of the Lok Sabha to pass the letter renders the enactment of the former by which section 433A was introduced in the Code, `a legislative fraud ' as counsel had liked to call it or to use a more familiar expression `colourable exercise of legislative power '? Counsel submitted that section 433A was got introduced on the statute book by deception, in that, when the former Bill was made law an impression was given that the twin legislation which had already been cleared by the Rajya Sabha on November 23, 1978 would in due course be cleared by the Lok Sabha also so that the application of section 433A would be limited to capital offences only and would have no application to a large number of `lifers '.
It must be conceded that such would have been the impact if the Indian Penal Code (Amendment) Bill was passed by the Lok Sabha in the form in which the Rajya and approved it.
871 This is not a case of legislative incompetence to enact section 433A.
No such submission was made.
Besides the question of vires of section 433A of the Code has been determined by the Constitution Bench of this Court in Maru Ram 's case.
This Court repelled all the thrusts aimed at challenging the constitutional validity of section 433A.
But counsel submitted that the question was not examined from the historical perspective of the twin legislations.
Counsel for the State submitted that it was not permissible for us to reopen the challenge closed by the Constitution Bench on the specious plea that a particular argument or plea was not canvassed or made before that Bench.
The objection raised by counsel for the State Government is perhaps not without substance but we do not propose to deal with it because even otherwise we see no merit in the submission of the petitioner 's counsel.
It is only when a legislature which has no power to legislate frames a legislation so camouflaging it as to appear to be within its competence when it knows it is not, it can be said that the legislation so enacted is colourable legislation.
In K.C. Gajapati Narayan Deo vs State of Orissa, ; the Orissa Agricultural Income tax (Amendment) Act, 1950, was challenged on the ground of colourable legislation or a fraud on the Constitution as its real purpose was to effect a drastic reduction in the amount of compensation payable under the Orissa Estates Abolition Act, 1952.
The facts were that a Bill relating to the Orissa Abolition Act, 1952 was published in the Gazette on January 3, 1950.
It provided that any sum payable for agricultural income tax for the previous year should be deducted from the gross asset of an estate for working out the net income on the basis whereof compensation payable to the estate owner could be determined.
Thereafter on January 8, 1950, a Bill to amend the Orissa Agricultural Income tax, 1947, was introduced to enhance the highest rate of tax from 3 annas to 4 annas in a rupee and to reduce the highest slab from Rs. 30,000 to Rs. 20,000.
The next Chief Minister, however, dropped this Bill and introduced a fresh Bill enhancing the highest rate to 12 annas 6 pies in a rupee and reducing the highest slab to rs.
15,000 only.
On the same becoming law it was challenged on the ground that the real purpose of the legislation was to drastically reduce the compensation payable to the estate owners.
Mukherjea, J., who spoke for the Court observed as under: "It may be made clear at the outset that the doctrine of colourable legislation does not involve any question of bona fides or mala fides on the part of the legislature.
The whole doctrine resolves itself into the question of competency of a particular legislature to enact a particular law.
If 872 the legislature is competent to pass a particular law, the motives which impelled it to act are really irrelevant.
On the other hand, if the legislature lacks competency, the question of motive does not arise at all.
Whether a statute is constitutional or not is thus always a question of power.
" Thus the whole doctrine resolves itself into a question of competency of the concerned legislature to enact the impugned legislation.
If the legislature has transgressed the limits of its powers and if such transgression is indirect, covert or disguised, such a legislation is described as colourable in legal parlance.
The idea conveyed by the use of the said expression is that although apparently a legislature in passing the statute purported to act within the limits of its powers, it had in substance and reality transgressed its powers, the transgression being veiled by what appears on close scrutiny to be a mere pretence or disguise.
In other words if in pith and substance the legislation does not belong to the subject falling within the limits of its power but is outside it, the mere form of the legislation will not be determinate of the legislative competence.
In Sonapur Tea Co. Ltd. vs Must.
Mazirunnessa; , it was reiterated relying on Gajapati 's case that the doctrine of colourable legislation really postulates that legislation attempts to do indirectly what it cannot do directly.
Such is not the case before us.
It is no body 's contention that Parliament was not competent to amend the Criminal Procedure Code by which section 433A was inserted.
Whether or not the connecting Indian Penal Code (Amendment) Bill ought to have been cleared or not was a matter left to the wisdom of the Lok Sabha.
Merely because the Criminal Procedure Bill was made law and the Indian Penal Code (Amendment) Bill was passed by the Rajya Sabha did not obligate the Lok Sabha to clear it.
The Lok Sabha to clear it.
The Lok Sabha could have its own views on the proposed Indian Penal Code amendments.
It may agree with the executive 's policy reflected in the Bill, with or without modifications, or not at all.
Merely because in the subsequent instructions issued by the letter of July 10, 1979 and the accompanying note (Annex.
II) the Joint Secretary had interlinked the two Bills, the Lok Sabha was under no obligation to adopt the measure as such representation could not operate as estoppel against it.
Even the indirect attempt on the part of the High Court of Himachal Pradesh in the ragging case to force the State Government to legislate, State of Himachal Pradesh vs A Parent of a student of Medical College, Simla, [1985] 3 SCC 169 was disapproved by this Court as a matter falling, outside the functions and duties of the judiciary.
It is, therefore, obvious that no question of mala fides on the part of the legislature was involved in the enactment of one legislation and failure to 873 enact another.
There is no question of `legislative fraud ' or `colourable legislation ' involved in the backdrop of the legislative history of section 433A of the Code as argued on behalf of the petitioner.
Counsel for the Petitioner, However, tried to seek support form the Privy Council decision in W.R. Moram vs Deputy Commissioner of Taxation for N.S.W., Wherein the question to be considered was whether the legislative scheme was a colourable one forbidden by section 5(ii) of the Australian Constitution.
There was no attempt to disguise the scheme as it was fully disclosed.
The Privy Council, while holding that the scheme was not a colourable legislation, observed that `where there is admittedly a scheme of proposed legislation, it seems to be necessary when the `pith and substance ' or `scope and effect ' of any one of the Acts is under consideration, to treat them together and to see how they interact '.
But that was a case where the scheme was carried out through enactments passed by the concerned legislatures.
It is in that context that the above observations must be read and understood.
In the present case also if both the Bills had become law, counsel would perhaps have been justified in demanding that in understanding or construing one legislation or the other, the scheme common to both must be kept in view and be permitted to interact.
But where the linkage does not exist on account of the Indian Penal Code (Amendment) Bill not having become law we are unable to appreciate how section 433A can be read down to apply to only those classes of capital offences to which it would have applied had the said Bill been passed by the Lok Sabha in the terms in which it was approved by the Rajya Sabha.
The language of section 433A is clear and unambiguous and does not call for extrinsic aid for its interpretation.
To accept the counsel 's submission to read down or interpret section 433A of the Code with the aid of the change proposed by the Indian Penal Code (Amendment) Bill would tantamount to treating the provisions of the said Bill as forming part of the Indian Penal Code which is clearly impermissible.
To put such an interpretation with the aid of such extrinsic material would result in violence to the plain language of section 433A of the Code.
We are, therefore, unable to accept even this second limb of the contention.
The law governing suspension, remission and commutation of sentence is both statutory and constitutional.
The stage for the exercise of this power generally speaking is post judicial, i.e., after the judicial process has come to an end.
The duty to judge and to award the appropriate punishment to the guilty is a judicial function which culminates by a judgment pronounced in accordance with law.
After 874 the judicial function thus ends the executive function of giving effect to the judicial verdict commences.
We first refer to the statutory provisions.
Chapter III of IPC deals with punishments.
The punishments to which the offenders can be liable are enumerated in section 53, namely, (i) death (ii) imprisonment for life (iii) imprisonment of either description, namely, rigorous or simple (iv) forfeiture of property and (v) fine.
Section 54 empowers the appropriate government to commute the punishment of death for any other punishment.
Similarly section 55 empowers the appropriate government to commute the sentence of imprisonment for life for imprisonment of either description for a term not exceeding 14 years.
Chapter XXXII of the Code, to which section 433A was added, entitled `Execution, Suspension, Remission and Commutation of sentences ' contains sections 432 and 433 which have relevance; the former confers power on the appropriate government to suspend the execution of an offender 's sentence or to remit the whole or any part of the punishment to which he has been sentenced while the latter confers power on such Government to commute (a) a sentence of death for any other punishment (b) a sentence of imprisonment for life, for imprisonment for a term not exceeding 14 years of for fine (c) a sentence of rigorus imprisonment for simple imprisonment or for fine and (d) a sentence of simple imprisonment for fine.
It is in the context of the aforesaid provisions that we must read section 433A which runs as under: "433A. Restriction on powers of remission or commutation in certain cases Notwithstanding anything contained in Section 432, where a sentence of imprisonment for life is imposed on conviction of a person for an offence for which death is one of the punishments provided by law, or where a sentence of death imposed on a person has been commutted under section 433 into one of imprisonment for life, such person shall not be released from prison unless he had served at least fourteen years of imprisonment.
" The section begins with a non obstante clause notwithstanding anything contained in section 432 and proceeds to say that where a person is convicted for an offence for which death is one of the punishments and has been visited with the lesser sentence of imprisonment for life or where the punishment of an offender sentenced to death has been commuted under section 433 into one of imprisonment for life, such offender will not be released unless he has served at least 14 years of imprisonment.
The reason which impelled the legislature to insert this provision has been stated earlier.
Therefore, one who could have been 875 visited with the extreme punishment of death but on account of the sentencing court 's generosity was sentenced to the lesser punishment of imprisonment for life and another who actually was sentenced to death but on account of executive generosity his sentence was commutted under section 433(a) for imprisonment for life have been treated under section 433A as belonging to that class of prisoners who do not deserve to be released unless they have completed 14 years of actual incarceration.
Thus the effect of section 433A is to restrict the exercise of power under sections 432 and 433 by the stipulation that the power will not be so exercised as would enable the two categories of convicts referred to in section 433A to freedom before they have completed 14 years of actual imprisonment.
This is the legislative policy which is clearly discernible from the plain language of section 433A of the Code.
Such prisoners constitute a single class and have, therefore, been subjected to the uniform requirement of suffering atleast 14 years of internment.
Counsel for the petitioner next submitted that after this court 's decision in Bhagirath 's case permitting the benefit of set off under section 428 in respect of the detention period as an undertrial, the ratio of the decision in Godse 's case must be taken as impliedly disapproved.
We see no basis for this submission.
In Godse 's case the convict who was sentenced to transportation for life had earned remission for 2963 days during his internment.
He claimed that in view of section 57 read with section 53A, IPC, the total period of his incarceration could not exceed 20 years which he had completed, inclusive of remission, and, therefore, his continued detention was illegal.
Section 57, IPC reads as follows: "57.
Fractions of terms of punishment In calculating fractions of terms of punishment, imprisonment for life shall be reckoned as equivalent to imprisonment for twenty years.
" The expression `imprisonment for life ' must be read in the context of section 45, IPC.
Under that provision the word `life ' denotes the life of a human being unless the contrary appears from the context.
We have seen that the punishments are set out in section 53, imprisonment for life being one of them.
Read in the light of section 45 it would ordinarily mean imprisonment for the full or complete span of life.
Does section 57 convey to the contrary? Dealing with this contention based on the language of section 57, this Court observed in Godse 's case at pages 444 45 as under: 876 "Section 57 of the Indian Penal Code has no real bearing on the question raised before us.
For calculating fractions of terms of punishment the section provides that transportation for life shall be regarded as equivalent to imprisonment for twenty years.
It does not say that transportation for life shall be deemed to be transportation for twenty years for all purposes; nor does the amended section which substitutes the words "imprisonment for life" for "transportation for life" enable the drawing of any such all embracing fiction.
A sentence of transportation for life or imprisonment for life must prima facie be treated as transportation or imprisonment for the whole of the remaining period of the convicted person 's natural life.
" This interpretation of section 57 gets strengthened if we refer to sections 65, 116, 120 and 511, of the Indian Penal Code which fix the term of imprisonment thereunder as a fraction of the maximum fixed for the principal offence.
It is for the purpose of working out this fraction that it became necessary to provide that imprisonment for life shall be reckoned as equivalent to imprisonment for 20 years.
If such a provision had not been made it would have been impossible to work out the fraction of an in definite term.
In order to work out the fraction of terms of punishment provided in sections such as those enumerated above, it was imperative to lay down the equivalent term for life imprisonment.
The second contention urged before the Court in Godse 's case was based on the Bombay Rules governing the remission system framed in virtue of the provisions contained in the .
This Court pointed out that the did not confer on any authority a power to commute or remit sentences.
The Remission Rules made thereunder had, therefore, to be confined to the scope and ambit of that statute and could not be extended to other statutes.
Under the Bombay Rules three types of remissions for good conduct were allowed and for working them out transportation for life was equated to 15 years of actual imprisonment.
Dealing with Godse 's plea for premature release on the strength of these rules this Court observed at page 447 as under: "The rules framed under the enable such a person to remission ordinary, special and State and the said remissions will be given credit towards his term of imprisonment.
For the purpose of working out the remis 877 sions the sentence of transportation for life is ordinarily equated with a definite period, but it is only for that particular purpose and not for any other purpose.
As the sentence of transportation for life or its prison equivalent the life imprisonment is one of indefinite duration, the remissions so earned do not in practice help such a convict as it is not possible to predicate the time of his death.
That is why the rules provide for a procedure to enable an appropriate Government to remit the sentence under section 401 (now section 432) of the Code of Criminal Procedure on a consideration of the relevant factors including the period of remissions earned.
The question of remission is exclusively within province of the appropriate Government; and in this case it is admitted that though the appropriate Government made certain remissions under section 401 of the Code of Criminal Procedure, it did not remit the entire sentence.
" On this line of reasoning the submission of counsel that if the Court were to take the view that transportation for life or imprisonment for life enures till the last breath of the convict passes out, the entire scheme of remissions framed under the or any like statute and the whole exercise of crediting remissions to the account of the convict would collapse, was spurned.
This Court came to the conclusion that the Remission Rules have a limited scope and in the case of a convict undergoing sentence of transportation for life or imprisonment for life it acquires significance only if the sentence is commuted or remitted, subject to section 433A of the Code or in exercise of constitutional power under Articles 72/161.
In Maru Ram 's case the Constitution Bench reaffirmed the ratio of Godse 's case and held that the nature of a life sentence is incarceration until death; judicial sentence for imprisonment for life cannot be in jeopardy merely because of long accumulation of remissions.
Release would follow only upon an order under section 401 of the Criminal Procedure Code, 1898 by the appropriate Government or on a clemency order in exercise of power under Articles 72/161 of the Constitution.
At page 1220 the Constitution Bench expressed itself thus: "Ordinary where a sentence is for a definite term, the calculus of remissions may benefit the prisoner to instant release at that point where the substraction result is zero.
878 Here, we are concerned with life imprisonment and so we come upon another concept bearing on the nature of sentence which has been highlighted in Godse 's case.
Where the sentence is indeterminate or of uncertain duration, the result of substraction from an uncertain quantity is still an uncertain quantity and release of the prisoner cannot follow except on some fiction of quantification of a sentence of uncertain duration.
" Referring to the facts of Godse 's case and affirming the view that the sentence of imprisonment for life enures upto the last breath of the convict, this Court proceeded to estate as under: "Since death was uncertain, deduction by way of remission did not yield any tangible date for release and so the prayer of Godse was refused.
The nature of a life sentence is incarceration until death, judicial sentence of imprisonment for life cannot be in jeopardy merely because of the long accumulation of remissions.
" It is, therefore, clear from the aforesaid observations that unless the sentence for life imprisonment is commuted or remitted as stated earlier by the appropriate authority under the provisions of the relevant law, a convict is bound in law to serve the entire life term in prison; the rules framed under the or like statute may enable such a convict to earn remissions but such remissions will not entitle him to release before he has completed 14 years of incarceration in view of section 433A of the Code unless of course power has been exercised under Article 7/161 of the Constitution.
It will thus be seen from the ratio laid down in the aforesaid two cases that where a person has been sentenced to imprisonment for life the remissions earned by him during his internment in prison under the relevant remission rules have a limited scope and must be confined to the scope and ambit of the said rules and do not acquire significance until the sentence is remitted under section 432, in which case the remission would be subject to limitation of section 433A of the Code, or constitutional power has been exercised under Article 72/161 of the Constitution.
In Bhagirath 's case the question which the Constitution Bench was required to consider was whether a person sentenced to imprisonment for life can claim the benefit of section 428 of the Code which, inter alia provides for setting off the period of detention undergone by the accused as an undertrial against the sentence of 879 imprisonment ultimately awarded to him.
Referring to section 57, IPC, the Constitution Bench reiterated the legal position as under: "The provision contained in Section 57 that imprisonment for life has to be reckoned as equivalent to imprisonment for 20 years is for the purpose of calculating fractions of terms in punishment.
We cannot press that provision into service for a wider purpose.
" These observations are consistent with the ratio laid down in Godse and Maru Ram 's cases.
Coming next to the question of set off under section 428 of the Code, this Court held: "The question of setting off the period of detention undergone by an accused as an undertrial prisoner against the sentence of life imprisonment can arise only if an order is passed by the appropriate authority under section 432 of section 433 of the Code.
In the absence or such order, passed generally or specially, and apart from the provisions, if any of the relevant Jail Manual, imprisonment for life would mean, according to the rule in Gopal Vinayak Godse, imprisonment for the remainder of life.
" We fail to see any departure from the ratio of Godse 's case; on the contrary the afore quoted passage clearly shows approval of that ratio and this becomes further clear from the final order passed by the Court while allowing the appeal/writ petition.
The Court directed that the period of detention undergone by the two accused as undertrial prisoners would be set off against the sentence of life imprisonment imposed upon them, subject to the provisions contained in section 433A and, `provided that orders have been passed by the appropriate authority under section 433 of the Code of Criminal Procedure '.
These directions make it clear beyond any manner of doubt that just as in the case of remissions so also in the case of set off the period of detention as undertrial would enure to the benefit of the convict provided the appropriate Government has chosen to pass an order under sections 432/433 of the Code.
The ratio of Bhagirath 's case, therefore, does not run counter to the ratio of this Court in the case of Godse or Maru Ram.
Under the Constitutional Scheme the President is the Chief Executive of the Union of India in whom the executive power of the Union vests.
Similarly, the Governor is the Chief Executive of the 880 concerned State and in him vests the executive power of that State.
Articles 72 and 161 confer the clemency power of pardon, etc., on the President and the State Governors, respectively.
Needless to say that this constitutional power would override the statutory power contained in sections 432 and 433 and the limitation of section 433A of the Code as well as the power conferred by sections 54 and 55, IPC.
No doubt, this power has to be exercised by the President/Governor on the advice of his Council of Ministers.
How this power can be exercised consistently with Article 14 of the Constitution was one of the Questions which this Court was invited to decide in Maru Ram 's case.
In order that there may not be allegations of arbitrary exercise of this power this Court observed at pages 1243 44 as under: "The proper thing to do, if Government is to keep faith with the founding fathers, is to make rules for its own guidance in the exercise of the pardon power keeping, ofcourse, a large residuary power to meet special situations or sudden developments.
This will exclude the vice of discrimination such as may arise where two persons have been convicted and sentenced in the same case for the same degree of guilt but one is released and the other refused, for such irrelevant reasons as religion, caste, color or political loyalty.
" Till such rules are framed this Court thought that extant remission rules framed under the or under any other similar legislation by the State Governments may provide effective guidelines of a recommendatory nature helpful to the Government to release the prisoner by remitting the remaining term.
It was, therefore, suggested that the said rules and remission schemes be continued and benefit thereof be extended to all those who come within their purview.
At the same time the Court was aware that special cases may require different considerations and `the wide power of executive clemency cannot be bound down even by self created rules '.
Summing up its findings in paragraph 10 at page 1249, this Court observed: "We regard it as fair that until fresh rules are made in keeping with the experience gathered, current social conditions and accepted penological thinking a desirable step, in our view the present remissions and release schemes may usefully be taken as guidelines under ARticles 72/161 and orders for release passed.
We cannot fault the Government, if in some intractably savage delinquents, section 881 433A is itself treated as a guideline for exercise of Articles 72/161.
These observations of ours are recommendatory to avoid a hiatus, but it is for Government, Central or State, to decide whether and why the current Remission Rules should not survive until replaced by a more wholesome scheme.
" It will be obvious from the above that the observations were purely recommendatory in nature.
In Kehar Singh 's case on the question of laying down guidelines for the exercise of power under Article 72 of the Constitution this Court observed in paragraph 16 as under: "It seems to us that there is sufficient indication in the terms of Article 72 and in the history of the power enshrined in that provision as well as existing case law, and specific guidelines need not be spelled out.
Indeed, it may not be possible to lay down any precise, clearly defined and sufficiently channelised guidelines, for we must remember that the power under Article 72 is of the widest amplitude, can contemplate a myriad kind of and categories of cases with facts and situations varying from case to case, in which the merits and reasons of State may be profoundly assisted by prevailing occasion and passing time.
And it is of great significance that the function itself enjoys high status in the constitutional scheme.
" These observations do indicate that the Constitution Bench which decided Kehar Singh 's case was of the view that the language of Article 72 itself provided sufficient guidelines for the exercise of power and having regard to its wide amplitude and the status of the function to be discharged thereunder, it was perhaps unnecessary to spell out specific guidelines since such guidelines may not be able to conceive of all myraid kinds and categories of cases which may come up for the exercise of such power.
No doubt in Maru Ram 's case the Constitution Bench did recommend the framing of guidelines for the exercise of power under Articles 72/161 of the Constitution.
But that was a mere recommendation and not a ratio decidendi having a binding effect on the Constitution Bench which decided Kehar Singh 's case.
Therefore, the observation made by the Constitution Bench in Kehar Singh 's case does not upturn any ratio laid down in Maru Ram 's case.
Nor has the Bench in Kehar Singh 's case said anything with regard to using the 882 provisions of extent Remission Rules as guidelines for the exercise of the clemency powers.
It is true that Articles 72/161 make use of two expressions `remissions ' with regard to punishment and `remit ' in relation to sentence but we do not think it proper to express any opinion as to the content and amplitude of these two expressions in the abstract in the absence of a fact situation.
We, therefore, express no opinion on this question formulated by the learned counsel for the petitioner.
Lastly the learned counsel for the petitioner raised a hypothetical question whether it was permissible in law to grant conditional premature release to a life convict even before completion of 14 years of actual imprisonment, which release would tantamount to the prisoner serving time for the purpose of section 433A of the Code? It is difficult and indeed not advisable to answer such a hypothetical question without being fully aware of the nature of conditions imposed for release.
We can do no better than quote the following observations made at page 1247 in Maru Ram 's case: ". . the expression `prison ' and `imprisonment ' must receive a wider connotation and include any place notified as such for detention purposes.
`Stone walls and iron bars do not a prison make ': nor are `stone walls and iron bars ' a sine qua non to make a jail.
Open jails are capital instances.
any life under the control of the State whether within high walled or not may be a prison if the law regards it as such.
House detentions, for example, Palaces, where Gandhiji was detained were prisons.
Restraint on freedom under the prison law is the test.
Licencsed where instant re capture is sanctioned by the law and likewise parole, where the parole is not free agent, and other categories under the invisible fetters of the prison law may legitimately be regarded as imprisonment.
This point is necessary to be cleared even for computation of 14 years under section 433A.
Therefore, in each case, the question whether the grant of conditional premature release answers the test laid down by this Court in the afore quoted passage, would depend on the nature of the conditions imposed and the circumstances in which the order is passed and is to be executed.
No general observation can be made and we make none.
883 In paragraph 10 of the memorandum of the Writ petition.
, three reasons have been assigned for invoking this Court 's jurisdiction under Article 32 of the Constitution, viz., (i) the questions involved in this petition will affect the right of a large body of life convicts seeking premature release; (ii) this Court 's judgment in Bhagirath 's case deviated from the ratio laid down in Godse 's case and, therefore, the entire law of remissions needed a review; and (iii) the High Court of Rajasthan had refused to examine the merits of the various important questions of law raised before it.
It is on account of the fact that this petition was in the nature of a representative petition touching the rights of a large number of convicts of the categories referred to in section 433A of the Code, that we have dealt with the various questions of law in extenso.
Otherwise the petition could have been disposed of on the narrow ground that even though in view of sections 433A of the Code, premature release could not be ordered under sections 432/433 of the Code read with the 1958 Rules until the petitioner had completed 14 years of actual imprisonment, his release could be considered in exercise of powers under Articles 72/161 of the Constitution treating the 1958 Rules guidelines, if necessary.
The relief claimed in the petition is two fold, namely, (a) to grant a mandamus to the appropriate Government for the premature release of the petitioner by exercising constitutional power with the aid of 1958 Rules and (b) to declare the petitioner 's continued detention as illegal and void.
The petitioner has not completed 14 years of actual incarceration and as such he cannot invoke sections 432 and 433 of the Code.
His continued detention is consistent with section 433A of the Code and there is nothing on record to show that it is otherwise illegal and void.
The outcome of his clemency application under the constitution is not put in issue in the present proceedings if it has been rejected and if the same is pending despite the directive of the High Court it would be open to the petitioner to approach the High Court for the compliance of its order.
Under the circumstance no mandamus can issue.
The writ petition must, therefore, fail.
It is hereby dismissed.
Rule discharged.
G.N. Petition dismissed.
| The petitioner was convicted for murder and sentenced to life imprisonment, which was confirmed by the High Court.
Later he filed a Writ Petition before the High Court for premature release on the plea that he was entitled to be considered for release under the Rajasthan Prisons (Shortening of Sentences) Rules, 1958 notwithstanding the insertion of Section 433A in the Code of Criminal Procedure, 1973 with effect from 18.12.1978, just two days before his conviction.
It was contended that Section 433A Cr. P.C. which places an embargo of 14 years imprisonment before premature release could not curtail the constitutional power vested in the Governor by virtue of Article 161 of the Constitution.
The High Court, dismissed the Writ Petition on the ground that the petitioner 's representations to the Government and State Home Minister were pending consideration.
However, the High Court directed that the two representations of the petitioner should be disposed of within one month.
Unable to secure his release from the High Court as also from the State Government, the petitioner filed the present Write Petition before this Court, contending that the insertion of Section 433A in the Code of Criminal Procedure was invalid; that in the absence of guidelines under articles 72/161 of Constitution, Section 433A Cr.
P.C. could not apply to life convicts; that the Rajasthan Prisons (Shortening of Sentences) Rules, 1958 would prevail over Section 433A Cr.
P.C., and that the constitutional guarantee under Articles 14 and 21 was violated.
Dismissing the Writ Petition, this Court HELD: 1.1.
It is only when a legislature which has no power to legislate frames a legislation so camouflaging it as to appear to be within its competence when it knows it is not, it can be said that the legislation so enacted is colourable legislation.
If in pith and substance the legislation does not belong to the subject falling within the limits of its power but is outside it, the mere form of the legislation will not be determinate of the legislative competence.
[871C; 872C] 1.2.
It is not a case of legislative incompetence to enact section 433A.
No such contention was raised.
Besides the question of vires of section 433A of the Code has been determined by the Constitution Bench of this Court in Maru Ram 's case.
This Court Repelled all the thrusts aimed at challenging the constitutional validity of section 433A. [871A] 860 1.3.
It is no body 's contention that Parliament was not competent to amend the Criminal Procedure Code by which section 433A was inserted.
Whether or not the connecting Indian Penal Code (Amendment) Bill ought to have cleared or not was matter left to the wisdom of the Lok Sabha.
Merely because the Criminal Procedure Bill was made law and the Indian Penal Code (Amendment) Bill was passed by the Rajya Sabha did not obligate the Lok Sabha to clear it.
The Lok Sabha could have its own views on the proposed Indian Penal Code amendments.
It may agree with the executive 's policy reflected in the Bill, with or without modifications, or not at all.
Merely because in the subsequent instructions issued by the letter of July 10, 1979 and the accompanying note, the Joint Secretary had interlinked the two Bills, the Lok Sabha was under no obligation to adopt the measure as such representation could not operate as estoppel against it.
It is obvious that no question of mala fides on the part of the legislature was involved in the enactment of one legislation and failure to enact another.
There is no question of `legislative fraud ' or `colourbale legislation ' involved in the backdrop of the legislative history of section 433A of the Code of Criminal Procedure.
[872D H; 873A] 1.4.
In the present case if both the Bills had become law, then in understanding or construing one legislation or the other, the scheme common to both would be kept in view and be permitted to interact.
But where the linkage does not exist on account of the Indian Penal Code (Amendment) Bill not having become law, section 433A cannot be read down to apply to only those classes of capital offences to which it would have applied had the said Bill been passed by the Lok Sabha in the terms in which it was approved by the Rajya Sabha.
The language of section 433A is clear and unambiguous and does not call for extrinsic aid for its interpretation.
To read down or interpret section 433A of the Code with the aid of the changes proposed by the Indian Penal Code (Amendment) Bill would tantamount to treating the said Bills forming part of the Indian Penal Code, which is clearly impermissible.
To put such an interpretation with the aid of such extrinsic material would result in violence to the plain language of section 433A of the Code.
[873D F] Maru Ram vs Union of India, ; , followed.
K.C. Gajapati Narayan Deo vs State of Orissa, ; and Sonapur Tea Co. Ltd. vs Must Mariruznessa, ; , relied on.
861 State of Himachal Pradesh vs A Parent of a student of Medical College, Simla, [1985] 3 SCC 169 and W.R. Moram vs Deputy Commissioner of Taxation for N.S.W., , referred to.
The law governing suspension, remission and commutation of sentence is both statutory and constitutional.
The stage for the exercise of this power generally speaking is post judicial, i.e., after the judicial process has come to an end.
The duty to judge and to award appropriate punishment to the guilty is a judicial function which culminates by a judgment pronounced in accordance with law.
After the judicial function thus ends the executive function of giving effect to the judicial verdict commences.
[873G H; 874A] 2.2.
One who could have been visited with the extreme punishment of death but on account of the sentencing court 's generosity was sentenced to the lesser punishment of imprisonment for life and another who actually was sentenced to death but on account of executive generosity his sentence was commuted under section 433(a) for imprisonment for life have been treated under section 433A as belonging to that class of prisoners who do not deserve to be released unless they have completed 14 Years of actual incarceration.
Thus, the effect of section 433A is to restrict the exercise of power under sections 432 and 433 by the stipulation that the power will not be so exercised as would enable the two categories of convicts referred to in section 433A to freedom before they have completed 14 years of actual imprisonment.
This is the legislative policy which is clearly discernible from the plain language of section 433A of the Code.
Such prisoners constitute a single class and have, therefore, been subjected to the uniform requirement of suffering atleast 14 years of internment.
[874G H; 875A C] 3.
The expression `life imprisonment ' must be read in the context of section 45 IPC.
Read so, it would ordinarily mean imprisonment for the full or complete span of life.
Section 65, 116, 120 and 511 of the Indian Penal Code fix the term of imprisonment thereunder as a fraction of the maximum fixed for the principal offence.
It is for the purpose of working out this fraction that it became necessary to provide under section 57 that imprisonment for life shall be reckoned as equivalent to imprisonment for 20 years.
If such a provision had not been made it would have been impossible to work out the fraction of an indefinite term.
In order to work out the fraction of terms of punishment provided in the above sections it was imperative to lay down the equivalent term for life imprisonment.
[875G; 876C E] 862 Gopal Goads vs State of Maharashtra, ; ; affirmed.
4.1 Unless the sentence for life imprisonment is commuted or remitted by the appropriate authority under the provisions of the relevant law, a convict is bound in law to serve the entire life term in prison; the rules framed under the Prisons Act or life statute may enable such a convict to earn remissions but such remissions will not entitle him to release before he has completed 14 years of incarceration in view of section 433A of the Code unless of course power has been exercised under Article 72/161 of the Constitution.
Where a person has been sentenced to imprisonment for life the remissions earned by him during his internment in prison under the relevant remission rules have a limited scope and must be confined to the scope and ambit of the said rules and do not acquire significance until the sentence is remitted under section 432, in which case the remission would be subject to limitation of section 433A of the Code, or constitutional power has been exercised under Articles 72/161 of the Constitution.
[878D E] 4.2.
Articles 72 and 161 confer the clemency power of pardon, etc., on the President and the State Governors, respectively.
This constitutional power would override the statutory power contained in sections 432 and 433 and the limitation of section 433A of the Code as well as the power conferred by sections 54 and 55 IPC.
No doubt, this power has to be exercised by the President/Governor on the advice of his Council of Ministers.
[880A B] 4.3.
Though in Maru Ram 's case, this Court recommended the framing of guidelines for the exercise of power under Articles 72/161 of the Constitution of India, it had no binding effect on the Constitution Bench which decided Kehar Singh 's case.
Nor has this Court said anything in Kehar Singh 's case with regard to using the provisions of extent Remission Rules as guidelines for the exercise of clemency powers.
[881H; 882A] Maru Ram vs Union of India, ; ; Kehar Singh vs Union of India, ; ; Bhagirath vs Delhi Administration; , and Gopal Godse vs State of Maharashtra; , , affirmed.
It is true that Articles 72/161 make use of two expressions `remissions ' with regard to punishment and `remit ' in relation to sentence but it is not proper to express any opinion as to the content and amplitude of these two expressions in the abstract, in the absence of a fact situation.
[882B] 863 6.1 The hypothetical question whether it was permissible in law to grant conditional premature release to a life convict even before completion of 14 years of actual imprisonment, which release would tantamount to the prisoner serving time for the purpose of section 433A Cr.
P.C., need not be answered without being fully aware of the conditions imposed for release.
In each case, the question whether the grant of conditional premature release answers the test laid down by this Court in Maru Ram 's case, would depend on the nature of the conditions imposed and the circumstances in which the order is passed and is to be executed.
No general observation can be made.
[882C H] Maru Ram vs Union of India, ; ; referred to.
In the instant case, petitioner has not completed 14 years of actual incarceration and as such he cannot invoke sections 43 and 433 of the Code of Criminal Procedure.
His continued detention is consistent with section 433A of the Code and there is nothing on record to show that it is otherwise illegal and void.
The outcome of his clemency application under the Constitution is not put in issue in the present proceedings if it has been rejected, and if the same is pending despite the directive of the High Court it would be open to the petitioner to approach the High Court for the compliance of its order.
[883E F]
|
ISDICTION: Civil Appeal No. 855 (n) of 1979.
From the Judgment and Order dated 22nd October, 1975 of the Bombay High Court in Special Civil Application No. 985 of 1969.
WITH Civil Appeal No. 2665 of 1991.
M. Chander Sekhar, Additional Solicitor General (NP), A. Subba Rao and C.V. Subba Rao for the Appellants.
R.K. Garg, R.P. Singh, Rakesh Khanna, P.C. Kapur and Raj Kumar Gupta for the Respondents.
The Judgment of the Court was delivered by K. JAGANNATHA SHETTY, J.
In the field of mines and minerals, the Government of India has two departments, (i) Exploration Wing of the Indian Bureau of Mines (IBM) and (ii) Geological Survey of India (GSI).
The GSI is responsible for geological mapping and exploratory drilling calculated to delineate mineralised zones in the country.
The IBM conducts detailed probing operations in selected blocks of mineralised areas.
The functions of these two departments were found to be overlapping.
The Government of India, therefore, decided to merge the Exploratory Wing of IBM with the GSI to eliminate overlapping works and rationalise the functions of the two departments.
To accomplish this purpose, different cadres of the Exploration Wing of IBM were merged with the GSI from different dates.
There is no dispute that the posts concerned in these cases also came to be merged with the GSI.
The question, however, for consideration is about the date of that merger: whether it was from 1 January, 1966 or from any subsequent date.
The Government of India contends that the merger took place on 4/6 February 1969 while the contesting respondents claim that it was with effect from 1 January 1966.
The dispute as to the date of merger has arisen because of the 896 following circumstances.
That between the period from 1 January 1966 to 4 February 1969, thirty nine persons in the cadre of Lower Division Clerks belonging to GSI were promoted as Upper Division Clerks against the vacancies that arose in the GSI.
They were apparently juniors to their counterparts in the IBM.
Being aggrieved by the said promotions, the Association of the Officers who originally belonged to the IBM preferred Special Civil Application No. 985/69 at Nagpur Bench of the Bombay of the Bombay High Court for setting aside the seniority list and for a direction to consider their cases of promotion with effect from 1 January 1966.
It was contended before the High Court that the merger of the two departments took place with effect from 1 January 1966 and not from 4 February 1969 and therefore, there cannot be two separate channels of promotions from 1 January 1966 one for the employees of the Exploration Wing of IBM and another for the employees of GSI.
The Government of India sought to justify the promotions exclusively given to the Officers of GSI between the period from 1 January 1966 to 4 February 1969 on the ground that the actual merger took place not on 1 January 1966 but on 4 February 1969.
the High Court, however, did not accept the submission of the Government of India.
The High Court summarised its conclusion thus: ``It is also to be noted that after 1.1.1966 the petitions did not get any promotion or were not considered for promotion by the Indian Bureau of Mines because they were treated under the administrative control of Geological Survey of India.
If the contention of the respondents is accepted then it will have to be held that for three years the cases of the petitioners cannot be considered by the Geological Survey of India and they were not considered by the Indian Bureau of Mines because they were not under the administrative control of Indian Bureau of Mines.
This will result into absurdity and, therefore, such a contention cannot be accepted.
We are, therefore, inclined to hold on consideration of the annexures produced along with this petition that the merger in the two wings has taken place on 1.1.1966.
Therefore, the seniority of Upper Division Clerks will have to be considered and made in this light after taking into consideration the fact that the petitioners merged and became the part of Geological Survey of India on 1.1.1966 and, therefore, for the purpose of counting their seniority, their past service rendered with the Indian Bureau of Mines will have to be treated as service rendered with the Geological Survey of India.
This 897 is the correct effect of the letter R 2 relied upon by the respondents.
We, therefore, direct the respondent Nos. 1, 2, & 4 to prepare a fresh seniority list in the light of the observations made above as if the merger has taken place on 1.1.1966 and after determining inter seniority give an appropriate relief to the petitioners. ' ' Civil Appeal No. 855(N) of 1979 has been preferred against the above decision of the Bombay High Court.
A Senior Technological Assitant (Geology) of the erstwhile IBM moved the Karnataka High Court for similar relief contending inter alia that his case ought to have been considered for promotion in the merged cadre with effect from 1 January 1966.
The Karnataka High Court also allowed his claim with a direction to consider him for promotion with effect from 1 January 196 in the merged cadre.
That decision was not implemented by the GSI, perhaps on the ground that the dispute as to the date of merger is already pending consideration before this Court.
In the contempt proceedings taken for disobedience of the judgment, the High Court however, did not accept that excuse put forward by the GSI and Government of India, but allowed six weeks time for compliance.
SLP(C) No. 4906 of 1991 has been preferred against that direction issued by the Karnataka High Court.
Since the issue raised in both the matters is common, we grant special leave in this case also.
The issue as to the date of merger of the Exploration Wing IBM with GSI turns on the contents of some of the letters written by the Government of India to the Director General of GSI.
Both the parties depend upon the same letters but with different contentions and constructions.
We will now draw attention to the letters one by one.
(i) ``LETTER DATED 10 DECEMBER 1965 GOVERNMENT OF INDIA MINISTRY OF STEEL AND MINES, DEPARTMENT OF MINES AND METALS.
To The Director, Indian Bureau of Mines, Nagpur.
(For the attention of Sh.
K.N. Murthy, Deputy Director, IBM) 898 Sub: Reorganisation of the IBM and GSI.
Sir, xxxxx xxxxx xxxxx After careful consideration of all these matters and in consultation with Director General, GSI and IBM, the Government have decided to transfer the following from the IBM to the administrative control of the GSI w.e.f.
1st January 1966: (i) All the posts and personnel in the Prospecting Drilling and Mining Divisions of the Bureau will be transferred to the GSI as detailed in Appendices I & II.
(ii) The workshop and Mineral Technology and Physical Analysis Laboratories will transferred to the GSI along with the posts in these laboratories as detailed in Appendix II.
(iii) The posts in the common cadres in the Administration and Accounting Divisions as have been on the basis of actual work load as detailed in Appendix II.
The personnel holding the posts will be allocated to the GSI and the IBM on the basis of options indicated by them, the principal guideline being exigency of public service.
(iv) The equipment, vehicles and stores, will be transferred by the IBM to the GSI according to the distribution made on the basis of equipment etc.
being required by the organisations as per statement in Appendix III. 2.
The headquarters of the Prospecting, Drilling and Mining Divisions, as also the workshop and the Mineral Technology and Physical Analysis Laboratories, which are being transferred from the Bureau to the GSI, will continue to be at Nagpur.
On transfer of these Divisions, these will work as separate entity of the GSI under the administrative control of the DG, GSI.
Headquarters of the Mineral Technology Laboratory at Delhi will continue to remain at Delhi.
899 3.
The service conditions of the personnel to be transferred to the GSI such as status, emoluments, seniority etc.
will be governed by the existing recruitment rules until further orders.
The IBM will be responsible for the administration of Mines (Control and conservation) collection of statistical data of minerals and Ore Dressing Laboratory as here to before.
With effect from 1.1.1966 the GSI will provide in their budget the expenditure connected with the work transferred to them from the IBM and put up a Supplementary demand.
Correspondingly IBM will surrender the L(equivalent) amount from its budget. ' ' (ii) LETTER DATED 28 JUNE 1967 GOVERNMENT OF INDIA MINISTRY OF STEEL MINES & METALS, DEPARTMENT OF MINES AND METALS.
To The Director General, Geological Survey of India, 27, Chowringhee Road, Calcutta 13 Sub: Merger of Class I and II posts in the Drilling Divisions of the Geological Survey of India (Proper and Exploration Wing) and combined seniority lists.
Sir, In partial modification of the Ministry of Steel and Mines (Department of Mines & Metals) letter No. 20/4/65 MIII dated 10 December 1965, I am convey sanction of the Government to merge class I and II posts in the Drilling Divisions of the Exploration Wing and the Geological Survey of India (Proper) with immediate effect.
Heretofore, the service conditions of the class I and II officers of Drilling category of the merged Drilling Division would be governed in accordance with the revised recruitment rules which are under issue separately.
900 2.
In drawing up the combined seniority lists of the officers in different grades in the amalgamated cadres of Class I and II posts para 3 of the annexure to the Ministry of Home Affairs O.M. No. 9/11/55 RPS dt.
22.12.1958 according to which permanent officers of the grade are senior to temporary officiating officers of that grade, is not applicable.
In such cases, seniority is determined with reference to the date of continuous appointment to that grade on a regular basis in accordance with the other principles prescribed in the Ministry of Home Affairs O.M. No. dt.
23.12.1959 referred to above lists so drawn may please be sent for approval of Government.
Yours faithfully, Sd/ (A. Sethumadhavan) Under Secretary to the Govt.
of India (iii) LETTER DATED 4/6 FEBRUARY GOVERNMENT OF INDIA MINISTRY OF STEEL, MINES AND METALS (DEPARTMENT OF MINES AND METALS) No. 1/16/68 MIII To The Director General, Geological Survey of India, Calcutta.
Sub: Merger of Posts/scales of pay in the GSI (Proper) and the Exploration Wing transferred from the Indian Bureau of Mines to the Geological Survey of India.
Sir, I am directed to invite your attention to this Ministry 's letter No. 3/17/67 MIII, dated 28.6.1967 and to say that the President is pleaded to sanction merger of the posts and to prescribe the scales of pay for the merged cadres as shown in the enclosed statement with immediate effect.
Orders regarding merger of the remaining posts will be issued separately.
901 2.
The inter seniority of the incumbents in the merged cadres will governed in accordance with the principles laid down in para 2 of the Ministry 's letter referred to above.
The merger/revision of the scales of pay does not involve any change in the nature and duties of the respective posts.
The fixation of pay in the revised scales of pay may be done under FR 23, read with audit instruction 1 under FR 22. 4.
The officers concerned should be asked to exercise their option in writing so as to reach the authority concerned within four months of the issue of this letter, provided that: (i) in the case of a Government servant who is on that date out of India on leave, deputation or foreign service or active service, the said option shall be exercised in writing so as to reach the prescribed authority within four months of the date of his taking over charge of his post in the GSI and (ii) Where a Government servant is under suspension the option may be exercised by him within four months of the date of his return to duty, if that date is later than the date prescribed here.
In case the individual concerned fails to exercise the option within the time limit, he will be treated to have accepted the new scale of pay. ' ' In between these correspondence, the Government of India wrote one more letter to the Director General of GSI.
It was dated 29 November, 1966 which will be referred later.
Mr. Garg and Mr. Vaidyanathan, counsel for the contesting respondents rely on the first letter dated 10 December 1965 and also on the subsequent letter dated 29 November 1966 in support of the decision of the High Courts that the merger took place on 1 January 1966.
Mr. Subba Rao, counsel for the Union of India wants to take assistance from the terms of the letter dated 1/6 February 1969 in support of the counter plea.
It may be significant to note that the letter dated 10 December 1965 does not indicate the date of merger.
It is 902 stated therein that after consultation with the Director General of GSI and IBM, the Government has decided to transfer to the administrative control of GSI with effect from 1 January 1966 the posts and personnel in the prospecting drilling and mining divisions of the Bureau with the workshop, mineral technology and physical analysis laboratories.
The letter further states that the posts in the common cadres in the administration and accounting divisions as have been divided on the basis of actual work load (as detailed in Appendix II) with the personnel holding the post will be allocated to GSI and IBM on the basis of options indicated by them.
The equipment, vehicles and stores will be transferred by IBM to GSI according to the distribution made as per requirements of the two organisations.
The most important statements in the letter are these: (i) on transfer of the divisions they will however work as separate entity of the GSI under the administrative control of the Director General, GSI and (ii) the service conditions of the personnel to be transferred to GSI such status, emoluments, seniority etc.
will be governed by the existing recruitment rules until further orders.
It is further directed in the letter that with effect from January 1966, the GSI will provide in their budget the expenditure connected with the work transferred to them from the IBM and put up a supplementary demand.
Correspondingly, IBM will surrender the (equivalent) amount from the budget.
These statements in the letter make it abundantly clear that it was only administrative control of the relevant Wings of IBM that were transferred to GSI with effect from 1 January 1966.
The letter does not refer to the decision of merger of the two departments.
The decision taken on the merger of the posts as rightly submitted by Mr. Subba Rao was communicated by subsequent letters dated 28 June 1967 and 4/6 February 1969.
By letter dated 28 June 1967 the Government communicated the sanction of merger of class I & II posts in the drilling divisions of Exploration Wing of IBM and GSI (Proper) with immediate effect.
The letter also contains certain instructions to department about service conditions and seniority of persons in the amalgamated cadres of class I & II posts.
The decision with regard to merger in respect of other categories of posts is contained in the letter dated 4/6 February 1969.
Thereunder it is expressly stated that ``the President is pleased to sanction merger of the posts and to prescribe the scales of pay for the merged cadres as shown in the enclosed statement accompanying the letter include the posts with which we are concerned in these cases and there is no dispute on this matter.
903 The letter dated 4/6 February 1969 further provides that the inter se seniority of the incumbents in the merged cadres will be governed in accordance with the principles laid down in the earlier letter dated 28 June 1967.
The merger/revision of the scales of pay does not involve any change in the nature of duties of the respective posts.
The officers concerned in the merged cadre will be given options in writing for opting the new scales of pay in the merged cadre.
In case an individual concerned fails to exercise the option within the time limit, he will be treated to have accepted the new scale of pay.
It will be apparent from the terms of the letter dated 4/6 February 1969 that the posts referred to in the letter were merged with GSI with effect from 4 February 1966, as contended for the respondents, the letter dated 4/6 February 1969 would be unnecessary and uncalled for.
Counsel for the respondents however, placed strong reliance in support of the counter point on the letter dated 29 November 1966 which reads as follows: GOVERNMENT OF INDIA No. 8/39/66 MIII NEW DELHI 29TH NOV.
1966 To The Director General, Geological Survey of India, 27, Chowringhee Lane, Calcutta 13 Sub: Absorption of Shri B.K. Chatterjee, Stenographer (Selection Grade) of the Indian Bureau of Mines, in Geological Survey of India (Exploration Wing).
Sir, I am directed to refer to your letter No. 832/8 (N)/115/65/15 dated 4.11.1966 on the subject mentioned and to say that transfer in question cannot be termed as transfer from one department to the other department, since it place on a result of the reorganisation of the Indian Bureau of Mines and transfer was effected on the recommenda 904 tions of the Merger Committee when there was a vacancy in the GSI.
The transfer was made in the public interest and it is considered not necessary to approve the transfer in question in relaxation of the recruitment Rules as proposed.
The transfer of Shri Chatterjee may be treated as in order.
Further, the inter seniority of Stenographer and other categories of posts transferred from the Bureau to the Geological Survey of India as a result of the reorganisation of the former may be decided taking into account the fact that such transfers have been made in the public interest and such cases may be examined on the basis as if the individual concerned were originally appointed in the Geological Survey of India.
Yours faithfully, Sd/ (A. Sethumadhavan) Under Secy.
to the Govt.
of India We do not find any support from this letter to the submission of the respondents.
The letter concerns with the transfer of one Stenographer called Shri B.K. Chatterjee from IBM to the GSI.
The transfer was made in the public interest.
Consequently.
it was held that the person transferred was entitled to seniority as if he were originally appointed in the GSI.
That is a normal incident of transfer from one department to another and there is nothing strange in it.
But it may be noted that the respondents were not transferred from IBM to GSI with effect from 1 January 1966.
They were neither transferred to GSI, nor their posts were transferred to GSI with effect from 1 January 1966.
They were only brought under the administrative control of the Director General of GSI.
The result is that the posts and personnel remained in their own department and they would continue to be governed by their own service conditions.
This would indeed be the consequence of one department being brought under the control or supervision of another departmental head.
This point has also been made clear in the letter dated 1 January 1966 in which it has been provided ``that the service conditions of the personnel to be transferred to the GSI such as status, emoluments, seniority etc. will be governed by the existing recruitment rules until further orders ' '.
In other words, the service conditions which the respondents were entitled to, in their parent department would continue to be available to them until further orders.
905 The Bombay High Court has however, observed that it will lead to absurdity if the contesting respondents are not considered for promotion in the GSI from 1 January 1966 since they could not get any promotion in or were not considered for promotion by IBM because they were treated under administrative control of GSI.
It is difficult to accept this view.
This conclusion is based more on equitable consideration than on law.
It is the result of failure to focus on the difference between the terms of letters dated 1 January 1966 and 4/6 February 1969.
It may be emphasised that non consideration of the contesting respondents for promotion in the IBM during the period from 1966 to 1969 even assuming it to be true is however no ground for them to seek promotion in GSI.
They must seek their promotion during the interregnum only in their parent department.
Reference is made to the combined provisional seniority list of persons in class III cadres of IBM and GSI prepared as on 1 December 1968.
It is submitted that if the merger took place with effect from 4 February 1969 there were no necessity for GSI to prepare the provisional seniority list of officers of the combined cadre as on 1 December 1968.
Reference is also made to the ``Introduction to the compilation Vol.
100 Part I, Records of the GSI ' ', in which it is mentioned that on 1 January 1966, the Mining Divisions of the IBM have been merged with the GSI.
The said provisional seniority list and the statement of introduction to the compilation, in our opinion, are no evidence of the date of merger and indeed, they do not reflect the decision of the Government of India which we have earlier discussed.
For the foregoing reasons, we accept the appeals and set aside the impugned judgment and order.
In the circumstances of the case, however, there should not be any order as to costs.
V.P.R. Appeals allowed.
| In Civil Appeal No. 855(N) of 1979 and Civil Appeal No. 2665 of 1991 the issue raised was common and relating to the date of merger of the two departments of the Government of India, in the field of mines and minerals, namely (i) Exploration Wing of the Indian Bureau of Mines (IBM) and (ii) Geological Survey of India (GSI).
Between 1.1.1966 to 4.2.1969 thirty nine Lower Division Clerks belonging to GSI were promoted as Upper Division Clerks against the vacancies that arose in the GSI.
They were juniors to their counterparts in the IBM.
Being aggrieved by the said promotions, the respondents who originally belonged to the IBM, preferred Special Civil Application in the Bombay High Court for setting aside the seniority list and for a direction to consider their cases of promotion with effect from 1 January, 1966 and not from 4 February 1969 and therefore, there cannot be two separate channels of promotions from 1 January 1966 one from the employees of the Exploration Wing of IBM and another for the employees of GSI.
The appellants contended that the Officers of GSI were promoted on the ground that the actual merger took place not on 1 January 1966 but on 4 February 1969.
The High Court allowed the petition against which Civil Appeal No. 855(N) of 1979 has been preferred.
A Senior Technological Assistant (Geology) of the erstwhile IBM moved the Karnataka High Court for similar relief contending inter 894 alia that this case ought to have been considered for promotion in the merger cadre with effect from 1 January 1966.
The Karnataka High Court also allowed his claim with a direction to consider him for promotion with effect from 1 January 1966 in the merged cadre.
That decision was not implemented by the GSI.
In the contempt proceedings taken for disobedience of the judgment, the High Court allowed six weeks time for compliance, against which, SLP(C) No. 4906 of 1991 has been preferred.
Respondents relying on the letters dated 10 December 1965 and 29 November 1966 contended in support of the decision of the High Courts that the merger took place on 1 January 1966, whereas the appellants took assistance from terms of the letter dated 4/6 February 1969 in support of the counter plea.
Allowing the appeals, this Court, HELD: 1.
The statements in the letter make it abundantly clear that it was only administrative control of the relevant wings of IBM that were transfered to GSI with effect from 1 January 1966.
The letter does not refer to the decision of merger of the two departments.
[902E] 2.
The decision taken on the merger of the posts was communicated by subsequent letters dated 28 June 1967 and 4/6 February 1969.
By letter dated 28th June 1967 the Government communicated the sanction of merger of class I IBM and GSI (Proper) with immediate effect.
The letter also contains certain instructions to department about service conditions and seniority of persons in the amalgamated cadres of class I & II posts.
The decision with regard to merger in respect of other categories of posts which include are concerned in these cases is contained in the letter dated 4/6 February 1969.
[902F G] 3.
The letter dated 4/6 February 1969 further provides the inter se seniority of the incumbent in the merged cadres will be governed in accordance with the principles laid down in the earlier letter dated 28th June 1967.
The merger/revision of the scales of pay does not involve any change in the nature of duties of the respective posts.
The Officers concerned in the merged cadre will be given options in writing for opting the new scales of pay in the merged.
In case an individual concerned fails to exercise the option within the time limit, he will be treated to have accepted the new scale of pay.
It will be apparent from the terms of the letter dated 4/6 February 1969 that the posts 895 referred to in the letter were merged with GSI with effect from 4 February 1969 would be unnecessary and uncalled for.
[903A C] 4.
Provisional seniority list and the statement of introduction to the compilation are no evidence of the date of merger do not reflect the decision of the Govt.
of India.
|
t Petition (Civil) No. 13704 of 1983.
(Under Article 32 of the Constitution of India) P.N. Lekhi and M.K. Garg for the Petitioner.
Prithvi Raj, P.P. Rao, Govind Mukhoty, Satish Chander, Raju Ramachandran, Mrs. section Dikshit, A.K. Sangal, P.K. Chakraborty.
Ms. Sadhya Goswami and Y.C. Maheshwari for the Respondents.
K.R. Gupta, Smt.
Nanita Sharma, R.C. Gubrele, Vivek Sharma and O.P. Sharma for the Intervener.
The Judgment of the Court was delivered by KULDIP SINGH, J.
Ram Sewak Prasad, the petitioner before us, was appointed as Excise Sub Inspector, in the State of Uttar Pradesh in February, 1964 and was promoted to the post of Excise Inspector on ad hoc basis on February 24, 1972.
He was confirmed as Excise Sub Inspector by an order dated December 2, 1972 with effect from April 1, 1967.
Though promoted on ad hoc basis the petitioner 887 has continuously been working as Excise Inspector since February 24, 1972.
Raghubir Singh and Ram Dhan, respondents are direct recruits to the post of Excise Inspector.
The joined as such on March 29, 1972 and May 14, 1972 respectively.
They were promoted to the post of Excise Superintendent by an order dated September 29, 1983.
It is not disputed that the petitioner was not considered for promotion alongwith the respondents or at any time thereafter.
Even his name was not shown in the seniority list of Excise Inspectors circulated from time to time.
The respondents, including the State Government, have taken the stand that the petitioner 's promotion to the post of Excise Inspector was against the rules, he continues to be an ad hoc appointee and is not a member of the Excise Inspectors Service constituted under the rules.
For that reason he is neither been shown in the seniority list of Excise Inspectors nor considered for promotion to the post of Excise Superintendent.
It is necessary to examine the relevant statutory rules regulating recruitment and conditions of service of the Excise Inspectors.
Rule 3(ix) and 5 of the Uttar Pradesh Subordinate Excise Service Rules, 1967 (hereinafter called `1967 rules ') are as under: "3(ix).
"Member of the service" means a person appointed in a substantive capacity under the provisions of these rules, or of rules in force previous to the enforcement of these rules to a post in the cadre of the service" . 5.
Sources of recruitment Recruitment to the service shall be made (a) by direct recruitment of candidates, on the result of a combined competitive examinations conducted by the Commission, who having been selected in the prescribed manner for undergoing practical training have completed the course of training and passed the departmental examination prescribed in rule 23: Provided that no candidate shall be allowed to avail of more than three chances for appearing at the competitive examination; (b) by promotion of permanent clerks of the office at 888 the Headquarters of the Excise Commissioner and other regional and Subordinate Excise Offices of Assistant Excise Commissioners and Superintendents of Excise in Uttar Pradesh; and (c) by promotion of permanent Tari Supervisors The 1967 rules were superseded by the Uttar Pradesh Subordinate Excise Service Rules, 1983 (hereinafter called 1983 rules) which came into force on March 24, 1983.
Rule 3(g), 3(j), 5 and 21(1) of the 1983 rules are reproduced hereinafter: "3(g).
"Member of Service" means a person substantively appointed under or the rules or orders in force prior to the commencement of these rules to a post in the cadre of the service". "3(j).
"Substantive appointment" means an appointment, not being an ad hoc appointment, on a post in the cadre of the service, made after selection in accordance with the rules and, if there are no rules, in accordance with the procedure prescribed for the time being by executive instructions, issued by the Government.
" Sources of Recruitment.
Recruitment to the various categories of posts in this service shall be made from the following sources: (A) EXCISE INSPECTOR (1) 90% by direct recruitment on the result of a combined competitive examination conducted by the Commission.
(2) 10% by promotion from amongst the permanent sub Excise Inspectors.
"Rule 21(1) Except as hereinafter provided, the seniority of persons in any category of post shall be determined from the date of the order of substantive appointment and if two or more persons are appointed together, by the order in which their names are arranged in the appointed order; 889 Provided that if the appointment order specifies a particular back date with the effect from which a person is substantively appointed, that date, will be deemed to be the date of order of substantive appointment and, in other case it will mean the date of issue of the order;" Mr. Satish Chandra, learned senior advocate, appearing for some of the respondents who are direct recruits of 1982/83 has contended that the 1967 rules were holding the field when the petitioner was promoted as Excise Inspector on ad hoc basis.
According to him only clerks and Tari Supervisors could be considered for promotion to the post of Excise Inspector under rule 5 of the 1967 rules and the Excise Sub Inspectors were not eligible.
The petitioner 's promotion being in violation of the 1967 rules, he was not a member of the service and as such was rightly not shown in the seniority list of Excise Inspectors.
He, however, accepts the position that the petitioner can be considered for promotion to the post of Excise Inspector under the 1983 rules and would become member of the service from the date of promotion under the said rules.
Mr. Satish Chandra finally contended that the appointment of the petitioner from 1972 to 1983 being violative of 1967 rules, the benefit of the said service cannot be given to the petitioner towards seniority in the cadre of Excise Inspectors.
In support of his arguments Mr. Satish Chandra relied upon the judgments of this Court in Masood Akhtar Khan and Others vs State of Madhya Pradesh and Others, and Direct recruits class II Engineering Officers Association vs State of Maharashtra and Others, [1990] 2S.C.C. 715.
Mr. Govind Mukhoty, Mr. P.P. Rao and Mr. O.P. Sharma, learned senior advocates appearing for various respondents reiterated, with different flavour, the arguments advanced by Mr. Satish Chandra.
They further cited P. Mahendran and Ors etc.
vs State of Karnataka and Ors. etc.
, ; State of Punjab vs Jagdip Singh and Ors., ; ; Krishena Kumar and Ors.
vs Union of India and Ors.
, ; and A.K. Bhatnagar and Ors.
vs Union of India and Ors.
, ; Mr. Prithviraj, learned senior advocate appearing for the State of Uttar Pradesh stated that it may be possible to absorb the petitioner in the cadre of Excise Inspectors from the date of enforcement of the 1983 rules but the benefit of service rendered by him as Excise Inspector prior to that date cannot be given to him.
Mr. P.N. Lekhi, learned senior advocate appearing for the petitioner vehemently argued that the petitioner was promoted in `public interest ' as Excise Inspector in the year 1972 and since then he 890 has been working as such continuously.
He is being paid the same salary for doing the same work as is being done by the directly recruited Excise Inspectors.
There can no justifiable reason to treat the petitioner as an ad hoc Excise Inspector even after working as such for almost two decades.
According to him the 1967 rules which confined the channel of promotion to Tari Inspectors and Clerks were wholly arbitrary and as such violative of Articles 14 and 16 of the Constitution of India.
The Excise Sub Inspectors are at a lower rung in the same hierarchy of service to which Excise Inspectors belong.
The Sub Inspectors perform similar duties of less responsibility.
Mr. Lekhi further contended that providing avenue of promotion to Tari Inspectors and Clerks who had no similarity or service0link with the cadre of Excise Inspectors and depriving the same to the Excise Sub Inspectors render the 1967 rules arbitrary and discriminatory.
He relied upon Baleshwar Dass and Ors.
vs State of U.P. and Ors., [1981] 1 SCR 449; Narender Chadha and Ors.
vs Union of India and Ors.
, ; ; Rajendera Parsad Dhasmane vs Union of India and Ors., ; and Kumari Shrilekha Vidyarthi etc.
vs State of U.P. and Ors., Mr. Lekhi finally submitted that the petitioner is, in any case, entitled to be promoted substantively to the cadre of Excise Inspectors under the 1983 rules and he is entitled to fixation of seniority by counting his entire service as Excisa Inspector from 1972 onwards.
It is not necessary to go into the judgments cited by the learned counsel for the parties.
The judgments are on the peculiar facts of these cases and do not render much assistance to resolve the controversy before us.
The 1967 rules provided recruitment to the cadre of Excise Inspectors by way of direct recruitment and by promotion.
Recruitment by promotion was only confined to permanent clerks in the office of Excise Commissioner and Tari Supervisors.
The Excise Sub Inspectors were not eligible.
On the plain interpretation of 1967 rules Mr. Satish Chandra is justified to contend that the petitioner was not eligible for promotion to the post of Excise Inspector and as such he could not be member of the Uttar Pradesh Subordinate Excise Service as constituted under the 1967 rules.
On the other hand there is plausibility in the argument of Mr. P.N. Lekhi that rule 5 of the 1967 rules which denies avenue of promotion to the Excise Sub Inspectors is arbitrary and discriminatory.
When the 1967 rules were enforced on May 24, 1967 there was in existence a permanent cadre of Excise Sub Inspectors.
The nature of duties of both the cadres 891 were similar.
The Excise Inspectors, on molasses duty of the ranges, used to supervise the work of Excise Sub Inspectors under them.
The Excise Sub Inspectors were thus natural contenders for the post of Inspectors.
There was no justification whatsoever with the framers of the 1967 rules to have kept the Excise Sub Inspectors out of the channel of promotion to the post of Excise Inspectors.
Prima facie there is no escape from the conclusion that the Excise Sub Inspectors were dealt with in an arbitrary manner by the framers of 1967 rules.
However, the view we propose to take on the interpretation of 1983 rules it is not necessary for us to deal with the respective arguments of the learned counsel for the parties regarding the 1967 rules.
Rule 5 of the 1983 rules provides recruitment to the cadre of Excise Inspectors from two sources, 90% by direct recruitment and 10% by promotion from amongst the permanent Excise Sub Inspectors.
It is not disputed that under the 1983 rules the petitioner is eligible to be promoted and appointed as Excise Inspector.
In the writ petition the petitioner has specifically pleaded that the service record of the petitioner is unblemished and he is holding the post of Excise Inspector within the 10% promotion quota provided for the permanent Excise Sub Inspectors.
The State Government in its counter has not denied these averments.
The 1983 rules came into force on March 24, 1983.
There is nothing on the record to show as to why the petitioner was not considered for promotion under the 1983 rules till today.
Inaction on the part of the State Government is wholly unjustified.
The petitioner has been made to suffer for no fault of his.
He has been serving the State Government as Excise Inspector since February 24, 1972 satisfactorily.
Least the State Government could do was to consider the petitioner under the 1983 rules.
Mr. Prithviraj, learned counsel for the State of Uttar Pradesh has however fairly stated that the State Government is willing to promote the petitioner to the cadre of Excise Inspectors under the 1983 rules effect from the date of enforcement of the said rules.
Rule 21(1) of the 1983 rules provides that the seniority of a person in any category of post shall be determined from the date of the order of substantive appointment.
First proviso provides that if the appointment order specifies a particular back date with effect from which a person is substantively appointed then the said back date shall be deemed to be the date of order of substantive appointment.
It is thus obvious that rule 21(1) of the 1983 rules specifically permits substantive appointment to the cadre of Excise Inspectors with back date.
The framers of the 1983 rules were conscious that the cadre of 892 Excise Sub Inspectors was in existence from 1964 onwards and some of them were promoted to the post of Excise Inspectors much earlier to the enforcement of the 1983 rules.
In all probability the provision of back date appointment was made in the 1983 rules to do justice to persons like the petitioner.
The petitioner is eligible under the rules to be appointed as Excise Inspector by way of promotion.
It is not disputed that the petitioner was appointed as Excise Inspector on February 24, 1972 and he has been actually working in the said post continuously from that date and has been drawing the salary of the post of Excise Inspector.
This is a fit case where the petitioner should be appointed as Excise Inspector under the 1983 rules by giving him back date appointment with effect from February 24, 1972.
We, therefore, hold that the petitioner shall be deemed to be appointed by way of promotion as substantive Excise Inspector under the 1983 rules with effect from February 24, 1972.
The petitioner shall be entitled to the benefit of his entire period of service as Excise Inspector from February 24, 1972 towards fixation of his seniority in the cadre of Excise Inspector.
We further direct that the petitioner shall be considered for promotion to the post of Excise Superintendent from a date earlier than the date when respondents Ram Dhan and Raghubir Singh were promoted to the said post.
The petitioner shall also be entitled to be considered to the post of Assistant Excise Commissioner in accordance with the rules from a date earlier than the date when any of his juniors were promoted to the said post.
We make it clear that none of the respondents who have already been promoted to the higher rank of Excise Superintendents or Assistant Excise Commissioners be reverted to accommodate the petitioner or any other person similarly situated.
The State Government shall create additional posts in the cadre of Excise Superintendents and Assistant Excise Commissioners to accommodate the petitioner and other similar persons, if necessary.
The writ petition is allowed with costs in the above terms.
We quantify the costs as Rs.10,000 to be paid by the State of Uttar Pradesh.
Y.Lal.
Petition allowed.
| The petitioner was appointed as Excise Sub Inspector in February 1964 in the State of U.P. and was later promoted as Excise Inspector on ad hoc basis on February 24, 1972.
He was confirmed as Excise Sub Inspector w.e.f. April 1, 1967.
Though promoted on ad hoc basis, the petitioner has continuously been working as Excise Inspector since February 24, 1972.
Raghubir Singh and Ram Dhan, respondents are direct recruits to the post of Excise Inspector and they had joined the cadre later in point of time than the petitioner i.e. after 24.2.1972.
They were promoted to the post of Excise Superintendent on 29.9.1983 and the petitioner was ignored.
Being aggrieved the petitioner has filed this petition under Article 32 of the Constitution.
According to the State and other respondents, the petitioner 's promotion to the post of Excise Inspector being on ad hoc basis was against the 1967 rules, he continues to be an ad hoc appointed and as such is not a member of the Excise Inspectors service constituted under the rules.
His name has not been shown in the seniority list of Excise Inspectors.
According to them his case has rightly not been considered for further promotion.
On the other hand, it is contended on behalf of the petitioner that the 1967 Rules in as much as they confine the channel of promotion to Tari Inspectors and Clerks were wholly arbitrary and as such violative of Articles 14 and 16 of the Constitution.
It is submitted on his behalf that the petitioner is, in any case, entitled to be promoted substantively to the cadre of excise Inspectors under 1983 rules and he is also entitled to fixation of seniority by counting his entire service as Excise Inspector from 1972 onwards.
Respondents concede that the petitioner can be appointed under 1983 rules, but contend that he is not entitled to the benefit of past service for purposes of seniority.
885 Allowing the writ petition this Court HELD: When the 1967 rules were enforced on May 24, 1967 there was in existence a permanent cadre of Excise Sub Inspectors.
The nature of duties of both the cadres were similar.
The Excise Inspectors, on molasses duty of the ranges, used to supervise the work of excise Sub Inspectors under them.
The Excise Sub Inspectors were thus natural contenders for the post of Inspectors.
There was no justification whatsoever with the framers of the 1967 rules to have kept the Excise Sub Inspectors out of the channel of promotion to the post of Excise Inspectors.
Prime facie there is no escape from the conclusion that the Excise Sub Inspectors were dealt with in an arbitrary manner by the framers of 1967 rules.
[890H 891B] It is not disputed that under the 1983 rules, the petitioner is eligible to be promoted and appointed as Excise Inspector.
[891C D] The 1983 rules came into force on March 24, 1983.
There is nothing on the record to show as to why the petitioner was not considered for promotion under the 1983 rules till today.
Inaction on the part of the State Government is wholly unjustified.
The petitioner has been made to suffer for no fault of his.
He has been serving the State Government as Excise Inspector since February 24, 1972 satisfactorily.
[891E] Rule 21(i) of the 1983 rules specifically permits substantive appointment to the cadre of Excise Inspectors with back date.
In all probability the provision of back date appointment was made in the 1983 rules to do justice to persons like the petitioner.
The petitioner is eligible under the rules to be appointed as Excise Inspector by way of promotion.
Accordingly the Court directed that the petitioner shall be deemed to be appointed by way of promotion as substantive Excise Inspector under the 1983 rules with effect from February 24, 1972.
The petitioner shall be entitled to the benefit of his entire period of service as Excise Inspector from February 24, 1972 towards fixation of his seniority in the cadre of Excise Inspector.
The petitioner shall be considered for promotion to the post of Excise Superintendent from a date earlier than the date when respondents Ram Dhan and Raghubir Singh were promoted to the said post.
The petitioner shall also be entitled to be considered to the post of Assistant Excise Commissioner in accordance with the rules from a date earlier than the date when any of his juniors were promoted to the said post.
[891G, 892B E] None of the respondents who have already been promoted to the 886 higher rank of Excise Superintendents or Assistant Excise Commissioners be reverted to accommodate the petitioner or any other person similarly situated.
The State Government shall create additional posts in the cadre of Excise Superintendents and Assistant Excise Commissioners to accommodate the petitioner and other similar persons, if necessary.
[892F] Masood Akhtar Khan & Ors.
vs State of Madhya Pradesh, ; Direct recruits Class II Engineering Officers Association vs State of Maharashtra & Ors., ; ; P. Mahendran & Ors, etc.
vs State of Karnataka Singh & Ors.
, ; ; Krishena Kumar & Ors.
vs Union of India & Ors.
, ; ; A.K. Bhatnagar & Ors.
vs Union of India & Ors.
, ; ; Baleshwar Dass & Ors. etc.
vs State of U.P. & Ors.
, [1981] 1 S.C.C. 449; Narender Chadha & Ors.
vs Union of India & Ors.
, ; and Kumari Shrilekha Vidyarthi etc.
vs State of U.P. & Ors.
, , referred to.
|
ON: Civil Appeal No. 4297 of 1983.
From the Judgment and Order dated 26.10.1979 of the Allahabad High Court in C.M.W. No. 7168 of 1972.
Raja Ram Agarwal and A.K. Srivastava for the Appellants.
K.K. Venugopal, Rajinder Sachher, Satish Chandra, K.C. Dua, and J.P. Misra for the Respondents.
The Judgment of the Court was delivered by K.N. SAIKIA, J.
The State of U.P. by special leave appeals from the Judgment of the High Court of Allahabad dated 26.10.1979, allowing the respondents ' writ petition and holding that the State of U.P. and the Excise authori ties were not entitled to levy excise duty on the wastage of liquor in transit.
The respondents are manufacturers of high strength spirit classified as other sorts of spirit not otherwise specified ' under Section 28 of the United Prov inces Excise Act, 19 10, hereinafter referred to as 'the Act '.
After manufacture they transport those spirit in big containers from the distilleries to their warehouses, trans porting them on passes issued under section 16 of the Act.
In the bonded warehouses the same are sometimes diluted, separately bottled and sold.
They also used to manufacture and bottle military rum under a licence and supply the same to the defence personnel inside and outside the State of U.P.
The Officer Commanding Rail Head Depot A.S.C., Pathan kot having obtained permits from the State of Punjab for the import of military rum, against those permits the respond ents exported military rum from their distillery, under different passes.
The excise duty on military rum for export was Rs.7 per L.P. Litre while the rate for consumption within the State was 171 Rs.21 per L.P. Litre.
If the exported military rum was under bond thereupon duty was realised by the importing State from the importer thereof.
The respondents bottled the rum ac cording to rules and supplied the same to the consignees at the distillery premises and the consignments were taken by the consignees under the seal of the railway authorities to their respective destinations.
It appears by Notification dated March 26, 1979 in exercise of the powers under Sections 28 and 29 of the Act, read with section 21 of the U.P. General Clauses Act, 1904, and in supersession of the earlier Government Notification the Governor was pleased to direct that with effect from April 1, 1979 duty shall be imposed on country spirit at the rates specified in the schedule thereto and the duty was payable "before the issue from the distillery or bonded warehouse concerned save in the case of issued under bond".
By order dated 13.10.1970 notice was issued to the respond ents demanding Rs.4,295.55p.
on the wastage which was termed as "excess transit wastage" of rum calculated at the maximum rate of Rs.21 per L.P. Litre.
A representation of the re spondents dated November 9, 1970 was rejected by order dated 15.1.1972.
Another representation through the All India Distillers Association was also rejected by order dated August 28, 1972.
Several writ petitions challenging similar orders were filed by others before the Allahabad High Court for quashing the orders.
The respondents also filed Civil Miscellaneous Writ No. 7168 of 1972 under Article 226 of the constitution of India praying for appropriate writ, order or direction quashing the impugned orders dated 13.10.1970, 9.11.1970, 15.1.1972 and 28.8.1972 and for a mandamus commanding the State of U.P. not to realise or adjust any amount of duty towards wastage from the respondents ' advance duty account otherwise than in accordance with law and restraining them from giving effect to the impugned orders.
The High Court by the impugned judgment dated 26.10.1979 relying on an earlier Division Bench decision of the same High Court in M/s. Mohan Meakin Breweries Ltd. and Anr.
vs State of Uttar Pradesh and Ors.
, (Writ Petition No. 2604 of 1973, decided on 11.9.1979) allowed the writ petition and quashed the impugned orders thereby holding that no excise duty could legally be levied on the excess wastage the occurred during the transport of liquor in course of export, that is, taking out of U.P. otherwise than across a customs frontier as defined by the Central Government.
Mr. Raja Ram Agarwal, the learned counsel for the appel lants, submits that the duty has been levied keeping in mind the fact that in 172 U.P. excise duty is levied at two different rates at a higher rate when the liquor is sold inside the State, and at a lower rate when it is exported outside the State.
Counter vailing duty is paid by the importer on the quantity actual ly received in the importing State.
If there is excess wastage on transit the result is that the quantity actually received by the destination State is less than the quantity on which the State of U .P. charged the lower rate and, therefore, on the quantity shown as wastage the State of U.P. ought to recoup its differential duty by charging excise duty at the higher rate; and that this is clearly envisaged by the Act and the United Provinces Excise Manual Rules, hereinafter referred to as 'the Rules '.
Counsel further submits that it has a wholesome purpose, namely, to discourage evasion of duty and that there is no question of levying excise duty twice on the same article inasmuch as the amount of export duty actually paid is always deducted from the demand; and that it is a duty of regulatory charac ter meant to guard against perpetration of fraud or decep tion on excise revenue which the State is entitled to re ceive.
It is said to be a realisation of escaped duty justi fied by the implied presumption.
Mr. K.K. Venugopal, the learned counsel for the respond ents, submits that in this case while the exporting State, that is, U.P., levied export duty at a concessional rate the importing State levied countervailing duty on the quantity of rum imported; and the quantity exported and subjected to excise duty by the exporting State being the same as the quantity whereupon countervailing duty was imposed by the importing State, there could be no question of collecting differential duty on the excess wastage by the exporting State and if that was done it would amount to double taxa tion.
Explaining the procedure for export from U.P. counsel states that after export duty is paid, the exporter gets the alcohol released and transport it to the importing States in bottles or casks.
In the importing State countervailing duty is paid on full consignment at its destination and the seals of the bottles transported are intact.
So the entire con signment is taxed less the wastage.
The impugned demand notices have, submits counsel, rightly been quashed by the High Court and the appellants have rightly been restrained from levying such differential duty on excess wastage on transit in course of export.
The only question to be decided, therefore, is whether the differential duty is leviable under the Act and the Rules.
For answering the question we may refer to the Act and the Rules.
Included in Chapter V of the Act, which deals with duties and fees, Section 28 of the Act provides that an excise duty or a countervailing duty, as the 173 case may be, at such rate or rates as the State Government shall direct may be imposed either generally or for any specified local area on any excisable article stated in that section.
"Excise duty" and "countervailing duty" as defined in Section 3(3a) of the Act means any such excise duty or countervailing duty, as the case may be, as is mentioned in entry 51 of List II in the Seventh Schedule to the Constitu tion.
That entry reads as follows: "51.
Duties of excise on the following goods manufactured or produced in the State and countervailing duties at the same or lower rates on similar goods manufactured or produced elsewhere in India: (a) alcoholic liquors for human consumption; (b) opium, Indian hemp and other narcotic drugs and narcot ics; but not including medicinal and toilet preparations containing alcohol or any substance included in subparagraph (b) of this entry.
" The original Section 28 of the Act now re numbered as subsection (1) thereof, and sub sections 2 and 3 inserted by section 2 of the U.P. Act 7 of 1970 clearly covers Indian made foreign liquors.
There could be no dispute as to mili tary rum being one of the Indian made foreign liquors ex cisable under the Act.
A duty of excise under Section 28 is primarily levied upon a manufacturer or producer in respect of the excisable commodity manufactured or produced irre spective of its sale.
Firstly, it is a duty upon excisable goods, not upon sale or proceeds of sale of the goods.
It is related to production or manufacture of excisable goods.
The taxable event is the production or manufacture of the liq uor.
Secondly, as was held in A.B. Abdulkadir vs The State of Kerala.
reported in ; , an excise duty imposed on the manufacture and produc tion of excisable goods does not cease to be so merely because the duty is levied at a stage subsequent to manufac ture or production.
That was a case on Central Excise, but the principle is equally applicable here.
It does not cease to be excise duty because it is collected at the stage of issue of the liquor out of the distillery or at the subse quent stage of declaration of excess wastage.
Legislative competence under entry 51 of list II on levy of excise duty relates only to goods manufactured or produced in the State as was held in Bimal Chandra Banerjee vs State of Madhya Pradesh, ; In the instant case there is no 174 dispute that the military rum exported was produced in the State of U.P.
In State of Mysore & Ors.
vs M/s. D. Cawasji & Co., 10, which was on Mysore Excise Act, it was held that the excise duty must be closely related to production or manufacture of excisable goods and it did not matter if the levy was made not at the moment of production or manufacture but at a later stage and even if it was collected from retailer.
The differential duty in the in stant case, therefore, did not cease to be an excise duty even it was levied on the exporter after declaration of excess wastage.
The taxable event was still the production or manufacture.
It is settled law as was held in Bimal Chandra Banerjee vs State of Madhya Pradesh (supra), a case under the Madhya Pradesh Excise Act, that no tax can be levied by the State Government in the absence of specific authorisation by statute.
In that case the levy of duty on liquor which the contractor failed to lift was held to have been an attempt to exercise a power which the State Government did not possess.
Mr. Agarwal refers us to Rule 636 of the Rules which at the relevant time said: "636.
A distiller holding licences for bottling Indianmade foreign liquor of his own manufacture and for selling it by wholesale may export such foreign liquor bottled on his wholesale premises, to any other State or Union Territory in India subject to the following condi tions: (1) The exporter shall obtain from the importer a permit authorizing the import signed by the Chief Revenue Authority of the importing State or Union Territory or by an officer duly authorized in this behalf.
(2) The permit shall specify: (a) the name and address of the person of firm authorized to import; (b) the description and quantity of the foreign liquor to be imported; (c) the rate of duty chargeable in the importing State or Union Territory in case the Indian made foreign 175 liquor is imported in State or Union territory with which the state of Uttar Pradesh has entered into reciprocal arrangements for the adjustment of the excise duty by book transfer.
(d) the rate of duty charged in the importing State or Union Territory and the fact that it has been realized in advance in cases of import other than those covered by clause (c).
(3) On receipt of the permit the exporter shall deposit into the treasury; (a) Export duty on the total quantity of liquor to be ex ported; and (b) Where the export is made to a State or Union Territory with which the State of Uttar Pradesh has entered into a reciprocal arrangement for the adjustment of the excise duty by book transfer, and the rate higher than that enforced in the State of Uttar Pradesh, and that payable in the importing State or Union Territory on the total quantity of liquor to be exported.
(4) On receipt of the permit and the treasury receipt the wholesale vendor shall prepare a pass in form F.L. 23 in quadruplicate and submit it to the Excise Inspector, in charge of the distillery.
The Excise Inspector shall after satisfying himself that duty has been correctly realized, affix his signature to the pass.
The exporter shall then send one copy of the pass to the Collector of the district of export, one copy to the Chief Revenue Authority of the place of import or such other officer as may be authorised in this behalf.
One copy to the consignee and shall retain the fourth copy.
The treasury receipt shall always accompany the copy of the pass sent to the Collector of the exporting districts.
(5) The pass in form F.L. 23 shall state clearly: (a) the name and address of the consignor; 176 (b) the name and address of the consignee; (c) the exact description and quantity of each kind of foreign liquor despatched under the pass; (d) the route by which it is despatched; (e) the date of despatch; and (f) in case of export against duty paid permit, the fact that the duty has been prepaid in the State of import.
(6) A separate pass in form F.L. 23 shall be issued in respect of each consignment.
The Chief Revenue Authority or other officer of the place of import should send the copy of the pass received by him, duly countersigned, to the Excise Commissioner, Uttar Pradesh, in support of the claim for ' refund of duty annually after the close of the excise year.
(7) Should the rate of duty in the importing State be lower than that in force in Uttar Pradesh, exporter shall be entitled to a refund of the difference in duty.
If the duty has been prepaid in the State of import at the rate in force at the time of issuing import permit, the exporter shall be entitled to a refund of duty deposited by him in the State of export on verification of the claim by the Excise Inspector incharge of the distillery on the basis of export passes in form F.L. 23 duly countersigned by the Chief Revenue Authority of the State or Union Territory of import or the officer appointed in this behalf in token of receipt of the consignment of Indian made foreign liquor" Rule 637 provided than the duty, other that export duty, on foreign liquor manufactured at any distillery in Uttar Pradesh and exported therefrom on prepayment of duty to any State or Union Territory of India shall be credited by book transfer to the Government of the importing State or Union Territory after the close of the excise year.
Rule 637 A provided for registration of claims for refund or export of Indian made foreign liquor and provided that every distiller making exports of Indian made foreign liquor to other States, shall submit a statement showing all such exports made during the proceeding quarter, in form P.D. 31 to the Excise Commissioner, duly 177 verified by the officer incharge, distillery, despatching simultaneously a copy thereof to the Assistant Excise Com missioner of the charge.
Rule 37 B provided for maintenance of register of refunds against exports of Indian made for eign liquor and said that the Excise Inspector incharge of the distillery shall enter all the details given by the distillers in the statement in form P.D. 31, in a register to be maintained by him in form P.D. 31 A. As and when refunds are allowed by the Excise Commissioner, he shall make entries about refund in this register in relevant columns under his signature.
Similar entries shall also be made by the office of the Assistant Excise Commissioner concerned, on the copies of P.D. 31 statement received from the exporters, and be initialled by the Assistant Excise Commissioner after verification.
Thus it is seen that though not specifically mentioning charging up of differential export duty on excess wastage, the above rules definitely envisaged refund of excise duty of countervailing or equalising nature.
Mr. Agarwal also brings to our notice R.ale 8 14 which substituted the old Rule by the Excise Commissioner 's Noti fication No. 10909/IX.
241 A, dated February 8, 1978.
It provided as under: "Allowance for loss in transit.
An allowance upto 0.5 per cent will be made for the actual loss in transit by leakage, evaporation or other unavoidable cause, or spirit transport ed or exported under bond in wooden casks or metal vessels.
The allowance to be made under this rule will be determined by deducting from the quantity of spirit despatched from the distillery, the quantity received at the place of destina tion, both quantities being stated in terms of alcohol.
The allowance will be calculated on the quantity contained in each wooden cask metal vessels comprised in a consignment.
If the report of the officer by whom the consign ment of spirit has been gauged and proved at its destination shows that the wastage has occurred above the limit allowa ble the person executing the bond shall be liable to pay duty on so much of the deficiency as in excess of the allow ance.
The rate of duty leviable shall be the highest rate of duty leviable on such spirit in this State.
178 When the wastage does not exceed the prescribed limit, no action need be taken by the Officer in charge of the Distillery or bonded warehouse, as the case may be, but when the wastage exceeds the allowable limit, the Officer in charge of the Distillery shall obtain the expla nation of the Distillers or the person executing the bond and forward the same together with a full report of the circumstances to the Assistant Excise Commissioner or the Deputy Excise Commissioner of the charge in which the Dis tillery is situated.
The Assistant Excise Commissioner or the Deputy Excise Commissioner shall charge duty on excess wastage provided that when the total wastage in a consign ment is within the allowable limit.
Deputy/Assistant Excise Commissioner of the charge may write off the excess wastage in any particular wooden cask or metal vessel: Provided further that the Deputy Excise Commis sioner may write off the duty upto Rs.500, if he is satis fied that the excess wastage in a consignment was on account of an accident or other unavoidable cause but in other cases, the matter shall be referred to the Excise Commis sioner for orders.
Cases in which the Deputy Excise Commis sioner writes off duty shall be reported by him to the Excise Commissioner.
" It is emphasised by Mr. Agarwal that this provision is meant to discourage evasion of duty.
If any part of the lower export duty charged liquor is not in fact exported it should be made to pay the higher excise duty as payable on home consumed liquor.
It does not impose any new duty.
We are inclined to agree.
This rule does not authorise imposition of any new tax but only authorises charging up excise duty on the excess wastage of liquor in course of export which was charged at concessional rate.
The old Rule 814 of the Rules was made by B.O. No. 423/V 284 B, dated September 6, 1910 and No. 20/8 V E 980B, dated May 28, 1918 providing for allowance for Joss in transit.
It said: "An allowance will be made for the actual loss in transit, by leakage, evaporation or other unavoidable cause, of spirit transported or exported under bond.
The allowance is subject to the following maximum limits.
" Limits were prescribed differently for wooden casks and metal vessels, keeping in mind the duration of transport.
179 Thus, we find that the minimum limits of wastage in transit was prescribed even under the old rule.
This by implication enjoined that the excess wastage would be taxed as if not wasted.
The question may arise as to the date of the new Rule 814, to decide whether the impugned notices would be covered by it or by the old Rule.
Section 77 of the Act provides the answer.
It says: "77.
Publication of rules and notifications.
All rules made and notifications issued under the Act shall be published in the Official Gazette, and shall, have effect as if enacted in this Act from the date of such publication or from such other date as may be specified in that behalf." (The two provisos are not relevant for the purpose of this case) Both the old and the new Rule 8 14 must, therefore, have effect from the date of publication in the Official gazette or from such other date as may be specified in that behalf as if enacted in the Act.
The object of this ancient formu la, namely, "as if enacted in this Act" was to emphasise the fact that the notifications were to be as effective as the Act itself.
Its validity could be questioned in the same way as the validity of the Act could be questioned.
It is an ancient form of rule making still to be found in the Act.
Thus the Act having provided for fixed wastage allowance also in effect provided that the excess above the allowable wastage will be taxed.
It can not, therefore, be said that no such charging up of excise duty on the excess wastage in transit could be validly made.
The validity of Rule 814 had not been questioned before the High Court.
Absolute equality and justice is not attainable in taxing laws.
Legislature must be left to decide the State policy within Constitution al limitations.
In M/s. Mohan Meakin Breweries Ltd. vs Excise & Taxation Commissioner, Chandigarh, reported in 10: ; 1, the appellant company carried on the busi ness of manufacture, storage and sale of liquors.
Between June, 1967 and April 1969,.
it transported various quanti ties of liquor from its distilleries in U.P. to its bonded warehouse at Chandigarh.
On arrival, the consignments were examined by the Officer in Charge of the warehouse, and a shortage was found, exceeding the wastage allowance permis sible under rule 8 of the Punjab Bonded Warehouse Rules, 1957.
The Excise and Taxation Commissioner, exercising the powers of the .
Financial Commissioner. issued a show cause notice and then ordered 180 the appellant to pay duty on the wastage in excess.
The show cause notice required the appellant to pay duty on excess wastage in course of import of liquor from U.P. and the rules governing the appellant 's licence provided for a wastage allowance not exceeding 1% of the actual loss in transit by leakage or breakage of vessels or bottles con taining liquor, and if the wastage exceeded the prescribed limit the licensee should be liable to pay duty at the prescribed rate as if the wastage in excess of the pre scribed limit had actually been removed from the Warehouse, and it was also provided that the Financial Commissioner could in his discretion on goods cause being shown remit the whole or a part of the duty leviable on such wastage, and these provisions were challenged.
This Court held that the impugned rules did not impose any new duty or create any liability and that they were in essence and substance of a regulatory character meant to guard against perpetration of fraud or deception on the revenue.
"They provide for and regulate the storage and subsequently the removal of liquor from the bonded warehouse, on payment or otherwise of the duty which is chargeable under the Fiscal Rules of 1937.
" We agree with Mr. Agarwal that the instant Rules 636 and 814 are also a regulatory character and they are precautionary against perpetration of fraud on the excise revenue of the exporting State.
If out of the quantity of military rum in a consignment, a part or portion is claimed to have been wastage in transit and to that extent did not result in export, the State would, in the absence of reasonable expla nation, have reason to presume that the same have been disposed of otherwise than by export and impose on it the differential excise duty.
A statute has to be construed in light of the mischief it was designed to remedy.
There is no dispute that excise duty is a single point duty and may be levied at one of the points mentioned in Section 28.
The submission of the respondents that they paid duty on the entire quantity of rum to be exported under excise passes issued to the importer and that after payment of the export duty the rum bottled under the conditions enumerated in the Rules was supplied to the consignee at the distillery premises and the consignments were taken by the consignees under their seals and under the seal of the Railway authori ties and the consignments reached their destination with seals intact would not go to support the contention that the State Government was not competent to levy any duty on the excess wastage that is shown to have occurred during transit inasmuch as only a concessional rate of duty was levied on the liquor which was supposed to be exported out side the State of U.P. and if the entire quantity on which such concessional duty was paid did not reach its destination, and the 181 shortage is shown as wastage in transit, it surely meant that the short delivery was not exported.
The reason of the wastage would not be material so far as this conclusion is concerned.
Had this quantity been not exported but consumed locally the State would have derived higher duty of which it has been deprived.
The argument that countervailing duty is paid by the importers in the importing State on the quantity actually received, would also be immaterial for this conclusion though that may be of some importance for the purpose of revenue of the importing State as well as the consignee.
In case countervailing duty has been paid on the entire quanti ty of the consignment in the importing State there may be room for adjustment in accordance with the provisions of Rules 636, 637, 637 A and 637 B of the Rules.
The only material question may be whether the wastages was caused while the bottles were on transit but still within the territory of the exporting State or in transit inside the importing State.
If as a matter of fact it is found that the exported liquor actually crossed the territory of the ex porting State intact there may not be any justification for demanding differential duty.
That will of course be a ques tion of fact in no way affecting the right to demand the differential duty.
The decision in M/s. Ajudhia Distillery Rajaka, Sahaspur vs State of Uttar Pradesh and Anr., report ed in 1980 Taxation Law Reports 2262, quashing such a demand and holding that the exporting State had no jurisdiction to charge duty on the liquor wastage in transit cannot be said to have been correctly decided and the impugned judgment in the instant case suffers from the same infirmity, and has to be set aside.
Rule 814 envisages the levy of such differen tial duty.
There is no question of double charging or multi ple point charging in this case.
It is only a question of recovery of the difference on proof of the purposes for which lower duty was earlier levied having failed to be achieved entailing liability to make good the difference.
The Rules 636, 637 A and 637 are also relevant to this extent.
It was reiterated in M/s. Mc Dowell and Co. Ltd. vs Commercial Tax Officer, VH Circle, Hyderabad; , 14: ; , following Abdul Kadir (supra) that excise duty is a duty on the production or manufacture of goods produced or manufactured within the country though laws are to be found which impose a duty of excise at stages subsequent to the manufacture or production.
Similarly what was stated in Kalyani Stores vs The State of Orissa and Ors., ; , was reiterated in M/s Mohan Meakin Breweries Ltd. (supra) that a countervailing duty is meant "to counter balance; to avail 182 against with equal force or virtue; to compensate for some thing or serve as equivalent or substitute for".
A counter vailing duty is "meant to equalise the burden on alcoholic liquors manufactured or produced in the State.
" They may be imposed at the same rate as excise duty or at a lower rate so as to equalise the burden after taking into account the cost of transport from the place of manufacturing to the taxing State.
Countervailing duties are meant to equalise burden on alcoholic liquors imported from outside the State and the burden placed by excise duties on alcoholic liquors manufactured or produced in the State.
Countervailing duties can only be levied if similar goods are actually produced or manufactured in the State on which excise duties are being levied.
Thus, countervailing duty paid in the importing State does not ipso facto affect the excise revenue of the exporting State.
The fact that the importer is required to pay counter vailing duty on the imported military rum could, therefore, ipso facto be no ground for opposing the levy of differen tial duty on the excess wastage of exported rum that duty being levied with a view to safeguard the excise revenue of the exporting State.
If the excess wastage was actually lost to consumers while in the importing State no justification of such a duty may arise, that, however, would be an entire ly different question without in any way affecting the competence of the legislature of the exporting State to impose such a duty.
The fact that the exported rum was on payment of export duty or on bond would not again be materi al inasmuch as when the rum meant for export failed to be exported, there may be a presumption, may be rebuttable one, that what is shown as the excess has merged in mass of rum consumed within the State and was not separated from such a mass.
The imposition of differential duty was only deferred to this moment and it still continued to be a duty on pro duction or manufacture of rum.
It could not be regarded as a duty not connected with the taxable event of manufacture or production.
There is also no similarity with the excise duty sought to be levied only on the unlifted quantity of liquor by contractors which was held to be impermissible under Sec tions 28 and 29 of the Act in Excise Commissioner, U.P. vs Ram Kumar, and State of Madhya Pradesh vs Firm Gappulal; , In the instant case the military rum was obtained for the purpose of export and the lower export duty was paid and only when the rum did not result in export the question of imposing the differential duty arose.
The notion of the excise duty being changed or cancelled on account of what transpires later is not foreign to excise law.
Generally speaking 183 the imposing of the differential duty i.e. charging up the duty on the report of the excess wastage is the opposite of the system of drawback prevalent in some systems.
Drawback means the repayment of duties or taxes previously charged on commodities, from which they are relieved on exportation.
For example, in the customs laws of some countries an allow ance is made by the Government upon the duties due on im ported merchandise when the importer, instead of selling it within the country re exports it, and then the difference of duty is refunded, if already paid.
Similarly, in England there is a provision of refund of duties on British wine when the wine incidentally is spoilt or otherwise unfit for use or when delivered to another person has been returned to the maker as so spoilt or unfit.
The system of charging up the duty on the subsequent event of non export can not, therefore, be said to be irrespective of production or manufacture.
In the instant case if it is proved to the satisfaction of the appropriate authorities that countervailing duty had been paid on the entire consignment irrespective of the wastage then the question would arise as to whether the wastage could be ignored altogether by the exporting State as was done by the importing State.
Counsel for the parties had no objection to the idea that if the explanation for wastage was satisfactory and the countervailing duty was paid in the importing State on the entire consignment irre spective of the wastage, there would be room for adjustment by reducing the duty to similar extent.
For the foregoing reasons, the impugned Judgment is set aside and the appeal is allowed, but under the facts and circumstances of the case, without any order as to costs.
Y. Lal Appeal allowed.
| The respondents are manufacturers of high strength spirit.
They also used to manufacture and bottle military rum under a licence and supply the same to the defence personnel inside and outside the State of U.P.
The excise duty on military rum for export was Rs.7 per L.P. Litre while the rate for consumption within the State was Rs.21 per L .P. Litre.
An allowance upto 0.5 per cent for wastage during transit by leakage, evaporation etc.
was provided.
Against a proper permit the respondents supplied rum to the Officer Commanding Rail Road Depot.
A.S.C., Pathankot at the distillery premises and the consignments were taken by the consignees under the seal of the railway authorities to their respective destinations.
By a notification dated March 26, 1979, issued in super session to earlier notification, the Governor was pleased to direct that with effect from April 1, 1970 duty shall be imposed on country spirit at the rates mentioned in the schedule and that the duty was payable before issue from the distillery or bonded warehouse concerned save in the case of issued under bond.
Accordingly a notice was issued to the respondents demanding Rs.4,295.55P on the wastage which was termed as "excess transit wastage" of rum calculated at the maximum rate of Rs.21 per L .P. Litre.
The representation against the demand having been rejected, they filed a writ petition before the High Court challenging the validity of the orders and praying for a mandamus commanding the State of U.P. not to realise or adjust any amount of duty towards wastage from the respondents ' advance duty account and restraining them from giving effect to the impugned orders.
The High Court allowed the respondents ' writ petition holding that the State of U.P. and the Excise authorities were not entitled to levy 169 excise duty on the wastage of liquor in transit.
Hence this appeal by the State.
On the question, whether differential duty is leviable.
under the Act and the Rules.
Allowing the appeal, this Court, HELD: The Act having provided for fixed wastage allow ance also in effect provided that the excess above the allowable wastage will be taxed.
It cannot therefore be said that no such charging up of excise duty on the excess wast age in transit could be validly made.
[179E] Absolute equality and justice is not attainable in taxing laws.
Legislature must be left to decide the State policy within constitutional limitations.
[179F] Rules 636 and 814 are of regulatory character and they are precautionary against perpetration of fraud on the excise revenue of the exporting State.
A statute has to be construed in the light of the mischief it was designed to remedy.
[180D] In the instant case, the military rum was obtained for the purpose of export and the lower export duty was paid and only when the rum did not result in export the question of imposing the differential duty arose.
The notion of the excise duty being changed or cancelled on account of what transpires later is not foreign to excise law.
[182H] Drawback means the repayment of duties or taxes previ ously charged on commodities, from which they are relieved on exportation.
[183B] The system of charging up the duty on the subsequent event of non export cannot, therefore, be said to be irre spective of production or manufacture.
[183C] In the instant case, if it is proved to the satisfaction of the appropriate authorities that counter vailing duty had been paid on the entire consignment irrespective of the wastage then the question would arise as to whether the wastage could be ignored altogether by the exporting State as was done by the importing State.
[183D] A.B. Abdulkadir vs State of Kerala, ; ; Bimal Chandra Banerjee vs State of Madhya Pradesh, 467; State of Mysore & Ors.
vs M/s. D. Cawasji and Co., ; ; M/s. Mohan Meakin Breweries Ltd. vs Excise M/s. Mc Dowell and Co. Ltd. vs Commercial Tax Officer, VII Circle, Hyderabad, ; ; Kalyani Stores vs State of Orissa and Ors., ; ; Excise Commissioner, U.P. vs Ram Kumar, and State of Madhya Pradesh vs Firm Gappulal, ; , referred to.
Ajudhia Distillery Rajaka, Sahaspur vs State of U.P. and Anr., [1980] Taxation Law Repons 2262, overruled.
|
Criminal Appeal No. 385 of 1991.
From the Judgment and Order dated 18.4.1988 of the Andhra Pradesh High Court in Crl.
Revision Petition No. 41 of 1987.
M.C. Bhandare and Ms. C.K. Sucharita for the Appellants.
C.N. Sreekumar and G. Prabhakar (for the State) for the Respondents.
The Judgment of the Court was delivered by SAWANT, J.
Leave is granted.
Appeal is taken oj board for final hearing by consent of parties.
The 1st appellant and the 1st respondent were married ar Tirupati on February 27, 1975.
They separated in July 1978.
The 1st appellant filed a petition for dissolution of marriage in the Circuit of St. Louis Country Missouri, USA.
The 1st respondent sent her reply from here under protest.
The Circuit Court passed a decree for dissolution of marriage on February 19, 1980 in the absence of the 1st respondent.
826 2.
The 1st appellant had earlier filed a petition for dissolution of marriage in the Sub Court of Tirupati being O.P. No. 87/86.
In that petition, the 1st appellant filed an application for dismissing the same as not pressed in view of the decree passed by the Missouri Court.
On August 14, 1991 the learned sub Judge of Tirupati dismissed the petition.
On November 2, 1981, the 1st appellant married the 2nd appellant in Yadgirigutta, 1st respondent filed a criminal complaint against the appellants for the offence of bigamy.
It is not necessary to refer to the details of the proceedings in the said complaint.
Suffice it to say that in that complaint, the appellants filed an application for their discharge in view of the decree for dissolution of marriage passed by Missouri Court.
By this judgment of October 21, 1986, the learned Magistrate discharged the appellants holding that the complainant, i.e., the 1st respondent had failed to make out a prima facie case against the appellants.
Against the said decision, the 1st respondent preferred a Criminal Revision Petition to the High Court and the High Court by the impugned decision of April 18, 1987 set aside the order of the magistrate holding that a photostat copy of the judgment of the Missouri Court was not admissible in evidence to prove the dissolution of marriage.
The Court further held that since the learned Magistrate acted on the photostat copy, he was in error in discharging the accused and directed the Magistrate to dispose of the petition filed by the accused, i.e., appellants herein for their discharge, afresh in accordance with law.
It is aggrieved by this decision that the present appeal is filed.
It is necessary to note certain facts relating to the decree of dissolution of marriage passed by the Circuit Court of St. Louis Country Missouri, USA.
In the first instance, the Court assumed jurisdiction over the matter on the ground that the 1st appellant had been a resident of the State of Missouri for 90 days next preceding the commencement of the action and that petition in that Court.
Secondly, the decree has been passed on the only ground that there remains no reasonable likelihood that the marriage between the parties can be preserved, and that the marriage is, therefore, irretrievably broken ' '.
Thirdly, the 1st respondent had not submitted to the jurisdiction of the Court.
From the record, it appears that to the petition she had filed two replies of the same date.
Both are identical in nature except that one of the replies begins with an additional averment as follows: ``without prejudice to the contention that this respondent is not submitting to the jurisdiction of this hon 'ble court, this respondent sub 827 mits as follows ' '.
She had also stated in the replies, among other things, that (i) the petition was not maintainable, (ii) she was not aware if the first appellant had been living in the State of Missouri for more than 90 days and that he was entitled to file the petition before the Court, (iii) the parties were Hindus and governed by Hindu Law, (iv) she was an Indian citizen and was not governed by laws in force in the State of Missouri and , therefore, the Court had no jurisdiction to entertain the petition, (v) the dissolution of the marriage between the parties was governed by the and that it could not be dissolved in any other way except as provided under the said Act, (vi) the Court had no jurisdiction to enforce the foreign laws and none of the grounds pleaded in the petition was sufficient to grant any divorce under the .
Fourthly, it is not disputed that the 1st respondent was neither present nor represented in the Court passed the decree in her absence.
In fact, the Court has in terms observed that it had no jurisdiction ``in personam ' ' over the respondent or minor child which was born out of the wed lock and both of them had domiciled in India.
Fifthly, in the petition which was filed by the 1st appellant in that Court on October 6, 1980, besides alleging that he had been a resident of the State of Missouri for 90 days or more immediately preceding the filing of the petition and he was then residing at 23rd Timber View Road, Kukwapood, in the Country of St. Louis, Missouri, he had also alleged that the 1st respondent had deserted him for one year or more next preceding the filing of the petition by refusal to continue to live with the appellant in the United States and particularly in the State of Missouri.
On the other hand, the averments made by him in his petition filed in the court of the Subordinate Judge, Tirupati in 1978 shows that he was a resident of Apartment No. 414, 6440, South Claiborn Avenue, New Orleans, Louisiana, United States and that he was a citizen of India.
He had given for the service of all notices and processes in the petition, the address of his counsel Shri PR Ramachandra Rao, Advocate, 16 11 1/3, Malakpet, Hyderabad 500 036.
Even according to his averments in the said petition, the 1st respondent had resided with him at Kuppanapudi for about 4 to 5 months after th marriage.
Thereafter she had gone to her parental house at Relangi, Tanuka Taluk, West Godawari District.
He was, thereafter, sponsored by his friend Prasad for a placement in the medical service in the United States and had first obtained employment in Chicago and thereafter in Oak Forest and Greenville Springs and ultimately in the Charity Hospital in Louisiana at New Orleans where he continued to be emp 828 loyed.
Again according to the averments in the said petition, when the 1st respondent joined him in the United States, both of them had stayed together as husband and wife at New Orleans.
The 1st respondent left his residence in New Orleans and went first to Jackson, Texas and, thereafter, to Chicago to stay at the residence of his friend, Prasad.
Thereafter she left Chicago for India.
Thus it is obvious from these averments in the petition that both the 1st respondent and the 1st petitioner had last resided together at New Orleans, Louisiana and never within the jurisdiction of the Circuit Court of St. Louis Country in the State of Missouri.
The averments to that effect in the petition filed before the St. Louis Court are obviously incorrect.
Under the provisions of the (hereinafter referred to as the ``Act ' ') only the District Court within the local limits of whose original civil jurisdiction (i) the marriage was solemnized, or (ii) the respondent, at the time of the presentation of the petition resides, or (iii) the parties to the marriage last resided together, or (iv) the petitioner is residing at the time of the presentation of the petition, in a case where the respondent is, at the time, residing outside the territories to which the Act extends, or has not been heard of as being alive for a period of seven years of more by those persons who would naturally have heard of him if he were alive, has jurisdiction to entertain the petition.
The Circuit Court of St. Louis Country, Missouri had, therefore, no jurisdiction to entertain the petition according to the Act under which admittedly the parties were married.
Secondly, irretrievable breakdown of marriage is not one of the grounds recognised by the Act for dissolution of marriage.
Hence, the decree of divorce passed by the foreign court was on a ground unavailable under the Act.
Under Section 13 of the Code of Civil Procedure 1908 (hereinafter referred to as the ``Code ' '), a foreign judgment is not conclusive as to any matter thereby directly adjudicated upon between the parties if (a) it has not been pronounced by a Court of competent jurisdiction; (b) it has not been given on the merits of the case; (c) it is founded on an incorrect view of international law or a refusal to recognize the law of India in cases in which such law is applicable; (d) the proceedings are opposed to natural justice, (e) it is obtained by fraud, (f) it sustains a claim founded on a breach of any law in force in India.
As pointed out above, the present decree dissolving the marriage passed by the foreign court is without jurisdiction according to the Act as neither the marriage was celebrated nor the parties last 829 resided together nor the respondent resided within the jurisdiction of that Court.
The decree is also passed on a ground which is not available under the Act which is applicable to the marriage.
What is further, the decree has been obtained by the 1st appellant by stating that he was the resident of the Missouri State when the record shows that he was only a bird of passage there and was ordinarily a resident of the State of Louisiana.
He had, if at all, only technically satisfied the requirement of residence of ninety days with the only purpose of obtaining the divorce.
He was neither domiciled in that State nor had he an intention to make it his home.
He had also no substantial connection with the forum.
The 1st appellant has further brought no rules on record under which the St. Louis Court could assume jurisdiction over the matter.
On the contrary, as pointed out earlier, he has in his petition made a false averment that the 1st respondent had refused to continue to stay with him in the State of Missouri where she had never been.
In the absence of the rules of jurisdiction of that court, we are not aware whether the residence of the 1st respondent within the State of Missouri was necessary to confer jurisdiction on that court, and if not, of the reasons for making the said averment.
Relying on a decision of this Court in Smt.
Satya vs Teja Singh, it is possible for us to dispose of this case on a narrow ground, viz., that the appellant played a fraud on the foreign court residence does not mean a temporary residence for the purpose of obtaining a divorce but habitual residence or residence which is intended to be permanent for future as well.
We remain from adopting that course in the present case because there is nothing on record to assure us that the Court of St. Louis does not assume jurisdiction only on the basis of a mere temporary residence of the appellant for 90 days even is such residence is for the purpose of obtaining divorce.
We would, therefore, presume that the foreign court by its own rules of jurisdiction had rightly entertained the dispute and granted a valid decree of divorce according to its law.
The larger question that we would like to address ourselves to is whether even in such cases, the Courts in this country should recognise the foreign divorce decrees.
The rules of Private International Law in this country are not codified and are scattered in different enactments such as the Civil Procedure Code, the Contract Act, the Indian Succession Act, the Indian Divorce Act, the Special Marriage Act etc.
In addition, some rules have also been evolved by judicial decisions.
In matters of status or legal capacity of natural persons, matrimonial disputes, custody of 830 children, adoption, testamentary and intestate succession etc.
the problem in this country is complicated by the fact that there exist different personal laws and no uniform rule can be laid down for all citizens.
The distinction between matters which concern personal and family affairs and those which concern commercial relationships, civil wrongs etc.
is well recognised in other countries and legal systems.
The law in the former area tends to be primarily determined and influenced by social, moral and religious considerations, and public policy plays a special and important role in shaping it.
Hence, in almost all the countries the jurisdicational procedural and substantive rules which are applied to disputes arising in this area are significantly different from those applied to claims in other areas.
That is as it ought to be.
For, no country can afford to sacrifice its internal unity, stability and tranquility for the sake of uniformity of rules and comity of nations which considerations are important and appropriate to facilitate international trade, commerce, industry, communication, transport, exchange of services, technology, manpower etc.
This glaring fact of national life has been recognised both by the Hague Convention of 1968 on the Recognition of Divorce and Legal Seperations as well as by the Judgments Convention of the European Community of the same year.
Article 10 of the Hague Convention expressly provides that the contracting States may refuse to recognise a divorce or legal separation if such recognition is manifestly incompatible with their public policy.
The Judgments Convention of the European Community expressly excludes from its scope (a) status or legal capacity of natural persons, (b) rights in property arising out of a matrimonial relationship, (c) wills and succession, (d) social security and (e) bankruptcy.
A separate convention was contemplated for the last of the subjects.
We are in the present case concerned only with the matrimonial law and what we state here will apply strictly to matters arising out of and ancillary to matrimonial disputes.
The Courts in this country have so far tried to follow in these matters the English rules of Private International Law whether common law rules or statutory rules.
The dependence on English Law even in matters which are purely personal, has however time and again been regretted.
But nothing much has been done to remedy the situation.
The labours of the Law Commission poured in its 65th Report on this very subject have not fructified since April 1976, when the Report was submitted.
Even the British were circumspect and hesitant to apply their rules of law in such matters during their governance of this country and had left the family law to be governed by the customary rules of the diffe 831 rent communities.
It is only where was a void that they had stepped in by enactments such as the Special Marriage Act, Indian Divorce Act, Indian Succession Act etc.
In spite, however, of more than 43 years of independence we find that the legislature has not thought it fit to enact rules of Private International Law in this area and in the absence of such initiative from the legislature the courts in this country their inspiration, as stated earlier, from the English rules.
Even in doing so they have not been uniform in practice with the result that we have some conflicting decisions in the area.
We cannot also lose sight of the fact that today more than ever in the past, the need for definitive rules for recognition of foreign judgments in personal and family matters, and particularly in matrimonial disputes has surged to the surface.
Many a man and woman of this land with different personal laws have migrated and are migrating to different countries either to make their permanent abode there or for temporary residence.
Likewise there is also immigration of the nationals of other countries.
The advancement in communication and transportation has also made it easier for individuals to hop from one country to another.
It is also not unusual to come across cases where citizens of this country have been contracting marriages either in this country or abroad with nationals of the other countries or among themselves, or having married here, either both or one of them migrate to other countries.
There are also cases where parties having married here have been either domiciled or residing separately in different foreign countries.
This migration, temporary or permanent, has also been giving rise to various kinds of matrimonial disputes destroying in its turn the family and its peace.
A large number of foreign decrees in matrimonial matters is becoming the order of the recognition of the foreign judgments in these matters.
The minimum rules of guidance for securing the certainty need not await legislative initiative.
This Court can accomplish the modest job within the framework of the present statutory provisions if they are rationally interpreted and extended to achieve the purpose.
It is with this intention that we are undertaking this venture.
We aware that unaided and left solely to our resources the rules of guidance which we propose to lay down in this area may prove inadequate or miss some aspects which may not be present to us at this juncture.
But a begining has to be made as best as one can, the lacunae and the errors being left to be filled in and corrected by future judgments.
832 12.
We believe that the relevant provisions of Section 13 of the Code are capable of being interpreted to secure the required certainty in the sphere of this branch of law in conformity with public policy, justice, equity and good conscience, and the rules so evolved will protect th sanctity of the institution of marriage and the unity of family which are the corner stones of our societal life.
Clause (a) of Section 13 states that a foreign judgment shall not be recognised if it has not been pronounced by a court of competent jurisdiction.
We are of the view that this clause should be interpreted to mean that only that court will be a court of competent jurisdiction which the Act or the law under which the parties are married recognises as a court of competent jurisdiction to entertain the matrimonial dispute.
Any other court should be held to be a court without jurisdiction unless both parties voluntarily and unconditionally subject themselves to the jurisdiction of that court.
The expression ``competent court ' ' in Section 41 of the has also to be construed likewise.
Clause (b) of Section 13 states that if a foreign has not been given on the merits of the case, the courts in this country will not recognise such judgment.
This clause should be interpreted to mean (a) that the decision of the foreign court should be on a ground available under the law under which the parties are married, and (b) that the decision should be a result of the contest between the parties.
The latter requirement is fulfilled only when the respondent is duly served and voluntarily and unconditionally submits himself/herself to the jurisdiction of the court and contests the claim, or agrees to the passing of the decree with or without appearance.
A mere filing of the reply to the claim under protest and without submitting to the jurisdiction of the court, or an appearance in the Court either in person or through a representative for objecting to the jurisdiction of the Court, should not be considered as a decision on the merits of the case.
In this respect the general rules of the acquiescence to the jurisdiction of the Court which may be valid in other matters and areas should be ignored and deemed inappropriate.
The second part of clause (c) of Section 13 states that where the judgment is founded on a refusal to recognise the law of this country in cases in which such law is applicable, the judgment will not be recognised by the courts in this country.
The marriages which take place in this country can only be under either the customary or the statutory law in force in this country.
Hence, the only law that can be applicable 833 to the matrimonial disputes is the one under which the parties are married, and no other law.
When, therefore, a foreign judgment is founded on a jurisdiction or on ground not recognised by such law, it is a judgment which is in defiance of the Law.
Hence, it is not conclusive of the matters adjudicated therein and therefore, unenforceable in this country.
For the same reason, such a judgment will also be unenforceable under clause (f) of Section 13, since such a judgment would obviously be in breach of the matrimonial law in force in this country.
Clause (d) of Section 13 which makes a foreign judgment unenforceable on th ground that the proceedings in which it is obtained are opposed to natural justice, states no more than an elementary principle on which any civilised system of justice rests.
However, in matters concerning the family law such as the matrimonial disputes, this principle has to b extended to mean something more than mere compliance with the technical rules of procedure.
If the rule of audi alteram partem has any meaning with reference to the proceedings in a foreign court, for the purposes of the rule it should not be deemed sufficient that the respondent has been duly served with the process of the court.
It is necessary to ascertain whether the respondent was in a position to present or represent himself/herself and contest effectively the said proceedings.
This requirement should apply equally to the appellate proceedings if and when they are file by either party.
If the foreign court has not ascertained and ensured such effective contest by requiring the petitioner to make all necessary provisions for the respondent to defend including the costs of travel, residence and litigation where necessary, it should be held that the proceedings are in breach of the principles of natural justice.
It is for this reason that we find that the rules of Private International Law of some countries insist, even in commercial matters, that the action should be filed in the forum where the defendant is either domiciled or is habitually resident.
It is only in special cases which is called special jurisdiction where the claim has some real link with other forum that a judgment of such forum is recognised.
This jurisdiction principle is also recognised by the Judgments Convention of this European Community .
If, therefore, the courts in this country also insist as a matter of rule that foreign matrimonial judgment will be recognised only it it is of the forum where the respondent is domiciled or habitually and permanently resides, the provisions of clause (d) may be held to have been satisfied.
The provision of clause (e) of Section 13 which requires that the 834 courts in this country will not recognise a foreign judgment if it has been obtained by fraud, is self evident.
However, in view of the decision of this Court in Smt.
Satya vs Teja Singh, (supra) it must be understood that the fraud need not be only in relation to the merits of the mater but may also be in relation to jurisdictional facts.
From the aforesaid discussion the following rule can be deduced for recognising foreign matrimonial judgment in this country.
The jurisdiction assumed by the foreign court as well as the grounds on which the relief is granted must be in accordance with the matrimonial law under which the parties are married.
The exceptions to this rule may be as follows: (i) where the matrimonial action is filed in the forum where the respondent is domiciled or habitually and permanently resides and the relief is granted on a ground available in the matrimonial law under which the parties are married; (ii) where the respondent voluntarily and effectively submits to the jurisdiction of the forum as discussed above and contests the claim which is based on a ground available under the matrimonial law under which the parties are married; (iii) where the respondent consents to the grant of the relief although the jurisdiction of the forum is not in accordance with the provisions of the matrimonial law of the parties.
The aforesaid rule with its stated exceptions has the merit of being just and equitable.
It does no injustice to any of the parties.
The parties do and ought to know their rights and obligations when they marry under a particular law.
They cannot be heard to make a grievance about it later or allowed to bypass it by subterfuges as in the present case.
The rule also has an advantage of rescuing the institution of marriage from the uncertain maze of the rules of the Private International Law of the different countries with regard to jurisdiction and merits based variously on domicile, nationality, residence permanent or temporary or ad hoc forum, proper law etc.
and ensuring certainty in the most vital field of national life and conformity with public policy.
The rule further takes account of the needs of modern life and makes due allowance to accommodate them.
Above all, it gives protection to women, the most vulnerable section of our society, whatever the strata to which they may belong.
In particular it frees them from the bondage of the tyrannical and servile rule that wife 's domicile follows that of her husband and that it is the husband 's domicilliary law which determines the jurisdiction and judges the merits of the case.
Since with regard to the jurisdiction of the forum as well as the ground on which it is passed the foreign decree in the present case 835 is not in accordance with the Act under which the parties were married, and the respondent had not submitted to the jurisdiction of the court or consented to its passing, it cannot be recognised by the courts in this country and is, therefore, unenforceable.
The High Court, as stated earlier, set aside the order of the learned Magistrate only on the ground that the photostat copy of the decree was not admissible in evidence.
The High Court is not correct in its reasoning.
Under Section 74(1)(iii) of the (Hereinater referred to as the "Act") documents forming the acts or records of the acts of public judicial officers of a foreign country are public documents.
Under Section 76 read with Section 77 of the Act, certified copies of such documents may be produced in proof of their contents.
However, under Section 86 of the Act there is presumption with regard to the genuineness and accuracy of such certified copy only if it is also certified by the representative of our Central Government in or for that country that the manner in which it has been certified is commonly in use in that country for such certification.
Section 63(1) and (2) read with Section 65(e) and (f) of the Act permits certified copies and copies made from the original by mechanical process to be tendered as secondary evidence.
A photostat copy is prepared by a mechanical process which in itself ensures the accuracy of the original.
The present photostat copies of the judicial record of the Court of St. Louis is certified for the Circuit Clerk by the Deputy Clerk who is a public officer having the custody of the document within the meaning of Section 76 of the Act and also in the manner required by the provisions of the said section.
Hence the Photostat copy per se is not inadmissible in evidence.
It is inadmissible because it has not further been certified by the representative of our Central Government in the United States as required by Section 86 of the Act.
The expression "certified copy" of a foreign judgment in Section 14 of the Code has to be read consistent with the requirement of Section 86 of the Act.
While, therefore, holding that the document is not admissible in evidence for want of the certificate under Section 86 of the Act and not because it is a photostat copy of the original as held by the High Court, we uphold the order of the High Court also on a more substantial and larger ground as stated in paragraph 14 above.
Accordingly, we dismiss the appeal and direct the learned Magistrate to proceed with the matter pending before him according to law as expenditiously as possible, preferably within four months from now as the prosecution is already a decade old.
T.N.A. Appeal dismissed.
| The first appellant and the first respondent were married at Tirupati on 27.2.1975 according to Hindu Law.
They separated in July 1978.
The appellant husband filed a petition for dissolution of the marriage in the Sub Court of Tirupati stating that he was a resident of South Claiborn Avenue, New Orleans, Louisiana, and that he was a citizen of India and that he and his wife last resided together at New Orleans, Louisiana.
Subsequently he filed another petition for dissolution of marriage in the Circuit Court St. Louis Country, Missouri, USA alleging that he has been a resident of the State of Missouri for 90 days or more immediately preceding th filing of the petition by refusing to continue to live with the appellant in the US and particularly in the State of Missouri.
But from the averments made by him in the petition before the Sub Judge, Tirupati it was obvious that he and his wife had last resided together at New Orleans, Louisiana and never within the jurisdiction of th Circuit Court of St. Louis Country in the State of Missouri.
The respondent wife filed her reply raising her objections to the maintainability of the petition.
She also clearly stated that her reply was without prejudice to her contention that she was not submitting to the jurisdiction of the foreign court.
The Circuit Court Missouri assumed jurisdiction on the ground that the 1st Appellant had been a resident of the State of Missouri for 90 days next preceding the commencement of the action in the Court.
In the absence of the respondent wife the Circuit Court, Missouri passed a decree for dissolution of marriage on the only ground that the marriage has irretrievably down.
Subsequent to the passing of the decree by the Circuit Court, Missouri, the appellant filed an application for dismissal of his earlier petition before the Sub Court of Tirupati and the same was dismissed.
823 On 2nd November 1981 the last appellant married appellant No. 2.
Thereafter, the 1st respondent filed a criminal complaint against the appellants for the offence of bigamy.
The appellants filed an application for their discharge in view of the decree for dissolution of marriage passed by the Circuit Court, Missouri.
The Magistrate discharged the appellants by holding that the complainant wife had failed to make out a prima facie case against the appellants.
The respondent preferred a Criminal Revision Petition before the High Court which set aside the order of the Magistrate by holding (i) that a photostat copy of the judgment of Missouri Court was not admissible in evidence; (ii) since the Learned Magistrate acted on the photostat copy of the judgment, he was in error in discharging the accused.
Accordingly the High Court directed the Magistrate to dispose of the petition filed by the appellants for their discharge afresh in accordance with law.
Aggrieved by the decision of the High Court the appellants filed appeal in this Court.
Dismissing the appeal, this Court, HELD: 1.
The decree dissolving the marriage passed by the foreign court is without jurisdiction according to the as neither the marriage was celebrated nor the parties last resided together nor the respondent resided within the jurisdiction of that Court.
Further, irretrievable breakdown of marriage is not one of the grounds recognised by the Act of dissolution of marriage.
Hence, the decree of the divorce passed by the foreign court was on a ground unavailable under the Act which is applicable to the marriage.
Since with regard to the jurisdiction of the forum as well as the ground on which it is passed the foreign decree in the present case is not in accordance with the Act under which the parties were married, and the respondent had not submitted to the jurisdiction of the court or consented to its passing, it cannot be recognised by the courts in this country and is therefore, unenforceable.
[828H, 829A, 828E, 834H, 835A] 2.
Residence does not mean a temporary residence for the purpose of obtaining a divorce but habitual residence or residence which is intended to be permanent for future as well.
[829E] Smt.
Satya vs Teja Singh, , referred to.
The rules of Private International Law in this country are not codified and are scattered in different enactments such as the Civil Procedure Code, the Contract ACt, the Indian Succession Act, the Indian Divorce Act, the Special Marriage Act etc.
In addition, some 824 rules have also been evolved by judicial decisions.
In matters of status or legal capacity of natural persons, matrimonial disputes, custody of children, adoption, testamentary and intestate succession etc.
the problem in this country is complicated by the fact that there exist different personal laws and no uniform rule can be laid down for all citizens.
Today more than ever in the past, the need for definitive rules for recognition of foreign judgments in personal and family matters, and particularly in matrimonial disputes has surged to the surface.
A large number of foreign decrees in matrimonial matters is becoming the order of the day.
A time has, therefore, come to ensure certainty in the recognition of the foreign judgments in these matters.
The minimum rules of guidance for securing the certainty need not await legislative initiative.
This Court can accomplish the modest job within the frame work of the present statutory provisions if they are rationally interpreted and extended to achieve the purpose.
Though the proposed rules of guidance in this area may prove inadequate or miss some aspects which may not be present to us at this juncture, yet a begining has to be made as best as one can, the lacunae and the errors being left to be filled in and corrected by future judgments.
[829H, 830A, 831C, F H] 4.
The relevant provisions of Section 13 of the CPC are capable of being interpreted to secure the required certainty in the sphere of this branch of law in conformity with public policy, justice, equity and good conscience, and the rules so evolved will protect the sanctity of the institution of marriage and the unity of family which are the corner stones of our social life.
[832A] 4.1 On an analysis and interpretation of Section 13 of CPC the following rule can be deduced for recognising a foreign matrimonial judgment in this country.
The jurisdiction assumed by the foreign court as well as the grounds on which the relief is granted must be in accordance with the matrimonial law under which the parties are married.
The exceptions to this rule may be as follows; (i) where the matrimonial action is filed in the forum where the respondent is domiciled or habitually and permanently resides and the relief is granted on a ground available in the matrimonial law under which the parties are married; (ii) where the respondent voluntarily and effectively submits to the jurisdiction of the forum and contests the claim which is based on a ground available under the matrimonial law under which the parties are married; (iii) where the respondent consents to the grant of the relief although the jurisdiction of the forum is not in accordance with the provisions of the matrimonial law of the parties.
[834B D] 825 5.
The High Court erred in setting aside the order of the learned Magistrate only on the ground that the photostat copy of the decree was not admissible in evidence.
In the instant case photostat copies of the judicial record of the Court of St. Louis is certified for th Circuit Clerk by the Deputy clerk who is a public officer having the custody of the document within the meaning of Section 76 of the also in the manner required by the provisions of the said section.
Hence the photostat copy per se is not inadmissible in evidence.
It is inadmissible because it has not further been certified by the representative of our Central Government in the United States as required by Section 86 of the Act.
Therefore the document is not admissible in evidence for want of the certificate under Section 86 of the Act and not because it is a photostat copy of the original as held by the High Court.
[835B, E, F G] 6.
The Magistrate is directed to proceed with th matter pending before him according to law as expeditiously as possible, preferably within four months.
[835G]
|
ivil Appeal No. 4236 of 1988.
From the Judgment and Order dated 13.4.1988 of the Bombay High Court in W.P. No. 1689 of 1987.
V.M. Tarkunde, Mrs. Nandini Gore, Ms. Aditi Chaudhary and Mrs. M. Karanjawala (NP) for the appellant.
Dr. Y.S. Chitale, Shishir Sharma and P.H. Parekh for the Respondents.
The Judgment of the Court was delivered by RAY, J.
This appeal leave is directed against the judgment and order passed by the High Court at Bombay in Writ Petition No. 1689 of 1987 allowing the writ petition, setting aside the judgment and decree passed by the Trial Court and affirmed by the lower appellate court and thereby dismissing the suit by filed by the plaintiff (appellant in this appeal) for eviction of the tenant respondents.
The matrix of the case as appears from the pleadings of the parties is as follows: The plaintiff appellant, Gulabbai instituted Regular Civil Suit No. 19 of 1979 in the court of Shri S.S. Patil, III Jt.
Civil Judge, J.D., Ahmednagar at Ahmednagar for vacant possession of the suit property consisting of part of survey No. 3576 in the city of Ahmednagar and also for the arrears of rent and the costs of the suit.
Originally the said property belonged to the Imarat Company Private Limited.
The plaintiff purchased the said property from Imarat Company Private 945 Limited bearing numbers on the front on the eastern as 81 to 83 and rear part on the West 89 to 91, for a consideration of Rs. 34,000 on August 12, 1976.
At the time of purchase of the premises the said Amritlal Mutha in the name of his wife.
Gulabbai, the plaintiff.
The defendants were in possession of a part of the said premises bearing Nos.
81 to 83 on eastern side whereas the western part on the ground floor bearing Nos. 89 to 91 was possessed by the brother of Amritlal Mutha i.e. kanhyalal Mutha who has been running a provision store under the name and style of `Mutha Provision Store ' for the last 15 years.
The defendant Nos. 1 and 4 i.e. Nalin Narsi Vohra and Mulji Narsi Vohra are the brothers whereas defendant Nos. 2 and 3 are the wife and son of the defendant No. 1 respectively.
According to the plaintiff, the defendants are in possession of the suit shop Nos.
81 to 83 and measuring 21ft.
x 15ft.
on the monthly rent of Rs. 21.28 ps.
plus education cess Rs. 2.55 ps.
The tenancy commences from the first day of every month and ends on the last day of the said month according to the English calendar.
Prior to the purchase of the suit premises, the tenancy is in the name of defendant No. 1 i.e. Nalin Narsi Vohra and the rent receipts too were in the name of the defendant No. 1 only.
According to the plaintiff, the original agreement of defendant with Imarat Company Pvt. Ltd. is to pay rent from month to month.
After purchase of the said property.
Imarat Company intimated to the tenant defendant No. 1 about the said purchase by the plaintiff.
It has been pleaded by the plaintiff that the defendant No. 1 assured the plaintiff after purchase of the suit house, that he would vacate the said premises.
However, the defendants demanded `Pagadi ' amounting to Rs. 25000 in order to vacate the suit premises.
It was alleged by the plaintiff that the defendants were in arrears of rent since 12.8.1975 till 15.12.1977.
The plaintiff, therefore, issued a notice dated 15.12.1977 of ejectment and thereby demanded No. 1 after receipt of the notice sent Rs. 571.92 ps.
by Money Order.
But it was refused by the plaintiff as the rent was not correctly calculated.
The defendants again sent Rs. 960 by Demand Draft which was also refused by the plaintiff as miscalculated.
The defendants sent thereafter Rs. 658.55 ps.
by Money Order which was accepted by the plaintiff.
According to the plaintiff the defendants are monthly tenants and so according to her, defendants are defaulter for non paying the rent of the suit premises for more than six months.
The plaintiff also stated that her husband, Amritlal Mutha is a 946 Taxation Consultant and the suit premises are required for the purpose of office for her husband as her husband has no other suitable accommodation except the suit premises to open his office.
It has also been pleaded in the plaint that the defendants no longer require the suit premises for the purpose of business because the defendant Nos. 1 to 3 are at present residing at Pune and doing the business at Pune under the name and style of `Ashok and Company ' which deals with the sale and purchase of machine tools.
It has further pleaded by the plaintiff that the defendants are in possession of three other business at Nagar which are situated near the suit premises.
The defendants have purchased one shop in front of Kohinoor Cloth Store in the year 1964 and defendant Nos. 1 to 4 are partners in the shop `Liberty Dresses ' which deals with Reddy made garments and Hosiery.
The defendant Nos. 1 to 4 have also purchased the premises for Rs. 13,000 in the year 1972 from Imarat Company Private Ltd. which is also situated in front of the suit premises.
The defendants have also purchased one premises from Imarat Company Private Ltd.
In the year 1974 for 12,000.
The defendants have removed the middle wall in between the two properties mentioned above and opened a big shop and are carrying the business of readymade garments and woolen hosiery called as `Madura Stores '.
It is the case of the plaintiff that the defendants no more require the suit premises for business purposes and prayed for an order of eviction of the defendants from the suit premises on the ground of bona fide requirement.
It has also been pleaded that greater hardship would be caused to the plaintiff if the possession did not hand over the suit premises to the plaintiff after the receipt of the notice and the instant suit was filed on January 8, 1979.
The defendant respondent Nos. 1 to 4 filed a written statement exhibit 10 denying all the material allegations made by the plaintiff.
According to the defendants, the description of the suit house was not made properly in the plaint and hence on that ground the suit is liable to be dismissed.
The defendants has stated that the suit property is in their possession since the last 20 years at the annual rent of Rs. 255.36 ps.
They have further stated that the rent of the suit premises is to be given after every 1 year which the defendants had been regularly paying to Imarat Company Pvt.
Ltd. The defendants admit that the suit premises has been purchased by the plaintiff in the year 1975 and the defendants offered the rent to the plaintiff on several occasions but the plaintiff refused to accept the same.
Ultimately, they sent the rent by Money Order which was also refused by the plaintiff.
Again, in order to show their willingness the defendants sent an amount of 947 Rs. 960 by Demand Draft but it was also refused by the plaintiff.
The defendants thereafter have sent Rs. 658.58 ps.
which was accepted by the plaintiff on December 27, 1977.
Thus, the rent was paid upto 30.11.1977 and again from 1.12.1977 to 30.9.1978, the defendants paid the rent of the suit premises to the plaintiff and husband of the plaintiff accepted the same, but he did not give the receipt of the same.
The defendants further remitted an amount of Rs. 238.35 ps.
by Money Order to the plaintiff and it was accepted by the plaintiff.
The defendants submit that they were always ready and willing to pay the rent to the plaintiff but the plaintiff was not accepting the same.
The defendants also replied to the said notice.
According to the defendants the requirement of the plaintiff is neither bona fide nor reasonable.
The defendants further pleaded that the husband of the plaintiff is Income tax and State tax Practitioner and working with S.B. Gandhi as one of his partners and also having his own office which is situated in Ghas Gali, now called as Shahaji Road on the first floor and the said premises is suitable for plaintiff 's husband to open to his office there.
The plaintiff is in possession of area 15 fts.
x 25 fts.
on the ground floor facing towards west, adjacent to the suit premises and also complete first floor 15 fts.
x 15 fts.
The said area is suitable for plaintiff 's husband for his office if he so desires.
It has been pleaded by the defendant No. 1 that greater hardship would be caused to him if premises are vacated and handed over to the plaintiff.
The defendants submit that they are residing at Ahmednagar and carrying the business of Ready made garments in the suit shop.
It has been further pleaded that accommodation is not easily available in the Ahmednagar City for the purpose of business and Kapad Bazar area where the suit premises exist is the only good market of hosiery and so prayed for dismissal of the plaintiff 's suit.
On the above pleadings ten issues were framed of which the relevant issues are: Issue No. 2 : Whether the plaintiff proves that the is lawful defaulter in payment of monthly rent? Issue No. 3 : Whether the plaintiff proves that she bona fide requires possession of the suit premises for the office of her husband Amritlal? Issue No. 4 : To whom the greater hardship would be caused by passing the decree for eviction than by refusing to pass it? 948 Issue No. 7 : Whether the defendant No. 1 proves that suit premises were leased to him at annual rent of Rs. 255.36 ps.? The Trial Court held with regard to Issue No. that at the time of purchases there was ground floor and first floor to the suit premises.
The defendant were in possession of shop Nos.
81 to 83 on the eastern side and on the western side of the ground floor shops bearing Nos. 89 to 91 were in possession of the brother of the plaintiff 's husband, Kanhyalal Mutha were he had been running a provision store since the last 13 years.
The family of Amritlal Mutha, i.e. husband of the plaintiff considered of his wife, his 3 children, the eldest son aged about 16 years was studying in the 12th standard in the year 1981.
His second son aged about 13 years was in 7th standard and 3rd son in 3rd standard in the year 1981.
The plaintiff had been residing on the first floor of the suit premises, which consisted of 4 rooms, first one bed room towards west admeasuring 7 fts.
x 12 fts.
and next room kitchen admeasuring 7 fts.
x 11 fts.
and 3rd room admeasuring 7 fts.
x 11 fts.
which is used for the studies of the children.
One other room admeasuring 15 fts.
x 15 fts.
was used as a bed room.
It has been found that first floor premises is not sufficient for his office purposes because he requires at least 25 fts.
x 30 fts.
area for the purpose of office in order to keep the records and for the sitting arrangement for his clients and also for his cabin.
It has further been found that the ground floor shop Nos. 89 to 91 adjacent to the suit premises is not available for the plaintiff 's husband for opening his office as Kanhyalal Mutha, brother of the plaintiff 's husband, has been running there Mutha Provision Store for the last about 15 years, the evidence of Amritlal is also consistent with the evidence of Kanyalal Mutha on this point.
The Trial Court therefore, found that as the plaintiff has no other accommodation at Ahmednagar except the suit premises and the partnership of the plaintiff 's husband with S.B. Gnadhi has been dissolved, the plaintiff reasonably requires the suit premises for the purpose of opening of office of her husband as Tax Consultant.
The demand of the plaintiff is therefore, reasonable and bona fide.
It was also found that the defendant No. 1 was in possession of a number of premises which are near the suit premises and the defendants were carrying on the hosiery business in those premises under the name and style of `Liberty Dresses ' and `Madura Stores '.
It has been further held that the defendant No. 1 was shown as partner in the firm M/s Vohra and Company, 94/97 Budhwar Peth, Pune 2, and the residence of defendant No. 1 is known as Krishnakripa, Mukund Nagar, Pune 9 where the suit summons were served on the defendant No. 1.
It was 949 also found that it was evident from exhibit 105 that the son of defendant No. 1 and wife of son of defendant No. 1 are the partners in M/s Ashok and Company and both are residing at 7/3 C Vanshree Apartment, Rambag Colony, Sadashiv peth.
It has also been found that the defendant No. 1 has admitted in his cross examination that he has vacated his residential premises at Ahmednagar and he is in search of other residential accommodation.
It was, therefore, held that the plaintiff has proved his bona fide requirement of the suit premises and thus issue No. 3 had been decided in the affirmative.
As regards Issue No. 4, the Trial Court held that except the suit premises and first floor on it, no other premises was available to the plaintiff at Ahmednagar.
The Trial Court held further that the first floor premises is not suitable for the plaintiff 's husband to open his office and greater hardship will be caused to the plaintiff if the suit premises be not handed over to the plaintiff than by denying him the vacant possession of the suit premises.
Issue No. 4 was thus held in favour of the plaintiff.
It was further held that the suit premises were properly described in the plaint.
As regards Issue Nos. 2 and 7 it was held that the defendant No. 1 is a monthly tenant and the monthly rent in respect of such premises is Rs. 21.28 ps.
plus education cess Rs. 2.55 ps.
i.e. Rs. 23.83 ps.
It was also held that the tenancy commenced from the first day of every month and ended on last day of the same month as per the English calendar.
The Trial Court held that the defendants failed to prove that the suit premises were leased to them at annual rent of Rs. 255.36 and hence that issue was decided against the defendants.
The defendants were also to be held as defaulters as the deposits of rent were not made within the meaning of Section 12(3)(a) and 12(3)(b) of the Rent Act.
The Trial Court thus decreed the suit and directed the defendants to hand over vacant possession of the suit premises within one month of the date of order.
Against the said Judgment and decree, the defendant No. 1 Nalin Narsi Vohra filed an appeal being Regular Civil Appeal No. 430 of 1985 in the court of Addl.
Distt.
Judge, Ahmednagar, The learned Additional District Judge held that the Trial Court was right in holding that the defendant No. 1 was paying the rent monthly and he was a monthly tenant.
It was further held that there are no arrears for the statutory period in order to hold that the defendants are defaulters for which their tenancy is liable to be determined.
As such the Addl.
District Judge found against the plaintiff holding that the defendants 950 had not defaulted in payment of rent and there could not be any decree of ejectment on this ground.
The learned Addl.
District Judge further held that there was nothing which shattered the evidence of Amritlal when he speaks about the bona fide requirement of the plaintiff for having the suit property to open his office and the argument that plaintiff can acquire the premises of Kanhyalal could not be accepted as it was neither possible nor feasible in the near future to expect that Kanhyalal would surrender the premises to plaintiff.
The construction on the second floor of the suit premises was a temporary one and as such the same could not be used for residential purposes.
The Addled.
District Judge also considered the application for additional evidence which disclosed that the plaintiff 's husband had purchased a plot at Chahurana Bk.
at the T.P. Scheme No. 3 within the municipal limit of Ahmednagar and constructed a big bungalow covering about 2000 sq.
The Addl.
District Judge held that it was not known whether the Municipality has given permission for habitation and furthermore the requirement of the plaintiff was especially for conducting her husband 's profession of Tax Practitioner at the required suit premises, which is not for residential purposes.
The suit premises are situated in Kapad Bazar area where the trading communities have their shops and business establishments, and is fit for the opening of Tax Consultant 's office.
The bungalow constructed by the plaintiff 's husband was not suitable for starting the office of Tax Practitioner as it is at a remote place.
It was, therefore, held that the subsequent circumstances have not much relevance and the requirement of the plaintiff was a bona fide and genuine one.
As such, the Additional District Judge affirmed the judgment and decree passed by the Trial Court.
It was further held by the learned Additional District Judge that there was no possibility of any hardship being caused to the defendants in case the possession of the suit premises was granted to the plaintiff.
The Addl.
District Judge therefore, dismissed the appeal and affirmed the judgment and decree of the Trial Court.
Feeling aggrieved the respondent tenant, Nalin Narsi Vohra filed a writ petition under Article 227 of the Constitution being registered as Writ Petition No. 1689 of 1987 in the High Court of Judicature at Bombay.
The High Court issued a Rule on the said writ petition and after hearing the parties and considering the facts and circumstances including the evidences on record, the High Court held that in a petition under Article 227 of the Constitution of India the High Court does not generally interfere with regard to the concurrent findings of facts 951 arrived at by the courts below but in appropriate cases the High Court has jurisdiction under Article 227 of the Constitution to consider facts subsequent to the filing of an application for eviction which have a great bearing on the question of bona fide and reasonable requirement of the landlord for a decree for eviction of the suit premises.
The High Court has referred to some decisions rendered by this Court in this respect.
It has been held by the High Court that of the subsequent facts which are relevant and admissible can be taken into considerations by the High Court in order to come to a finding as to the reasonable and bona fide requirement of the landlord for passing a decree of eviction from the suit premises.
The High Court has held on a consideration of the additional evidences which have been expressly mentioned in the application for additional evidence stating in detail that the plaintiff 's husband, Amritlal Mutha after passing of the decree for eviction under section 13(1)(a) of the Bombay Rents.
Hotel and Lodging House Rates Control Act, 1947 has acquired a plot being No. 47/1 situated in T.P. Scheme No. III at Ahmednagar.
The total area of the plot is 3025 sq.
and after getting the permission from the Municipal Council of Ahmednagar, the plaintiff 's husband constructed a big bungalow thereon during the pendency of the appeal and had been residing there.
The said premises consists of a covered area of 2000 sq.
and the plaintiff is using the same for residence and office purpose also.
These facts were not properly considered by the lower appellate court while finding about the reasonable and bona fide requirement of the plaintiff in passing a decree of eviction of the defendants from the suit premises.
The High Court held that the said bungalow can be conveniently used for the residence of the plaintiff and her family members as well as for the purpose of opening of office of Tax Consultant by her husband.
That apart, the entire first floor of the suit premises can be conveniently utilised for opening the office of Tax Consultant by the plaintiff 's husband, Amritlal Mutha.
The lower appellate court totally failed to consider this aspect of the case.
It has, therefore, been held that: ``. .
Even otherwise the finding is manifestly so unjust and unsupported by the evidence that its validity cannot be sustained even in this limited field, more so, since there is utter mis reading of the evidence and non application of mind on material features and there is also an error apparent on the face of the record. ' ' The High Court, therefore, allowed the writ petition and made the rule absolute and set aside the judgments and decrees made by the courts below.
952 It is against this judgment and order, the instant appeal on special leave has been filed at the instance of the plaintiff in this court.
Three question were raised before the courts below.
The first question was whether the suit property was properly described in the plaint or not.
On this point, both the Trial Court as well as the lower appellate court have concurrently found that the suit premises being part of Survey No. 3576 which was previously owned by one Imarat Company Private Limited from whom the plaintiff 's husband Amritlal Mutha purchased for a sum of Rs. 34, 000 was properly described in the plaint and the respondents defendants have been occupying an area admittedly 20fts.
x 15fts.
being shop Nos.
81 to 83 on the eastern side of the said premises.
This finding of the courts below has neither been challenged before the High Court nor before this Court in the instant appeal.
The next point that was urged by the plaintiff in the courts below was that on the ground of default in payment of arrears of rent the defendant No. 1 was liable to be ejected from the suit premises in accordance with the provisions of Section 12(2) read with Section 12(3)(a) of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 hereinafter to be referred in short as the said Act.
On this point, the Trial Court held that: ``. the defendant by depositing rent for the first time on 8.6.80, for the period 1.10.78 to 31.12.80 committed breach of above mentioned ruling and is defaulter within the meaning of Section 12(3)(a) and 12(3)(b) of the Rent Act. ' ' The lower Appellate Court, however, after considering the evidences held that the defendant are not defaulters as there were no arrears for the statutory period.
Thus, the question of default on the part of the defendants in the payment of rent was not at all raised nor agitated before the Court of Appeal below by the plaintiff.
The only question that was agitated with great vehemence by the learned counsel on behalf of the appellant is about the finding arrived at by the High Court to the effect that there was no reasonable bona fide requirement for the plaintiff appellant to obtain a decree for eviction of the defendants respondents from the suit premises for the 953 purpose of opening of office of Tax Consultant by the appellant 's husband, Amritlal Mutha on the ground floor of the said premises.
Mr. Tarkunde, learned counsel appearing in support of the case of the appellant has with great vehemence urged before us that the bungalow that has been constructed by the appellant 's husband within Ahmednagar Municipal area is at a distance of about 1 2 Kms.
from the suit premises whereas the suit premises is situated in the Kapad Bazar area where the traders have their shops and establishments and as such the ejectment of the respondents from the suit premises was necessary for opening the office of Tax Consultancy in the suit premises by the husband of the appellant.
It has been further urged in this connection by Mr. Tarkunde that the bungalow that has been constructed and comprises of a covered area of 2000 sq.
ft. is entirely necessary for occupation of the appellant 's eldest son, Abhey Amritlal Mutha who passed MBBS in 1988 and obtained certificate of registration.
It has also been submitted in this connection that permission to start dispensary and consulting clinic/residence in the said premises has been obtained from the Town Planner and Chief Officer, Ahmednagar Municipal Council.
It has also been urged with great vehemence by Shri Tarkunde that the respondent has not been residing at all in Ahmednagar but has shifted to Pune as will be evident from the fact that the summons of the suit were served on the respondent No. 1 at his residence at Krishnakripa, Galli No. 3, 3rd Floor, Mukund Nagar, Pune 411009.
It has been further stated that the respondent No. 1, Nalin Narsi Vohra has started a business under the name and style of M/s Vohra and Company since February, 94/97, Budhwar Peth, Pune 2.
It is a partnership firm business and the partners, are Nalin Narsi Vohra, Krishnakripa, Mukand Nagar, Pune 9 and Mrs. Bhanu Ashok Vora, 41/166, Lokamanya Nagar, Pune 30.
This business has been started since July, 1979 as per the partnership deed and the copy of the register of firms.
It has also been stated that the respondent No. 1, Ashok Nalin also started a business of machine tools known as M/s Ashok & Company at 94/97, Budhwar Peth, Pune 2 vide partnership deed dated 12.2.1982.
It has further been urged on behalf of the appellant tha the suit premises remained under lock and key for about ten years and no business was transacted in the said premises.
It has also been urged in this connection that besides the suit premises the respondents purchased the Municipal Premises No. 2733/6 and has been running `Madura Stores ' for selling ready made garments.
In 1972, the respondent No. 1 Nalin Narsi Vohra and his brother, respondent No. 4, Mulji Narsi Vohra jointly purchased the ownership rights from Imarat Company Pvt. ltd.
the premises No. 733/9 and open `Liberty Dresses ' therein for sale of 954 hosiery goods.
Similarly the respondent No. 1 also purchased another premises opposite to Kohinoor Cloth Store and after removing the wall in between two shops, has been running the business of ready made garments known as `Madura Stores '.
It has, therefore, been contended that the suit premises being closed for a period of ten years and no business being carried on there, the appellant is entitled to get decree of ejectment of the respondents from the suit premises under the provisions of the said Act.
The contention that the respondents kept the suit premises under lock and key for about ten years without opening the shop, running the business of ready made garments therein, has not at all been proved by any evidence whatsoever as has been held by the High Court.
Therefore, this contention is wholly untenable.
Moreover the ground of ejectment of the ground of non payment of rent for over six months under Section 12(2) and 12(3)(a) of the Bombay Rent Act has not been mentioned in the eviction suit nor any issue was framed on this score.
It has been on the other hand contended by the learned counsel appearing on behalf of the respondents that the submissions made in the application for additional evidence bring further materials before the lower appellate court on the question that the appellant has alternative accommodation and as such she did not reasonably and bona fide require the suit premises for the opening of the office of Tax Consultant for her husband, Amritalal Mutha therein.
It is convenient to note in this connection that the statements as well as the subsequent facts that have been brought to the notice of the court by the application for additional evidence under Order 41, Rule 27 of the Code of Civil Procedure and filed before the lower appellate court have not been controverted at all.
As such, the appellant or her husband, Amritlal Mutha did not deny those subsequent facts brought before the court by the said application.
The lower appellate court that admitted the application for additional evidence failed to consider at all the fact that a very specious bungalow comprising of about 2000 sq.
covered area had already been built within the Ahmednagar Municipal Area by the plaintiff 's husband, Amritlal Mutha.
After purchasing the plot and constructing the bungalow during the pendency of the appeal before the lower appellate court, the appellant with the members of her family had been residing there and the husband of the appellant had started the office of Tax Consultancy in that bungalow.
The lower appellate court merely by passed this relevant fact on the plea that that bungalow is at a distance from the Kapad Bazar area where the shops 955 of the traders are situated.
The lower appellate court also did not at all consider whether the first floor of the suit premises as well as the second floor which though claimed to be a shed, could be conveniently utilised for the purpose of the said Tax Consultancy Office.
The lower appellate Court simply considered that the second floor being a temporary shed could not properly be used for opening the Tax Consultancy Office and the first floor which consisted of 4 rooms of which 2 are used as bed rooms and 1 is used as a kitchen and 1 as study room of the sons of the appellant, cannot be conveniently utilised for the said office as there was no space for the same without considering at all that the appellant with members of his family had been residing already in the spacious bungalow referred to hereinbefore.
It has been urged with great vehemence on behalf of the appellant that both the Trial Court as well as the Lower Appellate Court having found that the appellant reasonably and bona fide required the suit premises for the opening of the office of Tax Consultant of the appellant 's husband, Amritlal Mutha, the decree of eviction of the suit premises should not have been set aside by the High Court under Article 227 of the Constitution by taking into consideration subsequent facts and evidences.
This submission, in our considered opinion, is without any substance and same is to be rejected.
Reference may be made in this connection to the decision in the case of M/s Variety Emporium vs V.R.M. Mohd. Ibrahim Naina; , wherein it has been observed that: "No authority is needed for the proposition that, in appropriate cases, the Court must have regard to events as they present themselves at the time when it is hearing the proceeding before it and mould the relief in the list of those events.
We may, however, draw attention to a decision of this Court in Hasmat Rai vs Raghunath Prasad, ; the ratio of which may be stated thus: When an action is brought by a landlord for the eviction of a tenant on the ground of personal requirements, the landlord 's need must not only be shown to exist at the date of the suit, but it must exist on the date of the appellate decree, or the date when a higher Court deals with the matter.
During the progress and passage of proceedings from court to court, if subsequent events occur which, if noticed, would non suit the landlord, the court has to examine and evaluate those events and mould the decree accordingly.
The tenant is entitled to show that the need or requirement of the landlord no more exists by pointing out such subse 956 quent events, to the court, including the appellate court.
In such a situation, it would be incorrect to say that as a decree or order for eviction is passed against the tenant, he cannot invite the Court to take into consideration subsequent events.
The tenant can be precluded from so contending only when 3 decree or order for eviction has become final.
(Pages 606 607).
Justice R.S. Pathak, who concurree with Justice D.A. Desai and Justice Venkataramiah, expressed the same view thus: It is well settled now that in a proceeding for the ejectment of a tenant on the ground of personal requirement under a statute controlling the eviction of tenants, unless the statute prescribes to the contrary, the requirement must continue to exist on the date when the proceeding is finally disposed of either in appeal or revision, by the relevant authority.
That position is indisputable.
(Page 624).
In Chandavarkar Sita Ratna Rao vs Ashalata section Guram, ; it has been observed that: "In exercise of jurisdiction under Article 227 of the Constitution, the High Court can go into the question of facts or look into the evidence if justice so requires it.
But it should decline to exercise that jurisdiction in the absence of clear cut down reasons where the question depends upon the appreciation of evidence.
It also should not interfere with a finding within the jurisdiction of the inferior tribunal or court except where the finding is perverse in law in the sense that no reasonable person properly instructed in law could have come to such a finding or there is any misdirection in law or a view of fact has been taken in the teeth of preponderance of evidence or the finding is not based on any material evidence or it has resulted in manifest injustice.
Except to that limited extent the High Court has no jurisdiction.
" In Pasupuleti Venkateswarlu vs The Motor & General Traders, ; it has been observed by this Court that: "For making the right or remedy, claimed by the party just 957 and meaningful as also legally and factually in accord with the current realities, the court can, and in many cases must, take cautious cognizance of events and development subsequent tot he institution of the proceeding provided the rules of fairness to both sides are scrupulously obeyed.
On both occasions the High Court, in revision, correctly took this view.
The later recovery of another accommodation by the landlord, during the pendency of the case, has as the High Court twice pointed out, a material bearing on the right to evict, in view of the inhibition written into section 10(3)(iii) itself.
The High Court was right in taking into consideration the facts which came into being subsequent to the commencement of the proceedings.
" Similar observation has been made in Hasmat Rai & Anr.
vs Raghunath Prasad, "It is immaterial that the amendment was sought more than three years after possession of the portion had passed to the respondent.
The High Court was bound to take the fact into consideration because, as is well settled now, in a proceeding for the ejectment of a tenant on the ground of personal requirement under a statute controlling the eviction of tenants, unless the statute prescribes to the contrary the requirement must continue to exist on the date when the proceeding is finally disposed of either in appeal or revision, by the relevant authority.
The position, to my mind, is indisputable.
The High Court should have allowed the amendment." In Amarjit Singh vs Smt.
Khatoon Quamarain, ; it has been observed by this Court that: "Administration of justice demands that any changes either in fact or in law must be taken cognizance of by the Court but that must be done in a cautious manner of relevant facts.
Therefore, subsequent events can be taken cognizance of if they are relevant and materiel.
" On a conspectus of all these decisions rendered by this Court, it is now beyond the pale of any doubt that in appropriate cases events subsequent to the filing of the suit can be taken notice of and can be duly considered provided the same is relevant in determining the sues 958 tion of bona fide requirement.
Therefore, the High Court was right in duly considering the new facts and circumstances that have been brought to the notice of the Court by the application for additional evidence filed under Order 41 Rule 27 of the Code of Civil Procedure and in coming to a firm finding that the plaintiff appellant having constructed a spacious bungalow where she with the members of her family had been residing, there is no reasonable and bona fide requirement for the plaintiff to get a decree of ejectment of the defendants from the suit premises in as much as the first floor of the suit premises as well as the second floor could be conveniently used for opening the office of Tax Consultancy of plaintiff 's husband who previously worked with one Mr. Gandhi in a partnership firm which partnership had been dissolved after Mr. Gandhi 's son came to practice with his father.
It is also relevant to consider in this connection the observations of this Court in Bega Begum and Ors.
vs Abdul Ahad Khan and Ors., ; as regards the meaning of the words `reasonable requirement and own occupation ' as used in Section 11(h) of the Jammu and Kashmir Houses and Shops Rent Control Act, 1966.
It has been held that the words `reasonable requirement undoubtedly postulate that there must be an element of need as opposed to a mere desire or wish.
The distinction between desire and need should doubtless be kept in mind but not so as to make even the genuine need as nothing but a desire.
In the instant appeal it has been rightly held by the High Court after considering the subsequent facts and materials brought out by the application for additional evidence that the plaintiff failed to prove reasonable and bona fide need for her occupation of the suit premises for the purpose of opining the Tax Consultancy Office of her husband, Amritlal Mutha.
Considering the facts and circumstances as well as the subsequent materials brought out by the application for additional evidence, we have no hesitation in our mind to hold that the aforesaid findings arrived at by the High Court is totally unexceptionable and so the same cannot be interfered with in this appeal.
It will not be out of place to mention in this connection that Amritlal Mutha, husband of the appellant has stated in the additional affidavit filed in this Court that Dr. Abhey A. Mutha, son of the appellant had purchased a flat on ownership basis in Co partnership Society, named Amrita Kunj Cooperative Housing Society Ltd. situated at 324/5 Shivaji Nagar, Pune 410005.
This, if taken notice of, will affirm the finding of the High Court that the appellant failed to prove her bona fide and reason 959 able need for the suit premises for opening the Tax Consultancy Office for her husband.
Besides the contentions referred to hereinbefore, no other contention has been advanced before this Court.
Therefore, this appeal fails and is hereby dismissed.
The judgment and order of the High Court is upheld.
In the facts and circumstances of the case, the parties will bear their own costs.
Y.Llal Appeal failed.
| The appellant plaintiff instituted a Regular Civil Suit in the court of Joint Civil Judge, J.D., Ahmednagar for vacant possession of the suit property and also for arrears of rent.
It was pleaded by the appellant that the defendants were in possession of the suit shop on the monthly rent and the tenancy commenced from the first day of every month and ended on the last day of the said month according to English calender.
The plaintiff based his suit primarily on two grounds viz., that the defendants had committed default in the payment of statutory rent and were thus defaulters and secondly the appellant required the premises for bona fide need for setting up an office for her husband, who is tax consultant.
It was asserted by the plaintiff that the defendants had acquired alternative business placed both in the vicinity of the suit premises, being partners of the firms named in the plaint and also elsewhere and they no longer required the premises.
It was also added that the suit premises remained mostly locked and no business was carried on there; defendants 1 to 3 having shifted from Ahmednagar to Pune were doing business there.
The defendants denied the allegations contained in the plaint, stating that the suit property was in their possession since last 20 years at the annual rent of Rs.255.36 ps; that an receipt of the notice they had sent the rent amounting to Rs.517 92 ps.
by Money Order which the appellant refused being not correctly calculated; then again the defendants sent Rs.960 by Demand Draft which was also refused by the appellant as miscalculated.
Thereafter the defendants sent Rs.658.55 ps.
by Money Order which was accepted by the appellant.
According to the tenants they are always to pay the rent and in fact the appellant 's husband had been accepting the rent without issuing any receipt therefore.
According to the defendants, the requirement of the plaintiff was neither bona fide nor reasonable; her husband, an 942 Income Tax and Sales/Tax Practitioner was working with Mr. Gandhi as one of his partners and also having his own office.
Further the plaintiff was in possession of an area 15ft.
x 25ft.
on the ground floor facing towards west, adjacent to the suit premises and also complete first floor 45ft.
x 15ft.
The Trial Court held that the defendants failed to prove that the suit premises were leased to them at annual rent and as such they were held to be defaulters as the deposits of rent were not made within the meaning of Section 12(3)(a) and 12(3)(b) of the Rent Act.
The Trial Court further found that as the plaintiff has no other accomodation at Ahmednagar except the suit premises and the partnership of the plaintiff 's husband with with S.B. Gandhi had been dissolved, the plaintiff reasonably required the suit premises for the purpose of opening office of her husband as Tax Consultant.
Accordingly the Trial Court decreed the suit and directed the defendants to hand over the vacant possession of the suit premises within one month of the date of order.
Being aggrieved, the defendants filed an appeal before the Additional District Judge, Ahmednagar.
The Additional District Judge, held that the trial court was right in holding that the defendant No. 1 was paying the rent monthly and he was a monthly tenant but there were no arrears for the statutory period in order to hold that the defendants were defaulters for which their tenancy was liable to be determined.
On the question of bona fide requirement of the appellant, the Additional District Judge also considered the application for additional evidence which disclosed that the plaintiff 's husband had purchased a plot and constructed a big bungalow covering about 2000 sq.
and held that it was not known whether the Municipality had given permission for habitation and furthermore the requirement of the plaintiff was especially for conducting her husband 's profession of Tax Practitioner at the required suit premises, which is not for residential purposes.
On this reasoning the Additional District Judge held that the subsequent circumstances have not much relevance and the requirement of the plaintiff appellant was a bona fide and genuine one.
Accordingly he affirmed the decree passed by the Trial Court.
The Respondent tenant being aggrieved filed a writ petition under Article 227 of the Constitution praying for setting aside the decree of ejectment passed against him.
The High Court, on a consideration of the additional evidences which have been expressly mentioned in the application for additional evidence, held that the husband of the appellant had required a plot in T.P. Scheme No. III, Ahmednagar and constructed a big bungalow thereon during the pendency of the appeal 943 and has been residing there.
The said premises consisted of a 2000 sq.
covered area and the appellant was using the same for residence and office purpose also.
The High Court held that the said bungalow can be conveniently used for the residence of the plaintiff and her family members as well as for the purpose of opening of office of Tax Consultant by her husband.
That apart, the entire first floor of the suit premises can be conveniently utilised for opening the office of Tax Consultant by the plaintiff 's husband.
The High Court therefore on that reasoning allowed the writ petition and set aside the judgments and decrees passed by the Courts below.
Hence this appeal by the appellant landlord by special leave.
Dismissing the appeal, this Court HELD: The lower Appellate Court, after considering the evidences held that the defendant are not defaulters as there were no arrears for the statutory period.
Thus, the question of the default on the part of the defendants in the payment of rent was not at all raised nor agitated before the Court of Appeal below by the plaintiff.
[952F G] It is now beyond the pale of any doubt that in appropriate cases events subsequent to the filing of the suit can be taken notice of and can be duly considered provided the same is relevant in determining the question of bona fide requirement.
The High Court was right in duly considering the new facts and circumstances that have been brought to the notice of the Court by the application for additional evidence filed under Order 41 Rule 27 of the Code of Civil Procedure.
[957H 958A] In the appeal it has been rightly held by the High Court after considering the subsequent facts and materials brought out by the application for additional evidence that the plaintiff failed to prove reasonable and bona fide need for her occupation of the suit premises for the purpose of opening the Tax Consultancy office of her husband, Amritlal Mutha.
Considering the facts and circumstances as well as the subsequent materials brought out by the application for additional evidence, we have no hesitation in our mind to hold that the aforesaid findings arrived at by the High Court is totally unexceptionable and so the same cannot be interfered with in this appeal.
[958F G] The words ``reasonable requirement ' ' undoubtedly postulatethat there must be an element of need desire or wish.
The distinction between desire and need should doubtless be kept in 944 mind but not so as to make even the genuine need as nothing that a desire.
M/s. Variety Emporium vs
V. R.M. Mohd. Ibrahim Naina; , ; Chandavarkar Sita Ratna Rao vs Ashalata section Guram, ; ; Pasupuleti Venkateswarlu vs The Motor & General Traders, ; ; Hasmat Rai & Anr.
vs Raghunath Prasad, ; Amarjit Singh vs Smt.
Khatoon Quamarain; , ; and Begum and Ors.
vs Abdul Ahad Khan and Ors., ; ;
|
ivil Appeal No. 203 of 1975.
From the Judgment and Order dated 12.12.1974 of the Madhya Pradesh High Court in Second Appeal No. 569 of 1970.
U.R. Lalit, Rameshawar Nath, L.G. Kher and Ravinder Nath for the appellant.
P.P. Rao, Dr. N.M. Ghatate, S.V. Deshpande, Ms. Priya Gupta and Ejaz Maqbool for the Respondents.
The Judgment of the Court was delivered by KASLIWAL, J.
This appeal by special leave is directed against 908 the judgment of the High Court of Madhya Pradesh at Jabalpur dated 12th December, 1974.
This litigation has a long chequered history of more than five decades.
The appellant, the Sagar Mahila Vidyalaya is an educational institution founded by a section of the public of District Sagar (M.P.) by giving donations and is duly registered under the Societies Registration Act (Act XXI of 1860).
On 17th November, 1933 one Govind Rao Harshe had mortgaged some agricultural land and house known as ``Harshewada ' ' to Lakshmi Chand and Duli Chand Modi.
The aforesaid mortgages filed a suit and obtained a preliminary decree for sale on 14th July, 1937.
A final decree for sale for the realisation of Rs. 5001/13/6 was passed on 26th March, 1938.
On 29th March 1938 the decree holders applied for execution of the said decree.
The execution of the aforesaid decree was stayed and in the meantime C.P. and Berar Relief of Indebtedness Act, 1939 came into force.
The judgment debtor Govind Harshe alongwith his minor sons namely, Sadashiv Rao and Ram Chander Rao applied for settlement of the debts on 14th September, 1939 in the Debt Relief Court, Sagar.
the execution of the final decree for sale had been stayed by the executing Court as per the provisions of the Relief of Indebtedness Act.
On 11th September, 1940, the Debt Relief Court reduced the amount and granted instalments.
The creditors filed revision applications against the aforesaid order of Debt Relief Court.
The revision filed by Lakshmi Chand and Duli Chand was registered as Civil Revision No. 119 of 1940 while that of another creditor Pandey Shankernath was registered as Civil Revision No. 27 of 1941.
The Additional District Judge disposed of both the revisions by order dated 29th September, is the copy of the order passed in Civil Revision No. 119 of 1940 and its operative part reads as under: ``For the reasons given in paragraph 8 of the order of C.R. No. 27 of 1941, I hold that a condition can be prescribed by the D. R. Court in default of which the order fixing instalments shall cease to have effect and the whole claim shall become recoverable.
I, therefore, order that the debtors shall keep the mortgaged property intact by paying its land revenue in time every year and shall keep the house in good repairs, as a condition precedent to the continuance of their right to pay the claim by instalments fixed by the D.R. Court.
In default of their paying land revenue of the Malik Makbuza land in time, endangering its sale for its recovery, and in case they deliberately fail to keep the mortgaged 910 house in proper repairs or endanger its existence, this order of instalments shall cease to have effect and the applicant creditor shall become entitled to recover the whole amount.
Parties will bear their own costs of this revision. ' ' On November, 1941 the decree holders Lakshmi Chand and Duli Chand Modi applied for the revival of the execution proceedings on the ground that the judgment debtor had defaulted in carrying out the directions of the revisional court and as such the order passed by the Debt Relief Court granting instalments had ceased to exist and the whole amount had become payable in lumpsum.
the decree holders as such prayed for the sale of the house property in dispute.
the judgment debtor Govind Rao Harshe did not appear before the executing court inspite of service of notice and allowed the execution case to proceed ex parte against him.
On 31st March, 1942 the executing court passed a order holding that the non applicant judgment debtor had committed breach of the condition and as such the decree holders were entitled to recover the amount determined by the Debt Relief Court as due to them at once.
It was further held that the decree holders were entitled to execute the decree for recovery of debt amount.
The judgment debtor Govind Rao Harshe submitted an application on 12th August, 1942 for setting aside the ex parte order dated 31st March, 1942.
This application was dismissed on 13th November, 1942.
Civil Appeal filed against the said order was also dismissed on 6th April, 1943 by the Additional District Judge.
In the meantime, the house mortgaged was put to auction and the highest bid of Rs. 5905 was knocked down in favour of one Gopal Rao Mutatkar on 20th August, 1942.
1/4th of the auction amount Rs. 1500 was deposited on the spot and the balance 3/4th amounting to Rs. 4405 was deposited on 4th September, 1942.
The Judgment debtor Govind Rao Submitted an application under Order XXI Rule 90 C.P.C. for setting aside the sale dated 20th August, 1942.
This application was rejected vide order dated 6th February, 1943.
Miscellaneous Appeal filed against the said order was dismissed by the Second Additional District Judge, Sagar vide order dated 19th December, 1943.
It may be noted at this stage that in the meantime the sale was confirmed vide order dated 10th April, 1943.
Sadashiv Rao and Ram Chander Rao, sons of judgment debtor Govind Rao Harshe who had become adult also moved the executing Court on 28th September, 1943 that they were also necessary parties to the execution case as they were also parties in the proceedings before 911 the Debt Relief Court and as they were not made parties in the execution court, the order passed by the executing court dated 31st March, 1942 was void and without jurisdiction.
This application was rejected on 13th December, 1943.
An appeal filed against this order was dismissed by the Additional District Judge, Sagar by order dated 24th April 1944.
The Miscellaneous second appeal filed against the appeal order was also dismissed by the High Court by order dated 15th December, 1947.
In the meantime on 15th January, 1944 an application was submitted by Mahila Vidyalaya, Sagar (appellant before us) through its Secretary, Shri G.R. Wakhle for granting the sale certificate to the applicant Mahila Vidyalaya.
It was stated in the application that the house in question was auctioned by the Court and was purchased by Gopal Rao Mutatkar on 20th August, 1942 for Mahila Vidyalaya, Sagar for Rs. 5905 and the auction sale was confirmed by the Court on 10th April , 1943.
It was prayed that the sale certificate be granted to the applicant purchaser (Mahila Vidyalaya).
Stamps of Rs. 90 were supplied with the application.
A note was also appended with the application as under: ``That when Gopal Rao son of Madho Rao offered bid in public auction he was a member of the above mentioned institution.
But at present he is not a member.
Therefore, the following applicant who is the Secretary of this institution makes this application. ' ' The executing court on 26th February, 1944 passed an order to the following effect: ``The sale certificate will issue in the name of Mahila Vidyalaya, Sagar through Secretary, G.R. Wakhle ' '.
The sale certificate was then actually issued in favour of Mahila Vidyalaya on 8th April, 1944.
It is further important to note that four sons of the judgment debtor Govind Rao, namely, Sadashiv Rao, Ram Chander Rao, Sarad Chand (minor) and Ashok Kumar (minor) filed a Civil suit in the year 1948 (Civil Suit No. 1 A of 1948) for a declaration that the execution sale was not binding on their interest.
It may be noted that initially this suit was filed against Gopal Rao Mutatkar for Mahila Vidyalaya, Sagar as defendant No. 1(a), Shri G.R. Wakhle, Secretary, Mahila Vidyalaya as defendant No. 1(b), Lakshmi Chand and Duli Chand as defendant Nos. 2 and 3 and Govind Rao Harshe (father of the 912 plaintiffs) as defendant No. 4.
In that suit Gopal Rao Mutatkar and G.R. Wakhle filed their written statements and raised an objection that they were unnecessarily made parties as they had ceased to have any connection with the Mahila Vidyalaya.
exhibit P 22 is the copy of the written statement dated 10th March, 1948 filed by Gopal Rao Mutatkar in which he admitted that the house under dispute was auctioned on 20th August, 1942 and the same was purchased by the Sagar Mahila Vidyalaya, Sagar through him and that defendant No. 1 b (G.R. Wakhle) as Secretary of the said Mahila Vidyalaya had made an application for issue of sale certificate and for possession of the house.
The Sagar Mahila Vidyalaya, Sagar was a registered institution and the suit should have been filed against the institution itself and not in the name of its office bearers.
Shri G.R. Wakhle was the Secretary of the Sagar Mahila Vidyalaya, Sagar in 1942 and 1943.
He was no longer its secretary and the present Secretary of the said institution was Mr. Kamlakar Nagarkar.
It was thus prayed that the defendants 1 a and 1 b had been unnecessarily joined as parties to the suit and should be discharged.
Thereafter, the plaintiffs impleaded Mahila Vidyalaya, Sagar as party.
This suit filed by the aforementioned four sons of the judgment debtor was also dismissed on 27th December, 1949 and costs were imposed not only on the plaintiffs but also on defendant No. 4 i.e. Govind Rao Harshe, the judgment debtor.
The defendant No. 4 was also required to pay Rs. 300 to defendants 1, 2 and 3 as compensatory costs.
No further appeal was preferred against this judgment and decree.
The Sagar Mahila Vidyalaya, Sagar in the capacity of auction purchaser then applied for the delivery of possession.
The possession was delivered to Mahila Vidyalaya on 24th March, 1951.
At the time of delivery of possession some portion of the house was in the occupation of Smt.
Radha bai, widowed sister of the judgment debtor, Govind Rao Harshe and other portions were in the occupation of the tenants.
The Secretary of the Mahila Vidyalaya Agreed to the request of the tenants including Smt.
Radha Bai that they will not be ousted as they were willing to execute rent notes.
Thereafter, Mahila Vidyalaya being in need of more occupation moved the Rent Controller for permission to serve notices on the tenants to vacate the premises.
The permission was granted by the Rent Controller on 10th March, 1953 after service of the notices, all the tenants except Mst.
Radha Bai vacated the premises and handed over possession to Mahila Vidyalaya.
The Mahila Vidyalaya then instituted a suit (Civil Suit No. 100 A of 1954) against Mst.
Radha Bai and also Govind Rao Harshe who had started to live with his family in the portion occupied by Mst.
Radha bai as her 913 licensee.
The Trial Court dismissed the suit for ejectment but passed a decree for arrears of rent against Mst.
Radha Bai alone.
The appeal filed by the Mahila Vidyalaya was allowed by the Additional District Judge by judgment dated 27th October, 1957.
Against this decision, Govind Rao Harshe alone preferred an appeal in the High Court and Mst.
Radha Bai was impleaded as respondent No. 2.
The High Court by its judgment dated 29th April, 1960 dismissed the second appeal filed by Govind Rao Harshe.
The Mahila Vadyalaya then filed an execution application for ejectment of the occupants and the same is still pending as a result of stay order passed in a subsequent suit filed by Govind Rao Harshe, which is now the subject matter of the present appeal before us.
In the above background, we would, now state the facts of suit No. 133 of 1960 filed in the Court of Civil Judge, Class I, Sagar on 26th November, 1960 by Govind Rao Harshe, which has culminated in the present appeal.
Govind Rao Harshe filed the suit against Mahila Vidyalaya for a declaration, possession and permanent injunction.
Plaintiff Govind Rao Harshe died on 14th December, 1967 during the pendency of the suit and all the respondents in the present appeal were substituted in his place as his legal representatives.
The suit was dismissed by the Trial Court on 13th December, 1968.
On an appeal the District Judge, Sagar allowed the appeal and decreed the suit in favour of the present respondents granting the declaration, delivery of possession of the house together with a mandatory injunction directing demolition of some new constructions made by the Mahila Vidyalaya.
Aggrieved against the judgment of the First Appellate Court, the defendant Mahila Vidyalaya filed a second appeal before the High Court.
The High Court by order dated 12th December, 1974 dismissed the appeal.
The defendant Mahila Vidyalaya in the above circumstances have come in appeal by the grant of special leave.
The High Court held that as Gopal Rao Mutatkar was the auction purchaser, no sale certificate could be issued by the executing court in favour of the appellant Mahila Vidyalaya.
It was held that the bid in the auction was made by Gopal Rao for himself and not on behalf of Mahila Vidyalaya.
The deposit of auction money was also made in his own name and the order dated 10th April, 1943 confirming the sale was also made in his name.
The High Court affirmed the finding of the First Appellate Court that Gopal Rao Mutatkar did not purchase the property in the auction acting on behalf of the appellant and the First Appellate Court rightly held that Gopal Rao Mutatkar was the auction purchaser ad the sale was confirmed in 914 his name and the deposited full sale amount in his own name.
The High Court also held that Gopal Rao Mutatkar could only transfer his proprietary right by sale or a gift which he did not do.
In the circumstances, there was no transfer of the proprietary rights in favour of the appellant Vidyalaya and if that was so, no certificate could be issued in favour of the Mahila Vidyalaya.
The act of the executing court was clearly without jurisdiction and the sale certificate being void and inoperative conferred no right or title upon the appellant Mahila Vidyalaya over the suit property.
The High Court further held that suit filed on 26th November, 1960 being within 12 years from 24th March, 1951 was within time.
The plaintiff Govind Rao Harshe was never ousted by Gopal Rao Mutatkar who was the auction purchaser.
He was dispossessed by a person who had no title.
There was, therefore, no question of filing a suit for setting aside the sale.
It was further held that the plaintiff in this case was not required to file a suit for getting the sale set aside when he was pleading that the sale itself was void.
A void sale could be ignored by a true owner and it did not affect his title.
The High Court thus took the view that the suit for possession on the basis of title was governed by Article 144 of the Limitation Act, 1908.
In either case, whether Article 142 or 143 of the Limitation Act, 1908 is applied, the suit is within time.
We have heard learned counsel for the parties and have thoroughly perused the records.
In our view the High Court completely misdirected itself and wrongly ignored the earlier decisions between the parties and we are, therefore, inclined to allow this appeal.
The admitted facts of the case are that the house in question was auctioned in the execution of a decree for sale obtained by the mortgagees Lakshmi Chand and Duli Chand Modi.
Gopal Rao Mutatkar took part in the auction bid and it was knocked down in his favour on 20th August, 1942.
The sale was confirmed by an order of the executing court dated 10th April, 1943.
Govind Rao the judgment debtor submitted an application for setting aside the sale under Order XXI Rule 90 C.P.C. but remained unsuccessful.
The steps taken by his adult sons Sadashiv Rao and Ram Chander Rao for impleading them as parties also proved futile.
It is an admitted position that an application was submitted by the Mahila Vidyalaya through its Secretary as early as 5th January, 1944 for issue of a sale certificate in its name as the house was purchased in the auction for the Vidyalaya by Gopal Rao Mutatkar as a member of the institution.
The Court on 26th February, 1944 ordered that the sale certificate be issued to Mahila Vidyalaya.
The necessary stamps for the sale certificate were supplied 915 by the Mahila Vidyalaya and the sale certificate was actually issued in the name of the Mahila Vidyalaya on 8th April, 1944.
It is important to note that no finger was raised nor any steps were taken by the judgment debtor or his sons objecting the issue of sale certificate in favour of Mahila Vidyalaya.
A suit was brought in the year 1948 by the four sons of the judgment debtor Govind Rao Harshe.
The two adult sons were those who had already remained unsuccessful in challenging the order of the Court dated 31st March, 1942 and two sons Sarat Chand and Ashok Kumar were those who were born in the meantime.
This suit filed in 1948 was for a declaration that the execution sale was not binding on their interests.
It is worthwhile to note that this suit was initially filed against Gopal Rao Mutatkar and G.R. Wakhle but subsequently the plaintiffs impleaded the Mahila Vidyalaya in view of an objection raised by Gopal Rao Mutatkar and G.R. Wakhle that the house in question was actually purchased by Mahila Vidyalaya and the sale certificate was also issued in the name of Mahila Vidyalaya.
This suit was dismissed on 27th December, 1949 and had become final as no appeal was preferred against the dismissal of the suit.
It may be further noted that application for delivery of possession to auction purchaser was filed by Mahila Vidyalaya on 22nd September, 1948 and the symbolic possession was also delivered on 24th March, 1951.
As Mahila Vidyalaya was in need of more building, it moved the Rent Controller for permission to serve notices on the tenants.
The said permission was granted on 10th March, 1953 and all the tenants except Mst.
Radha Bai who was the widowed sister of Govind Rao Harshe, handed over the possession to Mahila Vidyalaya.
The Mahila Vidyalaya thereafter instituted Civil Suit No. 100 A of 1954 against Mst.
Radha Bai and Govind Harshe for ejectment and rent.
The Trial Court dismissed the suit for ejectment but passed a decree for arrears or rent against Mst.
Radha Bai alone.
The appeal filed by the Mahila Vidyalaya was allowed by the Additional District Judge, Sagar on 27th October, 1957 and the prayer for ejectment was also allowed.
Against this decision, Govind Rao Harshe alone preferred a second appeal in the High Court and the same was dismissed by order dated 29th April, 1960.
In this litigation Govind Rao Harshe was held to be a licensee of his sister Mst.
Radha Bai.
The above narration of events which remain undisputed go to show that the house in question was sold in the execution of a final decree for sale and the bid was knocked down in the name of Gopal Rao Mutatkar as back as 20th August, 1942.
The entire sale money was deposited and the sale was confirmed under Order XXI Rule 92 C.P.C. by order dated 10th April, 1943.
It is no doubt correct that the 916 final bid in the sale was knocked down in the name of Gopal Rao Mutatkar and the sale was also confirmed in his name but the sale certificate was admittedly issued in the name of the Mahila Vidyalaya.
In this regard an application was filed on behalf of Mahila Vidyalaya on 5th January, 1944 and the executing court had passed an order on 26th February, 1944 that the sale certificate will issue in the name of Mahila Vidyalaya.
In the application filed by Mahila Vidyalaya it was clearly stated that the house in question was auctioned by the Court and was purchased by Gopal Rao Mutatkar on 20th August, 1942 for Mahila Vidyalaya.
This stand taken by Mahila Vidyalaya was accepted and the executing court passed a specific order on 26th February, 1944 for issue of a sale certificate in the name of Mahila Vidyalaya.
The sale certificate was thereafter, actually issued in the name of Mahila Vidyalaya on 8th April, 1944.
Steps for executing the decree and for obtaining actual possession was also taken by the Mahila Vidyalaya.
Govind Rao Harshe was a party to the execution proceedings and till the filing of the present suit on 26th November, 1960, no objection was raised as regards the sale certificate being wrongly issued in favour of Mahila Vidyalaya.
Not only that in a suit for declaration filed in 1948 by the four sons of Govind Rao Harshe, Gopal Rao Mutatkar in his written statement filed on 10th March, 1948 had taken a clear stand that the house in question was actually purchased by Mahila Vidyalaya and as such he was wrongly impleaded as defendant in the suit.
On such stand taken by Gopal Rao Mutatkar, the plaintiffs had subsequently impleaded Mahila Vidyalaya as the defendant.
In this suit also no objection was raised on behalf of the plaintiffs, who were sons of Govind Rao Harshe, that no sale certificate could have been issued in the name of Mahila Vidyalaya nor any title could have passed to Mahila Vidyalaya and as such there was no question of impleading Mahila Vidyalaya as defendant and the suit for declaration should continue against Gopal Rao Mutatkar.
The High Court in the impugned order considered that as Gopal Rao Mutatkar was the auction purchaser, no sale certificate could be issued by the executing court in favour of the appellant Mahila Vidyalaya.
The High Court in arriving at the aforesaid conclusion also took the view that there was nothing on record to show that till the sale was confirmed it was ever made known that Gopal Rao Mutatkar was purchasing the property for and on behalf of the Mahila Vidyalaya.
The order dated 10th April, 1943 relating to confirmation of sale was also made in the name of Gopal Rao Mutatkar.
The High Court further took the view that Gopal Rao Mutatkar could only 917 transfer his proprietary rights by sale or a gift and the same being not done, there was no transfer of the proprietary rights in favour of the appellant Mahila Vidyalaya.
It was thus held that the Act of the executing court was clearly without jurisdiction and the sale certificate being void and inoperative conferred no right or title on the appellant Mahila Vidyalaya over the suit property.
We do not subscribe to the above view taken by the High Court in the facts and circumstances of the present case.
The sale certificate is issued under Order XXI Rule 94 C.P.C. The sale certificate is granted by specifying the property sold and the name of the person who at the time of sale is declared to be the purchaser.
An application was submitted on 5th January, 1944 on behalf of Mahila Vidyalaya that it was the real purchaser and the bid in the auction was made by Gopal Rao Mutatkar on its behalf as he was a member of the institution.
This application was accepted by the executing court by a specific order dated 26th February, 1944 and it was directed that the sale certificate shall be issued in favour of the applicant Mahila Vidyalaya.
The executing court had jurisdiction to allow or reject such application and it cannot be said that the act of the executing court was clearly without jurisdiction and the sale certificate as well as the entire execution proceedings were void and inoperative.
In case Govind Rao Harshe had any grievance he ought to have challenged the order dated 26th February, 1944 in the proper forum and had no right to challenge the same after 16 years by filing the present suit on 26th November, 1960.
We are not going into the propriety of such order but the same cannot be said to be void on account of being without jurisdiction as held by the High Court.
The High Court while dealing with the question of limitation held that the plaintiff in this case was not required to file a suit for getting the sale set aside when he is pleading that the sale itself is void.
A void sale could be ignored by a true owner and it did not affect his title.
The High Court in our view was totally wrong in holding that it was a case of void sale.
It may be noted that Govind Rao Harshe had already taken steps for getting the sale set aside by moving a petition under Order XXI Rule 90 C.P.C. and his sons had filed a suit for declaration but all those proceedings finally terminated against them.
Even if for arguments sake the objection now raised in the present suit is considered, it is only in respect of the sale certificate being wrongly issued in favour of Mahila Vidyalaya.
So far as the sale in favour of Gopal Rao Mutatkar is concerned, there is no illegality and the sale was rightly confirmed in his favour under Order XXI Rule 92 C.P.C. by order dated 10th April, 1943.
It may be noted that once an order was made under Order XXI Rule 92 confirming the sale, the title of 918 the auction purchaser related back to the date of sale as provided under Section 65 C.P.C. The title in the property thereafter vests in the auction purchaser and not in the judgment debtor.
The issue of sale certificate under Order XXI Rule 94 C.P.C. in favour of the auction purchaser though mandatory but the granting of certificate is a ministerial act and not judicial.
Thus looking into the matter from this angle also it is clear that no right or title remained with Govind Rao Harshe after confirmation of sale in favour of Gopal Rao Mutatkar which related back to the date of sale i.e. 20th August, 1942.
Thus there is no question of holding that it was a case of a void sale which could be ignored by a true owner and it did not affect his title.
Govind Rao Harshe and as such the respondents who are his legal representatives were not entitled to take the stand that they were true owner as the sale itself was void and they were not required to file a suit for getting the sale set aside.
With the risk of repetition it is held that it was not a case of the sale being void and in any case so far as issue of sale certificate in favour of Mahila Vidyalaya is concerned, the same was determined by a judicial order dated 26th February, 1944 and the executing court was competent to pass such order cannot be held to be void on the ground of being without jurisdiction as determined by the High Court and it was necessary to challenge the said order within limitation.
Even if the residuary Article 120 of the Limitation Act, 1908 is applied, it should have been challenged within 6 years and as such the present suit filed on 26th November, 1960 was hopelessly barred by time.
The High Court was clearly in error in taking the view that Govind Rao Harshe was the true owner and the appellant Mahila Vidyalaya was a trespasser.
Even if it may be considered for a moment that sale certificate could not have been issued in favour of the appellant Mahila Vidyalaya still in the facts of this case it cannot be held that Mahila Vidyalaya was a trespasser and G.R. Harshe was the true owner at the time of filing of the present suit.
The sale of the property in question was perfectly valid and as soon as the sale was confirmed in favour of Gopal Rao Mutatkar under Order XXI Rule 92 C.P.C., Govind Rao Harshe had no right or title in the property and Gopal Rao Mutatkar became the owner of the property.
The admitted position which is borne out from the records is that Gopal Rao Mutatkar never claimed any right in the property nor took proceedings for obtaining possession by executing the decree.
On the other hand, he took a clear stand in his written statement filed on 10th March, 1948 that he had bit in the auction on behalf of Mahila Vidyalaya and the sale certificate was rightly issued in favour of the Mahila Vidyalaya.
919 The apart, after the issue of sale certificate in favour of Mahila Vidyalaya it alone was entitled to obtain possession under Order XXI 95 C.P.C.
The appellant Mahila Vidyalaya had filed execution application and possession was given to it on 24th March, 1951.
Not only that Mahila Vidyalaya got an order for serving notice of ejectment on the tenants from the Rent Controller and all the tenants except Mst.
Radha Bai surrendered possession in favour of Mahila Vidyalaya.
Not only that a suit for ejectment filed against Mst.
Radha Bai and Govind Rao Harshe was also decreed in favour of the appellant Mahila Vidyalaya.
In execution of the decree for ejectment Mahila Vidyalaya was trying to obtain possession.
Thus by no stretch of imagination can it be said that Mahila Vidyalaya was a trespasser in the facts and circumstances mentioned above.
Th High Court in our view did not consider the case in a proper perspective and took a wholly erroneous view in holding that the appellant was a trespasser and Govind Rao Harshe could have filed a suit for possession.
The plaintiff Govind Rao Harhse himself had come forward with a plea that the execution proceedings and sale was null and void and unless he was able to succeed in this regard, which he did not in the present case, no decree for possession could at all have been passed in his favour.
Thus, we allow the appeal, set aside the judgment and decree of the High Court dated 12th December, 1974 and dismiss the suit with costs.
Y. Lal Appeal allowed.
| One Govind Rao Harshe mortgaged some agricultural land and a house to Lakshmi Chand and Duli Chand Modi.
The mortgagees filed a suit and obtained a preliminary decree and later a final decree for sale of the property for realisation of Rs. 5001/13/6 on 26.3.1938, and applied for execution of the said decree, which was stayed ' because the mortgagor applied for relief under the C.P. and Berar Relief of Indebtedness Act, 1939, to save the property from being sold at auction.
Consequent upon his failure to comply with the conditions of the order passed in those proceedings, the decree holders alleging default again applied for the revival of the execution proceedings and prayed for sale of the house property in dispute.
The judgment debtor did not appear before the Executing Court and the said Court held that the decree holders were entitled to execute the decree for the recovery of the debt.
Thereupon the judgment debtor submitted an application for setting aside the ex parte order, which was dismissed and an appeal filed against the said order was also dismissed by the District Judge.
In the meantime the house was put to auction and the highest bid of Rs. 6905 was knocked down in favour of one Gopal Rao Mutatkar on 20.8.1942 and the sale was confirmed vide order dt.
10.4.1943.
Applications filed by the judgment debtor and his adult sons seeking to set aside sale were dismissed and the appeals failed even upto the High Court.
In the meantime the appellant, a registered educational institution, through its Secretary, moved an application for granting a sale certificate stating that the house in question was auctioned by the Court and was purchased by Gopal Rao Mutatkar a member of the appellant institution, on 20.8.1942, for Mahila Vidyalaya, which sale was confirmed on 10.4.43.
The appellant prayed that the certificate be granted in its favour.
A stamp requisite for the purpose was also supplied.
The execution court on 26.2.1944, ordered that the sale certificate will issue in the name of Mahila Vidyalaya, Sagar, through Secretary, G.R. Wakhle and 907 accordingly the sale certificate was issued in favour of the appellant on 8.4.1944.
The four sons of the mortgagor filed a suit impleading the auction purchaser, G.R. Wakhle, Secretary, mortgagees and their father mortgagor, as defendants, praying that the execution sale was not binding on their interest.
The auction purchaser and the former Secretary of the appellant institution objected to their being impleaded as parties to the suit, as according to them they had ceased to be the functionaries of the appellant and the suit should have been filed against the appellant itself and not against its office bearers.
Thereafter the plaintiffs impleaded the appellant as party.
This suit by the sons of the mortgagor was dismissed.
The appellant thereupon as auction purchaser applied for the delivery of possession, which was granted.
Some portion of the property was in occupation of the widowed sister, Radhabai, of the original mortgagor and other portions were in the possession of tenants.
The Secretary of the appellant agreed to the request of the tenants that they will not be ousted as they were willing to execute rent notes.
The appellant later required the premises and moved the Rent Controller for permission to serve notices on the tenants to vacate the premises.
All the tenants except Radhabai and the original mortgagor who had also started living with his sister, vacated the premises.
The appellant then instituted a suit against them.
The trial court dismissed the suit for ejectment but passed a decree for arrears of rent.
The appeal filed by the appellant against that order was allowed by the District Judge.
The original mortgagor 's appeal failed before the High Court whereupon the appellant filed a execution application for ejectment of the occupants which is still pending as a result of stay order passed in a subsequent suit filed by Govind Rao Harshe, original mortgagor, against the appellant for a declaration, possession and permanent injunction.
This suit giving rise to the present appeal was dismissed by the Trial Court.
An appeal preferred against that order by the legal representatives of the deceased plaintiff, was allowed by the District Judge granting the declaration, delivery of possession of the house together with a mandatory injunction directing demolition of some new constructions made by the appellant.
The appellant filed a second appeal before the High Court which was dismissed by the impugned special leave.
The High Court held that as Goapl Rao Mutatkar was the auction purchaser, no sale certificate could be issued by the executing court in favour of the appellant, his bid being in his personal capacity and not one for and on behalf of the appellant.
It was also held by High Court that Gopal Rao Mutatkar could transfer his proprietary right by sale or a gift which he did not do.
According to the High Court the act of the executing court was clearly without jurisdic 908 tion and the sale certificate being void and inoperative, conferred no right or title upon the appellant over the suit property.
Allowing the appeal, this Court HELD: Once an order is made under Order XXI rule 92, confirming the sale, the title of the auction purchaser related back to the date of sale as provided under Section 65, C.P.C. The title in the property thereafter vests in the auction purchaser and not in the judgment debtor.
The issue of sale certificate under order XXI, rule 94, C.P.C. in favour of the auction purchaser though mandatory but the granting of certificate is a ministerial act and not judicial.
[917H 918B] The sale of the property in question was perfectly valid and as soon as the sale was confirmed in favour of Gopal Rao Mutatkar under Order XXI Rule 92, C.P.C. Govind Rao Harshe had no right or title in the property and Gopal Rao Mutatkar became the owner of the property.
[918G] The High Court did not consider the case in a proper perspective and took a wholly erroneous view in holding that the appellant was a trespasser and Govind Rao Harshe could have filed a suit for possession.
The plaintiff Govind Rao Harshe himself had come forward with a plea that the execution proceedings and the sale was null and void and unless he was able to succeed in this regard, which he did not in the present case, no decree for possession could at all have been passed in his favour.
[919C D]
|
ivil Appeal Nos.
338 339 of 1991.
From the Judgment and Order dated 28.12.85 of the Hyderabad High Court in OMA No. 456 of 1984 and CRP No. 2743 of 1984.
WITH Civil Appeal Nos. 2692 930F 1991.
K.R. Choudhary for the Appellant.
K. Madhava Reddy, G. Prabhakar, T.V.S.N. Chari (N.P.) for the Respondents.
J. Leave granted in S.L.P. (C) Nos.
7071 72 of 1986.
These appeals are brought against the common judgment of the 929 Andhra Pradesh High Court in O.M.A. No. 456 of 1984 and C.R.P. No. 2743 of 1984.
The High Court set aside in part the common judgment of the Ist Additional Chief Judge, Civil Court at Hyderabad, in Original Suit No. 174 of 1983 and O.P. No. 49 of 1983 whereby he made the award of the umpire (hereinafter referred to as the `umpire ' or `arbitrator ') a rule of court and passed a decree in terms of the award together with interest on the principal amount awarded at the rate of 12 per cent per annum from the date of the decree.
The High Court set aside the decree in respect of Claim Nos.
III, Vi and IX and affirmed the decree for the other claims.
The main appeal Nos. 338 & 339 of 1991 arising from S.L.P. (C) Nos.
1573 & 1574 of 1986 are by the Associated Engineering Co. (hereinafter referred to as `the Contractor ').
It challenges the judgment of the High Court setting aside the decree of the Civil Court in respect of Claim Nos.
III, VI and IX.
The other appeals arising from S.L.P. (C) Nos.
7071 & 7072 of 1986 are by the Government of Andhra Pradesh and they are against the judgment of the High Court confirming the decree of the Civil Court in respect of Claim Nos.
II, IV and VII(4).
The High Court set aside Claim Nos.
III, VI and IX on the ground that those claims were not supported by the agreement between parties and that the arbitrator travelled outside the contract in awarding those claims.
While that portion of the judgment of the High Court is supported by the Government, the Contractor submits that the High Court exceeded its jurisdiction in interfering with non speaking award.
The Government challenges the judgment of the High Court in so far as it affirmed the findings of the Civil Court in respect of Claim Nos.
II IV and VII(4) on the ground that the arbitrator awarded those claims totally unsupported by the contract.
Mr. A.B. Dewan, appearing for the Contractor, submits that the umpire made a non speaking award.
He did not incorporate any document as a part of the award, notwithstanding his reference to the contract.
In the circumstances, counsel submits, the law does not permit interference by the Court with such an award.
Mr. K. Madhava Reddy, appearing for the Government, on the other hand, submits that the umpire made a speaking award with reference to the claims and he gave reasons for awarding those claims.
It is true, counsel says, that the umpire made only brief reference to the provisions of the contract and his reasons for making the award.
But notwithstanding the brevity of his reasoning, he has spoken sufficiently clearly as a result of which errors of law and fact have become 930 apparent on the face of the award disclosing that the umpire acted contrary to, and unsupported by, contract, thereby exceeding his jurisdiction.
He says that the umpire has referred to the contract not merely for the purpose of reciting or narrating his authority to hear the matter and resolve the dispute, but for incorporating it as a part of the award.
In doing so, he exceeded the contract, not merely by misinterpreting it, but by travelling totally outside it, and by making an award without regard to and independent of the contract.
A number of decision have been cited on either side in support of the respective contentions.
The award was made in respect of disputes which arose between the Government and the Contractor for the cement concrete lining under Agreement dated 20.1.1981 (as supplemented subsequently) in connection with the construction of Nagarjunasagar Dam.
The parties filed their pleadings and documents before the arbitrator/umpire.
There were 15 claims apart from the general claim for cost and interest.
As stated earlier, we are concerned only with Claim Nos.
III, VI and IX which are claims awarded by the umpire and decreed by the Civil Court, but set aside by the High Court, and with Claim Nos.
II, IV and VII(4) which were awarded by the umpire and decreed by the Civil Court as well as by the High Court.
The first set of claims respectively, are: `Escalation on Napa Slabs '; `Payment of Extra Lead for water; and, `Extra Expenditure incurred due to flattening of canal slopes and consequent reduction in top width of banks used as roadway '.
The other set of claims relate respectively to `Labour Escalation '; `Refund of excess Hire Charges of Machinery '; and ' `Stand conveyance '.
The umpire after reciting the background of the dispute which led to his entering upon reference on 16.12.82 to decide the dispute and the relevant agreement between the parties deals with the claims seriatim.
As regards Claim No. III, he says: "I hereby declare and award and direct the respondent to compensate the claimants towards escalation in the cost of napaslabs calculated at Rs.4.25 (Rupees four and paise twenty five) per Sq.
of napa slab lining, under item 11 of schedule A of the agreement for the entire work and make payments accordingly".
The main criticism levelled by the Government against this award is that there was no provision in the contract for escalation of 931 the cost or price of napa slabs.
The escalation provision in the contract related to labour, diesel oil, tyres and tubes, as provided in Item 35 thereof.
There was no escalation provision in the contract as far as napa slabs were concerned.
The price for these slabs had been determined in the contract at Rs. 4.25 Per Sq.
and there was no provision for increase or decrease of that price.
Both the parties to the contract were bound by that price and the arbitrator, therefore, had no jurisdiction to award any escalation in the price of napa slabs.
In the absence of any provision in the contract, the arbitrator had no jurisdiction to make an award for escalation.
This contention of the Government was accepted by the High Court.
Mr. Dewan, appearing for the Contractor, is not in a position to refer to any provision of the contract allowing escalation for napa slabs.
All that he is in a position to refer to is Item 35 of the contract which refers to price adjustment for increase or decrease inthe cost.
That item, as stated earlier, refers to various matters such as, diesel oil, labour, etc., but not to napa slabs.
On the other hand, at the end of that item, it is specifically stated `no claims for price adjustment other than those provided herein, shall be entertained '.
Furthermore, it is specifically provided in the contract `the contractor shall have to make his own arrangements to obtain the napa slabs as per standard specifications.
The Department does not accept any responsibility either in handing over the quarries or procuring the napa slabs or any other facilities.
The contractor will not be entitled for any extra rate due to change in selection of quarries as above '.
There is thus a specific prohibition against price adjustment or award for escalated cost in respect of any matter falling outside Item 35.
Mr. Dewan, however, submits that being a non speaking award, the Court cannot examine the reasons.
Mr. Madhava Reddy, appearing for the Government, submits that the award is not silent on the point.
It speaks eloquently, though briefly.
It is not merely in the recital or narrative portion of the award that the agreement is referred to, but in making the award under Claim No. III the agreement is specifically incorporated by directing payment for escalation on napa slabs under Item 11 of Schedule A of the Agreement at the rate of Rs.4.25.
The agreement is thus bodily incorporated into the award thereby disclosing an error apparent on its face and the total lack of the arbitrator 's jurisdiction by reason of his going totally outside and opposed to the contract.
This, counsel says, is revealed not by a construction of the contractual provisions, but by merely looking at the matters covered by the contract.
932 Claim No. VI Payment of Extra Lead for water.
This is what the arbitrator says: "I hereby declare and award and direct the Respondent to pay extra towards additional lead for water i.e. 3 K. Ms. over the specified lead of 2 K.Ms.
in the agreement for items 4, 5, 6, 10 and 11 of Schedule A".
As regards this claim, Mr. Dewan reiterates his contention that the award is silent as to the reasons and, therefore, the Court should not interfere.
Mr. Madhava Reddy on the other hand submits that the award speaks as to the reasons for allowing the claim for extra amount towards additional lead for water i.e. for 3 K.Ms.
over and above the specified lead of 2 K.Ms.
But counsel says, the agreement provides for no payment at all for any lead and much less for any additional lead.
He refers to the specific provision of the agreement regarding water.
He says that the Contractor had to make its own arrangements for supply of water at work site for all purposes including quarry.
There is no provision in the contract for making any payment to the Contractor for the water brought by it to the site.
In the absence of any such provision, counsel says, it is preposterous that the arbitrator should have awarded extra amount for additional lead for water.
The contract specifically stated that it was the responsibility of the Contractor to make its on arrangements for the supply of water.
The Government gave no assurance to the Contractor regarding the availability of water or the prices payable therefor.
The umpire, therefore, had no jurisdiction to allow Claim No. VI.
The High Court accepting the contention of the State reversed the Civil Court 's decree as regards that claim and held" . .
In view of unequivocal agreement that the contractor should make his own arrangements for supply of water for the purpose of curing, the award of compensation is outside the purview of the agreement and is vitiated".
Claim No. IX Extra expenditure incurred due to flattening of canal slopes and consequent reduction in top width of banks used as roadway.
Referring to this claim, this is what the award says: "I hereby declare and award and direct the respondent to pay the claimant for 50% of the work done on the napa slab lining on the left side slope of Canal at the extra rate of Rs.4.00 per Sq.
Met of lining work".
933 Rejecting the contentions of the Contractor and accepting those of the Government, the High Court held that the contract did not provide for any payment whatever for the maintenance of canal slopes and consequent deduction in top width of banks used as roadway.
The High Court found that it was the responsibility of the Contractor to repair the banks and the contract contained no provision for payment of any amount towards the decrease in the width or otherwise.
The High Court says `. the acceptance of claim on this score is beyond the purview of the agreement and as such vitiated '.
While counsel for the Contractor repeats his contentions regarding the award being silent as to reasons, Mr. Madhava Reddy submits that the contract provides for no payment whatever under Claim No. IX.
On the other hand, it specifically states "8(A) SITE FACILITIES Haul roads from batching plant site to the work site in the first instance will be formed by the Department as per site surveys per each batching plant site.
These haul roads are fair weather roads only with hard passages at stream crossings.
Formation of haul roads within the batching plant area, maintenance of all haul roads including those formed by the Department shall be the responsibility of the contractors.
Existing roads and roads under the control of N.S. Project can be made use of by the Contractor.
Any other haul roads required by the Contractor and not specified in plan shall be carried out by the Contractor at his cost.
8.(A) 1.
WIDENING OF BANKS The canal banks will be widened to 5 meters and 3 meters width respectively by the Department for right and left banks to facilitate transport of materials.
The contractor however has to maintain the haul roads".
In the absence of any provision to pay for extra expenditure and in the light of the specific provision placing the sole responsibility for the maintenance of the haul roads on the Contractor, the arbitrator had no jurisdiction to award 50% at extra rate of Rs. 4 per Sq.
Meter.
The contract contains no provision for payment of any amount outside what is strictly specified under the clause.
In the circumstances, Mr. 934 Madhava Reddy says, the High Court was perfectly justified in coming to the conclusion, which it did, as regards the arbitrator acting outside his jurisdiction.
We shall now deal with the other set of claims, namely, Claim Nos.
II, IV and VII(4) which had been awarded and decreed by both the courts below.
The arbitrator deals with Claim No. II as follows: "The claim is admitted.
I hereby declare and award and direct the Respondents that due to the statutory revision of Minimum rates of wages payable to various categories of workers, the claimant is to be paid compensation as per the following formula: P1 (WSI WSO)0.10+ (WSSI WSSO)0.10 (WUSI WUSO)0.8 V2 X R 100 WSO WSSO WUSO increase in Min.
Wages of labour notified by the Government of A.P. after 22.10.1980 under the Min.
Wages Act., 1948.
Percentage Labour component of each item of Work as per Appendix 9 at page 139 of Agreement.
R Value of work done under each item of work during the period under review.
WSO 11.15 (Daily Minimum wage in force on the date of Tender for skilled labour).
WSSO 8.50 (Daily Minimum wage in force on the date of Tender for semiskilled labour).
WUSO 5.65 (Daily Minimum wage in force on the date of Tender for unskilled labour).
WSI Revised daily Min. wage as fixed by Govt.
A.P. for skilled labour applicable for the period under review.
935 WSSI Revised daily Min. wage as fixed by Govt.
of A.P. for semiskilled labour applicable for the period under review.
WUSI Revised daily Min. wage as fixed by Govt.
of A.P. for semiskilled labour applicable for the period under review.
WUSI Revised daily Min.
Wages as fixed by Government of A.P. for unskilled labour applicable for the period under review.
The above compensation is payable to the claimant for the work done after 23.12.80, the date of publication of G.O. No. 835 dated 18.12.80, till the completion of the work".
It is not seriously disputed that the observation "The claim is admitted" is only a reference to the arbitrator 's decision to allow the claim and not as a concession or admission on the part of the Government.
In fact from the pleadings it is quite clear that the Government had opposed every claim and there was no concession on its part.
Claim No. II had been, as seen above, elaborately dealt with by the arbitrator.
On account of the statutory revision of minimum rates of wages payable to various categories of workers, the arbitrator made the award in respect of labour escalation.
Escalation under this item is in fact, as stated above, provided for under the contract, but in terms thereof.
The grievance of the Government is not because the umpire awarded escalation for labour, but because he allowed escalation otherwise than as provided under the contract.
The contract under Item 35 provides `Increase or decrease in the cost due to labour shall be calculated quarterly in accordance with the following formula: V1 = 0.75 P1 X R(i i) 100 10 V1 = increase or decrease in the cost of work during the quarter under consideration due to changes in rates for labour.
R = the value of the work done in Rupees during the quarter under consideration 936 1 = the average consumer price index for industrial workers (wholesale prices) for the quarter in which tenders were opened (as published in Nalgonda District by the Director of Bureau of Economics and Statistics, Andhra Pradesh).
P1 = Percentage of labour components (specified in schedule in appendix 9 of the item).
i = the average consumer price index for industrial workers (wholesale prices) for the quarter under consideration.
Price adjustment clause shall be applicable only for the work that is carried out within the stipulated time or extensions thereof as are not attributable to the contractor.
No claims for price adjustment other than those provided herein, shall be entertained".
The contention of the Government is that the two formulae are totally different from each other as a result of which the arbitrator awarded very much more than what is warranted under the agreed formula.
Mr. Madhava Reddy submits that it is true that the contractor was bound to pay minimum wages according to the relevant statutory provisions.
In fact the contract contains a provision making it necessary for the Contractor to conform to all laws, regulations, bye laws, ordinances, regulations, etc.
But the fact that the Contractor necessarily had to pay enhanced rates of wages did not entitle it to claim any amount from the Government in excess of what had been strictly provided under the contract.
A specific formula had been prescribed under Item 35, as seen above, and the function of the umpire was to make an award in accordance with that formula.
He had no jurisdiction to alter the formula, which he has done, as seen from the award.
It is not disputed on behalf of the Contractor that the formula followed by the arbitrator, as seen from the award under Claim No. II, is different from the formula prescribed under the contract.
But Mr. K.R. Chowdhury, one of the counsel appearing for the Contractor, points out that the contract provided for payment of all wages according to the current rates and, therefore, the arbitrator was well within his jurisdiction to make an award by adopting a formula in keeping with the enhanced rates of wages, and the High Court, he contends, 937 rightly decreed the amounts under that claim in terms of the award.
We shall deal with Claim Nos.
IV and VII(4) separately.
But as regards Claim Nos.
III, VI and IX, we are of the view that the High Court was right in stating that the arbitrator acted outside the contract in awarding those claims.
For the very same reason we are of the view that the High Court was wrong in coming to the conclusion, which it did, regarding Claim No. II.
We say so because there is no justification whatsoever for the arbitrator to act outside the contract.
These four claims are not payable under the contract.
The contract does not postulate in fact it prohibits payment of any escalation under Claim No. III for napa slabs or Claim No. VI for extra lead of water or Claim No. IX for flattening of canal slopes or Claim No. II for escalation in labour charges otherwise than in terms of the formula prescribed by the contract.
The conclusion is reached not by construction of the contract but by merely looking at the contract.
The umpire travelled totally outside the permissible territory and thus exceeded his jurisdiction in making the award under those claims.
This is an error going to the root of his jurisdiction: See Jivarajbhai Ujamshi Sheth & Ors.
vs Chintamanrao Balaji & Ors., AIR 1965 SC 214.
We are in complete agreement with Mr. Madhava Reddy 's submissions on the point.
As regards Claim Novs.
IV and VII(4), we see no merit in Mr. Madhava Reddy 's contentions.
Claim No. IV relates to `Refund of excess hire charges of machinery and payment towards losses suffered as a result of poor performance of department machinery and also direction for the future '.
This claim, was rightly allowed by the arbitrator and his decision was rightly upheld by High Court.
The Government was, in terms of the contract, bound to compensate the Contractor for the excess higher charges paid as a result of the poor performance of the machinery supplied by the Government.
Claim No. VII(4) is as regards `Sand Conveyance '.
The arbitrator says "The diesel oil requirement shall be taken as 0.35 lit for item No. 5 of statement (A) at page 59 of Agreement as indicated in the original tender and not as 0.035 and price adjustment made accordingly".
The arbitrator was, in our view, right in so stating and the High Court, 938 in our view, rightly upheld this claim.
The arbitrator cannot act arbitrarily, irrationally, capriciously or independently of the contract.
His sole function is to arbitrate in terms of the contract.
He has no power apart from what the parties have given him under the contract.
If he has travelled outside the bounds of the contract, he has acted without jurisdiction.
But if he has remained inside the parameters of the contract and has construed the provisions of the contract; his award cannot be interfered with unless he has given reasons for the award disclosing an error apparent on the face of it.
An arbitrator who acts in manifest disregard of the contract acts without jurisdiction.
His authority is derived from the contract and is governed by the Arbitration Act which embodies principles derived from a specialised branch of the law of agency (see Mustill & Boyd 's Commercial Arbitration, Second Edition, p. 641).
He commits misconduct if by his award he decides matters excluded by the agreement (see Halsbury 's Laws of England, Volume II, Fourth Edition, Para 622).
A deliberate departure from contract amounts to not only manifest disregard of his authority or a misconduct on his part, but it may tantamount to a mala fide action.
A conscious disregard of the law or the provisions of the contract from which he has derived his authority vitiates the award.
A dispute as to the jurisdiction of the arbitrator is not a dispute within the award, but one which has to be decided outside the award.
An umpire or arbitrator cannot widen his jurisdiction by deciding a question not referred to him by the parties or by deciding a question otherwise than in accordance with the contract.
He cannot say that he does not care what the contract says.
He is bound by it.
It must bear his decision.
He cannot travel outside its bounds.
It he exceeded his jurisdiction by so doing, his award would be liable to be set aside.
As stated by Lord Parmoor: ". .It would be impossible to allow an umpire to arrogate to himself jurisdiction over a question which on the true construction of the submission was not referred to him.
An umpire cannot widen the area of his jurisdiction by holding, contrary to the fact, that the matter which he affects to decide is within the submission of the parties . .".
939 Attorney General for Manitoba vs Kelly & Others, , 276.
Evidence of matters not appearing on the face of the award would be admissible to decide whether the arbitrator travelled outside the bounds of the contract and thus exceeded his jurisdiction.
In order to see what the jurisdiction of the arbitrator is, it is open to the Court to see what dispute was submitted to him.
If that is not clear from the award, it is open to the Court to have recourse to outside sources.
The Court can look at the affidavits and pleadings of parties; the Court can look at the agreement itself.
Bunge & Co. vs Dewar & Webb, [1921] 8 L1.
L.Rep.
436(K.B.).
If the arbitrator commits an error in the construction of the contract, that is an error within his jurisdiction.
But if he wanders Outside the contract and deals with matters not allotted to him, he commits a jurisdictional error.
Such error going to his jurisdiction can he established by looking into material outside the award.
Extrinsic evidence is admissible in such cases because the dispute is something which arises under or in relation to the contract or dependent on the construction of the contract or to be determined within the award.
The dispute as to jurisdiction is a matter which is outside the award or outside whatever may be said about it in the award.
The ambiguity of the award can, in such cases, be resolved by admitting extrinsic evidence.
The rationale of this rule is the nature of the dispute is something which has to be determined outside and independent of what appears in the award.
Such jurisdictional error needs to be proved by evidence extrinsic to the award.
See M/s. Alopi Parshad & Sons.
Ltd. vs The Union of India, ; ; Bunge & Co. vs Dewar & Webb.
, [1921] 8 L1.
L. Rep. 436 (K.B.); Christopher Brown Ld.
vs Genossenschaft Oesterreichischer, ; Rex vs Fulham, ; Falkingham vs Victorian Railways Commission, ; Rex vs All Saints, Southampton, [1828] 7 B. & C. 785; Laing.
Son & Ltd. vs Eastcheap Dried Fruit Co., [961] 1 L1.L. Rep. 142, 145 (Q.B.); Dalmia Dairy Industries Ltd. vs National Bank of Pakistan, [1978] 2 L1.
L. Rep. 223 (C.A.); Heyman vs Darwing Ld., Union of India vs kishorilal; , ; Renusager Power Co. Ltd. vs General Electric Company, ; ; Jivarajbhai vs Chintamanrao, AIR 1965 SC 214; Gobardhan Das vs Lachhmi Ram, AIR 1954 SC 689, 692; Thawardas vs Union of India., AIR 1955 SC 468; Omanhene vs Chief Obeng, AIR 1934 P.C. 185, 188; F.R. Absalom.
Ltd. vs Great Western London Garden Village Society.
Limited, and M. Golodetz 940 vs Schrier & Anr., [1947] 80 L1.
L. Rep. 647.
In the instant case, the umpire decided matters strikingly outside his jurisdiction.
He outstepped the confines of the contract.
He wandered far outside the designated area.
He diagressed far away from the allotted task.
His error arose not by misreading or misconstruing or misunderstanding the contract, but by acting in excess of what was agreed.
It was an error going to the root of his jurisdiction because he asked himself the wrong question, disregarded the contract and awarded in excess of his authority.
In many respects, the award flew in the face of provisions of the contract to the contrary.
See the principles state in Anisminic Ltd. vs Foreign Compensation Commission., ; ; Pearlman vs Keepers and Governors of Harrow School, ; ; Lee vs Showmen 's Guild of Great Britain, ; M.L. Sethi vs R.P. Kapur, ; ; The Managing Director.
J. and K. Handicrafts vs M/s. Good Luck Carpets, and State of Andhra Pradesh & Anr.
vs R.V. Rayanim; , See also Mustill & Boyd 's Commercial Arbitration, Second Edition; Halsbury 's Laws of England, Fourth Edition,Vol.
The umpire, in our view, acted unreasonably, irrationally and capriciously in ignoring the limits and th clear provisions of the contract.
In awarding claims which are totally opposed to the provisions of the contract to which he made specific reference in allowing them, he has misdirected and misconducted himself by manifestly disregarding the limits of his jurisdiction and the bounds of the contract from which he derived his authority thereby acting ultra fines compromissi.
In the circumstances, we affirm the judgment of the High Court under appeals except in respect of Claim No. II.
Accordingly, the appeals of the contractor are dismissed; and, the appeals of the Government are allowed in respect of claim No. II.
We do not, however make any order as to costs.
G.N. Appeals dismissed.
| Some disputes arose between the Respondent State and the Contractor in respect of the Cement concrete lining under an agreement in connection with the construction of Nagarjunasagar Dam.
Arbitrator Umpire was appointed and the parties filed their pleading and documents before him.
There were 15 claims apart from the general claim for cost and interest.
The award made by the Umpire was filed before the Civil Court.
The Civil Court made the award a rule of Court and passed a decree in terms of the award together with interest at 12% per annum from the date of the decree.
On appeal, the High Court set aside the decree in respect of three claims on the ground that the claims were not supported by the agreement between the parties and that the arbitrator had gone beyond the contract in awarding the claims, and confirmed the decree in respect of three other claims.
Aggrieved by the High Court 's Judgment, both the Contractor and the State Government preferred appeals by special leave.
On behalf of the Contractor it was contended that since the Umpire made a non speaking award and did not incorporate any document as part of the award except his reference to the contract, law did not permit interference by the Court with the award, and that the High Court exceeded its jurisdiction in interfering with a non speaking award.
On behalf of the State Government it was contended that notwith 925 standing the brevity of his reasoning, the arbitrator had given a speaking award, but with errors of law and fact apparent on the face of it; and that he acted contrary to the contract, thereby exceeding his jurisdiction.
Dismissing the appeal of the Contractor and partly allowing the appeal of the State Government, this Court, HELD: 1.
The arbitrator cannot act arbitrarily, irrationally capriciously or independently of the contract.
His sole function is to arbitrate in terms of the contract.
He has no power apart from what the parties have given him under the contract.
If he has travelled outside the bounds of the contract, he has acted without jurisdiction.
But if he has remained inside the parameters of the contract and has construed the provisions of the contract, his award cannot be interfered with unless he has given reasons for the award disclosing an error apparent on the face of it.
[938A B] 2.
An arbitrator who acts in manifest disregard of the contract acts without jurisdiction.
His authority is derived from the contract and is governed by the Arbitration Act which embodies principles derived from a specialised branch of the law of agency.
He commits misconduct if by his award he decides matters excluded by the agreement.
A deliberate departure from contract amounts to not only manifest disregard of his authority or a misconduct on his part, but it may tantamount to a mala fide action.
A conscious disregard of the law or the provisions of the contract from which he has derived his authority vitiates the award.
[938C E] Mustill & Boyd 's Commercial Arbitration, Second Edition, p. 64; Halsbury 's Laws of England, Volume II, 4th Edn., para 622, referred to.
A dispute as to the jurisdiction of the arbitrator is not a dispute within the award, but one which has to be decided outside the award.
An Umpire or arbitrator cannot widen his jurisdiction by deciding a question not referred to him by the parties or by deciding a question otherwise than in accordance with the contract.
He cannot say that he does not care what the contract says.
He is bound by it.
It must bear his decision.
He cannot travel outside its bounds.
If he exceeded his jurisdiction by doing so, his award would be liable to be set aside.
[938E F] Attorney General for Manitoba vs Kelly & Others, , referred to.
926 4.1 Evidence of matters not appearing on the face of the award would be admissible to decide whether the arbitrator travelled outside the bounds of the contract and thus exceeded his jurisdiction.
In order to see what the jurisdiction of the arbitrator is, it is open to the Court to see what dispute was submitted to him.
If that is not clear from the award, it is open to the Court to have recourse to outside sources.
The Court can look at the affidavits and pleadings of parties; the Court can look at the agreement itself.
[939A B] Bunge & Co. vs Dewar & Webb, [1921] 8 LI.
L.Rep.
436(K.B.), referred to.
If the arbitrator commits an error in the construction of the contract, that is an error within his jurisdiction.
But if he wanders outside the contract and deals with matters not allotted to him, he commits a jurisdictional error.
Such error going to his jurisdiction can be established by looking into material outside the award.
Extrinsic evidence is admissible in such cases because the dispute is not something which arises under to the contract or dependent on the construction of the contract or to be determined within the award.
The dispute as to jurisdiction is a matter which is outside the award or outside whatever may be said about it in the award.
The ambiguity of the award can, in such cases, be resolved by admitting extrinsic evidence.
The nature of the dispute is something which has to be determined outside and independent of what appears in the award.
Such jurisdictional error needs to be proved by evidence extrinsic to the award.
[939C F] M/s. Alopi Parshad & Sons Ltd. vs The Union of India, ; ; Union of India vs Kishori Lal, ; ; Renusagar Power Co. Ltd. vs General Electric Company, ; ; Jivarajbhai vs Chintamanrao, AIR 1965 SC 214; Gobardhan Das vs Lachhmi Ram, AIR 1954 SC 689 and Thawardas vs Union of India, AIR 1955 SC 468, relied on.
Bunge & Co. vs Dewar & Webb, [1921] 8 LI.
L. Rep. 436 (K.B.); Christopher Brown Ltd. vs Genossenschaft Oesterreichischer, ; Rex vs fulham, ; Falkingham vs Victorian Railways Commission, ; Rex vs All Saints, Southampton, [1828] 7 B. & C. 785; Laing, Son & Co. Ltd. vs Eastcheap Dried Fruit Co., [1961] 1 LI.
L. Rep. 142, 145 (Q.B.); Dalmia Dairy Industries Ltd. vs National Bank of Pakistan, [1978] 2 LI.
L. Rep. 223 (C.A.); Heyman vs Darwins Ltd., [1942] A.C. 356; Omanhene vs Chief Obeng, AIR 1934 P.C. 185; F.R. Absalom Ltd. vs Great Western (London) Garden 927 Village Society, Limited, and M. Golodetz vs Schrier & Anr., [1947] 80 LI.
L.Rep.
647, referred to.
In the instant case, the umpire decided matters strikingly outside his jurisdiction.
He outstepped the confines of the contract.
He wandered far outside the designated area.
He diagressed far away from the allotted task.
His error arose not by misreading or misconstruing or misunderstanding the contract, but by acting in excess of what was agreed.
It was an error going to the root of his jurisdiction because he asked himself the wrong question, disregarded the contract and awarded in excess of his authority.
In many respects, the award flew in the face of provisions of the contract to the contrary.
The umpire acted unreasonable, irrationally and capriciously in ignoring the limits and the clear provisions of the contract.
In awarding claims which are totally opposed to the provisions of the contract to which he made specific reference in allowing them, he has misdirected and misconducted himself by manifestly disregarding the limits of his jurisdiction and the bounds of the contract from which he derived his authority thereby acting ultra fines compromissi.
[940A D] M.L. Sethi vs R.P. Kapur, ; ; The managing Director, J. and K. Handicrafts vs M/s. Good Luck Carpets, and State of Andhra Pradesh & Anr.
vs R.V. Rayanim; , , relied on.
Anisminic Ltd. vs Foreign Compensation Commission, ; ; Pearlman vs Keepers and Governors of Harrow School, ; and Lee vs Showmen 's Guild of Great Britain, , referred to.
Mustill & Boyd 's Commercial Arbitration, Second Edition, p. 641 and Halsbury 's Laws of England, 4th Edn., Vol. 2, para 622, referred to.
In the instant case, the contract did not postulate in fact it prohibited payment of any escalation under Claim No. III for napaslabs or Claim No. VI for extra lead of water or Claim No. IC for flattening of canal slopes or Claim No. II for escalation in labour charges otherwise than in terms of the formula prescribed by the contract.
The umpire travelled totally outside the permissible territory and thus exceeded his jurisdiction in making the award under those claims.
This is an error going to the root of his jurisdiction.
As such, the High Court was right in holding that the arbitrator acted outside the contract 928 in awarding the abovesaid claims.
However, the High Court went wrong in confirming the decree in respect of Claim No. II relating to escalation in labour charges since a specific formula had been prescribed under Item 35, and the function of the umpire was to make an award in accordance with the formula; he had no jurisdiction to alter the same.
[937C D; 936F] Jivarajbhai Ujamshi Sheth & Ors.
vs Chintaman rao Balaji & Ors., AIR 1965 SC 214, relied on.
Claim No. IV relating to `Refund of Excess hire charges of machinery and payment towards losses suffered as a result of poor performance of department machinery and also direction for the future ' was rightly allowed by the arbitrator and his decision was rightly upheld by the High Court.
The Government was, in terms of the contract, bound to compensate the contractor for the excess higher charges paid as a result of the poor performance of the machinery supplied by the Government.
[937E F] 6.3.
As regards Claim No. VII(4) relating to `Sand Conveyance ' the arbitrator was right in stating that the diesel oil requirement should be taken as 0.35 lit for item No. 5 of statement (A) at page 59 of Agreement as indicated in the original tender and not as O.035 and price adjustment made accordingly.
The High Court Court rightly upheld this claim.
[937G H; 938A]
|
iminal Appeal No.413 of 1982.
From the JUdgment and Order dated 12.1.1982 of the Madhya Pradesh High Court in Criminal Appeal No. 7 of 1979.
U.R. Lalit, Prithvi Raj, S.S. Khanduja, J.P. Dubey, Y.P. Dhingra, B.K. Satija, Uma Nath Singh, section Karnail and S.K. Gambhir for the appearing parties.
The Judgment of the Court was delivered by AHMADI, J.
This appeal by special leave is preferred by the appellant Khujji @ Surender Tiwari who has been convicted by both the courts below under section 302 IPC for the murder of one Gulab.
The facts leading to this appeal, briefly stated, are that on the evening of May 20,1978 the deceased Gulab and his companion PW4 Ramesh Chander hired a Rickshaw to go to the dispensary of Dr. Mukherjee.
PW 3 Kishan Lal pulled the Rickshaw and while he was passing 8 through Suji Mohalla near Panchsheel Talkies the appellant and his companions surrounded the Rickshaw and launched an attack on the deceased and his companion.
PW 4 was the first to receive an injury by a cycle chain.
Sensing trouble both Gulab and PW 4 jumped out of the Rickshaw and ran in differ ent directions.
Gulab ran towards Suji Mohalla whereas PW 4 ran towards Panchsheel Talkies.
They were chased by the assailants who formed themselves into two groups.
PW 4 was fortunate enough to escape with not too serious an injury but his companion Gulab received stab wounds to which he succumbed on the spot.
The evidence of PW 12 Dr. Nagpal shows that the deceased had received three injuries, namely, (i) a penetrating stab wound with a second injury on the intercostal space on right side rib of the size of 3 cms x 5cms x Icm, (ii) a piercing stab wound 8cms below the scapu lar bone and 8cms outside the vertibral column of the size of 2.5cms x 1.5cms x 3cms, and (iii) an incised wound on the frontal auxiliary line 2.5cms x 1.Scms x 2cms deep on the left hipocardium region.
This witness, who performed the post mortem, deposed that injury No.1 which had injured the heart was sufficient in the ordinary course of nature to cause death.
He further stated that all the three injuries were collectively sufficient to cause death in ordinary course of nature.
The three articles, namely, the knife, the Chhuri and the Chhura which were attached in the course of investigation were shown to this witness and he stated that the three injuries were possible by the aforesaid articles.
It is clear from this evidence that Gulab died a homicidal death.
To bring home the guilt against the appellant the prose cution placed reliance on the evidence of three eye witness es, namely, PW 1 Komal Chand (an on looker), PW 3 Kishan Lal (the Rickshaw Puller) and PW 4 Ramesh (the companion of the deceased) besides the find of human blood on the weapon discovered at the instance of the appellant and on the lant which he was wearing at the time of his arrest.
The First Information Report, Exh.P 3, was lodged by PW 4 Ramesh immediately after the incident and the same was recorded by the Investigating Officer PW 13 Ramji Singh at about 9.15 p.m.
In the said first information report PW 4 gave the details regarding the incident and furnished the names of all the six assailants.
Soon after the first infor mation report was lodged the Investigating Officer visited the scene of occurrence and drew up the Panchnama on the basis of which a sketch plan Exh.P 20A was prepared in due course.
The appellant and some of his companions could not be traced till May 22, 1978.
After they were traced, they were interrogated and on their expressing 9 willingness to discover the weapons used in the commission of the crime, the Investigating Officer summoned two wit nesses, namely, PW 5 Panna Lal and Rajinder to act as Panch witnesses.
The prosecution case is that in the presence of these witnesses the appellant and his companions made cer tain confessional statements under section 27 of Evidence Act which led to the discovery of the weapons used in the commission of the crime.
According to the prosecution the appellant Khujji discovered a Chhura (knife) from his garage and the same was attached under the Panchnama Exh.
Since this weapon had bloodlike stains, it was sent to the Chemical Analyser and Serologist for examination and report.
The report indicates that it was stained with human blood but the blood group could not be determined.
The other two companions of the appellant, namely, Parsu and Guddu, also discovered a knife, Exh.[P 7, and a Chhura, Exh.P 13, which were attached under Panchnamas Exh] P 6 and P 12, respec tively.
As stated earlier the shirt and pant of Khujji were also attached as blood like stains were noticed thereon.
Both these articles were sent to the Chemical Analyser and Serologist.
So far as the shirt is concerned, since the blood stains were disintegrated it was not possible to determine the origin thereof.
But so far as the pant is concerned, the report states that the stains were of human blood but the blood group could not be determined as the result of the test was inconclusive.
On the basis of the first information report, the statements of three witnesses recorded in the course of investigation as well as the evidence regarding discovery and the find of human blood on the incriminating articles, the appellant and five others were charge sheeted for the murder of Gulab.
The trial court acquitted all except the appellant.
Before the trial court PW 4 Ramesh, who had lodged the first information report, tried to disown it.
He was declared hostile as he expressed his inability to identify the accused persons as the assail ants of the deceased Gulab.
PW 3, the Rickshaw Puller, while narrating the incident expressed a similar inability and he too was treated as hostile and cross examined by the Public Prosecutor.
The third eye witness PW 1 Komal chand, however, supported the prosecution case in his examination in chief but in his cross examination he expressed some doubt regard ing the identity of the appellant and Guddu stating that he had seen their backs only.
The trial court came to the conclusion that not only was this witness a chance witness but his presence at the scene of occurrence was extremely doubtful as it was difficult to believe that he had come out at that hour to purchase vegetables.
Thus the trial court refused to place reliance on the evidence of the three eye witnesses.
The trial court, however, came to the conclusion that the appellant was absconding and that he had discovered the weapon 10 which was found to be stained with human blood.
It also relied on the factum of find of human blood on the pant worn by the appellant at the time of his arrest.
On the basis of this evidence the trial court convicted the appellant under section 302 IPC and sentenced him to life imprisonment.
Khujji preferred an appeal against the said conviction.
The High Court while ignoring the evidence of PW 3 Kishan Lal and PW 4 Ramesh relied on the evidence of PW 1 Komal Chand and came to the conclusion that his evidence clearly estab lished the presence of the appellant as one of the assail ants notwithstanding his effort in cross examination to wriggle out of his statement in examination inchief in regard to the identity of the appellant.
The High Court noticed that the examination in chief of this witness was recorded on November 16, 1976 whereas his cross examination commenced on December 15, 1976 i.e. after a month and in between he seemed to have been won over or had succumbed to threat.
This inference was drawn on the basis of PW 3 's statement that he was severely beaten on the night previous to his appearance in court as a witness.
The High Court, therefore, took the view that the subsequent attempt of PW 1 Komal Chand to create a doubt regarding the identity of the appellant was of no consequence since there was intrinsic material in his evidence to establish the presence of the appellant amongst the assailants of deceased Gulab.
Relying further on the discovery evidence as well as the find of human blood on the weapon found from the garage of the appellant and on his pant which he was wearing at the time of his arrest, the High Court came to the conclusion that his conviction was well founded and dismissed his appeal.
It may here be mentioned that the State did not prefer an appeal against the five companions of the appellant who came to be acquitted by the trial court.
It is in these circum stances that the appellant has invoked this Court 's jurisdiction under Article 136 of the Constitution.
Mr. U.R. Lalit, learned counsel for the appellant, took us through the entire evidence and submitted that the prose cution version regarding the incident, particularly the involvement of the appellant, is highly doubtful since the correctness of the statement made in the first information report purporting to have been lodged by PW 4 Ramesh is itself doubtful because Ramesh himself has dis owned it.
Since the prosecution had declared both PW 3 Kishan Lal and PW 4 Ramesh as hostile to the prosecution the trial court was justified in refusing to rely on their evidence.
He further submitted that the presence of PW 1 Komal Chand at the place of occurrence at that hour was highly doubtful and this doubt was reinforced by his conduct in not raising a hue and cry or going to the help of the victim.
The evidence 11 disclosed that this witness resides at a place almost two furlongs from the scene of occurrence and claims to have seen the incident from a distance of about 22 feet from a point wherefrom the incident could not have been witnessed by him as is evident from the physical condition of the locality described in this sketch Exh.P 20A.
He, therefore,/ submitted that the trial court was justified in describing this witness as a chance witness and in doubting his presence at the scene of occurrence at the relevant point of time.
According to him the High Court committed an error in placing reliance on the testimony of this witness.
He, however, submitted that the trial court was not justi fied in recording the conviction on the mere fact that the appellant could not be found for two days and there was human blood on his weapon and pant attached in the course of investigation.
These two circumstances, contended counsel, constituted extremely thin and weak evidence to record a finding of guilt particularly when the trial Court had discarded the evidence of all the three eye witnesses and had doubted the contents of the first information report Exh.
Lastly he submitted that the High Court committed an error in brushing aside the statement made by PW 1 Komal Chand in his cross examination which went to show that his evidence regarding identity of the appellant was highly suspect.
Merely because there was a time gap between his examination in chief and his cross examination the High Court was not justified in jumping to the conclusion that the accused party had succeeded in winning him over by threat or otherwise.
On this line of reasoning Mr. Lalit contended that the High Court ought not to have interfered with the appreciation of his evidence by the trial court.
Besides these submissions based on the evidence of the three eyewitnesses and the find of human blood on the weapon and pant of the appellant, Mr. Lalit further submitted that one set of Panch witnesses, PW 5 Pannalal and Rajinder (not examined), had been employed for all the discovery panchna mas as well as the attachment of clothes of the appellant and others which went to show that PW 5 was a stock witness for the prosecution.
He, therefore, submitted that no reli ance could be placed on the evidence of PW 5 and consequent ly the find of human blood on the weapon and the pant looses its probative value.
In the end he submitted that the con viction of the appellant substantively under section 302 IPC was not well founded for the simple reason that not a single witness had deposed that the fatal injury was caused by the appellant.
The evidence of PW 12 Dr. Nagpal shows that the deceased had three injuries and out of them only injury No. 1 was by itself sufficient in the ordinary course of nature to cause death.
So far as injuries Nos. 2 and 3 are concerned, the medical evidnce does not show that each one of them separately was sufficient in the ordinary 12 course of nature to cause death.
But the medical evidence is to the effect that all the three injuries taken collectively Were SuffiCient in the ordinary course of nature to cause death.
In the absence of positive evidence that injury No. 1 was caused by the appellant and none else, his conviction substantively under section 302 cannot be sustained.
In that case at best he can be convicted for hurt under Section 324, IPC further submitted that since his companions were acquitted and the State had not preferred any appeal against their acquittal he could not be convicted with the aid of sections 34 or 149 IPC.
Mr. Prithvi Singh, the learned counsel for the State, submitted that the trial court was wrong in rejecting the evidence of PWs 3 and 4 merely because they were declared hostile as if their evidence was totally against the prose cution on that account.
He submitted that their evidence cannot be treated as effaced from the record merely because the prosecution chose to treat them as hostile on the limit ed question of identity of the assailants.
Their evidence as to the occurrence and number of persons involved in the commis sion of the crime can be relied upon along with that of PW 1 as he was neither a chance witness nor was he faking his presence at the scene of occurrence at the material time.
His evidence regarding identity of the assailants is equally acceptable and his subsequent statement made in crossexami nation after a time gap of almost one month was rightly brushed aside by the High Court, whatever be the reason for his change of heart.
With regard to the criticism regarding the absence of names of witnesses in the Inquest Report, counsel urged that it was not necessary in law to mention the names of the witnesses in the inquest report as the purpose of preparing the inquest report was merely to make a note of the physical condition of the body and the marks of injury there of noticed at that point of time.
On the ques tion of value to be attached to the evidence of the Panch witness PW 5, counsel submitted that nothing was alleged against this witness nor had the appellant given any expla nation regarding existence of human blood on the weapon and the pant attached from him in his statement recorded under section 313 of the Code.
On the question regarding the offence committed by the appellant, counsel submitted that once it is proved that more than one person had participated in the assault, the appellant could be convicted for the murder of the deceased with the aid of section 34 or 149 IPC.
He, therefore, submitted that the appeal is without merit and deserves to be dismissed.
We have given our anxious consideration to the submis sions made by the learned counsel for the contesting parties.
The fact that 13 an incident of the type alleged by the prosecution occurred on May 20, 1978 at about 8.20 p.m. is not seriously disputed nor is the location of the incident doubted.
The evidence of PW 3 Kishan Lal and PW 4 Ramesh came to be rejected by the trial court because they were declared hostile to the prose cution by the learned Public Prosecutor as they refused to identify the appellant and his companions in the dock as the assailants of the deceased.
But counsel for the State is right when he submits that the evidence of a witness, de clared hostile, is not wholly effaced from the record and that part of evidence which is otherwise acceptable can be acted upon.
It seems to be well settled by the decisions of this Court Bhagwan Singh vs State of Haryana, ; ; Rabinder Kumar Dey vs State of Orissa, ; and Syed lqbal vs State of Karnataka, [1980] 1 SCR 95 that the evidence of a prosecution witness cannot be rejected in toto merely because the prosecution chose to treat him as hostile and crossexamined him.
The evidence of such witness es cannot be treated as effaced or washed off the record altogether but the same can be accepted to the extent their version is found to be dependable on a careful scrutiny thereof.
In the present case the evidence of the aforesaid two eye witnesses was challenged by the prosecution in cross examination because they refused to name the accused in the dock as the assailants of the deceased.
We are in agreement with the submission of the learned counsel for the State that the trial court made no effort to scrutinise the evidence of these two witnesses even in regard to the factum of the incident.
On a careful consideration of their evi dence it becomes crystal clear that PW 4 had accompanied the deceased in PW 3 's rickshaw to the place of incident.
In the incident that occurred at the location pointed out by the prosecution, PW 4 sustained an injury.
His presence in the company of the deceased at the place of occurrence, there fore, cannot be doubted.
Immediately after the incident within less than an hour thereof PW 4 went to the police station and lodged the first information report.
It is true that the first information report is not substantive evi dence but the fact remains that immediately after the inci dent and before there was any extraneous intervention PW 4 went to the police station and narrated the incident.
The first information report is a detailed document and it is not possible to believe that the investigating officer imagined those details and prepared the document Exh.
The detailed narration about the incident in the first information report goes to show that the subsequent attempt of PW 4 to dis own the document, while admitting his signa ture thereon, is a shift for reasons best known to PW 4.
We are, therefore, not prepared to accept the criticism that the version regarding the incident is the result of some fertile thinking on the part 14 Of the investigating officer.
We are satisfied, beyond any manner of doubt, that PW 4 had gone to the police station and had lodged the first information report.
To the extent he has been contradicted with the facts stated in the first information report shows that he has tried to resile from his earlier version regarding the incident.
So also the presence of PW 3 at the scene of occurrence cannot be doubt ed once the presence of PW 4 is accepted.
The trial court did not go so far as to say that both these witnesses were not present at the scene of occurrence or that PW 4 was not injured in the incident but refused to look into their evidence treating their evidence as non est on their ' being declared hostile by the prosecution.
We think that the ap proach of the trial court insofar as the evidence of these two witnesses is concerned, is legally unacceptable.
The High Court has not endeavoured to assess their evidence since it thought that the conviction of the appellant could be sustained on the evidence of PW 1 Komal Chand.
We are satisfied on a close scrutiny of the evidence of the afore said two eyewitnesses, PWs 3 and 4, that the deceased and PW 4 came to the place of occurrence in the rickshaw pulled by PW 3.
On reaching the spot where the incident occurred they were surrounded by certain persons who were lying in wait and a murderous assault was launched on them.
The first to receive the injury was PW 4.
When they gauged the intention of their assailants they jumped out of the rickshaw and both ran in different directions.
The appellant first tried to chase PW 4 but later he turned to the deceased as he was informed by one of his companions Gopal that the person he was pursuing was not Gulab.
Therefore, from the evidence of these two eye witnesses the fact that the deceased and PW 4 came to the place of occurrence in the rickshaw of PW 3 is established.
So also the fact that on their reaching the place of occUrrence they were surrounded by some persons and an assault was launched on them in which PW 4 received an injury and Gulab died is clearly established.
The only area where they have not supported the prosecution and have resiled from their earlier statements is regarding the identity of the assailants.
We will deal with that part of the evidence a little later but the fact remains that the deceased had received three injuries as narrated by PW 12 Dr. Nagpal, to which he succumbed on the spot.
Once these facts are accepted as proved, the only question which really survives for consideration is whether the appellant was an assailant of the deceased.
That brings us to the evidence of PW 1 Komal Chand.
Komal Chand 's evidence was not accepted by the trial court on the ground that he was not a natural witness and was only a chance witness.
PW 1 explained his presence by stating that he had gone to the market to 15 purchase vegetables and while he was returning therefrom on foot with his cycle in hand he heard a commotion and saw the incident from a short distance.
Being a resident of Suji Mohalla, the place of occurrence was clearly in the vicinity thereof and, therefore, his presence at the market place could not be considered to be unnatural.
It is not unnatural for working people to purchase vegetables at that hour and, therefore, his explanation regarding his presence cannot be ruled out as false.
The sketch map prepared by PW 11 Gaiser Prasad shows that he had seen the incident from a short distance of hardly 22 feet although PW 1 says he saw it from the square.
Since the incident occurred at a public place with a lamp post nearby, the possibility of his having identified the assailants could not be ruled out.
The exami nation i nchief of this witness was recorded on November 16, 1976 when he identified all the assailants by name.
He stated that he knew the six accused persons in court and they were the persons who had surrounded the rickshaw and launched an assault on PW 4 and the deceased Gulab.
Of them Gopal struck PW 4 with a chain.
He also stated that the appellant Khujji and his companions Gudda and Parsu were armed with knives and when Khujji tried to assault PW 4 with a knife, Gopal shouted Khujji that man is not Gulab".
There upon Khujji and his companions ran after the Gulab, overtook him and the appellant, Parsu and Gudda assaulted Gulab with their weapons.
Gudda struck Gulab from the front on his chest, Parsu stabbed him on the side of the stomach while Ram Kishan and Gopal held him and the appellant attacked him from behind with a knife whereupon Gulab staggered shouting 'save save ' and fell in front of the house of Advocate Chintaman Sahu.
Thereafter all the six persons ran away.
His cross examination commenced on 15th December, 1978.
In his crossexamination he stated that the appellant Khujji and Gudda had their backs towards him and hence he could not see their faces while he could identify the remaining four persons.
He stated that he had inferred that the other two persons were the appellant and Gudda.
On the basis of this statement Mr.Lalit submitted that the evidence regarding the identity of the appellant is rendered highly doubtful and it would be hazardous to convict the appellant solely on the basis of identification by such a wavering witness.
The High Court came to the conclusion and, in our opinion rightly, that during the one month period that elapsed since the recording of his examination in chief something transpired which made him shift his evidence on the question of identi ty to help the appellant.
We are satisfied on a reading of his entire evidence that his statement in cross examination on the question of identity of the appellant and his compan ion is a clear attempt to wriggle out of what he had stated earlier in his examination in chief.
16 Since the incident occurred at a public place, it is reason able to infer that the street lights illuminated the place sufficiently to enable this witness to identify the assailants.
We have, therefore, no hesitation in concluding that he had ample opportunity to identify the assailants of Gulab, his presence at the scene of occurrence is not unnat ural nor his statement that he had come to purchase vegata bles unacceptable:We do not find any material contradictions in his evidence to doubt his testimony.
He is a totally independent witness who had no cause to give false evidence against the appellant and his companions.
We are, therefore, not impressed by the reasons which weighed that the trial court for rejecting his evidence.
We agree with the High Court that his evidence is acceptable regarding the time, place and manner of the incident as well as the identity of the assailants.
It was faintly submitted by counsel for the appellant that the evidence of eye witnesses could not be relied upon as their names did not figure in the inquest report prepared at the earliest point 'of time.
We see no force in this submission in view of the clear pronouncement of this Court in Pedda Narain vs State of Andhra Pradesh, [1975] Supp.SCR 84.
Referring to section 174 of the Code of Criminal Proce dure this Court observed at page 89 as under: "A perusal of this provision would clearly show that the object of the proceedings under section 174 is merely to ascertain whether a person has died under suspicious circumstances or an unnatural death and if so what is the apparent cause of the death.
The question regarding the details as to how the deceased was assaulted or who assaulted him or under what circumstances he was assaulted appears to us to be foreign to the ambit and scope of the proceedings under section 174.
In these circumstances, therefore, neither in practice nor in law was it necessary for the police to have mentioned these details in the inquest report".
We, respectfully agree and see no merit in this submission made by the counsel for the appellant.
After the appellant and his two companions Parsu and Gudda were arrested they were interrogated by the investi gating officer PW 13 Ramji Singh.
In the course of interro gation they showed their willingness to point out the weapons of assault.
thereupon the investigating officer called two Panchas, one of them being PW 5 Panna Lal.
The very same Panch witnesses were panchas to all the three discovery panchnamas as well as panchnamas regard ing the attachment of the clothes worn by the appellant and his companions.
It was, therefore, contended by the counsel for the appellant that PW 5 Panna Lal was a stock witnes whom the police had employed to act as a panch witness.
Pointing out that it was Tulsi Ram the brother of the de ceased who had chosen him because he was closely associated with the family of the deceased and was intimated with Babulal another brother of the deceased, Mr. Lalit submitted that no reliance can be placed on the evidence of such an highly interested and specially chosen witness.
The witness comes from the same locality and his house is situate within 100 yards of the residence of the deceased.
He knows the family of the deceased quite well being a neighbour and of the same 'biradari '.
It is equally true that he had gone to the hospital on learning about the assault on Gulab and had stayed back with Babulal since the latter was not feeling well.
But would it be proper to throw out his evidence on account of his neighbourly relations with the family of the deceased, when nothing has been brought out in crossexamina tion to shake the intrinsic value to be attached to his evidence? Even in the cross examination of the investigating officer nothing has been brought out to infer that the choice of PW 5 as a Panch witness was a deliberate one made with a view to enlisting his support to the prosecution case.
The mere fact that he was a witness to all the Panch namas prepared by the investigating officer is by itself not sufficient to discard his evidence.
Even in the case of an interested witness, it is settled law that his evidence cannot be overlooked merely on that ground but at the most it must receive strict scrutiny.
In the case of PW 5, except being a good neighbour nothing more is shown.
On the question of recovery of the weapon as well as the blood stained pant of the appellant there is hardly any effective crose examination.
Nor has the appellant offered any explanation in his statement recorded under section 3 13 of the Code.
In these circumstances we are not prepared to reject his evi dence on the specious plea of his being an interested witness.
In `Himachal Pradesh Administration vs Om Prakash, ' ; this Court observed at page 777 that it could not be laid down as a matter of law and practice that where recoveries have 'been effected from different places on the information furnished by the accused, different sets of persons should be called in to witness them.
There was no injunction in law against the same set of witnesses being present at the successive enquiries if nothing could be urged against them.
It is, therefore, clear from the deci sion of this Court that merely because the same set of Panch witnesses were used for witnessing all the three discoveries as well as the attachment of the 18 clothes of the appellant and his companions, PW5 's evidence could not be discarded since nothing had surfaced in cross examination to shake his evidence.
We are, therefore, satis fied that the evidence of PW5 Pannalal was rightly accepted by both the courts below.
We make limited use of this evi dence in the sense that we do not use any part of the evi dence admissible under section 27 Evidence Act, against the appellant.
We merely use the factum of find of the incrimi nating weapon from his garage and his inability to explain the presence of human blood thereon as a circumstance against the appellant.
The evidence of PW5 further shows that when the appellant was arrested his garments, namely, shirt and pant were attached as blood like stains were noticed thereon.
These articles were sent to the Chemical Analyser and Serologist for examination and report.
As stated earlier these reports reveal that the blood stains on the pant worn by the appellant were of human origin.
The appellant has not offered any plausible explanation for the existence of human blood on his pant.
This too is a circum stance against the appellant particularly because no injury was noticed on the person of the appellant.
Mr. Lalit, however, argued that since the report of the serologist does not determine the blood group of the stains on the weapon and the pant of the appellant, the mere find of human blood on these two articles is of no consequence, whatsoever.
In support of this contention he placed strong reliance on the decisions of this Court in Kansa Behera vs State of Orissa; , and Surinder Singh vs State of Punjab, [1989] Suppl. 2 SCC 21.
In the first men tioned case the conviction was sought to be sustained on three circumstances, namely, (i) the appellant and the deceased were last seen together; (ii) a dhoti and a shirt recovered from the possession of the appellant were found to be stained with human blood; and (iii) the appellant had made an extra judicial confession to two witnesses when arrested.
There was no dispute in regard to the first cir cumstance and the third circumstance was held not satisfac torily proved.
In this backdrop the question for considera tion was whether the first and the second circumstances were sufficient to convict the appellant.
This Court, therefore, observed that a few small bloodstains could be of the appel lant himself and in the absence of evidence regarding blood group it cannot conclusively connect the bloodstanis with the blood of the deceased.
In these circumstances this Court refused to draw any inference of guilt on the basis of the said circumstance since it was not 'conclusive ' evidence.
This Court, however, did not go so far as to say that such a circumstance does not even provide a link in the chain of circumstances on which the prosecution can place reliance.
In the second case also this 19 Court did not consider the evidence regarding the find of human blood on the knife sufficient to convict the appellant in the absence of determination of blood group since the evidence of PW 2 was found to be uninspiring and there was no other circumstance to connect him with the crime.
In this case we have the direct testimony of PW 1 Komal Chand, besides the testimony of PWs 3 and 4 which we have consid ered earlier.
The find of hunam blood on the weapon and the pant of the appellant lends coroboration to the testimony of PW 1 Komal Chand when he states that he had seen the appel lant inflicting a knife blow on the deceased.
The appellant has not explained the presence of human blood on these two articles.
We are, therefore, of the opinion that the afore said two decisions turned on the peculiar facts of each case and they do not lay down a general proposition that in the absence of determination of blood group the find of human blood on the weapon or garment of the accused is of no consequence.
We, therefore, see no substance in this conten tion urged by Mr. Lalit.
That brings us to the last contention whether the con viction of the appellant for the substantive offence of murder can be sustained in the absence of a finding that the fatal injury No. 1 was caused by the appellant.
We must at once acceptt the fact that it is not possible from the ocular evidence to record a definte of fact that the appel lant had caused that fatal injury.
On the contrary the evi dence of PW 1 Komal Chand indicates that in all probability the stab wound inflicted by the appellant resulted in injury No. 2.
that injury by itself was not sufficient in the oridinary course of nature to cause death.
If that be so, can the appellant be convicted under section 302, IPC?
Counsel for the appellant submits that the legal position is well settled by a chain of decisions of this Court that if named accused are acquitted except one of the them, the latter cannot be convicted with the aid of section 34 or 149, IPC.
In support of this contention he invited our attention to a few decisions, namely, Baikuntha Nath Chaud hury vs The State of Orissa, ; Kasturi Lal vs The State of Haryana, ; Chandubhai Sha nabhai Parmar vs State of Gujarat, and Sukh Ram vs State of M.P., [1989] Suppl.1 SCC 214.
Counsel for the state, however, submitted that while it may be correct that the appellant cannot be substantively convicted under section 302, IPC, he can certainly be convicted with the aid of section 34 or 149, IPC, if this Court on a reap preciation of the evidence comes to the conclusion that more than one person, may be six or seven of them, had launched an attack on the deceased.
In this connection he submitted that notwithstanding the acquittal of others by the Trial Court this Court can reach its own conclusion regarding the number of 20 persons who attacked the deceased for the obvious reason that the higher Court is not bound by the appreciation of evidence by the Trial Court or even the High Court.
In support of this contention he placed strong reliance on this Court 's recent decision in Brathi vs State of Punjab, [199 1] 1 SCC 519.
Counsel for the appellant on the other hand contended that the acquittal of the co accused creates a legal bar against the conviction of the appellant on the ground that they were privy to the crime notwithstanding their acquittal and this legal bar cannot be got over by reappreciation of evidence.
In support of this contention he invited our attention to a Five Judge Bench decision in Krishna Govind Patil V. State of Maharashtra, ; and contended 'that the said decision was binding on us being of a larger bench and the decision in Brathi 's case must be taken to be per incuriam since it had failed to notice and runs counter to the said larger bench decision.
We are of the opinion, for reasons which we will immediately state, that the contention urged by counsel for the appel lant is not well founded.
The ratio of the decision of this Court in Brathi 's case may be noticed at the outset to appreciate the contention urged by counsel for the appellant.
In that case, the appel lant and his uncle were tried under section 302/34, IPC.
The Trial Court acquitted the appellant 's uncle but convicted the appellant under section 302, IPC.
The order of acquittal became final because the State did not choose to challenge it in appeal.
The appellant, however, preferred an appeal against his conviction to the High Court.
The `High Court on a reappreciation of the evidence held that the fatal blow was given by the appellant 's uncle and since the appellant was charged under section 302/34, IPC, he could not be convicted substantively under section 302, IPC.
However, for assessing the credibility of the prosecution case, the High Court incidentally considered the involvement of the appel lant 's uncle and held that the eye witnesses had given a truthful account of the occurrence and the appellant 's uncle had actually participated in the commission of the crime along with the appellant.
In other words, the High Court came to the conclusion that the acquittal of the appellant 's uncle was erroneous but since there was no appeal preferred by the State it could not interfere with that order of acquittal.
It, however, came to the conclusion that the crime was committed by the appellant and his uncle in fur therance of their common intention and accordingly main tained the conviction of the appellant under section 302, IPC, with the aid of section 34, IPC.
Before this Court the appellant contended that on the acquittal of his uncle the sharing of common intention disappeared and the High Court was not justified in invoking 21 section 34 for maintaining the conviction against him under section 302, IPC.
This Court while dealing with this submis sion held that in the matter of appreciation of evidence the powers of the Appellate Court are as wide as that of the Trial Court and the High Court was, therefore, entitled in law to review the entire evidence and to arrive at its own conclusion about the facts and circumstances emerging there from.
To put it differently, this Court came to the conclu sion that the High Court was not bound by the appreciation of the evidence made by the Trial Court and it was free to reach its own conclusions as to the proof or otherwise of the circumstances relied upon by the prosecution on a review of the evidence of the prosecution witnesses.
This Court, therefore, held that when several persons are alleged to have committed an offence in furtherance of their common intention and all except one are acquitted, it is open to the Appellate Court under Sub section (1)(b) of section 386 of the code to find out on a reappraisal of the evidence who were the persons involved in the commission of the crime and although it could not interfere with the order of acquittal in the absence of a State appeal it was entitled to deter mine the actual offence committed by the convicted person.
Where on the reappreciation of the evidence the Appellate Court comes to the conclusion that the appellant and the acquitted accused were both involved in the commission of the crime, the Appellate Court can record a conviction with the the aid of section 34 notwithstanding the acquittal of the co accused the appellate Court cannot reverse the order of acquittal in the absence of a State appeal, it cannot at the same time be hedged by the appreciation of the evidence by the lower court if that appreciation of evidence is found to be erroneous.
This Court, therefore, pointed out that in such a fact situation it is open to the Appellate Court to record a finding of guilt with the aid of section 34 not withstanding the acquittal of the co accused since the English doctrine of repugnancy on the face of record has no application in this country as we are governed by our own statutory law.
On this ratio this Court confirmed the con viction of the appellant under section 302, IPC, but with the aid of section 34, IPC.
The fact situation before us is more or less similar.
Several decisions were cited in support of the contention that where two named persons are charged for the com mission of an offence with the aid of section 34, IPC and one of them is acquitted the other cannot be convicted with the aid of section 34, IPC.
Dealing with these decisions this Court observed in Brathi 's case that all the decisions relied on were distinguishable on the ground that in none of them the Appellate Court was shown to have disagreed with the Trial Court 's appreciation of evidence but on the con trary the Appellate 22 Court had proceeded on the footing that the appreciation of evidence by the Trial Court was correct.
We think that the cases on which Mr. Lalit has placed reliance can also be distinguished on the same ground.
In Baikuntha Nath Chaudhury 's case the evidence of two eye witnesses PWs 9 and 10 was to the effect that accused Nos. 1 and 2 had killed their brother with the active par ticipation of accused No. 3, their mother.
According to the prosecution accused No. 2, the appellant, had called the deceased tohis house and while he was there accused No. 1 inflicted two lathi blows which proved fatal.
The dead body was then put m a gunny bag supplied by accused No. 3 and drowned into a nearby tank.
The three accused persons were charged under sections 302/34, and 201, IPC.
The Trial Court acquitted accused No. 3 but found the other two guilty.
On appeal the High Court acquitted accused No. 1 rejecting the prosecution evidence in regard to his involvement but con firmed the conviction of accused No. 2 under section 302/34, IPC, though the fatal injuries were inflicted by the acquit ted accused No. 1.
It will thus be noticed that on a reap preciation of evidence by the High Court accused No. 1 came to be acquitted although he was stated to have given the fatal lathi blows while his brother, the appellant, was convicted on the same evidence.
This Court, therefore, concluded that if the evidence of the two eye witnesses were to be accepted, accused No. 1 could not be acquitted since according to them it was he who had given the fatal blows while the appellant had merely caught hold of him.
This Court, therefore, observed in paragraph 12 of the judgment that if the occurrence spoken to by PWs 9 and lois accepted, the appellant will be constructively liable for his involve ment, though the fatal injuries were inflicted by his brother.
In that case his brother will also be guilty of the said offence.
But since the High Court had acquitted the first accused it meant that the High Court did not accept the evidence of PWs 9 and 10 in regard to the incident.
This Court did not come to the conclusion that the High Court 's appreciation of evidence in regard a accused No.1 was not proper.
In fact it did not examine the case from that point of view but held that since the High Court had not accepted the evidence of PWs 9 and 10 in regard to the part played by the acquitted accused, the appellant could not have been convicted on of the same appreciation of evidence.
This becomes clear on a close reading of paragraphs 12 and 13 of the judgment.
Similarly in the case of Kasturi Lal this Court came to the conclusion that the reasons given by the High Court for distinguishing the case of Kasturi Lal from that of Khazan Singh and Gurdial Singh were not correct and, therefore ', it was not justified in convicting Kasturi Lal.
So, when the case of 23 Kasturi Lal was not distinguishable from that of the above two, this Court felt that the High Court erred in con victing Kasturi Lal.
It will thus be seen that this Court came to the conclusion that the reasons Which weighed with the High Court for the distinction drawn were not correct and hence the conviction of Kasturi Lal 'had to be set aside This decision also does not help the appellant.
In Chandub hai 's case the prosecution relied on the testimony of PWs 1, 5 and 6 'Both the courts below found their testimony to be unreliable in several particulars and acquired the co accused of the appellant in two stages.
This Court concluded that the appellant 's case could not be distinguished from that of his two acquitted companions insofar as the reli ability of the ocular evidence of three eye witnesses was concerned.
It was in the said circumstances that this Court thought that the conviction of the appellant under section 302/34, IPC was not justified, particularly, after the evidence of the three witnesses was found to be unreliable.
this also, therefore, is not a case where the Appellate Court disagreed with the appreciation of the evidence by the Trial Court and came to a different conclusion regarding the participation of others in the commission of the crime.
In Sukh Ram 's case to which one of us (Ahmadi.J.) was a party, this Court interferred with the conviction of the appellant recorded with the aid of section 34 by the High Court because on the facts found proved on evidence the conviction of the appellant could not be sustained on the acquittal of the co accused on the same set of established facts.
This Court on its own did not come to the conclusion that the acquittal of Gokul was not well founded as High Court 's appreciation of evidence was not correct.
Had it come to that conclusion it could have recorded a conviction of the appellant under section 302/34, IPC, notwithstanding the acquittal of Gokul.
Therefore, all the aforesaid cases are clearly distinguishable from the facts of Brathi 's case where the High Court had clearly departed from the apprecia tion of the evidence by the Trial Court and had reached own conclusion in regard to the proof of various facts and circumstances relied on by the prosecution.
We are, there fore in respectful agreement with the distinction drawn by this Court on the ground that in none of the cases cited on behalf of the appellant it was shown that the Appellate Court had disagreed with the appreciation of evidence by the Trial Court and the conclusion of facts and circumstances recorded by it.
Does the decision in Krishna Govind Patii (supra) take a different view?
It is true that the attention of the Bench which disposed of Brathi 's case was not invited to this decision.
But, in our opinion, this decision does not take a view inconsistent with the ratio laid down in 24 Brathi 's case.
The facts reveal that Krishna Govind Patil and three others were put up for trial for the murder of one Vishwanath.
They were charged under section 302/34, IPC and were also separately charged under section 302, IPC.
Accused Nos. 1, 3 and 4 pleaded an alibi while accused No. 2 raised the plea of private defence.
The Trial Court acquitted all the accused on the ground that the prosecution witnesses were not speaking the truth and the version of accused No. 2 was a probable one.
The State appealed against the order of acquittal under section 302/34, but not against the acquit tal under section 302, IPC.
The High Court confirmed the acquittal of accused Nos. 1, 3 and 4 on the ground that the evidence regarding their participation in the commission of the crime was doubtful but convicted accused No. 2 on the ground that one or more of them might have participated in the commission of the offence.
Accused No. 2, therefore, preferred an appeal to this Court and contended that when three of the four named persons were acquitted the High Court was not justified in convicting him on the basis of constructive liability.
This Court held that before a Court can convict a person under section 302/34, IPC, it must record a definite finding that the said person had prior consultation with one or more other persons, named or un named, for committing the offence.
When three of the accused came to be acquitted on the ground that the evidence was not acceptable or on the ground that they were entitled to benefit of doubt, in law it meant that they did not partici pate in the offence.
It was further held that the effect of the acquittal of the three co accused is that they did not co jointly and with the appellant commit the murder.
These observations have to be read in the context of the facts stated above.
The High Court on an appreciation of the evidence, came to a definite conclusion that accused Nos. 1, 3 and 4 had not participated in the commission of the crime.
On that appreciation of the evidence the High Court could not have come to the conclusion that any of those acquitted accused was privy to the crime even for the limited purpose of convicting the appellant with the aid of section 34.
This again is not a case where the Appellate Court disagreed with the appreciation of evidence and reached a conclusion dif ferent from the conclusion recorded by the Trial Court in regard to the participation of the other co accused.
This decision is also distinguishable on the same ground as this Court distinguished the other decisions in Brathi 's case.
We are, therefore, of the opinion that the omission to refer to this decision does not render the decision in Brathi 's case per incuriam.
We are, therefore, in respectful agreement with the law explained in Brathi 's case.
Coming now to the facts of this case the Trial Court acquit ted the 25 co accused but convicted the appellant under section 302, IPC.
The High Court has confirmed that conviction.
Mr. Lalit is right when he says that the prosecution evidence does not disclose that the fatal blow which caused injury No. 1 was given by the appellant.
Inherent of this submission is the assumption that the fatal blow was given by someone else.
That establishes the fact that more that one person partici pated in the commission of the crime.
We have also on an independent appreciation of the evidence of the three eye witnesses, namely, PW 1 Komal Chand, PW 3 Kishan Lal and PW 4 Ramesh, come to the conclusion that several persons had participated in the commission of the crime.
The failure on the part of the prosecution witnesses PWs 3 and 4 to identi fy the others does not alter the situation.
We are, on the other hand, convinced from the evidence of PW 1 Komal Chand that some of the co accused, particularly, Gunda, Parsu and Gopal had participated in the commission of the crime.
It is another matter that in the absence of a State appeal the High Court could not, nor can we, interfere with their acquittal, but as rightly 'pointed in Brathi 's case this Court is not bound by the facts found proved on the appreci ation of evidence by the courts below and is, in law, enti tled to reach its own conclusion different from the one recorded by the court 's below on a review of the evidence.
In that view of the matter we think that the conviction of the appellant can be sustained with the aid of section 34 or 149, IPC, as the case may be.
In the present case we feel it safe to confirm the conviction of the appellant with the aid of section 34, IPC.
We, therefore, cannot agree with the submission of the learned counsel for the appellant that at best the conviction can be recorded under section 324, IPC.
We confirm the conviction of the appellant under section 302, IPC, with the aid of section 34 and maintain the sen tence awarded to him.
For the above reasons we see no merit in this appeal and dismiss the same.
N.P.V. Appeal dismissed.
| The appellant was convicted by the courts below under Section 302 IPC and sentenced to life imprisonment for the murder of one G.
It was alleged that when the deceased and his companion, PW 4 were proceeding in a rickshaw, pulled by PW 3, the appellant and his five companions launched an attack on them.
While PW 4 received an injury by a cycle chain, the deceased received stab injuries, to which the succumbed on the spot.
On the First Information Report lodged by PW 4, statements of three eye witnesses viz. PW I, an on looker and PWs 3 and 4 recorded during the course of investigation, and the evidence regarding discovery of incriminating articles and find of human blood on them, the appellant and his five companions were chargesheeted for the murder of the deceased. 2 During the trial, two of the eye witnesses, viz. PWs 3 and 4 were declared hostile, since they expressed their inability to identify the accused persons as assailants of the deceased.
Though PW 1 supported the prosecution in examination in chief, he expressed some doubt regarding the identity of the appellant and one other assailant in the cross examination.
The trial court refused to place reliance on the evidence of the three eye witnesses and acquitted all, except the appellant.
It convicted the appellant under Section 302 IPC and sentenced him to life imprisonment on the evidence that the appellant was absconding, that he had discovered the weapon which was found to be stained with human blood and the factum of find of human blood on the pant worn by him at the time of his arrest The appellant 's appeal was dismissed by the High Court.
While ignoring the evidence of PWs 3 and 4, the High Court relied on the evi dence of PW 1 holding that his subsequent attempt to create a doubt regarding the identity of the appellant was of no consequence, since there was intrinsic material in his evidence to establish the presence of the appellant amongst the assailants of deceased.
It also relied on the discovery evidence and find of human blood on the weapon and on the pant he was wearing at the time of his arrest.
The State did not prefer an appeal against the five companions of the appellant who were acquitted by the trial court.
In the appeal before this Court on behalf of the appel lant it was contended that (1) the prosecution version regarding the incident, particularly, the involvement of the appellant was highly doubtful since the correctness of the First Information Report, purported to have been lodged by PW4 was itself doubtful since he had disowned it; (2) the presence of PW1 at the scene of offence and at the time of occurrence was highly doubtful and the High Court committed an error in placing reliance on his testimony in examina tion in chief, while brushing aside his statement in cross examination; (3) same set of Panch witnesses had been em ployed for all the discovery panchnamas as well as the attachment of clothes of the appellant and others and since PW5, Panch witness was closely associated with the family and was a stock witness for the prosecution, no reliance could be placed on the evidence of such a highly interested and chosen witness and consequently find of human blood on the weapon and the pant lost its probative value; (4) the two circumstances, viz. that the appellant was not found for two days, and human blood was present on the weapon and his pant constituted extremely thin and weak evidence to record a finding of guilt, particularly, when the trial court had discarded all the eye witnesses ' evidence and doubted the contents of the FIR, and when the Serologist did not deter mine the blood group of the stains on the weapon and pant of the 3 appellant; (5) in the absence of positive evidence that the fatal injury ' No. I was caused by the appellant only, his conviction substantively under Section 302 IPC could not be sustained; (6) since appellant 's companion were acquitted, and the State had not preferred any appeal against their acquittal, he could not be convicted with the aid of Section 34 or 149 IPC, since the acquittal of the co accused created a legal bar against his conviction, which could not be got over by reappreciation of evidence; and (7) the eye witness es ' evidence could not be relied upon as their names did not figure in the inquest report prepared at the earliest time.
On behalf of the State it was contended that (1) evi dence of PWs 3 and 4 could not be treated as effaced from the record, merely because the prosecution chose to treat them as hostile on the limited question of identity of assailants;(2) PW I was neither a chance witness nor was he faking his presence at the scene of occurrence at the mate rial time; (3) it was not necessary in law to mention names of witnesses in the inquest report as the purpose of prepar ing the report was merely to make a note of the physical condition of the body and the marks of injury thereon no ticed at that point of time; (4) nothing was alleged against PW 5.
Panch witness, nor the appellant had given any expla nation regarding existence of human blood on the weapon and his pant in his statement recorded under section 313 of the Cr.
P.C.; (5) even if the appellant could not be substan tively convicted under Section 302 II 'C, he could still be convicted with the aid of Section 34 or 149 II 'C, if the Court came to the conclusion that more than one person launched the attack and notwithstanding the acquittal of others by the trial court, this Court could reach its own conclusion as the higher court was not bound by the appreci ation of evidence by the trial court or even the High Court.
Dismissing the appeal, this Court, HELD: 1.1 The evidence of a prosecution witness cannot be rejected in toto merely because the prosecution chose to treat him as hostile and cross examined him.
The evidence of such witnesses cannot be treated as effaced or washed off the record altogether, but the same can be accepted to the extent their version is found to be dependable on a careful scrutiny thereof.
[13C] Bhagwan Singh vs State of Haryana, ; Rabinder Kumar Dey vs State of Orissa, ; and Syed lqbal v.state of Karnataka, [1980] 1 S.C.R. 95, relied on.
4 SUPREME COURT REPORTS [1991] 3 S.C.R. 1.2 In the instant case the evidence of two eye witness es PW 3 and 4 challenged by the prosecution in cross exami nation because they refused to name the accused in the dock as the assailants of the deceased.
The trial court made no effort to scrutinise the evidence of these two witnesses even in regard to the factum of the incident.
It refused to look into their evidence treating it as non est, on their being declared hostile by the prosecution.
This approach of the trial court is legally unacceptable.
The High Court has not endeavoured to assess their evidence since it thought that the conviction of the appellant could be sustained on the evidence of PW 1.
From the evidence of these two wit nesses the fact that the deceased and PW 4 came to the place of occurrence in the rickshaw of PW 3 is established.
So also the fact that on their reaching the place of occur rence, they were surrounded by some persons and an assault was launched on them in which PW 4 received an injury and the deceased died is also established.
The only area they have not supported the prosecution and resiled from their earlier statements is regarding the identity of the assail ants but the fact remains that the deceased had received three injuries as narrated by PW 12, who conducted the post mortem, and succumbed to the injuries on the spot.
Similarly, there is no doubt at all that PW 4 had gone to the police station and had lodged the First Information Report.
The detailed narration about the incident in the First Information Report goes to show that the subsequent attempt of PW 4 to disown the document, while admitting his signature, thereon, is a shift for reasons best known to him.
Once the presence of PW 4 is accepted, the presence of PW 3 at the scene of occurrence cannot be doubted.
[13D, 14C, D F, B] 2.
The Trial Court has not accepted PW I 's evidence on the ground that he was not a natural witness, and was only a chance witness.
However, on a reading of the entire evidence of PW I it is clear that his statement in cross examination on the question of identity of the appellant and one of his companions is a clear attempt to wriggle out of what he had stated earlier in his examination in chief.
Since the inci dent occurred at a public place, it is reasonable to infer that the street light illuminated the place sufficiently to enable this witness to identify the assailants.
During the one month period that elapsed since the recording of exami nation in chief, something transpired which made him shift his evidence on the question of identity to help the appel lant.
In the circumstance there is no doubt that PW I had ample opportunity to identify the assailants of the de ceased, his presence at the scene of occurrence is not unnatural nor is his statement that he had come to purchase vegetables unacceptable.
There are no contradiction in his evidence to doubt his testimony.
He is a totally independent wit 5 ness, who had no cause to give false evidence against the appellant and his companions.
Therefore, his evidence is acceptable regarding the time, place and manner of the incident as well as the identity of the assailants.
[14H 16C] 3.1 The evidence of eye witnesses could not be rejected on the ground that their names did not figure in the inquest report prepared at the earliest point of time.
[16D] 3.2 A perusal of Section 174 of the Criminal Procedure Code would clearly show that the object of the proceedings under this Section is merely to ascertain whether a person has died under suspicious circumstances or an unnatural death and if so what is the apparent cause of the death.
The question regarding the details as tO how the deceased was assaulted or who assaulteld him or under what circumstances he was assaulted is foreign to the ambit and scope of the proceedings under the section.
In these circumstances, neither in practice nor in law, was it necessary for the police to have mentioned these details in the inquest re port.
[16E F] Pedda Narain vs State of Andhra Pradesh, [1975] Supp.
S.C.R. 84 relied on.
4.1 There was no injunction in law against the same set of witnesses being present at the successive enquiries if nothing could be urged against them.
Even in the case of an interested party, his evidence cannot be overlooked on that ground.
[17G. E] Himachal Pradesh Administration vs Omprakash, ; , relied on.
4.2 In the instant case, merely because the same set of Panch witnesses were used for Witnessing all the three discoveries as well as the attachment of the clothes of the appellant and his companions, PW 5 's evidence could not be discarded since nothing had surfaced in crossexamination to shake his evidence.
Besides, except being a good neighbour nothing more is shown against him.
As regards recovery of weapon, as well as the appellant 's blood stained pant, there is hardly any effective cross examination, nor has the appellant offered any explanation in his statement recorded under Section 313 of the Criminal Procedure Code.
Hence PW 5 's evidence cannot be rejected on the specious plea of being an interested witness.
In the circumstances, hi, evidence was rightly accepted by both the courts below.
[17 A, C D, F, 18 A] 6 5.1 The factum of find of the incriminating weapon from the appellant 's garage, and his inability to explain the presence of human blood thereon is a circumstance against him.
Similarly, the existence of human blood on the pant that he was wearing at the time of his arrest, for which no explanation was offered by him, is also a circumstance against him, particularly because no injury was noticed on him.
[18B D] 5.2 There is also direct testimony of PW I, besides that of PWs 3 and 4.
The find of human blood on the weapon and the pant, with no explanation for the same lends corrobora tion to the testimony of PW 1.
When he states that he saw the appellant inflicting a knife blow on the deceased.
In the circumstances, it cannot be accepted that in the absence of determination of blood group, the find of human blood is of no consequence.
[19B C] Kansa Behera vs State of Orissa, ; and Surinder Singh vs State of Punjab, [1989] Suppl.
2 S.C.C. 21, distinguished.
6.1 No doubt it is not possible from the ocular evi dence to record a definite finding of fact that the appel lant had caused the fatal injury.
On the contrary the evi dence of PW 1 indicates that in all probability the stab wound inflicted by the appellant resulted in injury No. 2, which by itself was not sufficient in the ordinary course of nature to cause death.
I Since the prosecution evidence does not disclose that the fatal blow, which caused injury No. 1 was given by the appellant, it means that the fatal blow was given by someone else, and this establishes the fact that more than one person participated in the commission of the crime.
On an independent examination appreciation of the evidence of the three eye witnesses, viz. PWs 1, 3 and 4 that several persons had participated in the commission of the crime.
The failure on the part of PWs 3 and 4 to identi fy the others does not alter the situation.
On the other hand, from the evidence of PW 1, it is clear that some of the accused participated in the commission of the crime.
[19E, 25A C] 6.2 No doubt in the absence of a State appeal, the High Court could not, nor can this Court interfere with the acquittal of the co accused, but this Court is not bound by the facts found proved on the appreciation of evidence by the courts below, and is, in law, entitled to reach its own conclusion different from the one recorded by the courts below on a review of the evidence.
The acquittal of the accused does not create a legal bar against the conviction of the appellant with the aid of Section 34 or 149 IPC.
[21C F] 7 Brathi vs State of Punjab, ; , affirmed.
Baikuntha Nath Chaudhury vs The State of Orissa, ; Kasturi Lal vs State of Haryana, ; Chandubhai Shanabhai Parmdr vs State of Gujarat, ; Sukh Ram vs State of M.P., [1989] Suppl.
1 SCC 214 and Krishna Govind Patil vs State of Maha rashtra; , , distinguished.
6.3 In the circumstances, the conviction of the ap pellant can be sustained with the aid of Section 34 or 149 as the case may be and it is safe to confirm the appellant 's conviction with the aid of section 34 I.P.C. [25D] The conviction of the appellant is accordingly con firmed and sentence awarded to him is maintained.
[25E] 7.
The omission to refer to the decision of larger Bench rendered Krishna Govind Patil 's case does not render the decision in Brathi 's case per incuriam.
In any event that decision does not take a view inconsistent with the ratio laid down in Brathi 's case.
[24G] Sukh Ram vs State of M.P., [1989] suppl.
1 SCC 214 and Brathi vs State of Punjab; , referred to.
|
N: Criminal Appeal No. 325 of 1987.
From the Judgment and Order dated 9.11.1984 of the Punjab and Haryana High Court in Crl.
Appeal No. 132 SB of 1984.
Amita Gupta and R.S. Suri for the Appellant.
R.L. Kohli, R.C. Kohli, G.S. Rao and Ms. C. Markandeya for the Respondents.
The Judgment of the Court was delivered by AHMADI, J.
Mohinder Kaur set herself and her three children ablaze on the afternoon of 7th June, 1983, at the residence of her husband Iqbal Singh.
The marriage had taken place seven or eight years before the incident.
She had given birth to two daughters and a son.
The deceased was working as a teacher while her husband was a clerk in the Punjab State Electricity Board office at Amritsar.
Soon after the marriage there were disputes between them on the question of dowry.
The demand for extra dowry strained the relations between them and the husband began to ill treat the deceased wife.
It appears that in course of time there was further deterioration in their relationship as a result whereof the deceased had written a letter to the Deputy Superintendent of Police on 12th October, 1977 complaining about the ill treatment meted out to her and apprehending danger to her life and the life of her children.
She therefore, sought police protection.
However, by the time the police came to inquire into the matter there was some understanding as a result of which has had informed the police that no further action be taken for the present but her application may be kept pending.
Then on 31st December, 1977 a divorce deed Exh. D 2 was executed but was not acted upon.
It seems that the situation did not improve and as a result she took the extreme step of putting an end to her life as well as the lives of her three children since she apprehended that their fate would be worse after her death.
However, before putting an end to her life she wrote a letter that very morning which has been reproduced in extenso in paragraph 13 of the judgment of the trial court.
The text of that letter dated 7th June, 1983 794 addressed to the Deputy Commissioner of Police, Public Dealing Branch, Amritsar, shows that her husband was demanding Rs.35,000 to Rs.40,000 by way of additional dowry and was ill treating her under the influence of alcohol on that account.
She also alleged that her mother in law and sister in law also conspired and made false accusations against her and instigated her husband to beat her if she refused to bring the additional dowry.
She alleges that they had conspired to kill her on the night of 6th June, 1983 by sprinkling kerosene/petrol on her but their plan misfired.
She was fed up on account of the beating given to her that night.
She further alleged that her children were also ill treated by her husband and his family members.
On account of these developments she had taken the decision to put an end her life and the lives of her children to spare them of the present and future agony.
At the foot of the letter she appended a note to the effect that even after their death she apprehended that her husband and his family members may try to cause physical harm to her mother and younger brother and requested the police to extend to them the necessary protection.
She implores that her salary, G.P. Fund and other monetary benefits to which she may be entitled from the school authorities should not fall in the hands of her husband and his relatives and may be given to some school or orphanage and her ornaments, etc.
may be recovered from her in laws and be returned to her parents.
Another letter of even date was addressed to her mother (her father having since died) stating that she was fed up of the continuous tension, suffering and agony that her mother had to go through on her account as she could not meet the demand for extra dowry.
She also states that apart from her husband demanding extra dowry he has started making false accusations against her and beating her time and again on that account.
She further alleges that her husband 's mother and sister were privy to this beating by her husband but she had somehow survived.
Then she adds `today I alongwith three children am sacrificing by fire '.
She ends the letter by stating that her mother need not think that her daughter was dead, in fact she will gain freedom from seven years of hell.
In the letter addressed to the Deputy Commissioner of Police there is reference to the earlier application/letter dated 12th October, 1977 by which she had complained about possible risk to life.
It appears from the said letter that the police had gone to inquire into the matter two months later on 11th December, 1977 but during that intervening period the relatives of her husband had intervened and had temporarily patched up the matter.
It was for that reason that she informed the police that no action was immediately necessary but still she insisted that her application may be kept pending, Thus this subsequent letter contains intrinsic evidence about her 795 previous application dated 12th October, 1977.
After the unfortunate incident which took place on the afternoon of 7th June, 1983 a First Information Report was lodged against the husband Iqbal Singh, by the mother of the deceased.
After investigation the husband, his mother and sister were put up for trial.
The Trial Court on an examination of the prosecution evidence convicted all the three accused persons under Section 306, IPC and sentenced the husband Iqbal Singh to rigorous imprisonment for seven years and a fine of Rs.5,000, in default, rigorous imprisonment for one year.
So far as the other two accused were concerned, having regard to their role and the fact that the mother was an aged and frail woman, he sentenced them to rigorous imprisonment for three years and a fine of Rs.1,000 each, in default, rigorous imprisonment for three months.
Against this order of conviction and sentence all the three accused persons preferred an appeal before the High Court.
The High Court on a reappreciation of the evidence and having regard to the language of Section 306, IPC came to the conclusion that the prosecution evidence did not establish the ingredients of the section, in that, there was no evidence to show that any of the accused was guilty of abetment.
In this view that the High Court took, it allowed the appeal and set aside the order of conviction and sentence passed against the appellants.
The State has, therefore, approached this Court by way of special leave.
In the meantime the accused Manjit Kaur has passed away.
The appeal is, therefore, limited to Iqbal Singh and his sister Kulwant Kaur.
Counsel for the State of Punjab took us through the evidence on record, particularly the letters dated 7th June, 1983 and submitted that this was a clear case of the husband and his sister creating conditions which compelled the deceased to take the extreme step of burning herself and her children.
The evidence of Dr. Harjinder Singh who performed autopsy has not been disputed before us.
His evidence shows that the deaths of all had resulted on account of shock sustained due to excessive burns.
PW 2 Jasbir Kaur, the mother of the deceased, says that her daughter complained to her from time to time about the ill treatment meted out to her by her husband on his own and at the instigation of his mother and sister.
She has also stated that this ill treatment was due to failure of the deceased to meet his demand for extra dowry.
She received a message about the incident while she was at her brother 's residence in amritsar.
She and her son went to the hospital and learnt that her daughter and grand children had passed 795 previous application dated 12th October, 1977.
After the unfortunate incident which took place on the afternoon of 7th June, 1983 a First Information Report was lodged against the husband Iqbal Singh, by the mother of the deceased.
After investigation the husband, his mother and sister were put up for trial.
The Trial Court on an examination of the prosecution evidence convicted all the three accused persons under Section 306, IPC and sentenced the husband Iqbal Singh to rigorous imprisonment for seven years and a fine of Rs. 5,000, in default, rigorous imprisonment for one year.
So far as the other two accused were concerned, having regard to their role and the fact that the mother was an aged and frail woman, he sentenced them to rigorous imprisonment for three years and a fine of Rs.1,000 each, in default, rigorous imprisonment for three months.
Again this order of conviction and sentence all the three accused persons preferred an appeal before the High Court.
The High Court on a reappreciation of the evidence and having regard to the language of Section 306, IPC came to the conclusion that the prosecution evidence did not establish the ingredients of the section, in that, there was no evidence to show that any of the accused was guilty of abetment.
In this view that the High Court took, it allowed the appeal and set aside the order of conviction and sentence passed against the appellants.
The State has, therefore, approached this Court by way of special leave.
In the meantime the accused manjit Kaur has passed away.
The appeal is, therefore, limited to Iqbal singh and his sister Kulwant Kaur.
Counsel for the State of Punjab took us through the evidence on record, particularly the letters dated 7th June, 1983 and submitted that this was a clear case of the husband and his sister creating conditions which compelled the deceased to take the extreme step of burning herself and her children.
The evidence of Dr. Harjinder Singh who performed autopsy has not been disputed before us.
His evidence shows that the deaths of all had resulted on account of shock sustained due to excessive burns.
PW 2 Jasbir Kaur, the mother of the deceased, says that her daughter complained to her from time to time about the ill treatment meted out to her by her husband on his own and at the instigation of his mother and sister.
She has also stated that this ill treatment was due to failure of the deceased to meet his demand for extra dowry.
She received a message about the incident while she was at her brother 's residence in Amritsar.
She and her son went to the hospital and learnt that her daughter and grand children had passed 796 away.
She then deposed to have received a letter of 7th June, 1983 on 9th June, 1983.
In her cross examination it was brought out that she had not pointed an accusing finger at the mother and sister of accused Iqbal Singh.
She tried to explain the absence of allegation against the said two persons on the ground that she was confused on account of the tragedy.
She further deposed that she had omitted the names of two ladies because of pressure exerted on her by Iqbal singh.
Obviously her explanation cannot carry conviction because it is difficult to believe that she would submit to the pressure of Iqbal Singh whom she considered primarily responsible for the death of her daughter and grand children.
It may also be mentioned at this stage accused Kulwant Kaur is a married women who lives with her husband in another village.
There is no evidence on record to show that she was at the residence of her brother on the date of the incident or immediately prior thereto to instigate her brother.
PW Santosh Singh, brother of the deceased, has maintained that accused Iqbal Singh was ill treating his sister soon after marriage as the latter was not able to meet his demand for extra dowry.
He further deposed that after the death of his father his mother had received a sum of Rs.60,000 or thereabouts by way of provident fund and gratuity and when the accuse Iqbal Singh learnt about the same he pressurised the deceased to secure a sum of Rs.40,000 or thereabouts from that amount to meet his demand for extra dowry.
He had gone with his mother PW 2 Jasbir Kaur to the hospital after learning about the incident.
In cross examination he was questioned about the purchase of a plot in the name of the deceased by Iqbal Singh.
He, however, stated that his father had given a sum Rs.20,000 or 21,000 for purchase of this plot although he could not state the exact price at which it was purchased.
The two letters, one addressed to the Deputy Commissioner of Police and the other to the mother dated 7th June 1983, have been duly proved by the prosecution.
These letters were written immediately before she put an end to her life and the lives of her three children.
These letters reveal her plight immediately before the incident.
There is a mention about an attempt on the part of her husband to kill her on the preceding day.
She apprehended that her children would suffer intolerable miseries if they survived her and, therefore, she took the extreme decision to put an end to their lives also along with her.
This letter clearly brings out her turmoil whereunder she took the extreme step of putting an end to her life.
The earlier letter of 12th October, 1977 also shows that she was being ill treated soon after her marriage.
The divorce deed produced at Exh.
D 2 is dated 30th November, 1977.
This would show that by that time the relatives had intervened and, therefore, when the police came to inquire on 11th December, 1977 she told them that 797 there was no immediate danger but her application should be kept pending.
Considerable emphasis was laid by the learned counsel for the respondents on the statement in Exh.
D 2 attributed to the deceased that she had been forced to marry Iqbal Singh.
Emphasis was also laid on the post script at the foot of the said document made by Iqbal Singh to the effect that he has agreed to a divorce since his wife desires it.
From these two statements counsel for the respondents argued that the accused Iqbal Singh had no grudge against his wife and had expressed his willingness to put an end to the marital relationship as his wife so desired.
He also submitted that the statement of the deceased that she was forced to marry Iqbal Singh went to show that it was she who was keen to put an end to the relationship as she did not desire to live with Iqbal Singh.
But counsel overlooks the fact that there is intrinsic evidence inthe divorce deed that their marital life was unhappy and she apprehended blood shed as well as harm to the children even after they parted company.
Counsel then referred to letter Exh.
D 1 April, 1983 written by the deceased to one Gopal Singh complaining about the behaviour of the Headmaster towards her.
By that letter she expressed her desire to secure a transfer from the school to get rid of the harassment meted out to her by the Headmaster.
In this letter there is a mention that her husband Iqbal Singh was spending considerable time in correspondable time in correspondence with the Headmaster.
From this letter counsel for the respondents submitted that the deceased could have committed suicide on account of the harassment caused to her by the Headmaster of the school.
But that does not explain the killing of the children.
This letter was written on 17th April, 1983 whereas the incident in question occurred on 7th June, 1983 i.e. more than 1 1/2 months thereafter.
The immediate cause for the extreme step taken by the deceased is clearly reflected in the two letters of 7th June, 1983.
Therefore, the inference drawn by the learned counsel for the respondents from the letter of 17th Aril, 1983 cannot advance the defence set up by the accused persons.
Iqbal Singh filed a written statement jointly with Kulwant Kaur wherein he stated that he had not helped his wife to secure a transfer as the family was having a good residence in the village and this was the real cause of quarrel between the two.
The statement shows that the factum of quarrel between the husband and wife is not seriously disputed.
The nature of correspondence he was carrying on with the Headmaster is not difficult to judge.
He then states that he had purchased the plot in the name of his wife for Rs. 12,500 but he does not disclose the source from which the consideration for the plot came.
He further states that his wife was earning Rs.900 per month and, therefore, he could never have entertained an intention to push her to committing suicide.
It 798 would, therefore, appear from the evidence placed on record that the relations between the deceased and Iqbal Singh were strained because of the latter 's demand for extra dowry and they worsened to such an extent that the deceased decided to put an end to her life.
The charge against the accused was under section 306, I.P.C.
That section must be read in the backdrop of the above facts.
Underthat section if any person commits suicide the person who abets the commission of suicide shall be liable to be punished with imprisonment of either description for a term which may extend to ten years and fine.
The question is whether on the facts proved it can be said that either Iqbal Singh or his sister were guilty of abetment.
Chapter V of the Penal Code is entitled `Of Abetment ' and comprises sections 107 to 120 of which we may notice sections 107 and 108 only.
`Abetment ' as defined by section 107 comprises (i) instigation to do that thing which is an offense (ii) engaging in any conspiracy for the doing of that thing and (iii) intentionally aiding by any act or illegal omission the doing of that thing.
Section 108 defines an abettor as a person who abets an offence or who abets either the commission of an offence or the commission of an act which would be an offence.
The word `instigate ' in the literary sense means to incite, set or urge on, stir up, goad, foment, stimulate, provoke, etc.
Since there is no question of parties being engaged in any sort of conspiracy we have to consider whether there was any intentional aiding for committing suicide.
The dictionary meaning of the word aid is to give assistance, help, etc.
Before we come to grips with the question at issue it is necessary to notice a few legislative changes introduced in the Penal Code to combat the menance of dowry deaths.
The increasing number of such deaths was a matter of serious concern to our law makers.
Cases of cruelty by the husband and his relatives culminated in the wife being driven to commit suicide or being done to death by burning or in any other manner.
In order to combat this menance the legislature decided to amend the Penal Code, Criminal Procedure Code and the Evidence Act by the Criminal Law (Section Amendment) Act, 1983 (No, 46 of 1983).
So far as the Penal Code is concerned, Section 498A came to be introduced whereunder `cruelty ' by th husband or his relative to the former 's wife is made a penal offence punishable with imprisonment for a term which may extend to three years and fine.
The explanation to the section defines `cruelty ' to mean (i) wilful conduct which is of such a nature as is likely to drive the woman to commit suicide or to cause grave injury or danger to her life, limb or health or (ii) causing harassment of the woman with a view to coercing her or any person 799 related to her to meet any unlawful demand for any property or valuable security.
Thus, under this newly added provision if a woman is subjected to cruelty by her husband or his relative it is a penal offence and by the insertion of section 198A in the Code of Criminal Procedure a Court can take cognizance of the offence upon a police report or upon a complaint by the aggrieved party or by the woman 's parents, brother, sister, etc.
The offence is made non bailable.
In so far as the Evidence Act is concerned, a new section 113A came to be introduced which reads as under: "113A. Presumption as to abetment of suicide by a married woman.
When the question is whether the commission of suicide by a woman had been abetted by her husband or any relative of her husband and it is shown that she had committed suicide within a period of seven years from the date of her marriage and that her husband or such relative of her husband had subjected her to cruelty, the court may presume, having regard to all the other circumstances of the case, that such suicide had been abetted by her husband or by such relative of her husband.
Explanation For the purposes of this section, `cruelty ' shall have the same meaning as in Section 498A of the Indian Penal Code (45 of 1860).
" On a plain reading of this provision it is obvious that if a wife is shown to have committed suicide within a period of seven years from the date of marriage and there is evidence that she was subjected to cruelty by her husband or his relative, it would be permissible for the court to presume that such suicide was abetted by her husband or by such relative of her husband.
The Amendment Act 46 of 1983 received the assent of the President on 25th December, 1983 and was published in the Gazette of India, dated 26th December, 1983.
The trial court rendered its Judgment on 23rd February, 1984 and it does not appear if the prosecution concentrated on section 113A, Evidence Act, for otherwise it would have tried to place on record the exact date of marriage to take advantage of the presumption arising thereunder.
The High Court referred to this provision but did not say anything in regard to its application.
Being a rule of evidence it could perhaps have been invoked if proof regarding the exact date of marriage was laid.
Since there is no cogent evidence that the marriage was solemnised within seven years from the date of incident we need not dilate on that point.
800 The law underwent a further change with the introduction of section 304B in the Penal Code and section 113B in the Evidence Act by the Dowry Prohibition (Amendment) Act, 1986.
Where the death of a woman is caused by burns or bodily injury or occurs otherwise than under normal circumstances within seven years of her marriage and evidence reveals that soon before her death she was subjected to cruelty or harassment by her husband or any of his relative for or in connection with any demand for dowry, such death is described as dowry death under section 304B for which the punishment extends to imprisonment for life but not less than imprisonment for seven years.
By section 113B, Evidence Act, the court has to raise a presumption of dowry death if the same has taken place within seven ears of marriage and there is evidence of the woman having been subjected to cruelty and/or harassment.
The legislative intent is clear: to curb the menance of dowry deaths, etc., with a firm hand.
We must keep in mind this legislative intent.
It must be remembered that since such crimes are generally committed in the privacy of residential homes and in secrecy, independent and direct evidence is not easy to get.
That is why the legislature has by introducing sections 113A and 113B in the Evidence Act tried to strengthen the prosecution hands by permitting a presumption to be raised if certain foundational facts are established and the unfortunate event has taken place within seven years of marriage.
This period of seven years is considered to be the turbulent one after which the legislature assumes that the couple would have settled down in life.
It a married woman is subjected to cruelty or harassment by her husband or his family members section 498A, I.P.C. would be attracted.
If such cruelty or harassment was inflicted by the husband or his relative for, or in connection with, any demand for dowry immediately preceding death by burns and bodily injury or in abnormal circumstances within seven years of marriage, such husband or relative is deemed to have caused her death and is liable to be punished under section 304B, I.P.C.
When the question at issue is whether a person is guilty of dowry death of a woman and and the evidence discloses that immediately before her death she was subjected by such person to cruelty and/or harassment for, or in connection with, any demand for dowry, section 113B, Evidence Act provides that the court shall presume that such person had caused the dowry death.
Of course if there is proof of the person having intentionally caused her death that would attract section 302, I.P.C. Then we have a situation where the husband or his relative by his wilful conduct creates a situation which he knows will drive the woman to commit suicide and she actually does so, the case would 801 squarely fall within the ambit of section 306, I.P.C.
In such a case the conduct of the person would tantamount to inciting provoking or virtually pushing the woman into a desperate situation of no return which would compel her to put an end to her miseries by committing suicide.
In the present case the facts clearly reveal from the divorce deed Exh.
D 2 that the relations between the husband and the wife were strained even in 1977.
There is intrinsic evidence in that document that the wife apprehended blood shed and harm to her children.
Before the execution of this document she had sought police protection by her application/letter dated 12th October, 1977.
Then in April, 1983 her efforts to secure a transfer from the school where she was harassed by the Head Master were frustrated by her husband.
Her husband had kept up the pressure for extra dowry since her marriage and had stepped it up after the demise of her father on learning that her mother had received the G.P. Fund, Gratuity, etc., due to her father.
Since she and her mother and brother were not able to meet this demand she was subjected to considerable torture.
Added to that was the anxiety caused by her husband 's conduct at trying to frustrate her efforts to seek a transfer from the school where she was serving.
The last straw on the camel 's back fell when she was severely beaten on the previous day, i.e. 6th June, 1983 as is evident from her letter of 7th June, 1983.
An atmosphere of terror was created to push her into taking the extreme step.
It would seem it was a carefully chalked out strategy to provoke her into taking the extreme step to kill herself and her children as she apprehended that they will be much more miserable after she is dead and gone.
In this fact/situation can it be said that the husband had not been responsible in creating circumstances which would provoke or force her into taking the only alternative left open to her, namely suicide? Can it be said that the husband did not realise where he was leading her by his wilful conduct? We think in the peculiar facts and circumstances of the case, the trial court had rightly convicted the husband under section 306 I.P.C. We think that the High Court committed an error in reversing the conviction.
We, therefore, allow this appeal, set aside the High Court 's order and restore the order of conviction and sentence passed by the trial court.
We cannot countenance the plea for reduction of his sentence.
No order on his C.M.P. So far as his sister 's involvement is concerned, we think the evidence falls short of proof beyond reasonable doubt and, therefore, we see no reason to interfere with the High Court 's order.
We, therefore, dismiss the State 's appeal directed against her.
Her bail bonds will stand cancelled.
V.P.R. Appeal allowed.
| Respondent No. 1 's wife setting herself and her three children ablaze, died at her husband 's house on 7.6.1983.
The marriage had taken place seven or eight years before the incident.
The deceased wife was working as a teacher while her husband was a clerk.
Soon after the marriage there were disputes between them on the question of dowry.
The demand for extra dowry strained the relations between them them and the husband began to ill treat the deceased wife.
The deceased had written a letter to the Deputy Superintendent of Police on 12.10.1977 complaining about the ill treatment meted out to her and apprehending danger to her life and the lives of her children.
When the police came to inquire into the matter there was some understanding, as a result of which she had informed the police that no further action be taken for the present but her application may be kept pending.
Later, a divorce deed was executed but not acted upon.
The situation did not improved.
On 7.6.1983, the very morning of incident, the deceased wife wrote a letter addressed to Deputy Commissioner of Police, wherein she narrated how she and her children were ill treated by her husband, narrated how she and and her children were ill treated by her husband, mother in law and sister in law for dowry and why she took the decision to put an end to her life and the lives of her children.
Another letter 791 of even date was addressed to her mother stating the reasons for her such act.
A First Information Report was lodged against the Respondent No. 1 by the mother of the deceased.
After investigation the Respondent No. 1, his mother and sister were put up for trial.
The Trial Court on an examination of the prosecution evidence convicted all the three accused persons under Section 306, IPC and sentenced the husband to rigorous imprisonment for seven years and a fine of Rs.5,000, in default, rigorous imprisonment for one year and sentenced the two others to rigorous imprisonment for three years and a fine of Rs.1,000 each, in default, rigorous imprisonment for three months, against which order, accused persons preferred an appeal before the High Court.
The High Court on a reappreciation of the evidence and having regard to the language of Section 306, IPC came to the conclusion that there was no evidence to show that any of the accused was guilty of abetment and allowed the appeal.
The State has, therefore, approached this Court by way of special leave.
In the meantime the Respondent No. 1 's mother had passed away.
The appeal was, therefore, limited to the Respondent No. 1 and his sister.
Allowing the appeal, this Court, HELD: 1. `Abetment ' as defined by Section 107 comprises (i) instigation to do that thing which is an offence, (ii) engaging in any conspiracy for the doing of that thing and (iii) intentionally aiding by any act or illegal omission the doing of that thing.
An abettor is a person who abets an offence or who abets either the commission of an offence of the commission of an act which would be an offence.
[798C D] 2.
The word `instigate ' in the literary sense means to incite, set or urge on, stir up, goad, foment, stimulate, provoke, etc.
The dictionary meaning of the word, "aid" is to give assistance, help, tec.
[798D E] 3.
Where the death of a woman is caused by burns or bodily injury or occurs otherwise than under normal circumstances within seven years of her marriage and evidence reveals that soon before her death she was subjected to cruelty or harassment by her husband or any of his relative for or in connection with any demand for dowry, such death is described as dowry under Section 304 B for which the 792 punishment extends to imprisonment for life, but not less than imprisonment for seven years.
By Section 113B, Evidence Act, the court has to raise a presumption of dowry death, if the same has taken place within seven years of marriage and there is evidence of the women having been subjected to cruelty and/or harassment.
[800A C] 4.
The legislative intent is clearly to curb the menance of dowry deaths, etc., with a firm hand.
Court must keep in mind this legislative intent.
It must be remembered that since such crimes are generally committed in the privacy of residential homes and in secrecy, independent and direct evidence is not easy to get.
That is why the legislature has by introducing sections 113A and 113B in the Evidence Act tried to strengthen the prosecution 's hands by permitting a presumption to be raised if certain foundational facts are established and the unfortunate event has taken place within seven years of marriage.
This period of seven years is considered to be the turbulent one after which the legislature assumes that the couple would have settled down in life.
[800D E] 5.
If a married woman is subjected to cruelty of harassment by her husband or his family members section 498 A, IPC would be attracted.
If such cruelty or harassment was inflicted by the husband or his relative for, or in connection with, any demand for dowry immediately preceding death by burns and bodily injury or in abnormal circumstances within seven years of marriage, such husband or relative is deemed to have caused her death and is liable to be punished under section 304B IPC.
[800E F] 6.
When the question at issue is whether a person is guilty of dowry death of a woman and the evidence discloses that immediately before her death she was subjected by such person to cruelty and/or harassment for, or in connection with, any demand for dowry, section 113B Evidence Act provides that the Court shall presume that such person had caused the dowry death.
[800F G] 7.
In the present case section 113A or 113B, Evidence Act cannot be invoked as the prosecution has not brought the exact date of marriage on record.
Yet where the husband or his relative by his wilful conduct creates a situation which he knows will drive the woman to commit suicide and she actually does so, the case would squarely fall within the ambit of section 306, IPC.
In such a case the conduct of the person would tantamount to inciting or provoking or virtually pushing the woman into a desperate act.
In this case it would seem from past events that it was a carefully chalked out strategy to provoke the woman into killing herself.
[800H 801A, 801E] 793 8.
In the peculiar facts and circumstances of the case, the trial court had rightly convicted the husband under section 306 IPC.
The High Court committed an error in reversing the conviction.
The plea for reduction of his sentence cannot be countenanced.
[801F G]
|
: Criminal Appeal Nos.
578/88 & 728/89.
From the Judgment and Order dated 15.7.
1986 of Patna High Court in Crl.
A. Nos.
97 & 87 of 1983.
A. Sharan for the Appellants.
D. Goburdhan for the Respondent.
These two appeals are directed against the judgment and order of the High Court of Patna dated 15.7.
1986 upholding the conviction of Dr. Harendra Narain Singh and Ram Nath Singh, appellants for the offences under Section 302/34 of the I.P.C. Briefly, the facts as disclosed by the prosecution are that Smt.
Jagia Devi; a widow having two sons was carrying four months pregnancy.
She was taken to the dispensary of Dr. Harendra Narain Singh, the appellant who was a Homeo pathic doctor on the pretext of treatment of pain in her stomach though the real purpose for taking ' 57 her to the dispensary was for aborting foetus which she was carrying.
She was murdered in the dispensary and her dead body was taken to Village Dibbi in an Ekka and placed in the courtyard of the house of Smt.
Tileshwara Kuar.
Teg Bahadur Singh PW 11 came to know from a young boy that a dead body was kept in the courtyard of Smt.
fileshwara Kuar.
He went to the house of Smt.
Tileshwara Kuar and on interrogation she told him that some persons after committing murder of Jagia Devi had kept her dead body inside her house.
The door of the house was locked.
Tileshwara handed over the key to Teg Bahadur Singh who unlocked the door and entered the house and found the dead body of Jagia lying on the ground in the courtyard.
He rushed to the Police Station and re ported the matter to the police which was reduced in writ ing.
The police registered a case and proceeded to the spot.
The Investigating Officer recovered the dead body from the house of Tileshwara Kuar and made inquest and sent the dead body for post mortem.
On completion of investigation the police submitted ' chargesheet against seven accused persons, namely, Tileshwara Kuar, Ram Nath Singh, Bishwanath Roy s/o Dip Roy, Ishwar Shah, Dr. Harendra Narain Singh, Smt.
Jota Kuar w/o Dip Roy and Bishwanath Singh alias Bissu.
During the pendency of the case before the Trial Court Bishwanath Roy and Jota Kuar died, therefore, the trial proceeded only against the remaining five accused persons.
Before the Trial Court, the prosecution produced 14 witnesses in support of its case but there was no direct evidence or eye witness to support the charge of murder.
Entire case of the prosecution is founded on circumstantial evidence.
The Trial Court acquitted Smt.
Tileshwara Kuar who had been charged for offences under Section 302/34 and 201 of the IPC but it convicted the remaining accused Ram Nath Singh, Ishwar Shah, Harendra Narain Singh & Bishwanath Singh alias Bissu for the offences under Section 302 of the IPC read with Section 34 of the IPC and also under Section 3 15/34, IPC.
On appeal by the accused the High Court acquit ted Ishwar Shah, Bishwanath Singh alias Bissu but it upheld the conviction of Dr. Harendra Narain Singh and Ram Nath Singh for offences under Section 302/34 of the IPC.
Ag grieved Dr. Harendra Narain Singh and Ram Nath Singh have preferred these two appeals.
The entire case of the prosecution rests on the circum stantial evidence as no prosecution witness has given any direct testimony against the appellants for the commission of the offence for which they have been convicted.
The Trial Court as well as *he High Court both have relied on circum stantial evidence in convicting the appellants for 58 the offences under Section 302/34 of the IPC.
Since the entire case rests on circumstantial evidence it is necessary to refer to the principles which should guide the Court in considering the conviction of an accused resting on circum stantial evidence.
It is a cardinal principle of criminal jurisprudence that circumstantial evidence must be fully established from which there should be inevitable conclusion of the guilt of the accused beyond any reasonable doubt and the facts so established should be consistent only with the hypothesis of the guilt of the accused, ruling out any hypothesis of innocence of the accused.
In Hanurnant vs The State of Madhya Pradesh, this Court laid down fundamental and basic principles for appreciating the circumstantial evidence.
Mahajan, J, speaking for the Court observed: "It is well to remember that in cases where the evidence is of a circumstantial nature, the circumstances from which the conclusion of guilt is to be drawn should in the first instance be fully established and all the facts so established should be consistent only with the hypothesis of the guilt of the ac cused.
Again the circumstances should be of a conclusive nature and tendency and they should be such as to exclude every hypothesis but the one proposed to be proved.
In other words, there must be a chain of evidence so far complete as not to leave any reasonable ground for a conclusion consistent with the innocence of the accused and it must be such as to show that within all human probability the act must have been done by the accused.
" These principles were reiterated by this Court in Shi vaji Saheb Rao Bobde & Anr.
vs State of Maharashtra, ; wherein it was emphasised that where the prosecu tion rests merely on circumstantial evidence, the facts established should be consistent only with the hypothesis of the guilt of the accused, that is to say, they should not be explainable on any other hypothesis except that the accused is guilty.
The Court further observed that the circumstances should be of a conclusive nature and tendency and they should exclude every possible hypothesis except the one to be proved and the chain of evidence should be so complete as to rule out any reasonable ground for the conclusion con sistent with the innocence of the accused and the circum stances must show that in all human probability the act must have been done by the accused.
These principles have been consistently laid down by this Court in several decisions, it is not necessary to refer to all these decisions.
Howev er, we would like to refer to the decision in Sharad B. Chand vs Maharashtra, [1985] 1 SCR page 88 as 59 this case has been relied upon by the High Court in uphold ing the conviction of the appellants.
In Sharad B. Chand 's case this Court while considering the absence of explanation or a false explanation of the accused for the circumstances and the facts proved against him, struck a note of caution that before a false explanation is used as additional link against the accused the Court should satisfy itself that (1) Various links in the chain of evidence led by the prosecu tion have been satisfactorily proved.
(2) The circumstances point to the guilt of accused with reasonable definiteness; and (3) The circumstances are in proximity to the time and situation where all these conditions are fulfilled only then a Court can use a false explanation or a false defence of an accused, as an additional link to lend an assurance to the Court and not otherwise.
There is yet another basic rule of criminal jurisprudence that if two views are possible on the evidence adduced in a case of circumstantial evidence, one pointing to the guilt of the accused and the other to his innocence, the Court should adopt the latter view favourable to the accused.
We have reminded ourselves of these princi ples with a view to ascertain as to whether the High Court has correctly applied these principles in convicting and sentencing the appellants.
The evidence produced by the prosecution relates to establish the circmustances that (1) Smt.
Jagia Devi, a widow (brother 's daughter of Smt.
Tileshwara Kuar, the accused) died on 22.9.1973.
(2) Death of Jagia Devi was caused due to throttling leading to asphyxia as deposed by Dr. Anand Mohan PW 6.
The Doctor who carried on the postmor tem of the dead body was of the opinion that Jagia Devi killed by strangulation in the neck.
(3) 1n the night be tween 22.9.
1973 and 23.9.1973, a dead body was taken out of the dispensary of Dr. Harendra Narain Singh by the accused Ram Nath Singh and Bish wanath Singh alias Bissu and placed on an ekka in the presence of Ishwar Shah and Dr. Harendra Narain Singh.
Jota Kuar (mother of Ram Nath Singh, the appellant) was also present there.
(4) The dead body was placed on the ekka of Amanat Khan PW 10 and the same was carried to village Dibbi.
Ram Nath Singh, Bishwanath Singh and Jota Kuar also accompanied the dead body to village Dibbi.
(5) Recovery of the dead body of Jagia Devi from the courtyard of Smt.
Tileshwara Kuar, an accused.
On the basis of these circumstances, the High Court upheld the conviction of Ram Nath Singh and Dr. Harendra Narain Singh, the appellants, as in its opinion Ram Nath Singh had motive to murder Jagia Devi as she being a widow was carrying pregnancy of four 60 months.
The murder was committed in the dispensary of Dr. Harendra Narain Singh where she had been taken for medical aid for pain in stomach.
The Trial Court had acquitted Smt.
Teleshwara Kuar, from whose house dead body was recovered.
In appeal the High Court acquitted Ishwar Shah and Bishwa nath Singh alias Bissu also.
The prosecution evidence and the circumstances on the basis of which Ram Nath Singh and Dr. Harendra Narain Singh have been convicted are the same as applicable to the case of Ishwar Shah and Bishwanath Singh alias Bissu, but the High Court acquitted them and at the same time it upheld the conviction of Ram Nath Singh and Dr. Harendra Narain Singh on the same set of the evidence and circumstances without ' there being any distinction.
The main circumstances which weighed with the High Court in upholding the conviction of Ram Nath Singh and Dr. Harendra Narain Singh was that the dead body of Jagia Devi was taken out of the dispensary of Dr. Harendra Narain Singh and placed on the ekka of Amanat Khan PW 10 by Ram Nath Singh.
In view of this proved circumstance the High Court concluded that in all likelihood Jagia Devi was murdered in the dis pensary of Dr. Harendra Narain Singh with his connivance and thereafter the dead ' body was taken on ekka to village Dibbi and placed in the courtyard of Smt.
Teleshwara Kuar.
The presumption that Ram Nath Singh committed murder of Jagia Devi by strangulation in the dispensary of Dr. Harendra Narain Singh with his connivance is based on conjecture without there being any conclusive circumstance justifying such presumption.
The High Court has placed strong reliance on the evi dence of PW 10 Amanat Khan in holding the appellants Dr. Harendra Narain Singh and Ram Nath Singh guilty of murder.
PW 10 Amanat Khan was an ekkawala who plied passengers on hire, he was resident of village Bagaura, where the dispen sary of Dr. Harendra Narain Singh was situate.
Amanat Khan testified that at about 2 a.m. in the night the appellants Ram Nath Singh, Dr. Harendra Narain Singh and Bishwanath Singh alias Bissu awakened him and requested him to 'carry a patient to village Dibbi.
At first he refused to ply his ekka at that odd hour of the night but after some time they again returned and put pressure on him to take his ekka to the dispensary of Dr. Harendra Narain Singh for transporting the patient to Village Dibbi.
On their pursuasion he took his ekka to the dispensary of Dr. Harendra Narain Singh where he found Ishwar Shah, Jagannath and Smt.
Jota Kuar (mother of appellant Ram Nath) present at the dispensary.
According to him Ram Nath and Bishwanath, deceased brought a dead body from the dispensary of the appellant Harendra Narain Singh and placed the 61 same on the ekka.
Ram Nath Singh, Bishwanath Singh alias Bissu and Smt.
Jota Kuar also sat in the ekka.
On their request he carried them to village Dibbi Where Ram Nath and Bishwanath alias Bissu unloaded the dead body from the ekka at the house of Smt.
Teleshwara Kuar.
Amanat Khan 's testimo ny is supported by PW 3, Dukhan Majhi, PW 4 Bisheshvar Chowkidar and PW 5 Shiv Dutt.
Their testimony is merely to the fact that the appellants Ram Nath Singh and Bishwanath Singh were sitting on the ekka which was carrying a dead body from the dispensary of Dr. Harendra Narain Singh.
Placing reliance on the testimony of these witnesses the High Court and the Trial Court concluded that Smt.
Jagia Devi, the deceased was murdered in the dispensary of Dr. Harendra Narain Singh and the dead body was carried by them on the ekka to village Dibbi and placed in the courtyard of Smt.
Tileshwara Kuar.
The High Court and the Trial Court both failed to notice that the prosecution produced no evidence to show that Smt.
Jagia, the deceased was brought to the dispensary of Dr. Harendra Narain Singh while she was alive.
There is further no evidence as to who brought her to the dispensary in what condition.
The only evidence which the prosecution has produced in this respect is that a dead body was taken out from the dispensary of Dr. Harendra Narain Singh and placed on the ekka by Ram Nath Singh and others and taken to village Dibbi.
The High Court was conscious of the weakness of the prosecution case, even then it upheld the conviction of the appellant perhaps on moral grounds.
In para 3 of its judg ment the High Court observed: "although 14 witnesses have been examined on behalf of the prosecution there is no direct evidence or eye witness account of murder.
The witnesses however are not all relevant even for proving the circumstances and other colat oral matters".
After making the aforesaid observations ordinarily the High Court should have rejected the prosecution case which was based on circumstantial evidence but strangely enough the High Court inspite of the aforesaid observations, upheld the conviction of the appellants.
While dealing with the case of Dr. Harendra Narain Singh the High Court observed that he was a man of shaky charac ter.
This observation was made on the basis that even though he was a homeopathic doctor but allopathic medicines were recovered from his dispensary.
In our opinion, mere recovery of allopathic medicines from the dis 62 pensary of Dr. Harendra Narain Singh does not necessarily show that he was a man of shaky character.
It is a matter of common knowledge that even a homeopathic doctor sometimes refer the patients to allopathic treatment.
The fact of recovery of allopathic medicines has no connection or rela tion to the commission of the offence for which Dr. Harendra Narain Singh has been convicted.
The High Court further observed that when the dead body of the deceased was taken out from the dispensary by Ram Nath Singh and other accused persons Dr. Harendra Narain Singh was present at the spot, therefore he was so closely connected with the affairs taking place at his house that none could without his as sistance do anything, Apart from this there was no other evidence or circumstance against Dr. Harendra Narain Singh It is significant to note that according to the prosecution when the dead body of the deceased was taken out of dispen sary and placed on ekka Ishwar Shah and Bishwanath Singh alias Bissu accused were also present at the dispensary along with Dr. Harendra Narain Singh yet 'they have been acquitted by the High Court.
The High Court failed to give any cogent reason for upholding the conviction of Dr. Haren dra Narain Singh.
We have carefully gone through the evidence on record and considered the various circumstances and the facts of the case.
In our opinion, there are two glaring circum stances which are fatal to the prosecution case.
The prose cution has produced evidence only to the effect that a dead body was taken out of the dispensary of Dr. Harendra Narain Singh by Ram Nath Singh and other accused persons and the same was carried on the ekka to village Dibbi.
The prosecu tion witnesses have merely deposed that they had seen a dead body being placed on the ekka and taken to village Dibbi.
None of the prosecution witness has however, deposed that he had seen the face of the dead body or identified the same.
In the absence of such evidence it would not be reasonable to assume that the dead body which was taken out from the dispensary and placed on the ekka was that of the deceased Jagia Devi.
In the absence of identification of dead body by the witnes ses it is not legitimate to hold that the dead body which was taken out from the dispensary of Dr. Harendra Narain Singh was that of Jagia Devi.
There is another vital defect in the prosecution case: The prosecution failed to produce any evidence that the deceased Jagia Devi was taken to the hospital for treatment by Ram Nath Singh and other accused persons while she was alive and that she was admit ted to the dispensary of Dr. Harendra Narain Singh for treatment, at a time when she was alive.
In the absence of any Such evidence there are various possibilities and proba bilities, one of them being that the 63 deceased may have been brought to the dispensary for medical assistance after she was found to be strangulated by some one.
There is further no evidence of the fact that when the deceased was inside the dispensary no other person had access to her except the appellants.
In the absence of any such evidence it would not be legitimate to assume that the deceased was strangulated in the dispensary by Ram Nath Singh with the connivance of Dr. Harendra Narain Singh.
Merely because the appellants failed to raise any such plea in their defence does not lend any support to the prosecu tion case.
The prosecution has to succeed on the basis of its own evidence and it can not rely on the absence of defence to sustain the guilt as there is no justification for raising such assumption against the appellants.
The circumstances established by the prosecution are not suffi cient to conclusively point to the appellants as the perpe trator of the crime or to rule out the hypothesis of their innocence.
Since the prosecution failed to prove the neces sary facts showing that the deceased while alive was last seen in the company of the appellants or that the dead body which was carried on the ekka was that of the deceased Jagia Devi, the High Court was not justified in drawing adverse inference for completing the chain of circumstances to uphold the appellant 's conviction merely on the appellant 's false explanation in defence.
In view of the above discussion, we are of the opinion that the High Court and the Trial Court both committed error in convicting the appellants.
We accordingly allow the appeals and set aside the judgment and order of the High Court convicting the appellants.
T.N.A. Appeals allowed.
| Appellants 1 and 2, along with other co accused, were prosecuted for the offence of murder.
The entire evidence was circumstantial: (a) The murder was committed by Appel lant 2 in the dispensary of the Appellant 1, a doctor, with his connivance; (b) the dead body was taken out of the dispensary of the appellant 1 and the same was kept on an ekka and carried to a village Dibbi where it was placed in the courtyard of one of the co accused; and (c) Recovery of the dead body from the courtyard of a co accused.
The Trial Court acquitted the accused from whose house the dead body was recovered but convicted the remaining four accused for the offences under section 302/34 of the Indian Penal Code.
On appeal by the accused persons the High Court acquitted the other two coaccused but upheld the conviction of the two appellants.
Against their conviction, the appel lants filed appeals in this Court, By an order dated 3.5. 1991, this Court allowed their appeals and set aside their conviction.
Giving reasons in support of its judgment, this Court, HELD: 1.
It is a cardinal principle of criminal juris prudence that circumstantial evidence must be fully estab lished from which there should be inevitable conclusion of the guilt of the accused beyond any reasonable doubt and the facts so established should be consistent only 55 with the hypothesis of the guilt of the accused, ruling out any hypothesis of innocence of the accused.
[58B] 2.
There is yet another basic rule of criminal jurispru dence that if two views are possible on the evidence adduced in a case of circumstantial evidence, one pointing to the guilt of the accused and the other to his innocence, the Court should adopt the latter view favourable to the ac cused.
[59C] 3.
The prosecution has to succeed on the basis of its own evidence and it can not rely on the absence of defence to sustain the guilt as there is no justification for rais ing such assumption against the appellants.
[63B] Hanumant vs The State of Madhya Pradesh, [1952] 3 S.C.R. 1091; Shivaji Saheb Rao Bobde & Anr.
vs State of Maharash tra; , and Sharad B. Chand vs Maharashtra, ; , referred to.
In the instant case, there are glaring circumstances which are fatal to the prosecution case.
The prosecution has produced evidence only to the effect that a dead body was taken out of the dispensary of Appellant 1 by Appellant 2 and other accused persons and the same was carried on the ekka to village Dibbi.
The prosecution witnesses have merely deposed that they had seen a dead body being placed on the ekka and taken to village Dibbi.
None of the prosecution witness has however, deposed that he had seen the face of the dead body or identified the same.
In the absence of such evidence it would not be reasonable to assume that the dead body which was taken out from the dispensary and placed on the ekka was that of the deceased.
In the absence of identi fication of dead body by the witnesses it is not legitimate to hold that the dead body which was taken out from the dispensary of Appellant 1 was that of deceased.
[62E F, G] 4.1 There is another vital defect in the prosecution case.
The prosecution failed to produce any evidence that the deceased was taken to the dispensary for treatment by Appellant 2 and other accused persons while she was alive and that she was admitted to the dispensary of Appellant 1 for treatment, at a time when she was alive.
In the absence of any such evidence there are various possibilities and probabilities, one of them being that the deceased may have been brought to the dispensary for medical assistance after she was found to be strangulated by some one.
Further there is no evidence of the fact 56 that when the deceased was inside the dispensary no other person had access to her except the appellants.
In the absence of any such evidence it would not be legitimate to assume that the deceased was strangulated in the dispensary by Appellant 2 with the connivance of Appellant 1 Therefore, the prosecution failed to prove the necessary facts and the circumstances established by it are not sufficient to con clusively point to the appellants as the perpetrator of the crime or to rule out the hypothesis of their innocence.
Accordingly, the High Court and the Trial Court both commit ted error in convicting the appellants.
The High Court was also not justified in drawing adverse inference for complet ing the chain of circumstances to uphold the appellant 's conviction merely on the appellant 's false explnaton in, defence.
[62G H, 63A C D]
|
N: Criminal Appeal No. 168of 1991.
From the Judgment and Order dated 26.7.1989 of the Madya Pradesh High Court in Crl.
A. No. 102 of 1984.
G.L. Sanghi and A.K. Sanghi for the Appellants.
The facts are few and simple.
The first appellant Rajendra, on 30th June, 1982, while running a shop under the name and style of M/s. Kumarvad Bros. in Khargaon Municipal ity, was found exhibiting and offering for sale tea dust, the quantity of which was about 11/2 kgs.
D.P. Nath, P.W. 1, the Food Inspector for Khargaon purchased tea dust in the requisite quantity for test.
The purchased tea was dealt with in the prescribed manner as per rules on the subject.
The purchase and other attendant documents were witnessed by Madan, P 'W ' 2 and another.
The Public Analyst, Bhopal, to whom one of the three samples was sent for analysis opined that the food article fell below the prescribed standard as its contents were present in quantities not within the prescribed limits of variabili ty.
The report of the Public Analyst was communicated to the first appellant as well as to his two brothers, the second and third appellants, because it appears that at the time of 99 the sale of the tea to the Food Inspector, he was told by the first appellants that the court 's intervention could be sought to have one of three brothers.
The accompanying covering letter suggested to the appellants that the court 's intervention could be sought to have one of the samples kept by the Local Health Authority examined one more time.
The appellants did not avail of the opportunity and faced the prosecution launched under section 7 read with section 16 of the before the Chief Judicial Magistrate, Khargaon.
Before the Trial Magistrate the facts as alleged by the prosecution regarding sale by the first appellant to the Food Inspector and of the article of food being adulterated as per report of the Public Analyst were not disputed.
Shelter, however, was taken behind the provisions of Rules 7(3) and 9 A of the Prevention of Food Adulteration Rules, 1955, as then standing, whereunder the Public Analyst was required to send his report to the Local Health Authority within 45 days, which he had not done, and the Local Health Authority was required to 'immediately ' after the institu tion of prosecution forward a copy of the report of the result of the analysis to the appellants.
Since there was a delay of nearly a month on that count the Trial Magistrate viewed this lapse as total to the prosecution.
Furthermore, the Trial Magistrate took the view that in the covering letter while sending the report, nowhere had the appellants been told that they had a right to have the second sample with the Local Health Authority analysed by the Central Food Laboratory in terms of section 13(2) of the Act.
The Trial Magistrate perhaps had in mind that had this been mentioned, the appellants may have chosen to avail of the opportunity of the analysis by the Central Food Laboratory and such report would have superseded the report of the Public Ana lyst, whether for or against the appellants.
On these two grounds the learned Trial Magistrate recorded acquittal of the appellants.
The High Court on appeal by the State of Madhya Pradesh, reversed the Order of acquittal and recorded conviction of the appellants add sentenced each one of them to six months ' rigorous imprisonment and to pay a fine of Rs.5000 each.
This has occasioned the appeal before us.
Our attention was brought to the aforesaid rules and section 13(2) of the Act and the case law on the subject.
Rule 7(3) requires that the Public Analyst shall within a period of 45 days of the receipt of any sample for analysis, deliver to the Local Health Authority, a report of the result of such analysis in Form III.
The Trial Magistrate found that this duty was not discharged by the Public Ana lyst within 100 the prescribed period of 45 days.
The High Court, however, recomputed the period and came to the conclusion that such duty was performed within the prescribed period.
That find ing is one of fact and nothing has been addressed to us in that regard.
So far as the Local Health Authority being required to 'immediately ' after the institution of prosecu tion send a copy of the report of the result of the analysis in Form III, its failure to do so instantly was held to be of no consequence, relying on a judgment of this Court in Tulsiram vs State of Madhya Pradesh, ; where in the word 'immediately ' was interpreted to convey 'reason able despatch and promptitude ' intending to convey a sense of continuity rather than urgency.
This Court then ruled at page 497 as follows: "The real question is, was the Public Ana lyst 's report sent to the accused sufficiently early to enable him to properly defend himself by giving him an opportunity at the outset to apply to the court to send one of the samples to the Central Food Laboratory for analysis.
If after receiving the Public Analyst 's report he never sought to apply to the court to have the sample sent to the Central food Laborato ry, as in the present case, he may not be heard to complain of the delay in the receipt of the report by him, unless, of course, he is able to establish some other prejudice.
Our conclusions on this question are: The expres sion 'immediately ' in Rule 9 A is intended to convey a sense of continuity rather than urgency.
What must be done is to forward the report at the earliest opportunity, so as to facilitate the exercise of the statutory right under section 13(2) in good and sufficient time before the prosecution commences leading evidence.
Non compliance with Rule 9 A is not fatal.
It is a question of prejudice.
" Tulsirarn 's case was thus a complete answer to the conten tion to contrary.
The next question which requires consideration is wheth er all the appellants are guilty of the crime.
From the material available on the record, we find no basis to sus tain the conviction of the second and third appellants, Om Prakash and Subhash.
There is no evidence worth the name to conclusively prove their complicity beyond reasonable doubt.
The first appellant is alleged to have told the Food Inspec tor on the date of sale of tea dust that the shop was being run in partnership by him with his two brothers.
This was the only case set up by 101 the prosecution at the trial.
No evidence was gathered or tendered to prove the partnership.
On the facts, which are eloquent, the first appellant alone made the sale of tea dust to the Food Inspector and not all.
Burden was on the prosecution to prove the existence of the partnership.
We do not propose to indulge in the refinery of civil law but have to adopt the cautious approach to adjudge criminality of the accused appellants.
Even it the Food Inspector is believed that the first appellant told him that 'the business on the shop was being run in partnership that per he was not enough to inculpate the remaining two appellants without further evidence '.
We find an area of doubt in this sphere and extending the same to the second and third appellants order their acquittal.
They be discharged from their bail bonds.
Fine, if paid, be refunded to them.
The case of the first appellant stands singled out.
His conviction was well deserved which is hereby maintained confirming the sentence of imprisonment but reducing the fine to Rs. 1000, in default of payment of which further rigorous imprisonment for one month is ordered.
He shall surrender to his bail bonds.
The excess fine, if paid, be refunded to the first appellant.
As a result the appeal of appellants 2 & 3 is allowed and that of appellant No. 1 dismissed, subject, however to the reduction of sentence.
R.P. Appeal dis posed of.
| Appellant No. 1 was found exhibiting and offering for sale tea dust.
P.W. 1, the Food Inspector purchased tea dust in the requisite quantity for test.
Appellant No. 1 told P.W. 1 that the shop which was being run by him was a part nership concern of the three brothersappellant No. 1 to 3.
On receipt of Public Analyst 's report, prosecution was lanuched against the appellants under section 7 read with section 16 of the .
Before the trial Magistrate the facts regarding sale by appellant no.1 of the food article and the same being adul terated as reported by the Public Analyst were not disputed.
The appellants however, argued that the Public Analyst did not send the report within the period prescribed under r. 7(3) Prevention of Food Adulteration Rules, 1955 and the Local Health Authority did not forward the copy of the result of the analysis to the appellants 'immediately ' after institution of the prosecution as envisaged by r. 9A.
Since there was a delay of nearly a month on that count, the trial Magistrate viewed this lapse as fatal to the prosecution.
He also held that in the covering letter while sending the report, it was not mentioned that the appellants had a right to have analysed the second sample by the Central Food Laboratory in terms of section 13(2) of the 96 97 Act.
He, therefore, acquitted the appellants.
On appeal by the State, the High Court reversed the order of acquittal.
It convicted the appellants and sen tenced each of them to six months ' rigorous imprisonment and to pay a fine of Rs.5000 each.
Aggrieved the appellants preferred the appeal by special leave to this Court.
On consideration of evidence regarding guilt of all the appellants and requirements of section 13(2) of the and rr.
7(3) and 9A of the Prevention of Food Adulteration Rules, 1955, Disposing of the appeal, this Court, HELD: 1.
In the instant case, there was no basis to sustain the conviction of appellants No. 2 and 3.
There was no evidence worth the name to conclusively prove their complicity beyond reasonable doubt.
The only case set up by the prosecution against these appeliants was that appellant No. 1 was alleged to have told the Food Inspector that the shop was being run in partnership by him with his these two brothers.
Appellant No. 1 alone made the sale in question to the Food Inspector.
Burden was on the prosecution to prove the existence of partnership.
Even if the Food Inspector is believed that appellant No. 1 told him that the shop was being run in partnership, that per he was not enough to inculpate the remaining two appellants without further evidence.
There is an area of doubt in this sphere and extending the same to appellants No. 2 and 3, they are acquitted.
[100G H; 101A B] The case of first appellant stood singled out.
His conviction was well deserved, which should be maintained and the sentence confirmed.
However, fine was to be reduced to Rs.1,000.
[101C] 2.
The expression 'immediately ' in r. 9A of the Preven tion of Food Adulteration Rules, 1955, is intended to convey a sense of continuity rather than urgency.
What must be done is to forward the report at the earliest opportunity, so as to facilitate the exercise of the statutory right under section 13(2) in good and sufficient time before the prosecution commences leading evidence.
Non compliance with r. 9 A is not fatal.
It is a question of prejudice.
The word 'immedi ately ' was to be interpreted to convey 'reasonable despatch and promptitude ' intending to convey a sense of continuity rather than urgency.
The High Court was right in holding that failure to send instantly a copy of the analysis 98 report to the appellants was of no consequence.
[100A F] Tulsiram vs State of Madhya Pradesh, ; , relied on.
On the question of compliance of r. 7(3) in regard to the period of submission of the report by Public Analyst to the Local Health Authority, the High Court 's conclusion, reached by it after recomputing the period, that such duty was performed within the prescribed period was a finding of fact and nothing was addressed before this Court in that regard.
[99G H; 100A]
|
tition (C) No. 118 of 1987.
Under Article 32 of the Constitution of India.
O.P. Sharma, K.R. Gupta, Vivek Sharma, R.C. Gubrele and Ms. Nanita Sharma for the Petitioners.
M. Chander Sekhran, Additional Solicitor General I, P. Parmeshwaran, section N. Terda, Ms. Kitty Kumaramangalam, Ms. A. Subhashini and Ms. Sangeeta Aggarwal for the Respondents.
837 The Judgment of the Court was delivered by KULDIP SINGH, J.
B.P. Singh and nine other teachers employed in the schools run by the Ordnance Factories at Kanpur and Muradnagar, have filed this petition under Article 32 of the Constitution of India challenging their retirement from service on attaining the age of 58 years.
They claim that they are entitled to have the age of superannuation fixed at 60 years instead of 58 years.
Mr. O.P. Sharma, learned counsel appearing for the petitioners, has contended that the age of superannuation of the teachers working in the schools controlled by various departments of Government of India other than the Defence Department has been enhanced to 60 years and according to him there is no justification to single out the teachers working in the schools run by the Ordnance Factories under the control of the Defence Department of Government of India Mr. Sharma has relied upon a Memorandum issued by the Government of India, Ministry of Education dated September 6, 1983 by which the age of Retirement of Delhi School Teachers and teachers in other Union Territories was raised to 60 years.
He has also relied on a Memorandum dated March 9, 1984 issued by the Railway Board wherein the age of superannuation of the teachers working in the Railway schools was also enhanced to 60 years.
Mr. Sharma has thus argued that the action of the respondents in retiring the petitioners at the age of 58 years whereas retaining similarly situated teachers working in other departments of Government of India upto the age of 60 Years, is discriminatory and as such violative of Articles 14 and 16 of the Constitution of India.
Prima facie there seems to be force in the argument but in view of the Office Memorandum dated March 10, 1989 issued by the Government of India, Ministry of Personnel, New Delhi, it is not necessary to examine the same.
Shri N. Siva Subramaniam, Joint Secretary, Ministry of Defence has, alongwith an additional affidavit dated March 16, 1989 filed the said Memorandum in this court which is reproduced hereunder: "As the Ministry of Human Resource Development etc.
are aware, the age of superannuation for all Central Government employees, save with the exception of a few categories, has been fixed at 58 years and they are to retire on the last day of the month in which they attain that age.
838 However, there is no uniformity in the age of superannuation of teachers in various schools/institutions in the Central Government.
In the light of the observations of the Fourth Central Pay Commission regarding the age of retirement of Central Government employees, the Government has reviewed the entire question de novo and it has now been decided that the age of retirement on superannuation of all teachers working in Central Government Departments and Organisations including Union Territories may be uniformly fixed at 58 years, whether they are in the Ministry of Education, Ministry of Railways, Ministry of Defence or any other Ministry/Department or in Delhi Administration.
Consequently, in schools/institutions where the age of retirement on superannuation for teachers in presently fixed at 58 years, no change is required to be made and the incumbents as well as future recruits shall retire on attaining the age of 58 years.
However, in regard to schools/institutions where the age of retirement on superannuation for teachers is presently fixed at 60 years/the same shall be lowered to 58 years w.e.f.
1st April, 1989 with the exception that the teachers who had joined such schools/institutions prior to this date, shall continue to enjoy the existing benefit and superannuate on attaining the age of 60 years.
Further, in respect of such schools/institutions, no new appointment, either on regular or ad hoc basis, shall be made between the date of this Office Memorandum and 1.4.1989.
" It is thus obvious that with effect from April 1, 1989 the age of superannuation of all teachers working in Central Government Departments and Organisations including Union Territories has been uniformly fixed at 58 years.
The only argument advanced by Mr. Sharma has, thus, been completely answered by the above quoted Office Memorandum.
The Writ Petition is, therefore, dismissed with no order as to costs.
V.P.R. Petition dismissed.
| In the petition filed under Article 32 of the Constitution of India, the petitioners teachers, employed in the schools run by the respondents, controlled by the Defence Department of the Government of India, contended that the action of the respondents in retiring them at the age of 58 years, whereas retaining similarly situated teachers working in other departments upto the age of 60 years was discriminatory and violative of Articles 14 and 16 of the Constitution.
The respondents filed the Office Memorandum dated 10.3.1989 issued by the Ministry of Personnel, wherein it was stated that the age of retirement of the teachers working in all the Departments and Organisations was uniformly fixed at 58 years.
Dismissing the petition, this Court, HELD: With effect from April 1, 1989 the age of superannuation of all teachers working in Central Government Departments and Organisations including Union Territories has been uniformly fixed at 58 years.
[838F]
|
ICTION: Criminal Appeal No. 778 of 1979.
From the Judgment and Order dated 21.6.1979 of the Punjab and Haryana High Court in Crl.
A. Nos. 120 and 163 of 1977.
Frank Anthony and Sushil Kumar for the Appellants.
R.S. Suri for the Respondent.
The Judgment of the Court was delivered by AHMADI, J.
Harnam Singh, Sarpanch of Village Naushera, was murdered on the night between 6th June, 1976 while he was sleeping at his tubewell to guard the wheat bags stacked in his filed.
PW 1 Dr. Malhotra who conducted the autopsy at about 4.15 p.m. on 7th June, 1976 found four injuries on the person of the deceased, namely, (i) a lacerated penetrating circular would, 1/4 ' ' in diameter, with black margins inverted on right middle back, 3 ' 'from mid line and 9 ' ' from iliac crest, (ii) a vertical bruise 6 ' ' X 1/2 ' ' on the front of right forearm running downwards and outwards, (iii) beuises in the area of 5 ' ' X 1 ' ' on the front and inner aspect of right upper arm above the elbow joint, running forwards, outwards and downwards and (iv) an abrasion 5 ' ' X 1 ' ' on the right side of the chest, 5 ' ' from mid line and 3 ' ' from the clavicle running downward and inward.
On opening the first would it was found that the 8th and 9th ribs were fractured posteriorly; the diaphram and superior surface on the left lobe of the liver were lacerated; the heart was lacerated into pieces and the third, fourth, fifth, sixth and seventh ribs of the left side were broken anteriorly.
The exit wound was 8 ' ' X 4 ' ' on the left upper chest just 969 above the nipple.
Death was on account of shock and haemorrhage resulting from the bullet injury.
This injury No. 1 was stated to be sufficient in the ordinary course of nature to cause death.
The other injuries were possible by a hard and blunt weapon and were simple in nature.
Death was instantaneous.
Both the Courts below, therefore, rightly concluded that death was homicidal.
The prosecution case, briefly stated, was that the appellant and the deceased who were neighbours in the village had quarrelled over the passage of sullage water a few months before the incident.
The appellants had diverted their sullage water towards the house of the deceased and the latter had protested and frustrated their effort.
On account of this obstruction the sullage water collected in a pool near the house of the appellants which infuriated them.
On account of this incident as well as past election rivalries the relations between the appellants and the deceased were so soured that on the night of the incident the three appellants went armed with weapons to the tubewell of the deceased where the latter was sleeping to guard his wheat stacked in bags.
Gurmej Singh was armed with a rifle, Gian Singh was armed with Gandasi and Bur Singh carried a Dang.
The prosecution alleged that Gurmej Singh had concealed the rifle in the Chadar wrapped around him and on reaching the place where the deceased was sleeping on a cot he threw off the chadar and shot the deceased at point blank range.
The incident was witnessed by three persons.
PW2 Swaran Singh, nephew of the deceased, PW3 Fauja Singh, a close relative of the deceased and one Narain Singh (not examined) who too were sleeping in the field.
Actually Narain Singh was sleeping near the deceased whereas PWs 2 and 3 were sleeping at a distance of approximately 10/15 karams therefrom.
the prosecution did not examine Narain Singh on the plea that he was won over.
The evidence of PWs 2 and 3 shows that they got up on hearing some movement in the filed and they saw the three appellants near the cot of the deceased.
They were able to identify them because of the existence of an electric light at the tubewell.
According to them on reaching near the cot of the deceased Gurmej Singh fired a shot from close range at the deceased who was still sleeping in his cot.
Thereafter Gian Singh struck a Gandasi blow on the chest of the deceased followed by a Dang blow on the right arm by Bur Singh.
Gurmej Singh is stated to have warned others not to get up unless they wanted to be killed.
On account of this warning PWs 2 and 3 did not run to the rescue of the deceased for fear of being killed.
After making sure that their victim was dead, the appellants fled away.
PW 2 Swaran Singh then went to the house of his father PW4 Waryam Singh and narrated the incident.
PW2 accom 970 panied by Gurdas Singh, Lambardar, then went to the Police Station at about 8.30 a.m. on 7th June, 1976 and lodged the first information report.
PW8 Sub Inspector Kartar Chand Singh then reached the place of occurence, held an inquest on the dead body of the deceased, lifted the blood stained earth from the place of occurrence and then recorded the statements of PW3 Fauja Singh, Narain Singh and others.
Gian Singh and Bur Singh were arrested on 2nd July, 1976 while Gurmej Singh was arrested on 7th July, 1976.
It appears that two more persons, namely, Sucha Singh and Santokh Singh (original accused Nos. 1 and 4, respectively) were also shown as arrested for the commission of this crime on 2nd July.
1976 although their names were not disclosed in the first information report.
The allegation of the prosecution witnesses PWs 2, 3 and 4 is that these two persons were falsely involved as PW8 Sub Inspector Kartar Chand Singh wanted to save his skin as he was found to have illegally and wrongly detained them at the police station.
We will deal with this aspect later but suffice it to say that both the courts below have come to the conclusion that they were falsely involved in the commission of this crime by fabricating statements of PWs 2 and 3 under Section 161 of Criminal Procedure Code (`the Code ' for short).
In view of this conclusion reached by both the courts, the said two persons were acquitted.
No appeal was preferred challenging their acquittal.
The Trial Court convicted Gurmej Singh under section 302 IPC and the other two under Section 302/34 IPC and sentenced all the three to imprisonment for life and also imposed token fines.
Against their conviction the present three appellants filed an appeal which was dismissed by a Division Bench of the High Court on 21st June, 1979.
It is against this finding of guilt recorded by both the courts below that the present three appellants have preferred this appeal by special leave.
Mr. Frank Anthony, counsel for the appellants, submitted that there were three eye witnesses to the incident even according to the prosecution case and out of them Narain Singh was nearest to the deceased when the incident occurred on that dark night in the field.
This Narain Singh alone was an independent witness and yet the prosecution did not examine him on the specious plea that he was won over.
The other two eye witnesses.
PWs 2 and 3, are admittedly close relatives of the deceased and out of them the presence of PW3 is extremely doubtful being a resident of a nearby village.
At any rate he can be termed as a chance witness and in all probability he came to the filed from his village after learning about the incident.
Besides, since the incident occurred on a dark night and the evidence that the electric light at the tubewell was on at that hour is extremely doubtful, it is 971 difficult to believe that PWs 2 and 3 saw the actual incident from a distance of 10/15 karams and were able to identify the assailants.
Said counsel, the conduct of both these eye witnesses is not normal since they did not raise an alarm even though they depose to have woken up on hearing some movement in the field.
They could have cautioned the deceased and Narain Singh about the entry of third parties in the field since they were there precisely for that purpose.
They have tried to explain their unnatural conduct on the plea that the appellant Gurmej Singh had raised a `lalkara ' that anyone trying to come near the deceased would be killed.
But this `lalkara ' was after the event and not before, while the conduct of the eye witnesses before the in incident is unnatural if they had actually got up on hearing some movement of third parties in the field.
Else it must be accepted that they got up on hearing the gun fire and before they could go near the deceased, the assailants had fled away.
In this situation the evidence of Narain Singh assumes importance as he was most competent to unfold the true version regarding the incident, being just by the side of the deceased at the time of the incident.
The failure to call him to the witness stand was, counsel submitted, unfair to the defence as it deprived the defence of the opportunity to elicit the true version regarding the offence.
Lastly he submitted that the prosecution has not place any material on record nor has it stated any reason in its written report in support of its conclusion that he had been won over.
In any event, it is hazardous to base a conviction on the highly interested testimony of PWs 2 and 3, particularly when the motive alleged by the prosecution for implicating the appellants is very weak.
Besides the evidence of PWs2 and 3 suffers from several infirmities.
Counsel for the State submitted that this Court should not disturb the concurrent findings of fact recorded by the two courts and the reliance placed by them on the two eye witnesses whose evidence is corroborated by PW4.
He pointed out that both the courts below had recorded a positive finding that the electric light was on at the tubewell which provided sufficient light to enable PWs 2 and 3 to identify the assailants even from a distance of 10/15 karams.
The assailants were not strangers to PWs 2 and 3 and, therefore, their evidence on the question of identity cannot be doubted.
The prosecution had stated the reason for not examining Narain Singh and if the defence had any doubt in that behalf it could have requested the court to examine the said witness as a court witness rather than keeping silent and then raising a belated grievance.
In short he supported the line of reasoning adopted by the two courts below.
972 It must be conceded at the outset that the prosecution se hinges on the credibility of PWs2 and 3.
PW2 is the nephew of the deceased.
PW3 is the maternal cousin of PW2 and ws closely related to the deceased as the latter 's daughter Piari was his younger brother 's wife.
PW3 is a resident of a neighbouring village lying at a distance of three miles from the village of the deceased.
Ordinarily, therefore, PW3 would not be expected to be present at the scene of occurrence but according to him he had gone to see P.W. 2 and after having his meals both he and PW 2 had gone to the tubewell of the deceased.
PW 3 claims that he woke up at about 3.00 a.m. as he was to return to his village when he saw the three persons and identified them as the appellants.
He does not speak of any `lalkara ' or to have got up on hearing footsteps as desposed by PW2 but he too did not raise any alarm or try to caution the deceased and Narain Singh who were sleeping 10/15 karams away.
After the incident he went to the village to inform his younger brother 's wife about the death of her father and returned with her to the village by which time the police has arrived.
In these circumstances the question is whether absolute reliance can be placed on PWs 2 and 3 regarding the involvement of the appellants? Mr. Frank Anthony, the learned counsel for the appellants, firstly submitted that the incident occurred on a dark night in an open field at about 3.00 a.m. when as shown by the defence through the evidence of two independent witnesses DW 1 and DW 2 the electricity had tripped and, therefore, the prosecution witnesses could not have seen the assailants from a distance of about 10/15 karams.
He, therefore, submitted that the claim of the prosecution witnesses that they had identified the assailants on account of the presence of electric light at the tubewell is clearly belied by the evidence of DWs 1 and 2.
DW 1 Kewal Krishan.
Sub Station Attendant, Punjab State Electricity Board, Gurdaspur, stated that on 7th June, 1976 the electric current had broken down at about 2.35 a.m. and was not restored till 5.50 a.m.
In support of this statement he produced certain entries from the register but on cross examination he admitted that the log sheets were not available and it was noticed that the register was not properly bound and the threads of the previous binding were broken and fresh binding was done raising a suspicion about the register having been tampered with.
DW2 Inder Pal Singh, SDO, Subarban Gurdaspur, merely reiterated what DW1 had stated.
The courts below suspected the correctness of the entry in the register.
But that apart, the High Court was right in saying that the time of 3.00 a.m. was a mere estimate of eye witnesses PWs 2 and 3 and neither of them had verified the time with any wrist watch so as to vouch for its accuracy.
PW 2 had 973 categorically stated that a 200 watt bulb was on at the time when the incident in question occurred.
He does not depose to have checked the time with his wrist watch or with the wrist watch of PW3.
Infact PW3 has deposed that he was not wearing a wrist watch at the time of the incident.
Therefore, the estimate of time given by PWs 2 and 3 cannot be taken as accurate and it is quite possible that the incident occurred before the tripping of supply of electric energy took place.
We are, therefore, not impressed by the contention of Mr. Anthony that the evidence of DWs 1 and 2 belies the version of PWs 2 and 3 that they were able to identify the appellants because of existence electric light at the tubewell.
Besides, it must be remembered that the appellants were no strangers to these prosecution witnesses to make their identification by them difficult.
It was next submitted by Mr. Anthony that Narain Singh, an independent witness, was deliberately dropped for fear that he would reveal the truth and expose the falsehood of PWs 2 and 3.
He submitted, relying on the decision of this Court in Sahaj Ram vs State of UP, that the prosecution should, in fairness, have produced this witness since he was one who would have unfolded the true version regarding the incident as he was in the vicinity of the deceased.
The presence of blood at the scene of occurrence establishes, beyond any manner of doubt that the incident occurred at the place pointed out by PWs 2 and 3.
It is true that Narain Singh was sleeping near the deceased when the latter was shot at.
Narain Singh was indeed a witness to the occurrence and ordinarily we would have expected the prosecution to examine him.
Dropping a witness on the specious plea that he won over without laying the foundation therefore is generally to be frowned upon.
Counsel for the appellants, therefore, submitted that an adverse inference should be drawn against the prosecution for its deliberate failure to examine Narain Singh.
But it must be remembered that the investigating office had recorded the further statement of Narain Singh under section 161 of the Code for involving the two acquitted persons who were nowhere in the picture.
Narain Singh was, therefore, not likely to support the prosecution version.
The defence at no point of time questioned the prosecution statement that Narain Singh was won over.
The courts below accepted the prosecution statement in this behalf.
The judgment of both the courts reveal that no submission was made before them regarding the non examination of this witness.
If an objection was raised at the earliest point of time, the prosecution may have called him to the witness stand.
His presence was not required to unfold the prosecution story.
That had been done by PWs 2 and 3.
Therefore, the non 974 examination of Narain Singh cannot reflect on the credibility of PWs 2 and 3.
Counsel for the appellants next submitted that according to the prosecution applellant Gian Singh was armed with a Gandasi and he is alleged to have given a blow therewith on the chest of the deceased.
Ordinarily a Gandasi blow would cause an incised wound whereas the deceased had an abrasion 5 ' ' X 1 ' ' on the chest caused by a hard and blunt substance.
According to counsel normally when a witness deposes to the use of a particular weapon there is no warrant for supposing that the blunt side of the weapon was used by the assailant.
In support of this contention counsel invited our attention to two decisions, namely, Hallu & Ors.
vs State of MP, ; and Nachhattar Singh & Ors vs The State of Punjab, In his submission, therefore, the injury found on the chest could not be attributed to Gian Singh who is stated to have used the Gandasi.
We see no merit in this contention for the simple reason that the prosecution witnesses have categorically stated that Gian Singh used the blunt side of the Gandasi.
If the prosecution witnesses were silent in this behalf the submission of counsel would have carried weight.
But where the prosecution witnesses categorically state that the blunt side of the weapon was used there is no room for believing that the sharp side of the weapon which would be normally used had in fact been used.
The observations in the aforesaid two judgments do not lay down to the contrary.
In fact in the first mentioned case it is clearly stated that if the prosecution witnesses have clarified the position, their evidence would prevail and not the normal inference.
Counsel, however, made a grievance that the prosecution had not tried to elicit the opinion of PW 1 Dr. Malhotra on the question whether such an abrasion was possible by a Gandasi blow.
According to him, as held by this Court in Kartarey vs State of U.P., and Ishwar Singh vs State of UP, , it was the duty of the prosecution to elicit the opinion of the medical man in this behalf.
PW1 clearly stated in the course of his examination in chief that injuries Nos. 2, 3 and 4 were caused by a blunt weapon.
It is true that he was not specifically asked if the chest injury could have been caused by the blunt side of the Gandasi.
It cannot be gainsaid that the prosecution must endeavour to elicit the opinion of the medical man whether a particular injury is possible by the weapon with which it is alleged to have been caused by showing the weapon to the witness.
In fact the Presiding Officer should himself have elicited the opinion.
However, in this case it should not make much difference because the evidence of PWs 2 and 3 is acceptable and is corroborated by the first information report as well 975 as PW 3.
If the medical witness had also so opined it would have lent further corroboration.
But the omission to elicit his opinion cannot render the direct testimony of PWs 2 and 3 doubtful or weak.
We, therefore, do not see any merit in this submission.
In fact if we turn to the cross examination of PW1 we find that the defence case was that these three injuries were caused by the rubbing of the body against a hard surface, a version which has to be stated to be rejected.
It was next contended that PWs 2 and 3 being close relatives of the deceased could not be relied upon particularly because their version regarding the incident is not corroborated by independent evidence and it is extremely doubtful if they could have identified the assailants from a distance of about 10/15 karams.
We have already dealt with the latter part of this submission.
We have no hesitation in agreeing with the two courts below that they could have identified the assailants who were no strangers to them from that distance of 10/15 karams since the electric light at the tubewell was switched on.
Once the evidence of the prosecution witnesses regarding existence of light is accepted, there is no difficulty in accepting their evidence regarding identification.
The presence of PW 2 at the tubewell cannot be doubted as it was he who went to PW 4 in the early hours and then travelled a distance of about 12 km.
to the police station where he lodged his complaint.
Since PW3 was visiting PW2 it was natural for him to accompany the latter to the field.
Both the courts accepted their evidence and we see no reason to discard the same on the specious ground that they are interested witnesses.
Their evidence has been subjected to close scrutiny but nothing adverse is found to doubt their credibility.
The next submission of counsel for the appellants is that the evidence regarding motive is weak and, therefore, it is not possible to believe that the appellants would kill the deceased on account of a minor quarrel regarding the passage of sullage water which had taken place a few months back.
In this connection he invited our attention to the decisions of this Court in A.N. Rao vs Public Prosecutor, Andhra Pradesh, and State of UP vs Hari Prasad & Ors., ; This submission cuts both ways.
It the evidence regarding motive is not sufficiently strong as argued by the counsel for the appellants, it is difficult to believe that PWs 2 and 3 would go out of their way to falsely involve the appellants.
But it must be realised that there were election disputes and the deceased had successfully contested the election against Dalbeer Singh who was the candidate of Gian Singh, Bur Singh and others.
This old enmity coupled with the incident regarding the passage of sullage water in regard to which 976 proceedings under section 107/151 of the Code were pending is the motive alleged by the prosecution and we do not think it is so weak that it would not prompt the appellants to kill their rival.
The decisions on which counsel places reliance can, therefore, have no application in the special facts and circumstances of the present case.
Counsel for the appellants then submitted that the evidence of PWs 2 and 3 which is corroborated by the evidence of PW4 to whom the incident was narrated by PW2 cannot be believed in view of the contradictions brought on record from their statements recorded under section 161 of the Code.
As stated earlier both the Courts have come to the conclusion that these statements are a fabrication.
Both the courts below have given cogent reasons for reaching this conclusion.
In particular the High Court has after examining the record of the habeas corpus petition shown beyond any manner of doubt that PW8 had intentionally prepared false statements of all these eye witnesses for falsely involving Sucha Singh and Santokh Singh since they were wrongly and illegally detained by him in the police station, a fact which was noticed by the Court 's Warrant Officer who had visited the police station on 2nd July, 1976 at about 5.15 p.m.
He was initially told that no such person or persons had been detained inthe police station.
The Warrant Officer, however, searched the police station and noticed the presence of these two and other persons.
It, therefore, became necessary for PW 8 to explain their presence in the police station since it was alleged in the habeas corpus petition filed on 30th June, 1976 that they were illegally detained.
The Court had appointed the Warrant Officer to verify this allegation.
PW8 had, therefore, to cover up the illegal detention of these two persons.
So he substituted statements purported to have been made by PWs 2 and 3 under section 161 of the Code involving the said two persons in the commission of the crime although their names did not figure in the first information report.
The courts below, therefore, rightly came to the conclusion that the contradictions brought on record on the basis of these statements cannot shake the credibility of the two eye witnesses to the occurrance.
It must be realised that immediately after two of the appellants were arrested on 2nd July, 1976, PW2, Swaran Singh had gone to the police station and had informed PW8 that the said two persons, namely, Sucha Singh and Santokh Singh were wrongly detained.
PW2 lost no time and followed it up by filing an affidavit in the trial court on 3rd July, 1976 alleging that the investigating agency was trying to favour Gurmej Singh and had for that purpose fabricated his statement as also the statements of other witnesses under section 161 of the Code.
In his evidence before the court also PW2 stated that 977 he had informed the police officials that Sucha Singh and Santokh Singh were in no way concerned with the crime and had been wrongly named by the police to bail out Gurmej Singh.
It is also difficult to believe that PW 2 would give a total go by to his immediate version in the first information report while making his statement under section 161 of the Code.
We are, therefore, of the opinion that both the courts were right in coming to the conclusion that the contradictions brought on record from such statements of PWs 2 and 3 can have no evidentiary value.
Counsel, however, submitted that the inference drawn by the two courts below is falsified by the fact that DSP Oujla had verified the investigation papers on 10th June, 1976 and had given a direction that Gurmej Singh should be shown in column No. 2 There is, however, nothing on record to show that Oujla had counter signed these two statements which are used for contradicting the two eye witnesses.
Therefore, the mere fact that Oujla had verified the investigation record on 10th June, 1976 cannot come to the rescue of the appellants.
There is, therefore, no substance in the criticism levelled by the learned counsel for the appellants that the prosecution had shifted its case at the trial from the one narrated to the police in the course of investigation.
The prosecution version is that immediately after the incident PW2 went to the residence of his father PW4 and informed him about the incident.
This conduct of PW2 is quite natural.
The evidence of PW2 stands corroborated by the evidence of PW4.
PW2 thereafter hired a tempo and left for the police station and promptly lodged the first information report.
It must be realised that PW2 had no time for manipulation as he had reached the Police Station, which was at a distance of 12 Km.
before 8.30 a.m. He would not have named the assailants if he had not seen them.
There was no reason for him to falsely implicate the appellants since he bore no grudge against them; it was just the reverse.
A copy of this report had reached the concerned Magistrate by about 11.15.a.m.
This first information report also lends corroboration to his testimony.
The medical evidence tendered by PW1 also corroborates the version of PWs 2 and 3.
We, therefore, do no see any infirmity in the approach of the two courts below in convicting the appellants.
For the above reasons we see no merit in this appeal and dismiss the same.
The appellants who are on bail will surrender to their bail forthwith.
Y.Lal.
Appeal dismissed.
| The appellants and the deceased Harnam Singh, were neighbours and had strained relations on account of passage of sullage water and elections.
According to the prosecution, they had quarrelled over the passage of sullage water a few months before the incident; the appellants had diverted their sullage water towards the house of the deceased and the latter had protested and frustrated their effort, with the result the water collected in a pool near the house of the appellants which infuriated them.
The appellants attacked and murdered Harnam Singh on the night between 6th and 7th June, while he was sleeping at his tubewell alongwith P.Ws 2 and 3 and one Narain Singh (not examined); P. Ws 2 and 3 were sleeping at a distance of about 15 karams while Narain Singh was sleeping near the deceased.
The prosecution alleged that Gurmej Singh fired a shot from close range at the deceased while he was asleep; Gian Singh struck a Gandasi blow on the chest and Bur Singh gave a Dang blow on the arm.
After making sure that the victim had died, the appellants fled away.
P. Ws 2 and 3 did not raise any alarm as they were threatened by the appellants that they would be killed in case they made any hue and cry.
P. W. 2 lodged the F.I.R. and disclosed therein the names of the appellants only as assailants.
Two other persons Sucha Singh and Santokh Singh were also shown as arrested for the commission of this crime though their names did not figure in the F.I.R.
According to the prosecution witnesses, these persons were falsely implicated by P.W. 8 Sub Inspector.
The appellants alongwith these two persons were put up for trial.
The trial Judge acquitted these persons as having been falsely involved and no appeal against their acquittal was preferred.
However the Trial Court relying on the evidence of P.Ws, convicted Gurmej Singh under Section 302, I.P.C. and the other two under Section 302/34 I.P.C. and sentenced all 967 the three to imprisonment for life and also imposed token fines.
The appellants appealed against their conviction before the High Court but the Division Bench of the High Court dismissed their appeal.
They have now filed this appeal against their conviction and sentence, after obtaining special leave.
Dismissing the appeal, this Court HELD: It is true that Narain Singh was sleeping near the deceased when the latter was shot at Narain Singh was indeed a witness to the occurrence and ordinarily we would have expected the prosecution to examine him.
Dropping a witness on the specious plea that he was won over without laying the foundation therefor is generally to be frowned upon.
[973E] The defence at no point of time questioned the prosecution statement that Narain Singh was won over.
The courts below accepted the prosecution statement in this behalf.
The judgment of both the courts reveal that no submission was made before them regarding the non examination of this witness.
If an objection was raised at the earliest point of time, the prosecution may have called him to the witness stand.
His presence was not required to unfold the prosecution story.
That had been done by P.Ws. 2 and 3.
Therefore, the non examination of Narain Singh cannot reflect on the credibility of P.Ws. 2 and 3.
[973G 974A] Both the courts were right in coming to the conclusion that the contradictions brought on record from the statement of PWs 2 and 3 can have no evidentiary value.
[977B] There is no substance in the criticism levelled by the learned Counsel for the appellants that the prosecution had shifted its case at the trial from the one narrated to the police in the course of investigation.
The prosecution version is that immediately after the incident PW2 went to the residence of his father P.W. 4 and informed him about the incident.
This conduct of P.W. 2 is quite natural.
The evidence of P.W. 2 stands corroborated by the evidence of P.W. 4 P.W. 2 therefore hired a tempo and left for the police station and promptly lodged the first information report.
It must be realised that P.W. 2 had no time for manipulation as he had reached the Police Station, which was at a distance of 12 Km.
before 8.30 a.m. He would not have named the assailants if he had not seen them.
There was no reason for him to falsely implicate the appellants since he bore no grudge against them; it was just the reverse.
A copy of this report had reached the concerned 968 Magistrate by about 11.15.
a.m. This first information report also lends corroboration to his testimony.
The medical evidence tendered by P.W. 1 also corroborates the version of P.Ws. 2 and 3.
There is, therefore, no infirmity in the approach of the two courts below in convicting the appellants.
[977D G] Sahaj Ram vs State of U.P., ; Hallu Singh & Ors.
vs State of Punjab, ; Kartarey vs State of U.P., ; Ishwar Singh vs State of U.P., ; A.N. Rao vs Public Prosecutor, Andhra Pradesh, and State of U.P. vs Hari Prasad & Ors., {1974} 3 S.C.C. 673, referred to.
|
ivil Appeal No. 3041 of 1988.
From the Judgment and Order dated 2. 1988 of the Calcutta High Court in Original Order Tender No. (F.M.A.T.) No. 181 of 1987.
Dr. Shankar Ghosh, Mrs. Naresh Bakshi and K.D. Prasad for the Appellants.
Ashok H. Desai, P. Parmeshwaran and A. Subba Rao for the Respondents.
The Judgment of the Court was delivered by KULDIP SINGH, J.
M/s Burn Standard Company Limited, the appellant before us, is one of the leading manufacturer of wagons.
The wagons manufactured and produced by the appellant are primarily supplied to the Railway Board.
The wagons are manufactured in 962 accordance with the specifications, terms and conditions contained in the agreements entered between the appellant and the Railway Board from time to time.
It is the admitted case of the parties that the Railway Board supplies wheel sets, axle boxes and various other finished components of wagons to the appellant which are termed as "free supply items".
These items are not manufactured by the appellant.
The readymade "free supply items" are made available to the appellant by the Railway Board without charging any price.
There items are fitted in the wagons manufactured by the appellant and are ultimately supplied to the Railway Board.
The invoice value of the wagon charged by the appellant from the Railway Board does not include the value of the "free supply items".
On the above facts, the short question for our determination is whether the excise duty under Section 3 and 4 of the (hereinafter called `the Act ') is to be charged on the invoice value of the wagon or on the value of completed wagon including that of the "free supply items".
The central excise authorities issued various show cause notices in respect of different transactions calling upon the appellant to show cause as to why the excise duty be not computed and charged onthe value of the completed wagon including that of the "Free supply items".
The appellant challenged the show cause notices by way of writ petition under Article 226 of the Constitution of India before the Calcutta High Court which was heard by a learned Single Judge who allowed the writ petition and quashed the demand raised by the central excise authorities.
The Learned Judge came to the conclusion that the excise duty could only be charged on the basis of the invoice value under the contract.
The learned Judge based his conclusions on the following reasoning: "There is no dispute that certain items of finished components are supplied by the Railway Board to the petitioner.
The value of these items is not taken into consideration in fixing the price of the wagons sold by the petitioner to the Railway Board.
The price of the completed wagons is calculated on the basis of the manufacturing cost of the petitioner including the price of components acquired by the petitioner for which the petitioner has actually to pay the price.
But the components which are supplied free of cost by the Railway Board do not enter into the pricing mechanism of the petitioner at all.
Therefore, the excise 963 value of the wagons manufactured by the petitioner cannot be calculated after adding back the price of the components supplied free of cost by the Railway Board.
" The Union of India filed appeal against the judgment of the learned Single Judge which was heard by a Division Bench of the Calcutta High Court.
The Bench did not agree with the reasoning and conclusions of the learned Single Judge, set aside his judgment and dismissed the writ petition of the appellant petitioner.
The division Bench allowed the appeal in the following words: "Admittedly, in this case, the cost of wagon as a whole has not been mentioned in the agreement and we feel that the cost of normal price should include cost of construction and furthermore, when sale is the charge and the same under charging section of the said Act would mean actual price of the goods viz. wagon as a whole, so the value of a wagon as a whole, will form part of the relevant and necessary assessable value under section 4 of the said Act, as the manufacturing cost of a complete wagon cannot be conceived of without taking into account or consideration the cost of free supply items .
We hold that the valuation cost of the free supply items should be included in the manufacturing cost of wagons.
We think that section 4(1)(a) of the said Act applies in this case and as such, the valuation of excisable goods will be charged or will take place when manufacture takes place.
Thus, we also find and hold that while determining the valuation of wagons for charging the duty, the Revenue Authorities had acted duly and with justification, in adding the cost of free supply items under the provisions of the said Act as indicated above, the more so when, under the agreement in this case, the said petitioners were and are required to manufacture and supply completed wagons, in which the free supply items were and are required to be fixed at the time of manufacture.
There cannot be any doubt that without fixing the free supply items, the production and manufacture of a wagon would not be effectively completed.
The manufacture of a complete wagon thus takes place as soon as or as and when th free supply items are fitted and fixed by the said petitioners and with such manufacture, the process of manufacture would be complete under section 2(f) of the said Act and the liability to duty will also be 964 attracted.
We hold that the value of the manufactured goods must be determined at the factory gate i.e. at the stage when the manufactured goods here in this case wagons, leave the factory." The appeal, against the judgment of the High Court, via special leave petition is by M/s. Burn Standard Company Limited.
The relevant parts of Sections 3 and 4 of the Act are reproduced hereinafter: "3. Duties specified in the First Schedule to be levied (1) There shall be levied and collected in such manner as may be prescribed duties of excise on all excisable goods other than salt which are produced or manufactured in (India) . . 4.
Valuation of excisable goods for purposes of charging of duty of excise. (1) Where under this Act, the duty of excise is chargeable on any excisable goods with reference to value, such value shall, subject to the other provisions of this section, be deemed to be (a) the normal price thereof, that is to say, the price at which such goods are ordinarily sold by the assessee to a buyer in the course of wholesale trade for delivery at the time and place of removal, where the buyer is not a related person and the price is the sole consideration for the sale: . (b) where the normal price of such goods is not ascertainable for the reason that such goods are not sold or for any other reason, the nearest ascertainable equivalent thereof determined in such manner as may be prescribed.
" Section 3 of the Act provides for levy of the duty of excise.
It is a levy on goods produced or manufactured in India.
Section 4 of the Act lays down the measure by reference to which the duty of excise is to be assessed.
The duty of excise is linked and chargeable with reference to the value of the excisable goods and the value is further defined in express terms by the said section.
In every case the fundamental crite 965 rion for computing the value of an excisable article is the normal price at which the excisable article or an article of the like kind and quality is sold or is capable of being sold by the manufacturer.
It is not disputed that the appellants are manufacturers of wagons.
What comes down from the assembly line of the appellant 's factory is a complete wagon and as such the appellant being manufacturer of wagons, is liable to pay duty of excise on the value of a complete wagon.
The "free supply items" like wheel sets etc.
in the process of manufacturing become part of the complete wagon and loose their identity.
It hardly matters how and in what manner the components of the wagon are procured by the manufacturer, so long as the appellant is manufacturing and producing the goods called "wagons" it is liable to pay duty of excise on the normal value of the wagon.
In Empire Industries Limited and Others vs Union of India and Others, ; this Court while interpreting Sections 3 and 4 of the Act held as under: "The fact that the petitioners are not the owners of the end product is irrelevant.
Taxable event is manufacture not ownership.
In M/s. Ujagar Prints and Others vs Union of India and Others, ; , M.N. Venkatachalaih, J. speaking for the Court observed as under: "Duties of excise are imposed on the production or manufacture of goods and are levied upon the manufacturer or the producer in respect of the commodity taxed.
The question whether the producer or the manufacturer is or is not the owner of the goods is not determinative of the liability.
" We, therefore, cannot accept the contention of the learned counsel for the appellant that the value of the "free supply items" should not be included in the assessable value of the wagons manufactured by the appellant.
We see no infirmity in the reasoning and the findings reached by the Division Bench of the High Court.
The appeal is, therefore, dismissed with no order as to costs.
V.P.R. Appeal dismissed.
| The appellant company manufactured railway wagons in accordance with the specifications, terms and conditions contained in the agreements entered between the appellant and the Railway Board from time to time.
The Railway Board without charging any price supplied wheel sets, axle boxes and various other finished components of wagons, which were termed as "free supply items," to the appellant, which were used in the manufacture of wagons and supplied the complete wagons to the Railway Board.
The invoice value of the wagon charged by the appellant did not include the value of the "free supply items.
" The central excise authorities issued show cause to the appellant as to why the excise duty be not computed and charged on the value of the complete, wagon, including that the "free supply items".
The appellant challenged the show cause notices by filing a Writ Petition before the High Court.
Holding that the excise duty could only be charged on the invoice value under the contract, the Single Judge allowed the petition.
The appeal filed by the Respondents against the judgment of the Single Judge was allowed by the Division Bench of the Court, against which the present appeal was made by the appellant company.
On the question, whether the excise duty under sections 3 and 4 of the Central Excise and Salt Act, 1944 was to be charged on the invoice value of the wagon or on the value of completed wagon including that of the "free supply items".
Dismissing the appeal, this Court, 961 HELD: 1.
Section 3 of the Act provides for levy of the duty of excise.
It is a levy on goods produced or manufactured in India.
Section 4 of the Act lays down the measure by reference to which the duty of excise is to be assessed.
The duty of excise is linked and chargeable with reference to the value of the excisable good and the value is further defined in express terms by the said section.
In every case the fundamental criterion for computing the value of excisable article is the normal price at which the excisable article or an article of the like kind and quality is sold or is capable of being sold by the manufacturer.
[940G 965A] 2.
What comes down from the assembly line of the appellant 's factory is a complete wagon and as such the appellant being manufacturer of wagons, is liable to pay duty of excise on the value of a complete wagon.
The "free supply items" like wheel sets etc.
in the process of manufacturing become part of the complete wagon and loose their identity.
It hardly matters how and in what manner the components of the wagon are procured by the manufacturer, so long as the appellant is manufacturing and producing the goods called "wagons" it is liable to pay duty of excise on the normal value of the wagon.
[965A C] Empire Industries Limited and Others vs Union of India and Others, ; and M/s. Ujagar Prints and Others vs Union of India and Others, ; , followed.
|
Special Leave Petition (Civil) No. 14822 of 1990.
From the Judgment and Order dated 16.8.1990 of the Bombay High Court in L.P.A. No. 65 of 1990.
G.L. Sanghi, K.S.V. Murthy, S.M. Puri and Pramod Dayal for the Petitioners.
Ashok H. Desai, George Kurian, A.P. Vaze and G.B. Sathe for the Respondent.
The Judgment of the Court was delivered by 32 S.C. AGRAWAL, J.
The questions raised for consideration in this petition for special leave to appeal involve the interpretation of the expression "arising out of the use of a motor vehicle" contained in section 92A of the (hereinafter referred to as the Act ').
On October 29, 1987, at about 3 A.M., there was a colli sion between a petrol tanker bearing Registration No. MKL 7461 and a truck bearing Registration No. MEH 4197 on the National Highway No. 4 near village Kavatha, in District Satara, Maharashtra.
The petrol tanker was proceeding from Pune side to Bangalore whereas the truck was coming from the opposite direction.
As a result of the said collision, the petrol tanker went off the road and fell on its left side at a distance of about 20 feet from the highway.
As a result of the overturning of the petrol tanker, the petrol contained in it leaked out and collected nearby.
At about 7.15 A.M., an explosion took place in the said petrol tanker resulting in fire.
A number of persons who had assembled near the petrol tanker sustained burn injuries and a few of them succumbed to the said injuries.
One of those who died as a result of such injuries was Deepak Uttam More.
The respond ent is the mother of Deepak Uttam More.
Petitioner No. 1 is the owner of the said petrol tanker and Petitioner No. 2, the insurer of the same.
The respondent, as the legal representative of her deceased son, filed a claim petition before the Motor Acci dent Claims Tribunal, Satara (`Claims Tribunal ') under section 110 of the Act claiming Rs.75,000 as compensation from the petitioners.
She also made a claim for payment of Rs. 15,000 as compensation under section 92A of the Act.
It appears that claim petitions were also filed by the legal representatives of other persons who had died as a result of the burn injuries sustained by them in the explosion and fire in the petrol tanker.
The petitioners contested the claim petitions filed by the respondent and other claimants under section 92A of the Act and raised objection with regard to the jurisdiction of the Claims Tribunal to enter tain such petitions on the ground that explosion and fire resulting in injuries to the deceased could not be said to be an accident arising out of the use of a motor vehicle.
The Claims Tribunal decided all the claim petitions filed under Section 92A of the Act by a common order dated Decem ber 2, 1989 whereby the said petitions were dismissed on the ground that the explosion could not be said to be an acci dent arising out of the use of the petrol tanker and that the provisions of section 92A of the Act were not attracted.
The Claims Tribunal was of the view that the explosion and the fire which took place after about four 33 hours had no connection whatsoever with the accident which took place at 3 A.M. and that the explosion and the fire was altogether an independent accident.
The Claims Tribunal also observed that the villagers tried to take the benefit of the earlier accident and tried to pilfer petrol from the petrol tanker and while thus pilfering the petrol there was fric tion which caused ignition and explosion and since an out side agency was responsible for the explosion and fire which situation was created by the villagers themselves the explo sion could not be said to be an accident arising out of the use of the tanker.
The respondent filed an appeal against the said order of the Claims Tribunal before the High Court.
The said appeal was allowed by a learned Single Judge of the High Court by judgment dated February 5, 1990.
The learned Single Judge disagreed with the finding of the Claims Tribu nal that the explosion was a direct consequence of the attempt to pilfer petrol from the tanker and observed that the Tribunal was not justified in proceeding on the assump tion that all the injured persons and deceased were engaged in pilfering the petrol and the explosion was a direct consequence of the same.
The learned Single Judge also held that in view of sub section (4) of section 92A of the Act if there is a wrongful act, neglect or default on the part of the deceased or the injured, the claim under section 92A of the Act for compensation for no fault liability cannot be rejected.
With regard to the applicability of section 92A of the Act, the learned Single Judge observed that the fact that at the material time the tanker was not being driven on the Highway but was lying turtle on its side would make no difference and that it was a vehicle lying on the side of the Highway and would be covered by the expression 'use ' in section 92A of the Act and compensation would be payable under no fault liability of section 92A of the Act.
He, therefore, directed payment of Rs. 15,000 as compensation under section 92A of the Act to the respondent.
The Peti tioners filed a Letters Patent Appeal against the said decision of the learned Single Judge which was dismissed by a Division Bench of the High Court by judgment dated August 16, 1990.
The Appellate Bench of the High Court has affirmed the finding of the learned Single Judge that there was no evidence whatsoever that the person or persons in respect of whose deaths compensation had been claimed under section 92A were themselves committing theft or pilferage of petrol at the time of their deaths and that these victims could have only been curious by standers at the site of the accident.
The learned Judges have observed that the expression 'use of a motor vehicle ' covers a very wide field, a field more extensive than which might be called traffic use of the motor vehicle and that the use of a vehicle is not confined to the periods when it Was in motion or was moving and that a vehicle would still be is use 34 even when it was stationary The learned Judges were of the view that merely ' because there Was interval of about four and half hours between the collision of the petrol tanker and the explosion and fire in the tanker, it cannot be necessarily inferred that there was no causal relation between earlier event and the later incident of explosion and fire and that the earlier collision if not the cause was at least the main contributory factor for the subsequent explosion and fire in the tanker in question inasmuch as the tanker was carrying petrol which was a highly combustible and volatile material and after the collision the petrol tanker had fallen on one of its sides on sloping ground resulting in escape of highly inflammable petrol and there was grave risk of explosion and fire from the petrol coming out of the tanker and the tanker was allowed to remain in such a dangerous condition for hours without any effort being made to prevent such great hazard of fire and explo sion from petrol escaping from the tanker.
According to the learned Judges, the collision between the tanker and the other vehicle which occurred earlier and the escape of petrol from the tanker which ultimately resulted in explo sion and fire were not unconnected but related events.
The learned Judges rejected the submission made on behalf of the petitioners that in the instant case the first information report recorded by the police and the panchanama indicated that the explosion and fire near the petrol tanker had been caused by careless act of throwing away of a match stick used for lighting a beedi or cigarette.
The learned Judges held that the papers and documents filed before the Claims Tribunal under rule 306B of the Bombay Motor Vehicles Rules, 1959 did not establish that the fire was ignited by someone carelessly throwing a match stick.
Feeling aggrieved by the said decision of the Appellate Bench of the Bombay High Court, the petitioner have filed this petition for special leave to appeal.
A notice for final disposal was issued on the petition and the learned counsel for the parties have been heard at length.
Shri G.L. Sanghi, the learned counsel appearing for the petitioners, has urged that in the instant case, it cannot be said that the explosion and fire in the petrol tanker which occurred at about 7.15 A.M., i.e., nearly four and half hours after the collision involving the petrol tanker and the other truck, was an accident arising out of the use of a motor vehicle and therefore, the claim petition filed by the respondent could not be entertained under section 92 A of the Act.
Shri Sanghi has made a three fold submis sion in this regard.
In the first place, he has submitted that the petrol tanker was not a motor vehicle as defined in section 2(18) of the Act at the time when the explosion and fire took place because at that time the petrol tanker was lying turtle and was 35 not capable of movement on the road.
The second submission of Shri Sanghi is that since before the explosion and fire the petrol tanker was lying immobile it could not be said that the petrol tanker, even if it be assumed that it was a motor vehicle, was in use as a motor vehicle at the time of the explosion and fire.
Thirdly, it has been submitted by Shri Sanghi that even if it is found that the petrol tanker was in use as a motor vehicle at the time of the explosion and fire, there was no causal relationship between the collision which took place between the petrol tanker and the truck at about 3 A.M. and the explosion and fire in the petrol tanker which took place about four and half hours later and it cannot, therefore, be said that explosion and fire in the petrol tanker was an accident arising out of the use of a motor vehicle.
Before we proceed to deal with the aforesaid submissions of Shri Sanghi, it would be relevant to mention that section 92A of the Act forms part of Chapter VII A which was intro duced in the Act by Motor Vehicles (Amendment) Act, 1982 (Act 47 of 1982).
The said Chapter bears the heading "LI ABILITY WITHOUT FAULT IN CERTAIN CASES" and contains sec tions 92A to 92E.
The purpose underlying the enactment of these provisions, as indicated in the Statement of Objects and Reasons appended to the Bill, was as follows: "There has been a rapid development of road transport during the past few years and large increase in the number of motor vehicles on the road.
The incidence of road accidents by motor vehicles has reached serious propor tions.
During the last three years, the number of road accidents per year on the average has been around 1.45 lakhs and of these the number of fatal accidents has been around 20,000 per year.
The victims of these accidents are generally pedestrians belonging to the less affluent sections of society.
The provisions of the Act as to compensation in respect of accidents can be availed of only in cases of accidents which can be proved to have taken place as a result of a wrongful act or negli gence on the part of the owners or drivers of the vehicles concerned.
Having regard to the nature of circumstances in which road acci dents take place, in a number of cases, it is difficult to secure adequate evidence to prove negligence.
Further, in what are known as "hit and run" accidents, by reason of the identity of the vehicle involved in the acci dent not being known, the persons affected cannot prefer any claims for compensation.
It is, therefore, considered necessary to amend the 36 Act suitably to secure strict enforcement of road safety measures and also to make, as a measure of social justice, suitable provisions first for compensation without proof of fault or negligence on the part of the owner or driver of the vehicle and, secondly, for compensation by way of solatium in cases in which the identity of the vehicle causing an accident is unknown. . " In this context, it may be pointed out that before the said amendment this Court had highlighted the need for legislation providing for no fault liability in motor acci dents claims in a number of decisions.
(See: Manjusri Raha & Ors.
vs B.L. Gupta & Ors.
; , ; State of Haryana vs Darshana Devi & Ors., ; ; Bishan Devi & Ors.
vs Sirbaksh Singh & Anr., ; and N.K.V. Bros. Ltd. vs M. Karumai Ammal and Ors.
etc., 1.
Section 92A which made provision for liability to pay compensation in certain cases on the principle of no fault read as under: "92 A. Liability to pay compensation in cer tain cases on the principle of no fault (1) Where the death or permanent disablement of any person has resulted from an accident arising out of the use of a motor vehicle or motor vehicles, the owner of the vehicle shall, or, as the case may be, the owners of the vehicles shall, jointly and severally, be liable to pay compensation in respect of such death or disablement in accordance with the provisions of this section.
(2) The amount of compensation which shall be payable under sub section (1) in respect of the death of any person shall be a fixed sum of fifteen thousand rupees and the amount of compensation payable under that sub section in respect of the permanent disablement of any person shall be a fixed sum of seven thousand five hundred rupees.
(3) In any claim for compensation under sub section (1), the claimant shall not be re quired to plead and establish that the death or permanent disablement in respect of which the claim has been made was due to any wrong ful act, neglect or default of the owner or owners of the vehicle or vehicles concerned or of any other person.
37 (4) A claim for compensation under sub section (1) shall not be defeated by reason of any wrongful act, neglect or default of the person in respect of whose death or permanent disa blement the claim has been made nor shall the quantum of compensation recoverable in respect of such death or permanent disablement be reduced on the basis of the share of such person in the responsibility for such death or permanent disablement.
" Section 92 B preserved the right to pay compensation for death or permanent disablement under other provisions of the Act and it provided as follows: "92 B. Provisions as to other right to claim compensation for death or permanent disable ment (1) The right to claim compensation under Section 92A in respect of death or permanent disablement of any person shall be in addition to any other right (hereafter in this section referred to as the right on the principle of fault) to claim compensation in respect there of under any other provision of this Act or of any other law for the time being in force.
(2) A claim for compensation under Section 92A in respect of death or permanent disablement of any person shall be disposed of as expeditiously as possible and where compen sation is claimed in respect of such death or permanent disablement under Section 92A and also in pursuance of any right on the princi ple of fault, the claim for Compensation under Section 92A shall be disposed of as aforesaid in the first place.
(3) Notwithstanding anything con tained in subsection (1), where in respect of the death or permanent disablement of any person, the person liable to pay compensation under section 92A is also liable to pay com pensation in accordance with the right on the principle of fault, the person so liable shall pay the first mentioned compensation and (a) if the amount of the first mentioned compensation is less than the amount of the second mentioned, he shall be liable to pay (in addition the first mentioned compensa tion) only so much of the second mentioned compen 38 sation as is equal to the amount by which it exceeds the first mentioned compensation; (b) if the amount of the first men tioned compensation is equal to or legs than the amount of the secondmentioned compensa tion, he shall not be liable to pay the sec ond mentioned compensation.
" In section 92 C of the Act, the expression 'permanent disablement for the purpose of Chapter VII A was explained.
Section 92 D made the provisions of Chapter VII A applicable in relation to any claim in respect of death or permanent disablement of any person under the (8 of 1923) resulting from an accident of the nature referred to in sub section (1) of section 92 A. Section 92 E of the Act gave overriding effect to the provi sions of Chapter VII A over any other provisions of the Act or of any law for the time being in force.
In Gujarat State Road Transport Corporation vs Ramanbhai Prabhatbhai & Anr., ; a reference has been made to the background in which Chapter VII A was introduced in the Act and it has been observed: "When the ' was enacted there were no motor vehicles on the roads in India.
Today, thanks to the modern civilisation, thousands of motor vehicles are put on the road and the largest number of injuries and deaths are taking place on the roads on account of the motor vehicles acci dents.
In view of the fast and constantly increasing volume of traffic, the motor vehi cles upon the roads may be regarded to some extent as coming within the principle of liability defined in Rylands vs Fletcher, [1968] ; , 340.
From the point of view of the pedestrian the roads of this country have been rendered by the use of the motor vehicles highly dangerous.
`Hit and run ' cases where the drivers of the motor vehicles who have caused the accidents are not known are increasing in number.
Where a pedestrian without negligence on his part is injured or killed by a motorist whether negligently or not, he or his legal representatives as the case may be should be entitled to recover damages if the principle of social justice should have any meaning at all.
In order to meet to some extent the responsibility of the society to the 39 deaths and injuries caused in road accidents there has been a continuous agitation through out the world to make the liability for dam ages arising out of motor vehicles accidents as a liability without fault.
In order to meet the above social demand on the recommendation of the Indian Law Commission Chapter VIIA was introduced in the Act.
(pp. 4 15 4 16)" In that case, this Court after taking note of the provi sions contained in section 92A has further observed: "It is thus seen that to a limited extent relief has been granted under section 92 A of the Act to the legal representatives of the victims who have died on account of motor vehicles accidents.
Now they can claim Rs.15,000 without proof of any negligence on the part of the owner of the vehicle or of any other person.
This part of the Act is clearly a departure from the usual common law princi ple that a claimant should establish negli gence on the part of the owner or driver of the motor vehicle before claiming any compen sation for the death or permanent disablement caused on account of a motor vehicle accident.
To that extent the substantive law of the country stands modified." (pp. 41.6 4 17) It is thus evident that section 92 A was in the nature of a beneficial legislation enacted with a view to confer the benefit of expeditious payment of a limited amount by way of compensation to the victims of an accident arising out of the use of a motor vehicle on the basis of no fault liability.
In the matter of interpretation of a beneficial legislation the approach of the courts is to adopt a con struction which advances the beneficient purpose underlying the enactment in preference to a construction which tends to defeat that purpose.
The same approach has been adopted by this Court while construing the provisions of the Act.
See: Motor Owners ' Insurance Co. Ltd. vs Jadavji Keshavji Modi & Ors., [1982] 1 SCR 860 and Skandia Insurance Co. Ltd. vs Kokilaben Chandravadan & Ors.
, ; The expression 'arising out of the use Of motor vehi cles" was also used by Parliament in sub section (1) of section 110 of the Act wherein provision was made for con stitution of Motor Accidents Claims Tribunals for speedy and expeditious adjudication of claims of compensation in re spect of accidents involving death or bodily injuries to 40 persons arising out of the use of motor vehicles or damages to any property of a third party so arising or both.
Fur thermore, by subsection (1) of section 94 of the Act an obligation was imposed that no person shall use except as a passenger or cause or allow any other person to,use a motor vehicle in a public place, unless there is in force in relation to the use of the vehicle by that person or that other person, as the case may be, a policy of insurance complying with the requirements of Chapter VIII of the Act.
Section 95 prescribed the requirements of such insurance policies as well as limits of liability.
In clause (b) of sub section (1) of section 95, it was laid down that the policy of insurance required must be a policy which insures the person or classes of persons specified in the policy to the extent specified in sub section (2) against (i) any liability which may be incurred by him in respect of the death of or bodily injury to any person or damage to any property of a third party caused by or arising out of the use of the vehicle in a public place and (ii) the death of or bodily injury to any passenger of a public service vehi cle caused by or arising out of the use of the vehicle in a public place.
While construing the expression "arising out of the use of a motor vehicle" in sub section (1) of section 92 A of the Act, regard will have to be had to the fact that expressions to the same effect were also contained in sec tions 95 and 110 of the Act.
The first submission of Shri Sanghi is based on the definition of the expression "motor vehicle" contained in sub section (18) of section 2 of the Act which was as under: "2(18) "motor vehicle" means any mechanically propelled vehicle adapted for use upon roads whether the power of propulsion is transmitted thereto from an external or internal source and includes a chassis to which a body has not been attached and a trailer, but does not include a vehicle running upon fixed rails or a vehicle of a special type adapted for use only in a factory or in any other enclosed premises" Shri Sanghi has urged that the word "adapted" in the aforesaid provision has been construed by this Court in Bolani Ores Ltd. etc.
vs State of Orissa etc.
; , to mean suitable or fit for use on the roads and that in the instant case, it cannot be said that at the time when the explosion and fire took place the petrol tanker which was lying turtle was suitable or fit for use on the road.
We find it difficult to accept this contention.
The petrol tanker was a vehicle manufactured for the purpose of trans porting petrol.
It was a vehicle which had been 41 adapted for such use and was suitable for use on the road for transporting petrol.
At the time when the petrol tanker collided with the truck on the national highway, it was being used for the purpose of transporting petrol.
It can not, therefore, be disputed that when the said collision took place it was a motor vehicle as the said expression was defined in section 2(18) of the Act.
Did it cease to be motor vehicle after the collision with the truck on account of its lying turtle on its side at some distance from the road as a result of the said collision? In our view, this question must be answered in the negative.
Merely because the petrol tanker had turned turtle as a result of the collision and was lying at a short distance away from the road, does not mean that it had ceased to be suitable or fit for use on the road and it had ceased to be a motor vehicle.
No material has been placed on record to show that the petrol tanker would not have been in a position to move after it was put back on the wheels.
The question whether a vehicle has ceased to be a me chanically propelled vehicle has been considered by the English Courts in cases involving prosecution for offence under Section 15 of the Vehicles (Excise) Act, 1949 which imposed a penalty on a person using on a public road any mechanically propelled vehicle for which a licence under the said Act was not in force.
In Newberry vs Simmonds, the prosecution was in respect of a motor car whose engine had been stolen some time prior to the period in question.
It was contended by the owner that since the engine of the motor car had been stolen it had ceased to be a mechanically propelled vehicle.
Negativing the said con tention, it was held.
"We are, however, satisfied that a motor car does not cease to be a mechanically propelled vehicle upon the mere removal of the engine if the evidence admits the possibility that the engine may shortly be replaced and the motive power restored." (p. 350) In Smart vs Allan & Anr., a similar question arose.
Here the defendant had bought a car for Pounds 2 and subsequently sold it as scrap for 30s.
It was found that the engine was in a rusty condition and was incomplete and it did not work, and there was no gear box or electric batteries; and the car was incapable of moving under its own power, having been towed from place to place and that it could only have been put in running order again by supplying a considerable number of spare parts and ef fecting considerable repairs, the ' cost of which would have been out of all proportion to its value.
In 42 support of the prosecution it was urged that every vehicle which starts its life as a mechanically propelled vehicle remains such until it is physically destroyed.
Rejecting the said contention, Lord Parker, C.J. observed: " . it seems to me as a matter of common sense that some limit must be put, and some stage must be reached, when one can say: "This is so immobile that "it has ceased to be a mechanically propelled vehicle.
" Where, as in the present case, and unlike Newberry vs Simmonds, there is no reasonable prospect of the vehicle ever being made mobile again, it seems to me that, at any rate at that stage, a vehicle has ceased to be a mechanically pro pelled vehicle".
(p. 298) We are inclined to agree with this formulation.
In the instant case, it cannot be said that the petrol tanker as a result of the collision with the truck was damaged to such an extent that was no reasonable prospect of the vehicle ever being made mobile again.
In the circum stances, it cannot be held that the petrol tanker which was a motor vehicle when it collided with the truck had ceased to be a motor vehicle after the said collision and it could not be regarded a motor vehicle under Section 2(18) of the Act at the time when the explosion and fire took place.
The second submission of Shri Sanghi was that even if it be assumed that at the time when the explosion and fire took place in the petrol tanker it was a motor vehicle, the tanker was not being used as a motor vehicle at that time inasmuch as it was lying immobile on its side.
It is, howev er, not disputed by Shri Sanghi that at the time when the petrol tanker had collided with the truck, it was being used as a motor vehicle but his submission was that the said user came to an end on such collision when the petrol tanker turned turtle and was rendered immobile.
This contention postulates a restricted meaning for the word "use" in the expression "use of the motor vehicle" by confining it to a situation when the vehicle is mobile.
The learned counsel, for the respondent has, on the other hand, suggested a wider connotation for the word "use" so as to include the period when the vehicle is stationary and has invited our attention to the observations in Elliott vs Grey, ; Government Insurance Office South Wales vs R.J. Green & Lloyd Pty. Ltd., ; ; Pushpa Rani Chopra vs Anokha Singh & Ors., ; 43 General Manager, K.S.R.T.C. vs section Satalingappa & Ors., and Oriental Fire & General Insurance Co. Ltd. vs Suman Navnath Rajguru & Ors., Elliott vs Grey, supra related to prosecution for of fence under section 35(1) of the Road Traffic Act, 1930 for using a motor car on road without there being in force in relation to such user an insurance policy in respect of third party risks complying with the requirements of Part 2 of the said Act.
The motor car of the appellant was standing on the road outside the appellant 's house for the past few months, after it broke down and in the meanwhile the insur ance cover of the motor car had terminated.
While it was thus parked, another motor vehicle had collided with appel lant 's motor car.
On that date, the appellant had cleaned the car, sent the battery to be recharged and had replaced the old carburettor with a new one.
The car could not be mechanically propelled because the engine would not work.
On behalf of the appellant it was urged that the ordinary use of the words "to use" in relation to a motor car contem plates some active movement, either driving it or taking part in a journey in it or moving it and the word "use" is quite inapt in relation to a motor car which cannot be used because it is out of action.
The said contention was reject ed.
The word "use"was construed in a wider sense to mean "to have the advantage of a vehicle as a means of transport including for any period or time between journeys".
In taking this view, Lord Parker, C.J. stated that he was influenced by the fact that section 35.
appeared in Part 2 of the Road Traffic Act under the heading "Provisions against third party risks arising out of the use of motor vehicles" which is intended for protection of third parties.
Similarly in Government Insurance Office of New South Wales vs R.J. Green & Lloyd Pty. Ltd., supra Barwick, CJ, while construing the word 'use ' in Motor Vehicles (Third Party Insurance) Act, 1942 1951 (N.S.W.) has observed that the said Act indicated an intention to cover a very wide field, a field more extensive than what might be called the traffic use of the motor vehicle.
The learned Chief Justice has further observed: "In my opinion, the relevant use of the vehicle cannot be confined to the periods it is in motion, or its parts moving in some operation.
It may be in use though stationary".
In Pushpa Rani Chopra & Ors.
vs Anokha Singh & Ors., supra a learned Judge of the Delhi High Court, while con struing the word 'use ' in section 110 of the Act, has held that the said word has been used in a wider sense and it covers all employments of the motor vehicle on the 44 public places including its driving, parking, keeping sta tionarys repairing, or leaving unattended on the road or for any other purpose.
In that case, the truck in question was stationary as its axle had broken down and it was parked on the road at the time of the accident.
In General Manager, K.S.R.T.C. vs section Satalingappa and Ors., ' supra the vehicle in question was a transport bus which was stationed by its driver on a slope unattended.
The bus suddenly started moving and dashed against a tea shop.
It was held by a Division Bench of the Karnataka High Court that the bus was in use at that time.
In Oriental Fire & General Ins.
Co. Ltd. vs Suman Nav nath Rajguru and Ors., supra a petrol tanker was parked near ' the footpath on the road in front of a petrol pump and it burst and explOded causing fatal injuries to a passerby.
A Division Bench of the Bombay High Court rejected the contention that at the material time, the petrol tanker was not in 'use '.
These decisions indicate that the word "use", in the context of motor vehicles, has been construed in a wider sense to include the period when the vehicle is not moving and is stationary, being either parked on the road and when it is not in a position to move due to some break down or mechanical defect.
Relying on the abovementioned decisions, the Appellate Bench of the High Court had held that the expression "use of a motor vehicle" in section 92 A covers accidents which occur both when the vehicle is in motion and when it is stationary.
With reference to the facts of the present.
case the learned Judges have observed that the tanker in question 'while proceeding along National Highway No. 4 (i.e. while in use) after colliding with a motor lorry was lying on the side and that it cannot be claimed that after the collision the use of the tanker had ceased only because it was disabled.
We are in agreement with the said approach of the High Court.
In our opinion, the word "use" has a wider connotation to cover the period when the vehicle is not moving and is stationary and the use of a vehicle does not cease on account of the vehicle having been ren dered immobile on account of a break down or mechanical defect or accident.
In the circumstances, it cannot be said that the petrol tanker was not in the use at the time when it was lying on its side after the collision with the truck.
The only other question which remains to be considered is whether the explosion and fire which caused injuries to the deceased son of the respondent can be said to have taken place due to an 45 accident arising out of the use of a motor vehicle viz. the petrol tanker.
Shri Sanghi has urged that the expression 'arising out of the use of a motor vehicle ' implies a causal relationship between the user of the motor vehicle and the accident which has resulted in death or disablement and that in the present case it cannot be said that the explosion and fire which took place in the petrol tanker four and half hours after ' the collision and after the tanker had turned turtle was an accident arising out of the use of the petrol tanker.
In this regard, Shri Sanghi has emphasised that the persons who sustained injuries as a result of the explosion and fire in the petrol tanker were pilfering petrol which had leaked out from the petrol tanker and the explosion and fire was the result of the said unlawful activity of those persons and that it was not on account of the user of the petrol tanker.
Shri Sanghi, in this 'connection, has placed reliance on the decision in Mackinnon Machkenzie & Co. Pvt. Ltd. vs Ibrahim Mahommed Issak, ; wherein this Court has construed the expression 'arising out of employment ' appearing in section 3 of the Workmen 's Compen sation Act, 1923 and has laid down that there must be a causal relationship between the accident and the employment.
Shri Sanghi has urged that similarly there must be a causal relationship between the accident and the user of the motor vehicle for the purpose of maintainability of a claim under section 92A of the Act.
With regard to the submission of Shri Sanghi that the persons who sustained injuries as a result of the explosion and fire in the ' petrol tanker were pilfering petrol which had leaked out from the tanker and that the explosion and fire was the result of this unlawful activity of those persons, we find that Claims Tribunal has recorded a finding that persons from the village Kavatha had gathered with their tins and barrels with the intention to pilfer petrol from the tanker and while pilfering the petrol probably ignition was caused by friction, but the said finding of the Claims Tribunal has not been upheld by the High Court.
The learned Single Judge has observed: "The learned member was influenced by the fact that certain villagers were trying to pilfer from the tanker to indicate that the explosion was a direct consequence of the attempt of pilfering the petrol from the tanker.
In my view, the learned member was not justified in proceeding on the assumption that all the injured and the deceased were engaged in pilfering the petrol and the explosion was a direct consequence of the same. . .
It would not be just to hold that all the injured as also the deceased 46 who met their fate on account of the explosion were all engaged in the crime of pilfering of the petrol.
" The Appellate Bench affirming the said finding of the learned Single Judge has laid down: "The learned Single Judge has also rightly pointed out that there was also no evidence whatsoever that the person or persons in respect of whose deaths compensation had been claimed under section 92 A were themselves actually committing theft or pilferage of petrol at the time of their deaths.
These victims could have been only curious bystand ers at the site of the accident.
We find that in the instant case the papers and docu ments including the F.I.R. and the panchnama produced before the Tribunal did not establish that the fire was ignited by someone careless ly throwing a match stick.
" We find no ground for interfering with these findings recorded by the High Court and we must proceed on the basis that the persons who sustained injuries as a result of the explosion and fire in the petrol tanker were not indulging in any unlawful activity which may have caused the said explosion and fire.
The matter has, therefore, to be exam ined in the light of the meaning to be assigned to the words "arising out of" in the expression "accident arising out of the use of a motor vehicle" in section 92 A.
The words "arising out of" have been used in various statutes in different contexts and have been construed by Courts widely as well as narrowly, keeping in view the context in which they have been used in a particular legis lation.
In Heyman vs Darwins Ltd., while con struing the arbitration clause in a contract, Lord Porter expressed the view that as compared to the word "under", the expression "arising out of" has a wider meaning.
In Union of India vs E.B. Aaby 's Rederi A/S, Viscount Discount Dilhorne and Lord Salmon stated that they could not discover any difference between the expression "arising out of" and "arising under" and they equated "arising out of" in the arbitration clause in a Charter Party with "arising under".
In Samick Lines Co. Ltd. vs Owners of the Antonis P. Lemos, [1985] 2 WLR 468 the House of Lords was considering the question 47 whether a claim for damages based on negligence in tort could be regarded as a claim arising out of an agreement under section 20(2)(1)(h) of the Supreme Court Act, 1981 and fell within the Admiralty jurisdiction of the High Court.
The words "any claim arising out of any agreement relating to the carriage of goods in a ship or to the use or hire of a ship" in section 20(2)(i)(h) were held to be wide enough to cover claims, whether in contract or tort arising out of any agreement relating to the carriage of goods in a vessel and it was also held that for such an agreement to come within paragraph (h), it was not necessary that the claim in question be directly connected with some agreement of the kinds referred to in it.
The words "arising out of were not construed to mean "arising under" as in Union of India vs E.B. Aaby 's A/S, supra which decision was held inapplicable to the construction of section 20(2)(1)(h) and it was ob served by Lord Brandon: "With regard to the first point, I would readily accept that in certain contexts the expression "arising out of" may, on the ordi nary and natural meaning of the words use, be the equivalent of the expression "arising under", and not that of the wider expression "connected with".
In my view however; the ' expression "arising out of ' is, on the ordi nary and natural meaning of the words used, capable, in other contexts; of being the equivalent of the Wider expression "connected with".
Whether the expression "arising out of has the narrower or the wider meaning in any particular ease must depend on the context in which it is used".
keeping in view the context in Which the expression was used in the statute it was construed to have the wider meaning viz. "connected With".
In the context of motor accidents the expressions "caused by" and "arising out of" are often used in statutes.
Although both these expression 's imply a causal relation ship: between the accident resulting in injury and the use of the motor vehicle but they differ in the degree of prox imity of such relationship.
This distinction has been lucid ly brought out in the decision of the High Court of Austra lia in Government Insurance Office of N. S.W. vs R.J. Green 's, case supra wherein Lord Barwick, CJ has stated: "Bearing in mind the general purpose of the Act I think the expression 'arising out of must be taken to require a less 48 proxionship of the injury to the relevant use of the vehicle than is required to satisfy the words `caused by '.
It may be that an associa tion of the injury with the use of the vehicle while it cannot be said that that use was causally related to the injury may yet be enough to satisfy the expression 'arise out of ' as used in the Act and in the policy." (p. 433) In the same case, Windeyer, J. has observed as under: "The words 'injury caused by or arising out of the use of the vehicle ' postulate a causal relationship between the use of the vehicle and the injury.
`Caused by ' connotes a `di rect ' or 'proximate ' relationship of cause and effect. 'Arising out of ' extends this to a result that is less immediate; but it still carries a sense of consequence." (p. 447) This would show that as compared to the expression "caused by", the expression "arising out of" has a wider connotation.
The expression "caused by" was used in sections 95(1)(b)(i) and (ii) and 96(2)(b)(ii) of the Act.
In section 92 A, Parliament, however, chose to use the expression "arising out of" which indicates that for the purpose of awarding compensation under section 92 A, the causal rela tionship between the use of the motor vehicle and the acci dent resulting in death or permanent disablement is not required to be direct and proximate and it can be less immediate.
This would imply that accident should be connect ed with the use of the motor vehicle but the said connection need not be direct and immediate.
This construction of the expression "arising out of the use of a motor vehicle" in section 92 A enlarges the field of protection made available to the victims of an accident and is in consonance with the beneficial object underlying the enactment.
Was the accident involving explosion and fire in the petrol tanker connected with the use of tanker as a motor vehicle? In our view, in the facts and circumstances of the present case, this question must be answered in the affirma tive.
The High Court has found that the tanker in question was carrying petrol which is a highly combustible and vola tile material and after the collision with the other motor vehicle the tanker had fallen on one of its sides on sloping ground resulting in escape of highly inflammable petrol and that there was grave risk of explosion and fire from the petrol coming out of the tanker.
In the 49 light of the aforesaid circumstances the learnedJudges of the High Court have rightly concluded that the collision between the tanker and the other vehicle which had occurred earlier and the escape of petrol from the tanker which ultimately resulted in the explosion and fire were not unconnected but related events and merely because there was interval of about four to four and half hours between the said collision and the explosion and fire in the tanker, it cannot be necessarily inferred that there was no Causal relation between explosion and fire.
In the circumstances, it must be held that the explosion and fire resulting in the injuries which led to the death of Deepak Uttam More was due to an accident arising out of the use of the motor vehicle viz. the petrol tanker No. MKL 7461.
Shri Sanghi has also raised a question as to the proce dure to be followed by the Claims Tribunal while/adjudicat ing claims under section 92A of the Act and has submitted that such claims have to be adjudicated upon like other claims under section 110A of the Act and that claimant must first adduce evidence to establish his/her case and that the owner as well as the insurer of the vehicle in question must have a right to adduce evidence to rebut the same.
In this context, it may be mentioned that procedure for adjudication of a claim petition under Section 110A of the Act by the Accident Claims Tribunal is contained in Rules 291 to 311 of the Bombay Motor Vehicles Rules, 1989, (hereinafter referred to as 'the Rules ').
The said Rules prescribe a form for filing a claim petition and the documents to be filed along with it (Rule 291), examination of the applicant (Rule 293), issue of notice to the opposite party (Rule 297), filing of written statement by the opposite party (Rule 298), framing of issues (Rule 299), recording of evidence (Rules 300 and 301), local inspection (Rule 302) and judgment and award of compensation (Rule 306).
After the enactment of section 92 A, amendments have been made in the Rules in 1984.
In Rule 291A which has been inserted by such amendments, it has been provided that: "Notwithstanding anything contained in rule 291, every application, for a: claim under section 92A shall be filed before the Claims Tribunal in triplicate and shall be signed by the appellant and the following documents be appended to every such application, namely, 50 (i) Panchnama of the accident; (ii) First information report; (iii) Injury CertifiCate or in case of death, postmortem report or death certificate and; (iv) a certificate regarding ownership and insurance particulars of vehicle involved in the accident from the Regional Transport Officer or the Police".
Rule 297 was substituted by the fallowing, provision: "297.
Notice to opposite party (1) If the application is not dismissed under rule 296, the Claims Tribunal shall, on an application in writing made to it by the applicant, sent to the owner or the driver of the vehicle or both from whom the applicant claims relief (here in after re ferred to as "the opposite party") and the insurer, a copy of the application, together with a notice of the date on which it will dispose of the application, and may call Upon the parties to produce on that date any evi dence which they may wish to tender.
(2) Where the applicant makes a claim for compensation under section 92A, the Claims Tribunal shall give notice to the owner and insurer, if any, of the vehicle involved in the accident directing them to appeal on a date not later than ten days from the date of issue of such notice The date so fixed for such appearance shall also be not later than fifteen days from the receipt of the claims application filed by the claimant.
The Claims Tribunal shall state in such notice that in case they fail to appear on such appointed date the Tribunal will, proceed ex parte on the presumption that they have no contention to make against the award of compensation.
" Rule 306 A empowers the Claims Tribunal to obtain what ever supplementary information and documents which may be found necessary from the police, medical and other authori ties and proceed to award the claim whether the parties who were given notice to appear or not on the appointed date.
Rule 306B lays down: 51 "(1) The Claims Tribunal shall proceed to award the claim of compensation under section 92A on the basis of (i) registration certifi cate of the motor vehicle involved in the accident; (ii) insurance certificate or policy relating to the insurance of the vehicle against third party risks; (iii) panchnama and first information report; (iv) post mortem certificate or death certifi cate; or certificate of injury from the medi cal officer; and (v) the nature of the treatment given by the medical officer who has examined the victim.
(2) The Claims Tribunal in passing orders, shall make an award of compensation of fifteen thousand rupees in respect of the death and of seven thousand five hundred rupees in respect of the permanent disablement to be paid by insurer or owner of the vehicle involved in the accident.
(3) Where compensation is awarded to two or more persons, the Claims Tribunal shall also specify the amount payable to each of them.
(4) The Claims Tribunal in passing order under subrule (2) shall direct the insurer or owner of the vehicle involved in the accident to pay the amount of compensation to the claimant within two weeks from the date of the said order.
(5) The Claims Tribunal shall as far as possible dispose of the application for compensation within forty five days from the date of receipt of such application".
Rule 306C prescribes the procedure of disbursement of compensation under Section 92A to the legal heirs in case of death.
The submission of Shri Sanghi is that in spite of the aforesaid amendments which have been introduced in the Rules after the enactment of section 92A, the Claims Tribunal is required to follow the procedure contained in the other rules before awarding compensation under section 92A of the Act.
In other words, it must proceed to adjudicate the claim 52 after the opposite party is afforded an opportunity to file the written submission under Rule 298, by framing issues under Rule 299 and after recording evidence in accordance with rules 300 and 301 and that it is not permissible for the Claims Tribunal to make an order purely on the basis of the documents referred to in Rules 29 IA, 306A and 306B.
In our opinion, the said submission of Shri Sanghi cannot be accepted.
The object underlying the enactment of section 92A is to make available to the claimant compensation amount to the extent of Rs. 15,000 in case of death and Rs.7,500 in case of permanent disablement as expeditiously as possible and the said award has to be made before adjudication of the claim under section 110A of the Act.
This would be apparent from the provisions of section 92B of the Act.
Section 92B(2) of the Act provides that a claim for compensation under section 92A in respect of death or permanent disable ment of any person shall be disposed of as expeditiously as possible and where compensation is claimed in respect of such death or permanent disablement under section 92A and also in pursuance of any right on the principle of fault, the claim for compensation under section 92A shall be dis posed of 'as aforesaid in the first place.
With a view to give effect to the said directive contained in section 92B of the Act, the Maharashtra Government has amended the Rules and has inserted special provisions in respect of claims under section 92A in rules 291A, 291B, 297(2), 306A, 306B, 306C and 306D of the Rules.
The object underlying the said provisions is to enable expeditious disposal of a claim petition under Section 92A of the Act.
The said object would be defeated if the Claims Tribunal is required to hold a regular trial in the same manner as for adjudicating a claim petition under section 110 A of the Act.
Morever, for award ing compensation under section 92A of the Act, the Claims Tribunal is required to satisfy itself in respect of the following matters: (i) an accident has arisen out of the use of a motor vehicle; (ii) the said accident has resulted in permanent disablement of the person who is making the claim or death of the person whose legal representative is making the claim; (iii) the claim is made against the owner and the insurer of the motor vehicle involved in the accident; The documents referred to in Rules 291A and 306B will enable the Claims Tribunal to ascertain the necessary facts in regard to these matters.
The panchnama and the First information Report will show 53 whether the accident had arisen out of the use of the motor vehicle in question.
The Injury Certificate or the post mortem report will show the nature of injuries and the cause of death.
The Registration Certificate and Insurance Certif icate of the motor vehicle will indicate who is the owner and insurer of the vehicle.
In the event of the Claims Tribunal feeling doubtful about the correctness or genuine ness of any of these documents or if it considers it neces sary to obtain supplementary information or documents, Rules 306A empowers the Claims Tribunal to obtain such supplemen tary information or documents from the Police, medical or other authorities.
This would show that Rules 291A, 306A and 306B contain adequate provisions which would enable the Claims Tribunal to satisfy itself in respect of the matters necessary for awarding compensation under section 92A of the Act and in view of these special provisions which were introduced in the Rules by the amendments in 1984, the Claims Tribunal is not required to follow the normal proce dure prescribed under the Act and the Rules with regard to adjudication of a claim under section 110A of the Act for the purpose of making an order on a claim petition under section 92A of the Act.
In the result, we find no merit in this special leave petition which is accordingly dismissed.
By order dated January 7, 1991, while directing issue of notice on the special leave petition, it was ordered that the issue of the said notice shall be subject to the condition that the petitioners shall deposit a sum of Rs.5,000 in the Registry of this Court towards cost of the respondent and that the notice shall be issued only after the amount of cost has been deposited and the said amount shall be paid over to the respondent on her putting in appearance in this Court and the payment of the amount of cost to the respondent shall be irrespective of the result of the special leave petition.
In view of the said order, no further direction with regard to costs is necessary.
G.N. Petition dismissed.
| Due to a collision on the highway between a Petrol tanker and a truck, the Petrol tanker went off the road and fell on its side at some distance from the highway.
As a result of it, petrol leaked out and collected nearby.
Nearly four hours after the collision an explosion took place in the petrol tanker resulting in fire.
A large number of persons who had assembled near the petrol tanker sustained burn injuries; few of them succumbed to the injuries.
Re spondent 's son was of the persons who died as such.
Respondent filed a claim before the Motor Accident Claims Tribunal under Section 110 of the Motor Vehicles Act for Rs.75,000 as compensation.
She also claimed Rs.15,000 as compensation under Section 92A of the Act.
The Tribunal dismissed the claim under Section 92A on the ground that the explosion could not be said to be an accident arising out of the use of the petrol tanker and so the provisions of Sec tion 92A were not attracted.
It held that the explosion and the fire which took place after about four hours of the accident had no connec 27 tion with the accident and it was altogether a different and independent accident, It also observed that the villagers took benefit of the earlier accident and while they were trying to pilfer petrol ' from the tanker there was friction which caused the ignition and explosion and since an outside agency was responsible therefore the subsequent accident of explosion and fire could not be said to be an accident arising out of the use of the tanker.
On appeal, a Single Judge of the High Court disagreed with the finding of the Tribunal that the explosion was a direct consequence of the attempt to pilfer petrol from it and further held that in view of Sub Section (4) of Section 92A if there was a wrongful act, neglect or default on the part of the deceased or injured, the claim under Section 92A for compensation for no liability cannot be rejected.
He observed that the fact that at the material time, the tanker was not driven on the highway but was lying turtle on the side of the highway, would not make any difference and that the tanker was a vehicle lying on the side of the highway and would be covered by the expression 'use ' in Section 92A of the Act and so compensation would be payable under 'no fault liability '.
The petitioners filed a Letters Patent Appeal against the said decision and a Division Bench of the High Court dismissed the same affirming the findings of the Single Judge.
The Bench held that the collision between the tanker and the other vehicle which occurred earlier and the escape of petrol from the tanker which ultimately resulted in explosion and fire were not unconnected but related events.
It rejected the claim of the petitioners that the first information report recorded by the police and the panchnama indicated that the explosion and fire near the petrol tanker had been caused by careless act of throwing away of a match stick used for lighting a beedi or cigarette.
Aggrieved by the said decision, the petitioners pre ferred the present petition for special leave to appeal.
On behalf of the petitioners, it was contended that the petrol tanker was not a motor vehicle, as defined ln Section 2(18) of the Act, at the time the explosion and fire took place because at that time the petrol tanker was lying turtle and was not capable of movement on the road; that since before the explosion and fire the petrol tanker was lying immobile it could not be said that the petrol tanker was in use as a motor vehicle at the time of the explosion and fire; that even if it is found that the petrol tanker was in use as a motor vehicle at the time of the explosion and fire, there was no causal relationship between the 28 collision which took place between the petrol tanker and the truck and the explosion and fire in the petrol tanker which took place about four and half hours later and it cannot, therefore, be said that the explosion and fire in the petrol tanker was an accident arising out of the use of a motor vehicle.
Dismissing the petition, this Court, HELD: 1.
Section 92A of the was in the nature of beneficial legislation enacted with a view to confer the benefit of expeditious payment of limited amount by way of compensation to the victims of an accident arising out of the use of a motor vehicle on the basis of no fault liability.
In the matter of interpretation of a bene ficial legislation the approach of the courts is to adopt a construction which advances the beneficient purpose underly ing the enactment in preference to a construction which tends to defeat that purpose.
[39E G] Motor Owners ' Insurance Co. Ltd. vs Jadavji Keshavji Modi & Ors., [1982] 1 SCR 860; Skandia Insurance Co. Ltd. vs Kokilaben Chandravadan & Ors., ; , relied on.
Manjusri Raha & Ors.
B.L. Gupta & Ors.
; , ; State of Haryana vs Darshana Devi & Ors., ; ; Bishan Devi & Ors.
vs Sirbaksh Singh & Anr., ; ; N.K.V. Bros. Ltd. vs M. Karumai Ammal and Ors.
; , and Gujarat State Road Transport Corporation vs Ramanbhai Prabhatbhai & Anr., ; , referred to.
The petrol tanker was a vehicle manufactured for the purpose of transporting petrol.
It was a vehicle which had been adapted for such use and was suitable for use on the road for transporting petrol.
At the time when the petrol tanker collided with the truck on the national highway, it was being used for the purpose of transporting petrol.
It cannot, therefore, be disputed that when the said collision took place it was a motor vehicle as the said expression was defined in section 2(18) of the Act.
Merely because the petrol tanker had turned turtle as a result of the collision and was lying at a short distance away from the road, does not mean that it had ceased to be suitable or fit for use on the road and it had ceased to be a motor vehicle.
It could be said that as a result of the collision with the truck the petrol tanker was damaged to such an extent that there was no reasonable prospect of the vehicle ever being made mobile again.
In the circumstances, it cannot be held that the petrol tanker which was a motor vehicle when it collided with the 29 truck had ceased to be a motor vehicle after the said colli sion and it could not be regarded a motor 'vehicle under Section 2(18) of the Act at the time when the explosion and fire took place.
[40H; 41A C, 42D E] Bolani Ores Ltd. etc.
vs State of Orissa.
; , ; Newberry vs Simmonds, and Smart vs Allan & Anr., , referred to.
The word 'use ' has a wider connotationas to cover the period when the vehicle is not moving and is stationary and the use of a vehicle does not cease on account of the vehi cle having been rendered immobile on account of a break down or mechanical defect or accident.
In the circumstances, it cannot be said that the petrol tanker was not in the use at the time when it was lying on its side after the collision with the truck.
[44F G] Pushpa Rani Chopra vs Anokha Singh & Ors., ; General Managar, K.S.R.T.C. vs section Satalingappa & Ors., and Oriental Fire & General Insurance Co. Ltd. vs Suman Navnath Rajguru & Ors., , ap proved.
Elliott vs Grey, and Government Insur ance Office of New South Wales vs R.J. Green & Lloyd Pty. Ltd.; , , referred to.
There is no ground for interfering with the find ings recorded by the High Court that those persons who sustained injuries as a result of the explosion and fire in the petrol tanker did not indulge in any unlawful activity which might have caused the explosion and fire.
The matter has, therefore, to be examined in the light of the meaning to be assigned to the words "arising out of" In the expres sion "accident arising out of the use of a motor vehicle" in Section 92A of the Act.
[46D E] 4.2.
The words "arising out of" have been used in var ious statutes in different contexts and have been construed by Courts widely as well as narrowly, keeping in view the context in which they have been used in a particular legis lation.
[46F] 4.3.
In the context of motor accidents the expressions "caused by" and "arising out of" are often used in statutes.
Although both these expressions imply a causal relationship between the accident resulting in injury and the use of the motor vehicle but they differ in the degree of 30 proximity of such relationship.
As compared to the expres sion "caused by" the expression "arising out of" has a wider connotation and the causal relationship is not required to be direct and proximate and it can be less immediate.
[47G; 48E] 4.4.
The expression "caused by" was used in Sections 95(1)(b)(i) and (ii) and 96(2)(b)(ii) of the Act.
In Section 92A of the Act, Parliament, however, chose to use the ex pression "arising out of" which indicates that for the purpose of awarding compensation under Section 92A, the causal relationship between the use of the motor vehicle and the accident resulting in death or permanent disablementis not required to be direct and proximate and it can be less immediate.
This would imply that accident should be connect ed with the use of the motor vehicle but the said connection need not be direct and immediate.
This construction of the expression "arising out of the use of a motor vehicle" in section 92A enlarges the field of protection made available to the victims of accident and is in consonance with the beneficial object underlying the enactment.
[48D E] Mackinnon Machkenzie & Co. Pvt. Ltd. vs Ibrahim Mahommed Issak, ; ; Government Insurance Office of New South Wales vs R.J. Green & Ltyoyd Pl.
Ltd., ; ; Heyman vs Darwins Ltd., ; Union of India vs E.B. Aaby 's Rederi A/S, and Samick Lines Co. Ltd. vs Owners of the Antonis P. Lemos, [1985] 2 WLR 468, referred to.
In the facts and circumstances of the present case, the accident involving explosion and fire in the petrol tanker was connected with the use of tanker as a motor vehicle.
The High Court was right in holding that the colli sion between the tanker and the other vehicle which had occurred earlier and the escape of petrol from the tanker which ultimately resulted in the explosion and fire were not unconnected but related events and merely because there was interval of about four to hour and half hours between the said collision and the explosion and fire in the tanker, it cannot be necessarily inferred that there was no causal relation between explosion and fire.
In the circumstances, it must be held that the explosion and fire resulting in the injuries which led to the death of the Respondent 's son was due to an accident arising out of the use of the motor vehicle viz., the petrol tanker.
[48G H; 49A B] 6.
The object underlying the enactment of Section 92A is to make available to the claimant compensation amount to the extent of Rs.15,000 in case of death and Rs.7,500 in case of permanent disable 31 ment as expeditiously as possible and the said award has to be made before adjudication of the claim under Section 110A of the Act.
This would be apparent from the provision of Section 92B of the Act which provides that a claim for compensation under Section 92A in respect of death or perma nent disablement of any person shall be disposed of as expeditiously as possible and where compensation is claimed in respect of such death or permanent disablement under Section 92A and also in pursuance of any right on the prin ciple of fault, the claim for compensation under Section 92A shall be disposed of in the first place.
With a view to give effect to the said directive contained in Section 92B of the Act, the Maharashtra Government has amended the Rules and has inserted special provisions in respect of claims under Section 92A in Rules 291A, 291B, 297(2), 306A, 306B, 306C and 306D of the Rules.
The object underlying the said provi sions is to enable expeditious disposal of a claim petition under Section 92A of the Act.
The said object would be defeated if the Claims Tribunal is required to hold a regu lar trial in the same manner as for adjudicating a claim petition under Section 110A of the Act.
[52B E] 7.
Rules 291A, 306A and 306B of the Bombay Motor Vehi cles Rules, 1989 contain adequate provisions which would ennable the Claims Tribunal to satisfy itself in respect of the matters necessary for awarding compensation under Sec tion 92A of the Act and in view of these special provisions the Claims Tribunal is not required to follow the normal procedure prescribed under the Act and the Rules with regard to adjudication of a claim under Section 110A of the Act for the purpose of making an order on a claim petition under Section 92A of the Act.
[53B D]
|
tax 72 cannot be deducted from another Entry as ancillary exercise of power.
Since the Concurrent List does not contain any Entry relating to taxing power the concept of occupied field or repugnancy cannot arise.
If there is clash between exer cise of power under List II and List I then the State legis lation may be invalid due to Article 246(1) But since there can be no clash or invalidity in relation to taxing power the question of invalidity cannot arise.
[94G 95C] 3.14.
Price fixation of ethyl alcohol is an exercise of power for regulating distribution and supply of the general entry for regulating distribution and supply is different from exercise of taxing power.
The two do not even remotely touch each other.
Therefore if the price goes up in exercise of taxing power the subject to its being arbitrary or con fiscatory it could not be struck down as intruding in for bidden field.
[95C D] & CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2722 (NT) of 1991.
From the Judgment and Order dated 12.7.1990 of the Allahabad High Court in Civil Misc.
W.P. No. 361 of 1976.
Umesh Chandra, Rakesh Srivastava, A.K. Srivastava and K.D. Misra for the Appellants.
M.H. Baig, P.S. Shroff, R. Sasiprabhu, S.S. Shroff, Suresh A. Shroff and Rajan Mahapatra for the Respondents.
The Judgment of the Court was delivered by THOMMEN, J.
Leave granted.
This appeal is brought by the State of Uttar Pradesh against the judgment of the Allahabad High Court in Civil Miscellaneous Writ Petition No. 361 of 1976.
The High Court, allowing the writ petition, declared the Uttar Pradesh Sales of Motor Spirit, Diesel Oil and Alcohol Taxation (Amendment) Act, 1976 (Act No. 8 of 1976) to be null and ' void in so far as it purported to levy purchase tax on industrial alcohol.
By this Act, sub section (1) of section 3 of the United Provinces Sales of Motor Spirit, Diesel Oil and Alcohol Taxation Act, 1939 was amended, so as to substitute the following clause: "3(1) There shall be levied with effect from May 2, 1974.
73 (b) at the point of first purchase of alcohol in the State, a tax at the rate of 40 paise per litre for the first million liters and at the rate of 20 paise per litre for the remain der, payable by the purchaser, and which shall be collected and paid in the prescribed manner to the State Government.
This levy was sought to be justified by the state, when challenged in the writ proceeding, as a valid exercise of its legislative power on a matter falling under Entry 54 of List II of the Seventh Schedule of the Constitution/The writ petitioners, challenging the levy, contended that the State Legislature was incompetent to levy tax with reference to Entry 54 of List II in respect of industrial alcohol in so far as that article was the subject of regulation by the Central Government in exercise of its power under section 18G of the Industries (Development and Regulation) Act, 1951 (Act No. 65 of 1951) (hereinafter referred to as 'the IDR Act) and that the price of that article was regulated by the relevant Price Control Orders made by the Central Government under the said Act.
Any levy of sales tax or purchase tax by the State by recourse to Entry 54 of List II, it was con tended, would come into direct conflict with the law made by Parliament and the control exercised by the Central Govern ment under that law in regard to an industry falling under Entry 52 of List 1 read with Entry 33 of List III.
The writ petitioners, relying upon the decision of a Constitution Bench of this Court in Synthetics and Chemicals Ltd. & Others vs State of U.P. & Others, ; , contend ed before the High Court that, in so far as industrial alcohol was concerned, the State was incompetent of levy sales tax by reason of the operation of the Ethyl Alcohol (Price Control) Orders made by the Central Government in exercise of its power under section 18G of the IDR Act.
The State contended before the High Court that the aforesaid decision of this Court did not deal with any levy of tax falling under Entry 54 of List II.
The power of the State to levy taxes on the sale or purchase of goods was not the subject of consideration in that decision.
What was considered was the power of the State to collect vend fee or transport fee or the like by recourse to Entry 8 or 51 of List II with reference to the production, manufacture, possession, transport, purchase and sale of industrial alcohol during the operation of the IDR Act and the rules made thereunder.
The High Court accepted the contention of the writ petitioners and held that the impugned purchase tax, if allowed to be levied on 74 industrial alcohol, would have the effect of raising its price beyond the limit prescribed under the Price Control Orders made by the Central Government in relation to indus trial alcohol in exercise of its power under the IDR Act.
The High Court accordingly declared that the impugned levy of purchase tax on industrial alcohol was, during the opera tion of the Price Control Orders of the Central Government, beyond the legislative competence of the State.
In Synthetics; , this Court held that vend fee, transport fee and the like levied by Uttar Pra desh, Maharashtra and certain other States by recourse to Entry 8 or Entry 51 of List II were null and void in so far as such impost came into direct conflict with the exercise of power by the Centre for the control of supply, distribu tion, price, etc.
of industrial alcohol under section 18G of the IDR Act and the rules or orders made thereunder.
That case was apparently not concerned with the exercise of legislative power with reference to Entry 54 of List II which reads: "Taxes on the sale or purchase of goods other than newspapers, subject to the provisions of Entry 92 A of List I".
Significantly, this Entry shows that, subject to Entry 92A of List I, taxeson the sale or purchase of goods (other than newspapers) taking place within the State are the exclusive preserve of the State.
The only restriction on this legisla tive power is what is stated in Article 286.
Nevertheless, in the concluding portion of the judgment, Sabyasachi Muk harji, J. (as he then was) stated: "The position with regard to the control of alco hol industry has undergone material and significant change after the amendment of 1956 to the IDR Act.
After the amend ment, the State is left with only the following powers to legislate in respect of alcohol: (a) It may pass any legis lation in the nature of prohibition of potable liquor refer able to Entry 6 of List II and regulating powers.
(b) It may lay down regulations to ensure that non potable alcohol is not diverted and misused as a substitute for potable alcohol.
(c) The State may charge excise duty on potable alcohol and sales tax under Entry 52 of List H.
However, sales tax cannot be charged on industrial alcohol in the present case, because under the Ethyl Alcohol (Price Control) Orders, sales tax cannot be charged by the State on industrial alcohol.
I (d) However, in case State is rendering any service, as 75 distinct from its claim of so called grant of privilege, it may charge fees based on quid proquo." (1990) ISCC 109, 158, (emphasis supplied) So stating, the earlier decision Of this Court in State of Uttar Pradesh & Others vs M/s. SynthetiCs & Chemicals Ltd. & Others,. ; so far as it related to industrial alcohol., was overruled, but only prospectively, so as not to affect collection of taxes already made While invalidating the fees levied under various enactments chal lenged in Synthetics; , (including 'the transport fee levied under the Bombay Prohibition Act, 1949 and the vend fee.
levied by the State of Uttar Pradesh in respect of industrial alcohol) tO the extent 'that such levies were unsupported by quid pro quo, this Court also held, as seen above, that sales tax could not be charged on industrial alcohol because of the Ethyl Alcohol (Price Control) Orders.
Vend fee or transport fee was collected by various States purportedly in exercise of the power referrable to Entry 8 of List II.
The fee was at times sought to be levied under the Excise Rules 'made under the Excise Act and ex tended to potable alcohol and industrial alcohol alike.
Though the fee was collected supposedly in return for serv ice rendered, it was more often than not the price of li cence to deal in what is otherwise the exclusive privilege of the State.
No citizen has a fundamental right to deal in intoxicat ing liquors and it is the right of the State to control production, manufacture, sale, etc.
of such liquors with a view to even prohibiting the trade.
The term 'intoxicating liquors ' was so widely interpreted in decisions like Syn thetics 1 that State interference by way of control albeit as vend fee or transport fee of trade in non potable alcohol was challenged as a transgression on the area reserved for Parliament in respect of a controlled industry (see Entry 52 List I) and as repugnant to the control exercised by the Centre as regards the products of such a controlled industry (see Entry 33 List III).
The challenge was specially on the ground that the levy of fees could not be justified except within the bounds of Entry 8 of List II which is a subject of legislation limited to potable alcohol, but not a taxing Entry, and of Entry 51 of List II which relates to duties of excise on alcoholic liquors for human consumption, but excluding medicinal and toilet preparations containing alcohol.
The contention was that no fee or duty could be levied by the States in respect of industrial alcohol.
This contention was accepted by this Court in Synthetics ; as correct provided the levy 76 of fees in respect of industrial alcohol was unsupported by quid pro quo.
In other words, although Entry 66 of List II justified collection of fees in respect of matters falling in that List, levy of any such fee, by reason of the limita tion of the entries in that List concerning alcohol, had to be confined to potable liquor and could not be extended to industrial alcohol unless there was quid pro quo.
This was the rationale of the challenge in Synthetics ; and the crux of the ratio decidendi of that decision.
It was never contended by the States that the vend fee was a tax referfable to Entry 54 of List II or the transport fee imposed by the Prohibition Act and the Rules was a levy under Entry 56 of List II.
The Bombay Rectified Spirit (Transport in Bond) Second Amendment Rules, 1981 (made under the Bombay Prohibition Act, 1949) was challenged precisely for the reason that it was an invalid collection of fee amounting to an impermissible interference with the Central control of industrial alcohol.
This Court, as seen,above, upheld the challenge in so far as industrial alcohol was concerned, unless there was quid pro quo.
The Advocate General, appearing for the appellant State of U.P. (respondent in the High Court), submits that the reference to sales tax in the judgment of this Court in Synthetics ; which the High Court in the present case thought was binding upon it, was accidental and did not arise from the judgment.
The levy of sales tax was not in question at any stage of the arguments.
Nor was the question considered as it was not in issue.
The Court gave no reason whatever for abruptly stating that sales tax was not leviable by the State by reason of the Ethyl Alcohol (Price Control) Orders.
The question which arose for consid eration was in regard to the validity of vend fee and other fees charged by the States.
The argument was that such impost, to the extent that it fell on industrial alcohol, encroached upon the legislative field reserved for Parlia ment in respect of a controlled industry coming under Entry 52 of List I (read with Entry 33 of List III).
Vend fee or transport fee and similar fees, unless supported by quid pro quo, this Court held, interfered with the control exercised by the Central Government under the IDR Act, 1951 and the various orders made thereunder with respect to prices, 1licences, 'permits, distribution, transport, disposal, acquisition, possession, use, consumption, etc., of articles related to a controlled industry, industrial alcohol being one of them.
But none of the observations in the judgment warranted the abrupt conclusion, to which the Court came, that the power to levy taxes on sale or purchase of goods referrable to Entry.
54 of List II was curtailed by the control exercised by the Central Government under the IDR Act.
The casual reference to sales tax in the 77 concluding portion of the judgment, the Advocate General points out was accidental and per incurium.
Counsel for the respondents writ petitioners, however, submits that the prices are strictly controlled by the Central Government in exercise of its power under the IDR Act.
The State law cannot be allowed to disturb such prices.
Any attempt to raise the prices, despite the strict control exercised by the Central Government by means of statutory orders, is an invalid exercise of power.
Levy of sales or purchase tax affects the price, for the incidents of tax fall on the customer.
The customer will have to pay the amount of tax levied at the point of first purchase which would be in addition to the price determined by the Central Government under the Price Control Orders.
This is a trans gression on the legislative control exercised by Parliament and by the Central Government acting as its delegate.
The Government of U.P. charged fee under the U.P. Excise Act, 1910 (as amended in 1972 and 1976); the Govern ment of Maharashtra charged transport fee under the Bombay Rectified Spirit (Transport in Bond) Rules, 1951 made under the Bombay Prohibition Act, 1949, and the Andhra Pradesh Government extended the Excise Act, 1968 and the Distillery Rules, 1970 and the Rectified Spirit Rules, 1971 to all alcohol plants.
The applicability of these Acts and the Rules, so far as industrial alcohol was concerned, was challenged in Synthetics ; principally on the ground that the legislative power of the State to levy excise duty under Entry 51 of List II did not extend to industrial alcohol; and, in respect of that article no fee in the nature of a regulation or control or licence could be charged by reference to Entry 51 or 8 of List II which had no application to industrial alcohol, and also by reason of the control exercised by Parliament and the Central Govern ment under the IDR Act, 1951 which is a law referrable to Entry 52 of List I and Entry 33 of List III.
Dealing with that contention, this Court states: "The main question that falls for considera tion in these matters is whether the vend fee in respect of the industrial alcohol under different legislations and rules in different States is valid.
The question is is the vend fee an impost leviable or extractable by the States under different Acts. .
The questions with which we are mainly concerned are the following: (i) whether the power to levy excise duty in case of indust 78 trial alcohol was with the State legislature or the Central legislature? what is the scope and ambit of Entry 8.List 11 of the Seventh Schedule of the 'Constitution? (iii) whether, the State Government has exclu sive right or privilege of manufacturing, selling, distributing, etc.
of alcohols in cluding industrial alcohol. ".
(Para 2).
This Court further says " . .
In these matters, this Court is concerned with the taxing power of the States to impose and levy excise duty on industrial alcohol and/or imposts as vend fees. . (Para 4).
After elaborately discussing the increasing use of industrial alcohol, as distinct from potable alcohol, this Court says: "The only question which has to be determined is whether intoxicating liquor in Entry 8 in List H is confined to potable liquor or includes all liquors. ".
(Para 41).
(emphasis supplied) Answering that question, which is characterised as the only question.
this Court categorically states that intoxicating liquor within the meaning of Entry 8 of List II is confined to potable liquor and does not include industrial liquor.
Referring to the Constitutional obligations of the State, this Court says: "Article 47 of the Constitution imposes upon the State the duty to endeavour to bring about prohibition of the consumption except for medicinal purpose of intoxicating drinks and products which are injurious to health.
Does Article 47 oblige the State to prohibit even such industries as are licensed under the IDR Act but which manufacture industrial alcohol. . ? (Para 77).
In that view of the matter it appears to us that the relevant provisions of the U.P. Act, A.P. Act, Tamil Nadu Act, 79 Bombay Prohibition Act, as mentioned hereinbe fore, are unconstitutional insofar as these purport to levy a tax or charge imposts upon industrial alcohol, namely, alcohol used and usable for industrial purposes. (Para 82).
Furthermore, in view of the occupation of the field by the IDR Act, it was not possible to levy this impost.
(Para 84).
After the 1956 amendment to the IDR Act bringing alcohol industries (under fermentation industries) as Item 26 of the First Schedule to IDR Act, the control of this industry has vested exclu sively in the Union.
Thereafter, licences to manufacture both potable and non potable alcohol is vested in the Central Government Distilleries are manu facturing alcohol under the central licences under IDR Act.
No privilege for manufacture even if one existed, has been trans ferred to the distilleries by the State.
The Statecannot itself manufacture industrial alcohol without the permission of the Central Government.
The States cannot claim to pass a right which they do not pos sess.
Nor can the States claim exclusive right to produce and manufacture industri al alcohol which are manufactured under the grant of licence from the Central ' Government.
Industrial alcoholcannot upon coming into existence under such grant be amenable to States ' claim of exclusive posses sion of pri vilege.
The State can neither rely on Entry 8 of List II no Entry 33 of List III as a basis for such a claim.
The State cannot claim that under Entry 33 of List III, it can regulate industrial alcohol as a product of the scheduled indus try, because the Union, under Section 18 G of the IDR Act, has evinced clear intention to occupy the whole field.
Even otherwise sections like Sections 24A and 24B of the U.P. Act do not constitute any regulation in re spect of the industrial alcohol as product of the scheduled industry.
On the contrary, these purport to deal with the so called transfer of privilege regarding manufacturing and sale.
This power, admittedly, has been exercised by the State purporting to act under Entry 8 of List II and not under Entry 33 of List III".
(Para 85).
Summing up in paragraph 86 of the judgment, this Court stated what we have already set out above.
However, for continuity, we will repeat clause (c) of that paragraph: 80 "(c) The State may charge excise duty on potable alcohol and sales tax under Entry 52 of List II.
However, sales tax cannot be charged on" industrial alcohol in the present case, because under the Ethyl Alcohol (Price Control)Orders, sales tax cannot be charged by the State on industrial alcohol" We have extensively quoted from the judgment of the Constitution Bench in Synthetics & Chemicals Ltd. & Others vs State of U.P. & Others, ; , with a view to showing that the Court was concerned with only one question, and that was whether the States could levy excise duty or vend fee or transport fee and the like by recourse to En tries 51 or 8 in List II in respect of industrial alcohol.
This Court held, as seen above, that the States had no such power under either Entry in respect of non potable or indus trial alcohol.
The Court did not deal with the taxing power of the State under Entry 54 of List I1 which deals with 'taxes on the sale or purchase of goods other than news papers, subject to the provisions of Entry 92A of List I '.
The power of the State to levy taxes on sale or purchase of goods under that Entry was not the subject matter of discus sion by this Court,, although in paragraph 86 of the leading judgment of Sabyasachi Mukharji, J. as he then was, there is a reference to sales tax.
He says "The State may charge excise duty on potable alcohol and sales tax under Entry 52 of List II".
Entry 52 of List II is mentioned in connection with excise duty and sales tax, but neither of them fails under Entry 52.
Reference to Entry 51 of List 1I ought to have been made if it was excise duty that the Court had in mind.
Entry 54 of List II would have been referred to, and not Entry 52, if the Court had in mind sales tax.
On the other hand, Entry 52 refers to "Taxes on the entry of goods into a local area for consumption, use or sale therein".
None had a case that this Entry had any application to the fees or charges in question.
The Court further says: "However, sales tax cannot be charged on industrial alcohol in the present case, be cause under thee Ethyl Alcohol (Price Control Orders) sales tax cannot be charged by the State on industrial alcohol".
That was an abrupt observation without a preceding discus sion, and inconsistent with the reasoning adopted by this Court in earlier decisions from which no dissent was ex pressed on the point.
Coming, as it does, immediately after a reference to Entry 52 of List II in connection with excise duty and sales tax when neither falls under that Entry, the 81 submission of the Advocate General that the observation regarding sales tax in para 86 of the judgment was per incurium assumes great significance.
The genesis of the problem dealt with in Synthetics ; is traceable to the decision in the State of Bombay & Anr.
vs F.N. Balsara, ; , where this Court stated that the word 'liquor ' as understood in this country at the time of the Government of India Act, 1935 comprehended not only alcoholic liquors which were generally used as beverages and which produced intoxication, but also all liquors containing alcohol.
Section 2(24) of the Bombay Prohibition Act, 1949 was held to be intra vires.
However, so far as medicinal and toilet preparations containing alcohol were concerned, sections 12 and is of the Act were held to be invalid, being an unreasonable restriction on the fundamental right, to the extent that they prohibited possession, sale use and consumption of liquors for medicine and toilet preparations, but were held to be valid to the extent that they applied to other categories of alcoholic liquors, namely, spirits of wine, methylated spirit, wine, beer and toddy, as these items Were distinctly separable and easily severable from the other category, namely, all liq uors containing alcohol.
It was this principle which was followed by this Court in Synthetics, 1, where it was held that there was no fundamental right for a citizen to carry on trade or business in liquor and that the State had the power to enforce absolute prohibition on manufacture or sale of intoxicating liquor by reason of Article 47 of 'the Constitu tion and that the State had exclusive right or/privilege to manufacture or sell liquor.
This Court also held that the expression 'intoxicating liquor ' was not confined to potable liquor, but would also include all liquors which contained alcohol.
The State Government had the power to levy a fee for parting with its exclusive right respect of intoxicat ing liquor.
This Court stated that `alcohol ' included both ordinary as well as specially denatured spirit.
Denatured spirit contains ethyl alcohol.
The specially denatured spirit for industrial purposes is different from denatured spirit only because of the difference in the quantity and quality of the denaturants.
Specially denatured spirit and ordinary denatured spirit were classified according to their use and denaturants used.
This Court rejected the distinc tion sought to be drawn between denatured spirit for indus trial purposes and ordinary denatured spirit.
It was this wider understanding of 'intoxicating liquor ' so as to 82 comprehend not only potable alcohol, but also industrial alcohol, that was disapproved in Synthetics; , In drawing the distinction between potable and non potable alcohol, this Court had in mind the tremendous changes which have taken place in science and technology and industry and commerce and the increasing use of industrial alcohol in various industries.
Drawing a distinction between potable and non potable alcohol and, confining the doctrine of Article 47 to the former, this Court came to the conclu sion that the impugned statutory provisions purportedly levying fees or enforcing restrictions in respect of indus trial alcohol were impermissible in view of the control assumed by the Central Government in exercise of its power under section 18G of the IDR Act in respect of a declared industry falling under Entry 52 of List I, read with Entry 33 of List III.
Alcohol as an industry being one of the industries brought within the purview of the IDR Act and thus under the regulatory control of the Union, the power to grant licence for the manufacture of alcohol is vested in the Central Government.
Distilleries manufacturing alcohol are necessarily licensed under the IDR Act for such distill eries can manufacture alcohol of all types and, therefore, are necessarily brought under the control of the Central Government.
It is in this background that the cardinal question has to be examined, that is, whether or not the power of the State to levy tax on the sale or purchase of goods falling under Entry 54 of List II will comprehend industrial alco hol.
It is significant that the taxing power of the State on a matter falling within its competence under this Entry, namely, sale or purchase of goods (other than newspapers) is, subject to the taxing power of Parliament under Entry 92A of List I, and other provisions of the Constitution, plenary and unlimited, and untrammelled by the supervisory or regulatory power of Parliament under Entry 52 of List I read with its concurrent power under Entry 33 of List III.
This is the crucial distinction between the wide taxing power of the State under Entry 54 of List II and its condi tional or restricted taxing power, for example, over mineral rights mentioned in Entry 50 of that List which was consid ered in India Cement Ltd. & Ors.
vs State.
of Tamil Nadu & Ors., Similarly, the power of the State in respect of potable alcohol (as distinguished from industrial alcohol) falling under Entry 8 of List II is significantly unfettered, unlike, for example, mines and mineral develop ment over which the regulatory power of the State is specif ically stated to be subject to the regulatory power of Parliament (see entry 23 of List II read with Entry 54 of List I).
The legislative competence of the State in respect of mines and I minerals was accordingly held to be denuded to the extent that the 83 field was covered by section 9 of the Central Act, namely, see India Cement (supra).
Unlike mines and minerals, alcohol stands on a different footing, and is dealt with different ly, dependant on whether it is potable or not.
What is significant is that legislation falling in pith and sub stance under Entry 8 or Entry 51 of List II in relation to alcoholic liquor for human consumption (as distinguished from industrial alcohol) whether for the purpose of levying vend fee or transport fee or excise duty, strictly confined to such articles, is not subject to challenge on the ground of legislative incompetence or repugnancy by reason of the power vested in Parliament under Entry 52 or Entry 84 of List I or Entry 33 of List III.
Incompetence or repugnancy arises only when the impact of the legislation falls, not incidentally, but substantially on industrial alcohol so as to transgress on a field occupied by Parliament.
In M.P.V. Sundararamier & Co. vs The State of Andhra Pradesh & Anr., ; at 1479 Venkatarama Aiyar, J., speaking for the Constitution Bench, referred to the Entries in the three lists of the Seventh Schedule of the Constitution and drew a distinction between the main sub jects of legislation forming one group and taxes forming another group.
Entries 1 to 81 of List I are the main sub jects of legislation within the competence of Parliament.
Entries 82 to 92 of that List (92A and B have since been added) enumerate the taxes which Parliament is competent to impose.
Likewise, Entries 1 to 44 forming one group in List II relate to the main subjects within the legislative compe tence of the States, while Entries 45 to 63 of that List deal specifically with the taxes leviable by the States.
The general power of legislation vested in the States regarding trade and commerce, production, supply, etc.
is referrable to Entries 26 and 27 of List II.
The power of the State to levy taxes on the sale or purchase of goods other than newspapers is mentioned in Entry 54 of List II.
This power is, however, subject to certain restrictions imposed trader Article 286.
Clause (1) of Article 286 prohibits a State from imposing, or authorising the imposition of, a tax on the sale or purchase of goods taking place outside the State or in the course of import into or export out of the terri tory of India.
Parliament is empowered under clause (2) of this Article to formulate by law principles for determining when a sale or purchase takes place outside a State or in the course of import into or export out of the territory of India.
Clause (3) of this Article empowers Parliament to/impose certain restrictions and conditions on the taxing power of the State in respect of goods declared by Parlia ment to be of special importance in inter State trade or commerce and certain other goods falling under clause (29 A) of Article 366.
The legislative 84 power of Parliament in respect of inter State trade or commerce and its taxing power in regard to it are respec tively mentioned in Entries 42, 92A and 92B of List I. Taxes levied and collected by the Union on the sale or purchase of goods other than newspapers, where such sale or purchase takes place in the course of inter State trade or commerce, are assigned to the State in the manner provided in clause (2) of Article 269.
Clause (3) of that Article says that Parliament may by law formulate principles for determining when a sale or purchase or Consignment of goods takes place in the course of inter State trade or commerce.
It was by virtue of this power that Parliament enacted the , sections 3 and 4 of which formulate principles for determining when a sale or purchase of goods has taken place in the course of inter State trade or commerce or outside a State.
In all other respects the State enjoys legislative power to levy taxes on the sale or purchase of goods.
Industry as a subject of legislation falls under Entry 24 of List II.
But this provison is subject to Entries 7 and 52 of List I dealing respectively with "Industries declared by Parliament by law to be necessary for the purpose of defence or for the prosecution of the war" and "Industries the control of which by the Union is declared by Parliament by law to be expedient in the public interest".
It is Entry 52 of List 1 that is relevant for the present purpose for it is in respect of that Entry that Parliament enacted the IDR Act, 1951 to provide for the development and regulation of certain industries.
This Act contains a declaration by Parliament that 'it is expedient in the public interest that the Union should take under its control the industries specified in the First Schedule '. 'Fermentation Industries ' i.e. Alcohol and Other products of fermentation industries is Item 26 of the First Schedule.
Section 18G of the IDR Act confers upon the Central Government the power of control of supply, distribution, price, etc.
of the articles mentioned in the First Schedule of the Act.
All powers vested in the Central Government under section 18G of the IDR Act are referfable to Entry 52 of List I dealing with 'controlled ' industries, read with Entry 33 of List III which pertains to 'Trade and commerce in, and production, supply and distribu tion of ' the products of controlled industries.
None of the entries in the Concurrent List deals with tax but general subjects of legislation.
No conflict can, therefore, arise bet ween the taxing powers of the Union and the States.
Parliament has 85 the power to legislate in respect of a 'controlled ' industry falling under Entry 52 of List I, and both Parliament and the States have the power to legislate in respect of the trade and commerce in, and the production, supply and dis tribution of, the products of a 'controlled ' industry (Entry 33 of List III).
These are not taxing entries and do not, therefore, relate to taxes, but powers of regulation and control.
The power to control industry being thus vested in Parliament (Entry 52 of List I) and the legislative power in respect of trade and commerce in such industry being concur rently vested in the Union and the States (Entry 33 of List III) any exercise of control by the State must be subject to the legislative power of Parliament and the power conferred on the Central Government by such legislation (Article 246).
Any exercise of power by the State which transgresses upon the power of Parliament or of the Central Government, as its delegate, is to the extent of such transgression null and void.
Entry 8 of List II reads "Intoxicating liquors, that is to say, the production, manufacture, possession, trans port, purchase and sale of intoxicating liq uors".
These matters concerning intoxicating liquors are thus included within the legislative competence of the States.
In respect of any such matter the States are competent to levy fees (Entry 66 of List II).
Entry 51 of List II relating to excise duty on alcoholic liquors for human consumption reads "Duties of excise on the following goods manufactured or produced in the State and countervailing duties at the same or lower rates on similar goods manufactured or pro duced elsewhere in India: (a) alcoholic liquors for human consumption; (b) opium, Indian hemp and other narcotic drugs and narcotics; but not including medicinal and toilet prepar tions containing alcohol or any substance included in sub paragraph (b) of this entry".
While this Entry clearly refers to liquor for human consump tion, the 86 same meaning has been judicially ascribed in Synthetics; , to 'intoxicating liquors ' in Entry 8 of the same List.
The legislative competence of the State in re spect Of 'intoxicating liquors ' referred to in Entries,8 and 66 of List II as a subject of legislation and fee respec tively and the power of the State to levy excise duty on "alcoholic liquors for human consumption" falling under Entry 51 of the same List must necessarily be confined to potable alcohol, and cannot include industrial alcohol or medicinal and toilet preparations containing alcohol (see Entry 84 of List I).
Any transgression by the State on industrial alcohol will be invalid for want of power by reason of the limitation of Entries 8 and 51 of List II (being confined to potable alcohol) and consequent trans gression on areas covered by Entries 52 and 84 of List I respectively relating to declared industry and excise duty on industrial alcohol and medicinal and toilet preparations containing alcohol, and also for repugnancy arising from a clash with the centrally occupied field falling under Entry 33 of List III.
This is why this Court in Synthetics ; held that the State should not impose any fee, whether called vend fee, transport fee, excise duty and the like, on industrial alcohol as such impost would trespass upon the statutory orders made by the Central Government in exercise of its power of control under section 18G of the IDR Act as regards ethyl alcohol and other non potable products of fermentation industries.
Article 298 of the Constitution says that the executive power of the State, within the area of its legislative competence, or, subject to legislation by Parliament, in areas falling outside its legisaltive competence, shall include the conduct of any trade or business, the acquisi tion, holding and disposal of property and the making of any contract for such purpose.
The regulatory powers of the State extend to every form of activity concerning intoxicat ing liquor for human consumption.
The production, manufac ture, possession, transport, purchase and sale, of such articles fall within the regulatory power of the State.
The State is entitled to levy fees in respect of any such matter (Entry 66 List II).
The power of regulation and control is separate and dis tinct the power of taxation.
Legislative exercise of regula tion or control referfable to Entry 52 of List I or Entry 8 of List II is distinct and different from a taxing power attributable to Entry 54 of List II or Entry 92A or 92B of List I. The power to levy taxes on sale or purchase or consignment in referrable to these Entries, and subject to the other provisions of the Constitution, the taxing power of the State is not cut down by the general legislative control vested in Parliament and 87 referrable to the general topics of legislation.
In M/s. R.M.D.C. (Mysore) Private Limited vs The State of Mysore, , a Constitution Bench of this Court held: "that the subject of 'betting and gambling" in entry 34 of List II of the Seventh Schedule to the Constitution of India and that of " 'taxes on betting and gambling" in entry 62 of List II have to be read separately as separate powers, and therefore, ' when control and regulation of prize competitions was surren dered to Parliament by the resolution dated February 23, 1956, the power to tax could not be said to have been surrendered.
Therefore, if the Mysore Legislature had the power, which in our opinion, it had and it had not surrendered its power to Parliament which, in our opinion, it had not, then it cannot be said that the imposition of the tax is a piece of colourable legislation and is on that ground unconstitutional" In Ganga Sugar Corporation Ltd. vs State of Uttar Pra desh & Others; , , Krishna Iyer, J., speaking for the Constitution Bench, dealt with a challenge against the levy of purchase tax on the raw material consumed by a controlled industry, namely, the Sugar Industry, and stated: "Is the legislation ultra vires because the State enters the forbidden grounds by enacting on controlled industry? It is undisputed that sugar industry is a controlled industry, within the meaning of Entry 52, List I of Seventh Schedule and, therefore, the legisla tive power of Parliament 'covers enactments with respect to industries having regard to Article 246(1) of the Constitution.
If the impugned legislation invades Entry 52 it must be repulsed by this Court.
But Entry 54 in List II of the Seventh Schedule empower the State to legislate for taxes on purchase of goods and so if the Act under consideration is attracted, in pith and substance, by this entry legislative incompetence cannot void the Act. ".
This is precisely the question in the instant case, namely, 88 whether or not the impugned legislation falls in pith and substance with in Entry 54 of List II, and not whether the industry (producing goods the sale of which is leviable to tax under the impugned legislation) is controlled within the arebit of Entry 52 of List I.
This question was not consid ered in Synthetics; , A like question arose in a different form in Ch.
Tika Ramji & Others etc.
vs The State of Uttar Pradesh & Ors., ; This Court rejected the challenge in that case against the constitutional validity of the U.P. Sugar cane (Regulation of Supply and Purchase) Act, 1953 and the notifications issued thereunder.
It was held that the im pugned Act and the notifications were intra rites the State Legislature as they were concerned with the regulation of the supply and purchase of sugarcane which in no way trenched upon the exclusive jurisdiction of the Centre with regard to sugar.
No question of repugnancy under Article 254 of the Constitution could arise because Parliament and the State legislated in different fields and dealt with separate and distinct matters even though of a cognate and allied character.
There is no inconsistency between the two enact ments.
The provisions of section 18G of the IDR Act, 1951 did not cover sugarcane or indicate any intention on the part of Parliament to cover the entire field of such legis lation.
Raw material did not come within the ambit of 'any article or class of articles relatable to any scheduled industry within the meaning of that Act '.
The Court further pointed out that even if sugarcane was an article which fell within the purview of section 18G of the Act, no order having been issued by the Central Government under that provision, no repugnancy could arise, for repugnancy had to exist as a fact and not as a mere possibility.
The existence of an order covering the entire field was an essential prerequisite to give rise to repugnancy.
Similarly, in Kannan Devan Hills Produce Company Ltd. vs The State of Kerala & Another, ; a Constitu tion Bench of this Court stated: "It seems to us clear that the State has legislative competence to legislate on entry 18 List II and entry 42 List III.
This power cannot be denied on the ground that it has some effect on an industry controlled under entry 52 List I. Effect is not the same thing as subject matter.
If a State Act, otherwise, valid, has effect on a matter in List I it does not cease to be a legislation with re spect to an entry in List II or List III . ." 89 In Haechst Pharmaceuticals Ltd. & Anr.
vs State of Bihar & Others, ; this Court, reiterating the observations of the Constitution Bench in Sundararamier 's case ; as regards the distinction between general subjects of legislation and taxes in List 1 and List II and the absence of any entry in List III relating to taxes (apart from levy of fees stated: ". .
Thus in our Constitution, a conflict of the taxing power ' of the Union and of the States cannot arise.
That being so, it is difficult to comprehend the submission that there can be intrusion by a law made by Par liament under Entry 33 of List III into a forbidden field viz. the State 's exclusive power to make a law with respect to the levy and imposition of a tax on sale or purchase of goods relatable to Entry 54 of List II of the Seventh Schedule.
It follows that the two laws viz. sub section
(3) of section 5 (of the Bihar Finance Act, 1981) and paragraph 21 of the Control Order issued by the Central Government under sub section
(1) of section 3 of the Essential Commodi ties Act, operate on two separate and distinct fields and both are capable of being obeyed.
There is no question of any clash between the two laws and the question of repugnancy does not come into play".
These decisions unmistakably demonstrate the power of the State to levy taxes on the sale or purchase of goods other than newspapers but subject to Entry 92A of List I which deals with the legislative power of Parliament to levy taxes on the sale or purchase of goods other than newspapers where such sale or purchase takes place in the course of inter State trade Or commerce.
Subject to the overriding power of Parliament in respect of what falls under Entry 92A and the provisions of Article 286, the State has full legis lative competence in levying taxes on the sale or purchase of goods other than newspapers.
The power to tax under Entry 54 of List 11 being a specific power, it cannot be cut down or in any manner lettered by the general power of control exercised by Parliament by legislation on a matter falling under Entry 52 of List I relating to an industry, the con trol of which by the Union is declared by Parliament by law to be expedient in the public interest, read with Entry 33 of List III dealing with trade and commerce in and the production, supply and distribution of the products of any such controlled industry, and imported goods of the same kind as such products, and other articles mentioned in Entry 33.
The impugned provision of the Uttar Pradesh Sales of Motor Spirit, Diesel Oil and Alcohol Taxation (Amendment) Act, 1976 levying tax at the 90 point of first purchase of alcohol in the State is undoubt edly an impost failing in pith and substance under Entry 54 of List II.
In the absence of any fetter on the legislative power and in the absence of any valid challenge against the provision as a colourable piece of legislation, the impugned legislative enactment remains unimpeachable.
The control exercised by the Central Government by virtue of section 18G of the IDR Act is in a field far removed from the taxing power of the State under Entry 54 of List II.
So long as the impugned legislation falls in pith and substance within the taxing field of the State, the control of the Central Government in exercise of its power under the IDR Act in respect of a controlled industry fall ing under Entry 52 of List 1 cannot in any manner prevent the State from imposing taxes on the sale or purchase of goods which are the products of such industry and which are referrable to Entry 33 of List III.
As seen above, the taxing power of the State under Entry 54 of List II cannot be cut down by the general legislative power of control of the Centre.
The levy of fee, whether called vend fee or transport fee or duty or charge, whether levied by Rules purportedly made under the Excise Act or Prohibition Act or any other statute, otherwise than as a proper levy falling in pith and substance under a taxing Entry, was not valid, to the extent that it lacked quid pro quo and applied to industrial alco hol.
Any such fee or charge can be justified as a mode of control falling in pith and substance under Entry 8 read with Entry 66 of List 1I only to the extent that it remains within the bounds of the concerned subject matter, namely 'intoxicating liquors ', which must necessarily exclude industrial alcohol.
We see no substance in the contention that the Price Control Orders made by the Central Government in exercise of its power under the IDR Act fettered the legislative power of the State on a matter falling under Entry 54 of List II.
Taxes on sale or purchase are not governed by the Price Control Orders, for the purpose of the latter is to prevent the seller from pricing his goods beyond the limit pre scribed by the orders.
That is a fetter on the free play of demand and supply.
When supply is scarce, the price are bound to rise and it is that vice which is controlled by fixing the maximum price.
But that does not in any manner curtail the power of the State to levy taxes on the sale or purchase of goods.
It is no doubt true that the consumer of the article must in addition to the price, pay purchase tax due in respect of them.
But that is by reason of a valid levy which is within the constitutional power of every State, and is dehors the price, though often referrable to it.
91 The High Court, in our view, was clearly in error in striking down the impugned provision which undoubtedly falls within the legislative competence of the State, being refer rable to Entry 54 of List II.
We are firmly of the view that the decision of this Court in Synthetics; , is not an authority for the proposition canvassed by the assessee in challenging the provision.
This Court has not, and could not have, intended to say that the Price Control Orders made by the Central Government under the IDR Act imposed a fetter on the legislative power of the State under Entry 54 of List II to levy taxes on the sale or purchase of goods.
The reference to sales tax in paragraph 86 of that judgment was merely accidental or per incurium and has, therefore no effect on the impugned levy.
R.M. SAHAI, J.
I have, carefully, gone through the judgment of brother Thommen, J.
I agree with every word that has been said by him.
But considering the importance of issues involved I would like to add few words of my own.
The dispute is about levy of purchase tax on industrial alcohol.
The High Court held that the State legislature was competent to enact a law imposing purchase tax on it in exercise of power under Entry 54 of List II.
But it struck down the levy as it would disturb price structure regulated by Central Government.
It was held that control of alcohol industry having been taken over by the Parliament, for purpose of regulation and development the State stood denud ed of its taxing power under Entry 54 of List II to the extent the field of price fixation was covered by the price control order issued by the Government.
And the purchase price being component of price fixation which squarely fell within the power of Central Government the imposition of purchase tax amounted to intrusion into the forbidden area of price fixation by Central Government.
Support for this was drawn, principally, from the two Constitution Bench decision in Indian Cement Ltd. vs State of Tamil Nadu, and Synthetic and Chemicals vs State of U.P., The first was relied for the prin ciple that even a taxing legislation by the State could be invalid to the extent it trenched on Central legislation on the same subject.
And the latter for the conclusion that, 'however, sales tax cannot be charged on industrial alcohol in the present case, because under the Ethyl Alcohol (Price Control) Orders sales tax cannot be charged by the State on industrial alcohol '.
Reliance on Indian Cement Ltd. (supra) was under complete misapprehension.
The State in that case attempted to levy cess on royalty.
It was held to be in valid.
To save it the State attempted to justify it as a tax in exercise of power under Entry 50 of 92 List II.
The submission was negatived as the legislative power of State under Entry 50 of List II was 'subject to any limitation imposed by the Parliament by law relating to mineral development '.
The Bench held that in view of the Parliamentary legislation under Entry 54 of List 'I and the declaration made under Section 2 and provisions of Section 9 of the Act the State legislation was overridden to that extent.
No such restriction or limitation is placed under Entry 54 of List II except that the exercise of power has been made subject to the provisions of Entry 92 of List I.
But the problem has arisen due to the conclusion in the case of Synthetic and Chemicals (supra).
The question was if the State legislature could levy vend fee or excise duty on industrial alcohol.
The Bench answered the question in the negative as industrial alcohol being unfit for human con sumption the State legislation was incompetent to levy any duty of excise either under Entry 51 or Entry 8 of List II of the VIIth Schedule.
While doing so the Bench recorded the conclusion extracted earlier.
It was not preceded by any discussion.
No reason or rationale could be found in the order.
This gives rise to an important question if the conclusion is law declared under Article 141 of the Consti tution or it is per incuriurn and is liable to be ignored: 'Incuria ' literally means 'carelessness '.
In practice per incurium appears to mean per ignoratium. ' English Courts have developed this principle in relaxation of the rule of stare decisis.
The 'quotable in law ' is avoided and ignored if it is rendered, 'in ignoratium of a statute or other binding authority '.
(1944 IKB 718 Young vs Bristol Aeroplane Ltd. Same has been accepted, approved and adopted by this Court while interpreting Article 141 of the Constitution which embodies the doctrine of precedents as a matter of law.
In Jaisri Sahu vs Rajdewan Dubey, this Court while pointing out the procedure to be followed when conflicting decisions are placed before a Bench extracted a passage from Halsbury Laws of England incorprating one of the exceptions when the decision of an Appellate Court is not binding.
Does this principle extend and apply to a conclusion of law, Which was neither raised nor preceded by any considera tion.
In other words can such conclusions be considered as declaration of law? Here again the English Courts and ju rists have carved out an exception to the rule of prece dents.
It has been explained as rule of sub silentio.
A decision passed sub silentio, in the technical sense that has come to be attached to that phrase, when the particular ' point of law involved in 93 the decision is not perceived by the Court or present to its mind ' (Salmond 12th Edition).
In Lancaster Motor Company (London) Ltd. vs Bremith Ltd., [1941] IKB 675 the Court did not feel bound by earlier decision as it was rendered 'wit hout any argument, without reference to the crucial words of the rule and without any citation of the authority '.
It was approved by this Court in Municipal Corporation of Delhi vs Gumam Kaur; , The Bench held that, 'prece dents sub silentio and without argument are of no moment '.
The Courts thus have taken recourse to this principle for relieving from injustice perperated by unjust precedents.
A decision which is not express and is not founded on reasons nor it proceeds on consideration of issue cannot be deemed to be a law declared to have a binding effect as is contem plated by Article 141.
Uniformity and consistency are core of judicial discipline.
But that which escapes in the judg ment without any occasion is not ratio decedendi.
In Shama Rao vs State of Pondicherry, AIR 1967 SC 1680 it was ob served, 'it is trite to say that a decision is binding not because of its conclusions but in regard to its ratio and the principles, laid down therein '.
Any declaration or conclusion arrived without application of mind or preceded without any reason cannot be deemed to be declaration of law or authority of a general nature binding as a precedent.
Restraint in dissenting or overruling is for sake of stabil ity and uniformity but rigidity beyond reasonable limits is inimical to the growth of law.
Effort was made to support the conclusion, indirectly, by urging that the State having raised same objections by way of review petition and the same having been rejected it amounted impliedly asproviding reason for conclusion.
Law declared is not that can be culled out but that which is stated as law to be accepted and applied.
A conclusion without reference to relevant provision of law is weaker than even casual observation.
In the order of brother Thom men, the extracts from the judgment of the Constitution Bench quoted in extenso demonstrate that the question of validity of levy of sales and purchase tax was neither in issue nor was it raised nor is there any discussion in the judgment except of course the stray argument advanced by the learned Attorney General to the following effect.
"But alcohol not fit for human consumption are not luxury and as such the State Legislatures according to Attorney General will have no power to levy tax on such alcohol." Sales tax or purchase tax under Entry 54 is levied on sale or purchase of goods.
It does not contemplate any distinc tion between luxury and 94 necessity.
Luxuries are separately taxable under Entry 62.
But that has nothing to do with Entry 54.
What prompted this submission is not clear.
Neither there was any occasion nor there is any constitutional inhibition or statutory restric tion under the legislative Entry nor does the taxing statute make any distinction between luxuries and necessities for levying tax.
In any case the Bench did not examine it nor did it base its conclusions on it.
In absence Of any discus sion or any argu ment the order was founded on a mistake of fact and, therefore, it could not be held to be law de clared.
The Bench further was not apprised of earlier Con stitution Bench decisions in Hoechest Chemicals vs State of Bihar, ; and Ganga Sugar Mill vs State of U.P., ; which specifically dealt with the legislative competence of levying sales tax in respect of any industry which had been declared to be of public impor tance.
Therefore, the conclusion of law by the Constitution Bench that no sales or purchase tax could be levied on industrial alcohol with utmost respect fell in both the exceptions, namely, rule of sub silentio and being in per incurium, to the binding authority of the precedents.
Ethyl alcohol is not fit for human consumption.
It is principally used as raw material for manufacture of rubber etc.
Since it was of all India importance the activities of which affected the country as a whole, it was declared as of public importance by adding it as item No. (1) under Entry 26 of the first Schedule appended to the Industrial (Devel opment and Regulation) Act, 1951, (hereinafter referred as IDRA).
The effect of this declaration was that it stood removed from Entry 24 of List II and allocated to the Cen tral legislature.
The control thus vested in the Parliament.
But Entry 33 in Concurrent List permits both the Parliament and the State Legislature to deal with trade and commerce in it and also regulate production, supply and distribution of goods declared to be of public importance.
The State could, therefore, enact law under Entry 33 subject to it that the State legislation could not be repugnant to central legisla tion.
That is if the field is already occupied by a Central enactment then the State legislation to that extent shall be invalid.
(See Tika Ramji vs State of U. P., ; and Hoechest Pharmaceuticals Ltd. vs State of Bihar, ; Can this principle apply to levy of purchase tax by an enactment made in exercise of legislative power under Entry 54 of List II? Power to tax is a sovereign power.
In federal system of governance it is exercised by distribution of power between the Union and the State.
Both are supreme in their sphere.
That is brought out clearly by Arti and Article 246(3) of the Constitution.
The legislative field for levying tax by Union is set out in Entries 82 to 92 in List i and of State in Entries 45 to 63 in List II of the VIIth Schedule.
There is no overlapping.
Fields are clearly demarcated.
Limitations and restrictions are also mentioned.
Unlike general entries power to levy tax cannot be deduced from another Entry as ancillary exercise of power.
Since the Concurrent List does not contain any Entry relating to taxing power the concept of occupied field or repugnancy cannot arise.
If there is clash between exer cise of power under List II and last I then the State legis lation may be invalid due to Article 246(1).
But since there can be no clash or invalidity in relation to taxing power the question of invalidity can not arise.
Price fixation of ethyl alcohol is an exercise of power for regulating distribution and supply of it.
The general entry for regulating distribution and supply is different from exercise of taxing power.
The two do not even remotely touch each other.
Therefore, if the price goes up in exer cise of taxing power then subject to its being arbitrary or confiscatory it could not be struck down as intruding in forbidden field.
In Hoechest Pharmaceuticals (supra) this Court while examining the ambit of Entry 54 of List II observed, 'Entry 54 of List II of the Seventh Schedule is only subject to Entry 92A of List I and there can be no further curtailment of the status of power of taxation.
Therefore the entire basis for striking down the levy that even though the State had plenary power to impose tax on sales/purchase of goods can exercise taxing power under Entry 54 of List II so long as it does not militate against the legislative field occupied by the Central GOvernment under the IDR Act or any other enactment made under Entry 52 of List I proceeded on complete misconception of taxing powers of State.
In fact as stated earlier the entire theory of occupied field or State legislation being repugnant to Central legislation is available when the two legislatures exercise their powers under ConcUrrent List.
Therefore, the order of the High Court striking down the levy cannot be upheld.
V.P.R. Appeal allowed.
| The Uttar Pradesh Sales of Motor Spirit, Diesel Oil and Alcohol Taxation (Amendment) Act, 1976 amended sub section (1) of section 3 of the United Provinces Sales of Motor Spirit, Diesel Oil and Alcohol Taxation Act, 1939 purporting to levy purchase tax on industrial alcohol, which was chal lenged in a writ application before the High Court by the respondents.
The respondents contended before the High Court that the State Legislature was incompetent to levy tax with reference to Entry 54 of List II in respect of industrial alcohol in so far as that article was the subject of regulation by the Central Government in exercise of its power under section 18G of the Industries (Development and Regulation) Act, 1951; that the price of that article was regulated by the relevant Price Control Orders made by the Central Government under the IDR Act and any levy of sales tax or purchase tax by the State by recourse to Entry 54 of List II would come into direct conflict with the law made by Parliament and the control exercised by the Central Government under that law in regard to an industry falling under Entry 52 of List I read with Entry 33 of List III.
65 Relying upon the decision of a Constitution Bench of this Court in Synthetics and Chemicals Ltd. & Others vs State of U.P. & Others, ; the respondents further contended that, in so far as industrial alcohol was concerned, the State was incompetent to levy sales tax, by reason of the operation of the Ethyl Alcohol (Price Control) Orders made by the Central Government under section 18G of the IDR Act.
The appellants Opposite parties contended that the decision of this Court in ; did not deal with the question of levy of tax failing under Entry 54 of List 1I and that the power of the State to levy taxes on the sale or purchase of goods was not the subject of consideration in that decision.
The High Court allowing the writ petition and declaring the U.P. Act 8 of 1976 to be null and void held that the levy of purchase tax on industrial alcohol was, during the operation of the PriCe Control Orders of the Central Govern ment beyond the legislative competence of the State, against which the State filed the present Appeal.
The appellant submitted that the reference to sales tax in the judgment of this Court in ; , which the High Court in the present case thought was binding upon it, was accidental and per incurium and did not arise from the judgment; that the levy of sales tax was not in question at any stage of the arguments, nor was the question considered as it was not in issue; that the Court gave no reason what ever for abruptly stating that sales tax was not leviable by the State by reason of the Ethyl Alcohol (Price Control) Orders.
The respondents contended that the prices strictly controlled by the Central Government in exercise of its power under the IDR Act; that the State Law cannot be al lowed to disturb such prices; that any attempt to raise the prices, despite the strict control exercised by the Central Government by means of statutory orders, was an invalid exercise of power.
On the question, whether or not the power of the State to levy tax on the sale or purchase of goods falling under Entry 54 of List 1I will comprehend industrial alcohol, allowing the appeal of the State, this Court, HELD: Per T. Kochu Thommen & R.M. Sahai, JJ.
66 1.01.
The High Court was clearly in error in striking down the impugned provision in sub section (1) of section 3 of the United Provinces Sales of Motor Spirit, Diesel Oil and Alcohol Taxation Act, 1939 as amended by the U.P. Act 8 of 1976, undoubtedly fails within the legislative competence of the State being referrable to Entry 54 of List 11.
[91A] 1.02.
The decision of this Court in Synthetics ; is not an authority for the proposition canvassed by the assessee.
This Court has not, and could not have, in tended to say that the Price Control Orders made by the Central Government under the IDR Act imposed a fetter on the legislative power of the State under Entry 54 of List II to levy taxes on the sale or purchase of goods.
The reference to sales tax in paragraph 86 of that judgment was merely accidental or per incuriam and has therefore, no effect on the impugned levy.
So far ds industrial alcohol was con cerned, the State was incompetent to levy sales tax by reason of the operation of the Ethyl Alcohol (Price Control) Orders made by the Central Government in exercise of its power under section 18G of the IDR Act.
[91A C, 73E F] Per T. Kochu Thommen, J. 2.01.
This Court in Synthetics & Chemicals Ltd. & Others vs State of U.P. & Others, ; was concerned with only one question, and that was whether the States could levy excise duty or vend fee or transport fee and the like by recourse to Entries 51 or 8 in List 11 in respect of industrial alcohol and it did not deal with the taxing power of the State under 54 of List II, although there is a refer ence to sales tax.
"The State may charge excise duty on potable alcohol and sales tax under Entry 52 of List II".
Entry 52 of List II is mentioned in connection with Excise duty and sales tax, but neither of them fails under Entry 52.
Reference to Entry 51 of List 11 ought to have been made, if it was excise duty that the Court had in mind.
Entry 54 of List 11 would have been referred to, and not Entry 52, if the Court had in mind sales tax.
On the other hand, Entry 52 had any application to the fees or charges in question.
[80B F] The abrupt observation of this Court in ; was without a preceding discussion, and inconsistent with the reasoning adopted by this Court in earlier decisions from which no dissent was expressed on the point.
[80G H] 2.02.
The question in the instant case is whether or not the 67 impugned legislation fails in pith and substance within Entry 54 of List 11, and not whether the industry (Producing goods the sale of which is leviable to tax under the im pugned legislation) is controlled within the ambit of Entry 52 of List I was not considered in ; [87H 88B] Synthetics and Chemicals Ltd. & Others vs State of U.P. State of Uttar Pradesh & Others vs M/s. Synthetics & Chemcials Ltd. & Others, ; , overruled in ; , Referred to.
Per R.M. Sahai, J. (Concurring) 2.03.
A decision which is not express and is not founded on reasons nor it proceeds on consideration of issue cannot be deemed to be a law declared to have a binding effect as is contemplated by Article 141.
Uniformity and consistency are core of judicial discipline.
But that which escapes in the judgment without any occasion is not ratio decedendi.
[93B C] 2.04.
Any declaration or conclusion arrived without application of mind or preceded without any reason cannot be deemed to be declaration of law or authority of a general nature binding as a precedent.
Restraint in dissenting or overruling is for sake of stability and uniformity but rigidity beyond reasonable limits is inimical to the growth of law.
[93D E] 2.05.
Law declared is not that can be culled out but that which is stated as law to be accepted and applied.
A conclusion without reference to relevant provision of law is weaker than even casual observation.
[93E F] 2.06.
In absence of any discussion or any argument the order was founded on a mistake of fact, and, therefore, it could not be held to be law declared.
[94B C] 2.07.
The conclusion of law by the Constitution Bench in ; that no sales or purchase tax could be levied on industrial alcohol with utmost respect fell in both the exceptions, namely, rule of sub silention and being in per incurium to the binding authority of the precedents.
[94C D] 68 Young vs Bistol Aeroplane Ltd., [1944] I KB 718; Jaisri Sahu vs Rajdewan Dubey, ; Lancaster Motor Company (London) Ltd. vs Bremith Ltd., [1941] IKB 675; Municipal Corporation of Delhi vs Gurnam Kaur, ; and Shama Rao vs State of Pondicherry, AIR 1967 SC 1680, Referred to.
Per T. Kochu Thommen.
The power of regulation and 'control is separate and distinct from the power of taxation.
Legislative exer cise of regulation or control referrable to Entry 52 of List I or Entry 8 of List 11 is distinct and different from a taxing power attributable to Entry 54 of List I or Entry 92A or 92B of List I. The power to levy taxes on sale or pur chase or consignment is referrable to these Entries, and subject to the other provisions of the Constitution, the taxing power of the State is not cut down by the general legislative control vested in Parliament and referrable to the general topics of legislation.
[86G 87H] 3.02.
Any exercise of power by the State which trans gresses upon the power of Parliament or of the Central Government, as its delegate, is to the extent of such trans gression null and void.
[85C] 3.03.
None of the entries in the Concurrent List deals with tax but general subjects of legislation.
No conflict can, therefore, arise between the taxing powers of the Union and the States.
Parliament has the power to legislate in respect of a 'controlled ' industry failing under Entry 52 of List I, and both Parliament and the States have the power to legislate in respect of the trade and commerce in, and the production, supply and distribution of, the products of a 'controlled ' industry (Entry 33 of List Ill).
These are not taxing entries and do not, therefore, relate to taxes, but powers of regulation and control.
The power to control industry being thus vested in Parliament (Entry 52 of List I) and the legislative power in respect of trade and com merce in such industry being concurrently vested in the Union and the States (Entry 33 of List III) any exercise of control by the State must be subject to the legislative power of Parliament.
[84H 85C] 3.04.
The taxing power of the State on a matter falling within its competence under Entry 54 of List II, namely, sale or purchase of goods (other than newspapers) is, sub ject to the taxing power of Parliament under Entry 92A of List I and other provisions of the Constitution, plenary and unlimited, and untrammelled by the supervisory or regulatory power of Parliament under Entry 52 of List I read with its 69 concurrent power under Entry 33 of List III.
This is the crucial: distinction between the wide taxing power of the State under Entry 54 of List II and its conditional or restricted taxing power, for example, over mineral rights mentioned in Entry 50 of that List.
[82E G] 3.05.
Similarly, the power of the State in respect of potable alcohol (as distinguished from industrial alcohol) falling under Entry 8 of List II is significantly unfet tered, unlike, for example, mines and mineral development over which the regulatory power of the State is specifically stated to be subject to the regulatory power of Parliament (see Entry 23 of List II read with Entry 54 of List I).
The legislative competence of the State in respect of mines and minerals was held to be denuded to the extent that the field was covered by section 9 of the Central Act, namely, Mines and Minerals (Regulations and Development Act), 1957.
[82G 83A] 3.06.
Unlike mines and minerals, alcohol stands on a different footing, and is dealt with differently, dependent on whether it is potable or not.
What is significant is that legislation failing in pith and substance under Entry 8 or Entry 51 of List 1I in relation to alcoholic liquor for human consumption (as distinguished from industrial alcohol) whether for the purpose of levying vend fee or transport fee or excise duty, strictly confined to such articles, is not subject to challenge on the ground of legislative incompe tence or repugnancy by reason of the power vested in Parlia ment under Entry 52 or Entry 84 of List I or Entry 33 of List III.
Incompetence or repugnancy arises only when the impact of the legislation falls, not incidentally, but substantially on industrial alcohol so as to transgress on a field occupied by Parliament.
[83A C] 3.07.
The matters concerning intoxicating liquors are included within the legislative competence of the States.
In respect of any such matter, the States are competent to levy fees (Entry 66 of List II).
Entry 51 of List II relating to excise duty on alcoholic liquors for human consumption clearly refers to liquor for human consumption, the same meaning has been judicially ascribed in ; to 'intoxicating liquors ' in Entry 8 of the same List, the legislative competence of the State in respect of 'intoxi cating liquors ' referred to in Entries 8 and 66 of List II as a subject of legislation and fee respectively and the power of the State to levy excise duty on "alcoholic liquors for human consumption" falling under Entry 51 of the same List must necessarily be confined to potable alcohol, and cannot include industrial alcohol or medicinal and toilet preparations containing alcohol (see Entry 84 of List I).
70 Any transgression by the State on industrial alcohol will be invalid for want ' of power by reason of the limitation of Entries 8 and 51 of List II (being confined to potable alcohol) and consequent transgression on areas covered by Entries 52 and 84 of List I respectively relating to de clared industry and excise duty on industrial alcohol and medicinal and toilet preparations containing alcohol, and also for repugnancy arising from a clash with the centrally occupied field failing under Entry 33 of List III.
[85E, 85H 86D] 3.08.
The power to tax under Entry 54 of List II being a specific power, it cannot be cut down or in any manner lettered by the general power of control exercised by Par liament, by legislation on a matter failing under Entry 52 of List I relating to an industry, the control of which by the Union is declared by Parliament by law to be expedient in the public interest, read with Entry 33 of List III dealing with trade anti commerce in, and the production, supply and distribution of the products of any such con trolled industry, and imported goods of the same kind as such products, and other articles mentioned in Entry 33.
[89F H] 3.09.
The impugned provision of the Uttar Pradesh Sales of Motor Spirit, Diesel Oil and Alcohol Taxation (Amendment) Act, 1976 levying tax at the point of first purchase of alcohol in the State is undoubtedly an impost failing in pith and substance under Entry 54 of List II.
In the absence of any fetter on the legislative power and in the absence of any valid challenge against the provision as a colourable piece of legislation, the impugned legislative enactment ' remains unimpeachable.
[89H 90B] 3.10.
The control exercised by the Central Government by virtue of section 18G of the IDR Act is in a field far/removed from the taxing power of the State under Entry 54 of List II.
So long as the impugned legislation fails in pith and substance within the taxing field of the State, the control of the Central Government in exercise of its power under the IDR Act in respect of a controlled industry fail ing under Entry 52 of List cannot in any manner prevent the State from imposing taxes on the sale or purchase of goods which are the products of such industry and which are referrable to Entry 33 of List III.
The taxing power of the State under Entry 54 of List II cannot be cut down by the general legislative power of control of the Centre.
[90B D] 3.11.
The levy of fee, whether called vend fee or trans port fee or duty or charge, whether levied by Rules purport edly made under the Excise Act or the Prohibition Act or any other statute, otherwise than as 71 a proper levy falling in pith and substance under a taxing Entry, was not valid, to the extent that it lacked quid pro quo and applied to industrial alcohol.
Any such fee or charge can he justified as a mode of control falling in pith and substance under Entry 8 read with Entry 66 of List II only to the extent that it remains within the bounds of the concerned subject matter, namely, `intoxicating liquors ', which must necessarily exclude industrial alcohol.
[90D F] 3.12.
Taxes on sale or purchase are not governed by the Price Control Orders, made under the IDR Act, the purpose of which is to prevent the seller from pricing his goods beyond the limit prescribed by the Orders.
That is a fetter on the free play of demand and supply.
When supply is scarce, the prices are bound to rise and it is that vice which is con trolled by fixing the maximum price.
But that does not in any manner curtail the power of the State to levy taxes on the sale or purchase of goods.
It is no doubt true that the consumer of the article must, in addition to the price, pay purchase tax due in respect of them.
But that is by reason of a valid levy which is within the constitutional power of every State, and is dehors the price, though often referra ble to it.
[90F H] State of Bombay & Anr.
vs F.N. Balsara, ; ; India Cement Ltd. & Ors.
vs State of Tamil Nadu & Ors.
, ;I M.P.V. Sundararamier & Co. vs The State of Andhra Pradesh & Anr., ; at 1479; M/s. R.M.D.C. (Mysore) Private Limited vs The State of Mysore, ; Ganga Sugar Corporation Ltd. vs State of Uttar Pradesh & Others, ; ; Ch.
Tika Ramji & Others etc.
vs The State of Uttar Pradesh & Ors., ; ; Kannan Devan Hills Produce Company.
Ltd. vs The State of Kerala & Another, ; and Hoechst Pharmaceuticals Ltd. & Anr.
vs The State of Bihar & Others.
, ; , referred to.
" Per.
R.M. Sahai, J. (Concurring) 3.13.
Power to tax is a sovereign power.
In federal system of governance it is exercised by distribution of power between the Union and the State Both are supreme in their sphere.
That is brought out Clearly by Article 246(1) and Article 246(3) of the Constitution.
The legislative field for levying tax by Union is set out in Entries 82 to 92 in List I and State in Entries 45to 63 in List II of the VIlth Schedule.
There is no overlapping.
Fields are clearly demarcated.
Limitations and restrictions are also mentioned.
|
(C) No. 235 of 1990.
(Under Article 32 of the Constitution of india).
Gopal Subramanium, Ms. Binu Tamta and section Murlidhar for the Petitioner.
Altar Ahmad, Additional Solicitor General, Ms. A. Subha shini, K. Swami, C.S. Vaidyanathan and S.R. Setia for the Respondents.
The Judgment of the Court was delivered by SAWANT, J.
On 7th October, 1989, by a notification issued in exercise of the powers conferred by clause (2) of Article 324 of the Constitution, the President fixed, until further orders, the number of Election Commissioners (other than the Chief Election Commissioner), at two.
By a subse quent notification of 16th October, 1989 issued under the same provisions, the President appointed the petitioner and one Shri V.S. Seigell as Election Commissioners w.e.f.
the afternoon of that day.
On the same day, by another notifica tion issued in exercise of the powers conferred by clause (5) of Article 324 of the Constitution, the President made rules to regulate the conditions of service and tenure of office of the Election Commissioners (other than the Chief Election Commissioner).
These conditions laid down, among other things, that an Election Commissioner shall hold office for a term of five years or until he attains the age of 65 years whichever happens earlier.
On 1st january, 1990, in exercise of the powers conferred under Article 324(2) of the Constitution, the President issued two notifications one rescinding, with immediate effect, the notification of 7th October, 1989 creating the two posts of Election Commissioners 165 and another rescinding, with immediate effect, the notifi cation of 16th October, 1989 by which the appointment of the petitioner and Shri V.S. Seigell was made.
It is these two notifications of ist January, 1990 which are being assailed in the present petition.
The grounds of attack are, firstly, once appointed, an Election Commissioner continues in office for his full tenure determined by the rules made under Article 324(5) of the Constitution which is five years or till the attainment of 65 years of age whichever is earlier.
The President could remove the petitioner only on the recommendation of the Chief Election Commissioner.
He had otherwise no power to cut short the tenure either under the Constitution or under the rules.
Hence, the rescission of the notifications of 7th and 16th October, 1989 by the impugned notifications of 1st January, 1990 is illegal.
Secondly, it is urged that the Election Commission is an independent body and its independ ence is vital to free and fair elections which are a sine qua non for democracy.
Any interference with the working of the Election Commission, directly or indirectly is bound to have adverse, effect on the health of our democracy.
Hence, it is of paramount importance to the democracy enshrined in our Constitution that its independence is not eroded in any manner.
The device adopted in the present case, viz., of the rescission of the notification creating the posts and there by abolishing the poets and thus removing the petitioner and the other Election Commissioner was an attempt to remove the Election Commissioners which removal could not be effected otherwise either under the Constitution or under the service rules.
The third attack is that the two notifications were issued mala fide under the advice of the Chief Election Commissioner with the sole object of getting rid of the petitioner and the other Election Commissioner because the Chief Election Commissioner was from the beginning illdis posed towards the creation of the posts of the Election Commissioners.
It is also alleged that there were differ ences of opinion between the Chief Election Commissioner on the one hand and the Election Commissioners on the other and the former desired that he should have the sole power of decision making in all matters.
Lastly, it is/ contended that the petitioner 's removal affected him materially since after a distinguisthed career as a civil servant he had joined the Bihar Public Service Commission as its Chairman only on 30th September, 1989 and had resigned the said post on 14th October, 1989 to join as Election Commissioner on 16th October, 1989.
His career was abruptly ended within less than three months thereafter.
It was also urged that while announcing the removal, his photograph was flashed on the television during a news bulletin of 2.1.
1990 subject ing him to severe 166 loss of dignity and reputation.
This act also shows mala fides of the Janata Dal which was a part of the succeeding government and had a prejudice against him.
The petition is resisted by the 1st respondent (Union of India) and the 2nd respondent (the then Chief Election Commissioner).
No separate counter affidavit is filed on behalf of the 3rd respondent Election Commission.
After the sad demise of the 2nd respondent during the pend ency of the petition, he was deleted as a party to the petition.
However, the reply filed by him is being relied upon on behalf of the other respondents.
In the reply filed by the ist respondent, it is contended that the President had issued the impugned notification rescinding the notifi cation of 7th October, 1989 in bona fide exercise of his power under the first part of clause (2) of Article 324 the Constitution which authorises the President to determine the strength of the Election Commission and fix the number of Election Commissioners from time to time.
There is no limitation on the power of the President to determine and fix the strength of the Election Commission from time to time.
The exercise of the said power is based on the subjec tive satisfaction of the President formed on the advice tendered by the Counsel of Ministers.
In support of this contention, it is pointed out that whereas Article 324(2) creates an obligation that the Election Commission shall consist of the Chief Election Commissioner, as regards the appointment of the other Election Commissioners and their number, the matter is left, without any limitation, to the discretion of the President.
It is further pointed out that when the President had issued the notifications of 7th and 16th October, 1989, he had expected that on account of the reduction in the lower age limit of the voters from 21 to 18 years necessitating revision of the electoral rolls and the impending statutes, viz., the Panchayat Raj and Nagar Palika Bills, which were then before the Parliament, the work of the Election Commission would increase, and to cope up with the same, the augmentation of the strength of the Election CommissiOn was necessary.
However, the electoral rolls became ready and the two Bills in question lapsed on 13th October, 1989.
Hence, the augmented strength was considered surplus to the requirement.
A decision was ' therefore, taken to abolish the posts and the impugned notification of 7th October, 1989 was rescinded.
Consequent upon it, the appointments of the petitioner and the other Election Com missioner came to an end.
It was not necessary to issue another notification to rescind the notification of 16th October, 1989 by which the said appointments were made.
However, by way of abundant precaution, the notification of 16th October, 1989 was also rescinded by another notifica tion 167 of 1st January, 1990.
It was, thus, according to the 1st respondent, a case of a termination of service of the peti tioner consequent upon the abolition of the post.
It was not a case of a removal of the petitioner from service as al leged by the petitioner.
In the affidavit filed by the 2nd respondent he has been candid in stating that there was in fact no need of any Election Commissioner and the Chief Election Commissioner along with his then machinery was capable of coping with the work.
However, after the appoint ment of the Election Commissioners, the Election Commission took decisions on all matters unanimously although there were differences of opinion.
There was no occasion for the Chief Election Commissioner either to resent the appointment of the petitioner and the other Election Commissioner or to recommned their removal.
In fact, the petitioner himself has admitted on the petition that the Chief Election Commission er had at no stage made any recommendation for his removal or for the removal of the other Election Commissioner.
He has also vehemently denied the allegations made against him qua the various incidents and has contended the all his actions were in conformity with law and the past practices of the Commission.
Article 324 of the Constitution reads as follows: "324.
Superintendence, direction and control of elections to be vested in an Election Commission. (1) The superintendence, direction and control of the preparation of the electoral rolls for, and the conduct of, all elections to Parliament, and to the Legislature of every State and of elections to the offices of President and Vice President held under this Constitution shall be vested in a Commission (referred to in this Constitution as the Election Commission).
The Election Commission shall consist of the Chief Election Commissioner and such number of other Election Commissioners, if any, as the President may from time to time fix and the appointment of the Chief Election Commissioner and other Election Commissioners shall, subject to the provisions of any law made in that behalf by Parliament, be made by the President.
(3) When any other Election Commis sioner is so appointed the Chief Election Commissioner shall act as the Chairman of the Election Commission.
168 (4) Before each general election to the House of the People and to the Legislative Assembly of each State, and before the first general election and thereafter before each biennial election to the Legislative Council of each State having such Council, the Presi dent may also appoint after consultation with the Election Commission such Regional Commis sioners as he may consider necessary to assist the Election Commission in the performance of the functions conferred on the Commission by clause (1).
(5) Subject to the Provisions of any law made by Parliament, the conditions of service and tenure of office of the Election Commissioners and the Regional Commissioners shall be such as the President may by rule determine: Provided that the Chief Election Commissioner shall not be removed from his office except in like manner and on the like grounds as a Judge of the Supreme Court and the conditions of service of the Chief Elec tion Commissioner shall not be varied to his disadvantage after his appointment: Provided further that any other Election Commissioner or a Regional Commis sioner shall not be removed from office except on the recommendation of the Chief Election Commissioner.
(6) The President, or the Governor of a State, shall, when so requested by the Election Commission, make available to the Election Commission or to a Regional Commis sioner such staff as may be necessary for the discharge of the functions conferred on the Election Commission by clause (1).
" The provisions of clause (1) of the Article show that the superintendence, direction and control of the prepara tion of the electoral rolls for and the conduct of all elections to Parliament and to the Legislature of every State and of elections to the offices of the President and Vice President are vested in the Election Commission.
The relevant provisions of the Representation of the People Act, 1950 and of the Representation of the People Act, 1951 further show that various functions are entrusted to, and powers are conferred upon, the Commission in the matter of the conduct of election to the Parliament and to the Legislatures of the States.
In the discharge of these duties and in the exercise of these powers, the Com mission has to act on its own and to take various dicisions and implement them as an independent body.
In the discharge of its duties and functions, it is not amenable to the control of any other body.
There is no doubt, therefore, that the Election Commission as envisaged by the Constitu tion is an independent institution and has to function as such.
The salient features of the composition of the Elec tion Commission as given in clauses (2), (3) and (4) of the Article are that the Commission shall always consist of a permanent incumbent, viz., the Chief Election Commissioner.
But the President has also been given the power to appoint such number of other Election Commissioners as may, from time to time, fix.
In other words, while the appointment of the Chief Election Commissioner is a must, the appointment of the other Election Commissioner or Commissioners is not obligatory.
What is further, the number of other Election Commissioners is left to the descretion of the President depending upon the need felt from time to time.
This would mean that both the increase and the reduction in the number of the Election Commissioners would depend upon the require ments of the time as assessed by the President.
The power given to the President to appoint the Chief Election Commissioner and other Election Commissioners is subject to the provisions of any law that may be made by the Parliament in that behalf.
The Parliament has thus reserved to itself the power to regulate these appointments.
It is obvious from clauses (2) and (3), that when the Commission consists only of Chief Election Commissioner, it is he who alone constitutes the Commission and acts as such.
However, when other Election Commissioners are appointed, the Commis sion consists of both the Chief Election Commissioner and the other Election Commissioners and together they consti tute the Commission.
In such a case, the Chief Election Commissioner acts as the Chairman of the Election Commis sion.
Clause (4) of the Article gives power to the Presi dent to appoint, after consulting the Election Commission, such Regional Commissioners as he may consider necessary to assist the Election Commission in the performance of the functions conferred on the Commission.
The Regional Commis sioners abviously do not constitute the Commission but are appointed to assist it.
However, in the matter of the conditions of service and 170 tenure of office of the Election Commissioners, a distinc tion is made between the Chief Election Commissioner on the one hand and Election Commissioners and Regional Commission ers on the other.
Whereas the conditions of service and tenure of office of all are to be such as the President may, by rule determine, a protection is given to the Chief Elec tion Commissioner in that his conditions of service shall not be varied to his disadvantage after his appointment, and he shall not be removed from his office except in like manner and on the like grounds as a Judge of the Supreme Court.
These protections are not available either to the Election Commissioners or to the Regional Commissioners.
Their conditions of service can be varied even to their disadvantage after their appointment and they can be removed on the recommendation of the Chief Election Commissioner, although not otherwise.
It would thus appear that in these two respects not only the Election Commissioners are not on par with the Chief Election Commissioner, but they are placed on par with the Regional Commissioners although the former constitute the Commission and the latter do not and are only appointed to assist the Commission.
It is necessary to bear these features in mind because although clause (2) of the Article states that the Commission will consist of both the Chief Election Commis sioner and the Election Commissioners if and when appointed, it does not appear that the framers of the Constitution desired to give the same status to the Election Commission ers as that of the Chief Election Commissioner.
The Chief Election Commissioner does not, therefore, appear to be primus inter parties.
i.e., first among the equals, but is intended to be placed in a distinctly higher position.
The conditions that the President may increase or decrease the number of Election Commissioners according to the needs of the time that their service conditions may be : varied to their disadvantage and that they may be removed on the recommendation of the Chief Election Commissioner militate against their being of the same status as that of the Chief Election Commissioner.
In this connection, the controversy as to whether there should be a one member Commission or a multi member Commission also assumes a little importance since it throws light both on the genesis of Article 324 as well as its implications.
We may first refer to the relevant discussion on the subject in the Constituent Assembly.
In the Draft Constitution, the present Article 324 was numbered as Article 289.
It appears from Dr. Ambedkar 's introductory comments on the Article (Constituent Assembly Debates, Vol.
VIII p. 905) that the Drafting Committee appointed on the Fundamen 171 tal Rights had made a report that the independence of the elections and the avoidance of any interference by the executive in the elections to the legislature should be regarded as a Fundamental Right and provided for, in the Chapter dealing with Fundamental Rights.
When the matter came up before the House, it was decided to treat it as of fundamental importance but to provide for it in some other part of the Constitution and not in the chapter dealing with Fundamental Rights.
The House had affirmed without any kind of dissent that in the interests of purity and freedom of elections, the Commission should be free from any kind of interference from the executive of the day.
Article 289 (now Article 324) was designed to carry out that part of the decision of the House.
Explaining the provisions of clause (2) of the Article, Dr. Ambedkar stated that there were two alternatives before the Drafting Committee, viz., either to have a permanent body consisting of 4 or 5 members of the Election Commission who would continue in office throughout without any break, or to permit the President to have an adhoc body appointed at the time when there is an election on the anvil.
The Drafting Committee had steered a middle course.
What the Committee proposed by the said clause was to have permanently in office one man called the Chief Election Commissioner so that the skeleton machinery would always be available This was felt sufficient, taking into consideration all exigencies At the same time, it was felt that when the elections come up, the President may add to the machinery by appointing other members of the Commission.
Commenting upon clause (4) of the then Article 289 (now clause (5) of Article 324), Dr. Ambedkar stated as follows: "So far as clause (4) is concerned, we have left the matter to the President to determine the conditions of service and the tenure of office of the members of the Election Commis sion, subject to one or two conditions, that the Chief Election Commissioner shall not be liable to be removed except in the same manner as a Judge of the Supreme Court.
If the object of this House is that all matters relating to Elections should be outside the control of the Executive Government of the day, it is abso lutely necessary that the new machinery which we are setting up, namely, the Election Com mission should be irremovable by the execu tive by a mere fiat.
We have, therefore, given 'the Chief Election Commissioner the same status so far as removability is concerned as we have given to the Judges of the Supreme Court.
We, of course,do not propose to give the same status to the other members of the Commission.
We have left the 172 matter to the President as to the circum stances under which he would deem fit to remove any other member of the Election Com mission, subject to one condition that the Chief Election Commissioner must recommend that the removal is just and proper.
(Emphasis supplied) Prof. Shibban Lal Saksena wanted, among other things, the appointment of the Chief Election Commissioner as well as of the Election Commissioners to be confirmed by two third majority in a joint session of both Houses of Parlia ment.
He also wanted both the Chief Election Commissioner and the Election Commissioners to be removed by the same process, viz., in like manner and on the like grounds as a Judge of the Supreme Court, and non variation of the service conditions of the Election Commissioners to their disadvan tage as was provided for in the service conditions of the Chief Election Commissioner.
This amendment was supported, among others, by Pandit Hriday Nath Kunjru.
The amendments were not accepted by the House, and the distinction between the Chief Election Commissioner and the Election Commission ers with regard to the security of the service conditions and the procedure of their removal was maintained as was proposed.
It appears that the issue whether the Commission should be uni member or multi member had remained alive even after the adoption of the Constitution, and it cannot be said that it has lost its relevance even today.
This is clear from the Election Commission 's reports of the earlier period.
The 2nd respondent in the Commission 's report for 1986 87, had referred to this issue and observed therein, as pointed out by the petitioner himself, as follows: "though three of the former Chief Election Commissioners have opposed a multi member body on the ground, inter alia, that quick deci sions are needed in Election matters and the Commission acts in actual practice in consul tations with various authorities, agencies and that a process of deliberation precedes its decisions and there is considerable force in what they have said, it would, in view of the demand from certain quarters for a multi member Commission, be desirable to examine the proposal and take a decision after ascertain ing the views of the various political par ties.
A suggestion to this effect was made to the Government by the Commission through its letter dated 173 October 29, 1986 to the Law Minister".
As stated by the 2nd respondent, the then Prime Minister had categorically stated in Parliament in December 1988 that he was against a multi member Election Commission.
It is presumed that this statement was made by the Prime Minister after the Government had considered the views expressed by the 2nd respondent in his letter of 29th October, 1986 to the Law Minister.
Unfortunately, there was no discussion in the Con stituent Assembly on the subject of the procedure to be adopted by the Commission in transacting its business when Election Commissioners are appointed in addition to the Chief Election Commissioner.
We are not aware as to what precise relationship between the Chief Election Commissioner and the other Election Commissioners, if and when appointed, was assumed by the earlier three Chief Election Commission ers when they opposed the multi member Election Commission or what suggestion was made by the 2nd respondent with regard to the said relationship in his letter of 29th Octo ber, 1986 to the Law Minister.
As we have seen from the provisions of clause (3) of Article 324, all that the Arti cle says is that when any other Election Commissioner is appointed, the Chief Election Commissioner shall act as the Chairman of the Election Commission.
What is, therefore, evident from the discussion of the framers of the Constitution is, firstly, they did not want to give the same status to the Election Commissioners as of the Chief Election Commissioner and, secondly, they wanted the Chief Election Commissioner to be in overall control of the business of the Commission.
The nearest analogy of another Constitutional institution that comes to our mind in this connection, is that of the Council of Ministers under Articles 74 and 163 of the Constitution.
The Prime Minister and the Chief Minister, as the case may be, are at the head of the Council of Ministers and they togeth er with the other Ministers constitute the council.
They are, however, not bound by the views of the other Ministers and may even override them.
Nor have the other Ministers the same power as the Prime Minister or the Chief Minister.
There is also some similarity between the powers of the Prime Minister and the Chief Minister on the one hand and the Chief Election Commissioner on the other, in the matter of recommendations for the removal of the other Ministers and Commissioners respectively.
There is no doubt that there is an important distinction between the Council of Ministers and the Election Commission in that whereas the Prime Minis ter or 174 he Chief Minister is appointed by the President or the Governor and he other Ministers are appointed by the Presi dent or the Governor on he advice of the Prime Minister or the Chief Minister, the appointnent of both the Chief Elec tion Commissioner and the other Election Commissioners as the law stands today, is made by the President under Artii cle 324(2) of the Constitution.
It has, however, to be noted that he provisions of the said Article have left the matter of appointment of the Chief Election Commissioner and the other Election Commissioners to be regulated by a law to be made by the Parliament, and the President exercises the power of appointing them today because of the Absence of such law which has yet to be made.
In pointing out these similarities we do not intend to place the two institutions on par.
Instead, we want to stress that in the absence of rules to the contrary, the members of a multi member body are not and need not always be on par with each other in the matter of their rights, authority and powers.
In the case of the functioning of the Council of Ministers there is the Westministerial Convention crystallised into an,unquestion able rule, to back it.
We are not aware if there is any Election Commission in a similar Constitutional framework as ours in any other part of the world and of its composition and the manner of its working.
But, if there is one, the method of its working will be worth studying, in this con nection.
It is further an acknowledged rule of transacting business in a multi member body that when there is no ex press provision to the contrary, the business has to be carried on unanimously.
The rule to the contrary such as the decision by majority, has to be laid down specifically bY spelling out the kind of majority whether simple, special, of all the members or of the members present and voting etc.
In a case such as that of the Election Commission which is not merely an advisory body but an executive one, it is difficult to carry on its affairs by insisting on unanimous decisions in all matters.
Hence, a realistic approach de mands that either the procedure for transacting business iS spelt out by a statute or a rule either prior to or simulta neously with the appointment of the Election Commissioners or that no appointment of Election Commissioners is made in the absence of such procedure.
In the present case, admit tedly, no such procedure has been laid down.
For this reason, again, we are not impressed by the stress laid on behalf of the petitioner on the provisions of clause (4) of Article 324 in relation to the appointment of the Regional Commissioners.
The fact that the Regional Commissioners are to be appointed 175 by the President in consultation with the Commission to assist the Commission to perform its functions, though places the Election Commissioners on a higher pedestal than the Regional Commissioners, does not raise them to the status of the Chief Election Commissioner.
The provision is intended to vest the President with the powers of appoint ment of the Regional Commissioners for a particular purpose, and the framers of the Constitution, it appears, desired to give a constitutional status to the Regional Commissioners also, as and when they are appointed.
The provision, though spells out the relationship between Election Commission and Regional Commissioners, does not help to throw light on the relationship between the Chief Election Commissioner and Election Commissioners inter se.
On the other hand, clause (5) of the Article, by placing the Election Commissioners Regional Commissioners on par in the matter of service conditions and their removability, reinforces the assumption that Election Commissioners do not enjoy the same status and authority as that of the Chief Election Commissioner.
The experience of the short period during which the petitioner and the other Election Commissioners were in the Commission, as has been brought out in the petition and in the counter filed by the then Chief Election Commissioner, shows that were it not for the restraint and sagacity shown by the Chief Election Commissioner, the work of the Commis sion would have come to a standstill and the Commission would have been rendered inactive.
In the first instance, the petitioner and the other Election Commissioners were appointed when the work of the Commission did not warrant their appointment.
The reason given by the ist respondent (Union of India), that on ac count of the Constitution (61st Amendment) Act reducing the voting age and the ConstitUtion (64th Amendment) and (65th Amendment) Bills relating to election to the Panchayats and Nagar Palikas, the work of the Commission was expected to increase and, therefore, there was need for more Election Commissioners, cuts no ice.
As has been pointed out by the 2nd respondent, the work relating to revision of electoral rolls on account of the reduction of voting age was complet ed in all the States except Assam by the end of July 1989 itself, and at the Conference of the Chief Electoral Offi cers at Tirupati, the 2nd respondent had declared that the entire preparatory work relating to the conduct of the then ensuing general elections to the Lok Sabha would be complet ed by August in the whole of the country except Assam.
Further, the Constitution (64th and 65th Amendment) Bills had already fallen in Parliament, before the 176 appointments.
In fact, what was needed was more secretarial staff for which the Commission was pressing, and not more Election Commissioners.
What instead was done was to appoint the petitioner and the other Election Commissioner on 16th October, 1989.
Admittedly, further the views of the Chief Election Commissioner were not ascertained before making the said appointments.
In fact, he was presented with them for the first time in the afternoon of the same day, i.e., 16th October, 1989.
What follows is more instructive and interesting for it lends considerable force to what the 2nd respondent has stated in this connection in his reply.
Barely 24 hours after the appointment of the Election Commissioners, the Principal Secretary to the Prime Minister called on the 2nd respondent in the forenoon of 17th October, 1989 and con veyed to him the desire of the Prime Minister that the go.
, at elections to the Lok Sabha should be held on a particular date and that the announcement in that behalf should be made by the Commission forthwith and before 2 p.m. on that day, in any case.
It appears that the 2nd respondent took the stand that it was for the Commission and not for the Govern ment to fix the date of the election.
The new Election Commissioners joined issue with him with regard to his said stand and insisted that the Commission forthwith make an announcement Of the date of election as desired by the Prime Minister.
We do not propose to refer to all the other disputes which arose between the Chief Election Commissioner on the one hand and the petitioner and the other Election Commis sioner on the other.
But it appears from the contents of the petition and of the reply filed by the 2nd respondent that the petitioner and the other Election Commissioner probably misunderstood their role and thought that they were appoint ed to control the Chief Election Commissioner at every stage.
This is evident from two instances, among others.
It appears that a Writ Petition No. 3205 of 1989 [Indian Na tional Congress vs Election Commission and Ors.] was filed in the Delhi High Court on November 9, 1989, and a notice of the same was received by the Commission at about 6 p.m. on the same day.
According to the said notice, the with peti tion was scheduled to come up for hearing before the High Court on the following day, i.e., November 10, 1989.
By the time the notice was received in the office of the COmmis Sion, the 2nd respondent as well as the Election Commission ers had left the office.
The Deputy Election Commissioner contacted the 2nd respondent at his residence over the phone and mentioned the names of some counsel and also referred to the consistent practice of the Commission not to engage as 177 its counsel law officers of the Government of India in cases where the party in power is a party to the suit.
To the 2nd respondent it was a matter of a routine nature in view of the established practice of the Commission, and he suggested the name of one more counsel in addition to the names men tioned by the Deputy Election Commissioner.
Accordingly, a senior advocate, Shri V (we are not mentioning the full names of the Counsel here although they are candidly dis closed in the reply) was engaged, and he was briefed in the matter from about 8 p.m. to 9 p.m. on that day, i.e., 9th November, 1989.
Later on, the petitioner herein rang up the 2nd respondent to say that Shri D, the then Additional Solicitor General be engaged to represent the Commission and he also told him that he was so advised by the Union Law Secretary.
The 2nd respondent told him that firstly it was too late and secondly it was contrary to the practice of the Commission.
Later on, it inspired that the petitioner rang up the other Election Commissioner, Shri V.S. Seigell and thereafter rang up the Deputy Election Commissioner and directed him to withdraw the brief from Shri V with a view to entrust it to Shri D.
In order to avoid any controversy, the 2nd respondent acquiesced in the proposed appointment of Shri D.
In the morning of both November, 1989, Shri D was approached to act as Commission 's counsel.
He, however, expressed his inability to do so.
In the meanwhile, the petitioner had sent a note against the alleged violation of the procedure in that he and his other colleague were not consulted while appointing Shri V.
The withdrawal of the brief from Shri V and the refusal of Shri D to appear in the matter placed the Election Commission in an embarrassing position before the High Court since the Commission was not represented by any counsel as none of the standing counsel of the Central Government at the Delhi High Court was also willing to act as the Commission 's counsel.
An application for adjournment of the matter to the following day, i.e., 1 1th November 1989 was made on behalf of the Commission which was reluctantly granted by the Court as the following day happened to be a non working day of the Court.
It appears that confronted with the said situation, the petitioner and the other Commissioner realised their mistake and later agreed to the engagement of any other suitable counsel.
Thereafter, Shri R, another senior advocate was engaged who represented the CommisSion before the High Court on 11th November, 1989.
The second instance gives a glimpse of a still more contentious attitude adopted by the petitioner.
It appears that a "closed door" meeting of the Chief Electoral Officers was held on December 14, 1989 and the Chief Election Commis sioner in his inaugural speech had 178 referred to the policies, procedures and practices to be followed.
The petitioner objected to this speech insisting that before making the speech he should have been consulted.
He also objected to the manner in which the Chief Election Commissioner handled the subjects and the decisions were taken in the meeting.
This was so in spite of the fact that the petitioner and the other Election Commissioner had participated in the Conference, and everyone participating in it including the juniormost Chief Election Officer was free to express his opinion on the matters covered in the address and the decisions were arrived at on the basis of the views expressed by the majority of the Chief Election Officers.
Although the whole foundation of the contentions advanced on behalf of the petitioner is the need to safe guard the independer of the Commission, we are afraid that the manner of appointment the petitioner and the other Election Commissioner, and the attitude adopted by them in the discharge of their functions was hardly calculated to ensure free and independent functioning of the Commission, much less its smooth working.
In the circumstances and in the absence of rules to regulate the relationship between the Chief EleCtion Commissioner and the other Election Commissioners no one need shed tears that the posts were abolished.
There is no doubt that two heads are better than one, and particularly when an institution like the Election Commission is entrusted with vital functions, and is armed with exclusive uncontrolled powers to execute them, it is both necessary and desirable that the powers are not exer cised by one individual, however, all wise he may be.
It ill conforms the tenets of the democratic rule.
It is true that the independence of an institution depends upon the persons who man it and not on their number.
A single indi vidual may sometimes prove capable of withstanding all the pulls and pressures, which many may not.
However, when vast powers are exercised by an institution which is accountable to none, it is politic to entrust its affairs to more hands than one.
It helps to assure judiciousness and want of arbitrari sections The fact, however, remains that where more individuals than one, man an institution, their roles have to be clearly defined, if the functioning of the institution is not to come to a naught.
It is true that the Union of India in their reply have not been all that candid with the reasons for the abolition of the posts.
They have merely stated that since the Constitution (64th & 65th Amendment) Bills had lapsed and the revision of electoral rolls on account of 179 the lowering of the age was also completed before the gener al elections which took place in November, 1989, the reasons and events which occasioned the appointment of the Election Commissioners ceased to exist, and the Government on assess ing the prevailing position bona fide came to the conclusion that the volume of work in the changed context and circum stances did not warrant the continuance of the posts.
These reasons are not convincing since, as we have pointed out earlier from the contents of the reply filed by the 2nd respondent, they had ceased to be relevant even before the appointment of the two Commissioners was made on 16th Octo ber, 1989.
Yet, the appointments were made and the rules governing their service conditions were also promulgated simultaneously, which assured them the tenure of five years or upto the superannuation age of 65 years whichever hap pened earlier.
The facts as they appear from record, there fore, show that the then Government had thought it fit to make the two appointments although there was no need to do so.
What other considerations weighed with the then Govern ment in making the appointments is anybody 's guess, and we do not propose to go into them.
But we expected that the Union of India would candidly admit the initial mistake of making the said appointments rather than defend them on" non existent grounds.
It appears that there is an impression in some quarters that if the ' Government admits its mistake whether it is committed by the same Government or the earli er Government, it loses its face.
Nothing can be farther from reality.
In a democratic regime, the Government repre sents the people.
It adds to its respectability and credi bility, if the Government also owns its mistakes frankly.
The ' truth of the matter as is apparent from the record is that not only there was no need for the said appointments, but the appointments in the absence of the definition of their roles in the Commission, was creating an untoward and unworkable situation rendering the Commission internally torn and ineffectual in its functioning.
There was, of course, an option before the Government, viz., to continue with the experiment of the multi member Commission by defin ing the roles of the new Commissioners.
This course, howev er, might have required either framing of the rules of business or enactment of a statute or an amendment to the provisions of Article 324 in view particularly of the provi sions of the 2nd proviso to clause (5) thereof.
We express no opinion on the same except stating that if the said course was thought of, it might have taken a considerable time.
In the meanwhile, the intractable situation in the Commission 's working would have continued and might even have deteriorated.
In the view that we have taken, namely, that there was no 180 need for the posts of the Election Commissioners at the time the appointments were made and that in the absence of a clear definition of their role in the Commission, particu larly, vis a vis the Chief Election Commissioner, the ap pointments were an oddity, the abolition of the posts far from striking at the independence of the Commission paved the way for its smooth and effective functioning.
In view further of the fact that for reasons stated above, it is not possible to hold that the Election Commissioners have the same powers and the authority as the Chief Election Commis sioner, and it may well be that the Chief Election Commis sioner has the power to disregard and override the views of the Election Commissioners, the abolition of their posts least infringed on the independence of the Commission.
Hence, we are not enamoured of the second contention ad vanced on behalf of the petitioner, viz. that the abolition of the posts tampered directly or indirectly with the inde pendence of the Commission.
As regards the first contention, namely, that in view of the service rules, the Election Commissioners were entitled to remain in their posts for a period of five years or till they attained the age of 65 years whichever event occurred earlier, we are of the view that this is not a case of a premature termination of service.
It is a clear case of the abolition of posts on account of the reasons stated earlier and the termination of the service is a consequence thereof.
Hence, the termination of service is not open to challenge on the ground of any illegality.
For the same reason, we are also not attracted by the argument that the notifications abolishing the two posts and removing the petitioner and the other Election Commissioner were issued mala fide at the instance of the Chief Election Commissioner who allegedly wanted to get rid of them.
We are satisfied, on the basis of the record, that the Chief Election Commis sioner had never recommended their removal.
In fact, the petitioner himself has admitted that his removal and the removal of the other Election Commissioner was not on the recommendation of the Chief Election Commissioner under the 2nd proviso to clause (5) of Article 324.
There is further nothing brought on record by the petitioner to show that even otherwiSe the Goverment while abolishing the posts had acted on the suggestion of the Chief Election Commissioner.
On the other hand, it is clear from the contents of the petition as well as the reply filed by the 2nd respondent that although there were bickerings even on petty issues, all the decisions were taken ultimately unanimously.
It is, however, another thing that this unison in working, in the circumstances, could not have been guaranteed for all time to come, and the Government if they desired the contintu ance of the two Commissioners has an option to make the 181 rules of business etc.
as stated earlier.
That the Govern ment chose one rather than the other option is no ground to allege mala fides against them and much less against the Chief Election Commissioner.
It may be pointed out in this connection that as admitted by the petitioner himself al though the earlier three Chief Election Commissioners had opined against a multi member Commission, the second re spondent Chief Election Commissioner was inclined in favour of the concept.
Hence, the allegations of mala fides against the Chief Election Commissioner are hard to accept.
The last of the contentions advanced on behalf of the petitioner is in two parts.
The first part relates to the material loss on account of the cutting short of the tenure of the petitioner.
Such loss is not unknown in a service career and is one of the exigencies of employment.
The creation and abolition of post is the prerogative of the executive, and in the present case of the President.
Article 324(2) leaves it to the President to fix and appoint such number of Election Commissioners as he may from time to time determine.
The power to create the posts is unfettered.
So also is the power to reduce or abolish them.
If, therefore, the President, finding that there was no work for the Elec tion Commissioners or that the Election Commission could not function, decided to abolish the posts, that was an exigency of the office held by the petitioner.
In fairness to the petitioner, we may record here that Shri Gopal Subramaniam appearing for him made it clear at the very outset that the petitioner had not approched the court to make a grievance of his material loss but to assert the principle that the independence of the Election Commission should not be per mitted to be tampered with, either directly or indirectly by the subterfuge of the abolition of the posts.
We have dealt with this aspect earlier inquite somedetail 26.
We, however, find, some force in the second part of the contention.
The petitioner in paragraph 30 of his peti tion has averted as follows: "The abolition of the post of Election Commis sioners was (lead news) in the Doordarshan Hindi News Bulletins at 7.30 pm and 8.40 pm with photos of the two 'removed ' Commissioners being flashed on the TV screen.
They quoted the Government Press Note which sought to justify abolition of the two posts on the basis of a review of the work of the Election Commission but before that an earlier left out shot of the Prime Minister 's Press Conference was 182 shown in which viewers were made to hear a question of a Press report casting aspersions on the two newly appointed Election Commis sioners with the Prime Minister answering that the Government would review these appointments along with other electoral reforms.
This was clearly defamatory and it was clear to every viewer that the two Election Commissioners had been 'removed ' for the reasons contained in the insinuation of the press reporter and the official reasons justifying abolition of the posts were a mere eye wash. . " In their reply to this paragraph the Union of India in paragraph 27 have stated: "With reference to para 30, it is submitted that the allegations and contentions contained therein are irrelevant and have no bearing on the issues arising in the writ petition.
The said allegations in any event are not admitted.
and the petitioner is put to strict proof thereof.
" Although we do not find any substance in the grievance of the petitioner against the answer given by the Prime Minis ter to the Press Reporter in the Press Conference, we do find that the flashing of the photos of the petitioner and the other Election Commissioner in their Hindi News Bulletin at 7.30 pm and 8.40 pm by the Doordarshan was clearly un called for.
There is nothing on record to show at whose instance it was done.
But the act deserves condemnation in the strongest language.
This may probably be the first in stance where the photos of the officers whose services were terminated had been flashed on the TV screen.
That the Government should casually dismiss this incident by a me chanical denial of it, adds poignancy to the episode.
We wish that the Government had adopted a reasonable attitude and given a plausible answer to the allegation.
It was within their powers to investigate the incident.
Instead, they have non chalantly stated in the reply that "the said allegations in any event are not admitted and the petitioner is put to strict proof thereof".
We must record our strong disapproval of the attitude adopted.by the Government to wards the erstwhile public servants.
It has neither enhanced the prestige of the Government nor of the public service.
That the flashing of the photos on the TV screen had nothing to do with the validity of the abolition of the posts and the consequential termination of the services of the peti tioner and the other Election Commissioner is no argument to justify the event.
Government could have offered to investi gate the 183 event and to make proper amends to the petitioner and the other Election Commissioner.
This event was cited by the petitioner as a proof of vindictiveness of the Janta Dal which was a partner in the then Government and which was allegedly aggrieved by the stand taken by the two Commis sioners in the dispute relating to its symbol in the 1989 elections.
It was, therefore, all the more necessary to deal with it seriously.
We, however, leave the matter here be cause for the reasons we have discussed earlier, the inci dent has no bearing on the result of the petition.
The petition, thus, fails and the rule is dis charged.
In the circumstances of the case, there will be no order as to costs.
.T.N.A. Petition dismissed.
| Article 324(2) of the Constitution empowers the Presi dent to fix and appoint such number of Election Commission ers as he may from time to time determine.
By a notification dated 7.10.1989 the President fixed the number of Election Commissioners at two.
By another notification dated 16.10.89, the President appointed the petitioner and another person as Election Commissioners.
Simultaneously, the Presi dent also promulgated the rules regulating the conditions of service and tenure of the Election Commissioners under which an Election Commissioner was to hold office for a term of five years or until he attained the age of 65 years whichev er was earlier.
However, on 1st January, 1990, the President issued two notifications rescinding the earlier two notifications dated 7.10.89 and 16.10.89.
Consequently, the two posts of Elec tion Commissioners were abolished and the appointment of the petitioner and the other Election Commissioner came to an end.
159 160 The petitioner filed a writ petition in this Court challenging the legality of the notifications dated 1st January, 1990 contending that: (a) the Election Commission being an independent body, the abolition of the posts of Election Commissioners and their consequent removal tampered with the independence of the Election Commission directly or indirectly; (b) in view of the service rules made by the President the Election Commissioners were entitled to con tinue in office for full tenure of five years or until they attained the age of 65 years whichever was earlier; (c) the notification abolishing the two posts and removing the petitioner and the other Election Commissioner were issued mala fide under the advice of the Chief Election Commission er; (d) Petitioner 's removal affected him materially; and (e) the flashing of the photographs of the petitioner and other Election Commissioner while announcing their removal on the television during a news bulletin subjected them to severe loss of dignity and reputation. ' Dismissing the petition, this Court, HELD: 1.
The Election Commission as envisaged by the Constitution is an independent institution and has to func tion as such.
In the discharge of its duties and functions it is not amenable to the control of any other body.
The salient features of the composition of the Election Commis sion as given in Article 324 are that the Commission shall always consist of a permanent incumbent, viz. the Chief Election Commissioner.
But the President has also been given the power to appoint such number of other Election Commis sioners as he may, from time to time, fix.
While the ap pointment of the Chief Election Commissioner is a must, the appointment of the other Election Commissioner or Commis sioners is not obligatory.
The number of other Election Commissioners is left to the discretion of the President depending upon the need felt from time to time.
[169A B C] 1.1 However, in the matter of the conditions of service and tenure of office of the Election Commissioners, a dis tinction is made between the Chief Election Commissioner on the one hand and Election Commissioners and Regional Commis sioners on the other.
Whereas the conditions of service and tenure of office of all are to be such as the President may, by rule determine, a protection is given to the Chief Elec tion Commissioner in that his conditions of service shall not be varied to his disadvantage after his appointment, and he shall not be removed from his office except in like manner and on the like grounds as a judge of the Supreme Court.
These protections are not available either to the Election Commissioners or to the Regional Commissioners.
Their conditions 161 of service can be varied even to their disadvantage after their appointment and they can be removed on the recommenda tion of the Chief Election Commissioner, although not other wise.
Thus in these two respects not only the Election Commissioners are not on par with the Chief Election Commis sioner, but they are also placed on par with the Regional Commissioners although the former constitute the Commission and the latter do not and are only appointed to assist the Commission.
[169H, 170A B C] Article 324(4) though spells out the relationship be tween Election Commission and Regional Commissioners does not help to throw light on the relationship between the Chief Election Commissioner and Election Commissioners inter se.
The fact that the Regional Commissioners are to be appointed by the President in consultation with the Commis on to asist the Commission to perform its functions, though places the Election Commissioners on a higher pedestal than the Regional Commissioners does not raise them to the status of the Chief Election Commissioner.
The Chief Election Commissioner does not, therefore, appear to be primus inter partes, i.e. first among the equals, but is intended to be placed in a distinctly higher position.
Therefore, it cannot be held that the Election Commissioners have the same powers and the authority as the Chief Election Commissioner, and it may well be that the Chief Election Commissioner has the power to disregard and override the views of the Election Commissioners the abolition of their posts therefore least infringed on the independence of the Commission.
[175B, 174H, 175A, 170E, 180B] 1.2 The petitioner and the other Election Commissioners were appointed when the work of the Commission did not warrant their appointment.
It is evident from record that the then Government had thought it fit to make the two appointments although there was no need to do so.
What other considerations weighed with the then Government in making the appointment is anybody 's guess, and the Court does not propose to go into them.
However, it was expected that the Union of India would candidly admit the initial mistake of making the said appointments rather than defend them on non existent grounds.
Not only there was no need for the said appointments, but also the appointments in the absence of the definition of their roles in the Commission were creating an untoward and unworkable situation rendering the Commission internally torn and ineffectual in its function ing.
Thus the manner of appointment of the Election Commis sioners and the attitude adopted by them in the discharge of their functions was hardly calculated to ensure free and independent functioning of the Commission, much less its smooth working.
[175E, 179C D, E, 178C] 162 1.2.
In view of the fact that there was no need for the posts of the Election Commissioners at the time the appoint ments were made and that in the absence of a clear defini tion of their role in the Commission, particularly, vis a vis the Chief Election Commissioner, the appointments were an oddity, the abolition of the posts far from striking at the independence of the Commission paved the way for its smooth and effective functioning.
[179H, 180A] 2.
The instant case is not a case of a premature termi nation of service.
It is a clear case of the abolition of posts and the termination of the service is a consequence thereof.
Hence the termination of service is not open to challenge on the ground of any illegality.
[180D E] 3.
The allegations of mala fides against the Chief Election Commissioner are hard to accept.
The removal of the Election Commissioners was not on the recommendations of the Chief Election Commissioner under the 2nd proviso to clause (5) of the Article 324.
Nothing has been brought on record to show that even otherwise the Government while abolishing the posts had acted on the suggestion of the Chief Election Commissioner.
On the other hand, the records shows that although there were bickerings even on petty issues, all the decisions were taken ultimately unanimously.
It is, however, another thing that this unison in working, in the circum stances, could not have been guaranteed for all time to come, and the Government if they desired the continuance of the two Commissioners had an option to make the rules of business.
That the Government chose one rather than the other option is no ground to allege mala fides against them and much less against the Chief Election Commissioner.
[181B; 180F H, 181A] 4.
Material loss on account of cutting short of the tenure is not unknown in a service career and is one of the exigencies of employment.
The creation and abolition of post is the prerogative of the executive, and in the present case of the President.
Article 324(2) leaves it to the President to fix and appoint such number of Election Commissioners as he may from time to time determine.
The power to create the posts is unfettered.
So also is the power to reduce or abolish them.
If, therefore, the President, finding that there was no work for the Election Commissioners or that the Election Commission could not function, decided to abolish the posts, that was an exigency of the office held by the petitioner.
[181C D] 5.
The flashing of the photographs of the petitioner and the other Election Commissioner in the news bulletin by the Doordarshan was 163 clearly uncalled for.
Although there is nothing on record to show at whose instance it was done, yet the act deserves condemnation in the strongest language.
It was within the powers of the Government to investigate the incident and it could have offered to investigate the event and to make proper amends to the petitioner and the other Election Commissioner.
Instead it has casually dismissed the incident by a mechanical denial of it.
The attitude adopted by the Government towards the erstwhile public servants is strongly disapproved.
[182E F G H, 183A] 6.
It appears that there is an impression in some quar ters that if the Government admits its mistake whether it is committed by the same Government or the earlier Government, it loses its face.
Nothing can be farther from reality.
In a democratic regime, the Government represents the people.
It adds to its respectability and credibility, if the Govern ment also owns its mistakes frankly.
[179D E] 7.
In the absence of rules to the contrary, the members of a multi member body are not and need not always be on par with each other in the matter of their rights, authority and powers.
[174C] 7.1 It is an acknowledged rule of transacting business in a multimember body that when there is no express provi sion to the contrary, the business has to be carried on unanimously.
The rule to the contrary such as the decision by majority, has to be laid down specifically by spelling out the kind of majority whether simple special of all the members or of the members present and voting etc.
[174E] 7.2 In a case such as that of the Election Commission which is not merely an advisory body but an executive one, it is difficult to carry on its affairs by insisting on unanimous decisions in all matters.
No procedure has been laid down for transacting the business when Election Commis sioners are appointed.
Hence, a realistic approach demands that either the procedure for transacting business is spelt out by a statute or a rule either prior to or simultaneously with the appointment of the Election Commissioners or that no appointment of Election Commissioners is made in the absence of such procedure.
[174F G] 8.
There is no doubt that two heads are better than one, and particularly when an institution like the Election Commission is entrusted with vital functions, and is armed with exclusive uncontrolled power to execute them, 'it ' is both necessary and desirable that the powers are not exer cised by one individual, however, all wise he may be.
It iII conforms the tenets of the democratic rule.
It is true that the inde 164 pendence of an institution depends upon the persons who man it and not on their number.
A single individual may some times prove capable of withstanding all the pulls and pres sures, which many may not.
However, when vast powers are exercised by an institution which is accountable to none, it is politic to entrust its affairs to more hands than one.
It helps to assure judiciousness and want of arbitrariness.
The fact, however, remains that where more individuals than one man an institution, their role have to be clearly defined, if the functioning of the institution is not to come to a naught.
[178E G]
|
(Civil) No. 1410 of 1987.
(Under Article 32 of the Constitution of India).
WITH Writ Petition (Criminal) No. 528 of 1987.
AND Writ Petition (Civil) No. 1372 of 1987.
J.P. Verghese, Aby T. Varkey and N.N. Sharma for the Petitioners.
Altar Ahmed, ASG.
U.N. Bachawat, R.B. Mishra, Ms. A. Subhashini and Uma Nath Singh for the Respondents.
The Judgment of the Court was delivered by SHARMA, J.
By these three petitions under Article 32 of the Constitution, the petitioners who are foreign nationals, have challenged the order dated 8.7.1987 whereby their prayer for further extension of the period of their stay in India was rejected and they were 153 asked to leave the country by the 3 1st July, 1987.
Mr. Louis De Raedt, petitioner in W.P. (C) No. 1410 of 1987, came to India in 1937 on a Belgium passport with British visa and Mr. B.E. Getter the petitioner in W.P. (Crl.) No. 528 of 1987 in 1948 on an American passport and both have been engaged in Christian missionary work.
The petitioner in W.P. (C) No. 1372 of 1987, Mrs. S.J. Getter is Mr. B.E. Getter 's wife.
Mr. Verghese, the learned counsel, who ap peared for the three petitioners, referred to the facts in W.P. (C) No. 1410 of 1987 and stated that the cases of the other two petitioners are similar and they are entitled to the same relief as Mr. Louis De Raedt.
According to his case, Mr. Louis De Raedt has been staying in India continuously since 1937 excepting on two occasions when he went to Belgium for short periods in 1966 and 1973.
It has been contended that by virtue of the provi sions of Article 5(c) of the Constitution of India the petitioner became a citizen of this country on 26.11.1949, and he cannot, therefore, be expelled on the assumption that he is a foreigner.
Referring to the it was urged that power under Section 3(2)(c) could not be exer cised because the Rules under the Act have not been framed so far.
Alternatively, it has been argued that the power to expel an alien also has to be exercised only in accordance with the principles of natural justice and a foreigner is also entitled to be heard before he is expelled.
For all these reasons it is claimed that the impugned order dated 8.7.1987 being arbitrary should be quashed and the authori ties should be directed to permit the petitioners to stay on.
It has been contended by Mr. Verghese that after the independence of India, appropriate orders were passed per mitting many foreign Christian missionaries to stay on permanently in the country but, as in 1950 petitioner Mr. Louis De Raedt was working in certain remote area of the Adivasi belt in Bihar, he could not obtain the necessary order in this regard.
Later, however, he had also filed applications for the purpose which have remained undisposed of till today.
1985 an order was passed asking him to leave the country, and he made a representation to the authorities on 20.9.
1985, a true copy Whereof is Annexure I to the writ petition.
On 1.3.1986 he filed another application for naturalisation, a copy whereof has been marked as Annexure II.
A copy of his third application dated 15.3.1986 is Annexure III.
The impugned order Annexure IV was passed in this background.
The main ground urged by the learned counsel is based on 154 Article 5 of the Constitution, which reads as follows: "5.
Citizenship at the commencement of the Constitution At the commencement of this Constitution every person who has his domicile in the territory of India and (a) who was born in the territory of India, or (b) either of whose parents was born in the territory of India; or (c) who has been ordinarily resident in the territory of India for not less than five years immediately preceding such commencement, shall be a citizen of India.
" The argument is that since Mr. Louis De Raedt was staying in this country since 1937, that is, for a period of more than five years immediately preceding the commencement of the Constitution, he must be held to have duly acquired Indian citizenship.
One of the necessary conditions mentioned in Article 5 of the Constitution is that the person concerned must be having his domicile in the territory of India at the com mencement of the Constitution.
The question is as to whether the petitioner fulfils this condition? The facts stated by the petitioner himself do not leave any room for doubt that he did not have his domicile here.
In his application dated 20.9.1985 addressed to the Home Minister, Government of Madhya Pradesh, Bhopal, Annexure I, the petitioner stated that he had been staying in this country on the basis of residential permit renewed from time to time and when he had gone to Belgium, "No Objection to Return" Certificate was issued without difficulty.
He asserted that since he was working in education and social work for a long period he was "more Indian than Belgium".
Towards the end of his application he stated thus: "Therefore, I plead for a cancellation of the above order on compassionate ground.
I would request Your Honour to kindly allow me to stay in India till the end of my life by extending my residential permit.
For this act of kindness I will be ever grate ful to (emphasis added) 155 In his application dated 1.3.
1986 addressed to the Collec tor, Surguja (Madhya Pradesh), which is Annexure II, he mentioned the subject as "request for naturalisation".
In this application he referred to the provisions of Article 5 of the Constitution as a basis of his claim but concluded his prayer thus: "If however Government decides that I have LOST my citizenship (sic) would be grateful to be informed about it.
So that I can apply under one of the naturalisation Act.
(Sic)" He reiterated his stand in Annexure III dated 15.3.
The entire relevant official records were available with the learned counsel for the respondents during the hearing of the case, which indicated that the impugned order (Annexure IV) was passed on the basis of another application of the petitioner filed earlier on 25.1.
Photostat copies of the said application were filed and kept on the records of the case.
It was stated therein that the autho rised period for his stay in India was going to expire on 3.3. 1980.
It contained a prayer for the extension of the period of stay by one year.
The petitioner mentioned the reason for extension of this stay thus: "to do further social work as a missionary".
The purpose of his visit to India was also similarly mentioned: "to do social work as a missionary".
There was no indication whatsoever in the said application that he intended to stay in this country on a permanent basis.
The period for which the extension was asked for being one year only indicated that by 1980 he had not decided to reside here permanently.
Mr. Verghese has contended that the fact that the petitioner has been staying in this country since 1937 and visited Belgium only twice is sufficient by itself to estab lish his case of domicile in India.
It was argued that the petitioner 's case cannot be rejected merely for the reason that he has been holding a foreign passport.
Reliance was placed on Mohd. Ayub Khan vs Commissioner of Police, Madras and Another, and Kedar Pandey vs Narain Bikram Sah, ; Reference was also made to Union of India vs Ghaus Mohammed, ; , and it was argued that 'a proceeding ought to have been started against the petitioner under Section 9 of the where he should have been allowed to defend.
The learned counsel submitted that even a foreigner who comes on the strength of a foreign passport, in case of his overstaying has to be heard before he can be thrown out, and this has been denied to the petitioners.
156 8.
Lastly, Mr. Verghese contended that in no event the Superintendent of Police who signed the impugned order, i.e. Annexure, IV, is authorised to direct deportation of the petitioner.
There is no force in the argument of Mr. Verghese thai for the sole reason that the petitioner has been stay ing in this country for more than a decade before the com mencement of the Constitution, he must be deemed to have acquired his domicile in this country and consequently the Indian citizenship.
Although it is impossible to lay down an absolute definition of domicile, as was stated in Central Bank of India vs Ram Narain, ; it is fully established that an intention to reside for ever in a coun try where one has taken up his residence is an essential constituent element for the existence of domicile in that country.
Domicile has been described in Halsbury 's Laws of England, 4th edition, Volume 8, Paragraph 42 1) as the legal relationship between individual and a territory with a distinctive legal system which invokes that system as his personal law.
Every person must have a personal law, and accordingly every one must have a domicile.
He receives at birth a domicile of origin which remains his domicile, wherever he goes, unless and until he acquires a new domi cile.
The new domicile, acquired subsequently, is generally called a domicile of choice.
The domicile of origin is received by operation of law at birth and for acquisition of a domicile of choice one of the necessary conditions is the intention to remain there permanently.
The domicile of origin is retained and cannot be divested until the acquisi tion of the domicile of choice.
By merely leaving his coun try, even permanently, one will not, in the eye of law, lose his domicile until he acquires a new one.
This aspect was discussed in Central Bank of India vs Ram Narain (supra) where it was pointed out that if a person leaves the country of his origin with undoubted intention of never returning to it again, nevertheless his domicile of origin adheres to him until he actually settles with the requisite intention in some other country.
The position was summed in Halsbury thus: "He may have his home in one country, but be deemed to be domiciled in another." Thus the proposition that the domicile of origin is retained until the acquisition of a domicile of choice is well estab lished and does not admit of any exception.
For the acquisition of a domicile of choice, it must he shown that the person concerned had a certain state of mind, the animus manendi.
If he claims that he acquired a new domicile at a particular time, he must prove that he had formed the inten tion of making his permanent home in the country of resi dence and of continuing to reside there permanently.
Resi dence alone, unaccompanied by this state of mind, is insuf ficient.
Coming to the facts of the present cases the ques tion which has to be answered is whether at the commencement of the Constitution of India the petitioners had an inten tion of staying here permanently.
The burden to prove such an intention lies on them.
Far from establishing the case which is now pressed before us, the available materials on the record leave no room for doubt that the petitioners did not have such intention.
At best it can be said that they were incertain about their permanent home.
During the rele vant period very significant and vital political and social changes were taking place in this country, and those who were able to make up their mind to adopt this country as their own, took appropriate legal steps.
So far the three petitioners are concerned, they preferred to stay on, on the basis of their passports issued by other countries, and obtained from time to time permission of the Indian authorities for their further stay for specific periods.
None of the applications filed by the petitioners in this connection even remotely suggests that they had formed any intention of permanently residing here.
None of the cases relied upon on behalf of the petitioners is of any help to them.
The case of Mohd. Ayub Khan was one where the appellant had made an application to the Central Government under Section 9(2) of the Indian for the determination of his citizen ship.
Section 9(1) says that if any citizen of India ac quired the citizenship of another country between 26.1. 1950 and the commencement of the , he ceased to be a citizen of India and sub section (2) directs that if any question arises as to whether, when or how any person has acquired the citizenship of another country, he shall be determined by the prescribed authority.
Mohd. Ayub Khan was a citizen of this country at the commencement of the constitution of India and was asked to leave the country for the reason that he had obtained a Pakistani Passport.
The question which thus arose in that case was entirely differ ent.
The case of Kedar Pandey vs Narain Bikram Sah, (supra), does not help the petitioners at all.
On a consideration of the entire facts and circumstances this Court concluded that "the requisite animus manendi as has been proved in the finding of the High Court is correct".
The Respondent Narain Bikram Sah, who claimed to have acquired Indian citizenship, had extensive properties at large number of different places in India and had pro 158 duced many judgments showing that he was earlier involved in litigations relating to title, going upto the High Courts in India and some time the Privy Council stage.
He was born at Banaras and his marriage with a girl from Himachal Pradesh also took place at Banaras and his children were born and brought up in India.
Besides his other activities supporting his case, he also produced his Indian passport.
In the cases before us the learned counsel could not point out a single piece of evidence or circumstance which can support the petitioners ' case, and on the other hand they have chosen to remain here on foreign passports with permission of Indian authorities to stay, on the basis of the said passports.
Their claim, as pressed must, therefore, be rejected.
The next point taken on behalf of the petitioners, that the foreigners also enjoy some fundamental right under the Constitution of this country, is also of not much help to them.
The fundamental right of the foreigner is confined to Article 21 for life and liberty and does not include the right to reside and settle in this country, as mentioned in Article 19(1)(e), which is applicable only to the citizens of this country.
It was held by the Constitution Bench in Hans Muller of Nurenburg vs Superintendent, Presidency Jail, Calcutta and Ors, ; that the power of the Government in India to expel foreigners is absolute and unlimited and there is no provision in the Constitution lettering this discretion.
It was pointed out that the legal position on this aspect is not uniform in all the countries but so far the law which operates in India is concerned, the Executive Government has unrestricted right to expel a foreigner.
So far the right to be heard is concerned, there cannot be any hard and fast rule about the manner in which a person concerned has to be given an opportunity to place his case and it is not claimed that if the authority concerned had served a notice before passing the impugned order, the petitioners could have produced some relevant material in support of their claim of acquisition of citizenship, which they failed to do in the absence of a notice.
The last point that the impugned order (Annexure IV) passed.
by the Superintendent of Police, who was not autho rised to so, is also devoid of any merit.
The order was not passed by the Superintendent of Police; the decision was of the Central Government which was being executed by the Superintendent, as is clear from the order itself.
For the reasons mentioned above, we do not find any merit in the petitions, which are accordingly dismissed, but without costs.
G.N. Petitions dismissed.
| The Petitioners, foreign nationals engaged in Christian missionary work have been staying in India continuously for a long time since pre independence period.
They continued to stay on the basis of resi 149 150 dential permits renewed from time to time.
In 1985 an order was passed asking them to leave the country and they made representations to the authorities, followed by further representations in 1986 for naturalisation further extension of stay.
However by order dated 8.7.1987 their request was rejected and they were asked to leave the country by 31st July, 1987.
The petitioners challenged the said order in the writ petitions filed before this Court.
It was contended by the petitioners that since they were staying in this country for a period of more than five years immediately preceding the commencement of the Consti tution, they should be held to have duly acquired Indian citizenship on the basis of Article 5(e) of the Constitution of India; that their continuous stay in India has estab lished their case of domicile in India which cannot be rejected merely because were holding foreign passports; that proceedings against them have been initiated under section 9 of the enabling them to defend their case; that they were denied hearing; and that in no event the Superintendent of Police who had signed the deportation order was authorised to do so.
Dismissing the Writ Petitions, this Court, HELD: 1.
Every person must have a personal law, and accord ingly every one must have a domicile.
He receives at birth a domicile of origin which remains his domicile, wherever he goes, unless and until he acquires a new domicile.
The new domicile, acquired subsequently, is generally called a domicile of choice.
The domicile of origin is received by operation of law at birth and for acquisition of a domicile of choice one of the necessary conditions is the intention to remain there permanently.
The domicile of origin is retained and cannot be divested until the acquisition of the domicile of choice.
By merely leaving his country, even permanently, one will not, in the eye of law, lose his domicile until he acquires a new one.
This proposition that the domicile of origin is retained until the acquisition of a domicile of choice is well established and does not admit of any exception.
[156D F] Central Bank of India vs Ram Narain, ; , relied on.
Halsbury 's Laws of England, 4th Edn., Vol. 8, para 421, referred to.
One of the necessary conditions mentioned in Article 5 of the 151 Constitution is that the person concerned must be having his domicile in the territory of India at the commencement of the Constitution.
It is not established that they had such an intention for the sole reason that the Petitioners 'have been staying in India for more than a decade before the commencement of the Constitution, and it cannot be deemed that they acquired domicile in India and consequently Indian citizenship.
[154E] 3.1.
For the acquisition of a domicile of choice, it must be shown that the person concerned had a certain State of mind, the animus manendi.
If he claims that he acquired a new domicile at a particular time, he must prove that he had formed the intention of making his permanent home in the country of residence and of continuing to reside there permanently.
Residence alone, unaccompanied by this state of mind, is insufficient.
[156H; 157A] 3.2.
The burden to prove that the petitioners had an intention to stay permanently in India lies on them.
The available materials on the record leave no room for doubt that the petitioners did not have such intention.
At best it can be said that they were uncertain about their permanent home.
During the relevant period very significant and vital political and social changes were taking place in this country, and those who were able to make up their mind to adopt this country as their own, took appropriate legal steps.
The petitioners preferred to stay on, on the basis of their passports issued by other countries, and obtained from time to time permission of the Indian authorities for their further stay for specific periods.
None of the applications filed by the petitioners in this connection even remotely suggested that they had formed an intention of permanently residing here.
[157B D] Mohd. Ayub Khan vs Commissioner of Police, Madras, and Kedar Pandey vs Narain Bikram Sah, ; , distinguished.
Union of India vs Ghaus Mohammed, ; , referred to.
The fundamental right of the foreigner is confined to Article 21 for life and liberty and does not include the right to reside and settle in this country, as mentioned in Article 19(1)(e), which is applicable only to the citizens of this country.
The power of the Government in India to expel foreigners is absolute and unlimited and there is no provision in the Constitution fettering this discretion.
The legal position on this aspect is not uniform in all the countries but so far the law which 152 operates in India is concerned, the Executive Government has unrestricted right to expel a foreigner.
[158C E] Hans Muller of Nurenburg vs Superintendent, Presidency Jail, Calcutta & Ors., ; , relied on.
So far the right to be heard is concerned, there cannot be any hard and fast rule about the manner in which a person concerned has to be given an opportunity to place his case and it is not claimed that if the authority concerned had served a notice before passing the impugned order, the petitioners could have produced some relevant material in support of their claim of acquisition of citizenship, which they failed to do in the absence of a notice.
[158E F] 6.
The contention that the Superintendent of Police was not authorised to direct deportation of the petitioners, is devoid of merit.
Actually the order was not passed by the Superintendent of Police.
It was the decision of the Central Government, which was being executed by the Superintendent of Police.
This is clear from the order.
[158G]
|
are the persons inti mately, vitally and adversely affected by any action of the BDA and the Government which is destructive of the environ ment and which deprives them of facilities reserved for the enjoyment and protection of the health of the public at large.
Being residents of the locality, the petitioners are naturally aggrieved by the orders in question, and they have, therefore, the necessary locus standi.
[131H, 132A B] & CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2750 of 1991.
From the Judgment and Order dated 13.9.89 of the Karna taka High Court in W.A. No. 162 of 1989.
B.R.L. lyengar, S.S. Javali, R.V. Narasimhamurthi, E.C. Vidyasagar, G.V. Shantharaju, D.N.N. Reddy, Raju Ramachan dran, K. Jagan Mohan Rao, M. Veerappa and R.P. Wadhwani for the appearing parties.
The Judgment of the Court was delivered by THOMMEN, J.
Leave granted.
I have had the advantage of reading in draft the judg ment of my learned Brother Sahai, J. and I am in complete agreement with what he has stated.
It is in support of his reasoning and conclusion that I add the following words.
A site near the Sankey 's Tank in Rajmahal Vilas Exten sion in the City of Bangalore was reserved as an open space in an improvement scheme adopted under the City of Bangalore Improvement Act, 1945.
This Act was repealed by section 76 of the Bangalore Development Authority Act, 1976 (Karnataka Act No. 12 of 1976) (hereinafter referred to as the "Act") which received the assent of the Governor on 2.3.
1976 and is deemed to have come into force on 20.12.
By a notification issued under section 3 of the Act, the Govern ment constituted the Bangalore Development Authority (the "BDA") thereby attracting section 76 which, so far as it is material, reads: "section 76.
REPEAL AND SAVINGS (1) On the issue of the 117 notification under sub section (1) of section 3 constituting the Bangalore Development Authority, the City of Bangalore Improvement Act, 1945 (Mysore Act 5 of 1945) shah stand repealed.
(2). . . . (3). . . .
Provided further that anything done or any action taken (including any appointment notification rule, regulation, order, scheme or bye law made or issued, any permission granted) under the said Act shall be deemed to have been done or taken under the correspond ing provisions of this Act and shall continue to be in force accordingly unless and until superseded by anything done or any action taken under this Act: Provided also that any reference in any enactment or in any instrument to any provision of the repealed Act shall unless a different intention appears be construed as a reference to the corresponding provision of this Act.
(emphasis supplied) Accordingly, the scheme prepared under the repealed enact ment is deemed to have been prepared and duly sanctioned by the Government in terms of the Act for the development of Rajmahal Vilas Extension.
In the scheme so sanctioned the open space in question has been reserved for a public park.
However, pursuant to the orders of the State Government dated 27.5.1976 and 11.6.1976 and by its resolution dated 14.7.1976, the BDA allotted the open space in favour of the appellant, a medical trust, for the purpose of constructing a hospital.
This site is stated to be the only available space reserved in the scheme for a public park or play ground.
This allotment has been challenged by the writ petitioners (respondents in this appeal) 'who are residents of the locality on the ground that it is contrary to the provisions of the Act and the scheme sanctioned thereunder, and the legislative intent to protect and preserve the environment by reserving open space for 'ventilation ', recreation and play grounds and parks for the general pub lic.
118 The writ petitioners, being aggrieved as members of the general public and residents of the locality, have chal lenged the diversion of the user and allotment of the site to private persons for construction of a hospital.
The learned Single Judge who heard the writ petition in the first instance found no merit in it and dismissed the same.
He held that, a hospital being a civic amenity, the allotment of the site by the BDA in favour of the present appellant for the purpose of constructing a hospital was valid and in accordance with law.
On appeal by the respond ents (the residents of the locality) the learned Judges of the Division Bench held that, the area having been reserved in the sanctioned scheme for a public park, its diversion from that object and allotment in favour of a private body was not permissble under the Act, even if the object of the allotment was the construction of a hospital.
The learned Judges were not impressed by the argument that the proposed hospital being a civic amenity, the Act did not prohibit the abandonment of a public park for a private hospital.
Accord ingly, allowing the respondents ' appeal and without preju dice to a fresh allotment by the BDA of any alternative site in favour of the present appellant, according to law, the writ petition was allowed and the allotment of the site in question was set aside.
The appellant 's counsel submits that the learned Judges of the Division Bench exceeded their jurisdiction in setting aside an allotment which was purely an administrative action taken by the BDA pursuant to a valid direction issued by the Government in that behalf.
He submits that in the absence of any evidence of mala fide the impugned decision of the BDA was impeccable and not liable to be interfered with in writ jurisdiction He says that the decision to allot a site for a hospital rather than a park is a matter within the discre tion of the BDA.
The hospital, he says, is not only an amenity, but also a civic amenity under the Act, as it now stands, and the diversion of the user of the land for that purpose is justified under the Act.
The respondents, on the other hand, contend that it was improper to confer a largesse on a private party at the expense of the general public.
The special consideration extended to the appellant, they say, was not permissible under the Act.
To have allotted in favour of the appellant an area reserved for a public park, even if it be for the purpose of constructing a hospital, was to sacrifice the public interest in preserving open spaces for 'ventilation ', recreation and protection of the environment 119 The scheme is undoubtedly statutory in character.
In view of the repealing provisions contained in section 76 of the Act, which we have in part set out above the impugned actions affecting the scheme will be examined with reference to the Act.
The validity of neither the Act nor the scheme is doubted.
The complaint of the writ petitioners (respond ents) is that the scheme has been violated by reason of the impugned orders.
The scheme, they point out, is a legitimate exercise of statutory power for the protection of the resi dents of the locality from the ill effects of urbanisation, and the impugned orders sacrificing open space reserved for a public park is an invalid and colourable exercise of power to suit private interest at the expense of the general public.
The Act, as enacted in 1976, has undergone several changes, but the definition of 'amenity ' in clause (b) of section 2 remains unchanged. 'Amenity ' includes various 'conveniences ' such as road, drainage, lighting etc.
and such other conveniences as are notified as such by the Government.
Section 2 was amended in 1984 by Karnataka Act No. 17 of 1984 to add clause (bb), after clause (b), which distin guished a 'civic amenity ' from an 'amenity '.
Certain ameni ties were specified as civic amenities, such as dispen saries, maternity homes etc.
and those amenities which are notified as civic amenities by the Government.
By Act 11 of 1988, clause (bb) of section 2 was, w.e.f. 21.4.
1984, substituted by the present clause which defines a civic amenity as, amongst others, a dispensary, a hospi tal, a pathological laboratory, a maternity home and such other amenity as the Government may by notification, speci fy.
Clauses (b) and (bb) of section 2 read together show that all those conveniences which are enumerated, or, noti fied by the Government under clause (b), are `amenities '; and, all those amenities which are enumerated, or, notified by the Government under clause (bb), are 'civic amenities '.
Significantly, a hospital is specifically stated to be a 'civic amenity '.
The concept of 'amenity ' under clause (b), however, remains unchanged.
it is not clear from sub clause (i) of clause (bb) whether a hospital which is not run by the Government or a civic 'Corporation ' but, as in the present case, by a private body, would qualify as 'civic amenity '.
Nor is it clear whether a hospital was either an `amenity ' or a 'civic amenity ' until it was specifically stated to be the latter by the Amendment Act 11 of 1988.
The respondents (residents) 120 contend that a hospital did not have the status of an 'amen ity ' and much less a 'civic amenity ' until Act 11 of 1988 so stated.
But perhaps the appellant rightly contends that Act 11 of 1988 was merely clarificatory of what was always the position, and the hospital has always been regarded as an 'amenity ', if not a 'civic amenity '.
However, on the facts of this case, it is unnecessary to pursue this point fur ther.
Nor is it necessary to consider whether a privately owned and managed hospital, as in the present case, is an 'amenity ' for the purpose of the Act.
The question really is whether an open space reserved for a park or play ground for the general public, in accord ance with a formally approved and published development scheme in terms of the Act, can be allotted to a private person or a body of persons for the purpose of constructing a hospital? Do the members of the public, being residents of the locality, have a right to object to such diversion of the user of the space and deprivation of a park meant for the general public and for the protection of the environ ment? Are they in law aggrieved by such diversion and allot ment? To ascertain these points, we must first took at the relevant provisions of the Act.
Chapter III of the Act deals with 'development schemes '.
The BDA is empowered to draw up detailed schemes for the development of the Bangalore Metropolitan Area.
It may, with the previous approval of the Government, undertake from time to time any work for such development and incur expenditure therefor.
The Government is also empowered to require the BDA to take up any development scheme or work and execute the same, subject to such terms and conditions as may be specified by the Government (See section 15).
Section 16 provides that such development schemes must provide for various matters, such as acquisition of land, laying and re laying of land, construction and reconstruc tion of buildings, formation and alteration of streets, drainage, water supply and electricity.
In 1984 this section was amended by Act 17 of 1984 by inserting clause (d) so as to provide for compulsory reservation of portions of the layout for public parks and play grounds and also for civic amenities.
Section 16(1)(d) provides: "section 46.
PARTICULARS TO BE PROVIDED FOR IN A DEVELOPMENT SCHEME Every development scheme under section 15: (1) shall, within the limits of the area com prised in the scheme, provide for: 121 (d) the reservation of not less than fifteen per cent of the total area of the layout for public parks and play grounds and an addition al area of not less than ten percent of the total area of the layout for civic amenities.
" This provision thus treats 'public parks and play grounds ' as a different and separate amenity or convenience from a 'civic amenity '.
15% and 10% of the total area of the layout must respectively be reserved for (1) public parks and play grounds, and, (2) for civic amenities.
The extent of the areas reserved for these two objects are thus separately and distinctly stated by the statute.
The implication of this conceptual distinction is that land reserved for a public park and play ground cannot be utilised for any 'civic amenity ' including a hospital.
16(2) says: "section 16(2) may, within the limits aforesaid, provide for (b) forming open spaces for the better venti lation of the area comprised in the scheme or any adjoining area; The need for open space for 'better ventilation ' of the area is thus emphasised by this provision.
One of the main ob jects of public parks or play grounds is the promotion of the health of the community by means of `ventilation ' and recreation, It is the preservation of the quality of life of the community that is sought to be protected by means of these regulations.
Section 17 lays down the procedure to be followed on completion of a development scheme.
It deals with, amongst other things, the method of service of notice on affected parties.
Section 18 deals with the procedure for sanctioning the scheme.
The BDA must submit to the Government the scheme together with the particulars such as plans, estimates, details of land to be acquired etc.
and also representa tions, if any, received from persons affected by the scheme.
On consideration of the proposed scheme, the Government is empowered under sub section (3) of section 18 to accord its sanction for the scheme.
122 Section 19 says that when necessary sanction is accorded by the Government, it should publish in the Official Gazette a declaration as the sanction accorded and the land proposed to be acquired for the scheme.
Sub section (4) of section 19 says: "19(4) If at any time it appears to the authority that an improvement can be made in any part of the scheme, the Authority may alter the scheme for the said purpose and shall subject to the provisions of sub sections (5) and (6), forthwith proceed to execute the scheme as altered.
" This means that the BDA may, subject to certain restrictions contained in sub sections (5) and (6), alter the scheme, but such alteration has to be carried out pursuant to a formal decision duly recorded in the manner generally followed by a body corporate.
The scheme is a statutory instrument which is administrative legislation involving a great deal of general law making of universal application, and it is not, therefore, addressed to individual cases of persons and places.
Alteration of the scheme must be for the purpose of improvement and better development of the City of Bangalore and adjoining areas and for general application for the benefit of the public at large.
Any alteration of the scheme with a view to conferring a benefit on a particular person, and without regard to the general good of the public at large, is not an improvement contemplated by the section.
See the principle stated in Shri Sitaram Sugar Company Limited & Anr. etc.
vs Union of India & Ors., [1990] 1 SCR 909,937, et.
Section 30 has not been amended, and, so far as it is material, reads: "30.
STREETS ON COMPLETION TO VEST IN AND BE MAINTAINED BY CORPORATION (2) Any open space including such parks and play grounds as may be notified by the Govern ment reserved for ventilalion in any part of the area under the jurisdiction of the Author ity as part of any development scheme sanc tioned by the Government shall be transferred on completion to the Corporation for mainte nance at the expense of the Corporation and shall thereupon vest in the Corporation.
. . . . . . . . (emphasis supplied) 123 Sub section (2) of this section thus refers to open space, including parks and play grounds, notified by the Government as reserved for `ventilation '.
Section 31 prohibits transfer by sale or otherwise of sites for the purpose of construc tion of buildings until all the improvements specified in section 30, including parks and play grounds, have been provided for in the estimates.
Section 32 prohibits any person from forming any extension or layout for the purpose of construction of buildings without specific sanction of the BDA.
Section 33 has empowered the Commissioner of the BDA to order alteration or demolition of buildings con structed otherwise than in conformity with the sanction of the BDA.
These provisions have not undergone any material change.
Chapter V of the Act deals with property and finance of the BDA.
Section 38 reads: "38.
POWER OF AUTHORITY TO LEASE, SELL OR TRANSFER PROPERTY Subject to such restric tions, conditions and limitations as may be prescribed, the Authority shall have power to lease, sell or otherwise transfer any movable or immovable property which belongs to it, and to appropriate or apply any land vested in or acquired by it for the formation of open spaces or for building purposes or in any other manner for the purpose of any develop ment scheme." (emphasis supplied) This section also has not undergone any material change.
It says that, subject to such restrictions, conditions etc., as may be prescribed, the BDA has the power to lease, sell or otherwise transfer any movable or immovable property which belongs, to it, and to appropriate or apply any land vested in it or acquired by it for the formation of 'open spaces ' or for building purposes or in any other manner for the purpose of any development scheme.
This implies that land once appropriated or applied or earmarked by formation of 'open spaces ' or for building purposes or other development in accordance with a duly sanctioned scheme should not be used for any other purpose unless the scheme itself, which is statutory in character, is formally altered in the manner that the BDA as a body corporate is competent to alter.
This section, of course, empowers the BDA to lease or sell or otherwise transfer any property.
But that power has to be exercised consistently with the appropriation or application of land for formation of 'open spaces ' or for building purposes or any other development scheme sanctioned by 124 the Government.
Property reserved for open space in a duly sanctioned scheme cannot be leased or sold away unless the scheme itself is duly altered.
Any unauthorised deviation from the duly sanctioned scheme by sacrificing the public interest in the preservation and protection of the environ ment by means of open space for parks and play grounds and 'ventilation ' will be contrary to the legislative intent, and an abuse of the statutory power vested in the authori ties.
That this is the true legislative intent is left in no doubt by the subsequent amendment by Act 17 'Of 1984, insert ing section 38A, which reads: "38A. PROHIBITION OF THE USE OF AREA RESERVED FOR PARKS, PLAY GROUNDS AND CIVIC AMENITIES FOR OTHER PURPOSES The authority shall not sell or otherwise dispose of any area reserved for public parks and play grounds and civic amenities, for any other purpose and any disposition so made shall be null and void." (emphasis supplied) This amendment of 1984, which came into force on 17.4.84, is merely clarificatory of what has always been the legislative intent.
The new provision clarifies that it shall not be open to the BDA to dispose of any area reserved for public parks and play grounds and civic amenities.
Any such site cannot be diverted to any other purpose.
Any action in violation of this provision is null and void.
The legislative intent to prevent the diversion of the user of an area reserved for a public park or play ground or civic amenity is reaffirmed by the Bangalore Development Authority (Amendment) Act, 1991 (Karnataka Act No. 18 of 1991) which came into force w.e.f. 16.1.1991, and which substituted a new section 38A in the place of the earlier provision inserted by Act 17 of the 1984.
Section 2 of the Karnataka Act 18 of 1991 reads: "section 2.
Substitution of section 38A For sec tion 38A of the Bangalore Development Authori ty Act, 1976 (Karnataka Act 12 of 1976 (here inafter referred to as the principal Act), the following shall be deemed to have been substi tuted with effect from the twenty first day of April, 1984, namely: `38A. Grant of area reserved for civic amenities etc: (1) The Authority shall have the power to lease, sell or 125 otherwise transfer any area reserved for civic amenities for the purpose for which such area is reserved.
(2) The Authority shall not sell or otherwise dispose of any area reserved for public parks and playgrounds and civic ameni ties, for any other purpose and any disposi tion so made shall be null and void Provided that where the allottee commits breach of any of the conditions of allotment, the Authority shall have right to resume such site after affording an opportuni ty of being heard to such allottee.
" This new section 38A, as clarified in the Statement of Objects and Reasons and in the Explanatory Statement at tached to L.A. Bill No. 6 of 1991, removed the prohibition against lease or sale or any other transfer of any area reserved for a civic amenity, provided the transfer is for the same purpose for which the area has been reserved.
This means that once an area has been stamped with the character of a particular civic amenity by reservation of that area for such purpose, it cannot be diverted to any other use even when it is transferred to another party.
The rationale of this restriction is that the scheme once sanctioned by the Government must operate universally and the areas allo cated for particular objects must not be diverted to other objects.
This means that a site for a school or hospital or any other civic amenity must remain reserved for that pur pose, although the site itself may change hands.
This is the purpose of sub section (1) of section 38A, as now substitut ed.
Sub section (2) of section 38A, on the other hand, emphasises the conceptual distinction between 'public parks and play grounds ' forming one category or ' 'space ' and 'civic amenities ' forming another category of sites.
While public parks and play grounds cannot be parted with by the BDA for transfer to private hands by reason of their statu tory dedication to the general public, other areas reserved for.
civic amenities may be transferred to private parties for the specific purposes for which those areas are re served.
There is no prohibition, as such, against transfer of open spaces reserved for public parks or play grounds, whether or not for consideration, but the transfer is limit ed to public authorities and their user is limited to the purposes for which they are reserved under the scheme.
The distinction is that while public parks and play grounds are dedicated to the public at large for common use, and must therefore remain with the State or its instrumentalities, such as the BDA or a Municipal Corporation or any other authority, the civic amenities are not so dedicated, 126 but only reserved for particular or special purposes.
This restriction against allotment of public parks and play grounds is further emphasised by section 3 of the Karnataka Act 18 of 1991 which reads: "S.3.
Validation of allotment of civic amenity sites Notwithstanding anything contained in any law or judg ment, decree or order of any court or other authority, any allotment of civic amenity site by way of sale, lease or otherwise made by the authority after the twenty first day of April, 1984, and before the Seventh day of May, 1988 for the purposes specified in clause (bb) of Section 2 of the principal Act, shall, if such site has been made use of for the purpose for which it is allotted, be deemed to have been validly made and shall, have effect for all purposes as if it had been made under the principal Act, as amended by this Act and accordingly: (i) all acts or proceedings, or things done or allotment made or action taken by the Authority shall, for all purposes be deemed to be and to have always been done or taken in accordance with law; and (ii) no suit or other proceedings shall be instituted, maintained or continued in any court or before any authority for cancellation of such allotment or demolition of buildings constructed on the sites so allotted after obtaining building licences from the Authority or the (local authority concerned or for questioning the validity of any action or) things taken or done under section 38A of the principal Act, as amended by this Act and no court shall enforce or recognise any decree or order 'declaring any such allotment made, action taken or things done under the principal Act, as invalid." The evil that was sought to be remedied by the validation provision is in regard to allotment of "civic amenity sites", and not public parks or play grounds (see also the Explanatory Statement attached to the Bill).
All these provisions unmistakably point to the legislative intent to preserve 'a public park or public play ground in the hands of the general public, as represented by the BDA or any other public authority, and thus prevent private hands from grab bing them for private ends.
it must also be stated here that the validation clause relates to the period between 21.4.
1984 and 7.5. 1988 which was long after the impugned allot ment.
127 Section 65 empowers the Government to give such direc tions to the BDA as are, in its opinion, necessary or expe dient for carrying out the purposes of the Act.
It is the duty of the BDA to comply with such directions.
It is con tended that the BDA is bound by all directions of the Gov ernment, irrespective of the nature or purpose of the direc tions.
We do not agree that the power of the Government under section 65 is unrestricted.
The object of the direc tions must be to carry out the object of the Act and not contrary to it.
Only such directions as arc reasonably necessary or expedient for carrying out the object of the enactment are contemplated by section 65.
If a direction were to be issued by the Government to lease out to private parties areas reserved in the scheme for public parks and play grounds, such a direction would not have the sanctity of section 65.
Any such diversion of the user of the land would be opposed to the statute as well as the object in constituting the BDA to promote the healthy development of the city and improve the quality of life.
Any repository of power be it the Government or the BDA must act reasonably and rationally and in accordance with law and with due regard to the legislative intent.
It is contended on behalf of the appellant that section 38A prohibiting sale or any other disposal of land reserved for 'public parks or play grounds ', and section 16(1)(d) requiring that 15 per cent of the total area of the layout be reserved for public parks and play grounds, and an addi tional area of not less than ten per cent of the total area of the layout for civic amenities, were enacted subsequent to the relevant orders of the Government dated 27.5.1976 and 11.6.1976 and the resolution of the BDA dated 14.7.76 re sulting in the allotment of the site in favour of the appel lant.
Counsel says that at the material time when the Gov ernment made these orders and the BDA acted upon them there was no restriction on the diversion of the user of land reserved for a public park or play ground to any other purpose.
Significantly, the original scheme, duly sanctioned under the Act, includes a public park and the land in ques tion has been reserved exclusively for that purpose.
Al though it is open to the BDA to alter the scheme, no altera tion has been made in the manner contemplated by section 19(4).
It is, however, true that certain steps had been taken by the Government and the BDA to allot the open space in question to the appellant.
My learned brother Sahai, J. has referred to the letter dated 21st April, 1976 addressed by the Chairman of the BDA to the Chief Minister and the endorsement made by the Chief Minister on that letter as well as the Orders of the Government dated 27th May, 1976 and 11th June, 1976 sanctioning conversion of the low level park 128 into a civic amenity site and allotting the same to the appellant.
These orders were followed by a resolution adopt ed by the BDA on 14th July, 1976 reading as follows: "393.
Allotment of C.A. Site to Bangalore Medical Trust for construction of Hospital in Rajmahal viias Extension.
It was resolved `The Government Order No. HMA 249 MNG 76 Bangalore dt. 17.6.1976 regarding allotment of C.A. site situated next to the land allotted to H.K.E. Society in Rajmahal viias Extension, Bangalore, in favour of Banglore Medical Trust for construction of Hospital to read and recorded with confirma tion for further action in the matter".
These documents leave no doubt that the action of the Gov ernment and the BDA resulting in the resolution dated 14th July, 1976 have been inspired by individual interests at the costs and to the disadvantage of the general public.
Public interest does not appear to have guided the minds of the persons responsible for diverting the user of the open space for allotment to the appellant.
Conversion of the open space reserved for a park for the general good of the public into a site for the construction of a privately owned and managed hospital for private gains is not an alteration for improve ment of the scheme as contemplated by section 19, and the impugned orders in that behalf are a flagrant violation of the legislative intent and a colourable exercise of power.
In the circumstances, it has to be concluded that no valid decision has been taken to alter the scheme.
The scheme provides for a public park and the land in question remains dedicated to the public and reserved for that purpose.
It is not disputed that the only available space which can be utilised as a public park or play ground and which has been reserved for that purpose is the space under consideration.
The scheme is meant for the reasonable accomplishment of the statutory object which is to promote the orderly devel opment of the City of Bangalore and adjoining areas and to preserve open spaces by reserving public parks and play grounds with a view to protecting the residents from the iII effects of urbanisation.
It is meant for the development of the city in a way that maximum space is provided for the benefit of the public at large for recreation, enjoyment, 'ventilation ' 129 and fresh air.
This is clear from the Act itself as it originally stood.
The amendments inserting sections 16(1)(d), 38A and other provisions are clarificatory of this object.
The very purpose of the BDA, as a statutory authori ty, is to promote the healthy growth and development of the City of Bangalore and the area adjacent thereto.
The legis lative intent has always been the promotion and enhancement of the quality of life by preservation of the character and desirable aesthetic features of the city.
The subsequent amendments are not a deviation from or alteration of the original legislative intent, but only an elucidation or affirmation of the same.
Protection of the environment, open spaces for recrea tion and fresh air, play grounds for children, promenade for the residents, and other conveniences or amenities are matters of great public concern and of vital interest to be taken care of in a development scheme.
It is that public interest which is sought to be promoted by the Act by estab lishing the BDA.
The public interest in the reservation and preservation of open spaces for parks and play grounds cannot be sacrificed by leasing or selling such sites to private persons for conversion to some other user.
Any such act would be contrary to the legislative intent and incon sistent with the statutory requirements.
Furthermore, it would be in direct conflict with the constitutional mandate to ensure that any State action is inspired by the basic values of individual freedom and dignity and addressed to the attainment of a quality of life which makes the guaran teed rights a reality for all the citizens.
See Kharak Singh vs The State of U.P. & Others, [1964] 1 SCR 332; Municipal Council, Ratlam vs Shri Vardhichand & Ors., ; ; Francis Coralie Mullin vs The Administrator, Union Territory of Delhi & Ors., ; ; Olga Tellis & Ors.
vs Bombay Municipal Corporation & Ors., ; ; State of Himachal Pradesh & Anr.
vs Umed Ram Sharma & Ors., ; and Vikram Deo Singh Tomar vs State of Bihar, ; Reservation of open spaces for parks and play grounds is universally recognised as a legitimate exercise of statutory power rationally related to the protection of the residents of the locality from the illeffects of urbanisation.
See for e.g: Karnataka Town and Country Planning Act, 1961; Maha rashtra Regional and Town Planning Act, 1966; Bombay Town Planning Act, 1954; The Travancore Town and Country Planning Act, 1120; The Madras Town Planning Act, 1920; and the Rules framed under these Statutes; Town & Country Planning Act, 1971 (England & Wales); Encyclopaedia Americana, Volume 22, page 240; Encyclopaedia of the Social Sciences, Volume XII at page 130 161; Town Imporvement Trusts ' in lndia, 1945 by Rai Sahib Om Prakash Aggarawala, p. 35; et.
, ' Halsburys Statutes, Fourth Edition, p. 17 et.
and Journal of Planning & Environment Law, 1973, p. 130 et.
See also: Penn Cen tral Transportation Company vs City of New York, ; (1978)]; Village of Belle Terre vs Bruce Bora as; , (1974)]; Village of Euclid vs Ambler Realty Company, (1926) and Halsey vs Esso Petroleum Co. Ltd., In Agins vs City of Tiburon, ; (1980), the Supreme Court of the United States upheld a zoning ordinance which provided `. it is in the public interest to avoid unnecessary conversion of open space land to strictly urban uses, thereby protecting against the resultant impacts, such as . pollution, . destruction of scenic beauty.
disturbance of the ecology and the environment, hazards related geology, fire and flood, and other demonstrated consequences of urban sprawl '.
Upholding the ordinance, the Court said: ".
The State of California has determined that the development of local open space plans will discourage the "premature and unnecessary conversion of open space land to urban uses".
The specific zoning regulations at issue are exercises of the city 's police power to pro tect the residents of Tiburon from the iII effects of urbanization.
Such governmental purposes long have been recognized as legiti mate.
The zoning ordinances benefit the appellants as well public by serving the city 's interest in assuring careful and order ly development of residential property with provision for open space areas.
See com ments on this decision by Thomas J. Schoen baum, Environmental Policy Law, 1985 p. 438 et.
See also Summary and Comments, [1980] 10E.L.R. 10125 et.
" The statutes in force in India and abroad reserving open spaces for parks and play grounds are the legislative at tempt to eliminate the misery of disreputable housing condi tion caused by urbanisation.
Crowded urban areas tend to spread disease, crime and immorality.
As stated by the U.S. Supreme Court in Samuel Berman vs Andrew Parker, 99 1.
Ed. 27 ; ".
They may also suffocate the spirit by reducing the 131 people who live there to the status of cattle.
They may indeed make living an almost insuf ferable burden.
They may also be an ugly sore, a blight on the community which robs it of charm, which makes it a place from which men turn.
The misery of housing may despoil a community as an open sewer may ruin a river.
The concept of the public wel fare is broad and inclusive.
The values it represents are spiritual as well as physical, aesthetic as well as monetary.
It is within the power of the legislature to deter mine that the community should be beautiful as well as healthy, spacious as well as clean, well balanced as well as carefully patrolled.
In the present case, the Congress and its authorized agencies have made determinations that take into account a wide variety of values. . ".
(Per Douglas, J.).
Any reasonable legislative attempt bearing a rational relationship to a permissible state objective in economic and social planning will be respected by the courts.
A duly approved scheme prepared in accordance with the provisions of the Act is a legitimate attempt on the part of the Gov ernment and the statutory authorities to ensure a quiet place free of dust and din where children can run about and the aged and the infirm can rest, breath fresh air and enjoy the beauty of nature.
These provisions are meant to guaran tee a quiet and healthy atmosphere to suit family needs of persons of all stations.
Any action which tends to defeat that object is invalid.
As stated by the U.S. Supreme Court in Village of Belle Terre vs Bruce Boraas, 1: ".
The police power is not confined to elimination of filth, stench, and unhealthy places.
It is ample to lay out zones where family values, youth values, and the blessings of quiet seclusion and clean air make the area a sanctuary for people".
See also Village of Euclid vs Ambler Realty Company, 1926.
See the decision of the Andhra Pradesh High Court in T. Damodhar Rao & Ors.
vs The Special Officer, Municipal Corporation of Hyderabad & Ors., AIR 1987 AP 17 1.
The residents of the locality are the persons ' intimately, vitally 132 and adversely affected by any action of the BDA and the Government which is destructive of the environment and which deprives them of facilities reserved for the enjoyment and protection of the health of the public at large.
The resi dents of the locality, such as the writ petitioners, are naturally aggrieved by the impugned orders and they have, therefore, the necessary locus standi.
In the circumstances, we are of the view that, apart from the fact that the scheme has not been validly altered by the BDA, it was not open to the Government in terms of section 65 to give a direction to the BDA to defy the very object of the Act.
The impugned orders of the Government dated 27.5.
1976 and 11.6.1976 and the consequent decision of the BDA dated 14.7.
1976 are inconsistent with, and contrary to, the legislative intent to safeguard the health, safety and general welfare of the people of the locality.
These orders evidence a colourable exercise of power, and are opposed to the statutory scheme.
The impugned orders and the consequent action of the BDA in allotting to private persons areas reserved for public parks and play grounds and permitting construction of build ings for hospital thereon are in the circumstances, declared to be null and void and of no effect.
R.M. SAHAI, J. Public park or private nursing home which serves public interest, better, is itself an interesting issue in this appeal directed against order of the Karnataka High Court, apart, from if the conversion of the site from park to hospital was in accordance with law and whether a private hospital was an amenity or civic amenity under the Bangalore Development Authority Act (Act 12 of 1976) (in brief the Act) and in any case could it be considered as an improvement, under Section 19(4) of the Act, if so whether the authorities while doing so acted within the constraints of law.
Factual martix is quite simple and plain.
But before narrating it or entering into merits of various issues it is imperative to sort out at the threshold if a private nursing home with modern facilities and sophisticated instruments is more conducive to the public interest than a park as it was stressed that even if the conversion of the site suffered from any infirmity procedural or substantive the High Court should have refrained from exercising its extraordinary jurisdiction and that also in favour of those residents many of whom did not have their houses around the park and thus could not be placed in the category of 133 persons aggrieved.
It was also emphasised that the hospital with research centre and even free service being more impor tant from social angle the inhabitants of the locality could not be said to suffer any injury much less substantial injury.
Locus standi to approach by way of writ petition and refusal to grant relief in equity jurisdiction are two different aspects, may be with same result.
One relates to maintainability of the petition and other to exercise of discretion.
Law on the former has marched much ahead.
Many milestones have been covered.
The restricted meaning of aggrieved person and narrow outlook of specific injury has yielded in favour of broad and wide construction in wake of public interest litigation.
Even in private challenge to executive or administrative action having extensive fall out the dividing line between personal injury or loss and injury of a public nature is fast vanishing.
Law has veered round from genuine grievance against order affecting prejudicially to sufficient interest in the matter.
The rise in exercise of power by the executive and comparative decline in proper and effective administrative guidance is forcing citizens to espouse challenges with public interest flavour.
It is too late in the day, therefore, to claim that petition filed by inhabitants of a locality whose park was converted into a nursing home had no cause to invoke equity jurisdiction of the High Court.
In fact public spirited citizens having faith in rule of law are rendering great social and legal service by espousing cause of public nature.
They cannot be ignored or overlooked on technical or conservative yardstick of the rule of locus standi or absence of personal loss or injury.
Present day development of this branch of jurispru dence is towards freer movement both in nature of litigation and approach of the courts.
Residents of locality seeking protection and maintenance of environment of their locality cannot be said to be busy bodies or interlopers S.P. Gupta vs Union of India, ; Akhil Bhartiya Soshit Kararnchari Sangh vs U.O.I., and Fertilizer Corporation Karngar Union vs
U.O.I., AIR 1981 SC 364.
Even otherwise physical or personal or economic injury may give rise to civil or crimi nal action but violation of rule of law either by ignoring or affronting individual or action of the executive in disregard of the provisions of law raises substantial issue of accountability of those entrusted with responsibility of the administration.
It furnishes enough cause of action either for individual or community in general to approach by way of writ petition and the authorities cannot be permitted to seek shelter under cover of technicalities of locus standi nor they can be heard to plead for restraint in exercise of discretion as grave issues of 134 public concern outweigh such considerations.
Public park as a place reserved for beauty and recrea tion was developed in 19th and 20th Century and is associat ed with growth of the concept of equality and recognition of importance of common m.n.
Earlier it was a prerogative of the aristocracy and the affluent either as a result of royal grant or as a place reserved for private pleasure.
Free and healthy air in beautiful surroundings was privilege of few.
But now it is a, `gift from people to themselves '.
Its importance has multiplied with emphasis on environment and pollution.
In modern planning and development it occupies an important place in social ecology.
A private nursing home on the other hand is essentiality a commercial venture, a profit oriented industry.
Service may be its morn but earn ing is the objective.
Its utility may not be undermined but a park is a necessity not a mere amenity.
A private nursing home cannot be a substitute for a public park.
No town planner would prepare a blue print without reserving space for it.
Emphasis on open air and greenery has multiplied and the city or town planning or development acts of different States require even private house owners to leave open space in front and back for lawn and fresh air.
In 1984 the BD Act itself provided for reservation of not less than fifteen per cent of the total area of the lay out in a development scheme for public parks and playgrounds the sale and dispo sition of which is prohibited under Section 38A of the Act.
Absence of open space and public park, in present day when urbanisation is on increase, rural exodus is on large scale and congested areas are coming up rapidly, may given rise to health hazard.
May be that it may be taken care of by a nursing home.
But it is axiomatic that prevention is better than cure.
What is lost by removal of a park cannot be gained by establishment of a nursing home.
To say, there fore, that by conversion of a site reserved for low lying into a private nursing home social welfare was being promot ed was being oblivious of true character of the two and their utility.
Merits, too, raise issues of far reaching importance.
One of them being the efficacy of exercise of individualised discretion where law or the rules contemplate participatory objective decision or conclusion.
Another is the requirement of substantive fairness in dealings by government or local bodies or public institutions with people of any strata of society uniformly and equally.
To begin with the factual setting in which the controversy arose it is undisputed that the City Improvement Board constituted under City of Banga lore Improvement Act, 1945, prepared the development scheme for bringing into 135 existence an extension of the City of Bangalore which came to be known as the Palace Upper Orchards/Sadashiv Nagar, later came to be known as Raj Mahal Viias Extension.
In this an area facing, the Sankey tank, was earmarked for being developed as a low level park.
In 1976 the Improvement Act was repealed and replaced by Act 12 of 1976 which came into force with effect from December, 1975.
Section 76 of the Act while repealing Improvement Act by Section 76 saved the scheme by proviso Second to Sub Section (3) of the Section and provided that it shall be deemed to have been done under corresponding provisions of the Act.
The Act received the assent in March 1976.
And in the same month the Chairman of the Bangalore Development Authority received a communication from the Chief Minister of the State that the Bangalore Medical Trust, the appellant (referred as BMT) was keen to have the plot reserved for park as nursing home.
On it the Chairman, without any meeting of any Committee or the Devel opment Authority, wrote a letter to the Chief Minister on 21st April, 1976, the contents of which are extracted below: "No. PS.
56/76 77 Encl.
One Blue Print.
Respected sir, Re: Grant of land to Bangalore Medical Trust for construction of a nursing home.
The Bangalore Medical Trust have applied to your goodself on 30.3.
1976 for grant of vacant land situated next to that given to H.K.E. Society, Rajmahal Viias Exten sion, on which you have passed orders "Chair man, BDA A suitable site for the proposed hospital building may be given.
I herewith enclose a blue print showing the location of the said plot, which they have requested.
In the blue print ap proved by the erstwhile City Improvement Trust Board, Bangalore, this site is marked as a Low Level Park, which measures approximately 13,485 sq.
This is a low level area when compared to the surrounding ground level.
The sponsors of Bangalore Medical Trust are very keen to secure this land for their use to construct a nursing home 136 with eminent specialists to cater medical relief to the needy public.
In the first instance, it has to be approved by the Government to convert this low level park as a civic amenity site.
Secondly Government has to approve the allotment of the said land to the Bangalore Medical Trust as a Civic Amenity Site.
Therefore, I seek your kind orders in the matter, how I should act.
With warm regards, Yours sincerely.
On it the Chief Minister made an endorsement is his own hand which reads as under: "This area which was allowed to be kept for laying a park may be converted into C.A. Site.
Another similar bit kept for the same purpose has been given away for Education Society some years back.
And this remaining area is said to be not suitable for park.
" In consequence of the direction by the Chief Minister the Government on 27th May, 1976 converted the site from public park to a civic amenity.
Copy of the order is ex tracted below: "Subject: Grant of land to Bangalore Medical Trust for construction of a Nursing Home.
ORDER NO.
HMA 249 MNG 76 DATED BANGA LORE THE 27TH MAY 1976.
READ; Letter No. PS 56/7 6 77 dated 21.4.1976 from the Chairman, Bangalore Development Authority, Bangalore.
PREAMBLE; The Chairman, Bangalore Development Authority 137 has requested for sanction of Government to the conversion of the low level park, next to the land allotted to the HKE Society, in Rajmahal Viias Extension as a C.A. Site and to the allotment of the said site to the Banga lore Medical Trust for the construction of a Nursing Home. 'ORDER Sanction is accorded to the conver sion of the Low Level Park, situated next to the land allotted to the H.K.E. Society in Rajmahal Vilas Extension, Bangalore as a civic amenity site.
By order and in the name of the Governor of Karna taka sd/ (S.R. Shankaranarayana Rao I/c.
Under Secretary to Government Health & Municipal Admn.
Deptt.
" It was followed by another order dated 17th June, 1976, sanctioning the lease to the BMT.
The order reads as under: "Subject: Allotment of a C.A. site to Banga lore Medical Trust for Construction of a hospital.
ORDER NO.
HMA 249 MNG 76, BANGALORE DATED THE 17TH JUNE, 1976.
READ; (1)Govt.
Order No. PLM 18 MNG 64 dated 17th March, 1964.
2) Govt.
Order No. HMA 249 MNG 76 dated 27th May, 1976.
3) Letter No. PS 132/76 77 dated 1st June, 1976 from the Chairman, Bangalore Development Authority, Bangalore.
PREAMBLE; 138 Sanction was accorded to convert a low level park situated next to the land allotted to H.K.E. Society in Rajmahal Viias Extension, Bangalore vide Govt.
Order read at (ii) above.
Now the Chairman, Bangalore Development Authority requests for lease of the aforesaid Civic Amenity Site to the Banga lore Medical Trust, Bangalore.
ORDER Sanction is accorded to the lease of Civic Amenity Site situated next to the land allotted to HKE Society in Rajmahal Viias Extension Bangalore to the Bangalore Medical Trust for construction of hospital with condi tions of lease as detailed in the Govt.
Order No. PLM 18 MNG 64, dated 17th March, 1964.
The trust should strictly adhere to the condition No. 7 of the lease and should complete the building well within 3 years.
By Order and in the name of Governor of Karnataka sd (K.G. Rajanna) Under Secretary to Government Health & Munici pal Admn.
Deptt.
" On 14th July the Bangalore Development Authority.
(hereinafter referred as BDA) completed the formality by passing the resolution and allotting the site to the BMT.
The resolution reads as under: "The Government Order No. HMA 249 MNG 76 Bangalore dated the 17th June, 1976 regarding allotment of C.A. Site situated next to the land allotted to H.K.E. Society in Rajmahal Vilas Extension, Bangalore in favour of Banga lore Medical Trust for construction of hospi tal be read and recorded with confirmation for further action in the matter.
On coming to know of the allotment in 1981, when some construction activity was noticed by the residents, they approached the 139 High Court by way of writ petition on which the learned single Judge framed two issues: "(1) Whether the land had become the property of the Corporation and therefore the allotment of land by the BDA in favour of the fourth respondent was illegal and invalid? (2) Even assuming that the ownership of the land had not been transferred to the Corpora tion, whether the action of the BDA in allot ting the land, originally earmarked for a park, for construction of a nursing home and a hospital, to the fourth respondent is illegal and invalid? Both the issues were answered in the negative.
On the first it was held that even though building and street etc. were transferred to the Corporation by the State Govt.
by a notification issued under Section 23(I) of the Act no such notification under Sub Section (2) of Section 23 was issued in respect of open space etc.
therefore the site reserved for public park did not vest in the Corporation and it continued with the BDA which could deal with it.
The finding was affirmed by the Division Bench as well.
Its correctness was not assailed by the respondents, in this Court.
As regards the second question the learned Judge while agreeing with the Division Bench in Holy Saint Education Society vs Venkataamana, ILR 1982 1 Karnataka P. 1.
that a site re served for children 's playground under the scheme prepared under the City Improvement Act when came to be vested in the Corporation, it was under a duty to retain it as such and it had no authority to divert it for any other use or grant it to a private person or organisation ' held that the ratio was not helpful as, `both under the provisions of the City Improvement Act and the BDA Act, the CIT or the BDA, as the case may be, had the authority to improve the scheme by making alteration in the scheme and in exercise of the said power, the purpose for which any space was reserved, could be changed and after such change is effected the land could be disposed of for the purpose for which it is earmarked after such change.
The Judge held that since the site re served for public park was converted under order of the Government it was not possible to hold that the land in question was reserved for a park.
It was further held, that, since only notification allotting the site was challenged and not the conversion of site from public park to private nursing home and once the scheme was altered and the area reserved for park was converted to be an area reserved for civic amenity the contention of the petitioners that the BDA had allotted 140 the site for a purpose other than to which the land was reserved, had no basis at all for the fact that after alter ation brought about by Government under order dated 27th March, 1976, the site in question was only reserved for a civic amenity generally and not for a part specially. ' Two other subsidiary submissions which in fact are now the principal issues, that the BDA had no power to alter the scheme ', and in any event a site reserved for a civic ameni ty could not have been allotted for construction of a hospi tal" also did not find favour as the scheme could be altered under Section 19(4) of the Act and it was done with approval of State Govt.
In appeal the Division Bench after examining inclusive definition of civic amenity in Section 2(bb), ad ed in 1984, amended with retrospective effect in 1983 held that a hospital could not be considered to be an amenity in 1976 as, "public amenity civic or otherwise to be a public convenience for purposes of the BDA Act, the Govern ment has to notify.
If it does not specify whatever may otherwise be a public convenience will not be a civic ameni ty or.
amenity under clauses (bb) and (b) of Section 2 respectively for purposes of the BD Act.
"The Bench further held that in allowing the site to the BMT largess was con ferred on it in utter violation of law and rules.
Did the Division Bench commit any error of law? Was the conversion of site in accordance with law? Were any of the authorities aware or apprised of the provisions under which they could convert a site reserved for public park into a nursing home? Did the authorities care to ascertain the provisions of law or rules under which they could act? Was any precaution taken by the Chief Executive of the State to adhere to legislative requirement of altering any scheme.
Not in the least.
The direction of the Chief Minister, the apex public functionary of the State, was in breach of public trust, more like a person dealing with his private property than discharging his obligation as head of the State administration in accordance with law and rule The Govt.
record depicted even more distressing picture.
The role of the administration was highly disappointing.
In their noting even a show of awareness of law and fact was missing.
This culture of public functionary, adorning high est office in the State of being law to himself and the administration acting on dictate, for whatever reason dis turbs the balance of rule of law.
What is more shocking is that this happened in 1976 and not even one out of various departments from which the papers were routed through raised any objection.
And the statutory body like BDA with impres sive members too succumbed under the pressure without, even, a murmur.
141 Financial gain by a local authority at the cost of public welfare has never been considered as legitimate purpose even if the objective is laudable.
Sadly the law was thrown to winds for a private purpose.
The extract of the Chief Minister 's order quoted in the letter of Chairman of the BDA leaves no doubt that the end result having been decided by the highest executive in the State the lower in order of hierarchy only followed with `ifs ' and `buts ' ending finally with resolution of BDA which was more or less a formality.
Between 21st April and 14th July, 1976, that is less than ninety days, the machinery in BDA and Government moved so swiftly that the initiation of the proposal, by the appellant a rich trust with 90,000 dollars in foreign depos its, query on it by the Chief Minister of the State, guid ance of way,out by the Chairman, direction on it by the Chief Minister, orders of Govt.
resolution by the BDA and allotment were all completed and site for public park stood converted into site for private nursing home without any intimation direct or indirect to those who were being deprived of it.
Speedy or quick action in public institu tions call for appreciation but our democratic system shuns exercise of individualised discretion in public matters requiring participatory decision by rules and regulations.
No one howsoever high can arrogate to himself or assume without any authorisation express or implied in law a dis cretion to ignore the rules and deviate from rationality by adopting a strained or distorted interpretation as it ren ders the action ultra vires and bad in law.
When the law requires an authority to act or decide, 'if it appears to it necessary" or if he is 'of opinion that a particular act should be done ' then it is implicit that it should be done objectively, fairly and reasonably.
Decisions affecting public interest or the necessity of doing it in the light of guidance provided by the Act and rules may not require intimation to person affected yet the exercise of discretion is vitiated if the action is bereft of rationality lacks objective and purposive approach.
The action or decision must not only be reached reasonably and intelligibly but it must be related to the purpose for which power is exercised.
The purpose for which the Act was enacted is spelt out from the Preamble itself which provides for establishment of the Authority for development of the city of Bangalore and areas adjacent thereto.
To carry out this purpose the development scheme framed by the Improvement Trust was adopted by the Development Authority.
Any alteration in this scheme could have been made as provided in Sub Section (4) of Section 19 only if it resulted in improvement in any part of the scheme.
As stated earlier a private Nursing Home could neither be considered to be an amenity nor it could be considered improvement over necessity like a public park.
The exercise of power, therefore, was contrary to the pur pose 142 for which it is conferred under the statute.
Was the exercise of discretion under Sub Section (4) of Section 19 in violation or in accordance with the norm provided in law.
For proper appreciation the Sub Section is extracted below: "(4) If at any time it appears to the Authori ty that an improvement can be made in any part of the scheme, the Authority may alter the scheme for the said purpose and shall subject to the provisions of sub section (5) and (6) forthwith proceed to execute the scheme as altered.
" This legislative mandate enables the Authority to alter any scheme.
Existence of power is thus clearly provided for.
What is the nature of this power and the manner of its exercise? It is obviously statutory character.
The legisla ture took care to control the exercise of this power by linking it with improvement in the scheme.
What is an im provement or when any change in the scheme can be said to be improvement is a matter of discretion by the authority empowered to exercise the power.
In modern State activity discretion with executive and administrative agency is a must for efficient and smooth functioning.
But the extent of discretion or constraints on its exercise depends on the rules and regulations under which it is exercised.
Sub Section (4) of Section 19 not only defines the scope and lays down the ambit within which the discretion could be exercised but it envisages further.
the manner in which it could be exercised.
Therefore, any action or exercise of discretion to alter the scheme must have been backed by substantive rationality flowing from the Section.
Public interest or general good or social betterment have no doubt priority over private or individual interest but it must not be a pretext to justify the arbitrary or illegal exercise of power.
It must withstand scrutiny of the legislative stand ard provided by the Statute itself.
The authority exercising discretion must not appear to be, impervious to,legislative directions.
From the extracts of correspondence between the Chairman and the Chief Minister it is apparent that neither of them cared to look in, the provisions of law.
It was left to the learned Advocate General to defend it, as a matter of law, in the High Court.
There is no whisper anywhere if it was ever considered, objectively, by any authority that the nursing home would amount to an improvement.
Whether the decision would have been correct or not would have given rise to different consideration.
But here it was total absence of any effect to do so.
Even in the reply filed on behalf of BDA in the High Court which appears more a legal jugglery than statement of facts bristling 143 with factual inaccuracies there is no mention of it.
The extent of misleading averments for purpose of creating erroneous impressions on the Court shall be clear from the statement contained in paragraph 1 of the affidavit relevant portion of which is extracted below: "The fourth respondent had made an application for grant of land for purpose of constructing a Nursing Home.
This application was made also to this Respondent.
Considering the fact that the medical facilities available in Bangalore were meagre and were required to be supple mented by charitable medical institutions, this authority was required to ascertain whether a suitable site could be given for the hospital building of the fourth respondent.
Upon scrutiny of the Rajmahal Viias Extension, as early as in 1976, the area in question which had been marked as a low level park measuring 13485 sq.
yards was found suitable to cater to the medical relief to the needy public.
However, since the said area had been marked as a low level park, it was necessary to convert the said low level park as civic amenity site.
Furthermore, it is essential that the Government had to approve allotment of the site to the fourth respondent as a civic amenity site.
There are proceedings before the first respondent in relation to allotment of site to public institutions.
Under the recommendations which has been made, it was decided that plots could be allotted to public institutions subject to certain condi tions.
" It was this statement which resulted in erroneous finding by the learned single Judge to the effect.
"Therefore, it is clear that though at the time of preparation of the scheme, formation of a park was considered in the interest of the general public, nothing prevents the BDA from taking the view that the construction of a hospital to provide medical facilities to the general public is necessary and therefore, the area earmarked for park should be converted into a civic amenity site is in exercise of this power, the BDA decided to convert the area reserved for park into a civic amenity site so as to enable its disposal in favour of the fourth respondent for construction of a hospital.
Though Section 19(4) does not expressly require the taking of the approval of the Government for such alteration, the approval was necessary as the original scheme in which the area was reserved for a park had been approved by the Government.
Therefore, the BDA considered appropriate, and in my opinion rightly, to seek the approval of the Government for making such conversion The State Government 144 accorded sanction for the conversion.
Therefore, the conver sion was in accordance with law".
The averment in the affi davit of the BDA that an application was made before it could not be substantiated.
Nor it could be established that the BDA or any of its committee ever took into consideration that medical facilities were meagre in the city of Banga lore.
Such misleading statements call for serious condemna tion.
No further comment is needed except that the public institutions should be cautious and must not give impression of taking sides.
It is destructive of fairness.
The then Chairman 's letter in 1976 extracted above was forthright whereas the stand of BDA in 1983 appears to be crude effort to support the executive action.
No record was produced to substantiate ' the averments.
It was necessary as it was not m harmony with the correspondence extracted earlier.
The statement by the counsel for the BDA that the records were not traceable was not satisfactory.
The executive or the administrative authority must not be oblivious that in a democratic set up the people or community being sovereign the exercise of disceretion must be guided by the inherent philosophy that the exercisor of discretion is accountable for his action.
It is to be tested on anvil of rule of law and fairness or justice particularly if competing interest of members of society is involved.
Was this adhered to by any of the authority? Unfortunately not.
Much was attempted to be made out of exercise of discre tion in converting a site reserved for amenity as a civic amenity.
Discretion is an effective tool in administration.
But wrong notions about it results in iII conceived conse quences.
In law it provides an option to the authority concerned to adopt one or the other alternative.
But a bet ter, proper and legal exercise of discretion is one where the authority examines the fact, is aware of law and then decides objectively and rationally what serves the interest better.
When a Statute either provides guidance or rules or regulations are framed for exercise of discretion then the action should be in accordance with it.
Even where Statutes are silent and only power is conferred to act in one or the other manner, the Authority cannot act whimsically or arbi trarily.
It should be guided by reasonableness and fairness.
The legislature never intends its authorities to abuse the law or use it unfairly.
When legislature enacted Sub section (4) it unequivocally declared its intention of making any alteration in the scheme by the Authority, that is, BDA and not the State Government.
It further permitted interference with the scheme sanctioned by it only if appeared to be improvement.
The facts, therefore, that were to be found by the Authority were that the conversion of public park into private nursing home would be an improvement in the scheme.
Neither the Authority nor the State 145 Government undertook any such exercise.
Power of conversion or alteration in scheme was taken for granted.
Amenity was defined in Section 2(b) of the Act to include road, street, lighting, drainage, public works and such other conveniences as the Government may, by notification, specify to be an amenity for the purposes of this Act.
The Division Bench found that before any other facility could be considered amenity it was necessary for State Government to issue a notification.
And since no notification was issued including private nursing home as amenity it could not be deemed to be included in it.
That apart the definition indicates that the convenience or facility should have had public characteris tic.
Even if it is assumed that the definition of amenity being inclusive it should be given a wider meaning so as to include hospital added in clause 2(bb) as a civic amenity with effect from 1984 a private nursing home unlike a hospi tal run by Govt.
or local authority did not satisfy that characteristic which was necessary in the absence of which it could not be held to be amenity or civic amenity.
In any case a private nursing home could not be considered to be an improvement in the scheme and, therefore, the power under Section 19(4) could not have been exercised.
Manner in which power was exercised fell below even the minimum requirement of taking action on relevant considera tions.
A scheme could be altered by the Authority as defined under Section 3 of the Act.
It is a body corporate under Section 3 consisting of the Chairman and experts on various aspects, namely, a finance member, an engineer, a town planner, an architect, the ex officio members such as Com missioner of Corporation of the City of Bangalore, officer of the Secretariat and elected members for instance, two persons of the State Legislature, one a woman and other a Scheduled caste and Scheduled tribe member, representative of labour, representative of water supply, sewerage board, electricity board, State Road Transport Corporation, two elected counsillors etc.
and the Commissioner.
This authori ty functions through committees and meetings as provided 'ruder Sections 8 and 9.
There is no Section either in the Act nor any rule was placed to demonstrate that the Chairman alone, as such, could exercise the power of the Authority.
There is no whisper nor there is any record to establish that any meeting of the Authority was held regarding altera tion of the scheme.
In any case the power does not vest in the State Government or the Chief Minister of the State.
The exercise of power is further hedged by use of the expres sion, if `it appears to the Authority '.
In legal terminology it visualises prior consideration and objective decision.
And all this must have resulted in conclusion that the alteration would have been improvement.
Not 146 even one was followed.
The Chairman could not have acted on his own.
Yet without calling any meeting of the authority or any committee he sent the letter for converting the site.
How did it appear to him that it was necessary, is mentioned in the letter dated 21st April, because the Chief Minister desired so.
The purpose of the Authority taking such a decision is their knowledge of local conditions and what was better for them.
That is why participatory exercise is contemlated.
If any alteration in Scheme could be done by the Chairman and the Chief Minister then Sub Section (4) of Section 19 is rendered otiose.
There is no provision in the Act for alteration in a scheme by converting one site to another, except, of course if it appeared to be improvement.
But even that power vested in the Authority not the Govern ment.
What should have happened was that the Authority should have applied its mind and must have come to the conclusion that conversion.
of the site reserved for public park into a private nursing home amounted to an improvement then only it could have exercised the power.
But what hap pened in fact was that the application for allotment of the site was accepted first and the procedural requirements were attempted to be gone through later and that too by the State Govt.
which was not authorised to do so.
Not only that the Authority did not apply its mind and take any decision if there was any necessity to alter the Scheme but even if it is assumed that the State Govt. could have any role to play, the entire exercise instead of proceeding from below, that is, from the BDA to State Government proceeded in reverse direction, that, from the State Government to the BDA.
Every order, namely, converting the site from public park to private nursing home and even allotment to BMT was passed by State Government and the BDA acting like a true subservient body obeyed faithfully by adopting and confirming the direc tions.
It was complete abdication of power by the BDA.
The Legislature entrusted the responsibility to alter and ap prove the Scheme to the BDA but the BDA in complete breach of faith reposed in it, preferred to take directions issued on command of the Chief Executive of the State.
This result ed not only in error or law but much beyond it.
In fact the only role which the State Government could play in a scheme altered by the BDA is specified in Sub Section (5) and (6) of Section 19 of the Act.
The former requires previous sanction of the Govt.
if the estimated cost of executing the altered scheme exceeds by a greater sum than five per cent of the cost of executing the scheme as sanctioned.
And later if the 'scheme as altered involved the acquisition otherwise than by agreement.
In other words the State Government could be concerned or involved with an altered scheme either because of financial considerations or when additional land was to be acquired, an exercise which could not 147 be undertaken by the BDA.
A development scheme, therefore, sanc ; tioned and published in the Gazette could not be altered by the Government.
Effort was made to justify the exercise of power under SubSection (3) of Section 15 which reads as under: "(3) Notwithstanding anything in this Act or in any other law for the time being in force, the Government may, whenever it deems it necessary require the Authority to take up any development scheme or work and execute it subject to such terms and conditions as may be specified by the Government.
" In Sub Section (1) the Authority is empowered to draw up development scheme with approval of government whereas under Sub Section (2) it is entitled to proceed on its own provid ed it has funds and resources.
Sub Section (3) is the power of State Government to direct it to take up any scheme.
The main thrust of the Sub Section is to keep a vigil on the local body.
But it cannot be stretched to entitle the Gov ernment to alter any scheme or convert any site or power specifically reserved in the Statute in the Authority.
The general power of direction to take up development scheme cannot be construed as superseding specific power conferred and provided for under Section 19(4).
The Authority under Section 3 functions as a body.
The Act does not contemplate individual action.
That is participatory exercise of powers by different persons representing different interest.
And rightly as it is the local persons who can properly assess the need and necessity for altering a scheme and if any proposal to convert from one use to another was an improve ment for residents of locality such as exercise could not be undertaken by the Government.
Absence of power apart, such exercise is fraught with danger of being activated by extra neous considerations.
Section 65 the overall power reserved in Government to give such directions to the Authority as it considers expe dient for carrying out any purpose of the Act was another provision relied to support an order which is otherwise unsupportable.
An exercise of power which is ultra vires the provisions in the Statute cannot be attempted to be resusci tated on general powers reserved in a Statute for its proper and effective implementation.
The Section authorises the Government to issue directions to ensure that the provisions of law are obeyed and not to empower it itself to proceed contrary to law.
What is not permitted 148 by the Act to be done by the Authority cannot be assumed to be done by State Government to render it legal.
An illegali ty cannot be cured only because it was undertaken by the Government.
The Section authorises the Government to issue directions to carry out purposes of the Act.
That is the legislative mandate should be carried out.
And not that the provision of law can be disregarded and ignored because what was done was being done by State Government and not the Authority.
An illegality or any action contrary to law does not become in accordance with law because it is done at the behest of the Chief Executive of the State.
No one is above law.
In a democracy what prevails is law and rule and not the height of the person exercising the power.
For these reasons the entire proceedings before the State Government suffered from absence of jurisdiction.
Even the exercise of power was vitiated and ultra vires.
There fore the orders of the Government to convert the site re served for public park to civic amenity and to allot it for private nursing home to Bangalore Medical Trust and the resolution of the Bangalore Development Authority in compli ance of it were null, void and without jurisdiction.
Leave granted.
ORDER In the result this appeal fails, for the reasons stated by us in our separate but concurring judgments, and is accordingly dismissed.
We further direct that the respond ents shall be entitled to their cost throughout.
N.P.V. Appeal dis missed.
| A site in the city of Bangalore was reserved as an open space in an improvement scheme adopted under the City of Bangalore Improvement Act.
This Act was replaced by the Bangalore Development Authority Act, 1976 and the scheme prepared under the repealed enactment was deemed to have been prepared and duly sanctioned by the Government in terms of the new Act.
In the scheme, the open space in question had been reserved for a public park.
However, pursuant to the orders of the State Government, and by a Resolution, the Bangalore Development Authority allotted the open space in favour of the appellant, a private medical Trust, for the purpose of constructing a hospital.
This allotment and diversion of the user of the site was challenged before the High Court by the respondents, as residents of the locality and as general public, contending that it was contrary to the provisions of the Act and the scheme sanctioned thereun der, and the legislative intent to protect and preserve the environment by reserving open space 103 for ventilation, recreation and play grounds and parks for the general public.
A Single Judge of the High Court dismissed the Writ Petition holding that a hospital being a civic amenity, the allotment of the site by the BDA in favour of the appellant for the purpose of constructing a hospital was valid and in accordance with law, and, rejected the claim of the peti tioners that the BDA had no power to alter the scheme, and in any event, a site reserved for a civic amenity could not have been allotted for construction of a hospital, on the ground that the scheme could be altered under Section 19(4) of the Act, and it was done with approval of State Govt.
On appeal, the Division Bench held that though the BDA had the authority to deal with the plot in question, the area, having been reserved in the sanctioned scheme for a public park, its diversion from that object and allotment in favour of a private body was not permissible under the Act, even if the object of the allotment was the construction of a hospital, since a hospital could not be considered to be an amenity in 1976, and that in alloting the site to the appellant Trust, largesse was conferred on it in utter violation of law and rules, and set aside the allotment of the site in question to the appellant with liberty to the BDA to make a fresh allotment of any alternative site in favour of the appellant.
In appeal before this Court, on behalf of the appellant trust, it was contended that the Division Bench exceeded its jurisdiction in setting aside an allotment which was purely an administrative action by the BDA pursu ant to a valid direction by the Government in that behalf, that in the absence of any evidence of mala fide the deci sion of the BDA was not liable to be interfered with, that the decision to allot a site for a hospital rather than a park was a matter within the discretion of the BDA and that the hospital being not only an amenity but also a civic amenity under the Act, as amended from time to time, the diversion of the user of the land for that purpose was justified, that under Section 65 the BDA was bound by all directions of the Government, irrespective of the nature or purpose of the directions, and that Section 38A prohibiting sale or any other disposal of land reserved for 'public parks or playgrounds and Section 16(1)(d) requiring that 15% of the total area of the lay out be reserved for public parks and playgrounds and an additional area of not less than 10% of the total area for civic amenities were enacted subsequent to the relevant orders of the Government dated 27.5.76 and 11.6.76 and the resolution of the BDA 104 dated 14.7.76 resulting in the allotment of the site in favour of the appellant and at the material time when the Government made these orders and the BDA acted upon them, there was no restriction on the diversion of the user of the land reserved for the public park or a playground to any other purpose.
On behalf of the respondents, it was contended that it was improper to confer a largesse on a private party at the expense of the general public and the special consideration extended to the appellant was not permissible under the Act, and that to allot in favour of the appellant an area re served for public park even if it be for the purpose of constructing a hospital was to sacrifice the public interest in preserving the open spaces for ventilation, recreation and protection of the environment.
Dismissing the appeal, this Court, HELD: Per Sahai, J. 1.
The entire proceedings before the State Government suffered from absence of jurisdiction.
Even the exercise of power was vitiated and ultra vires.
Therefore,the orders of the Government to convert the site reserved for public park to civic amenity and to allot it for private nursing home to the appellant Trust and the resolution of the Development Authority in compliance of it were null, void and without jurisdiction.
[148C D] 2.1 The purpose for which the Bangalore Development Authority Act, 1976 was enacted is spelt out from the pream ble itself which provides for establishment of the Authority for development of the city and areas adjacent thereto.
To carry out this purpose, the development scheme framed by the Improvement Trust was adopted by the Development Authority.
Any alteration in this scheme could have been made as pro vided in Sub Section (4) of Section 19 only if it resulted in improvement in any part of the scheme.
A private Nursing Home could neither be considered to be an amenity nor it could be considered improvement over necessity like a public park.
The exercise of power, therefore, was contrary to the purpose for which it is conferred under the statute.
[141G H] 2.2 The legislative mandate under Sec.
19(4) enables the Authority to alter any scheme.
Thus, existence of power is clearly provided for.
But the legislature took care to control the exercise of this power by linking it with im provement in the scheme.
What is an improve 105 ment or when any change in the scheme can be said to be improvement is a matter of discretion by the authority empowered to exercise the power.
[142C D] 2.3 Sub Section (4) of Section 19 not only defines the scope and lays down the ambit within which discretion could be exercised but it envisages further the manner in which it could be exercised.
Therefore, any action or exercise of discretion to alter the scheme must have been backed by the substantive rationality flowing from the Section.
[142E] 2.4 The exercise of power is further hedged by use of the expression if it appears to the Authority.
In legal terminology it visualises prior consideration and objective decision.
And all this must have resulted in conclusion that the alteration would have been improvement.
[145G H] 3.1 When legislature enacted Sub Section (4), it une quivocally declared its intention of making any alteration in the scheme by the Authority, that is, BDA and not the State Government.
It further permitted interference with the scheme sanctioned by it only if it appeared to be improve ment.
Therefore, the facts that were to be found by the Authority were that the conversion of public park into private Nursing Home would be an improvement in the scheme.
Neither the Authority nor the State Government undertook any such exercise.
Power of conversion or alteration in scheme was taken for granted.
There is no whisper anywhere if it was ever considered, objectively, by any authority that the nursing home would amount to an improvement.
Whether the decision would have been correct or not would have given rise to different consideration.
But it was a total absence of any effort to do so.
[144G H, 145A, G] 3.2 The manner in which power was exercised fell below even the minimum requirement of taking action on relevant considerations.
A scheme could be altered by the Authority, as defined under Section 3 of the Act.
It is a body corpo rate consisting of the Chairman and experts on various aspects.
This Authority functions through committees and meetings as provided under Sections 8 & 9.
The purpose of the Authority taking such a decision is their knowledge of local conditions and what was better for them.
That is why participatory exercise is contemplated.
Yet, without calling any meeting of the authority or any committee the Chairman sent the letter for converting the site.
If any alteration could be done by the Chariman or the Chief Minister, then subsection (4) of Section 19 is rendered otoise.
106 3.3 Financial gain by a local authority at the cost of public welfare has never been considered as legitimate purpose even if the objective is laudable.
Sadly the law was thrown to winds for a private purpose.
The extract of the Chief Minister 's order quoted in the letter of Chairman of the BDA leaves no doubt that the end result having been decided by the highest executive in the State, the lower in order of hierarchy only followed with 'ifs ' and 'buts ' ending finally with resolution of BDA which was more or less a formality.
In less than ninety days, the machinery in BDA and Government moved so swiftly that the initiation of the proposal, by the appellant, a rich trust with foreign depos its, query on it by the Chief Minister of the State, guid ance of way out by the Chairman, direction on it by the Chief Minister, orders of Govt., resolution by the BDA and allotment were all completed and the site for public park stood converted into site for private nursing home without any intimation direct or indirect to those who were being deprived of it.
[141A C] 3.4 Speedy or quick action in public institutions call for appreciation but our democratic system shuns exercise of individualised discretion in public matters requiring par ticipatory decision by rules and regulations.
No one howso ever high can arrogate to himself or assume without any authorisation express or implied in law a discretion to ignore the rules and deviate from rationality by adopting a strained or distorted interpretation as it renders the action ultra vires and bad in law.
[141C D] 3.5 There is no provision in the Act for alteration in a scheme by converting one site to another, except, of course if it appeared to be improvement But even that power vested in the Authority, not the Government.
The Authority should have applied its mind and must have come to the conclusion that conversion of the site reserved for public park into a private nursing home amounted to an improvement; then only it could have exercised the power.
Instead, the application for allotment of the site was accepted first and the proce dural requirements were attempted to be gone through later, and that too, by the State Government, which was not autho rised to do so.
The only role which the State Government could play in a scheme altered by the BDA is specified in Sub Sections (5) and (6) of Section 19 of the Act, viz, the State Government could be concerned or involved with an altered scheme either because of the financial considera tions or when additional land was to be acquired, an exer cise which could not be undertaken by the BDA.
A development scheme, therefore, sanctioned and published in the Gazette could not he altered by the Government.
[146B, G H, 147A] 107 3.6 Not only that the Authority did not apply its mind and take any decision if there was any necessity to alter the Scheme, but even if it is assumed that the State Govt. could have any role to play, the entire exercise, instead of proceeding from below, that is, from the BDA to State GOv ernment, proceeded in reverse direction, that is, from the State Government to the BDA.
Every order, namely, converting the site from public park to private nursing home and even allotment to the applicant was passed by State Government and the BDA, acting like a true subservient body, obeyed faithfully by adopting and confirming the directions.
It was complete abdication of power by the BDA.
[146D E] 3.7 The Legislature entrusted the responsibility to alter and approve the Scheme to the BDA, but the BDA in complete breach of faith reposed in it, preferred to take directions issued on command of the Chief Executive of the State.
This resulted not only in error of law, but much beyond it.
[146F] 3.8 Under Sub Section (3) of Section 15, the State Government has power to direct the Authority to take up any scheme.
The main thrust of the Sub Section is to keep a vigil on the local body.
But it cannot be stretched to entitle the Government to alter any scheme or convert any site or power specifically reserved in the Statute in the Authority which functions as a body.
The general power of direction to take up development scheme cannot be construed as superseding specific power conferred and provided for under Section 19(4).
Absence of power apart, such exercise is fraught with danger of being activated by extraneous considerations.
[147D E] 3.9 An exercise of power which is ultra vires the provi sions in the Statute cannot be attempted to be resuscitated on general powers reserved in a Statute for its proper and effective implementation.
Section 65 authorises the Govern ment to issue directions to carry out purposes of the Act and to ensure that the provisions of law are obeyed, and not to empower itself to proceed contrary to law.
What is not permitted by the Act to be done by the Authority cannot be assumed to be done by State Government to render it legal.
An illegality cannot be cured only because it was undertaken by the Government, or because it is done at the behest of the Chief Executive of the State.
No one is above law.
In a democracy what prevails is law and rule and not the height of the person exercising the power.
[147G H, 148A B] 3.10 Amenity was defined in Section 2(b) of the Act to include road, street, lighting, drainage, public works and such other con 108 veniences as the Government may, by notification, specify to be an amenity for the purpose of this Act and before any other facility could be considered amenity, it was necessary for State Government to issue a notification.
And since no notification was issued including private nursing home as amenity, it could not be deemed to be included in it.
That apart, the definition indicates that the convenience or facility should have had public characteristic.
Even if it is assumed that the definition of amenity, being inclusive, it should be given a wider meaning so as to include hospital added in clause 2(bb), as a civic amenity with effect from 1984, a private nursing home, unlike a hospital run by Govt.
or local authority, did not satisfy that characteristic which was necessary, in the absence of which it could not be held to be amenity on civic amenity.
In any case, a private nursing home could not be considered to be an improvement in the scheme and, therefore, the power under Section 19(4) could not have been exercised.
[145A D] 4.1 Discretion is an effective tool in administration.
But wrong notions about it result in ill conceived conse quences.
In law it provides an option to the authority concerned to adopt one or the other alternative.
But a better, proper and legal exercise of discretion is one where the authority examines the fact, is aware of law and then decides objectively and rationally what serves the interest better.
When a Statute either provides guidance or rules or regulations are framed for exercise of discretion then the action should be in accordance with it.
Even where Statutes are silent and only power is conferred to act in one or the other manner, the Authority cannot act whimsically or arbi trarily.
It should be guided by reasonableness and fairness.
The legislature never intends its authorities to abuse the law or use it unfairly.
[144E G] 4.2 The executive or the administrative authority must not be oblivious that in a democratic set up the people or community being sovereign, the exercise of discretion must be guided by the inherent philosophy that the exerciser of discretion is accountable for his action, It is to be tested on anvil of rule of law and fairness or justice particularly if competing interests of members of society are involved.
[144C D] 4.3 When the law requires an authority to act or decide, if it appears to it necessary ' or if he is 'of opinion that a particular act should be done ', then it is implicit that it should be done objectively, fairly and reasonably.
Deci sions affecting public interest or the necessity of doing it in the light of guidance provided by the Act and rules may not require intimation to person affected yet the exercise of discretion is vitiated if the action is bereft of ration ality, lacks objective and 109 purposive approach.
The action or decision must not only be reached reasonably and intelligibly but it must be related to the purpose for Which power is exercised.
Public interest or general good or social betterment have no doubt priority over private or individual interest but it must not be a pretext to justify the arbitrary or illegal exercise of power.
It must withstand scrutiny of the legislative stand ard provided by the Statute itself.
The authority exercising discretion must not appear to be, impervious to legislative directions.
No doubt, in modern State activity, discretion with executive and administrative agency is a must for efficient and smooth functioning.
But the extent of discre tion or constraints on its exercise depends on the rules and regulations under which it is exercised.
[141E F, 142F, D] Public park as a place reserved for beauty and recrea tion is associated with growth of the concept of equality and recognition of importance of common man.
Earlier free and healthy air in beautiful surroundings was privilege of few.
But now it is a 'gift from people to themselves '.
Its importance has multiplied with emphasis on environment and pollution.
In modern planning and development it occupies an important place in social ecology.
A private nursing home, on the other hand, is essentially a commercial venture, a profit oriented industry.
Service may be its moto but earn ing is the objective.
Its utility may not be undermined but a park is a necessity not a mere amenity.
A private nursing home cannot be a substitute for a public park.
[134A C] 5.2 In 1984, the BD Act itself provided for reservation of not less than fifteen per cent of the total area of the lay out in a development scheme for public parks and play grounds, the sale and disposition of which is prohibited under Sec.
38A of the Act.
Absence of open space and public park, in present day when urbanisation is on increase, rural exodus is on large scale and congested areas are coming up rapidly, may give rise to health hazard.
May be that it may be taken care of by a nursing home.
But it is axiomatic that prevention is better than cure.
What is lost by removal of a park cannot be gained by establishment of a nursing home.
To say, therefore, that by conversion of a site reserved for low lying park into a private nursing home, social welfare was being promoted was being oblivious of true character of the two and their utility.
[134D F] 6.1 Locus standi to approach by way of writ petition and refusal to grant relief in equity jurisdiction are two different aspects, may be with the same result.
One relates to maintainability of the petition and other to exercise of discretion.
Law on the former has marched much ahead.
110 Many milestones have been covered.
The restricted meaning of aggrieved person and narrow outlook of specific injury has yielded in favour of broad and wide construction in the wake of public interest litigation.
Even in private chal lenge to executive or administrative action having extensive fall out the dividing line between personal injury or loss and injury of a public nature is fast vanishing.
[133B C] 6.2 Law has veered round from genuine grievance against order affecting prejudicially to sufficient interest in the matter.
The rise in exercise of power by the executive and comparative decline in power and effective administrative guidance is forcing citizens to expose challenges with public interest flavour.
Therefore, it is too late in the day to claim that petition filed by inhabitants of a locali ty whose park was converted into a nursing home had no cause to invoke equity juris diction of the High Court.
In fact, public spirited citizens having faith in rule of law are rendering great social and legal service by espousing cause of public nature.
They cannot be ignored or overlooked on technical or conservative yard stick of the rule of locus standi or absence of personal loss or injury.
Present day development of this branch of jurisprudence is towards free movement both in nature of litigation and approach of the courts.
Residents of locality seeking protection and mainte nance of environment of their locality cannot be said to be busy bodies or interlopers.
Even otherwise physical or personal or economic injury may give rise to civil or crimi nal action but violation of rule of law either by ignoring or affronting individual or action of the ' executive in disregard of the provisions of law raises substantial issue of accountability of those entrusted with responsibility of the administration.
It furnishes enough cause of action either for individual or community in general to approach by way of writ petition and the authorities cannot be permitted to seek shelter under cover of technicalities of locus standi nor they can be heard to plead for restraint in exercise of discretion as grave issues of public concern outweigh such considerations.
[133C H] S.P. Gupta vs Union of India, [1982] 2 S.C.R. Akhil Bhartiya Sashit Karamchari Sangh vs U.O.I., AIR 1981 SC 293 and Fertilizer, Corporation Kamgar Union vs U.O.I., AIR 1981 SC 364, referred to.
Per Thommen J. (Concurring) 1.1 Apart from the fact that the scheme has not been validly altered by the Bangalore Development Authority, it was not open to the Government in terms of section 65 of the Bangalore Development Act, 1976 to give a direction to the BDA to defy the very object of the Act.
The orders of the Government dated 27.5.
1976 and 11.6.1976 and the consequent decision of the BDA dated 111 14.7.1976 are inconsistent with, and contrary to, the legis lative intent to safeguard the health, safety and general welfare of the people of the locality.
These orders evidence a colourable exercise of power, and are opposed to the statutory scheme.
[132B D] 1.2 The orders in question and the consequent action of the BDA in allotting to private persons areas reserved for public parks and play grounds and permitting construction of buildings for hospital thereon are, in the circumstances, declared to be null and void and of no effect.
[132D E] 2.1 Under Sub Section (4) of Section 19 of the Bangalore Development Authority Act, 1976 the BDA may, subject to certain restrictions contained in sub sections (5) and (6), alter the scheme, but such alteration has to be carried out pursuant to a formal decision duly recorded in the manner generally followed by a body corporate.
The scheme is a statutory instrument which is administrative legislation involving a great deal of general law making of universal application, and it is not, therefore, addressed to individ ual cases of persons and places, Alteration of the scheme must be for the purpose of improvement and better develop ment of the City and adjoining areas and for general appli cation for the benefit of the public at large.
Any altera tion of the scheme with a view to conferring a benefit on a particular person, and without regard to the general good of the public at large, is not an improvement contemplated by the Section.
[122C E] Shri Sitaram Sugar Company Limited & Anr. etc.
vs Union of India & Ors., [1990] 1 SCR 909,937 et.
relied on.
2.2 Under Section 38, the BDA has the power, subject to such restrictions, conditions etc., as may be prescribed, to lease, sell or otherwise transfer any movable or immovable property which belongs to it, and to appropriate or apply any land vested in it or acquired by it for the formation of 'open spaces ' or for building purposes or in any other manner for the purpose of any development scheme.
This implies that land once appropriated or applied or earmarked by formation of 'open spaces ' or for building purposes or other development in accordance with a duly sanctioned scheme should not be used for any other purpose unless the scheme itself, which is statutory in character, is formally altered in the manner that the BDA as a body corporate is competent to alter.
But that power has to be exercised consistently with the appropriation or application of land for formation of 'open spaces ' or for building purposes or any other development scheme sanctioned by the 112 Government.
Any unauthorised deviation from the duly sanc tioned scheme by sacrificing the public interest in the preservation and protection of the environment by means of open space for parks and play grounds and 'ventilation ' will be contrary to the legislative intent, and an abuse of the statutory power vested in the authorities.
Section 38A inserted by Amendment Act 17 of 1984 clarifies that it shall not be open to the BDA to dispose of any area reserved for public parks and play grounds and civic amenities.
Any such site cannot be diverted to any other purpose.
Any action in violation of this provision is null and void.
[123F H, 124A, D E] 2.3 Section 16 treats 'public parks and play grounds ' as a different and separate amenity or convenience from a 'civic amenity ', and reserves 15% and 10% respectively for these two purposes.
The extent of the areas reserved for these two objects are thus separately and distinctly stated by the Statute.
The implication of the conceptual distinc tion is that land reserved for a public park and play ground cannot be utilised for any 'civic amenity ' including a hospital.
[121B C] 2.4 One of the main objects of public parks or play grounds is the promotion of the health of the community by means of ventilation and recreation.
It is the preservation of the quality of life of the community that is sought to be protected by means of these regulations.
[121E F] 2.5 The legislative intent is to preserve a public park or public playground in the hands of the general public as represented by the BDA or any other public authority and prevent private hands from grabbing them for private ends.
[126G] 3.1 The scheme provides for a public park and the land in question remains dedicated to the public and reserved for that purpose.
It is meant for the reasonable accomplishment of the statutory object which is to promote the orderly development of the city and adjoining areas and to preserve open space by reserving public parks and play grounds with a view to protecting the residents from the ill effects of urbanisation of the city in a way that maximum space is provided for the benefit of the public at large for recrea tion, enjoyment, 'ventilation ' and fresh air.
This is clear from the Act itself as it originally stood.
The amendments inserting sections 16(1)(d), 38A and other provisions are clarificatory of this object.
The legislative intent has always been the promotion and enhancement of the quality of life ' by preservation of the character and desirable aes thetic features of the city.
, [128F H, 129A B] 113 3.2 The original scheme, duly sanctioned under the Act, includes a public park and the land in question has been reserved exclusively for that purpose.
Although it is open to the BDA to alter the scheme, no alteration has been made in the manner contemplated by section 19(4).
[127F] 3.3 The letters addressed by the Chairman of the BDA to the Chief Minister and the endorsement made by the Chief Minister on that letter as well as the orders of the Govern ment sanctioning conversion of the low level park into a civic amenity site and alloting the same to the appellant and the resolution adopted by the BDA leave no doubt that the action of the Government and the BDA resulting in the resolution have been inspired by individual interests at the costs and to the disadvantage of the general public.
Public interest does not appear to have guided the minds of the persons responsible for diverting the user of the open space for allotment to the appellant.
Conversion of the open space reserved for a park for the general good of the public into a site for the construction of a privately owned and managed hospital for private gains is not an alteration for improve ment of the scheme as contemplated by Section 19, and the orders in question in that behalf are a flagrant violation of the legislative intent and a colourable exercise of power.
In the circumstances, no valid decision has been taken to alter the scheme.
[127G H, 128A, D F] 3.4 The power of the Government to give directions to the Authority under section 65 is not unrestricted.
The object of the directions must be to carry out the object of the Act and not contrary to it.
Only such directions as are reasonably necessary or expedient for carrying out the object of the enactment are contemplated by section 65.
If a direction were to be issued by the Government to lease out to private parties areas reserved in the scheme for public parks and play grounds, such a direction would not have the sanctity of section 65.
Any such diversion of the user of the land would be opposed to the statute as well as the object in constituting the BDA to promote the healthy devel opment of the city and improve the quality of 'life.
Any repository of power be it the Government or the BDA must act reasonably and rationally and in accordance with law and with due regard to the legislative intent.
[127B D] 3.5 The BD Act as enacted in 1976 has undergone several changes but the definition of 'amenity ' in Clause (b) or Sec. 2 remains unchanged.
Amenity includes various conven iences such as "road, drainage, lighting etc.
and such other conveniences" as are notified as 114 such by the Government.
The section was amended in 1984, and to add clause (bb) after clause (b) which distinguished a civic amenity from amenity,and specified as civic amenities, such as dispensaries, maternity homes, etc.
and those ameni ties which are notified as civic amenities by the Govern ment.
Clause (bb) which was substituted by Act 11 of 1988 defines a civic amenity as, amongst others, a dispensary, a hospital, a pathological laboratory, a maternity home and such other amenity as the Government may by Notification specify.
Thus, Clauses (b) and (bb) of Sec. 2 read together show that all those conveniences which are enumerated or notified by the Government under Clause (b) amenities and those amenities which are enumerated or notified by the Government under clause (bb) are civic amenities.
Signifi cantly, a hospital is specifically stated to be a civic amenity.
However, the concept of amenity under clause (b) remains uncchanged, though, it is not clear from sub clause (i) of clause (bb) whether a hospital, when is not run by the Government or a civic 'Corporation ', but by a private body as in the instant case, would qualify as 'civic ameni ty '.
But the Act of 1988 was merely clarificatory of what was always the position and the hospital has always regarded as an 'amenity ', if not a `civic amenity '.
[119C G, 120A] 4.1 Protection of the environment, open spaces for recreation and fresh air, play grounds for children prome nade for the residents, and other conveniences or amenities are matters of great public concern and of vital interest to be taken care of in a development scheme.
It is that public interest which is sought to be promoted by the Act by estab lishing the BDA.
[129C] 4.2 The public interest in the reservation and preserva tion of open spaces for parks and play grounds cannot be sacrificed by leasing or selling such sites to private persons for conversion to some other user.
Any such act would be contrary to the legislative intent and inconsistent with the statutory requirements.
Furthermore, it would be in direct conflict with the constitutional mandate to ensure that any State action is inspired by the basic values of individual freedom and dignity and addressed to the attain ment of a quality of life which makes the guaranteed rights a reality for all the citizens.
[129D E] Kharak Singh vs The State of U.P. & Others, [1964] 1 SCR 332; Municipal Council Ratlam vs Shri Vardhichand & Ors., ; ; Francis Coralie Muffin vs The Administrator Union Territory of Delhi & Ors., ; ; Olga Tellis & Ors.
vs Bombay Municipal Corporation & Ors., ; ; State of Himachal Pradesh 115 Deo Singh Tomar vs State of Bihar.
, ; , re ferred to.
4.3 Reservation of open spaces for parks and play grounds is universally recognised as a legitimate exercise of statutory power rationally related to the protection of the residents of the locality from the iII effects of urban isation.
Crowded urban areas tend to spread disease, crime and immorality.
[129G, 130G] Karnataka Town and Country Planning Act, 1961; Maharash tra Regional and Town Planning Act, 1966; Bombay Town Plan ning Act, 1954; The Travancore Town and Country Planning Act, 1120; The Madras Town Planning Act 1920; and the Rules framed under these Statutes; Town & Country Planning Act, 1971 (England & Wales); Encyclopaedia Americana, Volume 22, page 240; Encyclopaedia of the Social Sciences, Volume XII at page 161; Town Improvement Trusts in India, 1945 by Rai Sahib Om Prakash Aggarawala, p. 35; et.
; Halsbury 's Statutes, Fourth Edition, p. 17; el. seq.
and Journal of Planning & Environment Law, 1973, p. 130 et.
Penn Central Transportation Company vs City of New York, 57 L. Ed. 2d/631 ; 1978; Village of Belle Terre vs Bruce Boraas, ; 1974 Village of Euclid vs Ambler Realty Company, 1926 Halsey vs Esso Petro leum Co. Ltd., [1961] 1 WLR; Thomas J. Schoenbaum, Environ mental Policy Law 1985 p. 438; et.
Summary and Comments ; et.
and Agins vs City of Tribu ron; , 1980, referred to.
Samuel Berman vs Andrew Parker, ; , referred to.
4.4 Any reasonable legislative attempt bearing a ration al relationship to a permissible state objective in economic and social planning will be respected by the courts.
A duly approved scheme prepared in accordance with the provisions of the Act is a legitimate attempt on the part of the Gov ernment and the statutory authorities to ensure a quiet place free of dust and din where children can run about and the aged and the infirm can rest, breath fresh air and enjoy the beauty of nature.
These provisions are meant to guaran tee a quiet and healthy atmosphere to suit family needs of persons of all stations.
Any action which tends to defeat that object is invalid.
[131D F] Village of Belle Terre vs Bruce Boraas, ; ; Village of Euclid vs Ambler Realty Company, 1926, and 116 T. Damodhar Rao & Ors.
vs The Special Officer, Municipal Corporation of Hyderabad & Ors., , referred to.
|
Civil Appeal Nos.
1837 1841 of 1977.
From the Judgment and Order dated 28.10.1976 of the Karnataka High Court in Misc.
First Appeal Nos. 557 to 561 of 1975.
Dr. Anand Prakash, Ms. Kitty Kumaramangalam and C.V. Subba Rao for the Appellant.
309 G.B. Pai, Dr. Shankar Ghosh, D.N. Mishra and Ms. Mridula Ray for the Respondents.
The Judgment of the Court was delivered by K. JAGANNATHA SHETTY, J.
These appeals by special leave are directed against the judgment of the Karnataka High Court rejecting the claim of the appellant Corporation for covering the factories the respondents under the provisions of the (the Act).
Section 1(4) excluses "seasonal factory" from the scope of the Act.
The "seasonal factory" is defined under Section 2(12) of the Act which is extracted hereunder: "Seasonal factory means a factory which is exclusively engaged in one or more of the following manufacturing processes, namely, cotton, ginning, cotton or jute pressing.
decortication of groundnuts, the manufacture of coffee, indigo, lac, rubber, sugar (includ ing gur) or tea or any manufacturing process which is incidental to or connected with any of the aforesaid processes.
" The factories of the respondents were excluded from the operation of the Act since they were declared to be the seasonal factories within the meaning of the above stated definition.
There is no dispute on this aspect.
By Amending Act 44 of 1966 which came into force with effect from 28th January 1968, the definition of "seasonal factory" has been amended.
The definition as amended reads: "Seasonal factory means a factory which is exclusively engaged in one or more of the following manufacturing processes, namely, cotton ginning, cotton or jute pressing.
decortication of groundnuts.
the manufacture of coffee, indigo, lac, rubber, sugar (includ ing gur) or tea or any manufacturing process which is incidental to or connected with any of the aforesaid processes and includes a factory which is engaged for a period not exceeding seven months in a year (a) in any process of blending, packing or re packing of tea or coffee; or 310 (b) in such other manufacturing process as the Central Government may, by notification in the Official Gazette, specify; The expressions "manufacturing process" and "power" shall have the meaning respective ly assigned to them in the ".
After the said amendment, the Employees ' State Insur ance Corporation called upon the respondents to pay the contributions payable under the Act and threatened to take coercive steps to recover the arrears under the Revenue Recovery Act and prosecute them.
Challenging the validity of the demand made, the respondents approached the Employees ' Insurance Court, inter alia contending that the amendment to the definition of the expression "seasonal factory" brought out by the Amending Act 44 of 1966 has not altered the position of the seasonal factory as obtained prior to the amendment and Section 1(4) of the Act would still continue to exclude such factory from the operation of the Act.
The Employees ' Insurance Court accepted the respondent 's plea.
The Karnataka High Court has also agreed with the view taken by the Employees ' Insurance Court.
The Corporation has now appealed to this Court.
The sole question for consideration is whether the respondents ' factories in view of the amendment to the definition of 'seasonal factory ' have lost the benefit of exclusion from the Act.
The High Court on this aspect has observed that the purpose of the amendment was to enlarge and not to restrict the statutory concept of 'seasonal factory ' and the position of respondents establishments as seasonal factories under and for the purpose of the Act remained unaltered even after the amendment.
The view ,taken by the High Court seems to be justified.
The statement of Objects and Reasons of the Bill which later became the Act 44 of 1966 indicates that the proposed amend ment was to bring within the scope of the definition of 'seasonal factory ', a factory which works for a period of not exceeding seven months in a year (a) in any process of blending, packing or repacking of tea or coffee; or (b) in such other manufacturing process as the Cenrtral Government may, by notification in the Official Gazette, specify.
The amendment therefore, was clearly in favour of the widening the definition of 'seasonal factory '.
The amendment is in the nature of expansion of the original definition as it is clear from the use of the words 'include a factory '.
311 The amendment does not restrict the original definition of "seasonal factory" but makes addition thereto by inclusion.
The word "include" in the statutory definition is generally used to enlarge the meaning of the preceding words and it is by way of extension, and not with restriction, The word 'include ' is very generally used in interpretation clauses in order to enlarge the meaning of words or phrases occur ring in the body of the statute; and when it is so used, these words or phrases must be construed as comprehending, not only such things as they signify according to their natural import but also those things which the interpreta tion clause declares that they shall include.
(See: (i) Stroud 's Judicial Dictionary, 5th ed.
3, p. 1263 and (ii) C.I.T. Andhra Pradesh vs M/s Taj Mahal Hotel, Secun derabad; , (iii) State of Bombay vs The Hospital Mazdoor Sabha & Ors., ; at 875.
In view of these well accepted statutory construction, the decision of the High Court does not call for interfer ence.
In the result the appeals and the special leave petition fail and are dismissed with costs.
S.B. Appeals and petition dismissed.
| The Regional Director, State Employees Corporation the appellant in the instant case claimed for covering the factories of the respondents M/s. High Land Coffee Works of P.F.X. Sakdanha & Sons under the provisions of the .
Section 1(4) of the Act excludes "seasonal factory" from the scope of the Act.
The seasonal factory is defined under section 2(12)of the Act.
The factories of the respondents were excluded from the operation of the Act since they were declared to be seasonal factories within the meaning of the definition of section 2(12) of the Act.
By amending Act 44 of 1966 which came into force from 28th January, 1966,the definition of 'seasonal factory ' has been amended and accordingly the seasonal factory means a factory which exclusively engaged in one or more of the manufacturing processes detailed in the definition and includes a factory which is engaged for a period not exceed ing seven months in a year.
The expressions manufacturing process & power shall have the meaning respectively assigned to them in the .
So after the amendment the Corporation called upon the respondents to pay the contributions payable under the Act and threatened to take coercive steps to recover the arrears under the Revenue Recovery Act and prosecute them.
The respondents challenged the demand made by the appel lants in the Employees Insurance Court contending that even the amending of 1966 has not altered the definition of seasonal factory, would still excludes such factory from the opera tion of the Act.
The Employees Insurance Court accepted the plea of the respondents and even the Karnataka High Court agreed to the view of aforesaid Court.
So the Corporation appealed to this Court.
The sole question before the Court for consideration is whether the respondents ' factories in view of the amendment to the definition of seasonal factory have lost the benefit of exclusion from the Act.
Dismissing the appeals and the special leave petition the Court, HELD: That in the instant case the High Court observa tion that the purpose of the definition by the amending act was to enlarge and not to restrict the Statutory concept of seasonal factory so the position of the respondents estab lishments as seasonal factories remain unaltered.
This view seems to be justified because the objects reasons of the Bill of the amending Act clearly indicates that the proposed amendment was to 'bring within the scope of the definition of seasonal factory ' a factory which works for a period of not exceeding seven months in a year a) in any process of blending, packing or repacking of tea or coffee b) in such other manufacturing processes as the Central Government may, by notification in the official Gazettee specify.
Thus amendment is clearly in favour of widening the definition of seasonal factory ' because the word 'include ' in the Statutory definition is generally used to enlarge the mean ing of the preceeding words.
This is well accepted statutory construction that in interpretation clauses in order to enlarge the words or phrases occuring in the body of the statute the word include is very generally used.
[310F 311C] Stroud 's Dictionary, 5th Edn.
3 page 1263.
C.I.T. Andhra Pradesh vs M/s. Taj Mahal Hotel, Secun derabad, 971 ] 3 SCC 550 and State of Bombay vs The Hospital Mazdoor Sabha Ors., [1960] 2 SCR p. 666 at 875, referred to.
|
on (CRL.) No. 1061 of 1982.
(Under Article 32 of the Constitution of India).
M.A. Krishna Moorthy, A.S. Pundir, Din Dayal Sharma, Ms. Sangeeta Aggarwal, C.V. Subba Rao and Gopal Subramaniam for the appearing parties.
The following Order of the Court was delivered: Pursuant to our order of May 10, 1991, this matter was called on 11th July, 1991, when parties and both the Commis sioners were heard.
The report from the Executive Chairman of the U.P. State Legal Aid and Advice Board has been re ceived and looked into.
The proceeding has been pending in this Court for almost nine years.
In spite of all possible orders and directions made from time to time no substantial progress has yet been made.
The land records have got to be prepared; the forest land has to be identified and final action under the Forest Act has to be taken.
The exercise involved in this process is undoubtedly massive but that by itself would not justify a protracted proceeding.
When we made our order in May, 1991, we had a feeling that before the rains started there would be substantial progress.
The rainy season has come though rains are belat ed.
In these two months, however, there has been no progress.
Mr. R.P. Pandey, one of the Commissioners has been staying at Allahabad and he does not find it convenient to shift to the site.
As we indicated earlier, the matter has reached a stage where presence of all the officers and the Commissioners at the site has become almost indispensable Mr. Pandey has informed the Court that he would find it difficult to shift to the site.
We do not think much of his services can be utilised if he is allowed to stay at Allaha bad.
It would, therefore, be 404 necessary to substitute him by appointing some other judi cial officer as Commissioner.
Mr. Pandey had done good work during the period he was supervising the process.
We would suggest to the Secretary to the Commission appointed by us to make a report to us as to in what way Mr. Pandey can be compensated for the work done.
In place of Mr. R .P.
Pandey we direct Shri Prem Singh, retired District Judge of the State to be appointed as one of the Commissioners.
The Registry shall cake steps to intimate him of the assignment at his Varanasi address.
At the hearing of the matter, on 11th July grievance was made that several directions out of the order of 10th May, 1991 had not been complied with.
Mr. Yogeshwar Prasad, Senior Advocate for the State of Uttar Pradesh assured us in Court that immediate steps would be taken to comply with all the directions excepting the requirement of depositing of Rs.20 lakhs with the Secretary of the Commission.
We have considered his stand in regard to the direction for deposit ing Rs.20 lakhs and are prepared to modify the amount of Rs.20 lakhs to Rs.5 lakhs in view of the assurance that more of funds can come on requisition without loss of time.
That amount may be kept in deposit with the Secretary in the imprest account within two weeks hence.
The State of Uttar Pradesh shall file an affidavit that all the directions made on 10th May as modified now have been complied with within three weeks from today in the Registry of this Court.
Some time back, the Chief Secretary had set up a small Committee at Lucknow for monitoring the work.
We suggest to the Chief Secretary that he may revive the Committee which on account of the intervening disturbances of law and order followed by the general elections had perhaps been abandoned so that coordinated activity may be possible.
We request Mr. Justice Loomba, Executive Chairman of U.P. State Legal Aid and Advice Board to continue to super vise the work which he has been doing already so that the monitoring at the spot can 'appropriately be cross checked He is requested to send monthly reports to the Court.
The matter may be placed again five weeks hence.
Petition disposed of with interim directions.
| Under Section 20 of the Forest Act, 1927 certain areas were declared as reserve forest.
On behalf of the inhabi tants of the areas, the petitioner filed the present Writ Petition challenging their eviction from the said areas.
From time to time this Court had been passing interim orders and directions.
This Court also appointed Commissioners for the purpose of preparation of land records, identification of forest land and the final action to be taken under the Forest Act.
Reviewing the progress made so far and passing interim directions, this Court, HELD: 1.
The exercise involved in the process of prepar ing the records, identification of forest land and final action under the Forest Act, is undoubtedly massive but that by itself would not justify a protracted proceeding.
[403E] 2.
Mr. R.P. Pandey, one of the Commissioners has been staying at Allahabad and he does not find it convenient to shift to the site.
The matter has reached a stage where presence of all the officers and the Commissioners at the site has become almost indispensable.
Not much of his serv ices can be utilised if he is allowed to stay at Allahabad.
It would, therefore, be necessary to substitute him by appointing some other judicial officer as Commissioner.
In his place, Shri Prem Singh, retired District Judge would be appointed as one of the Commissioners.
The Registry shall take steps to intimate him of the assignment at his V arana si address.
[403G H; 404A B] 3.
With regard to the direction for depositing Rs.20 lakhs it is modified as Rs.5 lakhs in view of the assurance that more funds can come on requisition without loss of time.
[404D] 403 4.
The Chief Secretary may revive the Committee set up to monitor the work.
[404E F] 5.
The Executive Chairman of U.P. State Legal Aid and Advice Board would continue to supervise the work and send monthly reports to the Court.
[404F G]
|
N: Civil Appeal Nos.
5969 70 (NM) of 1990.
From the Order dated 21.8.1990 of the Customs, Excise and Gold (Control), Appellate Tribunal, New Delhi in Appeal Nos.
ED/SB/T/945/80 A and ED/SB/T/A. No. 586/81 A (Order No. 1284 to 1286/90 A.).
Dr. Debi Paul, Harish Salve, Darshan Singh, Ms. Suman J. Khaitan and Ms. Priya Hingorani for the appellant.
A. Subba Rao for the Respondent.
The following Order of the Court was delivered: These appeals arise out of and directed against the common appellate order dated 21.8.1990 of the Customs, Excise and Gold (Control) Appellate Tribunal, New Delhi ( 'Tribunal ' for short) m ' Appeals Nos.
ED/SB/T 945/80A and ED/SB/T/586/8 1A.
By the same order another appeal of the appellant was also disposed of but that matter is not car ried up in appeal here.
The appellant, M/s. Texmaco Ltd., pursuant to con tracts entered into in this behalf with the Railway Adminis tration fabricated and delivered to the Railways wagon bodies mounted on "wheel sets" supplied by the Railways.
The invoices raised by the appellant respecting these wagons reflected only the price of the wagon bodies without includ ing the value of the "wheel sets" on which the wagon bodies were mounted.
The goods were cleared for purposes of Excise duties on such invoice value.
The Revenue raised demand for recovery of short levy and sought to recover the unpaid duty on the value of the "wheel sets" also.
This claim for recov ery of the short levy having been adjudicated against the appellant, an appeal was taken before the Tribunal.
Before the Tribunal, it would appear, two contentions were raised: First that the goods manufactured by the appel lant were only the wagon bodies mounted on the "wheel sets" supplied by the Railway Administration and that, therefore, the assessable value could only be the value of the wagon bodies excluding the "wheel sets" 326 supplied by the Railways and, secondly, that at all events the value in excess of the 'invoice value ' which represented the price of the wagonbodies was exempt from levy of duty under the Exemption Notification No. 120/75 CE dated 30 April, 1975 issued under Rule 8 of the Central Excise Rules, 1944.
What is implicit in the second contention is that, but for the said Notification No. 120/75 CE dated 30.4.1975, the assessable value would otherwise require the exclusion in it the value of the "wheel sets" also on the premise that the "wheel sets" became an integral part of the wagons, even though the "wheel sets" had been supplied free of cost by the Railways themselves.
The Notification No. 120/75 CE exempted "so much of the duty of excise . . as is in excess of the duty calculated on the basis of invoice prices".
On the first contention: that the 'assessable value ' of the 'goods ' could not include the "wheel sets" which were not fabricated or manufactured by the appellant, the Tribu nal, rejecting the contention said: "On going through the facts and in view of the clear findings given by the lower authorities that no wagon is complete without the wheels; what has been cleared and removed by the appellants is the wagon mounted on wheel sets and not the wagon body alone .
On the issue of determination of assessable value, the Supreme Court has held that for the purpose of levy of excise duty, the value of the article is the full intrinsic value of the article inclusive of the cost of the materials and components supplied free by the customer and irrespective of the fact that no expenditure was incurred by the manufactur er on such components." No fault can be found with this reasoning of the Tribunal, indeed, considerations of ownership of the goods are extra neous to levy of duties of excise which are imposts on manufacture.
The second contention on which Dr. Pal laid particu lar emphasis, indeed, assumes the correctness of the first proposition and claims exemption on the strength of the Notification No. 120/75 CE.
That Notification says: "The Central Government has exempted goods falling 327 under Item No. 68 of the First Schedule to the (1 of 1944), cleared from the factory of manufac ture, on sale, from so much of the duty of excise leviable thereon as is in excess of the duty calculated on the basis of the invoice price (excluding duty and local taxes, if any, included in such price) charged by the manu facturer for the sale of such goods: Provided that the aforesaid exemp tion shall be admissible only if (i) the manufacturer files with the Superin tendent of Central Excise having jurisdiction a written declaration to the effect that he opts to avail of the said exemption: (ii) Omitted as unnecessary (iii) (iv) the invoice price is not influenced by any commercial, financial or other relation ship whether by contract or otherwise between the manufacturer or any person associated in business with the manufacturer and the buyer other than the relationship created by sale of the aforesaid goods: (v) Omitted as unnecessary.
Provided . (Omitted as unnecessary) The Tribunal also rejected the claims for exemption under the Notification.
It said: "We are unable to agree with the arguments of the appellants ' counsel that assessable value of the article is different from the consideration received by the appel lants to claim benefit under Notification 120/75.
To claim exemption on benefit under Notification 120/75 it should be subjected to in compliance with the conditions specified therein.
Condition No. IV of Notification No. 120/75 required that the invoice value should be 328 the full commercial price of the article.
According to the decision of the Supreme Court (supra) the value of the article is the in trinsic value and not restricted consideration received by the appellant as urged by the appellants ' counsel.
In the view we have taken, the appellants are not entitled to concession under Notification No. 120/75 dated 30.4.
1975 .
Dr. Pal appearing in support of the appeals urged that the Tribunal misdirected itself in law in its construc tion of the exemption Notification and in its reasoning that there was something in Clause (iv) of the Notification which detracted from the permissibility of its benefit in the present case.
Dr. Pal said that it was erroneous to read the said condition as requiring the 'invoice value ' to be the full commercial price of the goods including therein the value of the "wheelsets".
Dr. Pal said that clause (iv) did no more than merely importing the requirement that the invoice price should reflect a transaction at arms ' length and not that appellant 's invoice price should also include the value of the "wheel sets" supplied by the Railways.
Dr. Pal further urged that the very purpose of the exemption was to relieve the manufacturer from bearing the burden of the duty on such part of the assessable value as did not reflect the value of his supply and services but represented the value of the "wheel sets" supplied by the Railway Adminis tration itself free of charge.
If Clause (iv) was construed in the way in which the Tribunal did, the effect, counsel said, would be to take away with one hand what the notifica tion gave with the other.
Shri Subba Rao, learned counsel for the Revenue, with his usual tenacity contended that Clause (iv) of the Notifi cation signified and imported idea of full value of the manufactured goods being required to be reflected in the invoice and that the reasoning of, and the conclusion reached by, the Tribunal was correct.
On a consideration of the matter we are afraid the Tribu nal fell in to an error in its understanding of the notifi cation.
The Notification posits and predicates the possibil ity that the 'invoice value ' could be lesser than the "assessable value" and, taking into account the need to mitigate the hardship on the manufacturer of being called upon to pay ' duty on the value in excess of the invoice value, seeks to exempt the manufacturer from payment of duty "in excess of the duty calculated on the basis of the 'i nvoice price '.
There is no dipute in this case that the invoice price represented the value of the wagons, less the value of the "wheel sets" supplied by the Railways.
The invoice price 329 could not be required to include the value of the "wheel sets".
But the "assessable value" would take into account the full commercial value including that of the "wheel sets".
It is in order to mitigate the hardship that may arise by requiring the manufacturer to pay duty on this difference in such cases that the Notification No. 120/75 came to be promulgated.
There is nothing in Clause (iv) which enjoins upon the appellant to include the value of the "wheel sets".
The contract between the parties does not also require this.
The way in which the Tribunal looked at the Notification is neither good sense nor good law.
Such con struction would make the Notification and the exemption contemplated thereunder meaningless.
The need for the exemp tion arose in view of the fact that "assessable value" was higher than the 'invoice value '.
Requiring the former and the latter to be the same as something compelled by Clause (iv) is really to construe the Notification against itself.
Shri Subba Rao placed strong reliance on the pro nouncement of this Court in M/s. Burn Standard Company Ltd. & Anr.
vs Union of India & Ors., [1991] 3 Judgments Today 108.
On the contentions raised and argued in that case the judgment, if we may say so with great respect, is correct.
The question of the effect of the exemption Notification No. 120/7.5 CE was not raised and argued in that case.
That apart, the exemption Notification itself makes it clear that it does not apply or is attracted to every case automatical ly, but that the manufacturer should expressly opt for the benefit of the Notification.
Since no such claim was made in that case, the decision therein is of no assistance to the revenue.
We accordingly allow these appeals; set aside the order of the authorities as well the affirming order of the Tribunal under appeal and hold that the appellant was enti tled under the said Notification No 120/75/CE, to exemption from that part of the duty as was in excess of the invoice price which, we hold, was not required to include the value of the "wheel sets".
V.P.R. Appeals allowed.
| The appellant pursuant to contracts entered into with the Railway Administration fabricated and delivered to the Railways wagon bodies mounted on "wheel sets" supplied by the Railways.
The appellant 's invoices, reflected only the price of the wagonbodies without including the value of the "wheel sets" on which the wagon bodies were mounted.
The goods were cleared for purposes of Excise duties on such invoice value.
The Revenue raised demand for recovery of short levy and sought to recover the unpaid duty on the value of the "wheel sets" also.
The claim for recovery of the short levy having been adjudicated against the appellant, appeals were filed before the Tribunal, by the appellant contending that the goods manufactured by the appellant were only the wagon bodies mounted on the "wheel sets" supplied by the Railway Adminis tration; and therefore, the assessable value could only be the value of the wagon bodies excluding the "wheel sets" supplied by the Railways; and that at all events the value in excess of the 'invoice value ' which represented the price of the wagon bodies was exempt from levy of duty under the Exemption Notification No. 120/75CE dated 30th April, 1975 issued under Rule 8 of the Central Excise Rules, 1944.
The Tribunal dismissed the appeals, against which, the present appeals were filed before this Court.
The appellant contended that the Tribunal misdirected itself in law in its construction of the exemption Notifica tion and in its reasoning that there was something in Clause (iv) of the Notification which detracted from the permissi bility of its benefit in the present case; that 324 it was erroneous to read the condition as requiring the 'invoice value ' to be the full commercial price of the goods including therein the value of the "wheel sets"; that the very purpose of the exemption was to relieve the manufactur er from bearing the burden of the duty on such part of the assessable value as did not reflect the value of his supply and services but represented the value of the "wheel sets" supplied by the Railway Administration itself free of charge.
The Revenue Respondent contended that Clause (iv) of the Notification signified and imported the idea of full value of the manufactured goods being required to be reflected in the invoice and that the reasoning of, and the conclusion reached by, the Tribunal was correct.
This Court allowing the appeals, HELD. 1.
The Notification posits and predicates the possibility that the invoice value ' could be lesser than the "assessable value" and, taking into account the need to mitigate the hardship on the manufacturer of being called upon to pay duty on the value in excess of the invoice value, seeks to exempt the manufacturer from payment of duty "inexcess of the duty" calculated on the basis of the 'i nvoiceprice '.
[328G H] 2.
The way in which the Tribunal looked at the Notifica tion is neither good sense nor good law.
Such construction would make the Notification and the exemption contemplated thereunder meaningless.
The need for the exemption arose in view of the fact that "assessablevalue" was higher than the 'invoice value '.
Requiring the former and the latter to be the same as something compelled by Clause (iv) is really to construe the Notification against itself.
[329B C] 3.
In this case, there is no dispute that the invoice price represented the value of the wagons, less the value of the "wheel sets" supplied by the Railways.
The invoice price could not be required to include the value of the "wheel sets".
But the "assessable value" would take into account the full commercial value including that of the "wheel sets".
1t is in order to mitigate the hardship that may arise by requiring the manufacturer to pay duty on this difference in such cases that the Notification No. 120/75 came to be promulgated.
[328H 329B] 4.
There is nothing in Clause (iv) which enjoins upon the appellant to include the value of the "wheel sets".
The contract between the parties does not also require this.
[329B] 325 M/s. Burn Standard Company Ltd. & Anr.
vs Union of India
|
: Criminal Appeal (Con tempt) No. 144 of 1987.
From the Judgment and Order dated 13.1.87 of the Punjab and Haryana High Court in Crl.
Original Contempt Petition No. 22 of 1985.
Mahabir Shingh for the Appellant.
S.K. Bisaria, (N.P.) for the Respondents.
The Judgments of the Court were delivered by AHMADI, J. I am in complete agreement with my learned Brother Agrawal, J. that there is no merit in this appeal but I would like to add a few words of my own.
The appellant, a practising Advocate, having failed to persuade the learned Subordinate Judge to grant an ad inter im injunction pending filing of a counter by the opposite party, switched gear from persuasive advocacy to derogatory remarks in the fond hope that such tactic would succeed and the learned Judge would be browbeaten into submission.
Fortunately the learned Judges was made of sterner stuff and refused to succumb to such unprofessional conduct.
Instead he made a record of the disrespectful and derogatory remarks made with intent to tarnish his image as a Judicial Officer and forwarded a report to the District Judge who in turn reported the matter to the High Court to enable it to initi ate proceedings for contempt of court against the appellant.
The exact words uttered by the appellant, reproduced in the 316 judgment of my learned brother, leave no doubt that the intention of the appellant was to cast aspersions on the integrity of the learned Judge and to lower him in the esteem of others by creating doubts regarding his honesty, judicial impartiality and independence.
The tendency of maligning the reputation of Judicial Officers by disgruntled elements who fail to secure the desired order is ever on the increase and it is high time it is nipped in the bud.
And, when a member of the profession resorts to such cheap gim micks with a view to browbeating the judge into submission, it is all the more painful.
When there is a deliberate attempt to scandalise which would shake the confidence of the litigating public in the system, the damage caused is not only to the reputation of the concerned judge but also to be fair name of the judiciary.
Veiled threats, abrasive behaviour, use of disrespectful language and at times bla tant condemnatory attacks like the present one are often designedly employed with a view to taming a judge into submission to secure a desired order.
Such cases raise larger issues touching the independence of not only the concerned judge but the entire institution.
The foundation of our system which is based on the independence and impar tiality of those who man it will be shaken if disparaging and derogatory remarks are made against the Presiding Judi cial Officers with impunity.
It is high time that we realise that the much cherished judicial independence has to be protected not only from the executive or the legislature but also from those who are an integral part of the system.
An independent judiciary is of vital importance to any free society.
Judicial independence was not achieved overnight.
Since we have inherited this concept from the British, it would not be out of place to mention the struggle strong willed judges like Sir Edward Coke, Chief Justice of the Common Pleas, and many others had to put up with the Crown as well as the Parliament at considerable personal risk.
And when a member of the profession like the appellant who should know better so lightly trifles with the much endeared concept of judicial independence to secure small gains it only betrays a lack of respect for the martyrs of judicial independence and for the institution itself.
Their sacrifice would go waste if we are not jealous to protect the fair name of the judiciary from unwarranted attacks on its inde pendence.
And here is a member of the profession who has repeated his performance presumable because he was let off lightly on the first occasion.
Soft justice is not the answer not that the High Court has been harsh with him what I mean is he cannot be let off on an apology which is far from sincere His apology was follow, there was no remorse no regret it was only a device to escape the rigour of the law.
What he said in his affidavit was that he had not uttered the words attributed to him by the learned 317 Judge; in other words the learned judge was lying adding insult to injury and yet if the court finds him guilty (he contested the matter tooth and nail) his unqualified apology may be accepted.
This is no apology, it is merely a device to escape.
The High Court rightly did not accept it.
That is what this Court had done in a similar situation in L.D. Jaikwal vs State of U.P., [ ; This Court described it as a 'paper apology and refused to accept it in the following words: "We do not think that merely because the appellant has tendered his apology we should set aside the sentence and allow him to go unpunished.
Otherwise, all that a person wanting to intimidate a Judge by making the grossest imputations against him has to do, is to go ahead and scandalize him, and later on tender a formal empty apology which costs him practically nothing.
If such an apology were to be accepted, as a rule, and not as an exception, we would in fact be virtually issuing a 'licence ' to scandalize courts and commit contempt of court with impunity.
It will be rather difficult to persuade members of the Bar, who care for their self respect, to join the judiciary if they are expected to pay such a price for it.
And no sitting judge will feel free to decide any matter as per the dictates of his conscience on account of fear of being scandalized and persecuted by an advocate who does not mind making reckless allegations if the Judge goes against his wishes.
If this situation were to be counte nanced, advocates who can cow down the Judges, and make them fail in line with their wishes, by threats of character assassination and persecution, will be preferred by the liti gants to the advocates who are mindful of professional ethics and believe in maintaining the decorum of courts.
" When a member of the Bar is required to be punished for use of contemptuous language it is highly painful it pleases none but painful duties have to be performed to uphold the honour and dignity of the individual Judge and his office and the prestige of the institution.
Courts are generally slow in using their contempt jurisdiction against erring members of the profession in the hope that the concerned Bar Council will chasten its member for failure to maintain proper ethical norms.
If timely action is taken by Bar Councils, the decline in the ethical values can be easily arrested.
By refusing to interfere with the impugned order of the High 318 Court this Court is not merely punishing the appellant but is in fact upholding the independence of the Judiciary.
Let me conclude with the hope that this Court will not be called upon to deal with such a situation in future.
For the above reasons I agree that the appeal be dismissed.
S.C. AGRAWAL, J.
This appeal filed under section 19(1)(b) of the , 197 1 (hereinafter referred to as 'the Act ') is directed against the judgment and order of the High Court of Punjab and Haryana dated January 13, 1987 whereby the appellant has been convicted for having committed contempt of court under section 2(c)(i) of the Act and has been sentenced to pay Rs. 1,000 as fine and in case of default in payment of fine to undergo simple imprisonment for seven days.
The appellant, who is practising as an Advocate at Narnaul, was representing the plaintiff in Civil Suit titled Hari Ram vs Municipal Committee.
On September 20, 1985, the appellant appeared in the said suit for the plaintiff and orally prayed for ex parte ad:interim stay.
The said request was declined by the Subordinate Judge, Narnaul, who ordered for issuance of notice to the defendants for September 24,1985.
On September 24, 1985, Shri Banwari Lal Sharma ap peared for the defendants and requested for a date for filing a reply to the said application which request was not opposed by the appellant but the appellant prayed for ad interim stay in favour of the plaintiff.
The Subordinate Judge told the appellant that the question of ad interim stay would be considered after filing of the reply by the defendants and adjourned the case for September 26, 1985.
It appears that the appellant was not satisfied with this order passed by the Subordinate Judge and according to the Subor dinate Judge, Shri S.R. Sharma, the appellant uttered the following words in the Court: "You are wholly favouring the Municipal Com mittee.
Are you sitting as Judge or as Admin istrator of Municipal Committee? To me it seems that your are deciding the case as Administrator of Municipal Committee.
You are acting as, if you are a contractor of the Municipal Committee.
I do not expect any justice from you.
I do not think that you will grant stay to me as you are fully siding with the Municipal Committee.
You are not granting stay to me as you are in collusing with the Deputy Commissioner and under his (Deputy Commissioner) influence, you do not want to 319 grant stay to me and that he will complain against me to the Hon 'ble High Court.
" On September 25, 1985, the Subordinate Judge submitted a report exhibit P.A. to the District and Sessions Judge, Narnaul for taking necessary action against the appellant wherein the aforementioned words alleged to have been uttered by the appellant were set out.
The District and Sessions Judge, Narnaul submitted a report dated October 12, 1985, to the High Court and on the basis of the said report, proceedings for contempt were initiated against the appellant by the High Court.
The appellant submitted a reply by way of affi davit wherein he denied to have uttered the words mentioned in the report of Shri S.R. Sharma, Subordinate Judge, Nar naul to the District and Sessions Judge, Narnaul and also offered an unqualified apology.
Shri S.R. Sharma fi|ed his affidavit in the High Court and he was also examined as a witness, In addition, the High Court examined Shri Krishan Kumar Sharma, who was at the relevant time reader in the court of Shri S.R. Sharma, and three advocates, namely, Shri Banwari La| Sharma, Shri Gyan Chand Sharma and Shri Satya Narain Sharma.
The appellant did hot examine himself as a witness before the High Court.
The High Court found that the appellant had attacked the integrity of the learned Sub Judge by saying that he was a contractor of the Municipal Committee, that he was in collu sion with the Deputy Commissioner and he was under his influence and that the attack made on the learned Sub Judge disparaging in character and derogatory to his dignity would vitally shake the confidence of the public in him and that the aspersions made against the Sub Judge were much more than merely insult and, in fact, they scandalise the court in such a way as to create distrust in the people 's mind and impair confidence of the people in court.
The High Court was, therefore, of the view that the appellant had brought himself clearly within the ambit of contempt of court and he was accordingly found guilty under section 2(c)(i) of the Act.
As regards the apology tendered by the appellant, the High Court observed that this was not the first occasion and earlier also the proceedings for contempt had been initiated against him in pursuance of a report made by Shri K.K. Chopra, the then Chief Judicial Magistrate, Narnaul in C.O.C.P. No. 12 of 1983 wherein also the appellant had tendered an unqualified apology in the High Court and the rule against him was discharged and that the appellant is addicted to using contemptuous language and making scurri lous attacks on the judges.
The High Court held that apology must, in order to dilute the gravity of the 320 offence, be voluntary, unconditional and indicative of remorse and contrition and it should be tendered at the earliest opportunity and further, that the aspersions men tioned in the letter exhibit P.A. at 'A ' to 'A ' sent by Shri S.R. Sharma to the District and Sessions Judge, Narnaul were made by the appellant with a design and were not simply thoughtless and in such a case, the appellant cannot be allowed to get away by simply feeling sorry by way of apolo gy as the easiest way.
The High Court did not, therefore, accept the apology tendered by the appellant.
Shri Mahabir Singh, the learned counsel appearing for the appellant, has submitted that the High Court was in error in holding that the appellant had uttered the words mentioned in the letter exhibit P.A. sent by Shri S.R. Sharma to the District and Sessions Judge, Narnaul.
Shri Mahabir Singh has invited our attention to the statements of the witnesses who were examined before the High Court and has laid partic ular emphasis on the statement of Shri Banwari Lal Sharma, Advocate, who was representing the defendant Municipal Committee in the Civil Suit before the Subordinate Judge and was present in the court at the relevant time and who has stated that the appellant has not used any unparliamentary or foul language towards Shri S.R. Sharma, Sub Judge.
Shri Mahabir Singh has also referred to the statements of Shri Gyan Chand Sharma, Advocate and Shri Satya Narain Sharma, Advocate who have stated that they were present in the court of SubJudge, Narnaul on September 24, 1985 at about 2 or 2.15 p.m. when the appellant had requested the Subordinate Judge to grant ad interim stay against the Municipal Commit tee for demolition of a chabutra in the case of Hari Ram vs Municipal Committee and the said request of the appellant was declined by Shri S.R. Sharma and that the appellant did not use any discourteous or impolite language against Shri S.R. Sharma.
We have carefully perused the statements of the three Advocates mentioned above on which reliance has been placed by Shri Mahabir Singh.
Their evidence has to be considered along with the statements of the Sub JUdge, Shri S.R. Sharma Narnual and Shri Krishan Kumar Sharma, who was posted as reader in the court of ShriS.R. Sharma at that time.
Shri S.R. Sharma, during the course of examination in chief has stated that when he did not pass orders for interim injunc tion in favour of the appellant, he started speaking loudly and used defamatory language.
He has also repeated the language which was used by the appellant which in substance was in the same terms as mentioned in his letter exhibit P.A. addressed to the District and Sessions Judge, Narnaul, Shri Krishan Kumar Sharma in his deposition has stated: 321 ".
Shri M.B. Sanghi repeatedly tried to compel Shri Sita Ram Sharma to issue the ad interim injunction in favour of his client, but Shri Sita Ram Sharma had declined that request without hearing the arguments.
Shri M.B. Sanghi then stated that he had no hope of justice from Shri Sita Ram Sharma as the latter was behaving like an Administrator of the Municipal Committee.
Shri M.B. Sanghi, addressed Shri Sita Ram Sharma saying that he (Sh.
Sita Ram Sharma) was under the pressure of Deputy Commissioner, Narnaul.
" Nothing has been brought out during the course of exami nationin chief of these witnesses which may show that they were deposing falsely against the appellant.
The High Court has placed reliance on the testimony of these witnesses in preference to the testimony of three advocates, namely, Shri Banwari Lal Sharma, Shri Gyan Chand Sharma and Shri Satya Narain Sharma.
After considering the evidence of all the witnesses, I am inclined to agree with the appreciation of the evidence by the High Court.
I find no reason to discard the testimony of Shri S.R. Sharma who has been corroborated by his reader, Shri Krishan Kumar Sharma.
Considering the language used by the appellant in the Court of Shri S.R. Sharma, as mentioned by him in his report exhibit P.A. to the District & Sessions Judge, Narnaul and repeated by him in his statement before the High Court it must be held that the appellant had made an attack on the learned Subordinate Judge which was disparaging in character and derogatory to his dignity and would vitally shake the confidence of the public in him and that the aspersions made by the appellant had the effect of scandalising the court in such a way as to create distrust in the people 's mind and impair confidence of the people in court.
The appellant has, therefore, been rightly held guilty of having committed the contempt of court under section 2(c)(i) of the Act.
Shri Mahabir Singh has urged that the appellant is a fairly senior Advocate and has been practising for more than 20 years and since he had tendered unqualified apology before the High Court the same ought to have been accepted.
With regard to apology in proceedings for contempt of court, it is well settled that an apology is not a weapon of de fence to purge the guilty of their offence; nor is it in tended to operate as a universal panacea, but it is intended to be evidence of real contriteness.
(See: M.Y. Shareef & Anr.
vs The Hon 'ble Judges of the High Court of Nagpur & Ors., ; at p. 764).
In the instant case, I find that in his affidavit in reply to the notice issued by the High Court which is annexed at Annexure II, the appel lant first 322 denied having used the words as mentioned by Shri S.R. Sharma in his report sent to the District & Sessions Judge, Narnual or having shown disrespect in any manner whatsoever to Shri S.R. Sharma, the Presiding Officer of the court of Sub Judge, Narnaul on September 24, 1985.
In para 3 of the said affidavit, the appellant has stated as under: "That if this Hon 'ble Court comes to the conclusion that the deponent has committed contempt, the deponent tenders an unqualified apology to this Hon 'ble Court and begs for forgiveness.
The deponent is a senior and respected member of the Narnaul Bar besides that being law abiding citizen has greatest respect and regards for the judiciary and all the Presiding Officers.
" This would show that the apology that was tendered by the appellant before the High Court was to be taken into consideration in the event of the High Court finding the appellant guilty of having committed contempt of court.
Moreover in the present case, it has been found that this was not the first occasion in which proceedings for contempt of court had been initiated against the appellant and on an earlier occasion also proceedings for contempt of court had been initiated against the appellant in pursuance of a report of Shri K.K. Chopra, the then Chief Judicial Magis trate, Narnaul and in those proceedings the rule issued against the appellant was discharged on his tendering un qualified apology before the High Court.
In those proceed ings also the appellant is said to have made disparaging remarks against the Judge.
Keeping in view the said circum stance, the High Court has found that the appellant was addicted to using contemptuous language and making scurri lous attacks on judges.
Having regard to the fact that incidents of insubordination and use of improper language towards the judges are on the increase, the High Court was of the view that the appellant could not be allowed to get away by simply feeling sorry by way of apology as the easi est way.
I am unable to say that the High Court was not justified in taking this view.
Taking into consideration the facts and circumstances of the case and the fact that the appellant, a fairly senior advocate, is prone to use dispar aging and contemptuous remarks against judges, I am of the opinion that this is not a case in which the apology ten dered by the appellant may be accepted.
I, therefore, find no merit in the appeal and the same is accordingly dismissed.
G.N. Appeal dismissed.
| Unable to secure an ad interim stay in favour of his client, the appellant, a practising Advocate, uttered cer tain words imputing motives to the Sub Judge in refusing to grant the stay.
The sub Judge submitted a report to the District and Sessions Judge setting out the words uttered by the appellant, for taking necessary action against him.
The District and Sessions Judge in turn submitted a report to the High Court, and proceedings for contempt were initiated by the High Court.
In the contempt proceedings the appellant denied having uttered the words mentioned in the report of the Sub Judge and also offered unqualified apology.
The High Court held that the appellant was guilty of contempt of Court, under Section 2(c)(i) of the , as he had attacked the integrity of the Sub Judge by equating him with a Contractor of the Municipal Committee and by charging that he was in collusion with the Deputy Commissioner and was under his influence.
The High Court further held that the attack on the SubJudge, dispar aging in character and derogatory to his dignity, would vitally shake the confidence of the public in him.
The High Court did not accept the apology tendered by the appellant because the appellant 313 was addicted to using contemptuous language and making scurrilous attacks on the Judges, and had in an earlier contempt proceeding too tendered an unqualified apology on the basis of which the rule against him was discharged.
Aggrieved by the order of the High Court, the petitioner preferred the present appeal before this Court.
It was contended by him that he did not utter the words, as would be revealed by the statements of the three Advocates exam ined before the High Court, who had stated that the appel lant did not use any discourteous, unparliamentary or impo lite language against the Sub Judge.
Dismissing the appeal, this Court, HELD: (Per Agrawal, J.) 1.1.
The appellant had made an attack on the learned Subordinate Judge which was disparaging in character and derogatory to his dignity and would vitally shake the confi dence of the public in him and that the aspersions made by the appellant had the effect of scandalising the Court in such a way as to create distrust in the people 's mind and impair confidence of the prople in Court.
The appellant has, therefore, been rightly held guilty of having committed the contempt of court under section 2(c)(i) of the Act.
[319E G] 1.2.
The High Court, in its appreciation of evidence, has rightly placed reliance on the testimony of the Sub Judge corroborated by the evidence of the Reader in his Court, in preference to the testimony of the three Advo cates.
[321C] 2.
It is well settled that an apology is not a weapon of defence to purge the guilty of their offence; nor is it intended to operate as a universal panacea, but it is in tended to be evidence of real contriteness.
The apology that was tendered by the appellant before the High Court was so concluded as to be taken into consideration in the event of the High Court finding the appellant guilty of having com mitted contempt of court.
Moreover this was not the first occasion in which proceedings for contempt of court had been initiated against the appellant and on an earlier occasion also proceedings for contempt of court had been initiated against him in pursuance of a report of the then Chief Judicial Magistrate, and in those proceedings the rule issued against the appellant was discharged on his tendering unqualified apology before the High Court.
In those proceed ings also the appellant is said to have made 314 disparaging remarks against the Judge.
Keeping in view the said circumstance, the High Court has found that the appel lant was addicted to using contemptuous language and making scurrilous attacks on Judges.
Having regard to the fact that incidents of insubordination and use of improper language towards the Judges are on the increase, it could not be said that the High Court was not justified in taking the view that the appellant could not be allowed to get away by simply feeling sorry by way of apology as the easiest way.
The apology tendered by the appellant could not, therefore, be accepted.
[321G H; 322A B] M.Y. Shareef & Anr.
vs The Hon 'ble Judges of the High Court of Nagpur & Ors., ; , relied on.
Per Ahmadi, J. (Concurring): 1.
The exact words uttered by the appellant, leave no doubt that the intention of the appellant was to cast aspersions on the integrity of the Judge and to lower him in the esteem of others by creating doubts regarding his honesty, judicial impartiality and independence.
The tendency of maligning the reputation of Judicial Officers by disgruntled elements who fail to secure the desired order is ever on the increase and it is high time it is nipped in the bud.
And, when a member of the profession resorts to such cheap gimmicks with a view to browbeating the Judge into submission, it is all the more painful.
When there is a deliberate attempt to scandalise which would shake the confidence of the litigating public in the system, the damage caused is not only to the reputation of the concerned Judge but also to the fair name of the judiciary.
Veiled threats, abrasive behaviour, use of disre spectful language and at times blatant condemnatory attacks like the present one are often designedly employed with a view to taming a Judge into submission to secure a desired order.
Such cases raise larger issues touching the independ ence of not only the concerned Judge but the entire institu tion.
The foundation of our system which is based on the independence and impartiality of those who man it will be shaken if disparaging and derogatory remarks are made against the Presiding Judicial Officers with impunity.
The much cherished judicial independence which is of vital importance to any free Society, has to be protected not only from the executive or the legislature but also from those who are an integral part of the system.
[315H; 316A E] 2.
In the instant case, the appellant repeated his performance presumably because he was let off lightly on the first occasion.
Softjustice is not the answer.
The appellant cannot be let off on an apology which is far from sincere.
His apology was hollow, there was no remorse no regret it was only a device to escape the rigour of the 315 law.
The High Court rightly did not accept it.
[316G H; 317A B] L.D. Jaikwal vs State of U.P., ; , relied on.
When a member of the Bar is required to be punished for use of contemptuous language it is highly painful it pleases none but painful duties have to be performed to uphold the honour and dignity of individual Judge and his office and the prestige of the institution.
Courts are generally slow in using their contempt jurisdiction against erring members of the profession in the hope that the con cerned Bar Council will chasten its members for failure to maintain proper ethical norms.
If timely action is taken by Bar Councils, the decline in the ethical values can be easily arrested.
[317G]
|
ivil Appeal No. 1821 of 1991.
From the Judgment and Order dated 17 4.
1990 of the Central Administrative Tribunal, Delhi in R.A. No. 117/88 in T.A. No. 351 of 1986.
O.P. Saxena and Mukul Gupta for the Appellant.
J.D. Jain, Kailash Vasudev, Ms. Sushma Suri and S.N. Terdal for the Respondents.
332 The Judgment of the Court was delivered by K. JAGANNATHA SHETTY, J.
This appeal is from an order of the Central Administrative Tribunal, New Delhi and concerns with the scope of Rule 10(4) of the Central Civil Service (CCA) Rules, 1965 ( 'the Rules ') The facts leading to the appeal are these: The appellant was a cash clerk in the establishment of Delhi Milk Scheme, New Delhi.
There was some criminal case connected with the forgery of a cheque in which the appellant was arrayed as an accused.
Pending investigation of the criminal case, he was placed under suspension.
The order of suspension was made on March 27, 1976 under Rule 10(2) of the Rules.
On January 10, 1976 his services were terminated under Rule 5(1) of the Central Civil Services (Temporary Service) Rules, 1965.
On March 7, 1980, the appellant was acquitted in the criminal case.
On January 5, 1981 the appellant filed a civil suit in the District Court, New Delhi, challenging the order of termination of his services.
The suit was transferred to the Central Administrative Tribunal for disposal.
The Tribunal has, by its judgment dated September 5, 1988 set aside the termination order with the following conditions: "(i) The impugned order of termination dated 10.1.1978 is quashed.
Consequently, status quo ante as in regard to applicant being under suspension will continue from 10.1.1978.
(ii) It will be open to the competent authori ty to take a final decision on the continuance or otherwise of the suspension in the light of the judgment of Chief Judicial Magistrate dated 7.3.80 in case No. 57/2.
It will be open to the competent authority to revoke the order of suspension and reinstate the plaintiff into service as cash clerk.
In that event, the pay and allowances of the plaintiff during the period of his actual suspension from 27.3. 1976 to 10.1.78 and deemed suspension thereaf ter shall be regulated in accordance with the provisions of F.R. 54 B. Necessary adjust ments, if any, should be made or in regard to the subsistence allowance already paid to him.
The defendants shall also consider and decide whether the period of actual and deemed sus pension shall be treated as a period spent on duty or not.
333 (iii) It will also be open to the competent authority, if so advised, to continue the plaintiff on suspension if it is decided to initiate disciplinary proceedings against him based on his conduct which led to his prosecu tion before the criminal court.
The discipli nary proceedings if initiated should be com pleted within a period of six months from the date of communication of this order.
(iv) The competent authority shall take appro priate decision as regards (ii) and (iii) above within a period of two months from the date of communication of this order.
" Pursuant to the decision of the Tribunal management made an order dated November 10, 1988 under Rule 10(4) of the Rules placing the petitioner under suspension w.e.f. January 10, 1978.
The appellant shall be deemed to have been sus pended from the date of the original order of termination.
The management also directed that there should be further enquiry ' against the appellant.
The relevant portion of the order dated November 10, 1988 reads: "AND whereas the undersigned on a considera tion of the circumstances of the case, has also decided that a further enquiry should be held under the provision of CCS(CCA) Rules, 1965 against the said Shri Mohinder Singh, exhibit Cash Clerk on the allegation which led to his termination of service.
NOW THEREFORE the undersigned hereby: (i) set aside the order of termination of services of Shri Mohinder Singh, exhibit Cash Clerk (ii) directs that further enquiry should be held under the provisions of CCS(CCA) Rules, 1965 against Shri Mohinder Singh on the alle gations of misappropriation of Govt.
Money which led to the termination of service.
(iii) directs that the said Shri Mohinder Singh, exhibit Cash Clerk shall under sub rule 4 of Rule 10 of the CCS(CCA) Rules, 1965 be deemed to have been placed under suspension w.e.f. 10.1.
1978 and shall continue to remain under suspension until further orders.
(Baldev Chand) Disciplinary Authority Dy.
General Manager (A)" 334 After holding the enquiry the appellant was again dis missed from service.
That order was made on December 1, 1989.
It is said that the dismissal has been challenged by the appellant before the Tribunal.
From the above narration of facts it will be seen that the Tribunal while setting aside the termination order has directed that the appellant shall continue in suspension from January 10, 1978.
The management while deciding to hold further enquiry has also directed that the appellant shall be deemed to have been placed under suspension w.e.f.
Janu ary 10, 1978.
The management made this order under Rule 10(4) which reads as follows: "Where a penalty of dismissal, removal or compulsory retirement from service imposed upon a Government servant is set aside or declared or rendered void in consequence of or by a decision of a court of law and the disci plinary authority on a consideration of the circumstances of the case, decides to hold a further inquiry against him on the allegations on which the penalty of dismissal, removal or compulsory retirement was originally imposed, the Government servant shall be deemed to have been placed under suspension by the Appointing Authority from the date of the original order of dismissal, removal or compulsory retirement and shall continue to remain under suspension until further orders: Provided that no such further inquiry shall be ordered unless it is intended to meet a situation where the Court has passed an order purely on technical grounds without going into the merits of the case.
" There are three requirements for the application of Rule 10(4); (i) The Government servant is dismissed, removed or compulsorily retired as a measure of penalty; (ii) the penalty of dismissal, removal or compulsory retirement is set aside or declared or rendered void by a decision of a Court of Law; (iii) The disciplinary authority decides to hold a further inquiry against the Government servant on the allegations on which the original order of penalty was imposed.
If these three requirements are satisfied then the Government servant ,shall be deemed to have been placed under suspension by the appointing authority from the date of original order of penalty of dismissal, removal or com pulsory retirements and he shall continue to remain under suspension until further orders.
335 The order of the Tribunal and the management as to the retrospective suspension of the appellant cannot be sus tained under Rule 10(4) of the Rules.
It may be relevant to remember that the original order of termination was not passed against the appellant as a measure of punishment.
It was a 'simpliciter termination ' of the appellants ' service under Rule 5(1) of the CCS (Temporary Service) Rules 1965.
The Tribunal has set aside that order on the ground that it amounts to punishment and the order of punishment could not have been made without holding an inquiry against the appel lant.
But that is not the same thing to state that the management made an order terminating the services of the appellant by way of penalty.
The management treated the said order as a simpliciter discharge.
Rule 10(4) therefore, has no application to the case of the appellant.
Secondly, it would be misnomer to call it a further inquiry as contemplated under Rule 10(4).
There was no question of the management deciding to hold a further in quiry since there was no earlier inquiry against the appel lant.
The power to place delinquent officer under suspension from the date of the original order of dismissal, removal or compulsory retirement from service would be available pro vided if the original order of dismissal, removal or compul sory retirement from service was made by way of penalty and that order has been set aside by a Court of law.
Since there was no inquiry leading to the removal of the appellant in the first instance, the decision to hold fresh inquiry does not attract Rule 10(4).
The retrospective suspension of the appellant is therefore, unjustified and without authority of law.
However, it may be stated that the order of suspension dated November 10, 1988 would operate prospectively and the appellant would be entitled to reinstatement with all back wages till that day since the original order of termination has been set aside by the Tribunal.
The appeal is accordingly allowed modifying the impugned order.
In the circumstances of the case, however, we make no order as to costs.
N.P.V. Appeal allowed.
| The appellant, a cash clerk in the establishment of Delhi Milk Scheme, was placed under suspension under Rule 10(2) of the Central Civil Service (Classification, Control and Appeal) Rules, 1965, pending investigation into a crimi nal case, connected with the forgery of a cheque, in which he was arrayed as an accused.
Subsequently, his services were terminated under Rule 5(1) of the Central Civil Serv ices (Temporary Service) Rules, 1965.
Though he was acquit ted in the criminal case, he was not re instated.
However, the Central Administrative Tribunal set aside the termina tion order and directed that the appellant would continue to be under suspension from the original date of termination of service, and that it would be open to the competent authori ty, to revoke his suspension and re instate him in service or continue him under suspension, if it decided to initiate disciplinary proceedings against him.
Pursuant to the decision of the Tribunal, the Management passed an order under Rule 10(4) of the Rules placing the appellant under suspension from the date of original order of termination and also directed that there should be fur ther enquiry against the appellant.
Allowing the appeal preferred by the appellant and modifying the Tribunal 's order, HELD: 1.1 There are three requirements for the applica tion of Rule 10(4) of the Central Civil Services (Classifi cation, Control and Appeal) Rules, 1965.
These are (i) the Government servant is dismissed, removed or compulsorily retired as a measure of penalty; (ii) the said 331 penalty is set aside or declared or rendered void by a decision of a Court of Law; and (iii) the disciplinary authority decides to hold a further inquiry against the Government servant on the allegations on which the original order of penalty was imposed.
[334F G] 1.2 In the instant case, the original order of termina tion was not passed against the appellant as a measure of punishment.
It was a 'simpliciter termination ' under Rule 5(1) of the CCS (Temporary Service) Rules, 1965.
The Tribu nal has set aside that order on the ground that it amounts to punishment and the order of punishment could not have been made without holding an inquiry.
But that is not the same thing to state that the Management made an order termi nating the services by way of penalty.
It treated the said order as a simpliciter discharge.
Hence Rule 10(4) has no application.
Besides, there was no question of the Manage ment deciding to hold a further inquiry, since there was no earlier inquiry against the appellant and it would be misno mer to call it a further enquiry as contemplated under Rule 10(4).
[335B C] 1.3 Thus, the power to place a delinquent officer under suspension from the date of the original order of dismissal, removal or compulsory retirement from service would be available provided the original order was made by way of penalty and that order has been set aside by a Court of Law.
Since there was no inquiry leading to the removal of the appellant in the first instance, the decision to hold fresh inquiry does not attract Rule 10(4).
The retrospective suspension of the appellant is, therefore, unjustified and without authority of law.
However the order of suspension would operate prospectively and the appellant would be entitled to re instatement with all back wages till that day since the original order of termination has been set aside by the Tribunal.
The Tribunal 's order is modified according ly.
[335D G]
|
Civil Appeal Nos.
3050 305 1 of 199 1.
From the Judgment and Orders dated 23.8.90 & 13.6.1990 of the Madras High Court in Civil Revision Petition Nos.
1236/85 and 2758 of 1988.
T.S.K. lyer, Rajiv Datta and Shahid Azad for the Appellant.
M.S. Nargolkar, D.M. Nargolkar and A.T.M. Sampath for the Respondents.
The Judgment of the Court was delivered by OJHA, J.
Special leave granted.
Since in both these appeals an identical question of law arises they are being decided by a common judgment.
Facts in a nutshell necessary for appreciating the question involved may be stated.
M/s Patel Roadways (P) Limited, the appellant in both these appeals carries on the business of a carrier and transports goods on hire.
It has its principal office at Bombay and branch offices at various other places which shall hereinafter be referred to as subordinate of fices.
M/s Prasad Trading Company, the respondent in the Civil Appeal arising out of SLP (C) No. 14660 of 1990 who is a dealer in 395 cardamom entrusted a consignment of 851) kilograms of carda mora to the appellant at its subordinate office at Bodinaya kanur in Tamil Nadu to be delivered at Delhi.
After the goods had been transported by the appellant and kept in a godown at Delhi the same got destroyed and damaged in a fire as a result whereof the consignee refused to take delivery.
The respondent instituted a suit in the Court of Subordinate Judge, Periakulam within whose territorial jurisdiction the subordinate office of the appellant where the goods were entrusted for transport is situate for damages alleging that the fire was due to the negligence and carelessness on the part of the staff of the appellant.
M/s Tropical Agro Systems Private Limited, the respond ent 1 in the Civil Appeal arising out of SLP (C) No. 14692 of 1990 on the other hand entrusted certain packets of pesticides insured with the second respondent, M/s Oriental Insurance Company Limited to the appellant at its subordi nate office at Madras for being carried to New Delhi.
Ac cording to the respondents the goods aforesaid were deliv ered at New Delhi in a damaged condition resulting in loss to the first respondent and a suit was instituted for recov ery of the loss so sustained by the respondents in the Court of the Third Assistant Judge, City Civil Court, Madras.
In both the suits the appellant inter alia took the plea in its defence.
that in the contract entered into between them the parties had agreed that jurisdiction to decide any dispute between them would be only with the courts at Bombay and consequently the courts in Madras where the two suits re ferred to above had been instituted had no jurisdiction.
This plea was repelled in both the suits by the trial court.
The order of the trial court in each of the two suits was challenged by the appellant before the High Court of Judica ture at Madras under Section 115 of the Code of Civil Proce dure (hereinafter referred to as the Code).
This challenge having failed in each of the civil revisions, the appellant has preferred these civil appeals.
The question which arises in both these civil appeals, therefore, is as to whether in view of the relevant clause in the contract between the parties the courts at Bombay alone had jurisdiction and the jurisdiction of the courts at Madras where the two suits were instituted was barred.
It has been urged by the learned counsel for the appel lant that apart from the courts within whose territorial jurisdiction the goods were delivered to the appellant for transport, the courts at Bombay also had jurisdiction to entertain a suit arising out of the contract between the parties in view of the Explanation to Section 20 of the Code inasmuch as the principal office of the appellant was situ ate in 396 Bombay.
According to learned counsel for the appellant since courts at two places namely Madras and Bombay had jurisdic tion in the matter, the jurisdiction of the courts in Madras was ousted by the clause in the contract whereunder the parties had agreed that jurisdiction to decide any dispute under the contract would be only in the courts at Bombay.
Consequently the courts where the two suits were instituted had no jurisdiction to entertain them and the trial court in each of the two cases as well as the High Court erred in law in taking a contrary view.
Having heard learned counsel for the parties we find it difficult to agree with this submission.
For the sake of convenience Section 20 of the Code except the illustrations is reproduced hereunder: "20.
Other suits to be instituted where de fendants reside or cause of action arises: Subject to the limitations aforesaid, every suit shall be instituted in a Court within the local limits of whose jurisdiction : (a) the defendant, or each of the defendants where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain; or (b) any of the defendants, where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain, provided that in such case either the leave of the Court is given, or the de fendants who do not reside, or carry on busi ness, or personally work for gain, as afore said, acquiesce in such institution; or (c) the cause of action, wholly or in part, arises.
Explanation: A corporation shall be deemed to carry on business at its sole or principal office in India or, in respect of any cause of action arising at any place where it has also a subordinate office, at such place." In Hakam Singh vs M/s. Gammon (India) Ltd., [1971] 3 SCR Page 314 it was held that "corporation" referred to in Section 20 397 meant not only a statutory corporation but also a company registered under the Indian Companies Act.
It was also held that it is not open to the parties by agreement to confer jurisdiction on any court which it did not otherwise possess under the Code.
But where two courts have jurisdiction under the Code to try a suit or proceeding an agreement between the parties that the dispute between them shall be tried in one of such courts is not contrary to public policy nor does such an agreement contravene Section 28 of the Contract Act.
In that case also there was a clause in the agreement being clause No. 13 which provided that notwithstanding the place where the work under the contract was to be executed the contract shall be deemed to have been entered into between the parties at Bombay and the court in Bombay alone shall have jurisdiction to adjudicate thereon.
The trial court had held that the entire cause of action had arisen at Varanasi and the parties could not by agreement confer jurisdiction on the courts at Bombay which they did not otherwise pos sess.
In a civil revision filed by the respondent the Alla habad High Court held that the courts at Bombay had also jurisdiction and in view of clause 13 of the agreement the jurisdiction of the courts at Varanasi stood ousted.
It is in the appeal against the said judgment of the High Court that the propositions of law referred to above were laid down by this Court.
It was held that since the respondent had its head office at Bombay the courts at Bombay also had 'jurisdiction by virtue of Section 20 of the Code read with its Explanation and in view of clause 13 of the agreement between the parties the courts in Bombay alone had jurisdic tion in the matter.
The appeal was accordingly dismissed.
This view was reiterated by this Court in Globe Transport Corporation vs Triveni Engineering Works and Another, [1983] 4 SCC Page 707.
Reliance has been placed by learned counsel for the appellant on these two decisions and if it can be held that the courts at Bombay also had jurisdiction in the two suits referred to above the judgments appealed against will have to be set aside on the basis of these decisions.
The ques tion, however, is as to whether in any of these two suits the courts at Bombay also had jurisdiction apart from the courts within whose jurisdiction the goods were entrusted to the appellant for purposes of transport.
Having given our anxious consideration to the matter we are of the opinion that the courts at Bombay in these two cases did not at all have jurisdiction and consequently the agreement between the parties conferring exclusive jurisdiction on courts at Bombay is of no avail.
Clauses(a) and (b) of Section 20 inter alia refer to a court within 398 the local limits of whose jurisdiction the defendant inter alia "carries on business".
Clause (c) on the other hand refers to a court within the local limits of whose jurisdic tion the cause of action wholly or in part arises.
It has not been urged before us on behalf of the appellant that the cause of action wholly or in part arose in Bombay.
Conse quently clause (c) is not attracted to the facts of these cases.
What has been urged with the aid of the Explanation to Section 20 of the Code is that since the appellant has its principal office in Bombay it shall be deemed to carry on business at Bombay and consequently the courts at Bombay will also have jurisdiction.
On a plain reading of the Explanation to Section 20 of the Code we find an apparent fallacy in the aforesaid argument.
The Explanation is in two parts, one before the word "or" occurring between the words "office in India" and the words "in respect of" and the other thereafter.
The Explanation applies to a defendant which is a corporation which term, as seen above, would include even a company such as the appellant in the instant case.
The first part of the Explanation applies only to such a corporation which has its sole or principal office at a particular place.
In that event the courts within whose jurisdiction the sole or principal office of the defendant is situate will also have jurisdiction inasmuch as even if the defendant may not be actually carrying on business at that place, it will "be deemed to carry on business" at that place because of the fiction created by the Explanation.
The latter part of the Explanation takes care of a case where the defendant does not have a sole office but has a princi pal office at one place and has also a subordinate office at another place.
The words "at such place" occurring at the end of the Explanation and the word "or" referred to above which is disjunctive clearly suggest that if the ease falls within the latter part of the Explanation it is not the Court within whose jurisdiction the principal office of the defendant is situate but the court within whose jurisdiction it has a subordinate office which alone shall have jurisdic tion "in respect of any cause of action arising at any place where it has also a subordinate office".
Here we may point out that the view which we take finds support from a circumstance which, in our opinion, is rele vant.
Section 20 of the Code before its amendment by the Code of Civil Procedure (Amendment) Act, 2976 had two Expla nations being Explanations I and II.
By the Amendment Act Explanation I was omitted and Explanation II was renumbered as the present Explanation.
Explanation I so omitted read as hereunder: "Explanation I: Where a person has a permanent dwelling 399 at one place and also temporary residence at another place, he shall be deemed to reside at both places in respect of any cause of action arising at the place where he has such tempo rary residence." This Explanation dealt with the case of place of resi dence of the defendant and provided with regard to a person having a permanent dwelling at one place and also temporary at another place that such person shall be deemed to reside at both places in respect of any cause of action arising at the place where he has such temporary residence.
The lan guage used in Explanation II on the other hand which is the present Explanation was entirely different.
Had the inten tion been that if a corporation had its principal office at one place and a subordinate office at another place and the cause of action arose at the place where it had its subordi nate office it shall be deemed to be carrying on business at both places the language used in Explanation II would have been identical to that of Explanation I which was dealing with a case of a person having a permanent dwelling at one place and also temporary residence at another place.
The marked difference in the language of the two Explanations clearly supports the view which we have taken with regard to the interpretation of the present Explanation to Section 20 of the Code which was Explanation II earlier as indicated above.
We would also like to add that the interpretation sought to be placed by the appellant on the provision in question renders the explanation totally redundant.
If the intention of the legislature was, as is said on their behalf, that a suit against a corporation could be instituted either at the place of its sole or principal office (whether or not the corporation carries on business at that place) or at any other place where the cause of action arises, the provisions of clauses (a), (b) and (c) together with the first .part of the explanation would have completely achieved the purpose.
Indeed the effect would have been wider.
The suit could have been instituted at the place of the principal office because of the situation of such office (whether or not any actual business was carried on there).
Alternatively, a suit could have been instituted at the place where the cause of action arose under clause (c) (irrespective of whether the corpora tion had a subordinate office in such place or not).
This was, Therefore, not the purpose of the explanation.
The explanation is really an explanation to clause (a).
It is in the nature of a clarification on the scope of clause (a) viz. as to where the corporation can be said to carry on business.
T 'his, it is clarified, will be the place where the principal office is ituated (whether or not any business actually is carried on there) or the place where a business 400 is carried on giving rise to a cause of action (even though the principal office of the corporation is not located there) so long as there is a subordinate office of the corporation situated at such place.
The linking together of the place where the cause of action arises with the place where a subordinate office is located clearly shows that the intention of the legislature was that, in the case of a corporation, for the purposes of clause (a), the location of the subordinate office, within the local limits of which a cause of action arises, is to be the relevant place for the filing of a suit and not the principal place of business.
If the intention was that the location of the sole or principal office as well as the location of the subordinate office (within the limits of which a cause of action arises) are to be deemed to be places where the corporation is deemed to be carrying on business, the disjunctive "or" will not be there.
Instead, the second part of the explanation would have read "and in respect of any cause of action arising at any place where it has a subordinate office, also at such place".
As far as we can see the interpretation which we have placed on this section does not create any practical or undue difficulties or disadvantage either to the plaintiff or a defendant corporation.
It is true that, normally, under clauses (a) to (c), the plaintiff has a choice of forum and cannot be compelled to go to the place of residence or business of the corporation and can file a suit at a place where the cause of action arises.
If a corporation desires to be protected from being dragged into litigation at some place merely because a casue of action arises there it can save itself from such a situation by an exclusion clause as has been done in the present case.
The clear intendment of the Explanation, however, is that, where the corporation has a subordinate office in the place where the cause of action arises, it cannot be heard to say that it cannot be sued there because it does not carry on business at that place.
It would be a great hardship if, in spite of the corporation having a subordinate office at the place where the cause of action arises (with which in all probability the plaintiff has had dealings), such plaintiff is to be compelled to travel to the place where the corporation has its principal place.
That place should be convenient to the plaintiff; and since the corporation has an office at such place, it will also be under no disadvantage.
Thus the Explanation provides an alternative locus for the corporation 's place of busi ness, not an additional one.
There may be only one extra ordinary situation in which this interpretation may cause an apparent anomaly.
This is where the plaintiff has also his/its place of business at the same place as the 401 corporation but the cause of action has arisen at some other place.
The above interpretation would preclude him from filing a suit in that place of business common to both parties and compel him to go to a court having jurisdiction over the place where the cause of action has arisen.
But this is not really a hardship because such plaintiff must have had some nexus or connection with the place since some part of the cause of action had arisen there; if he can have dealings with the corporation at such a place giving rise to the cause of action, there is no reason why he should find it disadvantageous or difficult to file a suit at such place.
Equally, the corporation, having a subordinate office at the place, will suffer no disadvantage.
In this view of the matter since in the instant two cases clause (c) is not attracted to confer jurisdiction on courts at Bombay and the appellant has admittedly its subor dinate offices at the respective places where the goods in these two cases were delivered to it for purpose of trans port the courts at Bombay had no jurisdiction at all to entertain the suits filed by the respondents and the parties could not confer jurisdiction on the courts at Bombay by an agreement.
Accordingly no exception can be taken to the findings in this behalf recorded by the trial court and the High Court in these two cases.
In the result, we find no merit in any of these two appeals and they are accordingly dismissed but in the cir cumstances of the case the parties shall bear their own costs.
| The appellant in both the appeals carried on the busi ness of a carrier and transported goods on hire.
It had its principal office at Bombay and branch offices at various other places.
The respondent in the first appeal a dealer in cardamom entrusted a consignment of cardamom to the appellant at its branch office at Bodinayakanur in Tamilnadu to be delivered at Delhi.
After the goods had been transported by the appel lant and kept in a godown at Delhi the same got destroyed and damaged in a fire as a result whereof the consignee refused to take delivery.
The respondent instituted a suit in the sub court within whose territorial jurisdiction the branch office of the appellant was situated for damages alleging that the fire was due to the negligence and care lessness on the part of the staff of the appellant.
Respondent No. 4 in the second appeal entrusted certain packets of pesticides insured with the second respondent Insurance Company to the appellant at its branch office at Madras for being carried to Delhi.
The respondent alleged that the goods were delivered at New Delhi in a damaged condition resulting in loss and a suit was instituted for recovery of the loss in the City Civil Court at Madras.
In both the aforesaid civil suits the appellant pleaded in defence that in the contract entered into between them, the parties had agreed that jurisdiction to decide any dispute between them would be only with the courts at Bom bay, and consequently the courts in Madras ' where the two suits had been instituted had no jurisdiction.
This plea was repelled by the Trial Court in each of the suits.
The aforesaid orders were challenged by the appellant in the High 392 Court under Section 115 C.P.C. and having failed, the appel lant appealed to this Court.
In the appeal, it was contended on behalf of the appel lant that since the courts at two places namely Madras and Bombay had jurisdiction in the matter, the jurisdiction of the courts in Madras was ousted by the clause in the con tract whereunder the parties had agreed that jurisdiction to decide any dispute under the contract would be only in the courts at Bombay.
On the question: whether in view of the relevant clause in the contract between the parties the courts at Bombay alone had jurisdiction and the jurisdiction of the courts at Madras where the two suits were instituted was barred.
Dismissing the appeals, this Court, HELD: 1.
The courts at Bombay in these two cases did not at all have jurisdiction and consequently the agreement between the parties conferring exclusive jurisdiction on courts at Bombay is of no avail.
[401D] 2.
Clauses (a) and (b) of Section 20 refer to a court within the local limits of whose jurisdiction the defendant "carries on business".
Clause (c) on the other hand refers to a court within the local limits of whose jurisdiction the cause of action wholly or in part arises.
[397H 398A] 3.
Section 20 of the Code before its amendment by the Code of Civil Procedure (Amendment) Act, 1976 had two Expla nations being Explanation I and II.
By the Amendment Act Explanation I was omitted and Explanation II was renumbered as the present Explanation.
[398G] 4.
The Explanation is in two parts, one before the word "or" occurring between the wOrds "office in India" and the words "in respect of" and the other thereafter.
The Explana tion applies to a defendant which is a corporation which term, would include even a company such as the appellant in the instant case.
The first part of the Explanation applies only to such a corporation which has its sole or principal office at a particular place.
In that event the courts within whose jurisdiction the sole or principal office of the defendant is situate will also have jurisdiction inas much as even if the defendant may not be actually carrying on business at that place, it will "be deemed to carry on business" at that place because of the fiction created by the Explanation.
[398C F] 393 5.
The latter part of the Explanation takes care of a case where the defendant does not have a sole office but has a principal office at one place and has also a subordinate office at another place.
The words "at such place" occurring at the end of the Explanation and the word "or" referred to above which is disjunctive clearly suggest that if the case fails within the latter part of the Explanation it is not the court within whose jurisdiction the principal office of the defendant is situate but the court within whose juris diction it has a subordinate office which alone shall have jurisdiction "in respect of any cause of action arising at any place where it has also a subordinate office".
[398E F] 6.
The Explanation is really an explanation to clause (a).
It is in the nature of a clarification on the scope of clause (a) viz. as to where the corporation can be said to carry on business.
This, it is clarified, will be the place where the principal office is situated (whether or not any business actually is carried on there) or the place where a business is carried on giving rise to a cause of action (even though the principal office of the corporation is not located there) so long as there is a subordinate office of the corporation situated at such place.
The linking together of the place where the cause of action arises with the place where a subordinate office is located clearly shows that the intention of the legislature was that, in the case of a corporation, for the purposes of clause (a), the location of the subordinate office, within the local limits of which a cause of action arises, is to be the relevant place for the filing of a suit and not the principal place of business.
[399G 400B] 7.
If the intention was that the location of the sole or principal office as well as the location of the subordinate office (within the limits of which a cause of action arises) are to be deemed to be places where the corporation is deemed to be carrying or business, the disjunctive "or" will not he there.
Instead, the second part of the explanation would have read "and, in respect of any cause of action arising at any place where it has a subordinate office, also at such place ' '.
[400C] 8.
The clear intendment of the Explanation, however, is that, where the corporation has a subordinate office in the place where the cause of action arises, it cannot be heard to say that it cannot be sued there because it does not carry on business at that place.
It would be a great hard ship if, in spite of the corporation having a subordinate office at the place where the cause of action arises (with which in all probability the plaintiff has had dealings), such plaintiff is to be compelled to travel to the place where the corporation has its principal place.
That place should be convenient to the plaintiff; and since the corpo ration 394 has an office at such place, it will also be under no disad vantage.
Thus the Explanation provides an alternative locus for the corporation 's place of business, not an additional one.
[400F G] 9.
In the instant two cases since clause (c) is not attract ed to confer jurisdiction on courts at Bombay and the appel lant has admittedly its subordinate offices at the respec tive places where the goods in these two cases were deliv ered to it for purposes of transport, the courts at Bombay had no jurisdiction at all to entertain the suits filed by the respondents and the parties could not confer jurisdic tion on the courts at Bombay by an agreement.
Accordingly, no exception can be taken to the findings in this behalf recorded by the trial court and the High Court.
[401C D] Hakam Singh vs M/s. Gammon (India) Ltd., [1971] 3 SCR page 314, referred to.
|
ivil Appeal Nos.
1103 & 1104 of 1979.
From the Judgment and Order dated 20.3.
1978 of the Allahabad High Court in I .T.R. Nos.
428/72 and 542 of 1973.
Ashok Grover for the Appellant.
J. Ram Murthy, section Rajappa and Ms. A. Subhashini for the Respondent.
The Judgment of the Court was delivered by V. RAMASWAMI, J.
The appellant is a private limited company in Liquidation.
The winding up order was made by the High Court on 8th November, 1949 land the Liquidator was directed to submit reports every three months respecting the progress of the winding up proceedings and realisation of the assets.
In the course of winding up the Liquidator sold certain assets and deposited the money in fixed deposits with certain banks.
During the previous year relevant to the assessment year 1966 67 the appellant earned by way of interest from fixed deposits a sum of Rs.32,237.60.
The Liquidator had in the relevant previous year incurred the following expenditure totalling Rs. 12,379.45: Salaries Rs. 1,2 15.00 Legal fees Rs. 9,725.00 Liquidation expenses Rs. 538.85 T.A. & D.A. Rs. 751.51 Postage Rs. 95.34 Stationery Rs. 53.75 Total: Rs. 12,379.45 386 The assessee company claimed a deduction of the above said sum of Rs. 12,379.45 from the interest income of Rs.32,237.60.
The Income Tax Officer did not allow any part of the expenditure claimed by the assessee company and assessed the entire amount of Rs.32,237.60 as taxable under section 56 of the Income Tax Act, 1961 (hereinafter referred to as the 'Act '), under the head 'INCOME FROM OTHER SOURCES".
This assessment order was confirmed by the Appel late Assistant Commissioner and the Tribunal on an appeal.
In the assessment year 1967 68 also the assessee earned certain amounts of money by way of interest from fixed deposits and the Liquidator incurred identical expenditures as in the assessment year 1966 67 except for the difference in the amount.
The Income Tax Officer refused to allow any deduction of any part of the expenditure claimed by the assessee.
Even in this assessment year the entire interest income was taxed under section 56 of the Act under the head "Income From Other Sources".
The appeals flied in respect of this assessment year also were unsuccessful.
In respect of both these assessment years the following identical question was directed to be referred by the High Court under section 56(2) of the Act on the refusal of the Tribunal to refer the same under section 256( 1): "Whether on the facts and in the circumstances of the case, the assessee is entitled to the deduction of the whole or any part of the expenses incurred by the Liquidator in the computation of the assessee 's total income".
It may be mentioned that in respect of the assessment year 196263 the assessee had claimed deduction of simmilar expenditure from the interest income earned from fixed deposit.
At the instance of the assessee the Tribunal re ferred the following question: "Whether, on the facts and in the circum stances of the case, the sum of Rs. 13,023 is an admissible charge against the income of the previous year".
In the decision reported in Vijay Laxmi Sugar Mills Ltd. vs Commissioner of Income Tax, Delhi Central, All.
the High Court answered that reference holding that the income from the fixed deposit has to be considered as income from other sources and only that ex penditure can be deducted which under section 57(iii) of 387 the Act can be considered as incurred for earning that income and that the expenses claimed are not related to the earning of that income.
Accordingly the High Court answered the question in the negative and in favour of the Revenue.
It may also be mentioned that the assessing officers and the Tribunal followed this decision which was assessee 's own case for the earlier assessment year, in the assessments now in question.
The learned counsel for the appellant canvassed the correctness of the view propounded in Vijay Laxmi Sugar Mills Ltd. vs Commissioner of Income Tax, Delhi Central, (supra).
The learned counsel contended that among the ob jects mentioned in the memorandum of association of the company provision is made for advancing and lending money, investment of the company 's money and dealing in debentures, shares, stocks and other securities and carrying on various other businesses such as the company considered desirable in lieu of any other business which it was authorised to carry on.
Therefore, in effecting sale and realising of the assets of the company in Liquidation and investing in fixed depos its the Liquidation was engaged in the businesses of making investment in fixed deposits.
The interest income earned therefrom is a business income taxable under section 28 of the Act and not under section 56 of the Act under the head "Income From Other Sources".
If this contention of his is right the expenditure incurred by the Liquidator shall also be considered as for the purpose of earning the above men tioned income or at least could be said as wholly and exclu sively laid out or expended for the purposes of that busi ness and deductable from the total income earned by the company during the relevant previous year.
We are wholly at a loss to understand how this argument is possible on the facts and circumstances of this case.
As already stated the company had been directed to be wound up and a Liquidator was appointed by the High Court as early as in 1950.
The company before its Liquidation was engaged in the manufac ture of sugar.
The records do not disclose that the Liquida tor was carrying on the business of manufacture of sugar or any trading activity for the purpose of facilitating the winding up.
The statement of facts on record show that the Liquidator realised certain amount by way of sale of the assets of the company in Liquidation and it is those sale proceeds that was invested in fixed deposit which earned the interest.
The Liquidator in merely realising the assets of the company could not be considered as carry on any business of the company.
The activity of realising the assets and banking them in fixed deposit was in the course of winding up and it was not in furtherance of any business activity 388 carried on by the company before its winding up.
There may be cases where the Liquidator may be said to carry on the company 's business in so far as is necessary for the winding up or facilitate the winding up or realise the assets of the company in such a way as to involve the carrying on trade.
But in this case there is no evidence in this regard.
In fact the winding up order was made as early as in 1950 and nothing of the winding up activity is in evidence.
The only accepted fact is that the interest income was derived from fixed deposits purchased out of the pro ceeds of sale of assets during winding up.
The assessee, therefore, could not be said to have carried on any business to bring the interest income within the meaning of section 28 of the Act and that therefore the interest income was liable to be assessed only under the head "Income From Other Sources".
Very near to the facts of this case is the decision reported in Morvi Mercantile Bank Ltd. (In Liquidation) vs Commissioner of Income Tax, Gujarat, Guj.
In that case the assessee a banking company was compul sorily wound up and its licence was suspended by the Reserve Bank.
The Official Liquidator realised the assets and in vested the money in short term deposit pending distribution.
It was contended on behalf of the company in Liquidation that the income realised by the Liquidator was business income and that the Income Tax Officer was not right in treating it as "Income From Other Sources".
Rejecting this contention the Gujarat High Court held: "That the assets of which the liquidator was seized and which he tried to realise for purposes of winding up were of capital nature and they cannot be said to be business assets; nor can it be said that merely because he was investing the realisations, assuming that that was permissible either under the memorandum or under the statute, the activities which he was carrying on as a liquidator were those of a businessman.
In the circumstances, therefore, we cannot uphold the contention of Mr. Patel that the liquidator was making for merecantile necessity the investment of realisations as a business for beneficial winding up of the company.
The Tribunal has found as a fact that the main business of the assessee company having gone as a result of the winding up order, there did not remain any other activity 389 which can be legitimately said to be a busi ness activity and whatever the liquidator did was merely as a liquidator for purposes of liquidation of the company".
This is indeed the view to be taken even in this case also.
The Tribunal was, therefore, right in holding that the interest income in the instant case is not governed by section 28 but fails to be considered under section 56.
The next submission of the learned counsel for the assesee was that in the course of effecting the winding up of the assessee company the Liquidator has been incurring expenses such as salaries, legal fees, travelling expenses and other liquidation expenses and that these expenses are allowable deduction from income earned by way of interest from fixed deposits in the relevant year.
In computing the income chargeable under the head "Income From Other Sources", section 57(iii) provides that deduction is to be made in respect of expenditure laid out or expended wholly and exclusively for the purpose of making or earning such income.
The question for consideration, therefore, is wheth er the expenses of the type incurred by the Liquidator in this case can be said to have been incurred solely for the purpose of earning the interest income.
It is true that the connection between the expenditure and the earning of income need not be direct and it may be indirect.
But since the expenditure must have been incurred for the purpose of earning that income there should be some nexus between the expenditure and the earning of the income.
There is not even some sort of an evidence to show that the expenses incurred by the Liquidator was to facilitate the earning or at least for protecting of the income.
The interest accrues SUI GENERIS.
The interest is payable by the bank whether it is claimed or not and whether there is any establishment or not.
Normally there was no necessity for spending anything separately for earning the interest.
However we may hasten to add that if any explenditure was incurred like commission for collection or such similar expenditures which may be considered as spent solely for the purpose of earning that income, the position may be different.
But that was not so in this case.
It could not also be said that the expenditure incurred was to preserve or acquire the asset.
Nor could it be said that the expenses were incurred for the purpose of maintenance of the source.
The requirement under section 57(iii) that the expenditure should have been incurred "for the purpose of making or earning such income" show that the object of spending or the end or aim or the intention of such spending was for earning the interest 390 income.
There could be no doubt that the expenditure incurr eid by the Liquidator in this case can by no stretch be said to have been incurred with the object or for the purpose of earning the interest income.
The Tribunal was, therefore, right in holding that the expenses claimed are not related to the interest income and was not a deductable expenditure under section 57.
We are, therefore, of the view that the High Court correctly answered the reference in the negative and in favour of the Revenue.
The appeals are accordingly dismissed with costs.
R.P. Appeals dismissed.
| The appellant company was ordered to be wound up in 1949.
In the course of its winding up the liquidator sold certain assets of the company and invested the sale proceeds thereof in fixed deposits with certain banks.
The liquidator incurred certain expenditures on salaries, legal fees, travelling expenses, postage and stationery.
The assessee company claimed a deduction of the said expenses from the interest income.
The I.T.O. did not allow it, and assessed the entire interest income as taxable u/s 56 of the Income Tax Act, 1961 under the head "Income from other sources".
The assessment orders were confirmed by the Appellate As sistant Commissioner and by the Income Tax Appellate Tribu nal in appeal.
On a reference by the Tribunal the High Court held that the income from fixed deposit was income from other sources; and it disallowed deduction of the expenditure section 57(iii) on the ground that the expenses claimed were not related to the earning of the interest income.
Aggrieved the assessee companY preferred appeal by special leave to this Court.
On the questions whether: (1) in effecting the sale and realisation of the assets of the Company in liquidation and investing the same in fixed deposits the liquidator was engaged in the business of the company and the interest income was a business income taxable u/s 28 of the Act and not under section 56 under the head "Income from other sources", and (2) the expenses incurred by the liquidator were in curred solely for the 384 purpose of earning the interest income so as to claim deduc tion section 57(iii).
Dismissing the appeal, this Court, HELD: 1.
The Liquidator in merely realising the assets of the Company could not be considered as carrying on any business of the Company.
[387G] 2.
In the instant case, the company before its liquida tion was engaged in the manufacture of sugar.
The records did not disclose that the liquidator was carrying on the business of manufacture of sugar or ' any trading activity for the purpose of facilitating the winding up.
The only accepted fact was that the interest income was derived from fixed deposits purchased out of the proceeds of sale of assets during winding up.
The assessee, could not be said to have carried on any business to bring the interest income within the meaning of section 28 of the Act and, therefore, the interest income was liable to be assessed only under the head "Income from other sources".
The Tribunal was, there fore, right in holding that the interest income in the instant case was not governed by section 28 but fell to be con sidered under section 56.
[387F; 388B C; 389A B] Vijay Laxmi Sugar Mills Ltd. vs Commissioner of Income Tax, Delhi Central, All., affirmed.
Morvi Mercantile Bank Ltd. vs Commissioner of Income Tax, Gujarat., Guj., approved.
3.1 In computing the income chargeable under the head "Income from other sources", requirement under section 57(iii) of the Act is that the expenditure should have been incurred "for the purpose of making or earning such income" and the deduction is to be made in respect of expenditure laid out or expended wholly and exclusively for the purpose of making or earning such income.
[389C D & G] 3.2 It is true that the connection between the expendi ture and the earning of income need not be direct and it may be indirect.
But since the expenditure must have been in curred for purpose of earning that income, there should be some nexus between the expenditure and the earning of the income.
[389D E] 3.3 The interest accrues sui generis.
The interest is payable by the bank whether it is claimed or not and whether there is any establishment or not.
[389E F] 385 3.4 In the instant case there could be no doubt that the expendidure incurred by the liquidator can by no stretch be said to have been incurred with the object or for the pur pose of earning the interest income.
It could not be said that the expenditure incurred was to preserve or acquire the asset.
Nor could it be said that the expenses were incurred, for the purpose of maintenance of the source.
The Tribunal was, therefore, right in holding that the expenses claimed were not related to the interest income and was not a de ductable expenditure under section 57.
[390A B; 389G]
|
ivil Appeal No. 3235 of 1991.
From the Judgment and Order dated 14.8.1990 of the Karnataka High Court in Writ Petition No. 3436 of 1980.
Harish Salve, K.P. Kumar, Ravinder Narain, P.K. Ram and Ms. Amrita Mitra for the Appellant.
R.N. Narasimhamurthy, K.H. Nobin Singh and M. Veerappa for the Respondents.
The following Order of the Court was delivered: By this petition, Messrs Mangalore Chemicals & Fertilis ers Limited, a registered dealer under the Karnataka Sales Tax Act, 1957, ("Act") seeks special leave to appeal to this court from the judgment and order dated 14th August, 1990 of the High Court of Karnataka in W.P. No. 3436 of 1980.
We have heard Shri Harish Salve, learned counsel for the petitioner and Shri R.N. Narasimhamurthy, learned Senior Counsel for the respondent Revenue.
Special leave granted.
On 30th June, 1969, State Government issued a noti fication in exercise of powers referable to sec.
8A of the Act providing certain incentives to enterpreneurs starting new industries in the State, pursuant to State 's policy for "rapid industrialisation".
The notification contains a package of reliefs and incentives including one concerning relief from payment of sales tax with which this appeal is concerned.
The clause in the said notification of 1969 relevant for the present purpose reads: 340 "(1).
Sales tax: A cash refund will be allowed on all sales tax paid by a new industry on raw materials purchased by it for the first five (5) years from the date of the industry goes into production, eligibility to the conces sions being determined on the basis of a certificate to be issued by the Department of Industries and Commerce.
" This was followed by a further notification dated 11th August, 1975 envisaging certain modified procedures for effectuating the reliefs contemplated by the earlier exemp tion notification of 30th June, 1969.
The relevant portions of the Preamble and the body of the notification say: Preamble: ". .
The Commissioner of Commercial Taxes has suggested that New Indus tries covered by the above scheme might be permitted to adjust the refunds to which they would be eligible against the sales tax pay able by them.
Order In partial modification of the Gov ernment order cited (2) above, Government are pleased to prescribe the following procedure for claiming refund of sales tax by new indus tries.
The new industries intending to take advantage of the system of adjustment shall apply to the Deputy Commissioner of Commercial Taxes (Administration) of the Division concerned through the assessing authority.
The application must contain the following particulars.
i) Name and address of the new industry; ii) Date of commencement of the industry; iii) Reference number of the certificate issued by the Director of Industries & Com merce, Bangalore; iv) Year for which the permission to withhold tax amount is related; v) The description of finished products in which the materials are used.
341 3.
The Deputy Commissioner of Com mercial Taxes (Administration) of the con cerned Division, after scrutinising the appli cation filed by the new industry and after satisfying himself that the industry is cov ered by the scheme sanctioned in G.O. No. 0I 58 FMI 69 dated 30.6.1969 will permit the industry to withhold the amount of tax payable on raw materials purchased and used in the manufacture of goods.
Omitted as unnecessary 5.
The new industry may apply for permission at any time during the year subject to its renewal every subsequent year.
Until permission of renewal is granted by the Deputy Commissioner of Commercial Taxes, the new industry should not be allowed to adjust the refunds.
At the end of the assessment year, particulars should be formulated in the annual return of the total amount adjusted during the entire year.
Along with the return, details prescribed in Government Order No. FD 428 CSL 70 dated 1.2.
1971 should be furnished.
6) * * 7) * Omitted as unnecessary.
" * 8) * * 3.
Appellant, it is not in dispute, had the necessary eligibility under the original exemption notification of 1969.
The controversy is confined only to the question of the manner of effectuating the refund of sales tax that appellant, admittedly, was entitled to.
Some particulars as to the application made by the appellant for grant of permission might, perhaps, be neces sary here.
For the assessment year 1976 77, the appellant made such an application to Deputy Commissioner of Sales tax (Administration) on 10th November, 1976 for adjustment of the refunds against sales tax due.
This permission was granted with retrospective effect from 1st May, 1976, vali dating the adjustments which the appellant had made during the interregnum.
However, for the three subsequent years viz., 1977 78, 1978 79 342 and 1979 80, similar applications which were made on 29th March, 1977, 20th March, 1978 and 8th March, 1979, respec tively, remained undisposed of.
In the meanwhile, in antici pation of the permission appellant adjusted the refund against tax payable for these years and filed its montly returns setting out adjustments so effected.
There is, as set out earlier, no dispute that the appellant was entitled to the benefit of the notification dated 30th June, 1969.
There is also no dispute that the refunds were eligible to be adjusted against sales tax payable for respective years.
The only controversy is wheth er the appellant, not having actually secured the "prior permission" would be entitled to adjustment having regard to the words of the notification of 11th August, 1975, that "until permission of renewal is granted by the Deputy Com missioner of Commercial Taxes, the new industry should not be allowed to adjust the refunds".
The contention virtually means this: "No doubt you were eligible and entitled to make the adjustments.
There was also no impediment in law to grant you such permission.
But see language of clause 5.
Since we did not give you the permission you cannot be permitted to adjust.
" Is this the effect of the law? The sales tax already paid by the appellant on the raw materials procured by it is the subject matter of the re funds.
The sales tax against which the refund is sought to be adjusted is the sales tax payable by appellant on the sales of goods manufactured by it.
If the contention of the Revenue is correct, the position is that while the appellant is entitled to the refund it cannot, however, adjust the same against current dues of the particular year but should pay the tax working out its refunds separately.
The situa tion may well have been such but the snag comes here.
If the adjustments made by the appellant in its monthly statements are disallowed, the sales tax payable would be deemed to be in default and would attract a penalty ranging from 1 1/2% to 21/2% per month from the date it fell due.
That penalty, in the facts of this case, would be very much more than the amounts of refund.
What emerges from the undisputed facts is that appel lant was entitled to the benefit of these adjustments in the respective years.
It had done and carried out all that was necessary for it to do and carry out in that behalf.
The grant of permission remained pending on account of certain outstanding inter departmental issues as to which of the departments the Department of Sales tax or the Department of Industries should.
absorb the financial impact of these concessions.
343 Correspondence indicates that on account of these questions, internal to administration, the request for permission to adjust was not processed.
On 27th March 1979, the Deputy Commissioner of Commercial Taxes wrote to the appellant to say that the orders on appellant 's application for permis sion would be passed only on receipt of the clarification from the Government on these matters.
While the matter stood thus, on 9th January, 1980, the Commercial Tax Officer of the concerned jurisdiction issued three demand notices demanding payment of the sales tax.
He said prior permission to adjust "had not been con sidered by the Deputy Commissioner of Managlore Division, Mangalore, and, therefore, the Commercial Tax Officer was obliged to proceed to recover the taxes." Steps for recovery of the penalities were also initiated.
Thereafter, in Febru ary, 1980, the appellant moved the High Court for issue of writ of mandamus to quash the demand notices and the pro ceedings initiated for recovery of penalty under sec.
13 of the Act.
The contention in the High Court were somewhat di.fferent from those urged before us.
Before the High Court the Revenue asserted that the very conditions of eligibility for entitlement to these concessions stood modified under a subsequent notification of 12th January, 1977 and that appellant did not satisfy the altered conditions of eligi bility.
The question, therefore, was whether enterpreneurs who had commenced their ventures prior to 12th January, 1977, could be held to be governed by the terms of the later notification of 12th January 1977.
This question, in princi ple, had been settled by a decision of this Court in Assist ant Commissioner of Commercial Taxes (Asst.), Dharwar & Ors.
vs Dharmendra Trading Co. & Ors., [ ; The question that arose there pertained to another condition stipulated in the same notification of 12th January, 1977.
This Court held that industries established prior to that date were not governed by those altered conditions.
Though in the present case the altered condition set up against appellant was a different one, on the principle decided in Dharmendra Trading Company 's case the altered condition would not be attracted.
But the High Court took a different view of the matter.
It held, in our opinion quite erroneous ly, that the principle of the earlier decision of this Court was not applicable because it was rendered in the context of another condition in the 1977 notification.
What fell for decision was not whether a particular condition was or was not applicable; but the very basic question whether a subse quent notification could undo the eligibility for the con cession stipulated and conferred under the 1969 notifica tion.
344 Shri Narasimhamurthy with his usual fairness said that he found it difficult to support the approach of the High Court to the question.
The main point on which the case turned is thus settled in favour of the appellant.
But a subsidiary question arose whether the grant of permission for adjustment could at all be made after the period to which such adjustment related had itself expired.
On this, the High Court said: " . .
But under Ext.
B, the 1975 noti fication, a clear procedure was provided in order to claim the benefit of refund on the sales tax paid on raw materials purchased by the industrialists.
The industrialists claim ing the benefit had to secure the prior per mission of the assessing authority to withhold the tax subject to the Government 's permis sion.
In other words, prior permission was a condition precedent.
In the instant case, Mr. Kumar was not able to satisfy us, permission had indeed been granted.
On the other hand, he fairly conceded that though an application was made, no permission was actually granted to withhold the payment.
Therefore, in view of the 1975 notification prescribing the proce dure for claiming the benefit under 1969 notification as at exhibit A, there has been no compliance and as such, the petitioner will not be entitled to withhold the tax.
With the result, the demand at Annexure R.S and T would be justifiable and legal." (Emphasis supplied) This is the only ground on which the appellant 's right to adjustment is contested by the Revenue.
Shri Harish Salve urged that indisputably the permis sion for the three years had been sought well before the commencement of the respective years but had been withheld for reasons which were demonstrably extraneous.
Learned counsel emphasised that the basic eligibility was condi tioned by the notification of 30th June, 1969, which re quired a certificate from the Department of Industries and Commerce.
Both the eligibility and the fact that there was such certification from the Department of Industries were not disputed.
Indeed, the requirement of the annual permis sion for adjustment envisaged by the notification of 11th August, 1975 was, says counsel, merely procedural as clause 3 of the notification stipulated that if the conditions were satisfied there was no dispute they were the Deputy Com missioner 345 "will permit" the adjustment.
Counsel says that if, in these circumstances, the Deputy Commissioner withheld the permis sion law treats that as done which ought to have been done.
Shri Narasimha Murthy, however, sought to contend that the requirement of the prior permission was held and rightly by the High Court to be a 'condition precedent ' and that non satisfaction of that condition precedent, whatever be the reason for the non satisfaction, automatically en tailed the logical consequences.
Learned counsel further submitted that it was not as if the right to the refund was denied or defeated by the inaction of the Deputy Commission er but only one mode of the refund by adjustment became unavailable.
Learned counsel urged that the benefit envis aged by the notification of 11th August, 1975 was in the nature of a concession and that the appellant in order to avail itself of its benefit had to show strict compliance with condition subject to which it was available.
Learned counsel placed reliance on Kedarnath Jute Munufacturing Co. vs Commercial Tax Officer, Calcutta & Ors., ; and Collector of Central Excise, Bombay and Anr.
vs Messrs Parle Exports (P) Ltd., ; to support his contention that where exemptions were concerned, the condi tions thereof ought to be strictly construed and strict compliance with them exacted before a person could can lay claim to the benefit of the exemptions.
Learned counsel submitted that the point was not whether there was any justification for delaying the permission; but, more importantly, whether appellant at the relevant point of time had, such prior permission or not and that if, in the meanwhile, the period itself expired, no relief was possible as, quite obviously, the requirements of 'prior permission ' became impossible of compliance.
Shri Narasimha Murthy relied on the following observa tions of this court in Kedarnath Jute Manufacturing Co. 's case to support this contention: " . .
But the said exemption is made subject to a proviso.
Under that proviso, in the case of such sales a declaration form duly filled up and signed by the registered dealer to whom the goods are sold and containing the prescribed particulars on a prescribed form obtainable from the prescribed authority has to be furnished in the prescribed manner by the dealer who sells the goods . . 346 " . . .
The provision pre scribing the exemption shall, therefore, be strictly construed. . . . .
To accept the argument of the learned counsel for the appellant is to ignore the proviso altogether, for if his contention be correct it will lead to the position that if the declaration form is furnished, well and good; but if not fur nished, other evidence can be produced.
That is to rewrite the clause and to omit the proviso.
That will defeat the express inten tion of the Legislature . . " 11.
We have given our careful consideration to these submissions.
We are afraid the stand of the Revenue suffers from certain basic fallacies, besides being wholly techni cal.
In Kedarnath 's case, the question for consideration was whether the requirement of the declaration under the proviso to Sec.
5(2)(a)(ii) of the Bengal Finance (Sales tax) Act, 1941, could be established by evidence aliunde.
The court said that the intention of the Legislature was to grant exemption only upon the satisfaction of the substantive condition of the provision and the condition in the proviso was held to be of substance embodying considerations of policy.
Shri Narasimha Murthy would say the position in the present case was no different.
He says that the notification of 1 1th August, 1975 was statutory in character and the condition as to 'prior permission ' for adjustment stipulated therein must also be held to be statutory.
Such a condition must, says counsel, be equated with the requirement of production of the declaration form in Kedarnath 's case and thus understood the same consequences should ensue for the non compliance.
Shri Narasimhamurthy says that there was no way out of this situation and no adjustment was permissible, whatever be the other remedies of the appellant.
There is a fallacy in the emphasis of this argument.
The consequence which Shri Narasimha Murthy suggests should flow from the non compliance would, indeed, be the result if the condition was a substantive one and one fundamental to the policy underlying the exemption.
Its stringency and mandatory nature must be justified by the purpose intended to be served.
The mere fact that it is statutory does not matter one way or the other.
There are conditions and conditions.
Some may be substantive, mandatory and based on considera tions of policy and some others may merely belong to the area of procedure.
It will be erroneous to attach equal importance to the non observance of all conditions irrespec tive of the purposes they were intended to serve.
In Kedarnath 's case itself this Court pointed out that the string 347 ency of the provisions and the mandatory character imparted to them were matters of important policy.
The Court ob served: " . .
The object of section 5(2)(a)(ii) of the Act and the rules made thereunder is self evident.
While they are obviously intended to give exemption to a dealer in respect of sales to registered dealers of specified classes of goods, it seeks also to prevent fraud and collusion in an attempt to evade tax.
In the nature of things, in view of innumerable transactions that may be entered into between dealers, it will wellnigh be impossible for the taxing authorities to ascertain in each case whether a dealer has sold the specified goods to another for the purposes mentioned in the section.
Therefore, presumably to achieve the two fold object, namely, prevention of fraud and facilitating administrative effi ciency, the exemption given is made subject to a condition that the person claiming the exemption shall furnish a declaration form in the manner prescribed under the section.
The liberal construction suggested will facilitate the commision of fraud and introduce adminis trative inconveniences, both of which the provisions of the said clause seek to avoid.
" (Emphasis Supplied) (See: ; at 630) Such is not the scope or intendment of the provisions concerned here.
The main exemption is under the 1969 notifi cation.
The subsequent notification which contain condition of prior permission clearly envisages a procedure to give effect to the exemption.
A distinction between the provi sions of statute which are of substantive character and were built in with certain specific objectives of policy on the one hand and those which are merely procedural and technical in their nature on the other must be kept clearly distin guished.
What we have here is a pure technicality.
Clause 3 of the notification leaves no discretion to the Deputy Commissioner to refuse the permission if the conditions are satisfied.
The words are that he "will grant".
There is no dispute that appellant had satisfied these conditions.
Yet the permission was withheld not for any valid and substan tial reason but owing to certain extraneous things concern ing some inter departmental issues.
Appellant had nothing to do with those issues.
Appel |ant is now told "we are sorry.
We should have given you the permission.
But now that the period is over, nothing can be done".
The answer to this is in the words of Lord Denning: "Now I know that a 348 public authority can not be estopped from doing its public duty, but I do think it can be estopped from relying on a technicality and this is a technicality" (See Wells vs Minister of Housing and Local Government, at 1007).
Francis Bennion in his "Statutory Interpretation", 1984 edition, says at page 683: "Unnecessary technicality: Modern courts seek to cut down technicalities attendant upon a statutory procedure where these cannot be shown to be necessary to the fulfilment of the purposes of the legislation.
Shri Narasimhamurthy again relied on certain obser vations in Collector of Central Excise, Bombay 1 & Anr.
vs M/s. Parle Exports (P) Ltd.; , in support of strict construction of a provision concerning exemptions.
There is support of judicial opinion to the view that exemp tions from taxation have a tendency to increase the burden on the other unexempted class of tax payers and should be construed against the subject in case of ambiguity.
It is an equally well known principle that a person who claims an exemption has to establish his case.
Indeed, in the very case of M/s. Parle Exports (P) Ltd. relied upon by Sri Narasimhamurthy, it was observed: "While interpreting an exemption clause, liberal interpretation should be imparted to the language thereof, provided no violence is done to the language employed.
It must, howev er, be borne in mind that absurd results of construction should be avoided.
" The choice between a strict and a liberal construction arises only in case of doubt in regard to the intention of the Legislature manifest on the statutory language.
Indeed, the need to resort to any interpretative process arises only where the meaning is not manifest on the plain words of the statute.
If the words are plain and clear and directly convey the meaning, there is no need for any interpretation.
It appears to us the true rule of construction of a provi sion as to exemption is the one stated by this Court in Union of India & Ors.
vs M/s. Wood Papers Ltd. & Ors., [1991]JT(1) 151at 155.
Truly, speaking liberal and strict construction of an exemption provision are to be invoked at different stages of interpreting it.
When the question is whether a 349 subject jails in the notification or in the exemption clause then it being in nature of exception is to be construed strictly and against the subject but once ambiguity or doubt about applicability is lifted and the subject falls in the notification then full play should be given to it and it calls for a wider and liberal construction . " (Emphasis supplied) 13.
It appears to us that the view taken of the matter by the High Court does not acknowledge the essential dis tinction between what was a matter of form and w/hat was one of substance.
There was no other disentitling circumstance which would justify the refusal of the permission.
Appellant did not have prior permission because it was withheld by the Revenue without any justification.
The High Court took the view that after the period to which the adjustment related had expired no permission could at all be granted.
A permis sion of this nature was a technical requirement and could be issued making it operative from the time it was applied for.
We, therefore, allow the appeal, set aside the judgment of the High Court under appeal and direct the Deputy Commissioner of Sales Tax (Admn.) to grant the per mission for the said three years operative from the dates of the application.
The permission shall entitle the appellant to the adjustment of the refunds against the taxes due for the respective years.
We issue these directions in view of the admitted position that, apart from the technical objec tion that periods to which the applications related had since expired, there was no other, impediment for the grant of permission.
It also follows that the demand notices which proceed on the premise that adjustment of refunds against taxes due was unavailable can not also stand.
They are quashed.
There will be no order as to costs.
V.P.R. Appeal allowed.
| On 30th June, 1969, State Government issued a notifica tion under Section 8A of the Karnataka Sales Tax Act, 1957, providing a package of reliefs and incentives including one concerning relief from payment of sales tax.
A further notification dated 11th August, 1975 was issued, envisaging certain modified procedures for effectu ating the reliefs contemplated by the exemption notification of 30th June, 1969.
For the assessment year 1976 77, the appellant made an application to the Respondent No. 1 on 10th November, 1976 for adjustment of the refunds against sales tax due and permission was granted with retrospective effect from 1st May, 1976 validating the adjustments, which the appellant had made during the interregnum.
For the three subsequent years, viz., 1977 78, 1978 79 and 197980, similar applications, which were made on 29th March 1977, 20th March 1978 and 8th March 1979 respectively, remained undisposed of.
In anticipation of the permission, appellant adjusted the refund against tax payable for these years and filed its monthly returns setting out adjustments so effected.
337 There was no dispute that the appellant was entitled to the benefit of the notification dated 30th June, 1969 and that the refunds were eligible to be adjusted against sales tax payable for respective years.
The respondent No. 1 in his letter dated 27.3.1979 informed the appellant that the orders on appellant 's appli cation for permission would be passed only on receipt of the clarification from the Government on the matters.
On 9th January, 1980, the appellant was issued three demand notices by the Commercial Tax Officer demanding payment of the sales tax, stating that as prior permission to adjust sales tax had not been considered by the respond ent No. 1, he was obliged to proceed to recover the taxes.
Steps for recovery of the penalties were also initiated.
The appellant moved the High Court for issue of writ of mandamus to quash the demand notices and the proceedings initiated for recovery of penalty under section 13 of the Act.
The High Court dismissed the writ petition, against which the present appeal was filed.
The appellant urged that indisputably the permission for the three years had been sought well before the commencement of the respective years but had been withheld for reasons, which were demonstrably extraneous; that the basic eligibil ity was conditioned by the notification of 30th June, 1969, which required a certificate from the Department of Indus tries and Commerce; that the requirement of the annual permission for adjustment envisaged by the notification of 11th August; 1975 was merely procedural, as clause 3 of the notification stipulated; and that if the conditions were satisfied, it was deemed that permission was given.
The respondents contended that it was not as if the right to the refund was denied or defeated by the inaction of the Deputy Commissioner but only one mode of the refund by adjustment became unavailable; that the benefit envis aged by the notification of 11th August, 1975 was in the nature of a concession and that the appellant in order to avail itself of its benefit had to show strict compliance with conditions subject to which it was available; that where exemptions were concerned, the conditions thereof ought to be strictly construed and strict compliance with them exacted before a person could lay claim to the 338 benefit of the exemptions; and that if, in the meanwhile, the period itself expired, no relief was possible as quite obviously, the requirements of 'prior permission ' became impossible of compliance.
Allowing the appeal, this Court, HELD: 1.
The main exemption is under the 1969 notifica tion.
The subsequent notification which contains condition of prior permission clearly envisages a procedure to give effect to the exemption.
[347E F] 2.
Clause 3 of the notification leaves no discretion to the Deputy Commissioner to refuse the permission, if the conditions are satisfied.
The words are that he "will grant".
There is no dispute that appellant had satisfied the conditions.
Yet the permission was withheld not for any valid and substantial reason, but owing to certain extrane ous things concerning some interdepartmental issues.
Appel lant had nothing to do with those issues.
[347F H] 3.
There was no other disentitling circumstance which would justify the refusal of the permission.
Appellant did not have prior permission, because it was withheld by the Revenue without any justification.
The High Court took the view that after the period to which the adjustment related had expired no permission could at all be granted.
A permis sion of this nature was a technical requirement and could be issued making it operative from the time it was applied for.
[349C D] 4.
A distinction between the provisions of statute which are of substantive character and were built in with certain specific objectives of policy on the one hand and those which are merely procedural and technical in their nature on the other must be kept clearly distinguished.
[347E G] 5.
The choice between a strict and a liberal construc tion arises only in case of doubt in regard to the intention of the Legislature manifest on the statutory language.
Indeed, the need to resort to any interpretative process arises only where the meaning is not manifest on the plain words of the statute.
If the words are plain and clear and directly convey the meaning, there is no need for any inter pretation.
[348F G] Assistant Commissioner of Commercial Taxes (Asstt.), Dharwar & Ors.
vs Dharmendra Trading Co. & Ors., ; ; Wells vs Minister of Housing and Local Government, at 1007 339 and Union of India & Ors.
vs M/s. Wood Papers Ltd. & Ors., [1991] JT (1) 151 at 155, referred to.
Kedarnath Jute Manufacturing Co. vs Commercial Tax Officer, Calcutta & Ors., ; at 630 and Col lector of Central Excise, Bombay and Anr.
vs Messrs Parle Exports (P) Ltd., ; , distinguished.
Francis Bennion: "Statutory Interpretation", 1984 edi tion at page 683, referred to.
|
Appeal No. 11 of 1991.
From the Judgment and Order dated 15.10.1979 of the Punjab and Haryana High Court in C.Q.P. No. 1009 of 1974.
WITH Civil Appeal Nos.
2752/79, 1105/76, 29 & 985/87, 4950/89, 1032/79, 3331/83, SLP (Civil)No. 15/80, CMP.
No. 1350/80 and C.A. No. 1425 of 1976.
B. Sen, G.C. Sharma, S.K. Mehta, C.S. Aggarwal, BV.
Desai, Ms. Radha Rangaswamy, K.C. Dua, Umesh Khaitan, Dar shan Singh.
Praveen Kumar, M.M. Kashyap and S.K. Bagga for the Appellants.
J. Ramamurthy, B.B. Ahuja and Ms. A. Subhashini for the Respondents.
The Judgment of the Court was delivered by K. JAGANNATHA SHETTY, J.
The assessees in these appeals have made payments in cash exceeding a sum of Rs.2500 for some of the purchases of stock in trade.
The payments are not allowed as deductions in the computation of income under the head "profits and gains of business".
The payments are held to be in contravention of the terms of Section 40A(3) of the Income Tax Act, 1961 read with the Rule 6DD of the Income Tax Rules, 1962.
The assessees have appealed to this Court challenging the disallowance.
Two questions arise for consideration in these appeals; (i) The validity of Section 40A(3) of the Act; and (ii) The applicability of Section 40A(3) to payments made for acquir ing stock in trade.
Section 40A(3) so far as material provides: "40A. Expenses or payments not deductible in certain circumstances (1) The provisions of this section shall have effect notwithstanding anything to the contrary contained in any other provision of this Act relating to the computation of income under the head "Profits and Gains of business or profession.
XXX XXX XXX XXX 408 (3) Where the assessee incurs any expenditure in respect of which payment is made, after such date (not being later than the 31st day of March 1969) as may be speci fied in this behalf by the Central Government by notification in the Official Gazette, in a sum exceeding ten thousand rupees otherwise than by a crossed cheque drawn on a bank or by a crossed bank draft, such expenditure shall not be allowed as a deduction: XXX XXX XXX Provided further that no disallow ance under this subsection shall be made where any payment in a sum exceeding ten thousand rupees is made otherwise than by a crossed cheque drawn on a bank or by a crossed bank draft, in such cases and under such circum stances as may be prescribed, having regard to the nature and extent of banking facilities available, considerations of business expedi ency and other relevant factors." Originally, Section 40A(3) required payments in respect of expenditure, which exceed Rs.2,500 to be made by a crossed cheque or a crossed bank draft.
On failure to do so, the payments made were disallowed in the computation of income.
In order to remove hardship to smaller assessees, the Amending Act, 1987, has raised this ceiling to Rs. 10,000.
Section 40A(3) begins with a non obstante clause.
It is an overriding provision which operates inspite of any thing to the contrary contained in any other provision of the Act relating to the computation of income under the head "profits and gains of business or profession".
The legisla ture has thus made it clear that the provisions of Section 40A will apply in supersession of other contrary provisions of the Act relating to the computation of income.
Sub sec tion (3) empowers the assessing officer to disallow, as a deduction any expenditure in respect of which payment is made of any sum exceeding Rs. 10,000 otherwise than by a crossed cheque or crossed bank draft.
Rule 6DD of the Income Tax Rules, 1962 refers to cases and circumstances in which payment of a sum exceeding Rs. 10,000 may be made otherwise than by a crossed cheque or by a crossed bank draft.
The Rule so far as it is relevant reads: "6DD.
Cases and circumstances in which payment in a sum exceeding ten thousand rupees may be made otherwise 409 than by a crossed cheque drawn on a bank or by a crossed bank draft No disallowance under sub section (3) of Section 40 A shall be made where any payment in a sum exceeding ten thousand rupees is made otherwise than by crossed cheque drawn on a bank or by a crossed bank draft in the cases and circumstances specified hereunder, namely: XXX XXX XXX XXX (j) in any other ease, where the assessee satisfies the Assessing Officer that the payment could not be made by a crossed cheque drawn on a bank or by a crossed bank draft (1) due to exceptional or unavoidable circum stances; or (2) because payment in the manner aforesaid was not practicable, or would have caused genuine difficulty to the , payee, having regard to the nature of the transaction and the necessity for expeditious settlement thereof, and also furnishes evidence to the satisfac tion of the Assessing Officer as to the genu ineness of the payment and the identity of the payee.
" As to the validity of Section 40A(3) it was urged that if the price of the purchased material is not allowed to be adjusted as against the sale price of the material sold for want of proof of payment by a crossed cheque or crossed bank draft, then the income tax levied will not be on the income but it will be on an assumed income.
It is said that the provision authorising levy tax on an assumed income would be a restriction on the right to carry on the business besides being arbitrary.
In our opinion, there is little merit in this conten tion.
Section 40A(3) must not be read in isolation or to the exclusion of Rule 6DD.
The Section must be read along with the Rule.
If read together, it will be clear that the provi sions are not intended to restrict the business activities.
There is no restriction on the assessee in his trading activities.
Section 40A(3) only empowers the assessing officer to disallow the deduction claimed as expenditure in respect of which payment is not made by crossed cheque or crossed bank draft.
The payment by crossed cheque or crossed bank draft is insisted on to enable the asses 410 sing authority to ascertain whether the payment was genuine or whether it was out of the income from disclosed sources.
The terms of Section 40A(3) are not absolute.
Consideration of business expediency and other relevant factors are not excluded.
The genuine and bona fide transactions are not taken out of the sweep of the Section.
It is open to the assessee to furnish to the satisfaction of the assessing officer the circumstances under which the payment in the manner prescribed in Section 40A(3) was not practicable or would have caused genuine difficulty to the payee.
It is also open to the assessee to identify the person who has received the cash payment.
Rule 6DD provides that an asses see can be exempted from the requirement of payment by a crossed cheque or crossed bank draft in the circumstances specified under the rule.
It will be clear from the provi sions of Section 40A(3) and rule 6DD that they are intended to regulate the business transactions and to prevent the use of unaccounted money or reduce the chances to use black money for business transactions.
See: Mudiam Oil Company vs ITO, A.P.
If the payment is made by a crossed cheque drawn on a bank or a crossed bank draft then it will be easier to ascertain, when deduction is claimed, whether the payment was genuine and whether it was out of the income from disclosed sources.
In interpreting a taxing statute the Court cannot be oblivious of the proliferation of black money which is under circulation in our country.
Any restraint intended to curb the chances and opportunities to use or create black money should not be regarded as curtailing the freedom of trade or business.
As to the second question it may be stated that the word 'expenditure ' has not been defined in the Act.
It is a word of wide import.
Section 40A(3) refers to the expenditure incurred by the assessee in respect of which payment is made.
It means all outgoings are brought under the word 'expenditure ' for the purpose of the Section.
The expendi ture for purchasing the stock in trade is one of such outgo ings.
The value of the stock in trade has to be taken into account while determining the gross profits under section 28 on principles of commercial accounting.
The payments made for purchases would also be covered by the word 'expendi ture ' and such payments can be disallowed if they are made in cash in the sums exceeding the amount specified under section 40A(3).
We have earlier observed that Rule 6DD has to be read along with Section 40A(3).
The Rule also contem plates payments made for stock in trade and raw materials.
This Rule is in accordance with the terms of Section 40A(3).
The Rule provides that an assessee can be exempted from the requirements of payment by crossed cheque or a crossed bank draft where the purchases are 411 made of certain agricultural or horticultural commodities or from a village where there is no banking facility.
Section 40A(3) is, therefore.
attracted to payments made for acquir ing stock in trade and other materials.
This is also the view taken by several High Courts.
See ' Sajowanlal Jaiswal vs CIT, Orissa; U.P. Hardware Store vs CIT, Allahabad; Ratan Udyog vs ITO, Allahabad; P.R. Textiles vs CIT, Kerala, [19801 Kerala; CIT, vs Kishan Chand Maheswari Dass, P & H; Kanti Lal Purshottam and Co. vs CIT, Raj; CIT, vs New Light Tin Mfg. Co., P & H; Fakri Automobiles vs CIT, Raj; Venkata Satayanarayana Timber Depot vs ITR, AP.; and Akash Films vs CIT, Karnataka.
The decisions of the High Courts of Andhra Pradesh, Orissa, Allahabad, Kerala, Karnataka, Punjab & Haryana, Rajasthan and Patna are to the effect that the payments made for purchasing stock in trade or raw materials should also be regarded as expenditure for the purpose of Section 40A(3).
The only discordant note struck on this aspect is by the Gauhati High Court in CIT vs Hardware Exchange, The Gauhati High Court has observed that Section 40A(3) applies only to payments made on account of 'expenditure incurred ' and the payment made purchase of stock in trade cannot be termed as 'expenditure incurred since money does not go irretrievably in such cases.
We are unable to agree with the view taken by the Gauhati High Court.
In this view of the matter we dismiss all these appeals and special leave petition with costs.
S.B. Appeals dismissed.
| The assesses in these appeals have made payments in cash exceeding a sum of Rs.2500 for some of the purchases of stock in trade.
So while computing the income of the asses sees under the head "profits and gains of business" the assessing authority disallowed deduction on account of such payments held to be in contravention of the terms of section 40A(3) of the Income Tax Act, 1961 read with the Rule 6DD of the Income Tax Rules, 1962.
The assessees have challenged the same.
So in the in stant case the question under consideration before this Court is (i) the validity of section 40A(3) of the Act (ii) the applicability of section 40A(3) to payments made for acquiring stock in trade.
Originally section 40A(3) required payments in respect of expenditure which exceeded Rs.2500 to be made by a crossed cheque or crossed bank draft and by the Amending Act 1987 to remove hardships to smaller assessees the said amount has been raised to Rs. I0,000, Section 40A(3) begins with a non obstante clause so the legislature has made it clear that the provisions of section 40A(3) are overriding and operate inspite of any thing to the contrary contained in any other provisions of the Act relating to the computa tion of income under the head "profits and gains of business or profession".
Sub section (3) empowers the assessing authority to disallow as deduction of any expenditure in respect of which payment is made in cash exceeding Rs. 10,000 otherwise than by a crossed cheque or crossed bank draft.
Rule 6DD of Income Tax Rules, 1962 provides for cases and circumstances in which payment of a sum exceeding Rs. 10,000 may be made otherwise than by crossed cheque or by a crossed demand draft.
The assessees challenged on the ground that provisions of section 406 40A(3) intend to restrict the business activities.
Dismissing the appeals and Special Leave Petition, the Court, HELD: That section 40A(3) must not be read in isolation or to the exclusion of Rule 6DD.
This section must be read along with the Rule 6DD and if read together it is clear that the provisions of the section are not intended to restrict the business activities.
It only empowers the assessing officer to disallow the deductions claimed as expenditure in respect of which payment is not made by crossed cheque or crossed bank draft.
The same is insisted only to enable the assessing authority to ascertain whether it was out of the income from disclosed sources and even the terms of section 40A(3) are not absolute.
Considerations of business expediency and other relevant factors are not excluded, since it is open to the assessee to furnish the circumstances under which the payment was not practicable or would have caused genuine difficulty to the payee.
Rule 6DD provides that an assessee can be exempted from the require ment of payment by a crossed cheque or crossed bank draft in the circumstances specified under the rule.
Thus section 40A(3) and Rule 6DD are intended to regulate the business transactions and to prevent the use of unaccounted money or reduce the chance to use black money for business transac tions.
Moreover while interpreting a taxing statute the Court cannot be oblivious of the proliferation of black money which is in circulation in our country Thus any restraint intended to use or create black should not be regarded as curtailing the freedom of trade or business.
[409G 410E] The term expenditure as per section 40A(3), means all outgoings including the expenditure incurred for purchasing the stock in trade.
Since to determine the gross profits the value of the stock in trade has to be taken into account.
So payments can be disallowed if they are made in cash in the sums exceeding the amount specified under section 40A(3) and also not provided for exemption under Rule 6DD.
Thus section 40A(3) is attracted to payments made for acquiring stock intrade and other materials.
[410G 411A] Sajowanlal Jaiswal vs CIT, Orissa; U.P. Hardware Store vs CIT, ; Allahabad; Ratan Udyog vs ITO, Allahabad; P.R. Textiles vs CIT Kerala, Kerala; CIT vs Kishan Chand Maheswari Dass, P & H; Kanti Lal purshottam & Co. vs CIT, Raj; CIT vs New Light Tin Mfg. Co., P & H; Fakri Automobiles vs CIT, Raj; 407 Venkata Satayanarayana Timber Depot vs ITR, AP.
and Akash Films vs CIT, Karnataka, approved.
CIT vs Hardware Exchange, , reversed.
|
ivil Appeal No. 2574 of 199 1.
From the Judgment and Order dated 30.4.1991 of the Delhi High Court in C.W.P. No. 812 of 1991.
Altar Ahmed, Additional Solicitor General, V.C. Mahajan, A.K. Srivastava, S.N. TerdaI and Vijay Kumar Verma for the Appellant.
P.C. Jain, Ashim Vachher and Ms. Bharti Anand for the Respondent.
The Judgment of the Court was delivered by 353 YOGESHWAR DAYAL, J.
This appeal by Special Leave is directed against the judgment of the High Court of Delhi dated 30th April, 199 1 on behalf of the Union of India and the Chief of the Army Staff against Major General Dayanand Khurana.
By the impugned judgment the Division Bench of the High Court directed the issue of writ of mandamus modifying an order dated 26th October, 1990 and thereby directing the appellants herein to treat Major General D.N. Khurana, who was approved for promotion to the acting rank of Lt. General for 'Staff Only ' Stream, senior to all the other Major Generals who were promoted to the acting rank of Lt. General in the 'Command and Staff ' Stream, and also issued further writ of mandamus directing the appellants to expeditiously promote the respondent herein, ahead of the 1957 batch, to a Staff post which has occurred between 26th October, 1990 and 31st May, 1991 keeping in view the existing policy of the Government and in the light of the observations made in the judgment.
The brief facts which give rise to the filing of the writ petition in the High Court and the appeal before us may be noticed.
The respondent was commissioned in the army in the year 1954, therefore, his original seniority reckons from the year 1954.
As per the policy and procedure adopted in this connection every officer is given three chances for consid eration for promotion.
If an officer is not approved for promotion during the first consideration, he loses one year of seniority and slides into the batch of the next year.
In the eventuality of his not being approved for promotion even in the second consideration, he loses one more year of seniority and slides further into the next batch.
Thereaf ter, the officer is considered for the last time for promo tion in the third chance and if he is not approved even in the third chance, he is not given any further consideration and is finally regarded as a superseded officer.
In pursu ance of this policy, the respondent herein while he was acting as a Brigadier was first considered for promotion to the rank of Major General in the year 1983 but was not approved, and, therefore, he became part of 1955 batch instead of 1954 batch.
Thereafter he was superseded again and ultimately got selected as a Major General in the 1956 batch.
As per the existing policy at that time his seniority in the rank of Major General was re fixed alongwith the officers of 1956 batch as per the following sequence of selection: 354 1956 Batch: (a) Final review case of 1954 batch.
(b) First review case of 1955 batch.
(c) Fresh case of 1956 batch.
The respondent while working as Major General was con sidered for promotion to the rank of Lt. General in July, 1989 but was rejected by the Government.
He thus once again lost seniority of 1956 batch.
He was then considered as a first review case in July, 1990 alongwith 1957 batch and was approved for selection for 'Staff Only ' Stream in the fol lowing sequence of consideration: "(a) Final review case of 1955 batch.
(b) First review case of 1956 batch.
(c) Fresh case of 1957 batch.
Since the respondent was approved only for 'Staff Only ' Stream he was placed below all other Major Generals who were approved for selection in the Stream of 'Command and Staff.
The respondent was aggrieved by his placement below the officers who were approved for 'Command and Staff ' Stream, though he had been approved only for 'Staff Only ' Stream.
On 31st May, 1986 the Government of India approved, in principle, the 'Two Stream ' concept of career management of Army Officers of the ranks of Major General and Lt. General subject to the following stipulations: "(a) The modalities for implementation of 'Two Stream ' concept will be worked out by the Army Headquarters and submitted to Government for information.
This will include identification of appointments to be manned by officers belonging to the 'Staff Only ' Stream.
(b) The criteria and the QRs formulated by the Army HQrs and submitted to Government vide Army HQrs Note No. PC 01102/ MS 9B dated 7th February, 1986 will be applied for screening officers for promotion to the two streams.
It will be ensured that 355 the QRs prescribed for promotion to the 'Command and Staff stream are stricter than those prescribed for the 'Staff Only ' stream.
(c) A comprehensive review of the working of the concept will be done in 1987 and such amendments, as may be necessary, will be put up to Government for approval.
This approval of the Government was preceded by the approval of the Prime Minister on 26th May, 1986.
The reason for adoption of 'Two Stream Concept ' of career management for Army Officers is that the Army is highly command orient ed with the system itself providing a distinct edge for proven command performance.
This orientation, especially in higher ranks, has helped to maintain the fighting efficiency of the Army and has stood to the test of time, besides being in the over all interests of the Service and the Nation.
In order to be able to develop command potential, it was thought necessary that officers are allowed to hold command appointments for adequate periods.
Thereafter the modalities for above 'Two Stream Concept ' were worked out by the Army Headquarters and an office order was issued by Military Secretary 's Branch, Army Headquar ters, dated 9th September, 1986.
The relevant paragraphs are 1 to 3, 5 and 9 which read as under: "1.
The upgradations in senior ranks in the Cadre Reviews have been sanctioned only in the Staff and ERE appointments.
This has caused serious imbalances in the existing ratio between the Command, Staff and ERE appoint ments.
Whereas, earlier senior officers could be given a proper command tenure before their turn came up for the next promotion, it is not now feasible in all cases after the upgrada tions are fully implemented.
Ours is a Command oriented Army and successful performance in a command must continue to be mandatory for promotion to higher ranks.
It is not desirable to truncate command tenures, if we have to maintain our fighting efficiency.
It is to this and, that it has been decided to adopt the 'Two Stream Concept ' for officers of the rank of Brig.
and above.
The details of the concept are given in the succeeding paras.
356 Concept 3.
The concept envisages that officers on promotion to Maj.
General and Lt. General will be bifurcated into the 'Command and Staff ' and the 'Staff Only ' streams as per details given below: (a) 'Command and Staff Stream.
Very high calibre officers based on their merit will be promoted to this Stream.
They will hold com mand appointments in the Higher rank and thereafter be given exposure to Staff and ERE appointments as necessary.
They will be eligi ble for further promotion as per the existing criteria.
(b) 'Staff Only ' Stream.
Officers promot ed to this Stream will hold only staff ap pointments, in the higher rank and will pro ceed on superannuation thereafter.
These officers will not be eligible for further promotion.
. . . . .
Applicability 5.
The 'Two Stream ' concept generally will be applicable to the officers of the General Cadre.
However, non General Cadre officers will also be considered for the 'Staff Only ' Stream in the rank of Lt. General.
6 8 . . . . .
Inter se Seniority 9.
Officers selected for the 'Command and Staff Stream, will be promoted first, be it on a Command or Staff appointment.
Thereafter, officer of the same batch who are selected for the 'Staff Only ' Stream will be promoted.
Therefore, for the purpose of seniority, officers of the 'Staff Only ' Stream will be Junior to officers of the 'Command and Staff Stream.
After placing the officers of the 'Staff Only ' Stream in suitable appointments, review selectees of the 'Command and Staff Stream of the next batch will be promoted.
Again in adopting the methodology for implementation of the 357 'Two Stream Concept ' the following note dated 22nd Septem ber, 1986 was put up by the Military Secretary to the Chief of the Army Staff.
This note pertains to the sequence of promotion in respect of officers who are approved for promotion under the Two Stream concept.
The existing sequence of promo tion is laid down vide our policy letter No. 38360/MS 5 B dt. 29 May 84, placed opposite.
With our command orientation, viable tenures in command assignment are mandatory to increase the fighting efficiency of the Army.
It is, to this end that the Two Stream Concept has been adopted.
With the introduction of the two stream concept in the ranks of Maj. Generals and Lt. Generals, the sequence of promotion into the streams needs to be formalised.
In so doing, the main reasons for the introduction of the two stream concept, have to be the guiding principle.
The two stream concept was intro duced to promote younger high calibre officers early, so that they get viable tenures in command.
It is also well known that by and large an officer who is approved as a fresh case is of a higher calibre as compared to the ones approved for promotion as review cases.
Thus it would be logical to promote the former category of officers approved in the 'Command and Staff stream, earlier than the latter category of officers approved in the 'Staff only ' stream.
Two options are available for fixing the sequence of promotion under the 'Stream Concept '.
These are given in subse quent paras with the help of the following illustrations (a) Batches considered at the Screening Board.
(i) Final Review 1956 (ii) First Review 1957 358 (iii) Fresh Cases 1958.
(b) Officers Approved for Promotion (i) Final Review 1956 (aa) Command and Staff Stream One (ab) Staff only Stream One (ii) First Review 1957 (aa) Command and Staff Stream One (ab) Staff Only Stream One (iii) Fresh Cases 1958 (aa) Command and Staff ten Stream (ab) Staff only stream five 7.
Whatever sequence is followed, the IC number seniority within that stream of that batch needs to be maintained.
The sequence of promotion could follow the undermentioned op tions: (a) Option A.
To follow the existing sequence of promotion: (i) Final review Command and Staff stream 1956 batch.
(ii) Final review Staff only stream 1956 batch.
(iii) First review Command and Staff stream 1957 batch.
(iv) First review Staff only stream 1957 batch.
(v) Fresh Command and Staff stream 1958 batch.
359 (vi) Fresh Staff only stream 1958 batch.
(b) Option B.
The sequence of promotion to be: (i) Final review Command and Staff stream 1956 batch.
(ii) First review Command and Staff stream 1957 batch.
(iii) Fresh Command and Staff stream 1958 batch.
(iv) Final review Staff only stream 1956 batch.
(v) First review Staff only stream 1957 batch.
(vi) Fresh Staff only stream 1958 batch.
(The officers of 1959 batch, approved even in the Command and Staff stream, will be promoted after absorbing the Fresh 'Staff Only ' stream of 1958 batch.) 8.
The advantages of Option A will be the disadvantages of Option B. The advantages and disadvantages of Option A are discussed below: (a) Advantages.
(i) Those approved for promotion as review cases, will still get their promotion and also have a reasonably viable tenure.
The chances of any proved ' officer retiring without get ting his promotion, are remote.
(ii) The existence of dissatisfied officers among those approved for promotion, is unlike ly.
(b) Disadvantages.
(i) The basic principle behind the intro duction of the two stream concept gets defeat ed.
(ii) Tenure of Command.
Delay in the promo 360 tion of fresh cases of the Command and Staff stream, will give them lesser tenure, possibly affecting their chances of further promotion, thus having an overall detrimental effect.
(iii) The principle of promoting really high calibre and the best officers early, is vio lated.
Analysis.
It would be noticed that the difference in the two options are minimal.
In the case of Option A, the existing sequence of promotion has been maintained in that officers are being promoted as per their inter se seniority, irrespective of the stream.
In the case of Option B, whereas the existing se quence of promotion is still being maintained, but promotion is being affected in accordance with the stream in which an officer is being promoted.
Since officers of the 'Command and Staff are of higher calibre, promoting them over the 'Staff Only ' stream is logical and has been accepted in principle.
Hence adoption of Option B, is recommended.
For approval please.
Once ap proved, Ministry of Defence will be informed accordingly.
Sd/ (A.K. Chatterjee) Lt.
Genl Sena Sachiv/ Military Secretary 22 Sep. 86 COAS through VCOAS The above note of the Military Secretary was considered by the Vice Chief of Army Staff and vide note dated 24th September, 1986 in which he has observed as under: "1.
As I see it, in the ultimate, promotions in 'Command 361 and Staff ' stream and 'Staff stream should be independent of each other based on identified slots in each stream.
The differential in terms of time between the two may be as much as two to three years, the exact period vary ing from time to time.
It is only then that we would be able to have viable tenures for 'Command and Staff ' Stream officers, both in the rank of Maj. Gen. and Lt. Gen.
Thus, our aim should be to promote a 'Command and Staff ' stream officer to Maj. Gen. at the age of 48 years or so and to Lt. Gen. at the age of 52 to 53 years.
On the other hand, it would be acceptable if a staff stream officer is pro moted to Maj.
Gen. at the age of 51 years or so and to Lt. Gen. at the, age of 54 or 55 years.
In the light of the above, the propos al putforward by the MS cannot be a long term: proposal.
However, we have perhaps no option but to adopt this for the short term, as the ages at which the officers are currently being approved for higher promotions are compara tively higher, and there would be imbalances if we increase the differential suddenly.
MS proposal must, therefore, be seen as a valid one for the transitionary phase only.
To that extent, I am in agreement with his recom mendation.
Sd/ 24 Sep. 86 COAS The note of the Military Secretary alongwith the note of the Vice Chief of Army Staff was put up before the Chief of Army Staff, who, on 8th October, 1986 approved the note of the Vice Chief of Army Staff.
The file was again put up to JDMS through the Military Secretary and the matter was discussed.
Paragraph 7(a) of the note of the Military Secretary dated 22nd September, 1986 mentions Option 'A ' which was the existing sequence of promotion prior to September, 1986 and recommended in subparagraph (b) of paragraph 7 the sequence of promotion which was to be followed.
In paragraph 8 the Military Secretary discussed the advantages and disadvan tages of Option 'A ' and Option 'B '.
In paragraph 10 he recommended adoption of Option 'B '.
He also mentioned in his note that if the note is approved, the Ministry of Defence will be informed accordingly.
362 It is clear that the Vice Chief of Army Staff adopted the proposal as recommended in the note of Military Secre tary in paragraph 10 which was again agreed to by the Chief of Army Staff.
The matter was again sent to the Military Secretary who discussed it with the officers of Ministry of Defence.
It is clear from Option 'B ', which was adopted for working out the 'Two Stream Concept ', that the seniority will first be given to the Command and Staff ' Stream selected from any of the earlier batches and after the 'Command and Staff ' stream has been accorded the seniority, the three streams of 'Staff Only ', mention at Sl.
(iv), (v) and (vi) will be given seniority.
It is also clear that the final review, the first review or fresh stream of 'Staff Only ' rank below the similar three streams of 'Command and Staff ' trained.
The substance of this note is again conveyed by the Military Secretary in its communication dated 1st June, 1987 by way of further amplifying the methodology for implementa tion of the 'Two Stream Concept '.
The letter reads: "COMMAND AND STAFF STREAM 1.
Further to this Headquarters letter No. 00476/MS 9B dated 09 Sep 86. 2.
Certain doubts have been expressed by officers regarding the 'Two Stream Concept '.
This letter seeks to clarify the important issues with particular reference to: (a) Necessity of the Stream Concept.
(b) Ages of superannuation.
(c) Inter se seniority.
Necessity 3.
The upgradations which were sanctioned in the Second Cadre Review, were mainly on the Staff and ERE.
This resulted in an imbalance in the Command and Staff ratio.
Tenures in senior ranks in Command consequently became truncated which in a Command oriented Army like ours, is not acceptable.
Hence the 'Two Stream ' Concept was intro 363 duced with the due approval of the Govern ment.
Ages of Superannuation 4.
As per the current rules officers of the 'Staff Only ' Stream are to superannuate one year earlier 'than the officers of the 'Com mand and Staff Stream.
This rule is applicable both to the General Cadre and officers from other Arms and Services.
However, in the case of officers of other Arms and Services certain other clarifications given in the succeeding paras will also be applicable.
In the case of Maj Gens from other Arms and services, the screening is done primarily to permit the officers to be promot ed to un specified appointments outside their Corps on first promotion and if required ahead of officers not so selected.
The ages of superannuation in their respect will remain unchanged and they shall superannuate at an age corresponding to the officers of the Command and Staff in the rank of Maj Gen. 6.
Lt. Gens.
Each other Arm/Service is autho rised two appointments specific to the Corps in the rank of Lt. Gen.
Notwithstanding the proposal to downgrade the schools of Instruc tion, a second appointment in the rank of Lt. Gen. will invariably be made available to them to ensure that their promotional prospects do not lag behind.
Officers holding these two assured appointments will superannuate at 58 years.
Other officers from a particular Arm/Service in the 'Staff Only Stream ' over and above the two assured appointments will superannuate at 57 years as is applicable to officers of the General Cadre.
However, if an appointment within the Corps falls vacant, such officer will be screened to assess his fitness for holding the specific vacancy within the Corps.
If selected to hold the authorised vacancy, he will superannuate at an age corresponding to the age of Command and Staff Stream, i.e. 58 years.
If in case, no vacancy is available, the officers of this Stream continue to superannuate at 57 years as mentioned earlier.
Inter se seniority 7.
The 'Two Stream Concept ' envisages that officers of the 364 General Cadre of a particular batch seniority approved in the 'Command and Staff ' Stream will be e.n block senior to those officers of the same batch approved on the 'Staff Only ' Stream.
In so far as non General Cadre officers are concerned, the order of passing out is the determining factor to decide the inter se seniority amongst them subject to readjustment based on the sequence of selection.
Doubts have also been raised regarding the inter se seniority between the officers of other Arms and Services approved on the 'Staff Only ' Stream vis a vis officers of the General Cadre approved in the 'Command and Staff ' Stream as well as 'Staff Only ' Stream.
It is clarified, that as regards the seniority within the same batch is concerned, officers approved on the 'Command and Staff ' Stream continue to be senior to officers approved in the 'Staff Only ' Stream.
However, an officer of an earlier batch approved on the 'Staff Only ' Stream will be senior to an officer of subsequent batch approved on the 'Command and Staff ' Stream.
It will, therefore, be noticed from the above that while promoting officers in either the 'Command and Staff ' Stream or 'Staff Only ' Stream, concept of batch seniority as hither tofore applicable has in all cases been main tained.
It is reiterated that the 'Stream Concept ' has been introduced to ensure that the best available talent and expertise available in the service is utilised.
Content of this letter be widely dissemi nated.
sd/ (Vijay Kumar) Lt.
Gen Sena Sachiv/ Military Secretary" Before adverting to the submissions of the parties we may also refer to another letter dated 29th May, 1984 filed as Annexure P 2 to the writ petition in the High Court (page 306 of the paper book filed on 365 behalf of the respondents alongwith the counter affidavit).
The letter dated 29th May, 1984 reads as under: "SEQUENCE OF SELECTION FOR SELEC TIVE RANKS 1.
Reference MS Branch Liaison Letter No. 1/80 forwarded vide this Headquarters Letter No. OO170/MS9A dated 02 Aug 80. 2.
Paras 26 and 27 of the above quoted Liaison Letter deal with the revised sequence of selection for promotion to the rank of A/Lt. Col.
However, the example given in Para 26 has raised certain doubts in the minds of the officers.
According to this example, the revised sequence of selection was to be in the following order: (a) Final Review (Say) 1960 Batch (b) First Review 1961 Batch (c) Fresh Selectees 1962 Batch 3.
Prior to Feb., 1980 two different sequences of selection were being followed for promotion to the rank of A/Lt Col and A/Col, illustrated by the following examples: (a) for promotion to the rank of A/Lt Col (i) Fresh SeLEctees (Say) 1959 Batch (ii) Final Review 1957 Batch (iii) First Review 1958 Batch (b) for promotion to the rank of A/Col and above (i) Final Review 1954 Batch (ii) First Review 1955 Batch (iii) Fresh selectees 1956 Batch 366 4.
In Feb 1980, it was decided to bring the sequence of selection in the rank of A/Lt Col in line with the sequence being followed for promotion to the ranks of A/CoI and above.
The changed sequence of selection which is being presently followed is illustrated by the following examples: (a) Final Review 196 1 Batch (b) First Review 1962 Batch (c) Fresh selectees 1963 Batch 5.
This new sequence was to be applied com mencing with the fresh selectees of 1963 as illustrated in para 4 above.
Fresh selectees officers of 1962 and earlier seniority were to be treated by the old criterion as given in para 3(a) above.
It was also decided that past cases would not be opened up for the revision of seniority.
In view of above, para 26 of above men tioned Liaison Letter may please be treated as cancelled.
This letter may please be given wide publicity.
Sd/ (HB Kala) Col. Col MS 5 for Military Secretary" Learned counsels also brought to our notice paragraph 169 of Annexure P 3 filed in the writ petition (page 307 to 309 of the paper book) which reads as under: "169.
A ' Batch for consideration for promotion to select rank is defined as "all officers who reckon seniority in a particular calender year".
This has been done for the following reasons: (a) Officers are commissioned from IMA in Jan. and Dec. each year.
367 (b) Officers commissioned from OTS on grant of permanent commission lose seniority as per existing rules and they reckon seniority in Mar. and Sep. of each year.
(c) Officers who forefeit service as a result of disciplinary awards reckon fresh seniority on any date in the calender year.
(d) Officers passing promotion examinations late also reckon seniority corresponding to the date of the examination on which they finally passed.
" It will be noticed that both these communications are before the 'Two Stream Concept ' which was accepted by the Government on 3 1st May, 1986 and its modalities being worked out thereafter.
However, we will deal with these two communications little later.
The Division Bench of the High Court considered the note of Military Secretary dated 22nd September, 1986, referred to above, as well as the note of the Vice Chief of Army Staff dated 24th September, 1986 as also the note of the Chief of Army Staff and took the view that if the sequence of promotion which was being followed was for Option 'A ' the writ petitioner would be entitled to be placed above the fresh Command and Staff ' Stream cases belonging to 1957 batch.
The learned Judges further observed: "In our opinion it is the sequence which is referred to in the Option 'A ' which has to be followed for making promotion to the next higher rank of Lt. General.
The reason for this is obvious.
It is true that the Military Secretary had recommended in the note dated 22nd September, 1986 that Option 'B ' (supra) should be adopted.
The Vice Chief of Army Staff, however, has stated that the proposal of the Military Secretary cannot be a long term proposal.
He further recommended that the proposal of accepting Option 'B ' could be adopted for a short term only. "as the ages at which the officers are currently being approved for higher promo tions are comparatively higher".
The Vice Chief of Army Staff then (emphasis added) recommended that Option 'B ' should be regarded as being 368 followed "for a transitionary phase only".
It is clear from the aforesaid note of the VCOAS that option 'B ' was recommended for being approved only by way of temporary measure and with regard to those officers who were being considered for promotion at that time.
The use of the expression 'Currently being approved ' must lead to only one conclu sion that it referred to those officers who were being considered for promotion on or about September, 1986.
What is of greater importance is that the VCOAS was emphatic in observing that Option 'B ' could not be fa voured as a long term proposal.
The Chief of Army Staff agreed with the recommendation of the Vice Chief of Army Staff.
The effect of this must be that the recommendation of the Military Secretary to adopt Option 'B ' as a sequence of promotion was not accepted.
The existing sequence of promotion which was being followed was recommended to be continued.
" Again the Division Bench observed: "It is pertinent to note that notwithstanding the note dated 22nd September, 1986, and the subsequent opinion of the Vice Chief of Army Staff and the Chief of Army Staff, no letter of the type which was issued on 9th September, 1986, was ever issued by the Military Secre tary 's branch.
Whereas the letter of 9th September, 1986, was issued to all the Command Headquarters, there is no format document which was issued or made known to the offi cers, purporting to give effect to Option 'B ' suggested by the Military Secretary vide his note dated 22nd September, 1986.
On the con trary, the letter dated 1st June, 1987 issued by the Military Secretary 's Branch, referred to hereinabove, is clearly at variance with the suggestion of the Military Secretary contained in his note of 22nd September, 1986.
If Option 'B ' had been accepted, then that would have been mentioned in the letter ' of 1st June, 1987.
" Again in relation to the communication dated 1st June, 1987 the Division Bench observed as under: "Reverting to the letter of 1st June, 1987, we find that 369 towards the end of paragraph 9, it has been categorically stated that: "However, an officer of an earlier batch approved on the Staff Only Stream ' will be senior to an officer of subsequent batch approved on the 'Command and Staff ' stream".
This is then emphasised by the contents of paragraph 10 of that very letter which reiter ates that: "The concept of batch seniority as hithertofore applicable has in all cases been maintained.
" The anxiety of the Military Secretary 's branch apparently was that the batch seniority had to be maintained.
If the argument of Mr. Vazey is accepted, the batch seniority cannot be main tained if the fresh cases of 1957 batch are to be promoted earlier than the petitioner, which is a first review case of 1956 batch, then the effect would be that officers belonging to the 1957 batch would be senior to the petitioner who belongs to the 1956 batch.
Notwithstanding the note dated 22nd September, 1986 of the Military Secretary, the letter dated 1st June, 1987 of the Military Secretary 's branch makes it clear that the batch seniority shall always be maintained.
Notwithstanding the fact that the fresh cases of 1957 batch have been ap proved for command and Staff stream, they would, nevertheless, come in sequence after the petitioner who belongs to the 1956 batch though selected in the Staff only Stream.
It may happen that notwithstanding that the petitioner is placed at the head of the penal, no staff vacancy may occur and a vacancy may occur only for a command post to which the petitioner has not been selected but we are not concerned with such a case here.
It is the admitted case before us that out of the penal of officers who were selected as per the letter dated 26th October, 1990, Major Gen. S.A. Singh and section Roy Choudhary have been, on promotion, posted to posts which are non Command posts.
It appears to us that the Division Bench totally mis understood the note of the Military Secretary dated 22nd September, 1986 as well as the note of the Vice Chief of Army Staff dated 24th September, 1986.
370 It is in the select panel prepared dated 26th October, 1990 that the officers mentioned at (a) are the officers who were selected for 'Command and Staff ' stream whereas the respondent was selected for the stream of 'Staff Only. ' It is clear from the Scheme that the officers who were approved for 'Command and Staff ' stream can be appointed both for 'Command ' as well as 'Staff ' vacancies whereas the officers who were approved only for stream of 'Staff Only ' can only be appointed to the vacancies relating to 'Staff ' and cannot be appointed relating to vacancies for 'Command '.
The ex pression 'same batch ' which is referred to in paragraph 9 of the letter dated 1st June, 1987 is for the officers who were considered for selection at one time and not the individual batch of the Major General.
In the batch in which the re spondent was considered for promotion included (a) fresh cases of 1957, (b) first review case of 1956 and (c) final review cases of 1955.
It is that batch which is being re ferred to as the 'same batch ' and it is specifically men tioned in paragraph 9 that for the purpose of seniority.
officers of the 'Staff Only ' stream will be junior to the officers of the 'Command and Staff ' stream.
It is again specifically mentioned that after placing the officers of the 'Staff Only ' stream, review selectees of the 'Command and Staff ' stream of the next batch to be promoted.
This concept was further explained in the note of the Military Secretary dated 22nd September, 1986 which was approved by the Chief of Army Staff as well as duly informed to the Government as required by the communication dated 3 1st May, 1986, noticed by us earlier.
In the note of the Military Secretary dated 22nd September, 1986 Option 'A ' which was prevalent practice was substituted by Option 'B ' which was recommended for future and which was accepted both by Vice Chief of Army Staff as well as the Chief of Army Staff.
Option 'A ' was never put up as a proposal for acceptance or rejection to the Chief of Army Staff.
Vice Chief of Army Staff only considered the proposal as recommended by Mili tary Secretary in his note dated 22nd September, 1986 and Vice Chief of Army Staff accepted it and the same was adopt ed by the Chief of Army Staff.
This Option 'B ' has not been reviewed till date.
There can be no doubt that if Option 'A ' was available for preparation of select list the respondent would have been senior to other persons who were recommended for 'Command and Staff ' stream.
But Option 'A ' was given up and Option 'B ' was recommended for approval.
If Option 'B ' has been adopted and accepted, as is clear, the seniority of the respondent placed in the panel dated 26th October, 1990 is unexceptionable.
It is again clear that the recommenda tion of the Military Secretary dated 22nd September, 1986 approved by the Chief of Army Staff was fully stated in paragraphs 7, 9 and 10 of the communication dated 1st June, 1987.
Merely because no reference 371 is made to the note of the Military Secretary dated 22nd September, 1986 in the communication dated 1st June, 1987 it does not mean that the note has to be ignored.
It will be noticed from the communication dated 31st May, 1986 that after the Government had approved the concept of 'Two Stream ', it was left to the Army Headquarters to work out the modalities and merely inform the Government.
In fact, the select panel, even after being prepared, has to be approved by the Government and has been so approved which show that the Government has accepted the modalities worked out by the Army Headquarters of the 'Two Stream '.
It is clear from the noting of the Military Secretary which was accepted by the Chief of Army Staff that the same was inti mated to the Government and that the matter was also dis cussed with the Government by the Military Secretary.
Noth ing further was required to be done and those decisions find place in paragraphs 7, 9 and 10 of the letter dated 1st June, 1987 by way of working out modalities.
It is men tioned, even at the expense of repetition, in paragraph 7 of the aforesaid communication dated 1st June, 1987 that the 'Two Stream Concept ' envisages that the officers approved in the 'Command and Staff ' stream will be en block senior to the officers of the same batch approved in the 'Staff Only ' Stream.
The same batch here refers to the three types of officers who were considered for promotion in the 1957 batch.
Again in paragraph 9 it was 'repeated "it is clari fied, that as regards the seniority within the same batch is concerned, officers approved on the 'Command and Staff ' Stream continue to be senior to officers approved in the "Staff Only ' Stream.
It was further clarified that "however, an officer of an earlier batch approved on the 'Staff Only ' Stream will be senior to an officer of subsequent batch approved on the 'Command and Staff ' Stream.
Here the 'subse quent batch ' means the next batch of promotion.
The expres sion 'same batch ' in the communications of 22nd September, 1986 and 1st June, 1987 took colour from the context and not from the definition of 'batch ' given in paragraph 169 no ticed earlier.
Nor does the sequence of selection to be considered as was prevailing before the communication dated 22nd September, 1986 relevant.
It was only the sequence of selection as proposed in Option 'B ' which was adopted.
Again the observation of the Division Bench that the note of the Military Secretary dated 22nd September, 1986 is contrary to or at variance with the letter dated 1st June, 1987 is not correct.
The letter of 1st June, 1987 is again for working out further modalities of 'Two Stream Concept ' vis a vis seniority in the light of the note of the Military Secretary dated 22nd September, 1986.
372 The Government has been very fair in placing before the results of the select panel prepared since the introduction of 'Two Stream Concept '.
The first Special Selection Board, after September, 1986, for promotion to the rank of Lt. General was held in October, 1986.
It was 1954 batch com prising or (a) Final Review of 1952, (b) First Review of 1953 and (c) Fresh 1954 and the officers who were selected to the Stream of 'Command and Staff ' were of 1954 batch and were placed en block senior to officers selected for 'Staff Only ' Stream who were again Fresh 1954.
Again the same policy was followed in the case of the respondent.
It was called 1957 batch comprising (a) Final Review of 1955, (b) First Review of 1956 and (c) Fresh 1957.
Since the respond ent was approved only for 'Staff Only ' Stream, though he was first review case of 1956, he was placed below the officers who were approved for 'Command and Staff ' Stream and were Fresh 1957.
Since there was no vacancy which could fall to the share of the respondent in his turn as per the seniority till he was superannuated on 3 1st May, 1991, the respondent could not take advantage of his approved promotion.
The note dated 22nd September, 1986 amending the se quence of promotion and after giving advantage and disadvan tages of the two options i.e. Option 'A ' and Option 'B ' had, thereafter, recommended that Option 'B ' should be adopted.
It may not be accurate for the High Court to apply Option 'A ' which has never been recommended and which was superseded by Option 'B ' which was accepted at the highest level.
Fact remains that even the select panel prepared by the army authorities was approved by the Government before it was released.
Learned counsel for the respondent referred to the case of Major General R.K. Gaur as mentioned in paragraph 49 of the writ petition.
The averment in paragraph 49 of the writ petition is that Major General Gaur was a case of 1954 batch first review, and was approved on 26th August, 1988 for 'Staff Only ' Stream.
Sometime in October, 1987 fresh cases of 1955 batch were also approved for promotion to the rank of Lt. General in which Major General V.K. Singh and Major General Hatvans Singh, in addition to many others, were approved for 'Command and Staff ' stream.
By the time Major General Gaur was approved in its first review on 26th 2August, 1988 various officers of 1955 fresh cases were promoted except Major General V.K. Singh and Major General Harvans Singh.
Between 26th August, 1988 on which date Major General Gaur was approved in 'Staff Only ' Stream 373 and 26th October, 1988 no promotions were made to the rank of Lt. General and on 26th October, 1988 Major General Gaur was ordered to be promoted and in his order it is mentioned that the general officer i.e. Major General Gaur will report for his new appointment forthwith.
Since the order has come on 26th October, 1988 itself and the order was to report forthwith he could have picked up the rank the same day but incidentally he was out of station and returned only on 31st October, 1988 and he could pick up the rank only on 1st November, 1988.
The orders of promotion of Major General V.K. Singh and Major General Hatvans Singh were issued on 27th October, 1988 which clearly indicate that the order of promotion of Major General Gaur was issued ahead of both the aforesaid officers.
This would clearly indicate that in the case of Major General Gaur who was a 1954 batch first review case was promoted ahead of Major General V.K. Singh and Major General Harvans Singh who were approved in 'Command and Staff ' Stream as fresh cases of 1955 batch.
The inten tion of issuance of such order promoting Major General Gaur on 26th October, 1988 clearly indicates that he was to be promoted ahead of those two officers.
In reply to the submissions made in paragraph 49, it is pleaded on behalf of the Government that it was clearly mentioned that Major General Gaur, being a list review selectee of 1954 batch in 'Staff Only ' stream, reckoned seniority below the Fresh Selectee 'Command and Staff ' stream of 1955 batch.
In the Army, the seniority is decided by the date of substantive promotion and not by the date, the officer picks.
up his acting promotion.
In many cases officers due to various administrative reasons, who are otherwise seniors, pick up their acting rank due to late assumption of higher officer later than their juniors.
However, in such cases it is ensured that while granting substantive rank the panel seniority is maintained.
It is a well known principle practised in almost all services and the writ petitioner is trying to confuse the issue with the letter relating to posting and promotion of senior officers which was issued one day later than his junior.
It was contended that even in those promotion it was ensured that the seniors were at a liberty to assume their higher ap pointment in acting rank alongwith Major General Gaur.
It was averred that it has been conveniently overlooked by the writ petitioner that promotion orders of several others of his senior were issued earlier.
Moreover Lt. General Gaur was given substantive promotion at a date later than the other two officers mentioned by the writ petitioner.
Under no circumstances a junior is promoted ahead of the senior.
It was stated that Lt. General 374 Gaur was given substantive rank w.e.f. 1.11.
1988 whereas Lt. General Harvans Singh and Lt.
General V.K. Singh, both seniors to Lt. General Gaur, were given substantive promo tion w.e.f.
27th October, 1988.
We find that in view of this reply the petitioner cannot take advantage for being, promoted earlier than the officers selected for the 'Command and Staff ' Stream.
We, thus, accept this appeal, set aside the order of the High Court dated 30th April, 1991 and dismiss the writ petition filed by the respondent.
However, on the facts of the case, parties are left to bear their own costs through out.
T.N.A. Appeal allowed.
| On 31st May, 1986 the Government of India approved, in principle, the 'Two Stream ' concept of career management of Army Officers which envisaged that officers on promotion to Major General and Lt. General will be bifurcated into the 'Command and Staff ' and the 'Staff Only ' Stream.
By an order dated 9th September, 1986 issued by Military Secretary, Army Headquarters, the modalities of the concept, were worked out and it was inter alia provided that for the purpose of seniority, officers of the 'Staff Only ' Stream will be junior to officers of the 'Command and Staff" Stream.
While adopting the methodology for implementation of the 'Two Stream Concept ', in its note dated 22nd September, 1986 the Military Secretary stated that two options are available for fixing the sequence of promotion under the 'Stream Concept '.
Under option 'A ' the existing sequence of promo tion is maintained and in that officers are to be promoted as per their inter se seniority, irrespective of the stream.
In the case of Option 'B ', whereas the existing sequence of promotion is maintained, but promotion is to be effected in accordance with the stream in which an officer is being promoted.
After giving advantages and disadvantages of the two options, the said note recommended that option 'B ' should be adopted.
The Military Secretary 's note was ap proved by Vice Chief of Army Staff and the Chief of Army Staff.
By a communication dated 1st June, 1987 the Military Secretary clarified its earlier note dated 22nd September, 1986 explaining that officers of the General Cadre of a particular batch seniority approved in the 'Command and staff ' Stream will be en block senior to those 351 officers of the same batch approved on the 'Staff Only ' Stream.
However, an officer of an earlier batch approved on the 'Staff Only ' Stream will be senior to an officer of subsequent batch approved on the 'Command and Staff Stream.
Under the promotion policy of Army every officer is given three chances for consideration for promotion.
The first opportunity is called "fresh cases".
The second oppor tunity is called "first review cases" and the third opportu nity is called "final review cases".
An officer not approved for promotion loses one year on seniority and slides into the batch of the next year.
The respondent, commissioned in the army in 1954, while acting as Brigadier, was selected as Major General in 1956 batch.
Accordingly, his seniority was fixed alongwith 1956 batch.
While working as Major General he was considered for promotion to the rank of Lt. General in 1989 but was disap proved.
He thus lost seniority of 1956 batch.
He was then considered as a first review case in 1990 alongwith 1957 batch comprising of final review case of 1955 batch, first review case of 1956 batch and fresh case of 1957 batch and was approved for selection for 'Staff Only ' Stream.
Since he was approved only for 'Staff Only ' Stream, in the select panel dated 26th October, 1990 he was placed below all other Major Generals who were approved for selection in the Stream of 'Command and Staff.
Aggrieved by his placement below the officers who were approved for 'Command and Staff ' Stream, he filed a writ petition in the High Court which directed the Union of India to treat the respondent senior to all the other Major Gener als who were promoted to the acting rank of Lt. General in the 'Command and Staff ' stream and to expeditiously promote him ahead of the 1957 batch.
Against the decision of the Division Bench of the High Court the Union of India filed an appeal in this Court.
Setting aside the order of the High Court, this Court, HELD: 1.
The Division Bench of the High Court totally misunderstood the note of the Military Secretary dated 22nd September, 1986 as well as the note of the Vice Chief of Army Staff.
In the note of the Military Secretary dated 22nd September, 1986, Option 'A ' which was prevalent practice was substituted by option 'B ' which was recommended for future and which was accepted both by Vice Chief of Army Staff as well as Chief of Army Staff.
[369H 370E] 352 2.
It is clear from option 'B ' which was adopted for working out the 'Two Stream Concept ' that the seniority will first be given to the 'Command and Staff ' stream selected from any of the earlier batches and after the 'Command and Staff ' stream has been accorded the seniority, the three streams of 'Staff Only ' will be given seniority and that the final review, the first review or fresh stream of 'Staff Only ' rank below the similar three streams of 'Command and Staff '.
[362B C] 3.
It is also clear from the Scheme that the Officer who Were approved for 'Command and Staff ' Stream can be appoint ed both for 'Command ' as well as 'Staff ' vacancies whereas the officers who were approved only for stream of 'Staff Only ' can only be appointed to the vacancies relating to 'Staff ' and cannot be appointed relating to vacancies for 'Command '.
The expression 'same batch ' referred to in para graph 9 of the Military Secretary 's letter dated 1st June, 1987 is for the officers who were considered for selection at one time and not the individual batch of the Major Gener al.
[370B] 4.
Option 'B ' has not been reviewed till date.
There can be no doubt that if option 'A ' was available for preparation of select list the respondent would have been senior to other persons who were recommended for 'Command and Staff ' Stream.
But option 'A ' was given up and option 'B ' was recommended for approval.
Since option 'B ' has been adopted and accepted the seniority of the respondent placed in the panel dated 26th October, 1990 is unexceptionable.
[370F G] 5.
The respondent cannot take advantage for being pro moted earlier than the officers selected for the 'Command and Staff ' Stream.
[374B1
|
Civil Appeal No. 5047 (NT) of 1985.
From the Judgment and Order dated 17.7.
1985 of the Allahabad High Court in Sales Tax Revision No. of 1985.
Madan Lokur for the Appellant.
Ashok K. Srivastava for the Respondent.
M/s. D.H. Brothers Pvt. Ltd., a registered dealer under the U.P. Sales Tax Act, is engaged in the sale of machinery including sugarcane crushers.
After coming into force of the Uttar Pradesh Sales Tax Act, 1948 (hereinafter called 'the Act ') the State Government issued a notification dated June 7, 1948 exempting agricultural implements from the levy of sales tax.
Thereafter fresh notifications were issued from the time to time.
The relevant notification dated November 14,1980 enumerated the "Agricultural implements" as under: "Agricultural implements" worked by human or animal power, including Khurpi, Dibbler, Spade, Hansla (Sickle) Garden Knife, Axe, Gandasa, Chaff Cutters, Shears, Seca teurs, Rake, Shovel, Ploughs, Water lifting leather buckets (Pur and Mhot), Rahat and persian whell, Chain Pump, Harrows, Hoes, Cultivators, Seed Drills, Threshers, Shellers, Winnowing fans, Paddy weeders, Gardenfork, Lopper), Belcha, Bill Hook (Double edge), Kudali,Fork, garden Hatchet, Bill Hook (Single edge), Hay Bailer, Bund formers, Scrappers, Levellers or Levelling Karahas, Yokes, crop yield Judginghoops, Hand sprayers Hand dust ers, Animal driven vehicles including carts having pneumatic tyre wheels, crow bars, sugarcane Planters and accessories, attach ments and spare parts of these agricultural implements".
The assessee invoked the jurisdiction of Commissioner, Sales Tax, Uttar Pradesh under Section 35 of the Act claim ing that the Kohlu meant for extracting juice from sugarcane was an agricultural implement within the above quoted noti fication and as such was exempt from levy of Sales Tax.
The Commissioner by his order dated December 31, 1983 decided the question against the assessee.
The assessee filed appeal against the said order before the Sales Tax Tribunal.
Luc know Bench, under Section 10 of the Act.
The Tribunal upheld the findings of the Commissioner and dismissed the appeal.
Thereafter the assessee preferred a revision petition under Section 11 of the Act before the Allahabad.
High Court.
The High Court relying on its earlier decision in Bharat Engi neering and Foundry Works vs 426 The U.P. Government, [1963] 14 S.T.C. 262 dismissed the revision petition.
In that case the question for considera tion before the High Court was "whether cane crushers are agricultural implements within the meaning of the words 'agricultural implements ' as mentioned in the Government Notification. . and hence exempt from U.P. sales tax.
" The question was answered in the negative on the following reasoning: "Cane crushers and boiling pans are used only in the manufacture of gur from sugarcane.
Sugarcane is an agricultural produce and the process which results in the production of sugarcane is undoubtedly agriculture, but the production of gur from sugarcane is a manufac turing process and not an agricultural proc ess.
The agricultural process comes to an end with the production of sugarcane and when gur is subsequently being prepared it is manufac turing process that commences.
Merely because sugarcane is an agricultural produce anything that is done to it after it is product is not necessarily a continuation of the agricultural process.
It cannot be doubted that agricultur al produce can the subjected to a manufactur ing process; merely because gut is produced out of sugarcane which is an agricultural produce, the process of preparing gut does not become an agricultural process. .
An agricultural implement is an implement that is used in agriculture; any implement that is used after the agricultural process comes to an end and a manufacturing process commences, is not an agricultural implement.
" The High Court in Bharat Engineering case relied upon the following observations of this Court in Commissioner of Income tax, West Bengal, Calcutta vs Raja Benoy Kumar Sahas Roy, "Agriculture is the basic idea underlying the expressions 'agricultural purposes ' and 'agricultural operations ' and it is pertinent therefore to enquire what is the connotation of the term 'agriculture '.
As we have noted above, the primary sense in which the term agriculture is understood is agar field and cultracultivation, i.e., the cultivation of the field, and if the term is understood only in that sense agriculture would be restricted only to cultivation of the 427 land in the strict sense of the term meaning thereby, tilling of the land, sowing of the seeds, planting and similar operations on the land.
They would be the basic operations and would require the expenditure of human skill and labour upon the land itself.
There are however other operations which have got to be resorted to by the agriculturist and which are absolutely necessary for the purpose of effec tively raising the produce from the land.
They are operations to be performed after the produce sprouts from the land, e.g., weeding, digging the soil around the growth, removal of undesirable undergrowths and all operations which foster the growth and preserve the same not only from insects and pests but also from depradation from outside, tending, pruning, cutting, harvesting, and rendering the produce fit for the market.
The latter would all be agricultural operations when taken in conjunc tion with the basic operations above de scribed, and it would be futile to urge that they are not agricultural operations at all. . " It is clear from the above quoted observations of this Court that the agricultural process comes to an end when the crop is harvested and is brought home for marketing or for further processing.
In the present case the agricultural process finishes when sugarcane is harvested.
Preparation of gur from sugarcane is not the continuation of the agricul tural process.
While giving meaning to an item in a taxing statute the Courts should give it a meaning as intended by the framers of the statute by looking at the various items mentioned in a particular group.
The items in one group should be consid ered in a genderic sense.
The notification dated November 14, 1980 includes various items under the head "agricultural implements".
It is no doubt correct that the said definition cannot be confined to the various implements specifically mentioned therein.
The definition being inclusive it has a wider import and any other implement which answers the description of an agricultural implement can be included in the definition.
A bare reading of the notification, however, shows that all the implements mentioned by name after the word "including. . "are by and large those which are used for cultivation of land and other operations which foster the growth and preserve the agricultural produce.
None of these implements can be worked after the agricultur al process in respect of a crop comes to an end.
Therefore the intention of the framers of the 428 notification could only be to limit the general words in the notification to the implements of the same kind as are specified therein.
We are, therefore, of the view that on the plain reading of the notification the sugarcane crushers do not come within the definition of agricultural imple ments.
It has been brought to our notice that from 1985 onwards the State Government has specifically exempted sugarcane crushers from the levy of sales tax.
We dismiss the appeal with no order as to costs.
G.N. Appeal dis missed.
| The appellant, a registered dealer under U.P. Sales Tax Act, 1948 has been selling machinery including sugarcane crusher.
The State Government was issuing Notifications from time to time exempting agricultural implements from the levy of sales tax.
The State Government by its Notification dated 14.11.1980 amended the list and enumerated agricultural implements.
Since sugarcane crusher (Kohlu) was not included therein, the appellant claimed before the Sales tax Commis sioner that the Kohlu meant for extracting juice from sugar cane was an agricultural implement and as such was exempt from levy of sales tax.
Since the Commissioner negatived his claim, the appellant preferred an appeal before the Sales Tax Tribunal.
The Tribunal having upheld the findings of the Commis sioner, the appellant filed a revision petition before the High Court.
Relying on its earlier decision, the High Court dismissed the revision petition.
Aggrieved by the High Court 's decision, the appellant has preferred the present appeal.
Dismissing the appeal, this Court, HELD: 1.
The agricultural process comes to an end when the crop is harvested and is brought home for marketing or for further processing.
Preparation of gur from Sugarcane is not the continuation of the agricultural process.
[427D E] 424 Bharat Engineering and Foundry Works vs The U.P. Govern ment, [1963] 14 S.T.C. 262 and Commissioner of Income tax, West Bengal, Calcutta vs Raja Benoy Kumar Sahas Roy, , relied on.
While giving meaning to an item in a taxing statue the Courts should give it a meaning as intended by the framers of the statute by looking at the various items mentioned in a particular group.
The items in one group should be considered in a generic sense.
[427F] 3.
In the instant case the notification dated November 14, 1980 includes various items under the head "agricultural implements".
The said definition cannot be confined to the various implements specifically mentioned therein.
The definition being inclusive it has a wider import and any other implement which answers the description of an agricul tural implement can be included in the definition.
A bare reading of the notification shows that all the implements mentioned by the name after the word "including. . "are by and large those which are used for cultivation of land and other operations which foster the growth and preserve the agricultural produce.
None of these implements can be worked after the agricultural process in respect of a crop comes to an end.
Therefore the intention of the framers of the notification could only be to limit the general words in the notification to the implements of the same kind as are specified therein.
As such sugarcane crushers do not come within the definition of agricultural implements.
[427F H; 428A B]
|
ecial Leave Petition (C) No. 3790 of 199 1.
From the Judgment and Order dated 29.3.
1990 of the Madras High Court in W.A. No 1028 of 1989.
G. Ramaswamy, Attorney General, R. Mohan, V. Krishna murthy and R. Ayyam Perumal for the Petitioners.
K. Parasaran, K.R. Chaudhary, T.V.S.N. Chari, Ms. Suruchi Aggarwal and Ms. Manjula Gupta for the Respondents.
The Judgment of the Court was delivered by SHARMA, J.
The respondents have successfully challenged a notification under Section 4 of the Land Acquisition Act, 1894 proposing to acquire their land before the Madras High Court.
Their writ petition was allowed by a learned Single Judge and on appeal the order was confirmed by Division Bench.
The State of Tamil Nadu has challenged the decision by the present Special Leave Petition.
The acquisition proceeding, which is the subject matter of present case, was started for obtaining land for construction of houses by the Tamil Nadu Housing Board, constituted under Section 3 of the Madras State Housing Board Act, 1961 (Madras Act No. 17 of 1961) (hereinafter referred to as the 'Housing Board Act ') and this was men tioned in the impugned notification.
The High Court has held that the public purpose mentioned in the notification was too vague in absence of details relating to the scheme for which the acquisition is sought to be made, and consequently the land owners cannot effectively avail of the benefits under Section 5A of the Land Acquisition Act by filing their objection.
The learned Attorney General, appearing for the petitioner State, has contended that the notification has adequately described the nature of the public purpose by mentioning the proposed construction of residential build ings, and the respondents ought to have filed their objec tions under Section 5A instead of 378 moving the High Court with a writ application.
Relying on the decision in Babu Barkya Thakur vs The State of Bombay and Others, it has been argued that even assuming that the public purpose was not mentioned in the notification with sufficient particularity, the proceeding cannot be quashed at this stage and the High Court should have dismissed the writ petition by pointing out that the remedy of the land owners was under Section 5A. 3.
The reply of Mr. Parasaran, the learned counsel for the respondents, is that in view of the provisions of the Housing Board Act a proceeding for land acquisition can be commenced only after a scheme under the Act is framed, which has not been done in the present case.
The land acquisition proceeding, therefore, being premature has been rightly quashed.
As is indicated by the preamble of the Housing Board Act, the object of establishment of the Housing Board is to provide for the execution of housing and improvement schemes.
The Act envisages eight types of schemes detailed in section 40, the housing scheme, as in the present case, being one of them.
The framing of the schemes is dealt with in Chapter VII (Section 35 to 69) and Chapter VIII contain ing sections 70, 71 and 72 provides for acquisition and disposal of land.
Section 70 states that land required by the Board for any of the purposes of this Act may be ac quired under the provisions of the Land Acquisition Act and accordingly the present land acquisition proceeding was commenced.
The procedure prescribed for preparation of a scheme indicates that before it can be finalised, full publicity has to be given inviting objections; and in case of objec tions, the same have to be duly considered before granting sanction.
Further, if anybody is still aggrieved, he has a right of appeal to the State Government.
It is only after this stage is over that the scheme becomes final and en forceable.
Admittedly the proposal to build houses in the present case has not been put in the shape of a scheme at all and as stated on behalf of the petitioner a draft scheme with relevant details will be drawn up after the possession of the land is secured.
The question for decision is whether the acquisition proceeding can be initiated only after the framing of the proposed scheme and not earlier.
The learned Attorney Gener al contended that having regard to the provisions of the Act and the other relevant considerations it must be held that the procedure in regard to the preparation of 379 the scheme has to await the conclusion of the land acquisi tion proceeding.
It is only after the possession of the land is delivered to the Board that its engineers and other experts can go over the land, make necessary inspection and collect vital data, on the basis of which the scheme can be drawn up.
It is essential to have a clear idea of the area of the land, its boundaries, and the nature of the soil for deciding about the details of the proposed scheme, and this is not possible so long the owner of the land continues in possession.
Any attempt to draw up a scheme earlier has been described by the learned counsel as an exercise in futility.
Alternatively it has been contended that even if it be held to be permissible to frame the scheme without waiting for the acquisition and possession of the land, it cannot be further assumed that the land acquisition proceeding has to await the finalisation of the scheme.
In other words, both the proceedings may continue simultaneously, or any of the proceeding including one for land acquisition can be com menced without waiting for the other.
In any event, the land acquisition proceeding should not be condemned as pre mature on the ground that the scheme has not been framed.
We have closely examined the entire Act with the assistance of the learned counsel for the parties and in our view the conten tion on behalf of the respondents that the proceeding for acquiring land can be commenced only after the scheme is framed, is well founded.
As has been stated earlier, Chapter VII containing sections 35 to 69 deals with the framing of the scheme.
The Act has laid down separate procedures for the different types of schemes, according to necessity and suitability.
Some of the schemes do not require acquisition of land, which is however, essential for constructing residential buildings under the housing scheme.
Section 39 of the Act, therefore, while enumerating the matters to be included in the scheme, specifically mentions acquisition of land in clause (a).
If the acquisition is contemplated as a subject matter of the scheme itself, it follows that it must await the preparation of the scheme wherein it will be included.
The Act requires the proposed scheme to be published permitting objections to be made, and if they are found to be valid, under section 53, the scheme to be modified or abandoned.
Sub section (1) of section 49 directs the notice of the draft housing scheme to include and specify the following information as contained in clause (b) for the purpose of publication and information to the general pub lic: "(b) the place or places at which particulars of the scheme a map of the area, and details of the land which it is pro 380 posed to acquire and of the land in regard to which it is proposed to recover a betterment fee, may be seen at reasonable hours." (emphasis added) The underlined words above reaffirm the position that the acquisition of the land has to be a part of the scheme, which can be executed only after its finalisation.
Apart from the provisions of section 53 mentioned above, section 56 further clothes the Board with the power to alter or cancel the scheme even after it is finally sanctioned.
The language of clause (b) of the proviso to the section, which is quoted below, once more leads to the same conclusion that acquisition of the land has to await the framing of the scheme: "(b) If any alteration involves the acquisi tion otherwise than by agreement of any land not previously proposed to be acquired in the original scheme, the procedure prescribed in the forgoing sections of this Chapter shall, so far as it may be applicable, be followed as if the alteration were a separate scheme." (emphasis added) 8.
Mr. Attorney General repeatedly said that unless the Board gets actual possession of the land in question its officers cannot go over the same for collecting the informa tion essential for drawing up of the scheme.
It has, there fore, been suggested that it is wholly impractical to expect the scheme to be framed before obtaining the possession of the land.
Mr. Parasaran, the learned counsel for the re spondents, rightly pointed out that the provisions of sec tion 147 furnish a complete answer to this argument.
The section empowers the Chairman (now the Managing Director) of the Board or any person either generally or specially autho rised by him in this behalf to enter into or upon any land with or without assistants or workmen for the purpose of making any inspection, survey, measurement, valuation or enquiry or to take levels or to dig or bore into sub soil or to set out boundaries and intended lines of work et cetera.
The last clause in the section gives wide power to do any other thing which may appear necessary for achieving the purpose of the Act subject to certain reasonable restric tions.
The learned Attorney General also relied on sections 55 and 72 in support of the petitioners ' stand.
Section 55 directs the Board to proceed to execute the scheme as soon as it becomes enforceable.
It is 381 contended that if the acquisition proceeding is not over by the time the scheme is ready, undue delay is bound to take place.
The fallacy in the argument is that it assumes that the acquisition of the land is not a part of the execution of the scheme itself.
As has been indicated earlier the position is otherwise Since the acquisition is included in the scheme the process of execution of the scheme starts immediately when steps for acquisition are taken.
Thus there is no question of any disregard of the command in section 55.
Section 72 empowers the Board to lease, sell, exchange or otherwise dispose of any land vested in or acquired by it.
This power has been granted to the Board, according to the petitioners, so that if the scheme is abandoned under section 53 the land already acquired can be disposed of.
We do not see any warrant for linking section 72 with section 53.
The Board has been given the power to dispose of any land whenever it is considered in the interest of the Board to do so; and the circumstances where it may be expedient to use this power may be many, as for example, when the scheme is altered or cancelled under section 56 due to a new devel opment.
On the other hand, the order, in which the different steps for the preparation of the scheme and the acquisition of the land, is suggested on behalf of the petitioners to be taken, appears to be impractical and defeating the purpose of section 5A of the Land Acquisition Act.
If the notifica tion under section 4 under the Land Acquisition Act is published without waiting for the scheme, as has been done in the present case, it will not be possible for the land owners to object to the proposed acquisition on the ground that the land is not suitable for the scheme at all, and therefore does not serve any public purpose, or that another piece of land in the area concerned, is far more suitable, leading to the possible conclusion that the proposed acqui sition is mala fide.
As discussed above, the provisions of the Housing Board Act also suggest the same.
The Board has not been vested with the unrestricted power to frame any scheme, as suggested by its planners.
It has to take into account the representation by the local authority as men tioned under section 50 and the objection of any other person under section 53 and decide the same on merits before according sanction.
The matter is not concluded even at that stage; the aggrieved person may appeal to the State Govern ment and it is only subject to the final result therein that the scheme becomes enforceable.
In this set up it will be practical and consistent with common sense to have the scheme finalised before starting an acquisition proceeding We, accordingly, hold that a proceeding under the Land Acquisition Act read with section 70 of the Madras Housing Board Act, can be commenced only after framing the scheme of 382 which the land is required.
The notification issued under section 4 in the present case must, therefore, be held to be pre mature, and it was rightly quashed by the High Court.
Before closing his argument Mr. Attorney General stated that in the past a large number of land acquisition proceedings have been concluded and lands acquired without first framing the scheme and on the basis of the present judgement there may be an attempt by the land owners of those lands to re open the matter.
We do not think that as a result of this judgment the concluded land acquisition proceedings can be allowed to be re opened.
Although we have held that the initiation of the proceeding for acquisition has to await framing of a scheme, it does not mean that the concluded acquisition proceeding can be condemned as void so as to be ignored later.
However, to avoid unnecessary con troversy we are hereby clarifying the position that a ground based on the present judgment shall be available to the land owners only for such land acquisition proceedings, which are under challenge and are still pending decision.
The special leave petition is dismissed, but in the circumstances without costs.
V.P.R. Petition dismissed.
| Under Section 4 of the Land Acquisition Act, 1894 a notification was issued by the petitioners proposing to acquire the land of the respondents for construction of houses by the Tamil Nadu Housing Board, constituted under section 3 of the Madras State Housing Board Act, 1961.
The respondents challenged the impugned notification in a writ petition, which was allowed by the Single Judge of the High Court holding that the public purpose mentioned in the notification was too vague in absence of details relat ing to the scheme for which the acquisition was sought to be made, and consequently the land owners could not effectively avail of the benefits under section 5A of the Land Acquisi tion Act by filing objection.
This order was affirmed by the Division Bench of the High Court.
The State the petitioners filed this Special Leave Petition contending that the notification had adequately described the nature of the public purpose by mentioning the proposed construction of residential buildings and the respondents ought to have filed their objections under section 5 A instead of filing the writ petition; that the procedure in regard to the preparation of the scheme has to await the conclusion of the land acquisition proceeding; that the land acquisition proceeding should not be condemned as pre mature on the ground that the scheme has not been framed.
The respondents contended that in view of the provi sions of the Housing Board Act a proceeding for land acqui sition can be commenced only after a scheme under the Act is framed, which has not been done in the present case.
The land acquisition proceeding, being pre mature has been rightly quashed.
376 On the question whether the acquisition proceeding could De initiated only after the framing, of the proposed scheme and not earlier, dismissing the Special Leave Peti tion of the State, this Court, HELD: 1.01.
The procedure prescribed for preparation of a scheme indicates that before it can be finalised, full publicity has to be given inviting objections; and in case of objections, the same have to be duly considered before granting sanction.
Further, if anybody is still aggrieved, he has a right of appeal to the State Government.
It is only after this stage is over that the scheme becomes final and enforceable.
[378F] 1.02.
Section 39 of the Madras State Housing Act, 1961 while enumerating the matters to be included in the scheme, specifically mentions acquisition of land in clause (a).
If the acquisition is contemplated as a subject matter of the scheme itself, it follows that it must await the preparation of the scheme wherein it will be included.
[379F] 1.03.
The acquisition of the land is a part of the execution of the scheme itself.
Since the acquisition is included in the scheme the process of execution of the scheme starts immediately when steps for acquisition are taken.
[381A B] 1.04.
If the notification under section 4 under the Land Acquisition Act is published without waiting for the scheme, it will not be possible for the land owners to object to the proposed acquisition on the ground that the land is not suitable for the scheme at all, and therefore does not serve any public purpose, or that another piece of land in the area concerned, is far more suitable, leading to the possi ble conclusion that the proposed acquisition is mala fide.
The provisions of the Housing Board Act also suggest the same.
[381 DF] 1.05.
It will be practical and consistent with common sense to have the scheme finalised before starting an acqui sition proceeding.
A proceeding ' under the Land Acquisition Act read with section 70 of the Madras Housing Board Act, can be commenced only after framing the scheme for which the land is required.
The notification issued under section 4 hi the present case must, therefore, be held to be pre mature, and it was rightly quashed by the High Court.
[381G 382A] 1.06.
Although the initiation of the proceeding for acquisition has to await framing of a scheme, it does not mean that the concluded acquisition proceeding can be con demned as void so as to be ignored 377 later.
A ground based on the present judgment shall be available to the land owners only for such land acquisition proceedings, which are under challenge and are still pending decision.
[382C D] Babu Barkya Thakur vs The State of Bombay and Others, , distinguished.
|
vil Appeal No. 3 165 of 1991.
From the Judgment and Order dated 9.8.90 of the Rajas than High Court in W.P. No. 2009/90.
V.A. Bobde, and Mrs. Rani Chhabra for the Appellant.
504 Satish Kr.
Jain and Mrs. Pratibha Jain for the Respondents.
The Judgment of the Court was delivered by SINGH, J.
Special leave granted.
This appeal is directed against the judgment and order of the High Court of Rajasthan dated 9.8.
1990 dismissing the appellant 's writ petition made under Article 226 of the Constitution challenging the scheme for nationalisation of the route in dispute.
The appellant holds a Stage Carriage Permit for plying his vehicle on the Kota Khanpur route, which overlaps a portion of the KotaSangod route.
The Rajasthan State Road Transport Corporation, Jaipur issued a Notification on 11.10.
1979 proposing a scheme under Section 68 C of the (hereinafter referred to as the 'old Act ') for the exclusive operation of the vehicles of the State Road Transport Corporation on the Kota Sangod route.
The existing operators as well as the affected opera tors of the route filed their objections before the hearing authority appointed by the State Government of Rajasthan.
The hearing authority after considering those objections approved the scheme under Section 68 D (2) of the old Act by its order dated 30.11.
1984 and submitted the papers to the State Government for the issue of Notification under Section 68 D (3).
Before the State Government could issue Notifica tion under Section 68 1) (3) of the old Act, the appellant and other affected operators made representation to the Minister for Transport for affording them a fresh opportuni ty of hearing.
As a result of which no final Notification under Section 68 D (3) could be issued.
Meanwhile, the (hereinafter referred to as the new Act) was enforced with effect from 1.7. 1989 and the old Act was repealed.
The appellant thereupon filed a writ petition before the High Court under Article 226 of the Constitution for the issue of Mandamus restraining the State Government from issuing the final Notification, mainly on the ground that on the enforcement of the new Act, the Notification dated 11.
1979 issued under Section 68 C of the old Act had lapsed on account of delay in finalisation of the same.
A similar writ petition had been filed earlier in respect of Kishangarh Sarwad route by one Sardar Mohd. on similar grounds.
A learned single Judge of the High Court dismissed that writ petition holding that the draft scheme under the old Act was saved by the new Act and the same could legally be finalised under the provisions of the new Act.
Sardar Mohd. filed a Letters Patent Appeal against the judgment of the learned single Judge.
A 505 Division Bench of the High Court disposed of the Letters Patent Appeal of Sardar Mohd. as well as the various writ petitions including that of the appellant by a common order dated 9.8.
1990 impugned in the present appeal.
After the impugned judgment of the High Court, the State Government approved the Scheme as proposed under 68 C of the old Act.
Final notification approving this Scheme was pub lished in the Official Gazette on 29.8.1990 u/s 100(3) of the new Act, as a result of which the Kota Sangod route has become a notified route, consequently the appellant has no right to ply his vehicle on the overlapping portion of that route.
Learned counsel for the appellant urged that since there was undue delay of 11 years in issuing the final Notifica tion, the scheme as proposed under Section 68 C of the old Act should be deemed to have lapsed and the State Government had no authority or jurisdiction to finalise the same or to issue Notification under Section 100(3) of the new Act.
He placed reliance on a number of decisions of this Court in support of his contention that unreasonable delay in fina lising a scheme proposed under Section 68 C of the old Act rendered the same illegal.
He referred to the decisions of this Court in Yogeshwar Jaiswal etc.
vs State Transport Appellate Tribunal & Ors., AIR 1985 SC 5 16; Onkar Singh & Ors.
vs Regional Transport Authority, Agra & Ors., ; ; Devki Nandan vs State of Rajasthan & Ors., and Srichand vs Government of U.P., [1985] 4 SCC 169.
No doubt in these decisions the Court quashed the schemes proposed under Section 68 C of the old Act on the ground of inordinate delay for which there was no valid explanation.
In the instant case, the proposed scheme had been approved by the hearing authority under Section 68 D (2) of the old Act in 1984 within five years of the proposal of the scheme but when the matter was placed before the State Government for issue of final Notification Under Section 68 D (3) of the old Act, the appellant and other affected operators approached the Minister for Transport and stalled the issue of final Notification as a result of which delay was caused.
The appellant was himself responsible for the delay therefore he is not entitled to complain of the delay.
Moreover this Court has not ruled in the aforesaid decisions, or in any other decision that delay would auto matically render the scheme illegal.
Since under the old Act no time frame was prescribed for finalising a scheme penal consequences could not ensue.
Under the old Act a scheme proposed u/s 68 could continue to remain in force till it was quashed.
Since the scheme proposed on 11.10.1979 had not been 506 quashed by any Court, the same continued to be in force on the date of commencement of the new Act.
In the absence of any provision in the old Act rendering the scheme ineffec tive on the ground of delay, the scheme proposed u/s 68 C of the old Act could not lapse ipso facto.
Moreover, now the State Government has already issued final Notification under Section 100(3) of the new Act on 29.8.
1990, as a result of which the route has been notified.
In this view ratio of the aforesaid decisions of the Court are not applicable to the instant case at this stage.
Learned counsel for the appellant urged that under Section 100(4) of the new Act, if a draft scheme is not finalised and the final notification is not issued within one year from the date of the publication of the proposed scheme, the same would lapse.
Since in the instant case the draft scheme dated 11.10.1979 was not finalised under Sec tion 100(3) of the new Act the same had lapsed after one year from the date of the notification issued u/s 68 C of the old Act.
In order to appreciate this contention it is necessary to consider the relevant provisions of the new Act.
Chapter VI of the new Act contains special provisions relating to State Transport Undertakings.
Section 99 confers power on the State Government to propose a scheme for oper ating the vehicles of the State Transport Undertakings to the exclusion of other persons.
The proposed scheme is published in the Gazette.
Section 100 which provides for filing of the objections before the State Government and the issue of final notification, is as under: "100.
Objection to the proposal (1) on the publication of any proposal regard ing a scheme in the Official Gazette and in not less than one newspaper in the regional language circulating in the area or route which is to be covered by such proposal any person may, within thirty days from the date of its publication in the Official Gazette, file objections to it before the State Govern ment.
(2) The State Government may, after consider ing the objections and after giving an oppor tunity to the objector or his representatives and the representatives of the State Transport Undertaking to be heard in the matter, if they so desire, approve or modify such proposal.
(3) The scheme relating to the proposal as approved or 507 modified under sub section (2) shall be pub lished in the Official Gazette by the State Government making such scheme and in not less than one newspaper in the regional language circulating in the area or route covered by such scheme and the same shall thereupon become final on the date of its publication in the Official Gazette and shall be called the approved scheme and the area or route to which it relates shall be called the notified area or notified route: Provided that no such scheme which relates to any interState route shall be deemed to be an approved scheme unless it has the previous approval of the Central Government.
(4) Notwithstanding anything contained in this section, where a scheme is not published as an approved scheme under sub section (3) in the Official Gazette within a period of one year from the date of publication of the proposal regarding the scheme in the Official Gazette under sub section (1), the proposal shall be deemed to have lapsed.
Section 100 provides for filing of objections before the State Government within 30 days from the date of the publi cation of the proposed scheme in the Official Gazette.
Under sub section (2) the State Government may approve or modify the proposed scheme after considering the objections and hearing the objectors.
Under sub section (3) the State Government is required to publish the approved scheme in the Official Gazette and also in one newspaper.
On the publica tion of the approved scheme in the Official Gazette, the area or route to which it relates shall be called the noti fied area or notified route.
Sub section (4) lays down that if a scheme is not published as an approved scheme in the Gazette within one year from the date of publication of the proposed scheme in the Official Gazette, the proposed scheme shall be deemed to have lapsed.
Sub section (4) in our opinion prescribes a period of limitation during which the State Government should hear and consider the objections of the objectors and finalise the scheme and publish the same in the Official Gazette and on its failure to do so with in that period, penal consequences would ensue as a result of which the scheme itself shall stand lapsed.
The object and purpose of Section 100(4) is to avoid delay in finalising a scheme.
The Parliament was aware that under the old Act schemes were not 508 finalised for long years as a result of which public inter est suffered, therefore, it prescribed a time frame for the approval and publication of schemes.
The provisions of Section 100 are applicable to the schemes proposed under the new Act.
The question is whether it would apply to a scheme proposed under Section 68 C of the old Act.
The Legislature was conscious that a number of schemes proposed under the old Act were pending approval on the date of the commencement of the Act, it therefore made a provision for saving those schemes by enacting Section 2 17 of the Act, which is as under: "217.
Repeal and savings (1) The Motor Vehi cles Act, 1939 (4 of 1939) and any law corre sponding to that Act in force in any State immediately before the commencement of this Act in that State (hereinafter in this Section referred to as the repealed enactments) are hereby repealed.
(2) Notwithstanding the repeal by sub section (1) of the repealed enactments (a) any notification, rule, regula tion, order or notice issued, or any appoint ment or declaration made or exemption granted, or any confiscation made, or any penalty or fine imposed, any forfeiture cancellation or any other thing done, or any other action taken under the repealed enactments, and in force immediately before such commencement shall, so far as it is not inconsistent with the provisions of this Act, be deemed to have been issued, made, granted, done or taken under the corresponding provision of this Act; . . . . . . . . . . . . . (e) any scheme made under section 68 C of the (4 of 1939) or under the corresponding law, if any, in force in any State and pending immediately before the commencement of this Act shall be disposed of in accordance with the provisions of section 100 of this Act; (f) the permits issued under sub section (I A) of section 68 F of the (4 of 1939), or under 509 the corresponding provisions, if any, in force in any State immediately before the commence ment of this Act shall continue to remain in force until the approved scheme under Chapter VI of this Act is published. . . . . .
Under sub section (1) the old Act has been repealed but under subsection (2) inspite of repeal the Parliament has made provisions for saving the schemes proposed under Sec tion 68 C of the old Act.
Clause (e) of Section 217 (2) of the new Act provides that notwithstanding the repeal of the old Act a scheme proposed under Section 68 C of the old Act, if pending immediately before the commencement of the Act shall be finalised in accordance with the provisions of Section 100 of the new Act.
The Legislative intent is clear that the.
schemes proposed under Section 68 C. of the old Act pending on the date of the commencement of the new Act should not lapse instead those schemes should be finalised in accordance with the provisions of Section 100 of the new Act.
The pending schemes were therefore saved and the same were to be finalised within one year as contemplated by Section 100 (4) of the new Act.
Section 100 (4) lays down that if the proposed scheme is not finalised within one year from the date of its publication in the Official Gazette, it shall be deemed to have lapsed but that applies to a scheme proposed under the new Act and not to a scheme proposed under Section 68 C of the old Act.
If the period of one year from the date of the publication of the proposed scheme is applied to the pending schemes under Section 68 C of the old Act, the purpose and object of saving the old schemes under Clause (e) of Section 2 17 (2) of the new Act would be frustrated.
Learned counsel for the appellant urged that since Section 17(2)(e) provides for the finalisation of a pending scheme published under the old Act in accordance with the provi sions of Section 100 of the new Act, the period of limita tion of one year prescribed under sub section (4) of that section would also apply.
He further urged that since period of one year had already expired from the date of the publi cation of the scheme under Section 68 C of old Act, the scheme automatically lapsed and the same could not be final ly published under Section 100 of the Act.
If the appellant 's contention is accepted the schemes published under Section 68 C of the old Act would lapse after the expiry of the period of one year from the date of the publication of the scheme in 510 the Official Gazette in accordance with the provisions of the old Act.
On the other hand we find that Section 2 17(2)(e) permits finalisation of a scheme published under Section 68 C of the old Act if the same was pending on the date of the commencement of the new Act.
The old Act did.
not provide any period of limitation consequently a number of schemes published under Section 68 C of the old Act were pending on the date of commencement of the new Act although a period of one year had already expired.
If the Parliament intended to apply the limitation of period of one year to the pending schemes published under Section 68 C of the old Act, the new Act could have made provisions to that effect.
On the contrary Section 217(2)(e) has been enacted to save the schemes published under Section 68 C of the old Act which were pending on the date of the commencement of the Act with a further direction that the same shall be fina lised in accordance with Section 100 of the Act.
Sub section (4) of Section 100 provides that where a scheme is not published as approved under sub section (3) within period of one year from the date of publication of the proposal in the Official Gazette under sub section (1), the proposal shall be deemed to have lapsed.
A scheme published under Section 68 C of the old Act pending on the date of commencement of the Act could not be a scheme proposed under sub section (1) of Section 100, therefore, the rigour of period of one year as applicable to a scheme proposed under sub section (1) of Section 100 could not apply to a scheme under Section 68 C pending on the date of commencement of the Act.
It was not meant that a scheme u/s 68 C of the old Act pending on the date of commencement of the new Act may be approved or finalised with leisure without any time limit.
There appears to be some apparent conflict between Section 100(4) and Section 217(2)(e) of the Act.
While Section 217(2)(e) permits finalisation of a scheme in ac cordance with Section 100 of the new Act sub section (4) of Section 100 lays down that a scheme if not finalised within a period of one year shall be deemed to have lapsed.
If the appellant 's contention is accepted then Section 217(2)(e) will become nugatory and no scheme published under Section 68 C of the old Act could be finalised under the new Act.
On the other hand if the period of one year as prescribed under Section 100(4) is not computed from the date of publication of the scheme under Section 68 C of the old Act and instead the period of one year is computed from the date of com mencement of the Act both the provisions could be given full effect.
It is settled principle of interpretation that where there appears 511 to be inconsistency in two sections of the same Act, the principle of harmonious construction should be followed in avoiding a head on clash.
It should not be lightly assumed that what the Parliament has given with one hand, it took away with the other.
The provisions of one section of stat ute cannot be used to defeat those of another unless it is impossible to reconcile the same.
In Venkataramana Devaru vs State of Mysore, AIR 1958 SC 225 at p. 268, this Court observed: "The rule of construction is well settled that when there are in an enactment two provisions which cannot be reconciled with each other, they should be so interpreted that, if possi ble, effect should be given to both.
This is what.
is known as the rule of harmonious construction.
" The essence of harmonious construction is to give effect to both the provisions.
Bearing these principles in mind it is legitimate.
to hold that Section 100(4) prescribed period of limitation of one year in respect the scheme proposed under the provisions of the new Act, while in they case of a scheme under Section 68 C of the old Act, pending on the date of enforcement of the new Act, namely, 1.7. 1989, the period one year as prescribed under Section 100(4) should be computed from the date of commencement of the new Act.
This interpretation would give full effect to both the Sections Section 100(4) and Section 2 17(2)(e) of the new Act.
Learned counsel for the appellant placed reliance on a Division Bench decision of the Allahabad High Court in Santosh Kumar & Ors.
vs Regional Transport Authority, CMWP No. 2 1773/89, decided on 16th March, 1990.
In that case a Division Bench of Allahabad High Court held that a draft scheme under Section 68 C of the old Act published in 1986 shall be deemed to have lapsed on the date of the enforce ment of the new Act in view of the absolute prohibition contained in Section 100(43 of the new Act against the continuance of any scheme after one year.
We have gone through the judgment of the Division Bench carefully but in our opinion the view taken by the High Court of Allahabad is unsustainable in law.
The learned Judges constituting the Bench failed to notice the legislative intendment under Section 217(4)(e) of the new Act which kept alive the scheme published under Section 68 C of the old Act for the purposes of being finalised under the new Act.
We are therefore clearly of the opinion that the view taken by the Allahabad High Court is incorrect.
In the instant ease, the appellant had filed a writ petition in May, 512 1990 and obtained an interim order from the High Court restraining the State Government from publishing the final Notification under Section 100(3) of the new Act.
The State Government published the final notification under Section 100(3) of the new Act on 29.8.
1990 after the dismissal of the writ petition by the Division Bench of the High Court.
The period of one year with regard to the pending scheme expired on 1.7.1990 but since the appellant had obtained stay order from the High Court, the State Government could not publish final notification.
Explanation to Section 100(4) of the new Act lays down that in computing the period of one year any period during which the publication of the approved scheme under Section 100 is held up on account of any stay or order of any court, shall be excluded.
On the application of the Explanation the period during which the appellant had obtained stay order against the State Govern ment is liable to be excluded in computing the period of one year.
Admittedly in the instant case stay order passed by the High Court remained in force from May to 9th August, 1990.
On the exclusion of that period the final notification issued by the State Government under Section 100(3) of the new Act on 29.8.1990 was well within the prescribed period.
In view of the above discussion, we are of the opinion that the High Court rightly dismissed the appellant 's writ petition.
The appeal fails and is accordingly dismissed with costs.
V.P.R. Appeal dismissed.
| The appellant held a Stage Carriage Permit for plying his vehicle on the Kota Khanpur route, which overlaps a portion of the KotaSangod route.
The State Road Transport Corporation vide Notification dated 11.10.1979 proposed a scheme under Section 68 C of the for the exclusive operation of its vehicles on the Kota Sangod route.
The affected operators of the route, including the appellant, filed their objections against the scheme before the authority appointed by the State Government which ap proved the scheme.
Before the State Government could issue the final Noti fication under Section 68 D(3) of the old Act, the appellant and other affected operators made representation to the Minister for Transport for affording them a fresh opportuni ty of hearing.
501 Meanwhile, the was enforced with effect from 1.7.1989 repealing the old Act.
The appellant, thereupon, filed a writ petition before the High Court for restraining the State Government from issuing the final Notification on the ground that on the enforcement of the new Act, the Notification dated 11.10.1979 issued under Section 68 C of the old Act had lapsed on account of delay in finalisation of the same.
A similar writ petition had been filed earlier in re spect of Kishangarh Sarwad route by one affected party, on similar grounds.
A learned Single Judge of the High Court dismissed that writ petition holding that the draft scheme under the old Act was saved by the new Act and the same could legally be finalised under the provisions of the new Act.
When he filed a Letters Patent Appeal, the Division Bench dismissed the Appeal as well as the various writ petitions including that of the appellant by a common order, against which the present appeal was made.
After the judgment of the High Court, the final notifi cation was published in the Official Gazette on 29.8.1990 section 100(3) of the new Act.
The appellant, contended before the Court that since there was undue delay of 11 years in issuing the final Notification, the scheme as proposed under Section 68 C of the old Act should be deemed to have lapsed and the State Government had no authority or jurisdiction to finalise the same or to issue Notification under Section 100(3) of the new Act; that since the draft scheme dated 11.10.1979 was not finalised under Section 100(3) of the new Act, the same had lapsed after one year from the date of the notification issued section 68 C of the old Act; and that since period of one year had already expired from the date of the publica tion of the scheme under Section 68 C of old Act, the scheme automatically lapsed and the same could not be finally published under Section 100 of the new Act.
Dismissing the appeal this Court, HELD: 1.1.
The object and purpose of Section 100(4) is to avoid delay in finalising a scheme.
The Parliament was aware that under the old Act schemes were not finalised for long years as a result of which public interest suffered, therefore, it prescribed a time frame for the approval and publication of schemes.
Sub section (4) prescribes a period of limitation during which the State Government should hear 502 and consider the objections of the objectors and finalise the scheme and publish the same in the Official Gazette and on its failure to do so within that period, penal conse quences would ensue as a result of which the scheme itself shall stand lapsed.
[507H 508A, 507F G] 1.2.
The Legislative intent is clear that the schemes proposed under Section 68 C of the old Act pending on the date of the commencement of the new Act should not lapse instead those schemes should be finalised in accordance with the provisions of Section 100 of the new Act.
The pending schemes were therefore saved and the same were to be fina lised within one year as contemplated by Section 100(4) of the new Act.
[509C D] 1.3.
Section 217(2)(e) has been enacted to save the schemes published under Section 68 C of the old Act which were pending on the date of the commencement of the Act with a further direction that the same shall be finalised in accordance with Section 100 of the Act.
[510C ] 1.4.
If the period of one year from the date of the publication of proposed scheme is applied to the pending schemes under Section 68 C of the old Act, the purpose and object of saving the old schemes under Clause (e) of Section 217(2) of the new Act would be frustrated.
[509E F] 2.1.
While Section 217(2)(e) permits finalisation of a scheme in accordance with Section 100 of the new Act, sub section (4) of Section 100 lays down that a scheme if not finalised within a period of one year shall be deemed to have lapsed.
If the period of one year as prescribed under Section 100(4) is not computed from the date of publication of the scheme under Section 68 C of the old Act and instead the period of one year is computed from the date of com mencement of the Act, both the provisions could be given full effect.
[510F H] 2.2.
While in the case of a scheme under Section 68 C of the old Act, pending on the date of enforcement of the new Act, namely, 1.7.1989, the period of one year as prescribed under Section 100(4) should be computed from the date of commencement of the new Act.
[511D E] 2.3.
The appellant was himself responsible for the delay therefore he is not entitled to complain for the delay.
Delay would not automatically render the scheme illegal.
[500G] 2.4.
Since under the old Act no time frame was pre scribed for finalising a scheme penal consequences could not ensue.
Under the old 503 Act a scheme proposed section 68 could continue to remain in force till it was quashed.
[505G H] 2.5.
Since the scheme proposed on 11.10.1979 had not been quashed by any Court, the same continued to be in force on the date of commencement of the new Act.
In the absence of any provision in the old Act rendering the scheme inef fective on the ground of delay, the scheme proposed section 68 C of the old Act could not lapse ipso facto.
[505H 506A] 2.6.
In the instant case stay order passed by the High Court remained in force from May to 9th August, 1990.
On the exclusion of that period the final Notification issued by the State Government under Section 100(3) of the new Act on 29.8.1990 was well within the prescribed period.
[512C D] Yogeshwar Jaiswal etc.
vs State Transport Appellate Tribunal & Ors., AIR 1985 SC 516; Onkar Singh & Ors.
vs Regional Transport Authority, Agra & Ors., ; ; Devki Nandan vs State of Rajasthan & Ors., and Srichand vs Government of U.P., [1985] 4 SCC 169, distinguished.
Santosh Kumar & Ors.
vs Regional Transport Authority, CMWP No. 21773/89, decided on 16th March, 1990, over ruled.
Where there appears to be inconsistency in two sec tions of the same Act, the principle of harmonious construc tion should be followed in avoiding a head on clash.
It should not be lightly assumed that what the Parliament has given with one hand, it took away with the other.
The provi sions of one section of statute cannot be used to defeat those of another unless it is impossible to reconcile the same.
The essence of harmonious construction is to give effect to both the provisions.
Venkataramana Devaru vs State of Mysore, AIR 1958 'SC 225 at p. 268. Followed.
|
ivil Appeal No. 5483 of 1983.
From the Judgment and Order dated 7.10.
1982 of the Madhya Pradesh High Court in M.P. No. 169 of 1982.
R.F. Nariman and P.H. Parekh for the Appellants.
V.N. Ganpule, V.M. Tarkunde, S.K. Agnihotri, S.K. Sinha, Rajinder Narain, R.S. Singh, and Rameshwar Nath for the Respondents.
The appellant, a partnership firm filed the writ petition seeking writ of mandamus and other direction to remove Rajdhani Distilleries Corporation, the 7th respondent in the writ petition in the High Court and 6th respondent in this appeal for short 'respondent ' or his 'servants ' or 'agents ' and to deliver vacant and peace ful possession of U j jain Distillery and warehouses at tached to it and the plant and machinery mentioned in the schedule Annexure P 3 to the writ petition.
It also sought for mandamus or other order to have the valuation of the plant and machinery in Annexure P 3 assessed or direction to return the goods or things described in Annexure P 7 or on its failure to pay a sum of Rs.8,48,179.28 and a mandamus directing the State Govt.
to terminate the licence granted on August 25, 1981 to the respondent and to issue licence to the appellant under section 13 of the M.P. Excise Act, 19 15, for short 'the Act ', etc.
Thus this appeal.
The material facts, to dispose of the point arose in this appeal, lie 482 in a short compass as stated hereunder: In the State of Madhya Pradesh nine distilleries for the manufacture of spirit were established and one of which was situated at Ujjain.
The appellant and its predecessors continuously had licence under sections 13 and 14 of the Act in form D 2 to distil rectified spirit or denatured spirit or liquor and D I licence for wholesale supply of country made liquor in the distillery to retail vendors in the area attached to the distillery.
The licence was for a period of 5 years.
The last licence of which was for the period from April 1, 1977 to March 31.
The normal procedure in vogue was to call for tenders and the lowest was being accepted, though sometimes highest was also preferred.
Next licensing period commenced from April 1, 198 1 to March 31, 1986 and the respondent became the successful tenderer which the appellant impugned in Misc.
Petition No. 701/81 and obtained stay of dispossession from the distillery and the attached warehouses, The interim stay was later vacated and the petition was dismissed on August 20, 198 1.
We may also mention here that the writ petition was also dismissed and the special leave petition was dismissed by this court.
Thus grant of licence to the respondent under D 1 and D 2 li cences became final.
On August 21, 1981 the Officer in Charge of the distillery wrote a letter to the appellant calling upon them to be present on August 22, 1981 to deliv er the distillery, plant, machinery, etc.
to the respondent.
The appellant neither received it nor cooperated to deliver possession of the distillery, etc.
to the respondent.
In stead it locked the distillery and went away.
In the mean while the Excise Department also put their locks on the distillery etc.
On August 27.
1981 the District Excise Officer again called upon the appellant to be present on August 28, 1981 to deliver possession of the distillery, etc.
to the respondent.
But the appellant remained absent.
Consequently possession was taken of the distillery and warehouses, after taking inventory of stock in hand in the presence of the witnesses and the same were handed over to the respondent on August 28, 1981.
The appellant sent a letter on February 23, 1982 valuing the goods taken posses sion of at Rs.8,36,988.61.
On August 8, 1982 the appellant demanded redelivery of the distillery, plant and machinery and warehouses and the value of the stock in trade or pay the amount.
On March 16, 1982 the appellant filed the writ petition in the High Court but was dismissed.
The appellant contended in the High Court that it had been in exclusive possession of the distillery, plant and machinery at Ujjain and the attached warehouses and dispossession was unlawful and that, 483 therefore, the appellant was entitled to restitution of the plant and machinery and also to the grant of licence after cancellation of the licence granted to the respondent.
The High Court found that the appellant had no exclusive posses sion which always remained with the Excise Department.
The appellant worked out the contract of manufacturing rectified spirit or spirit (country made liquor) in the distillery and wholesale supply to the retail vendors within the area attached to the distillery.
Due to non cooperation of the appellant possession was taken and delivered to the incoming licensee, the respondent, as per rules and the appellant was not entitled to restitution.
The other findings are not necessary as they are not pressed before this court.
The appellant had given up the reliefs of valuation of the plant and machinery and stock in trade.
During the pendency of the appeal on an application made by the appellant this court directed the state to make over payment of a sum of Rs. 10 lacs deposited by the respondent with the State Govt.
and also further directed the respondent to deposited sum of Rs.5 lacs in the Registry of this court and directed the Registry to keep that amount in fixed deposit to earn inter est thereon subject to adjustment at the final hearing.
Despite issuance of several notices by the department, the appellant did not cooperate in the estimate of the value of the plant and machinery of the distillery and warehouses.
the Committee appointed in terms of the conditions of the licence, fixed a sum of Rs. 10,53,016.45 as total value payable to the appellant.
Since a sum of Rs. 10 lacs had already been paid, the appellant is still entitled to the balance amount of Rs.53,016.45.
R.F. Nariman, learned counsel for the appellant, in his thorough and analytical arguments based on record made a shift in the stand and now contended that on a read ing of several clauses in the licence exhibit P 2, in particu lar, clause 50 enjoins the state to fix the valuation of all materials like buildings, still, machinery, etc.
belonging to the appellant as an outgoing licensee; should be pur chased by the respondent before the expiry of the contract and commencement of the succeeding contract of the respond ent; the Committee appointed by the Excise Department in this behalf should estimate fair valuation and payment thereto be made to the appellant before taking over posses sion and handing over the plant and machinery of the dis tillery and the attached warehouses to the respondents as a condition precedent to dispossess the appellant and start the operation of the contract by the respondent which admit tedly were not done.
This is in contravention of the manda tory conditions of the licence and the rules.
The 484 appellant, therefore, is entitled to restitution of the plant and machinery of the distillery and the attached warehouses illegally taken possession of by the respondent and the state.
In support thereof he placed strong reliance in Godhra Electricity Co. Ltd. & Anr.
vs State of Gujarat & Ors.
, ; He also referred to us in support of his contention various documents.
In our view it is not necessary to dwelve deep into them.
Sri Ganpule and Sri Tarkunde, the learned senior counsel for the State and the respondent.
contended that the appellant was requested twice to be present for delivery of the plant and machinery in the distillery and warehouses to the respondent and due to its non cooperation possession was taken.
Even for the assess ment of the valuation, before the expiry of the contract.
the appellant was given several notices requesting it to furnish the evidence of the value of the plant and machinery stock in trade, etc., and due to its non cooperation.
the valuation could not be made.
Prior valuation and payment are not condition precedent to work out the licence.
The appel lant has no right to the restitution after the expiry of the licence.
Sri Tarkunde, in particular, emphasised that the restitution prayed for became infructuous on account of the subsequent events, namely, pursuant to December 1984 Govt.
policy the respondents established their distillery at U j jain at their own expenses.
The second period of licence also expired in 1991.
There was further change in the policy of the Govt.
, namely each District was made a supply area under a separate licence for two years.
Under these circumstances the appellant is not entitled to any reliefs.
It is also further contended that the conditions in the licence in exhibit P 2 marked in the High Court should be read harmoniously.
It is clear that prior fixation of the valuation and the payment of the price is not a condition precedent.
The ratio in Godhra Electricity Co. Ltd. case is inapplicable to the facts of this case.
The sole question is whether fixation of the price of the plants and machinery at Ujjain and the attached ware houses and stock in trade and payment thereof to the appel lant is a condition precedent to take possession and deliv ery thereof to the respondent on August 28, 1981.
At the outset we may make it clear that, though Sri Nariman con tended that the grant of licence to the respondent was in gross violation of the conditions of the tender as the respondent did not comply with any of the mandatory condi tions stipulated therein and the delivery of the possession of the distillery in pursuance of the illegal contract is without jurisdiction, we decline to go into this question, though prima facie may be plausible to be countenanced, for the 485 reasons that the grant of licence for the period of 1981 to 1986 to the respondent became final and expired by efflux of time.
It was also contended by Sri Nariman that the valua tion made at Rs. 10,53,0 16.45 was not proper and contrary to the tender 's conditions which stipulated deposit of a minimum of Rs. 19 lacs by the respondent as a condition to grant licence, and that, therefore, the appellant is enti tled to valuation of at least Rs. 19 lacs.
We decline to go into that question also since the relief of valuation was given up in the High Court.
It is also clear from the record that the appellant had not cooperated in estimating the value and the Committee of designated officers, namely the Addl.
Collector, the District Excise Officer, Astt.
Commis sioner of Excise and Accounts Officers was compelled to go into the question and made an assessment of the value on January 5, 1984.
That valuation was also not questioned in the writ petition.
To find whether it is a condition precedent to fix the valuation of the plants and machinery of the distillery and the warehouses and the stock in trade and payment thereof before taking over possession and handing over the same to the incoming licencee, the material clause 50 to be looked into reads thus: "All the materials like buildings, still, machinery, drums, wood fuel, coal, mahua, bottling, machinery, bottles, spices, red sealing wax, coaltar, pilfer proof seals, crown corks, alongwith alu capsules, etc.
belonging to the outgoing licensee purchased for the use of distillery and warehouses attached thereto, shall be valued before the expiry of the old contract and the commence ment of the new one by a committee appointed by the Excise Department in this behalf.
The committee aforesaid shall be appointed by the Excise Commissioner under the previous sanc tion of the Government (Separate Revenue Department) and it shall consist of five members, namely (1) Collector or Additional Collector convenor, (2) Assistant Commissioner of Excise of the Division concerned member (3) Executive Engineer Technical member, (4) Accounts Officer of the Excise Department Member, and (5) Representative of the licensee Member.
If the representative of the licensee remains absent in the committee at the appointed time, the remaining four members shall begin their work in his absence and no objection of the licensee in this respect shall be heard.
The valuation made and agreed upon by the Committee shall be sanc tioned by the Excise Commis 486 sioner with such necessary changes as he deems fit and in case of difference of opinion amongst the members, the Excise Commissioner shall pass orders relating to disputed valua tion.
The orders of Excise Commissioner shall be final and binding upon the licensee.
Note: The valuation of sanctioned plant at the warehouses may be done by a committee consisting of some of the members of the above referred committee, subject to the orders of the Excise Commissioner, which shall be final and binding on the licensee.
Prima facie, if the clause by itself is read in isola tion, it would indicate that prior fixation of the value and payment is a condition precedent.
But in our view all the conditions of the licence, policy of the Act and Rule of the possession, manufacture, supply, sale and distribution of the rectified spirit or denatured spirit or liquor from the stage of manufacture in Distillery till retail sale to the consumer be viewed as an integrated whole and the human behaviour of the outgoing licensee also has to be kept in view.
Any other view would disrupt smooth transition from the outgoing to the incoming licensee; hampers the continui ty of supply and sale of intoxicants and cause collosal loss of public revenue.
So let us consider the relevant proposi tions from this background.
Section 13 of the Act requires a licensee to manufacture intoxicants: (a) Licence is required for manufacture, etc.
of intoxicants; (b) No intoxicant shall be manufactured or collected . . . (f) No person shall induce, keep in his possession any material. . for the purpose of manufacture of intoxicants, other than tari, except under the authority and subject to the terms and conditions of the licence granted in that behalf.
Section 14 provides that: (a) establish a distillery in which spirit may be manufactured under licence granted under section 13 on such conditions as the Govt.
may impose. 487 (C) license on such conditions as the State Govt.
may impose the construction and working of the distillery and brewery; (c) establish or licence warehouses wherein any intoxicant may be deposited and kept without payment of duty, subject to payment of such fee as the State Govt.
may direct. .
Section 17 provides inter alia that no intoxicant shall be sold except under the authority and subject to the terms and conditions of licence granted in that behalf.
Thus it is clear that establishment of a distillery or a warehouse; manufacture of intoxicants, spirit (country made liquor), the possession and distribution and sale thereof are regulated under the Act.
The Govt.
in exercise of its power under section 62 of the Act made rules regulating the control of distilleries and warehouses by Officers of the Excise Department, especially appointed by the Excise Commissioner for that purpose.
Therefore, any licensee, under the Act and the Rules, be it incoming or outgoing, should have D 2 and D I licences for establishment of distillery and warehouses, possession of raw materials, manufacture of liquor or rectified spirit or denatured spirit and supply to the retail vendors of the area attached to the distillery.
Any infraction is an of fence.
It is settled law by several decisions of this court that there is no fundamental right to a citizen to carry on trade or business in liquor.
The state under its regulatory power, has power to prohibit absolutely any form of activity in relation to an intoxicant, its manufacture, possession, import and export.
No one can claim, as against the state, the right to carry on trade or business in any intoxicants, nor the state be compelled to part with its exclusive right or privilege of manufacture, sale, storage of liquor.
Fur ther when the state has decided to part with such right or privilege to the others, then state can regulate consistent with the principles of equality enshrined under article 14 and any infraction in this behalf at its pleasure are arbitrary violating Article 14.
Therefore, the exclusive right or privilege of manufacture, storage, sale, import and export of the liquor through any agency other than the state would be subject to rigour of Article 14.
Vide Har Shankar & Ors.
vs Dy.
Excise & Taxation Commissioner & Ors., and State of M. P.v.
Nandial Jaiswal.
; , 488 When the state was dealing with the grant of the privi lege of establishing or manufacturing intoxicants, rectified spirit or denatured spirit, spirit (country made liquor) in a distillery owned or regulated by it, and invites tenders in this regard it should conform to the rigour of article 14 of the Constitution.
Admittedly, the licence of the appellant expired on March 31, 1981 and thereafter it had no right to manufacture and store at distillery in Ujjain and distribu tion as wholesaler of the country made liquor from the attached warehouses to the retail vendors within that area granted to the respondent.
But for the stay granted by the High Court the operation of the respondent 's licence was to begin on April 1,198 1.
The outgoing licensee, the appel lant, had to hand it over to the respondent on that date.
The conditions in the licence P 2 postulate of mutual rights and obligations between the outgoing licensee to sell and the incoming licensee to purchase the plant and machinery of the distillery, stock in trade and also the machinery in the warehouse including the apparatus, etc.
enumerated in the conditions either at the price fixed or agreed directly between the parties or fixed by the committee of the desig nated officers.
In case of any difference in the valuation between the members, the Commissioner of the Excise or the State Govt.
would fix the valuation, which was made final.
The Committee designated was to be constituted with prior approval of the Govt.
as per condition 50 to evaluate the plant and machinery of the distillery and some of them of the warehouses.
Outgoing licensee also is entitled to repre sent in the Committee.
On his non cooperation the rest of the four members of the Committee are empowered to determine the value.
Clause 23(iii) provides that any dispute relating to valuation of the sanctioned plant shall be referred to the State Government and the decision of the State Govt.
shall be final and binding on the parties to the dispute.
Clause 2 thereof refers that the licensee shall made over the said distillery and warehouses buildings on the termination of the licence in as good condition as they were at the com mencement hereof excluding reasonable wear and tear.
Clause 36(4) provides that any dispute relating to the sale of spirit or plant by the licensee or the valuation of the plant shall be referred to the State Govt.
and the decision of the State Govt.
shall be final and binding.
Clause 39(1) in particular, mentions that at the commencement of the term of this licence, the licensee shall buy all sanctioned plant at the U j jain distillery including spare parts, furniture, motor trucks and fittings at a price to be fixed by the State Government.
Licensee shall pay the price thereof within 30 days of the communication.
Similarly, clause 41, 42(1) and clause 44 provide that the incoming licensee shall take on lease all 489 other buildings structures attached to the distillery at Ujjain on such conditions and terms as per Public Works Department Manual Vol.
II within a period of one month of the intimation of the acceptance of the tender.
Then comes clause 50 quoted hereinabove.
The incoming licensee shall make payment within 30 days from the date of communication of the value.
Therefore, the courts should adopt realism, pragmatism, practicality and the purpose envisaged under the Act and the rules in construing the relevant clauses in the licence.
The purpose of the Act the rules made therein is to regulate the manufacture, distribution sale of the intoxicants, rectified spirit or denatured spirit, liquor, sale to consumers within the state of Madhya Pradesh.
It is an on going process conducted through the licensing system, an exclusive privi lege of the state through the licences granted under form D 1 and D 2 in this behalf.
The duration of the licence is fixed one.
On expiry of the licence the outgoing licensee shall be bound to handover the distillery plant and machin ery therein, and warehouses attached thereto, the stock in trade and other apparatus and goods used for the manufac ture, storage and distribution.
The outgoing contractor is entitled continue his business activity till the last date of the licence, namely March 31, of the ending year.
The succeeding licensee would take over the business from the outgoing licensee on April 1 of the year of licence.
Thus there should be no hiatus between taking over and handing over the manufacture, possession.
storage of the wholesale business of the spirit (country made liquor) or rectified spirit or denatured spirit.
Under these circumstances it will well nigh be impossible to assess the valuation of the entire stock in trade or plant and machinery in the distill ery or the warehouses till the last date.
In addition the cooperation of the outgoing licensee is also necessary and expected as he would be in possesssion of the records of the previous purchases of the materials, or plant or machinery if any new additions are made etc.
Unless they are made available, it is not possible to assess the value after giving due rebate or depreciation, etc.
to the incoming licensee.
The human nature and conduct would be such that the outgoing licensee, being the unsuccessful tenderer, would not cooperate in handing over possession of the dis tillery and stock in trade and would approach the High Court under article 226 of the Constitution as was done in this case.
The incoming licensee has time of thirty days in case of stock in trade or three months in the case of plant and machinery from the date of communication to him to pay the value to the outgoing licensee.
Keeping those circumstances at the back of our mind we decline to adopt lexographic strict construction of clause 50 which 490 would thwart continuity; create hiatus in smooth operation of manufacture, storage, distribution and sales of the intoxicants.
Moreover, after the assessment is made and in case of any difference of opinion in the valuation or the outgoing licensee claims higher value the final arbiter would be in some cases like stock in trade, the Commissioner of Excise and in case of plant and machinery or warehouses the State Govt.
After the decision of the Commissioner or the State Government, it shall be communicated to the suc ceeding licensee, who has been given maximum period of three months to make payment to the outgoing licensee.
In the light of the scheme of valuation of the plant and machinery of the distillery, or the apparatus in the warehouses and the stock in trade, we hold that strict construction would lead to innumerable complications and loss of public reve nue.
We are inclined to hold that before the expiry of the licence, if the outgoing licensee cooperates, the value can be fixed with consensus, payment should also be made within the time stipulated.
In all other cases it could be done even after the expiry of the stipulated period.
In that perspective we have no hesitation to hold that prior valua tion of plant and machinery in the distillery, stock in trade therein or the value of the machinery in the ware houses and stock of the liquor stored therein and payment thereof before taking possession and handing them over to the incoming licensee is not a mandatory, nor a condition precedent.
Therefore, taking over possession from the appel lant on August 28, 1981 and handing over the plant and machinery, etc.
to the respondent is not illegal.
Undoubtedly this court, in Godhra Electricity case held that it is mandatory that a person who is deprived of his property, before its taking over, the value should be esti mated and the payment made or else it is illegal.
But the ratio would be considered in the light of the setting there in.
The licence granted under section 6 of the as amended in 1959 to produce electrical energy was acquired by the Electricity Board.
Section 6(6) provides that where a notice exercising the option of purchasing the undertaking has been served upon the licence, the licensee shall deliver the undertaking to the State Electricity Board on expiry of the relevant period referred to in section 6(1).
In that case the constitutional validity of section 6(6) was ques tioned which did not provide for payment before taking over of the undertaking as offending Article 19(1)(f) and (g) and article 14 of the constitution.
While considering the constitu tional validity of section 6(6) this court held that valuation and payment is a condition precedent since the Act did not envisage any payment of interest subsequent thereto.
Accord ingly this court directed redelivery of the undertaking 491 to the licensee subject to follow the procedure as per law laid down therein.
In this case admittedly the conditions of licence are not questioned, but expressly given up in the High Court.
Even before us the validity of the valuation has not been questioned.
It cannot cut the branch on which the appellant sits to assail the constitutional validity of the conditions of the licence.
Accordingly we have no hesitation to hold that the appellant is not entitled to the restitu tion of the plant and machinery of the distillery at Ujjain and the attached warehouses.
The appellant though claimed that the value of the plant and machinery was too low, contrary 'to the specification in this behalf in tender condition and though we decline to go into the question, the appellant appeared to have smarted under apprehension that it had to face the plea of acquies cence, if it were to cooperate earlier.
So it is open to the appellant to make a representation to the Govt.
and any officer not below a Secretary preferably of the concerned Department would go into the matter and decide the value as per the material on record.
It is open to the appellant to place all its material.
It is also open to the respondent to place its material and the authority would consider after giving an opportunity of hearing through counsel, if asked for, and decide the value accordingly.
As regards deposit now made in the Registry of this Court, the Registry is directed to make payment of a sum of Rs.53,016.45 and inter est accrued thereon to the appellant and the balance amount and the interest accrued on the residual to the respondent and the respondent 's liability would be subject to the decision by the Secretary as indicated in the judgment.
The appeal is accordingly allowed to the above extent and since the appellant substantially failed there would be no order as to costs.
Y.L. Appeal partly allowed.
| The appellants and its predecessors continuously held licences under Sections 13 and 14 of the Madhya Pradesh Excise Act to distil rectified spirit or denatured spirit or liquor.
The last of such licence which the appellant had related to the period from 1.4.1977 to 31.3.1981.
The next licensing period commenced from 1.4.1981 to 31.3.1986 and the respondent Rajdhani Distilleries Corporation became the successful tenderer in respect thereof which the appellant impugned by means of a writ petition before the High Court but failed both before the High Court as also in this Court in a special leave petition.
Thereupon the appellant was called upon twice to be present to deliver the possession of the distillery to the respondent but the appellant did not co operate.
Likewise the appellant did not co operate in fixing the value of the plant and machinery of the distill ery and warehouses as a result of which a committee was appointed in terms of the licence which fixed a sum of Rs.10,53,016.45 p. as the total value payable to the appel lant.
Due to the non cooperation of the appellant, the Excise Department took over the possession of the distillery after making inventory of stock in hand in the presence of the witnesses and the same was handed over to the respond ent.
The appellant thereafter demanded redelivery of the distillery and on his failure to get the same it filed a writ petition in the High Court praying for a writ of manda mus seeking inter alia restitution of the distillery and the warehouses etc., challenging the quantum of valuation fixed.
The High Court dismissed the writ petition.
The High Court found that the appellant had no exclusive possession which always remained with the excise Department; the appellant worked out the contract of manufacturing rectified spirit etc.
and that due to non cooperation of the appellant, possession was taken and delivered to the incoming licensee as per rules and the 479 480 appellant was not entitled to restitution.
Hence this appeal by special leave.
It is contended on behalf of the appellant that clause 50 enjoins the State to fix the valuation of all the materials belonging to the appellant and pay the same to it as an outgoing licensee, before taking over possession and handing over the distillery and the attached warehouses to the respondents.
According to it, it is a condition precedent under clause 50 to dispossess the appellant and start the operation of the contract by the respondent which admittedly were not done.
This is a contravention of the mandatory conditions of the licence and the rules.
The respondents on the other hand contend that the appellant is not entitled to restitution as it was due to its non cooper ation, possession was taken.
According to them prior valua tion and payment are not condition precedent to work out the licence.
Partly allowing the appeal, this Court, HELD: In the light of the scheme of valuation of the plant and machinery of the distillery, or the apparatus in the warehouses and the stock in trade, the Court held that strict construction (of clause 50) would lead to innumerable complications and loss of public revenue.
We are inclined to hold that before the expiry of the licence, if the outgoing licensee cooperates, the value can be fixed with consensus, payment should also be made within the time stipulated.
In all other cases it could be done even after the expiry of the stipulated period.
In that perspective the Court had no hesitation to hold that prior valuation of plant and machin ery in the distillery, stock in trade therein or the value of the machinery in the warehouses and stock of the liquor stored therein and payment thereof before taking possession and handing them over to the incoming licensee is not a mandatory, nor a condition precedent.
Therefore, taking over possession from the appellant on August 28, 1981 and handing over the plant and machinery, etc.
to the respondent is not illegal.
[490C E] In this case admittedly the conditions of licence are not questioned, but expressly given up in the High Court.
Even before us the validity of the valuation has not been questioned.
It cannot cut the branch on which appellant sits to assail the constitutional validity of the conditions of the licence.
Accordingly we have no hesitation to hold that the appellant is not entitled to the restitution of the plant and machinery of the distillery at Ujjain and the attached warehouses.
[491A B] It is open to the appellant to make a representation to Government and any officer not below a Secretary preferably of the concerned 481 Department would go into the matter and decide the value as per the material on record.
It is open to the appellant to place all its material.
It is also open to the respondent to place its material and the authority would consider after giving an opportunity of hearing through counsel, if asked for, and decide the value accordingly.
[491D] Godhra Electricity Co. Ltd. and Anr.
vs State of Gujarat and Ors.
, ; ; Hat Shankar & Ors.
vs Dy.
Excise of M. P.v.
Nandial Jaiswal; , , Referred to.
|
vil Appeal Nos.
54 to 56 of 1975.
From the Judgment and Order dated 29.6.1973 of the Kerala High Court in A.S. Nos.
603,604 and 605 of 1969.
N. Sudhakaran for the Appellants.
K.V. Viswanathan, K.R. Nambiar and T.T. Kunhikannan for the Respondents.
The Judgment of the Court was delivered by K. RAMASWAMY, J.
These appeals by special leave are directed against the judgment and decrees of Kerala High Court in A.S. Nos.
603,604 and 605 of 1969 dated June 29, 1973 confirming the award and decrees of the Civil Court in L.A.O.P. No. 413 etc.
of 1964 and 370 and 405 of 1966 dated January 16, 1969.
The notification under section 4(1) of the Land Acquisition Act 1894 (for short 'the Act ') was pub lished in the gazette on October 25, 1960 acquiring an ancient Chalai Anicut together with embarkments sluices, culverts etc.
by six notifications.
This ancient Chalai Anicut originally belonged to Arumughom Pillai.
On his demise it devolved on his four sons Venkatachalam Pillai, Vishwanathan Pillai, Pasupathy Pillai and Subhapathy Pillai by intestate succession as coparceners.
By partition deed exhibit B 23 dated December 22, 1954, the four brothers parti tioned certain properties but kept in common acquired Chalai Anicut under the management of the eldest brother Venkata chalam Pillai.
Pursuant to the notice issued under section 9(3) and 10 of the Act, Venkatacha 468 lam filed his objections making reference therein to the partition deed No. 2437 of 1954 in the Registrar 's office, Palghat and that each of the brothers had 1/4 share in the Anicut and irrigation system.
After the award made by the Land Acquisition Officer compensation was made to all the brothers at 1/4th share each.
Venkatachalam sought six references under section 18 as he was dissatisfied with the awards made by the Land Acquisition Officer.
The Civil Court enhanced in all to a sum of Rs.52,009.40 p.
The State filed no appeal against the enhancement of the compensation.
The Civil Court granted an award of 1/4 share thereof to Venka tachalam Pillai with solatium at 15 per cent and interest thereon at 4 per cent and did not award the balance amount to the appellants in their respective shares on the ground that they did not jointly ask for reference but only one alone asked for.
The two brothers asked for reference for two awards only and the last one did not ask for reference of any award.
On appeals, the High Court confirmed the award and decrees of the Civil Court.
Thus these three appeals at their behest.
Common question of law arises in these appeals and hence they are disposed of by a common judgment.
The sole question for decision is whether in a reference Sought for by one of the co owners whether the other co owners who did not expressly seek reference, are entitled to enhanced compensation pro rata as per their shares.
It is not in dispute that under the partition deed, the four brothers as coparceners kept in common the acquired property and Venkatachalam was in management thereof and each are entitled to 1/4 share in the ancient Anicut and the irriga tion system.
It is also undisputed that total enhanced compensation is Rs.52,009.40 p.
Therein all the four broth ers including the appellant are entitled to 1/4 share each.
In the reference application made by the Venkatachalam indisputably he mentioned that the acquired property be longed to him and his other brothers and the compensation awarded by the Land Acquisition Officer was inadequate and very low.
It was also stated that they Should get an en hanced amount at the figure specified in the reference application.
Undoubted he stated therein that he is entitled to 1/4 share.
What he stated thereby was that of his enti tlement of 1/4 share of the total enhanced compensation and obviously, after the reference on par with his three broth ers, he is entitled to receive compensation at 1/4 share.
The Courts below disallowed the payment to the appellants on the ground that there is no mention in the 469 claim petition of the partition deed; that they are the co owners and that there is no averment that the Venkatachalam was seeking reference under section 18 on his behalf and on behalf of his other three brothers.
As regards the first two grounds are concerned they are palpably incorrect.
It is seen that an express averment was made in the objections filed pursuant to notice under section 9(3) and 10 and also in his reference application under section 18 of the Act, that there was prior partition and each of the brothers are entitled to 1/4th share and that they are dissatisfied with the award of the Collector.
Undoubtedly there is no express averment in the reference application under section 18 that he is seeking a reference on his behalf and on behalf of his three brothers.
It is contended by the counsel for the State that the pleadings are to be strictly construed and that as the reference was sought for only by Venkatachalam of all the six awards the other three brothers are not entitled to any share in the enhanced compensation.
In support thereof it is also further contended that Viswanathan and Pasupathy had only asked for reference in respect of two awards and Sabhapathy Pillai made no request for reference against any of the six awards made by the Collector.
It is true that Viswanathan and Pasupathy made such request in respect of two awards and Sabhapathy did not make any request for reference against any of the awards.
But what would be the consequence in law is the question.
It is surprising that the State having acquired the property of a citizen would take technical objections regarding the entitlement of the claim.
The State certainly is right and entitled to resist claim for enhancement and lead evidence in rebuttal to prove the prevailing price as on the date of notification and ask the court to determine the correct market value of the lands acquired compulsorily under the Act.
But as regards the persons entitled to receive compensation are concerned it has no role to play.
It is for the claimants inter se to lay the claim for compensation and the court would examine and award the compensation to the rightful person.
As seen in the objections pursuant to the notice under section 9(3) and 10, Venkatchalam made necessary averments that himself and his brothers had 1/4 share in the Anicut and irrigation system pursuant to the partition deed referred to therein.
In his reference application under section 18 also he 470 reiterated the same and stated that the amount awarded by the Collector was in adequate and that they were dissatis fied with it and that they are entitled to more.
It is settled law that one of the co owners can file a suit and recover the property against strangers and the decree would enure to all the co owners.
It is equally settled law that no co owner has a definite right, title and interest in any particular item or a portion thereof.
On the other hand he has right, title and interest in every part and parcel of the joint property or coparcenery under Hindu Law by all the coparceners.
In Kanta Goel vs
B.P. Pathak & Ors,.
12, this Court upheld an application by one of the co owners for eviction of a tenant for personal occupation of the co owners as being maintainable The same view was reiterated in Sri Ram Pasricha vs Jagannath & Ors., [1977]1 S.C.R. 395 and Pal Singh vs Sunder Singh (dead) by Lrs. & Ors.
, ; A co owner is as much an owner of the entire property as a sole owner of the property.
It is not correct to say that a co owner 's property was not its own.
He owns several parts of the composite property along with others and it cannot be said that he is only a part owner or a fractional owner in the property.
That position will undergo a change only when partition takes place and division was effected by metes and bounds.
Therefore, a co owner of the property is an owner of the property acquired but 'entitled to receive compensation pro rata.
The State would plead no waiver nor omission by other co owners to seek reference nor disentitle them to an award to the extent of their legal entitlement when in law they are entitled to.
Since the acquired property being the ancestral coparcenary and continued to be kept in common among the brothers and the income derived therein was being shared in proportion of their shares by all the brothers it remained as joint property.
As co owners everyone is entitled to 1/4 share therein.
It was also laid by this Court in a recent judgment in Ram Kumar & Ors.
vs Union of India & Ors.
, ; that it is the duty of the Collector to send full infor mation of the survey numbers under acquisition to the court and make reference under section 18 and failure thereof is illegal.
The same ratio would apply to the facts in this case as well.
When one of.
the co owner or coparceners made a statement in his reference application that himself and his brothers 471 are dissatisfied with the award made by the Collector and that they are entitled to higher compensation, it would be clear that he was making a request, though not expressly stated so but by necessary implication that he was acting on his behalf and on behalf of his other co owners or coparcen ers and was seeking a reference on behalf of other co owners as well.
What was acquired was their totality of right, title and interest in the acquired property and when the reference was made in respect thereof under section 18 they are equally entitled to receive compensation pro rata as per their shares.
The courts below committed manifest error in refusing to pass an award and payment thereof to the appel lants merely on the ground that there was no mention in this regard in the reference application or two of them sought reference in respect of two awards and the last one made no attempt in their behalf.
The claimants are entitled to payment of the enhanced award by the Civil Court pro rata of their 1/4 share each with 15 per cent solatium and 4 per cent interest as awarded by the Civil Court.
The appeals are accordingly allowed with costs of this Court.
R.P. Appeals allowed.
| The three appellants and their eldest brother, under a family partition, which took place in 1954, kept in common certain ancestral properties under the management of the latter.
These properties were acquired in pursuance of a notification dated 15.1.1967 under section 4(1) of the Land Acquisition Act, 1894.
The eldest brother filed objections referring to the partition deed of 1954 and stated that each of the four brothers had 1/4 share in the properties in question.
Ultimately the compensation was made to all the brothers at 1/4th share each.
The eldest brother sought six references under section 18 being dissatisfied with the awards.
The Civil Court enhanced the compensation and granted an award of 1/4th share thereof to the eldest brother with solatium and interest, but did not award the balance amount to the appellants in their respective shares on the ground that they did not jointly ask for the reference.
Out of the remaining three brothers two asked for reference for two awards only and the last one did not ask for reference of any award.
On appeal, the High Court confirmed the award and decrees of the civil court.
Aggrieved, the appellants preferred appeals by special leave to this Court.
On the question: whether in a reference under section 18 of the Land Acquisition Act sought for by one of the co owners, the other co owners, who did not expressly seek reference are entitled to enhanced compensation pro rata as per their shares? Allowing the appeals, this Court, 466 HELD: 1.1 The Courts below committed a manifest error in refusing to pass an award and payment thereof to the appel lants.
The coparceners claimants appellants in the instant case were entitled to payment of the enhanced award by the Civil Court pro rate of their 1/4th share each with 15 per cent solatium and 4 per cent interest as awarded by the Civil Court.
[471C D] 1.2 It was not in dispute that under the partition deed, the four brothers as coparceners kept in common the acquired property under the management of the eldest brother.
The income derived therein was being shared in proportion to their shares by all the brothers.
Therefore, it remained as joint property.
As co owners everyone was entitled to 1/4th share therein.
[468E; 470F] 1.3 When one of the co owners or coparceners made a statement in the reference application that the acquired property belonged to him and his brothers, that he himself and his brothers were dissatisfied with the award made by the Collector and that they were entitled to higher compen sation, it would be clear that he was making a request, though not expressly stated so but by necessary implication that he was acting on his behalf and on behalf of his other co owners or coparceners and was seeking a reference on their behalf as well.
What was acquired was their totality of right, title and interest in the acquired property and when the reference was made in respect thereof under section 18, they were equally entitled to receive compensation pro rata as per their shares.
[468F; 471A B] 2.1 One of the co owners can file a suit and recover the property against strangers and the decree would ensure to all the co owners.
A co owner is an owner of the property acquired but entitled to receive compensation pro rata.
[470A & E] 2.2 A co owner is as much an owner of the entire property as a sole owner.
It is not correct to say that a co owner 's property was not his own.
He owns several parts of the composite property along with others and it cannot be said that he is only a part owner or a fractional owner in the property.
[470C D] 2.3 No co owner has a definite right, title and inter est in any particular item or a portion thereof.
On the other hand he has right, title and interest in every part and parcel of the joint property or coparcenary under Hindu Law by all the coparceners.
[470A B] Kanta Goel vs
B.P. Pathak & Ors., ; ; Sri Ram 467 Pasricha vs Jagannath & Ors., and Pal Singh vs SunderSingh (dead) by Lrs.
& Ors., [1989] 1 S.C.R. 67, relied on.
It is surprising that the State having acquired the property of a citizen would take technical objections re garding the entitlement of the claim.
The State certainly is right and is entitled to resist claim for enhancement and lead evidence in rebuttal to prove the prevailing price as on the date of notification and ask the court to determine the correct market value of the lands acquired compulsorily under the Act.
But so far as the persons entitled to receive compensation are concerned, it has no role to play.
It is for the claimants inter se to lay the claim for compensation and the Court would examine and award the compensation to the rightful person.
[469E F]
|
il Appeal No. 3 107 of 1991.
From the Judgment and Order dated 14.8.
1990 of the Gauhati High Court in Civil Rule No. 407 of 1985.
H.N. Salve.
K.S. Parihar and H.S. Parihar for the Appellant.
P.K. Goswami, Kailash Vasdev and M.J. Paul for the Respondents.
The Judgment of the Court was delivered by KANIA, J.
Special Ieave granted.
Counsel heard.
462 This is an appeal filed by the Reserve Bank of India, by special leave.
The contesting respondent, being respondent No. 1, is an association of its officers at its Gauhati unit.
The respondent association (referred to hereinafter as "the respondent") represents the interests of 45 officers belonging to Grades A to C employed in the appellant bank at its unit at Gauhati.
It appears from the affidavit filed on behalf of the appellant that there was difficulty in per suading officers of the appellant posted outside the North Eastern region to accept transfers to the unit of the appel lant in the North Eastern part of the country which unit was located at Gauhati in Assam.
It also emerges from the record that the Gauhati station was regarded as a hardship station by the officers who were transferred to the Gauhati unit from other regions of the country.
The Government of India found a similar difficulty in persuading its officers to accept postings in the NorthEastern region and they were given substantial incentives to accept transfers to the North Eastern region.
We are not here concerned directly with the actual benefits granted by the Government of India but what is material is that such benefits had to be given by the Government of India.
By a letter dated December 9, 1983, certain incentives and allowances were provided by the appellant to its officers posted at Gauhati who were not from the North Eastern regions.
Those allowances were gener ally known as special duty allowances.
We are not much concerned with the details as to how the special duty allow ances were calculated but the main special duty allowance basically comprised 25% of basic pay, subject to a maximum of Rs.400 per month.
These allowances were also known as special compensatory allowances or remote locality allow ances.
By a Memorandum issued by the appellant on April 11, 1985, an adhoc increase in salary was effected for non local officers and an option was given to them either to choose the adhoc increase or the special duty allowances for the period during which they were posted at Gauhati.
The re spondent demanded the extension of the said benefit to the local officers by its letter dated May 10, 1985.
We may mention here that the local officers who were posted at the Gauhati did get an extra allowance in addition to their salaries but it was considerably smaller than the main compensatory allowance paid to the officers from outside the NorthEastern region who were transferred to Gauhati.
Certain other benefits were also allowed to non local officers transferred to Gauhati but there is no need to refer to them in detail.
The appellant declined to allow the same allow ances to local officers posted at Gauhati as were given to the officers from other regions transferred to Gauhati as stated earlier.
It is this decision which gave rise to the writ petition from the decision in which this appeal arises.
463 It was the contention of the respondent before the Gauhati High Court that all the officers of the appellant bank posted at Gauhati, whether they were from the North Eastern region or outside had to live in the same conditions and suffer from the same hardships, and hence, if any allow ance was given to the officers transferred from outside to the Gauhati office, the very same allowance should also be given to the local officers posted at Gauhati.
In the coun ter filed in the High Court by the appellant bank, the Deputy Chief Officer of the appellant bank averted that the hardships faced by the non local officers are greater than those faced by the local officers.
The scheme of adhoc incentives was introduced to tide 'over the problem of adequately staffing the Gauhati office.
Non local officers experienced difficulties in getting accommodation, getting familiar with the language and so on, and some incentives had to be given to them to mitigate the hardships experi enced by them on transfer to Gauhati.
It was clarified that the said incentives were temporary and because of the pecu lier circumstances prevailing at the moment in the North Eastern region which was regarded as a difficult region.
It was accepted that considerable difficulties would have to be suffered by the officers posted there who hailed from places outside the NorthEastern region.
The contention of the appellant bank failed to find favour with the High Court which took the view that all officers at Gauhati suffered from substantially the same hardship and it pointed out that, for example, even officers from outside from Tripura who were posted at Gauhati would suffer almost the same degree of hardship as officers transferred to Gauhati from regions other than the North Eastern regions although Tripu ra was in the North Eastern region.
The High Court took the view that the local officers of the appellant bank, Gauhati were discriminated against and directed that they must be given the same benefits as the non local officers trans ferred to Gauhati.
It is the correctness of the view taken by the High Court which is sought to be impugned before us in this appeal.
We are of the opinion that the High Court was, with respect, in error in taking the view that officers from the North Eastern region who were posted at Gauhati.
either on transfer or otherwise, sufferred the same hardships as officers from other regions transferred to Gauhati.
The hardship and inconvenience sufferred by an officer of the appellant bank who was transferred to Gauhati from regions other than the North Eastern region, would certainly be more acute than those suffered by local officers posted at Gau hati.
His mother tongue might completely be different in speech and, even as far as the script is concerned, from the 464 language used by the local people at Gauhati.
He and his family members would, therefore.
find it very difficult to communicate freely with the local people.
His children might find it difficult to get admission to a school and pursue their education at Gauhati.
They would be unfamiliar with the surroundings and the customs of the people.
The hard ships faced by an officer say from the Western or Southern regions of India or North India posted at Gauhati would be qualitatively as well as quantitatively greater than the hardships faced by the local officers posted at Gauhati.
It may be that some of the officers coming from the North Eastern region may also face considerable hardships when posted at Gauhati but the fact that there might be a few such officers would not render the payment of special allow ance, exclusively to officers transferred from distant regions discriminatory and bad in law.
The High Court was, therefore, not justified in coming to the conclusion that all the officers of the appellant bank posted at Gauhati sufferred from the same degree of hardship.
A person trans ferred from outside the North Eastern region to Gauhati would normally have to face more severe difficulties than an officer from the North Eastern region posted in Gauhati or, at the least, the appellant bank could reasonably take that view.
Moreover, as pointed out by the appellant bank in the counter that they were finding it difficult to persuade their officers from outside to accept transfers to Gauhati and it is common knowledge that an office of a large bank cannot be run efficiently by officers a large number of whom have been posted there by transfers against their will and under the threat of disciplinary action.
The work done by them could hardly be expected to be satisfactory.
After all, the appellant, the Reserve Bank of India, is a banking institution and if in the interest of efficiency and proper working it bona fide took the decision, in the circumstances set out earlier, to grant some extra benefits to the non local officers transferred to Gauhati with a view to main tain efficient working of its unit at Gauhati, in our opin ion, they cannot be treated as being guilty of any unlawful discrimination.
In the result, we allow the appeal and set aside the order of the High Court.
The writ petition filed by respond ent No. 1 is dismissed.
There will be no order as to costs throughout.
V.P.R. Appeal allowed.
| By a letter dated December 9, 1983 certain incentives and allowances were provided by the appellant to its offi cers posted at Gauhati who were not from the North Eastern region.
Those allowances were generally known as special duty allowances and the main special duty allowance com prised 25% of basic pay, subject to a maximum of Rs.400 per month.
By a Memorandum issued by the appellant on April 11, 1985, an ad hoc increase in salary was effected for non local officers and an option was given to them either to choose the ad hoc increase or the special duty allowances for the period during which they were posted at Gauhati.
The respondent demanded the extension of the said bene fits to the local officers by their letter dated May 10, 1985.
When the appellant bank declined to allow the benefits to the local officers, the respondent association challenged the Memorandum dated April 11, 1985 in a writ petition in the High Court, contending that all the officers of the appellant bank posted at Gauhati, whether they were from the North Eastern region or outside had to live in the same conditions and suffer from the same hardships, and hence, if any allowance was given to the officers transferred from outside to the Gauhati Office, the very same allowance should also be given to the local officers posted at Gau hati.
The appellant bank averred in its counter that the scheme of ad hoc incentives was introduced to tide over the problem of adequately staffing the Gauhati office; that the non local officers experienced difficulties in getting accommodation, getting familiar with the language and so on, and some incentives had to be given to them to mitigate the hardships experienced by them on transfer to Gauhati; that the said incentives were temporary and because of the pecul iar circumstances 461 prevailing at the moment in.
the North Eastern region, which was regarded as a difficult region.
The High Court allowed the petition, holding that all officers at Gauhati suffered from substantially the same hardship and that the local officers of the appellant bank at Gauhati were discriminated against and directed that they must be given the same benefits as the non local officers transferred to Gauhati.
Allowing the appeal by special leave filed by the.bank, this Court, HELD: 1.01.
The hardship and inconveniences suffered by an officer of the appellant bank who was transferred to Gauhati from regions other than the North Eastern region would certainly be more acute than those suffered by local officers posted at Gauhati.
[463G H] 1.02.
Some of the officers coming from the North Eastern region may also face considerable hardship when posted at Gauhati but the fact that there might be a few such officers would not render the payment of special allowance, exclu sively to officers transferred from distant regions discrim inatory and bad in law.
[464B C] 1.03.
The Reserve Bank of India, is a banking institu tion and if in the interest of efficiency and proper work ing, it bona fide took the decision to grant some extra benefits to the non local officers transferred to Gauhati with a view to maintain efficient working of its unit at Gauhati, they cannot be treated as being guilty of any unlawful discrimination.
[464E F]
|
ivil Appeal Nos.
1694 1709 of 1991.
From the Judgment and Order ' dated 23.1.1990 of the A.P. Administrative Tribunal, Andhra Pradesh in R.P. Nos.
13986/89, 24045 50/89, 25091/89, 1027 & 2111/.89, 28925 26/89, 28929 to 31/89 and O.A. No. 1918 of 1990.
K. Madhava Reddy and G. Prabhakar for the Appellants.
M.K. Ramamurthi, section Markandeya and Ms. C. Markandeya for the Respondents.
The following Order of the Court was delivered: This is an appeal by the State Government of Andhra Pradesh by special leave: Challenge is to the order of the State Administrative Tribunal directing the benefit of the Government Order of 18.11.1981 to be extended to selection of the Sub Inspectors of Police which is done through the State level Recruitment Board.
The Government Order which has been extracted in the Order of the Tribunal reads thus: "Notwithstanding anything in the Andhra Pra desh State and Subordinate Service Rules or the Special Rules, candidates seeking appoint ment of all the non gazetted posts of all services, and seeking eligibility in general educational test who have obtained the basic educational qualifications prescribed for direct recruitment eligibility for promotion in the special rules governing such posts, through Telugu medium, shall be given weight age in the matter of selection to such posts by awarding them 5% of the total aggregate maximum marks of the relevant competitive examination held by the Andhra Pradesh Public Service Commission for recruitment acquiring eligibility to such posts.
566 "Having regard to the avowed policy of the Government to introduce Telugu progressively in the State in the coming years and as Telugu has been 'introduced as official language at Directorage level and also in the lower courts in certain Districts of the State and so as to give preference to candidates who have ob tained the basic educational qualification through the medium of Telugu, Government have after careful examination decided in consulta tion with the Andhra Pradesh Public Service Commission that such candidates to give weightage of 5% of the total aggregate maximum marks of all the competitive examinations of the Andhra Pradesh Public Service Commission for recruitment to all the non gazetted poStS of all services.
There is no dispute that the Order in its own terms applies to selection carried on through the State Public Service Commission; nor is there any dispute that the selection of Sub Inspectors, for the relevant period was being carried on by a body other than the State Public Service Commission.
The Tribunal observed as follows: "We cannot the rule too literally and defeat the object and purpose with which it has been made.
If the object and purpose are kept in view, then ' we have no hesitation m holding that it applies to all selections irrespective of the body that makes selections in the State.
We see no merit in the literal con struction suggested by Sri Sagar.
" We are told that the validity of the Government Notifi cation under challenge on the ground that the Government have no authority to make such a direction and that chal lenge is in an independent petition pending disposal before this Court.
Since this petition is not one challenging the Notification but seeking its extension to areas not covered by the Notification in terms, disposal of this petition has no bearing on the petition which challenges the Notifica tion.
The State Government is the authority to take a policy decision.
Whether the decision is tenable or not in law, as we have just pointed out, is not to be decided here.
But since Government in their wisdom have specifically confined the application of the Notification to recruitment through the State Public Service Commission, we have not been 567 able to appreciate the decision of the Tribunal that it was also available to be extended to selection through bodies other than the State Public Service Commission.
Mr. Ramamurti appearing in.
support of the respondents ' cause has pointed out that if the Government Notification is confined to selection through the State Public Service CommissiOn, the Government Notification would be hit by Article 14 of the Constitution.
Therefore, according to Mr. Ramamurti, it was open to the Tribunal to read down the requirement by saying that the benefit of the Notification would be applicable to all categories of selection.
We have not been able to agree with Mr. Ramamurti that when the Notification is specific and is intended to apply to a specified group of cases for selection, it would be open to the Tribunal to extend its application beyond what has been clearly.
Specified.
It is one matter to say that the Notification applied in a limited way may be hit by law; it is another to say that contrary to the restriction im posed, the Tribunal would allow the Notification to have general application.
We are inclined to agree with Mr. Madhava Reddy for the State that the Tribunal exceeded its jurisdiction in lifting the restriction imposed.
by the, Government in the matter of benefit of 5% of total aggregate marks to those candidates who wrote their papers in Telugu language.
The appeal is allowed and the order of the Tribu nal stands vacated.
No costs. ' T.N.A. Appeal al lowed.
| The Government of Andhra Pradesh issued an order dated 18.11.81 which provided that in respect of appointments to NonGazetted posts of all services, candidates who have obtained their basic educational qualification through the medium of Telugu shall be given weightage of 5% marks.
But the benefit of the order was confined to selection made through the State Public Service Commission.
The State Administrative Tribunal held that the order applies to ' all selections irrespective of the body that makes selection in the State and extended the benefit of the order to the selection of the Sub Inspectors of Police made through the State level Recruitment Board.
Against the order of the Tribunal, the State of Andhra Pradesh filed an appeal to this Court.
Allowing the appeal, this Court, HELD: 1.
The Tribunal exceeded its jurisdiction in lifting the restriction imposed by the Government in the matter of benefit of 5% marks.
The order of the Tribunal is vacated.
[567D E] 2.
The State Government is the authority to take a policy decision.
Whether the decision is tenable or not in law, is not to be decided by the Court.
Since Government in their wisdom have specifically confined the application of the Notification to recruitment through the State Public Service Commission, the decision of the Tribunal that it was also available to be extended to selection through bodies other than the State Public Service Commission, cannot be appreciated.
[566H, 567A] 565 3.
When the Notification is specific and is intended to apply to a specified group of cases for selection, it would not be open to the Tribunal to extend its application beyond what has been clearly specified.
It is one matter to say that the Notification applied in a limited way may he hit by law; it is another to say that contrary to the restriction imposed, the Tribunal would allow the Notification to have general application.
[S67C]
|
ew policy which is in vogue.
The licensing period is for two years commencing from 1.4.1991 to 31.3.1993.
Admittedly, the petitioner had not submitted any tender in terms of the new policy for manufac ture of rectified spirit or liquor for grant of D 2 and D 1 licences, the licences have already been granted to the third parties and they are not before this court.
Any direc tion in this regard would not only interfere with the li cences granted to them, but also create a hiatus in opera tional system.
This Court cannot direct the State Government to create a new policy of receiving private applications or to direct the Commissioner of Excise to carve out a new policy area and to grant licence to the petitioner.
It is not possible to give such a direction for the reasons that the petitioner, admittedly, did not offer himself as a candidate for consideration when tenders were called for licensing period commencing from 1.4.1991.
As regards the Government Distilleries at Ratlam is concerned for grant of D 1(s) licence, as requested for, we have no sufficient material whether any arrangements have 494 been made to any other parties for supply area in that regard.
Under these circumstances, it is extremely difficult to accede to the request made by the counsel for the peti tioner.
[498E 499A] & ORIGINAL JURISDICTION: Writ Petition No. 729 of 1988.
(Under Article 32 of the Constitution of India).
R.F. Nariman and P.H. Parekh for the Petitioners.
V.N. Ganpule.
V.M. Tarkunde, S.K. Agnihotri, S.K. Sinha, Rajinder Narain.
R.S. Singh and Rameshwar Nath for the Respondents.
The Judgment of the Court was delivered by K. RAMASWAMY, J.
In this writ petition under article 32 of the Constitution, the petitioner, a partnership firm seeks reliefs of mandamus to direct the State Government and the Commissioner of Excise of M.P. to allow the petitioner to set up a distillery pursuant to the cabinet policy dated December 30, 1984 and to grant D 2 licence; to declare the letter dated February 8, 1982 as unconstitutional, illegal and of no effect in law and to direct the respondent Nos. 1 and 2 to grant a licence to manufacture potable Alcohol within the state of Madhya Pradesh and to grant D 1 licence to supply country made liquor, etc.
This case has behind it chequered history which is necessary to adumbrate.
In the State of M.P. vs NandlaI Jaiswal & Ors., ; this court considered the legality of the policy, the subject matter in the writ petition.
It was held therein that nine distilleries in the State of Madhya Pradesh in cluding the one at U j jain were set up on the lands and buildings belonging to the Government.
The plants and ma chinery therein initially were of the Government, but in course of time the licensees installed or replaced the plants and machinery and became the owners.
The petitioner and its predecessors had licence for the distillery at Ujjain for well over 40 years to manufacture rectified spirit.
The last of the licences held by the petitioner was for the years April 1, 1976 to March 31, 198 1.
The period of licence was at that time for five years.
The practice as per the provisions of the M.P. Excise Act 1915 for short 'the Act ' and M.P. Distilleries, Breweries and Warehouses Rules for short 'the rules ' issued in exercise of the powers under section 62 was to call for the tenders to manufacture and supply the rectified spirit or denatured spirit, spirit (country made) to the retail vendors 495 within the area attached to the distillery.
Rajdahani Dis tillers Corporation, for short 'RDC ' became the successful tenderer for the licensing period starting from April 1, 1981 to March 31, 1986.
The petitioner challenged in Misc.
Petition No. 701/81 in the M.P. High Court under article 226.
Initially stay was granted, but later it was vacated on August 20, 1981 Licence was granted for the period starting from August 25,1981 to March 31, 1986 to RDC and the dis tillery, plant and machinery at Ujjain was handed over to RDC on August 28.
198 1.
Thereafter the petitioner filed another writ petition No. 169/82 on March 16, 1982 for redelivery Of the plant and machinery and the warehouses and other consequential reliefs.
That writ petition was dis missed by the High Court against which Civil Appeal No. 5483/83 was filed, which is just now disposed of.
The peti tioner had applied for grant of licence on February 19, 1982 and he reiterated his request in number of reminders includ ing one oh November 3, 1986.
In the interregnum the Govt.
changed the policy by a Cabinet Sub Committee policy deci sion dated December 30, 1984 under which they decided to grant licence to the existing licensees of the distilleries and that they should construct the factories at their ex penses on the land allotted by the State Govt.
or acquired and allotted by the State Govt.
and that they shift the business to new factories and the licence would be for a period of five years.
Calling in question of that policy several writ petitions including the one by the petitioner were filed in the M.P. High Court.
The Division Bench partly allowed the writ petition and quashed part of the policy decision.
Against it appeals and special leave petitions were filed by the State and the unsuccessful petitioners including the petitioner.
It was disposed of by this court reported in Jaiswal 's case.
During the hearing of the writ petition, the Attorney General of India conceded that if the petitioner makes any application for grant of licence it would be considered by the State Govt.
and be disposed of quickly.
That concession was noted and the argument was founded thereon to hold that the Govt.
did not intend to create any monopoly in favour of the existing licensees.
This court upheld the policy of the Govt.
and allowed the appeals and dismissed the special leave petitions of the petitioner and other.
Pursuant thereto the petitioner made an application on December 25, 1987 followed by several reminders.
Ultimately the State Govt.
rejected the petition by letter dated February 8, 1988, which is impugned in this writ petition.
Under section 13 of the Act, the State Govt. is empowered to grant licence to manufacture, possession and sale of recti fied spirit and the liquor in the distilleries or the brew eries.
Under section 14 and Rule XXII the licensee should also have licence to establish distillery to distil 496 rectified spirit or denatured spirit or liquor and a ware house wherein any intoxicant be deposited and kept without payment of duty, but subject to payment of the fee to the State Govt.
as it may direct.
No intoxicant shall be sold by operation of section 17, except under the authority and subject to the terms and conditions of the licence granted in that behalf.
Rule XXII provides the method of disposal of the licence which reads thus: "XXII.
Disposal of licences (1) Licence for the manufacture or sale of intoxicants shall be disposed of by tender.
auction.
fixed licence fee or in such other manner as the State Govt.
may, by general or special order, direct.
Except where otherwise prescribed, licence shall be granted by the Collector or by an Officer authorised by him in that be half." Rule III to V of the Distillery and Warehouse Rules also made inter alia under sub section 2(h) of section 62 deal with the subject of grant of ' licence and provide, in the follow ing terms, for different kinds of licences which may be issued, viz., licences in Forms D 1, D 1(s) and D 2: "III.
Subject to the sanction of the State Government, the Excise Commissioner may grant a licence in Form D 1 and Form D 1(s) for the wholesale supply of country spirit to retail vendors.
The Collector may issue, on payment of a fee of Rs. 1000 a licence in Form D 2 for the construction and working of a distillery to any person to whom a wholesale supply licence has been issued.
V. Subject to sanction of the State Government the Excise Commissioner may issue a licence in Form D 2 for the construction and working of a distillery on payment of a fee of Rs. 1000.
" The State Govt.
rejected application of the petitioner on three grounds.
namely, (1) that the petitioner requested to issue a licence at the old place at Ujjain Distillery which is no longer available; (2) present policy of the State and the Central Govt.
was to discourage manufacture of liquor for drinking purpose, except for molasses.
(3) 497 However, if it is manufactured from other raw materials other than the Mahua, his application would be considered.
If the petitioner makes an application for establishment or manufacturing denatured spirit at other places and if they produce a No Objection Certificate from Central Government and Environmental Department, his application would be considered.
The contention of Sri Nariman, the learned counsel for the petitioner, is that the State Govt.
having made solemn undertaking before this court and the arguments were heard in Nandlal Jaiswal 's case on the basis that the application of the petitioner would be considered and disposed of it was with an intention to grant licence to the petitioner, but rejection is contrary to the undertaking given to this court.
It was also contended that the petitioner have a long, clean and commendable history of 40 years in manufac turing country made liquor in the distillery and supply thereof within the area attached to U j jain Distillery.
The State Government 's non grant of licence thereto is only a rouse to defeat the fundamental rights of the petitioner to establish and trade in the manufacture and distribution of the liquor in terms of the provisions of the Act and the rules and the instructions of the Govt.
in that regard.
Having given the licence to the other distilleries, the petitioner being similarly placed, non grant thereto is arbitrary, discriminatory and violating article 14 of the Constitution.
It was also further contended that the peti tioner if for any reason cannot be granted D 2 licence at U j jain, D 2 licence may be granted on Government distillery at Ratlam and supply area attached to it under D 1(s) so as to do complete justice to the petitioner.
It was resisted by Sri Ganpule, learned senior counsel for the State contending that pursuant to the undertaking given to this court, the application was considered and found not feasible to grant the licence to the petitioner due to grounds stated in the impugned order which are relevant and existant being in conformity with the change of the policy, and so this Court cannot interfere and may not issue the writ as prayed for.
Though rule nisi was ordered on March 17, 1989, despite notice of the Registry dated April 24, 1989, neither copies of the writ petition, nor the requisite process fee for service of the rule nisi on the respondents were deposited in the court.
As a result the rule nisi was not issued to the contesting respondents Nos. 3 to 10.
Along with the connected appeal which is just disposed, Sri Tarkunde, the learned senior counsel appearing for RDC which was impleaded as 5th respondent to whom licence was given for Ujjain Distillery, contended that unless there is cut in the supply area of the operation of the existing 498 licences and a separate supply area is carved out, no D 2 licence could be issued to the petitioner.
The licensing period of 1986 to 1991 had expired by efflux of time.
New policy is in vogue for the succeeding licensing period of 199 1 to 1993.
The licences having been granted to the respective persons, who are not represented in this court, the relief asked for cannot be granted in their absence.
In our view there is force in the contentions of the respondents.
The only question for consideration is whether it is a fit case for interference by this court due to the aforestated sequence of events.
Undoubtedly the learned Attorney General assured this court that the application, if filed by the petitioner, would be considered.
Obviously in accordance with the provisions of the Act and the rules.
The policy of 1984 was upheld by this court under which nine distilleries were granted D 2 licences to manufacture recti fied spirit and liquor and to supply to the retailers under D 1 licence within the area attached to each of the distill eries.
The petitioner admittedly made application to grant licence to manufacture country made liquor, obviously with Mahua flowers or molasses at Ujjain.
The RDC established new distillery at Ujjain in terms of the new policy, at its expense, and is manufacturing and supplying the liquor.
It vacated the old distillery at Ujjain which we are informed that the building is still existing.
RDC had manufactured the spirit and country made liquor in terms of D 2 licence and supplied in terms of D 1 licence.
The period of the licence also expired by efflux of time.
Again there is change in the new policy which is in vogue.
The licensing period is for two years commencing from April 1, 199 1 to March 31, 1993.
Admittedly, the petitioner had not submitted any tender in terms of the new policy for manufacture of rectified spirit or liquor for grant of D 2 and D 1 licences, the licences have already been granted to the third parties and they are not before this court.
Any direction in this regard would not only interfere with the licences granted to them, but also create a hiatus in operational system.
This court cannot direct the State Govt.
to create a new policy of receiving private applications or to direct the Commissioner of Excise to carve out a new supply area and to grant licence to the petitioner.
It is not possible to give such a direction for the reasons that the petitioner, admittedly, did not offer himself as a candidate for consideration when tenders were called for licensing period commencing from April 1, 1991.
As regards the Govt.
Distilleries at Ratlam is concerned for grant of D 1 (S) licence as requested for, we have no sufficient material whether any arrangements have been made to any other parties for supply area in that regard.
Under these circumstances, it is extremely difficult to accede to the request made by the 499 counsel for the petitioner, Though the petitioner had estab lished long career in the field to manufacture, supply and distribution of intoxicants in the State of Madhya Pradesh for about 40 years, we cannot issue any direction as asked for.
Under these circumstances we are constrained to dismiss the writ petition, but without costs.
Y.L. Petition allowed.
| The petitioner and its predecessors had licence for distillery at Ujjain to manufacture rectified spirit and the last of such licence held by the petitioner was for the period 1.4.1976 to 31.3.1981.
For the licensing period commencing from 1.4.1981 to 31.3.1986, the petitioner was unsuccessful and the licence was granted in favour of Rajd hani Distillery Corporation.
The petitioner impugned the same but failed both before the High Court as also before the Court.
Thereafter, the petitioner filed a writ petition in the High Court claiming restitution of the distillery but failed and an appeal against the High Court 's order was preferred before this Court, which has been disposed of whereby this Court has declined to grant restitution but directed that the petitioner should move an application before the State Government to have the value of the plants licence on February 19,1982 and reiterated his request by number of reminders including the one in November 3, 1986.
In the interregnum, the Government policy was changed by a cabinet sub committe policy decision dated 30.12.1984, whereby they decided to grant licence to the existing licen sees of the distilleries and that they should construct the factories at their expenses on the land allotted by the State Government or acquired and allotted by the State Government and that they shift the business to new factories and the licence would be for a period of five years.
Several writ petitions including the one by the petitioner were filed in the High Court challenging the policy.
The High Court quashed part of the policy decision.
Against that order, petitions were filed by the State and the unsuccess ful petitioners including the petitioner in this Court.
Those petitions were disposed of by this Court by its judg ment in the case of State of M.P.v.
Nandlal Jaiswal and Ors.
, ; The court upheld the validity of the Government policy.
During the course of the arguments, the Attorney General of India conceded that if the petitioner makes an application for grant of licence, it would be considered by the Govern 493 ment and disposed of quickly.
Pursuant thereto the petition er made an application on December 25, 1987.
The State Government rejected the application by letter dated February 8, 1988, which among other things is impugned in this peti tion under Article 32 of the Constitution.
It is contended on behalf of the petitioner that the intention behind the solemn undertaking given by the State in Nandlal Jaiswal 's case clearly showed that the intention was to grant the licence to the petitioner rejection is contrary to the undertaking and violating the fundamental right of the petitioner to establish and trade in the manu facture and distribution of the liquor; further it is dis criminatory is as much as licences have been issued to others similarly placed.
Alternatively, it is contended that if it is not found feasible to grant licence for Ujjain, the same be granted for Ratlam Distillery.
Counsel for the State urged that it has not been found feasible to grant licence to the petitioner due to grounds stated in the order which are in confermity with the change in policy and the court should not interfere.
On behalf of Rajdhani Distillery Corpn.
it was urged that unless there is cut in the supply area of the operation of the existing licences and a sepa rate supply area is carved out, no licence could be issued to the petitioner; that new policy is in vogue for the succeeding licensing period of 1991 to 1993, and the li cences having been issued to persons, who are not represent ed in this court, the court should not grant the relief asked 1or in the writ petition.
Dismissing the writ petition, this Court,
|
: Criminal Appeal Nos 485 & 486 of 1991.
From the Judgment and Order dated 31.8.
1990 of the Bombay High Court in Crl.
W.P. Nos. 530 and 53 1 of the 1990.
R.K. Jain and V.V. Vaze (For the State), Maqsood Khan, R.S.M. Verma, S.A. Syed, M.T. Khan and A.S. Bhasme (For the State) for the Appellants.
A. Subba Rao, A.D.N. Rao and Ms. Sushma Suri for the Respondents.
The Judgment of the Court was delivered by AHMADI, J.
Special leave granted.
The events leading to the filing of these two appeals, briefly stated, are that on the afternoon of March 25, 1990, the officers of the Directorate of Revenue Intelligence being in possession of information intercepted a motor car at about 3.45 p.m. driven by the appellant Amir Shad Khan with the appellant Aziz Ahmad Khan as his compa 448 nion.
On search of the vehicle 1400 gold bars were recov ered.
The statements of the two appellants were recorded and thereafter they were formally arrested on March 28, 1990 and produced before the Chief Metropolitan Magistrate, Bombay.
The Chief Metropolitan Magistrate granted remand.
While the matter was under investigation a proposal was made to the first respondent.
Secretary (Preventive Detention), Govern ment of Maharashtra for invoking the powers conferred on him by Section 3 of the (hereinafter called 'the Act ').
On the very next day after the receipt of the proposal the first respondent passed the impugned orders of detention against the two appellants.
These orders were passed under sub section (1) of section 3 of the Act with a view to preventing the appellants from smuggling goods and engaging in transporting, keeping and concealing the same.
After these detention orders were passed on April 24, 1990 they were served on the appellants along with the grounds of detention and basic documents on which reliance was placed.
By clauses (iii), (iv) and (v) of paragraph 43 of the grounds of detention the appellants were informed that they had a right to make a representation to (i) the State Gov ernment; (ii) the Central Government; and (iii) the Advisory Board against the detention orders, if they so desired.
It was further stated that the representation to the State Government should be addressed to the Minister of State for Home Mantralaya, Bombay.
They were informed that to facili tate expeditious consideration thereof the Superintendent of Jails may be requested to forward the same to the detaining authority so that the Home Department can put up the case to the Minister for consideration.
It was further stated that ' the representation to the Central Government may be ad dressed to the Secretary, Government of India, Ministry of Finance (Department of Revenue), New Delhi through the Superintendent of Jail.
In the case of the Advisory Board the appellants were informed that the representation may be addressed to the Chairman, Advisory Board constituted under the Act and may be forwarded through the Superintendent of Jail.
On the basis of this advice contained in the grounds of detention the appellants preferred a representation addressed to the Detaining Authority and forwarded it through the Superintendent of Jail, Arther Road Central Prison, Bombay.
It is not necessary to state the various grounds made out in the representation for the revocation of the detention orders but it would suffice to reproduce the last paragraph of the representation.
That paragraph reads as under: "I would also like to request you that the copies of these representations be sent to the State and Central Govern 449 ment for their kind consideration in view of the above facts so as to revoke and/or set aside my order of detention and order my release forth with.
" It is not disputed that the representation was considered and rejected by the State GoVernment.
It was, however, not forwarded to the Central Government and hence the Central Government had no occasion to consider the representation of the appellants for the revocation of the detention orders.
As the detention orders were not revoked the appellants preferred separate habeas corpus writ petitions which were numbered Criminal Writ Petitions Nos.
530 31 of 1991 in the High Court of Bombay under Article 226 of the Constitution.
The High Court on a detailed consideration of the various contentions raised by the appellants dismissed both the writ petitions.
On the question whether the detention orders were vitiated as the Detaining Authority as well as the State Government had failed to forward their representations to the Central Government, the High Court answered in the negative for the reason that the detenus who had failed to follow the clear and specific instructions given in the grounds of detention regarding the manner and mode of ad dress to various authorities could not be allowed to reap the benefit of their own default.
On the question whether the fundamental right guaranteed by Article 22(5) of the Constitution was violated, the High Court observed as under: "So far we have not come across any authority of this court or of the Supreme Court wherein it has been ruled that despite this express communication to the detenu, if the detenu makes any representation, the Detaining Authority is under obligation under Article 22(5) of the Constitution to take out xerox copies of the same and forward to the State Government or the Central Government.
We are afraid, we cannot infer such obligation on the Detaining Authority or the State Govern ment under Article 22(5) of the Constitution.
But, however, it is advisable that upon re ceipt of such representation from the detenu, the Detaining Authority may immediately inform the detenu about the procedure that he has to follow in forwarding representations to the State Government, the Central Government or the Advisory Board against the order of deten tion.
" It is this view of the High Court which was vehemently challenged before us by learned counsel for the appellants.
In support of his contention counsel placed strong reliance on four decisions of this 450 Court reported in (i) Razia Umar Bakshi vs Union of India & Ors., ; (ii) Rattan Singh vs State of Punjab & Ors.
, ; (iii) Sat Pal vs State of Punjab & Ors., and (iv) Smt.
Gracy vs State of Kerala & Anr., JT On the other hand counsel for the State Government as well as the Central Government supported the view taken by the High Court and contended that the appellants cannot make a grievance if they have despite a clear direction in the grounds of deten tion chosen to deviate therefrom.
Once the procedure estab lished by law is followed by the respondents the failure on the part of the Detaining Authority or the State Government to accede to the request made by the appellants in the last paragraph of their representation to take out copies thereof and forward the same to the Central Government cannot viti ate the detention order.
It was further pointed out that a subsequent representation dated June 5, 1990 made to the Central Government was considered with despatch and was rejected on June 12, 1990.
We may at this stage state that we are not concerned with the subsequent representation.
The point which we have been called upon to consider is whether failure on the part of the Detaining Authority as well as the State Government to accede to the request of the appel lants to take out copies of the representations and forward the same to the Central Government for consideration has resulted in violation of their constitutional/statutory right to have their representation considered by the Central Government, and if yes, whether the detention orders are liable to be quashed on that ground.
The law of preventive detention is harsh to the person detained and, therefore, there can be no doubt that it must be strictly construed.
Article 22(3)(b) denies to a person who is arrested or detained under any law providing for preventive detention the protection of clauses (1) and (2) of the said Article.
Clause (4) thereof enjoins that the preventive detention law must conform to the limitations set out thereunder.
Clause (5) of Article 22 reads as under: "When any person is detained in pursuance of an order made under any law providing for preventive detention, the authority making the order shall, as soon as may be, communicate to such person the grounds on which the order has been made and shall afford him the earliest opportunity of making a representation against the order.
" This clause casts a dual obligation on the Detaining Author ity, namely, (i) to communicate to the detenu the grounds on which the 451 detention order has been made; and (ii) to afford to the detenu the earliest opportunity of making a representation against the detention order.
Consequently the failure to communicate the grounds promptly or to afford the detenu an opportunity of making a representation against the order would clearly violate the constitutional guarantee afforded to the detenu by clause (5) of Article 22 of the Constitu tion.
It is by virtue of this right conferred on the detenu that the Detaining Authority considers it a duty to inform the appellant detenu of his right to make a representation to the State Government, the Central Government and the Advisory Board.
The right to make a representation against the detention order thus flows from the constitutional guarantee enshrined in Article 22(5) which casts an obliga tion on the authority to ensure that the detenu is afforded an earliest opportunity to exercise that right, if he so desires.
The necessity of casting a dual obligation on the authority making the detention order is obviously to ac quaint the detenu of what had weighed with the Detaining Authority for exercising the extraordinary powers of deten tion without trial conferred by section 3(1) of the Act and to give the detenu an opportunity to point out any error in the exercise of that power so that the said authority gets an opportunity to undo the harm done by it, if at all, by correcting the error at the earliest point of time.
Once it is realised that Article 22(5) confers a right of represen tation, the next question is to whom must the representation be made.
The grounds of detention clearly inform the detenu that he can make a representation to the State Government, the Central Government as well as the Advisory Board.
There can be no doubt that the representation must be made to the authority which has the power to rescind or revoke the decision, if need be.
Our search for the authority must, therefore, take us to the statute since the answer cannot be found from Article 22(5) of the Constitution read in isola tion.
As pointed out earlier that clause casts an obligation on the authority making the detention order to afford to the detenu an earliest opportunity to make a representation against the detention order.
If we are to go by the state ment in the grounds of detention our search for that author ity would end since the grounds of detention themselves state the authorities to which the representation must be made.
The question must be answered in the context of the relevant provisions of the law.
Now as stated earlier by clause (5) of Article 22 a dual obligation is cast on the authority making the detention order one on which is to afford to the detenu an earliest opportunity of making a representation against the order which obligation has been met by informing the detenu in the grounds of detention to whom his representation should be addressed.
But the author ity to which the representation is addressed must have statutory backing.
In 452 order to trace the source for the statutory backing it would be advantageous to notice the scheme of the Act providing for preventive detention.
Section 2(b) defines a detention order to mean an order made under section 3.
Sub section (1) of section 3 empowers the Central Government or the State Government or any officer of the Central Government, not below the rank of a Joint Secretary to that Government, specially empowered for the purposes of this section by that Government, or any officer of a State Government, not below the rank of a Secretary to that Government, specially empow ered for the purposes of this section by that Government, to make an order of detention with respect to any person with a view to preventing him from acting in any manner prejudicial to the conservation or augmentation of foreign exchange or with a view to preventing him from doing any one of the five prejudicial acts enumerated thereunder.
Subsection (2) of that section provides that when any order of detention is made by a State Government or by an officer empowered by a State Government, the State Government shall, within ten days, forward to the Central Government a report in respect of the order.
It is evident from this provision that whenev er a detention order is made by the State Government or its officer specially empowered for that purpose an obligation is cast on the State Government to forward a report to the Central Government in respect of that order within ten days.
The purpose of this provision is clearly to enable the Central Government to keep an eye on the exercise of power under section 3(1) by the State Government or its officer.
Then comes sub section (3) which reads as under: "For the purposes of clause (5) of Article 22 of the Constitution, the communication to a person detained in pursuance of a detention order of the grounds on which the order has been made shall be made as soon as may be after the detention, but ordinarily not later than five days, and in exceptional circum stances and for reasons to be recorded in writing, not later than fifteen days, from the date of detention.
" This provision is clearly intended to meet the obligation cast by Article 22(5) that the grounds of detention shall be communicated 'as soon as may be '.
The legislation has, therefore, fixed the outer limit within which the grounds of detention must be communicated to the detenu.
Thus the first part of the obligation cast by Article 22(5) is met by section 3(3) of the Act.
Section 8 provides for the Consti tution of Advisory Boards.
This section is clearly to meet the obligation of 453 sub clause (a) of clause 4 and sub clause (c) of clause 7 of Article 22 of the Constitution.
Section 8(f) which has some relevance provides that in every case where the Advisory Board has reported that there is in its opinion sufficient cause for the detention of a person, the appropriate Govern ment may confirm the detention order and continue the deten tion of the person concerned for such period as it thinks fit and in every case where the Advisory Board has reported that there is in its opinion no sufficient cause for the detention of the person concerned, the appropriate Govern ment shall revoke the detention order and cause the person to be released forthwith.
This provision clearly obliges the appropriate Government to order revocation of the detention order if the Advisory Board reports want of sufficient cause for detention of that person.
Then comes section 11 which reads as under: "Revocation of detention orders (1) Without prejudice to the provisions of section 21 of the , a detention order may, at any time, be revoked or modified (a) notwithstanding that the order has been made by an officer of a State Government, by that State Government or by the Central Gov ernment.
(b) notwithstanding that the order has been made by an officer of the Central Government or by a State Government, by the Central Government.
" Sub section (2) is not relevant for our purpose.
It is obvious from a plain reading of the two clauses of sub section (1) of section 11 that where an order is made by an officer of the State Government, the State Government as well as the Central Government are empowered to revoke the detention order.
Where, however, the detention order is passed by an officer of the Central Government or a State Government, the Central Government is empowered to revoke the detention order.
Now this provision is clearly without prejudice to section 21 of the which lays down that where by any Central Act a power to issue orders is conferred, then that power includes a power, exercisable in the like manner and subject to the like sanction and conditions, if any, to rescind any order so issued.
Plainly the authority which has passed the order under any Central Act is empowered by this provision to rescind the order in like manner.
This provision when read in the context of section 11 of the Act makes it 454 clear that the power to rescind conferred on the authority making the detention order by section 21 of the is saved and is not taken away.
Under section 11 an officer of the State Government or that of the Central Government specially empowered under section 3(1) of the Act to make a detention order is not conferred the power to revoke it; that power for those officers has to be traced to section 21 of the .
Therefore, where an officer of the State Government or the Central Government has passed any detention order and on receipt of a represen tation he is convinced that the detention order needs to be revoked he can do so by virtue of section 21 of the since section 11 of the Act does not entitle him to do so.
If the State Government passes an order of deten tion and later desires to revoke it, whether upon receipt of a representation from the detenu or otherwise, it would be entitled to do so under section 21 of the but if the Central Government desires to revoke any order passed by the State Government or its officer it can do so only under clause (b) of Section 11(1) of the Act and not under section 21 of the .
This clari fies why the power under section 11 is conferred without prejudice to the provisions of section 21 of the .
Thus on a conjoint reading of section 21 of the and section 11 of the Act it becomes clear that the power of revocation can be exercised by three authorities, namely, the officer of the State Government or the Central Government, the State Government as well as the Central Government.
The power of revocation conferred by section 8(f) on the appropriate Government is clearly inde pendent of this power.
It is thus clear that section 8(f) of the Act satisfies the requirement of Article 22(4) whereas section 11 of the Act satisfies the requirement of the latter part of Article 22(5) of the Constitution.
The statu tory provisions, therefore, when read in the context of the relevant clauses of Article 22, make it clear that they are intended to satisfy the constitutional requirements and provide for enforcement of the right conferred on the detenu to represent against his detention order.
Viewed in this perspective it cannot be said that the power conferred by section 11 of the Act has no relation whatsoever with the constitutional obligation cast by Article 22(5).
We may now turn to the case law on which reliance was placed.
In Razia Umar 's case, section Murtaza Fazal Ali, J. sitting singly during vacation was concerned with a more or less similar situation.
In that case a detention order was passed by the State Government against which the detenu had made a representation to the said Government.
By that repre sentation he also prayed that his representation may be 455 forwarded to the Central Government for being considered.
That representation was disposed of by the State Government but it was not forwarded to the Central Government, notwith standing the specific prayer of the detenu.
The defence taken was that the detenu had himself sent a copy of his representation to the Central Government and, therefore, the Detaining Authority did not consider it necessary to forward the representation to the Central Government.
The defence of the State Government was held to be wholly unacceptable on the following line of reasoning: "Section 11 of the Act confers a constitution al right on the detenu to have his representa tion considered by the Central Government.
It is true that the Central Government has a discretion to revoke or confirm the detention but the detenu has undoubtedly a right that his representation should be considered by the Central Government for whatever worth it is.
The mere fact that the detenu had sent a copy to the Central Government does not absolve the detaining authority from the statutory duty of forwarding the representation to the Central Government." (Emphasis supplied) This observation would show that the power of revocation conferred by section 11 of the Act has a nexus with the fight of representation conferred on the detenu by Article 22(5) and, therefore, the State Government when requested to forward a copy of the representation to the Central Govern ment is under an obligation to do so.
The learned counsel for the appellant further pointed out that our case stands on a stronger footing because, admittedly, the appellants had not forwarded a copy of their representation to the Central Government as in Razia Umar 's case.
The High Court distinguished this decision on the ground that the facts of Razia Umar 's case reveal that the detenu had sent a separate representation to the Detaining Authori ty with a request to forward the same to the State Govern ment and the Central Government whereas in our case only one representation was sent to the Detaining Authority with a request that copies thereof be taken out and sent to the State Government as well as the Central Government for their consideration.
With respect, this distinction has nothing to do with the ratio of the decision; if at all, as rightly pointed out counsel for the appellants, the facts of this case are stronger than those of Razia Umar 's case.
456 In Rattan Singh 's case the facts reveal that the detenu had written a letter to the Superintendent of Central Jail, Amritsar, enclosing therewith two representations one of which was addressed to the Joint Secretary, Department of Home, Government of Punjab, Chandigarh, and the other to the Secretary, Union Ministry of Finance, Department of Revenue, New Delhi.
The Jail Superintendent was requested to forward the representations to the State Government as well as the Central Government.
In the counter filed on behalf of the Central Government it was stated that no representation by or on behalf of the detenu had been received by the Central Government.
It was contended that failure to forward the representation to the Central Government and the consequent failure of the Central Government to apply its mind to the representation vitiated the detention order.
This Court held that the detenu was unaccountably deprived of a valuable right to defend and assert his fundamental right to personal liberty.
Chandrachud.
who spoke for the three Judge Bench, observed as under: "But the laws of preventive detention afford only a modicum of safeguards to persons de tained under them and if freedom and liberty are to have any meaning in our democratic set up, it is essential that at least those safe guards are not denied to the detenus.
Section 11(1) of COFEPOSA confers upon the Central Government the power to revoke an order of detention even if it is made by the State Government or its officer.
That power, in order to be real and effective, must imply the right in a detenu to make a representation to the Central Government against the order of detention.
The failure in this case on the part either of the Jail Superintendent or the State Government to forward the detenu 's representation to the Central Government has deprived the detenu of the valuable right to have his detention revoked by that Government.
The continued detention of the detenu must, therefore, be held illegal and the detenu set free.
" In taking this view reliance was placed on an earlier deci sion of this Court in Tara Chand vs State of Rajasthan, In Sat Pal 's case also counsel for the detenu had for warded two representations one meant for the Central Govern ment and other for the State Government for exercise of power under section 11 of the Act.
The Jail Superintendent who was requested by a forwarding letter 457 to sent the representations to the appropriate Governments after obtaining the signatures of the detenu thereon for warded them to the Joint Secretary in the State Government with an endorsement that one of them may be forwarded to the Central Government.
The representation of the detenu to the Central Government was not forwarded to that Government by the State Government promptly.
It was; therefore, contended that the detention order was rendered illegal and liable to be quashed.
Dealing with this contention this Court observed that the making of an application for revocation of the order of detention by the Central Government under section 11 of the Act is part of the constitutional right a citizen has against his detention under a law relating to preventive detention.
It was, therefore, observed: "It is, therefore, idle to contend that this State Government had no duty to forward the representation made by the detenu to the Central Government for revocation of his order of detention under section 11 of the Act." In taking this view the Court placed reliance on Rattan Singh 's case Gracy 's case may not be entirely apposite because the question which the court was required to consider in that case was that the representation made to the Advisory Board was not taken into consideration by the Central Government after the papers were laid before it with the opinion of the Advisory Board that there was sufficient cause to justify the preventive detention.
That was, therefore, a case in which the representation was very much before the Central Government and it failed to consider the same before con firming and fixing the duration of the detention order.
In that case, therefore, the question for consideration was whether it was incumbent on the part of the Central Govern ment to consider a representation addressed to the Advisory Board notwithstanding its rejection by the Advisory Board.
Such is not the question before us but counsel for the appellants invited our attention to certain observations made in paragraphs 8 and 9 which indicate that the detenu 's right for consideration of his representation by the Central Government flows from Article 22(5), irrespective of the fact whether the representation is addressed to the Detain ing Authority or to the Advisory Board or both.
These obser vations though made in a different fact situation do support the submission made on behalf of the appellants.
But counsel for the respondents argued that the observations were too broadly stated.
It is not necessary for us to examine this contention as the earlier decisions are sufficient to uphold the appellants ' contention.
458 In the case before us the facts.clearly show that the appellants had made a request to the Detaining Authority to take out copies of his representation and forward them to the State Government as well as the Central Government for consideration.
Counsel for the Detaining Authority as well as the State Government contended that no such duty was cast on the said respondents to take out copies and forward them to the Central Government for consideration.
Counsel for the Union of India contended that since no such representation had reached the Central Government there was no question of the Central Government applying its mind thereto and taking a decision thereon.
In support, reliance was placed on Phil lippa Anne Duke vs The State of Tamil Nadu & Ors., ; a judgment rendered by O. Chinnappa Reddy, J. sit ting singly.
In that case the two petitioners who were British nationals were detained for smuggling electric equipments and goods secreted in specially made compart ments/cavities of their Mercedez Benz Van.
Representations were presented on their behalf to the Prime Minister of India during her visit to England.
No decision was taken on those representations and hence it was contended that the detention orders deserved to be quashed.
This Court held that representation from whatever source addressed to whoso ever officer of one or other department of the Government cannot be treated as representations under the Act.
It was further held that the Bout De Papier presented to the Prime Minister of India during her visit to Britain and the subse quent reminder addressed to the External Affairs Ministry could not be treated as representations to the Central Government.
It is, therefore, obvious that this decision turned on its special facts and is no authority for the proposition that the Detaining Authority or the State Gov ernment was under no obligation to forward the representa tions to the Central Government.
It must be realised that when a person is placed under detention he has certain handicaps and if he makes a request that a representation prepared by him may be forwarded to the Central Government as well as the State Government for consideration after taking out copies thereof it would be a denial of his right to represent to the Central Government if the Detaining Authority as well as the State Government refuse to accede to his request and omit to forward his representation to the Central Government for consideration.
It is difficult to understand why such a technical and rigid view should be taken by the concerned authorities in matters of personal liberty where a person is kept in preventive detention without trial.
Detenus may be literate or illiter ate, they may have access to legal advice or otherwise, they may or may not be in a position to prepare more than one copy of the 459 representation and if they make a request to the authorities which have the facilities to take out copies to do so and forward them for consideration to the Central Government, would it be just and fair to refuse to do so? In such cir cumstances refusal to accede to their request would be wholly unreasonable and in total disregard of the right conferred on the detenu by Article 22(5) of the Constitution read with section 11 of the Act.
We are, therefore, of the opinion that the Detaining Authority as well as the State Government were not justified in taking a hyper technical stand that they were under no obligation to take out copies of the representations and forward them to the Central Government.
We think that this approach on the part of the Detaining Authority and the State Government has robbed the appellants of their constitutional right under Article 22(5) read with section 11 of the Act to have their representation considered by the Central Government.
The request of the detenus was not unreasonable On the contrary the action of the Detaining Authority and the State Government was unrea sonable and resulted in a denial of the appellants ' consti tutional right.
The impugned detention orders are, there fore, liable to be quashed.
In the result we allow these appeals, set aside the order of the High Court and quash the detention orders on this single ground.
We direct that both the appellants who are in detention shall be set free at once unless they are required in any other pending matter.
PUNCHHI, J.
I agree to the release of the detenus, but in the facts and circumstances of the case.
I have reserva tions to section 11 of the being treated part of the constitutional guarantee under Article 22(5) of the Constitution of India.
Section 11 of the Act does not confer any constitutional right on the detenu to have his representation thereunder considered as if under Article 22(5), but merely a provision enabling the State Government or the Central Government, as the case may be, to revoke or modify detention orders.
Have section 11 of the Act repealed, it causes no affectation to the constitutional guarantee under Article 22(5) of the Constitution.
Corre spondingly, section 11 of the Act derives no sustenance from the said Article.
Both operate in mutually exclusive fields, though not as combatants.
Both the detenus may be set free as proposed by my learned brother, A.M. Ahmadi, J. V.P.R. Appeals allowed.
| On March 25, 1990, the officers of the Directorate of Revenue Intelligence intercepted a motor car driven by the appellant No. 1 with the other appellant as his companion and recovered 1400 gold bars.
The statements of the two appellants were recorded and they were formally arrested on March 28, 1990 and produced before the Chief Metropolitan Magistrate, who granted re mand.
While the matter was under investigation, a proposal was made to the first respondent Secretary (Preventive Deten tion), Government of Maharashtra for invoking the powers conferred on him by Section 3 of the .
On the very next day after the receipt of the proposal the first respondent passed the orders of detention against the two appellants under sub section (1) of section 3 of the Act.
After these detention orders were passed on April 24, 1990 they were served on the appellants along with the grounds of detention and basic documents on which reliance was placed.
The appellants were informed that they had a right to make a representation to (i) the State 444 Government; (ii) the Central Government; and (iii) the Advisory Board against the detention order, if they so desired.
They were informed that to facilitate expeditious consideration thereof, 'the Superintendent of Jails may be requested to forward the same to the detaining authority.
The appellants preferred a representation addressed to the Detaining Authority and forwarded it through the Superin tendent of Jail.
In the last paragraph of that representa tion a request was made that copies of the representation may be taken out and the same may be forwarded to the State Govt.
and the Central Govt.
The representation was considered and rejected by the State Government.
It was, however, not forwarded to the Central Government and hence the Central Government had no occasion to consider the representation of the appellants for the revocation of the detention orders.
As the detention orders were not revoked the appellants preferred separate habeas corpus writ petitions in the High Court which dismissed both the writ petitions, answering in negative on the question whether the detention orders were vitiated as the Detaining Authority as well as the State Government had failed to forward their representations to the Central Government for the reason that the detenus who had failed to follow the clear and specific instructions given in the grounds of detention regarding the manner and mode of address to various authorities, could not be allowed to reap the benefit of their own default.
This view of the High Court was challenged before this Court by the appellants.
The State Government as well as the Central Government supported the view taken by the High Court contending that the appellants cannot make a grievance if they have despite a clear direction in the grounds of detention chosen to deviate therefrom.
Once the procedure established by law is followed by the respondents the failure on the part of the Detaining Authority or the State Government to accede to the request made by the appellants in the last paragraph of their representations to take out copies thereof and forward the same to the Central Government cannot vitiate the deten tion order.
The Union of India contended that since no representa tion had reached the Central Government there was no ques tion of the Central Government applying its mind thereto and taking a decision thereon.
445 On the question whether failure on the part of the Detaining Authority as well as the State Government to accede to the request of the appellants to take out copies of the representations and forward the same to the Central Government for consideration has resulted in violation of their considerational/statutory right to have their repre sentation considered by the Central Government, and if yes, whether the detention orders are liable to be quashed on that ground, allowing the appeals, this Court, HELD: 1.
The Detaining Authority as well as the State Government were not justified in taking a hypertechnical stand that they were under no obligation to take out copies of the representations and forward them to the Central Government.
Such action of the Detaining Authority and the State Government was unreasonable and resulted in a denial of the appellants ' constitutional right.
The impugned deten tion orders are liable to be quashed and directed that the appellants, who were in detention, to be set free.
[459B E] Per A.M. Ahmadi, J. on his behalf himself and V. Ramas wami, J. 1.
Article 22(3)(b) (5) casts a dual obligation on the Detaining Authority, namely, (i) to communicate to the detenu the grounds on which the detention order has been made; and (ii) to afford to the detenu the earliest opportu nity of making a representation against the detention order.
Consequently the failure to communicate the grounds promptly or to afford the detenu an opportunity of making a represen tation against the order would clearly violate the constitu tional guarantee afforded to the detenu by clause (5) of Article 22 of the Constitution.
It ' is by virtue of this right conferred on the detenu that the Detaining Authority considers it a duty to inform the appellant detenu of his right to make a representation to the State Government, the Central Government and the Advisory Board.
The right to make a representation against the detention order thus flows from the constitutional guarantee enshrined in Article 22(5) which casts an obligation on the authority to ensure that the detenu is afforded an earliest opportunity to exercise that right, if he so desires.
[450H 451C] 2.
The necessity of casting a dual obligation on the authority making the detention order is obviously to ac quaint the detenu of what had weighed with the Detaining Authority for exercising the extraordinary powers of deten tion without trial conferred by section 3(1) of the Act and to give the detenu an opportunity to point out any error in the exercise of that power so that the said authority gets an opportunity to undo the harm done by it, if at all, by correcting the error at the earliest point of time.
[451C D] 446 3.
Under section 11 an officer of the State Government or that of the Central Government specially empowered under section 3(1) of the Act to make a detention order is not conferred the power to revoke it; that power for those officers has to be traced to section 21 of the General Clauses Act.
Therefore, where an officer of the State Gov ernment or the Central Government has passed any detention order and on receipt of a representation he is convinced that the detention order needs to be revoked he can do so by virtue of section 21 of the General Clauses Act since sec tion 11 of the Act does not entitle him to do so.
[454A C] 4.
If the State Government passes an order of detention and later desires to revoke it, whether upon receipt of a representation from the detenu or otherwise, it would be entitled to do so under section 21 of the General Clauses Act but if the Central Government desires to revoke any order passed by the State Government or its officer it can do so only under clause (b) of Section 11(1) of the Act and not under section 21 of the General Clauses Act.
[454C D] 5.
On a conjoint reading of section 21 of the General Clauses Act and section 11 of the Act it becomes clear that the power of revocation can be exercised by three authori ties, namely, the officer of the State Government or the Central Government, the State Government as well as the Central Government.
The power of revocation conferred by section 8(f) on the appropriate Government is clearly inde pendent of this power.
It is thus clear that section 8(f) of the Act satisfies the requirement of Article 22(4) whereas section 11 of the Act satisfies the requirement of the latter part of Article 22(5) of the Constitution.
The statu tory provisions, therefore, when read in the context of the relevant clauses of Article 22, make it clear that they are intended to satisfy the constitutional requirements and provide for enforcement of the right conferred on the detenu to represent against his detention order.
Viewed in this perspective it cannot be said that the power conferred by section 11 of the Act has no relation whatsoever with the constitutional obligation cast by Article 22(5).
[454D G] 6.
It must be realised that when a person is placed under detention he has certain handicaps and if he makes a request that a representation prepared by him may be for warded to the Central Government as well as the State Gov ernment for consideration after taking out copies thereof it would be a denial of his right to represent to the Central Government if the Detaining Authority as well as the State Government refuse to accede to his request and omit to forward his 447 representation to the Central Government for consideration.
In such circumstances refusal to accede to their request would be wholly unreasonable and in total disregard of the right conferred on the detenu by Article 22(5) of the Con stitution read with section 11 of the Act.
[458F G, 459B] Razia Umar Bakshi vs Union of India & Ors., ; Rattan Singh vs State of Punjab & Ors., ; Sat Pal vs State of Punjab & Ors., and Smt.
Gracy vs State of Kerala & Anr., JT ; Tara Chand vs State of Rajasthan, ; referred to.
Per M.M. Punchhi, J. 1.
Section 11 of the Act does not confer any constitutional right on the detenu to have his representation thereunder considered as if under Article 22(5), but merely a provision enabling the State Government or the Central Government, as the case may be, to revoke or modify detention orders.
Have section 11 of the Act re pealed, it causes no affectation to the constitutional guarantee under Article 22(5) of the Constitution.
Corre spondingly, section 11 of the Act derives no sustenance from the said Article.
Both operate in mutually exclusive fields, though not as combatants.
[459F G]
|
l Appeal No. 1036 of 1976.
551 From the Judgment and Order dated 11.6.1975 of the Kerala High Court in Appeal Suit No. 764 of 1972.
T.T. Kunhikannan for the Appellant.
section Padmanabhan and E.M.S. Anam for the Respondent.
The Judgment of the Court was delivered by K. RAMASWAMY, J.
This appeal by special leave is against the judgment and decree of the Kerala High Court dated June 11, 1975 made in A.S. No. 764 of 1972.
The notification under section 3 of the Kerala Land Acquisition Act, 1961 (Act 21 of 1962) was published in the Gazette on February 28, 1967 acquiring six acres of land in the city Of Calicut to construct staff quarters of P & T of Govt.
of India.
The Land Acquisition Officer by award dated February 29, 1969 awarded compensation @ Rs.230 per cent and also the value of the trees by capitalisation method in a sum of Rs.2,69,421.55 p. towards the land improvement together with 15 per cent solatium and 4 per cent interest.
On reference, the Civil Court enhanced the market value by judgment and award dated February 9, 1972 at Rs.500 per cent i.e., in total Rs.3,00,000 towards land value and confirmed the award of the Land Acquisition Officer of 2,69,421.55 p. towards land improvement making in all 5,69,421.55 p. with solatium at 15 per cent and interest at 4 per.
cent from the date of dispossession.
In the appeal by the State against the en hanced compensation, it was contended that the Civil Court committed grave error in fixing market value separately to the land and the trees on capitalisation basis to make up the compensation.
That contention was found favour with the High Court and it set aside the award of the Civil Court of the value of the land of Rs.3,00,000 and confirmed the award of Rs.2,69,421.55.
Calling in question the reversing decree of the High Court, this appeal has been filed.
Two contentions have been raised by Shri Padmanabhan, the learned senior counsel for the appellant.
Firstly he argued that there is an intensive cultivation in the ac quired land not only of the fruit bearing trees therein but also using the vacant space for other short term crops to establish which the appellant sought remand to the Civil Court to adduce additional evidence under Order 41 of Rule 27 etc.
The High Court had wrongly rejected the request for additional evidence.
we find no force in the contention.
It was not the case that the appellant was prevented to adduce evidence in this behalf.
Remand 552 under order 41 Rule 27, C.P.C cannot be made to adduce fresh evidence, when though available but was not adduced.
Even otherwise it was further argued that the land and the trees together constitute the value of the acquired lands and so are separately valued which would reflect the true and correct market value.
The Civil Court has correctly adopted the method and the High Court is unjustified in interfering with.the award of the Civil Court; It is also further contended that the land possessed of potential value as building sites and, therefore, the reliance by the Civil Court on exhibit A. 1 dated February 19, 1964 which worked out at Rs.400 per cent and exhibit A. 2 dated February 17, 1967 under which 14 were purchased worked out at Rs.556 percent and award of market value @ Rs.500 per cent by the Civil Court was not illegal.
exhibit B. 1 under which Rs.230 per cent accepted as claimed by the State cannot be relied upon as the document dated June 3, 1966 does not relate to the lands in the neighbourhood.
Admittedly they are situated six furlongs away from the limits of Calicut city and one mile from the acquired lands.
On the other hand, the lands under exhibit A. 1 and A. 2 are situated one furlong from the acquired lands.
Therefore, they provide the comparable sales for fixation of market value.
The second contention is that the appellant is entitled to 30 per cent solatium under section 23(2) of the Land Acquisition Act 1 of 1894 as amended under the Land Acquisition Amendment Act 68 of 1984.
The learned counsel appearing for the State has resisted the conten tions.
He argued that exhibit A. 1 and A. 2 relate to small extent of 5 cents and 14 cents together with the buildings situated therein.
Therefore, when a large extent of six acres was acquired they offer no comparable price.
Small plots always fetch higher price and that, therefore, they cannot form same basis to fix the market value at Rs.500 per cent.
He also further contended that the lands and the trees cannot be valued separately.
The court should adopt only either the value of the, land or income of the trees with suitable multiplier but not both.
The High Court is, there fore, well justified in rejecting the sale deeds and the total valuation and confirmed the capitalisation method of valuation.
He also contended that the Land Acquisition Act, 1894 and 1984 Amendment Act have no application since acqui sition proceedings were admittedly taken under the Kerala Land Acquisition Act.
The crucial question, therefore, is what is the proper method of valuation of the land in question.
The total extent of the land is six acres consisting of 1130 coconut trees; 65 arecanut trees and 45 pepper wines.
The Civil Court fixed the market value of the lands at 553 Rs.3,00,000.
Admittedly, the appellant did not file any cross objections in the High Court seeking any higher com pensation.
Accordingly the market value of the lands fixed at Rs.3,00,000 became final.
The fixation of the market value on capitalisation method also became final.
It is settled law that the methods of valuation to be adopted in ascertaining the market value of the land as on the date of the notification are: (i) opinion of experts (ii) the price paid within a reasonable time in bona fide transaction Of the purchase or sate of the lands acquired or the lands adjacent to the lands acquired and possessing similar advan tages and (iii) a number of years purchase of the actual or immediately prospective profits of the lands acquired.
These methods, however, do not preclude the court from taking any other special circumstances obtained in an appropriate case into consideration.
As the object being always to arrive as near as possible in an estimate of the market value in arriving at a reasonable correct market value, it may be necessary to take even two or all those matters into account inasmuch as the exact valuation is not always possible as tow lands may be the same either in respect of the situation or the extent or the potentiality nor is it possible in all cases to have reliable material from which that valuation can be accurately determined.
In State of Kerala vs
P.P. Hassan Koya; , the question arose whether the separate valuation of the land and building would be proper method to be adopted to determine the market value of the acquired property. ' This Court held that "the land and the building constitute one unit" and the value of "the entire unit must be determined with all its advantages" and poten tialities.
When the property is sold with building it is often difficult to have sale of single land with building approximately in time to the date of the notification.
Therefore, the, method which is to be adopted in determining the value of the land and building is the method of capital isation of return actually received or which might reasona bly be received from the land or the building separate valuation of the land and building was not approved and the annual rent received with the proper capitalisation was adopted by the courts below was approved by this Court.
In Special Land Acquisition Officer v.P. Veerabhadrappa, etc.
; , this court held that the method of valuation by capitalisation should not be resorted to when other methods are available.
However, where definite materi al is not forthcoming either in the shape of sales of simi lar lands in the neighbourhood at or about the, date of notification under section 4(1) or otherwise,.
the court has no other alternative but to fall back on the method of valua tion by capitalisation.
In valuing land or an interest in land for purposes of land acquisition proceedings, the rule as to number of years purchase is not a theoretical or legal rule but depends 554 upon economic factors such as the prevailing rate of inter est in money investments.
The return which an investor will expect from an investment will depend upon the characteris tic of income as compared to that of idle security.
The main features are: (1) security of the income; (2) fluctuation; (3) chances of increase; (4) cost of collection; etc.
The traditional view of capitalised value being linked with gilt edged securities, no longer be.
rigorous when invest ment in fixed deposits with nationalised banks, National Savings Certificates, Unit ' Trusts and other forms of Govt.
securities and even in the share market command a much greater return are available.
The capital in agricultural lands normally when the rate of return on investment was 8.25per cent in the years.
1971 72, the proper multiplier to be applied for the purpose of capitialisation would not, in any event, exceeding 10 per cent.
In that case the State had agreed to apply 12 1/2 per cent capitalised value of the lands, this court upheld capitalisation of the value of land at 12 1/2 per cent In Admn.
General of West Bengal vs Collector, Varanasi, ; this ' Court held that usually land and building there9n constitute one unit.
Land is one kind of property; land and building ' together constitute an alto gether different kind of property.
They must be valued as one unit.
But where, however, the property comprises exten sive land and the structure standing thereon, do not show that full utilization of potential of the land realised, it might not be impermissible to value the property estimating separately the market value of the land with reference to the date of the preliminary notification and to add to it the value of the structures as at that time.
In this method, building value is estimated on the basis of the prime cost or replacement cost less depriciation.
The rate of depricia tion, generally, arrived at by dividing the cost of con struction '(less the salvage valued at the end of the period of utility) by the number of years of utility of the build ing.
The factors that prolong the life and the utility of the building, such as good maintenance, necessarily influ ence and bring down the rate of depreciation.
In that case larger extent of 23.66 acres together with building of 25,000 sq.
feets comprises of 35 rooms,halls and other appurtenances, and 43 1 fruit bearing and 13 timber trees and 12 bamboo clumps situated in the city of Varanasi were acquired.
With regard to the value of the trees, this Court held that where the land is valued with reference to the potentiality for building purposes the trees on the land cannot be valued independently on the basis of its horticul tural value or with reference to the value of the yield but this principle does not come in the way of awarding the timber value after deducting costs for cutting and removing them from the lands as salvage value.
555 It is thus settled law that in evaluating the market value of the acquired property, namely, land and the build ing or the lands with fruit bearing trees standing thereon, value of both would not constitute one unit; but separate units; it would be open to the Land Acquisition Officer or the court either to assess the lands with all its advantages as potential value and fix the market value thereof or where there is reliable and acceptable ' evidence available, on record of the annual income of the fruit bearing trees the annual net income multiplied by appropriate capitalisation of 15 years would be the proper and fair method to determine the market value but not both.
In the former case the trees are to be separately valued as timber and to deduct salvage expenses to cut and remove the trees from the land.
In this case the award of compensation was based on both the value of the land and trees.
Accordingly the determination of the compensation of the land as well as the trees is illegal.
The High Court laid the law correctly.
It is seen that exhibit B. 1 relied on by the State was rejected by both the courts and, therefore, it cannot offer any reasonable basis to fix the market value of the land.
It is 'equally seen that exhibit A. 1 and A. 2 relate to small extent of land together with buildings standing thereon.
Therefore, they too do not also form any reasonable basis Or guide to determine market value of large extent of six acres of the acquired land.
The High Court rightly did not place reliance therein.
But from the evidence it is clear, as found by the Civil Court, that the lands possessed of poten tial value as building sites as the lands are situated in the city itself.
There was all round development around the lands.
The lands are situated half a furlong from the Bom bay Kanyakumari National Highway.
It also abutts the road to Naduvattom, a busy bus route within the Corporation, Cali cut.
It is situated nearby the industrial area.
The Western India Steel Mill, the Premier Steel Mills, Arts and Science College, Cinema Theatre, Police Station and other offices are situated in close proximity to the lands and that, therefore, the lands are possessed of potential value but unfortunately the appellant did not place any material of the prevailing prices as house sites.
However, the value of the land as fixed at Rs.3,00,000 became final.
The market value of the income from the trees with 15 years multiplier was ' worked out at Rs.2,69,42 1.55 p. by the Civil Court and the High Court accepted to be the correct valuation and it was also not questioned.
But it is lesser than the value of the land.
Being higher in value the appellant is entitled to the value of the land as determined by the Civil Cout at Rs.3,00,000 (three lakhs) in total.
The value of the trees as fire wood shall be determined towards compensation.
We have noted the number of coconut trees etc.
The learned counsel has left to this Court 556 to fix any reasonable compensation and On the totality of the facts and circumstances we are of the opinion that total sum of Rs. 10,000 would be reasonable compensation towards the value of the total trees as fire wood or as for use of other purposes after deducting salvage expenses.
Accordingly we hold that the appellant is entitled to total cOmpensation of Rs.3,10,000.
Admittedly, the appellant is entitled to solatium at 15 percent and 4 per cent interest under the Kerala Land Acqui sition Act.
Section 30 sub section (1) of the Land Acquisi tion Amendment Act 68 of 1984 reads thus: "Transitional Provisions (1) the provisions of sub section (1A) of section 23 of the Principal Act, as inserted by Clause (a) of section 15 of this Act, shall apply, and shall be deemed to have applied, also to, and in relation to, (a) every proceeding for the acquisition of any land under the principal Act pending on the 30th day of April, 1982 (the date of introduction of the Land Acquisition (Amend ment) Bill, 1982, in the House of People), in which no award has been made by the Collector before that date; (b) every proceeding for the acquisition of any land under the principal Act commenced after that date, whether or not an award has been made by the Collector before the com mencement of this Act".
(2) "The provisions of sub section, (2) of section 23 and section 28 of the principal Act, as amended by CI.
(b) of section 15 and section 18 of this Act respectively, shall apply, and shall be deemed to have applied, also to, and in relation to, any award made by the Collector or Court or to any order passed by the High Court or Supreme Court in appeal against any such award ' under the provisions of the, principal Act later the 30th day of April, 1982.
(the date of introduction of the Land Acquisition (Amend ment) Bill, 1932, in the House of the People) and before the commencement of this Act".
A reading of the provisions would reveal the legisla tive intendment that the transitional provisions could apply to every proceeding for acquisition of any land under the principal Act, namely, Act 1 of 1894 (Central Act), pending on the 30th day of April, 1982, 557 namely, the date of introduction of the Land Acquisi tion (Amendment) Bill, 2982 in the House of the People; in which no award has been made by the Collector before.
that date or the award made by the.
Civil Court at the date of the Amendment Act, namely, September 24, ,1984.
Thus it is clear that 'the Amendment Act 68 of 1984 including sub section (2) section 23 per se is inapplicable to the acquisition of the land under the Kerala Land Acquisition Act, 1961.
In Kanthitnathy Plantation Pvt. Ltd. vs State.
of Kerala & Ors., this Court held that,by operation of the Land Acquisition (Amendment) Act 68 of 1984 read with Art 254 of the Constitution, the Kerala Land Acquisition Act, 1961 by necessary implication stood repealed, in its application to the State of Kerala and that the Land Acqui sition Act 1 of 1984 as amended by Central Act 68 of 1984 stands applicable.
Therefore, the proceedings ' under the Kerala Act being pending proceedings would be continued from the stage at which they stood at.
Shri Padmanabhan then.contends that the ratio in Union of India & Ors.
vs Filip Tiago De Game of Veden Vasco De Gama, [1990] 1 SCC 277 would attract the facts in this case and the appellant is entitled to 30 per cent solatium under the amended Act.
We are afraid we cannot accede to this contention.
The admit ted facts in this case are that the award was made by the Collector on February 29, 1969.
On reference the Civil Court made the award on February 9, 1972.
In Filip Tiago 's case the award was made on March 5, 1969 and the Civil Court on reference under section 18 made its award on May 28, 1985.
In the light of those facts, this Court by processual interpretation of transitional provision of section 30(2) avoided injustice by eschewing literal construction and advanced justice by mending the law.
The ratio is clearly distin guishable.
In Union of India & Anr.
vs Raghubir Singh (dead) by Lrs.
; , a Constitution Bench of this Court, to resolve the conflict of decisions as to the 'applicability of the Amendment Act to pending appeals in the High Court and in this Court, held authoritatively that the award made by the Collector referred to in section 30(2) is an award made under section 11 of the Parent Act and the award made by the Principal Civil Court of original juris diction under section 23 of the Parent Act, on reference made to it by the Collector under section 18 of the Parent Act.
There can, therefore, be no doubt that the benefit of enhanced solatium intended by section 30(2) is in respect of an award made by the Collector between April 30, 1982 and September 24, 1984.
Likewise the benefit of the enhanced solatium is extended by section 30(2) to the case of an award made by the Civil Court between April 30, 1982 and September 24, 1984 even though it be upon reference from the award made before April 30, 1982.
Thus it was held that the pend ency of the appeals against the 558 award made preceding the aforestated two dates in the High Court or this Court would not attract the application of section 30(2) and that, therefore, enhanced solatium under section 30(2) read with section 23(2) is inapplicable.
Thereby, the appellant is not entitled to enhanced solatium at 30 per cent.
As regards interest is concerned it is fairly conceded that the claimant is entitled only to 4 per cent as awarded by the courts below.
Accordingly we allow the appeal, set aside the judgment of the High Court and hold that the appellant is entitled to Rs.3,10,000 as enhanced compensation with 15 per cent sola tium and interest at 4 per cent on enhanced market value from the date of dispossession.
The appeal is accordingly allowed with costs of this Court.
V.P.R. Appeal al lowed.
| The notification under section 3 of the Kerala Land Acquisition Act, 1961 (Act 21 of 1962) was published in the Gazette on February 28, 1967 acquiring six acres of land to construct staff quarters of P & T of Govt.
of India.
The Land Acquisition Officer awarded compensation @ Rs.2.30 per cent and also the value of the trees by capital isation method in a sum of Rs.2,69,421.55 p. towards the land improvement together with 15 per cent solatium and 4 per cent interest.
On reference, the Civil Court enhanced the market value at Rs.500 per cent, i.e., in total Rs.3,00,000 towards land value and confirmed the award of the Land Acquisition Offi cer of 2,69,421.55 p. towards land improvement.
making in all 5,69,421.55 p. with solatium at 15 per cent and interest at 4 per cent from the date of dispossession.
The appeal by the State was allowed by the High Court.
Calling in question the reversing decree of the High Court, this appeal has been filed by the claimant contending that there was an intensive cultivation in the acquired land not only of the fruit hearing trees therein but also using the vacant space for other short term crops to establish, which the appellant sought remand to the Civil Court to adduce additional evidence under Order 41 of Rule 27 etc., which request the High Court had wrongly rejected; that the appellant was entitled to 30 per cent solatium under section 23(2) of the Land Acquisition as amended under the Land Acquisition Amendment Act 68 of 1984; and that the land and the trees together constitute the value of the acquired lands and so were separately valued which would reflect the correct market value, which method the Civil Court had correctly adopted.
The State contended that the lands and.
the trees cannot be valued separately; and that the Laud Acquisitiou Act, 1894 and 1984 Amendment Act have no application since acqui sition proceedings were admittedly taken under.
the Kerala Land ACquisition Act.
On the question, what is the proper method of valuation of the land, this Court, allowing the claimant 's appeal, HELD.1.
The methods of valuation to be adopted in ascertaining the market value of the land as on the date of the notification are: (i) opinion of experts, (ii) the price paid within a reasonable time in bona fide transaction of the purchase or sale of the lands acquired or the lands adjacent to the lands acquired and possessing similar advan tages, and (iii) a number of years purchase of the actual or immediately prospective profits of the lands acquired.
These methods, however, do not 'preclude the court from taking any other special circumstances obtained in an appropriate case into consideration.
As the object being always to arrive as near as possible in an estimate of the market value in arriving at a reasonable correct market value, it may be necessary to take even two or all those matters into account inasmuch as the exact valuation is not always possible as no two lands may be.the same either in respect of the situation or the extent or the potentiality nor is it possible in all cases to have reliable material from which that valuation can be accurately determined.
[553B D] 2.
In evaluating the market value of the acquired property, namely, 'land and the building or the lands with fruit bearing trees standing thereon, value of both would not constitute one unit; but separate.units; it would be open to the Land Acquisition Officer or the court either to assess the lands with all its advantages as potential value and fix the market value thereof or where there is reliable and acceptable evidence available on record of the annual income of the fruit bearing trees the annual net income multiplied by appropriate capitalisation of 15 years would be the proper and fair method to determine the market value but not both.
[555A C] State of Kerala V.P.P. Hassan Koya; , ; Spe cial 550 Land Acquisition Officer vs
P. Veerabhadarappa, etc.
; , and Admn.
General of West Bengal vs Collec tor, Varanasi; , , referred to.
3. SectiOn 30 sub section (1) of the Land Acquisition Amendment Act 68 of 1984 would reveal the legislative in tendment that the transitional provisions could apply to every proceeding for acquisition of any land under the principal Act, namely, 'Act 1 of 1894 (Central Act), pending on the 30th day of April, 1982, namely, the date of intro duction of the Land Acquisition (Amendment) Bill, 1982 in the House of the People; in which no award has been made by the Collector before that date or the award made by the Civil Court at the date of the Amendment Act.
It is clear that the Amendment Act 68 of 1984 including sub section (2) of section 23 per se is inapplicable to the acquisition of the land under the Kerala Land Acquisition Act, 1961.
The pendency of the appeals against the award made preceeding the dates in the High Court or this Court would not attract the application of section 30(2) and that, therefore, en hanced solatium under section 30(2) read with section 23(2) is inapplicable.
[556H 557B, 557H 558B] Kanthimathy Plantation Pvt. Ltd. vs State of Kerala & Ors.
, , referred to.
Union of India & Ors.
vs Filip Tiago De Gama, [1990] 1 SCC 277, distinguished.
Union of India & Anr.
vs Raghubir Singh (dead) by Lrs.; , , followed.
On the totality of the facts and circumstances, total sum of Rs. 10,000 would be reasonable compensation towards the value of the total trees as fire wood or as for use of other purposes after deducting salvage expenses.
The appel lant iS not entitled to enhanced solatium at 30 percent: but is entitled to Rs.3,10,000 as enhanced compensation with 15per cent solatium and interest at 4 per cent on enhanced market value from the date of dispossession.
[556A B, 558B C] 5.
Remand under order 41 Rule27, C.P.C. cannot be made to adduce fresh evidence, when though available but was not adduced; [551H 552A]
|
Appeal No. 1661 of 1990.
From the Judgment and Order dated 26.10.
1989 of the Customs Excise and Gold (Control) Appellate Tribunal, New Delhi in Appeal No.
CD/SB/A No. 424 of 1983(A) in Order No. 729/89 A. H.N. Salve, Ms. Meenakshi Arora, Ms. Ayesha Khatri, Ms. Shirin Jain and Ms. Indu Malhotra for the Appellant.
KTS Tulsi, Additional Solicitor General, A.S. Rao and p. Parmeshwaran for the Respondent.
The Judgment of the Court was delivered by FATHIMA BEEVI, J.
The appellant is a federation of glass manufacturers in India.
The Federation entered into a contract with M/s. Magadi Soda Company Ltd., Kenya, for supply of 5000 metric ' tomes of soda ash dense at the rate of US $ 155 per metric tome c.i.f. Bombay.
The consignment arrived from Mombasa, Kenya on 23.12.
198 1.
The goods were cleared on payment of customs duty of 516 Rs.32, 15,904.21 from Bombay.
The appellant on distribution of the goods to various members of the federation, received complaints that the soda ash which had been supplied was of sub standard quality. 'The sellers M/s. Crescent Dyes & Chemicals as well as their agents were approached.
They sent a team of experts to examine the goods.
The inspection confirmed that the goods were defective.
As per agreement dated 9.2.
1982, M/s. Crescent Dyes & Chemical sent a Credit note of US $ 2,40,000 as compensation on account of the defective goods sent by M/s. Magadi Soda Company Ltd. The amount remitted on account of the import made was only US $ 5,35,000 as against the earlier contracted amount of US $ 7,75,000.
In view of such reduction, the appellant filed a refund application before the Customs Department to the tune of Rs.9.95,892.65.
The Assistant Collector was not satisfied as to the extent of deterioration of the goods before clearance as provided by Section 22 of the and rejected the refund application vide order dated 19.7.1982.
The appeal preferred against the order dated 19.7.1982 was rejected by the Collector of Customs on 23.12.
1982 on the reasoning that the damage was discovered after the goods were out of customs control.
The further appeal to the Tribunal was also unsuccessful.
The Tribunal by the order dated 26.10.
1989 held that the alleged inferior nature of goods was discovered after clearance.
This appeal is filed under Section 130E of the against the order of the Tribunal dated 26.10.
The question involved in the present appeal is whether the appellant is entitled to the refund of customs duty on account of the compensation given by the seller to the appellant on supply of goods?The appellant who imported the goods detected defects and the foreign supplier accepted the defects and damages and agreed for payment of compensation.
According to the appellant, goods supplied were not in accordance with the contractual specification.
The defects 'being inherent in nature resulted in diminution in the real value of the goods and what had been agreed upon by the foreign seller is reduction in price on account of these defects.
The appellant claimed that it would be entitled to refund of customs duty under Section 22 of the Act for reasons set out thus.
The value to be assessed under Section 14 of the Act is the real price at which goods imported are ordinarily sold at the time and place of importation and not the price erroneously indicated 517 by the seller at the time of filling the bill of entry.
The buyer who successfully sets up diminution of price on ac count of breach of warranty, which claim is accepted by the seller, can seek refund or adjustment in the customs duty payable where the duty has been paid erroneously on the full price prior to such diminution.
The claim under Section 22 of the Act would be maintainable where imported goods were defective and had deteriorated in quality even prior to the import when the assessment has to be on the basis of the real value of goods.
The contract dated 30.9.1981 is for the supply of 5000 metric tonnes of soda ash dense.
The complaint was that the sodium carbonate content was less than the specified 97%, that there was moisture in the soda ash dense supplied and hence it had turned lumpy.
M/s. Crescent Dyes & Chemicals Ltd. was the agent of the seller M/s. Magadi Soda Company Ltd. The consignment.
arrived in Bombay sometime in Decem ber, 1981.
The appellants filed their bill of entry with the customs and the goods were cleared on payment of customs duty of Rs.32,15,904.21, on 28.12.
the complaint about damage and deterioration was made long after clearance.
The team of experts examined the goods and confirmed the de fects.
The customs authorities were not associated with such inspection.
It is maintained by the appellant that the credit received was recorded in the letter dated 15.3.
1982 and the letter indicated that the amount remitted on account of the import made was only US $ 5,35,000.
The reduction in the amount remitted was to the extent of US $ 2,40,000.
The appellant claimed that on account of the reduction in the value of the consignment, the appellant is entitled to refund of customs duty proportionately.
The Collector of Customs pointed out that: "The duty is leviable on the basis of the value of the such or like goods at the time of clearance.
It has not been proved that the alleged defect on account of which the price has been reduced was present in the goods at the time 01 clearance.
At least some of the defects of the type pointed out, viz., the lumpy character, are such as could develop due to exposure to moisture etc.
during the period the goods were out of customs.
In any case, the customs were not associated even with the post clearance examination.
Any alleged reduc tion in value on the basis of a postclearance agreement between the buyer and the supplier or 518 some alleged grounds which the customs had no chance to verify ' prior to clearance is fraught with great risks to Revenue.
(emphasis supplied) According to the appellant, this reasoning is wrong.
The appellant stated that most of the defects were due to non adherence to specification provided under the contract.
The defects being inherent in character, the appellant could not have known about the same at the time of clearance of the consignment from customs.
The ground of deterioration of goods was not relevant as the claim for refund was based on the ground of diminution in value of the goods as the same were not as per the standard contracted for.
The assessable value of the goods under Section 14 of the Act is the price at which such goods were actually sold in the course of international trade.
It is the real price of the goods actually imported which is ordinarily the basis for assessa ble value.
Where goods do not conform to the description or stipulation as to quality or fitness, it is open to the buyer to treat the defect as a breach of warranty.
It is also open to the buyer to set up against the seller the breach of warranty in diminution of the price.
It is the diminished price which will be the real price of the goods and not the price claimed by the buyer initially which is reflected as c.i.f. value on the invoice.
Customs duty paid on the c.i.f. value is a duty paid under mistake of fact.
At the time of clearance of goods, the buyer did not have any knowledge of the defects in the goods.
Where defect which constitutes a breach of warranty and which the buyer elects to treat as a breach of warranty became apparent and ulti mately culminated in diminution of price, it would be open to the buyer to claim refund of the customs duty paid under mistake of fact.
It is not relevant as to when the defect became apparent to the buyer.
The fact that the documents proving the true and real value of the goods were not in existence at the time when the goods were cleared from the customes is wholly irrelevant This in short, is the argu ment advanced on behalf of the appellant.
Duties of customs shall be levied under Section 12 at such rate as may be specified under the Customs Tariff Act or any other law for the time being in force on goods im ported into or exported from India.
Section 14 of the Cus toms Act provides that value of such goods shall be deemed to be the price at which such or like goods are ordinarily sold or offered for sale for delivery at the time and place of importation in the course of international trade.
Such price shall be calculated with reference to the rate of exchange as in force on the date on which 519 a bill of entry is presented under Section 46.
The duty is ordinarily chargeable with reference to the tariff value in the case of goods entered for home consumption on the date on which the bill of entry in respect of such goods is presented.
Section 22 provides for payment of duty on damaged or deteriorated goods.
It reads thus: "22.
Abatement of duty on damaged or deterio rated goods.
(1) Where it is shown to the satisfaction of the Assistant Collector of Customs (a) that any imported goods had been damaged or had deteriorated at any time before or during the unloading of the goods in India; or (b) that any imported goods, other than ware housed goods, had been damaged at any time after the unloading thereof in India but before their examination under Section 17, on account of any accident not due to any wilful act, negligence or default of the importer, his employee or agent; or (c) that any warehoused goods had been damaged at any time before clearance for home consump tion on account of any accident not due to any wilful act, negligence or default of the owner, his employee or agent; such goods shall be chargeable to duty in accordance with the provisions of sub section (2).
(2) The duty to be charged on the goods re ferred to in sub section (1) shall bear the same proportion to the duty chargeable on the goods before the damage or deterioration which the value of the damaged or deteriorated goods bears to the value of the goods before the damage or deterioration.
" Where it is shown to the satisfaction of the Assistant Collector that any imported goods have been lost or de stroyed at any time before clearance for home consumption.
the Assistant Collector of 520 Customs shall remit the duty on such goods.
The period of six months has been prescribed under Section 27 to claim refund of duty paid with protest.
Refund is allowed when the Assistant Collector of Customs is satisfied that the whole or any part of the duty paid should be refunded.
No claim for refund of any duty shall be entertained except in ac cordance with the provisions of Section 27.
Chapter VII of the deals with the clearance of imported goods.
The imported goods unloaded in a customs area remain in the custody of the approved person until they are cleared for home consumption.
Without permission in writing of the appropriate officer, such goods are not removed or otherwise dealt with.
The importer shall give a declaration as to the truth of the contents of the bill of entry supported by the invoice.
The order permitting clear ance of the goods for home consumption is made on payment of the import duty, if any, assessed.
Thus, under the scheme of the Act, the importer is entitled to clear the goods on payment of duty assessed and such assessment is to be made with reference to the tariff value of the goods where tariff values are fixed.
In other cases, the price at which the goods are ordinarily sold for delivery at the time and place of importation represents the tariff value for the purpose of the assessment.
When the value is assessed on the basis of the invoice and the goods are cleared, the implication is that no remission is allowed and no abatement has been occasioned.
There is no express provision which enables the proper officer to make a re assessment for the purpose of remission on the ground that the goods at the time of their importation or at the time of the clearance was sub standard or damaged and the invoice price does not represent the real value.
Even if it is assumed that in view of the provisions contained in Section 28(a) enabling the proper office to determine the amount of duty due in cases where duty has not been levied or has been short levied or erroneously refunded after issuing show cause notice, there is a corresponding right on the importer to claim refund of the excess duty levied, it is necessary for the importer to prove to the satisfaction of the proper officer that the goods at the time of the clearance was chargeable to a lesser or lower duty for anyone of the reasons contained in Section 22 which alone provides for abatement of duty.
Any error in the assessment of the value by itself does not enable the importer to claim re assess ment or refund.
It has necessarily to be shown that on account of the damaged or deteriorated condition of the imported goods before or during the unloading the goods in India, the duty to be charged on the goods was propor 521 tionate to the value of the damaged or deteriorated goods.
The question of redetermining the value of the imported goods can arise only in a case where such damage or deterio ration before the clearance is proved to the Satisfaction of the proper officer.
When there had been no indication of any such condition and the duty has been assessed on the basis of the invoice value and duty is paid, the assessment would be binding.
The importer on finding the goods cleared and distributed not to his entire satisfaction may have a claim in contract against the seller for providing sub standard, damaged or deteriorated goods for the value in the invoice, and it may be open to the buyer to realize from the seller such damages as he would in law be entitled to.
That claim for damages cannot have any bearing to the assessment at the time of the clearance.
The price at which the goods had been sold is represented by the invoice price and whatever amount is realized on subsequent agreement is only by way of com pensation as damages.
It cannot be said that the damages thus received represents the difference in price that had been paid and that ought to have been paid.
When the seller had agreed to compensate the buyer for the quality of the goods imported, the buyer does not get the right to claim abatement of duty on the assumption that the real price was some thing less than what has been indicated in the invoice.
Learned counsel for the appellant referred para 574 at page 12 1, Vol.
Halsbury 's Laws of England: "574.
Goods not in accordance with contract.
Where it is shown to the satisfaction of the Commissioners of Customs and Excise that goods were imported in pursuance of a contract of sale and that their description, quality, state or condition was not in accordance with the contract, or that they were damaged in transit, and also that the importer, with the consent of the seller, either returned the goods to him or destroyed them unused, the importer is entitled to obtain from the Com missioners repayment of any customs duty paid on their importation.
The foregoing, however, does not apply to the goods imported on ap proval, or on sale or return, or on other similar terms.
" It deals with the returning of goods or destroying the goods unused without acceptance and not where the goods have been accepted and used and the importer had been compensated for the reduction in 522 standard.
The learned counsel also referred to the decision in Biggin & Co. Ltd. vs Premanite, LD., Berry Wiggins & Co. LD. ; Cehave NV vs Bremer, ; Ford Motor Company of India vs Secretary of State for India, [1937] 381 L.R. 65 I.A. 32 and vacuum Oil Co. vs Secretary of State for India, [1932] L.R. 59 I.A.258.
On the basis of these decisions, the learned counsel for the appellant contended that when the seller has allowed the reduction, the real price of the goods is that which has been accepted by the seller and that the assessment made on a higher value on the basis of the invoice price is in excess and such excess is refundable to the appellant.
It is not necessary to elaborate on the principle stated in the decisions on the facts of the present case.
It is admitted case of the appellants that the alleged inferior nature of goods was discovered by the appellant after clearance.
Until the refund application was made, no requisition appears to have been made to the customs author ities to have the value of the goods determined for the purpose of Section 22.
The correspondence between the appel lants and the sellers ,red their agents could only reveal that the appellant put forward a claim for compensation on the ground that the goods imported had become lumpy and was also of inferior standard.
Ultimately the sellers agreed to reimburse the appellants and pay compensation to the tune of US $ 2,40,000.
What appellants have received from the sell ers is compensation for the damage for breach of warranty.
It does not appear that the value was reduced or amount remitted by the appellant was the reduced value of tire goods.
The amount was the total compensation extended by the sellers to the appellants.
From that fact of payment of compensation or reimbursement by the sellers it cannot be taken that at the time and place of importation the goods imported was worth only the amount stated in the invoice less the compensation paid.
In other words, there is no proof that the real value of the goods at the time and place of importation was less than that what had been entered in the invoice and stated in the Bill of Entry.
So long as examination of the goods had not been made or its value re assessed to the satisfaction of the assessing authorities, it cannot be said that duty was charged not on the real value of the goods but on a higher amount.
The contention that the inherent defect in the supply of goods resulted in the diminution of the value of the goods cannot be counte nanced when it is conceded that what had been paid by the seller is only compensation for the breach of war 523 ranty.
Furthermore, there is no material on record to show that even by the team of experts there had been a re assess ment of the value of the goods.
What had been estimated is only quantum of damages sustained by the buyers and to that extent they had been compensated.
That arrangement between the buyer and the seller cannot be linked with the assess ment of duty and no claim for abatement of duty under the provisions of Section 22 or a claim for refund under Section 27 could be legitimately entertained.
For the reasons given above, the appeal must fail.
The appeal is dismissed with no order as to costs.
V.P.R. Appeal dismissed.
| The appellant Federation entered into a contract with a Soda Company of Kenya, for supply of 5000 metric tonnes of soda ash dense and the consignment arrived at Bombay on 23.12.1981.
The goods were cleared on payment of customs duty of Rs.32,15,904.21.
The appellant on distribution of the goods to various members of the Federation, received complaints that the soda ash which had been supplied was of sub standard quality.
When the sellers as well as their agents were approached, they sent a team of experts to examine the goods and on inspection the goods were found defective.
As per agreement dated 9.2.1982, the sellers sent a credit note of US $ 2,40,000 as compensation on account of the defective goods.
The amount remitted on account of the import made was only US $ 5,35,000 as against the earlier contracted amount of US $ 7,75,000.
In view of such reduction, the appellant filed a refund application before the Customs Department to the tune of Rs.9.95,892 65.
The Assistant Collector rejected the refund application as he was not satisfied to the extent of deterioration of the goods before clearance as provided by Section 22 of the .
The appeal preferred was rejected by the Collector of Customs on the reasoning that the damage wad discovered after the goods were out of customs control.
The further appeal to the Tribunal was rejected hold ing that the alleged inferior nature of goods was discovered after clearance.
514 Under Section 130E of the , present appeal was made to this Court, contending that the goods supplied were not in accordance with the contractual speci fication, the defects being inherent in nature resulted in diminution in the real value of the goods and what had been agreed upon by the foreign seller was reduction in price on account of the defects, and claimed that it would be enti tled to refund of customs duty under Section 22 of the Act.
On the question, whether the appellant was entitled to the refund of customs duty on account of the compensation given by the seller to the appellant on supply of goods, dismissing the appeal, this Court, HELD: 1.01.
When the value is assessed on the basis of the invoice and the goods are cleared, the implication is that no remission is allowed and no abatement has been occasioned.
There is no express provision which enables the proper officer to make a re assessment for the purpose of remission on the ground that the goods at the time of their importation or at the time of the clearance was sub standard or damaged and the invoice price does not represent the real value.
[520E F] 1.02.
Any error in the assessment of the value by itself does not enable the importer to claim re assessment or refund.
It has necessarily to be shown that on account of the damaged or deteriorated condition of the imported goods before or during the unloading of the goods in India, the duty to be charged on the goods was proportionate to the value of the damaged or deteriorated goods.
[520G 521A] 1.03.
The question of redetermining the value of the imported goods can arise only in a case where such damage or deterioration before the clearance is proved to the satis faction of the proper officer.
When there had been no indi cation of any such condition and the duty has been assessed on the basis of the invoice value and duty is paid, the assessment would be binding.
The importer on finding the goods cleared and distributed not to his entire satisfaction may have a claim in contract against the seller for provid ing sub standard, damaged or deteriorated goods for the value in the invoice, and it may be open to the buyer to realize from the seller such damages as he would in law be entitled to.
That claim for damages cannot have any bearing to the assessment at the time of the clearance.
The price at which the goods has been sold is represented by the invoice price and whatever amount is realized on subsequent agree ment is only by way of compensation as damages.
It cannot be said that the damages thus received represents the differ ence in price that had been paid and that ought to have been 515 paid.
When the seller had agreed to compensate the buyer for the quality of the goods imported, the buyer does not get the right to claim abatement of duty on the assumption that the real price was something less than what has been indi cated in the invoice.
[521A D] 1.04.
There is no material on record to show that there had been a re assessment of the value of the goods.
What had been estimated is only quantum of damages sustained by the buyers and to that extent they had been compensated.
That arrangement between the buyer and the seller cannot be linked with the assessment of duty and no claim for abate ment of duty under the provisions of Section 22 or a claim for refund under Section 27 could be legitimately enter tained.
[523A B] Biggin & Co. Ltd. vs Premanite, LD., Berry Wiggins & L.D., ; Cehave NV vs Bremer, ; Ford Motor Company of India vs Secretary ' of State for India, [1937 8] L.R. 659.
A. 32 and Vaccum Oil Co. vs Secretary of State for India, [1932] L.R. 59, IA 258, referred to.
Halsbury 's Laws of England, para 574 at page 121, Vol. 12; referred to.
|
No. 917 of 1990.
(Under Article 32 of the Constitution of India).
(With I,A. Nos. 1 3/90 in Writ Petition (Civil) No: 9/88 and Contempt Petition No. 45/91 in Writ Petition (Civil) NO.
602/90).
S.K. Bhattacharya and R. Venkataramani for the Petitioners.
Altaf Ahmed, Additional Solicitor General, S.K. Mehta, A. 597 Mariarputham, Ashok Bhan, Ms. A. Subhashini, R. Ramachan dran, S.P. Kalra and Arun Madan for the Respondents.
The following Order of the Court was delivered: The main application is under Article 32 of the Consti tution while the Contempt Petition and the Interlocutory Applications in the connected Writ Petition are for orders and directions.
The common aspects in all the three proceed ings are that the petitioners before this Court are Research Scholars connected with Projects entrusted to different Institutions.
They are before the Court for security of emplOyment and improvement of conditions of service.
In Writ Petition 999 of 1988.
along with Writ Petition No. 1043 of 1989 we gave our judgment on March 22, 1990, We then indicated: "The Institute set up by Statute is intended to carry on research in a continuous way to improve the level of medical knowledge.
Under the Act the Institute is an autonomous body though the Chairman thereof is no other than the Union Minister of Health.
It is true that the Institute is entrusted from time to time.
with research projects by the World Health Organisation, the Indian Council of Medical Research and other government and semi govern ment bodies.
It is appropriate that a Scheme should be evolved 'by the Institute m coordi nation with the Health Ministry and the Indian Council of Medical Research so that a team of researchers is built up to meet the general requirements of research.
It is quite possible that certain projects would require specia lised hands ' and on such occasions a special team could be set up on casual basis by draw ing the competent hands from different insti tutions ,for a period but to keep up the tempo of research if a team of researchers is built up, it would be.
convenient for the Institute for purposes of discipline and control as also for efficiency.
The Health Ministry must also sponsor Continuous research projects in the field of medicine and health and for such purpose several projects should be listed out from time to time and entrusted to the re spondents Institute as also a similar Insti tute at Chandigarh and to institutes as and when 'set up elsewhere.
This would assist ill updating relevant medical 'information ' and knowledge, apart from building up a scientific tone and temper for general circulation.
598 We commend that the Institute initiates serious action in this regard.
without delay and we suggest that the Ministry of Health and the indian Council of Medical Research collab orate with the Institute to work out the same.
Pursuant to our observations the Ministry of Health appears to have taken some action and particulars relating thereto have been placed before us.
On that occasion we indicated that those who have put in 15 year.
s of research work should immediately be regularised and core a cadre could be built up.
The Health Ministry has no objection tO a core cadre of researchers being created.
The Indian Council of Medical Research ( 'ICMR ' for short) is actually the organisation set up for the research purposes and as we gather the Union of India in the relevant Ministry meets its expenditure on research by funding.
The Court does not have the adequate technical knowhow but we are of the view that if appropriate coordination is made and the Health Ministry, ICMR and the Institutes where research is carried on tie up their operations more useful work can be done and simultane ously the researchers would have better terms of employment.
All the Institutes where research is carried on may not be at the national capital.
What is necessary is the emergence of a small monitoring unit which would finalise the various research projects well in advance and receive offers of projects from organisations like World Health Organisation or other bodies.
No consideration has been given.
as to why the drug manufacturers in India who have engaged themselves in a very lucrative trade should also participate in research pro grammes.
Quality of work in research institutes specialised in their fields is bound to.
be better than research carried on by the manufacturers themselves.
A scheme could be evolved by which established drug manufacturers could be required to participate in such programmes by supporting particular research projects which the monitoring body Could allot.
Continuing research not only keeps up the level of knowledge but also helps the enhancement of efficiency of treatment of diseases and in the matter of providing relief to the patients.
Mr. Venkataramani seriously presses before us that the researchers should have some scheme where within two to three years they could as in other Government service be made permanent and given guarantees of service.
When we gave our final decision in Writ Petition No. 999/1988 ' we had no intention of creating a permanent cadre of the type Mr. Venkataramani argues about.
In fact 'project 599 wise research helps to generate better efficiency than caderised research organisation.
Once service guarantees are provided and security of service is available, the flow of inspiration from within perhaps slows down.
We had, there fore, thought that those who had put in long period of research work should only be provided security so that in the later part of their service life, they may not be put to inconvenience.
We have no objection to a core cadre being built.
up and if the Health Ministry is of the view that there should be a core Cadre, perhaps, it can quickly be set up and such of the researchers who have put in a more or less continued period of work Could be brought into the Cadre at the first instance on regular basis.
The Committee which the Union of India has perhaps to set up may look into this matter more thoroughly and give shape to the idea we have conveyed by our judgment.
The Patel Chest Institute seems to ' be more or less a permanent feature and researchers therein may be continued.against the programmes available.
The funding of course has to be ultimately done by the Health Ministry and the manner of funding may be determined by it.
The research ers who have worked in the All India Institute of Medical Sciences should be continued upon availability of its pro grammes but those was have put in longer periods may be absorbed in available vacancies.
We are aware of the stand taken by Committee that researchers may be treated as in service candidates when regular vacancies occur for absorp tion.
This has our approval.
We adjourn these matters by two months to receive a comprehensive response.
from the Union Government in the Health Ministry so that we would have the opportunity of examining the comprehensive scheme and then make a final order.
Call on 4.10.1991.
G.N. Matters adjourned.
| In the present petitions filed before this court, the petitioners, Research Scholars connected with Projects entrusted to different institutions, prayed for security of employment and improvement of conditions of service.
In the earlier writ petitions this Court indicated that those who have put in 15 years of research work should be immediately regularised and that a core cadre be built up.
The Respond ents undertook to submit a comprehensive scheme and this court granted two month 's time to the Respondents to file the same.
Passing interim orders pending examination of a compre hensive scheme to be submitted by the Respondents, this Court, HELD: 1.
The Indian Council of Medical Research (I.C.M.R.)is actually the organisation set up for research purposes and the Union of India meets the expenditure on research by funding.
This Court does not have the adequate technical know how but is of the view that if appropriate coordination is made and the Health Ministry, ICMR and the Institutes where research is carried on tie up their opera tions, more useful work can be done and simultaneously the researchers would have better terms of employment.
All the Institutes where research is carried on may not be at the National Capital.
Hence a small monitoring unit requires to be set up which would finalise the various research projects well in advance and receive offers of projects from organi sations like World Health Organisation or other bodies.
[598B D] 596 2.
No consideration has been.
given as to why the drug manufacturers in India who have engaged themselves in a Very lucrative trade should also participate in research pro grammes.
Quality of work in research institutes specialised in their fields is bound to be better than research carried on by the manufacturers themselves.
A scheme could be evolved by which established drug manufacturers could be required to participate in such programmes by supporting particular research projects which the monitoring body 'could allot.
Continuing.
research not only keep up the level of knowledge but also helps the enhancement of effi ciency of treatment of diseases and in the matter of provid ing relief to the patients.
[598E G] 3.
Once service guarantees are provided and security of service is available, the flow of inspiration from within perhaps slows down.
However, there is no objection to a core cadre being built up and if the Health Ministry is of the view that there should be a core cadre, it can quickly set up the same and such of the researchers who have put in more or less continued period of work could he brought into the cadre at the first instance on regular basis.
The Committee which the Union of India has to set up my look into this totter more thoroughly and give shape to the idea.
[599A C] 4.
The Patel Chest Institute seem to be more or less a permanent future and researchers therein may be continued against the programmes available.
The funding of course has to be ultimately done by the Health Ministry and the manner of funding may be determined by it.
The researchers who have worked in the All India Institute of Medical Sciences should he continued upon availability of its programmes but those who have put in longer periods may be absorbed in available vacancies.
The stand taken by Committee that researchers may be treated as in service candidates when regular vacancies occur for absorption, is approved.
[599D, E]
|
vil Appeal No. 2 145 of 1988.
From the Judgment and Order dated 3.5.
1988 of the Allahabad High COurt in C.M.W.P. No. 13143 of 1985 Avadh Behari Rohatgi section Markandeya, G. Seshagiri Rao and Ms. C. Markandeya for the appellant.
Ms., Shobha Dikshit, Pankaj Kalra, Ejaz Maqbool, Dileep Tandon, J.M. Khanna and S.K. Jain for the Respondents.
The following Order of the COurt was delivered: This appeal by special leave is against the order of the Allahabad High Court.
The subject matter of dispUte is in regard to 11 lady teachers of Saghir Fatima Mohammadia Girls Inter College, Agra.
This is claimed to be a minority insti tution but fully financed from the State resources.
By interlocutory orders made from time to time the real litigative part of has already been attended to,.
We would refer to our order of 2nd May, 1991 where this court ob served "We are happy to find that pursuant to our order made earlier in this case Smt.
Kamla 561 Mehra, Smt.
Saran Kumari Gaur and Swaliha Begum have been given postings and they have already reported to duty.
So far as petitioners Km.
Asifa Rizvi, Km.
Sayyada Rizwani and Shafiqa Begum are concerned, Ms. Dikshit points out that though there is some possibility of adjusting them in other institutions it is a time taking process inasmuch as under the scheme government have no power to impose teachers from out side on the administration of the institutions.
We think it appropriate in the interest;of justice to require the Director of Secondary Education to require such of the colleges where appropriate vacancies are available to adjust these three teachers.
To so adjust them the institu tions shall take our present order as a direction to adjust them and as and when called by the Director of Secondary Education it shall be implemented.
Failure to comply shall be teated as violation of our direction.
So far as Smt.
Sudha Dixit is concerned, we gather from the representation made at the Bar ' that a vacancy in the spe ciality is about to arise in the coming month.
If that be so, Ms. Dikshit has agreed to see that she is so posted.
As far as two remaining teachers are concerned, they do not agree to go out of the institution and Ms. Dikshit points out that in their subjects there is no vacancy.
In these circumstances, they have choice to wait indefinitely till vacancy occurs without.claiming salary till employment.
If this is not acceptable to them the order of termination already made shall be taken as final and conclusive and their petition shall standdismissed.
" We are told that the vacancy which was contemplated in regard to Smt.
Sudha Dixit has not worked out for her.
She had been offered a posting in Mathura, away from.
the insti tution where she had been working and she did not choose to go there.
Mr. Markandeya appearing for her, however, does not agree with this statement made by others and says that she volunteered to go but was informed that the institution had not taken a decision to keep her and she was.
to be intimated as and when a decision was taken.
No intimation has been received by her as yet.
Out of the two remaining teachers referred to in our order dated 2nd May, 1991, it appears that one has already been absorbed in Aligarh and the.
remaining teacher, Khaliq Jahan, is holding a lower post for the time being and Ms. Dikshit has told us that she has already 562 suggested to the Government that as and when a vacancy arises she should be accommodated in a post according to her entitlement So far as Smt.
Sudha Dixit is concerned, we think 'a situation has now arisen where the Director must implement our order.
We had clothed him with adequate powers by our order of 2nd May, 199 1 and he must under that authority 'proceed to enforce his order.
The Director should provide employment to Smt.
Sudha Dixit in terms of the assignment made and the institution where she has been directed to join should accept the teacher.
Beyond that we do not intend to say anything at this stage.
This leaves the only, remaining question to be dealt.
with, i.e., as to how the period during which the seven of the teachers who have been absorbed in that very institution should be dealt with.
It is said that during this gap period of seven years another set of teachers had been working who are represented before us by Mr. Kalra in these proceedings, It is the submission of the appellants that the seven teach ers who are substituted did not possess the requisite quali fication and reliance is placed on Section 16(FF) of the Act to support the submission that they are not entitled to salary for the work done.
SimultaneouSly the seven ' teachers have contended through their counsel that they had been visiting the institution everyday and had been leaving their attendance with the appropriate authority, therefore, they should be entitled to salary.
This is not a proceeding in ,which we have to decide who has to be paid the salary.
But as things stand one set of teachers have actually worked while the other set for reasons which are germane to appropriate management has not, We are told that teachers had gone on strike and when they were called back to duty a group of teachers including the seven did not return within time and that led to appointment of alternate teachers.
We must point out that this again is not an appropriate matter to be decided by us.
We are, however, satisfied from the material placed before us that the 11 teachers who are represented by Mr. Kalra did work during the period.
It may not be appropriate, to hold that they are not entitled to remuneration for the work done.
The institution had admittedly not received any benefit.of service during the relevant period from the seven teachers on the appellants ' side.
On the principle that when work is not done remuneration is not to be paid, we dispose of the present appeal without giving any direction for payment to them.
If they are entitled to salary, it is open to them to take appropriate proceeding to claim the same, 563 We do not finally close their claim against the ' State of the institution.
But so far as teachers represented by Mr. Kalra are concerned, if they have not been paid, they should be disbursed the salary due to them.
There is some contest as to whether they are qualified or not.
On the basis of the facts on record we are of the view that they appear to be qualified and that question should not be reopened.
We draw support for our view for non payment to the appellants from our ' interim order of 7th February, 1990.
In regard to two teachers who were prepared to wait to take their chance, we indicated that they would not be paid any remuneration.
Seven teachers who have now been provided jobs under our orders and those who were waiting to take their chance should be equated for the common period of no work.
We, are, however, of the view that seven teachers who have got employment should be given their seniority for the period they were out of employment.
We accordingly require the Director of Public, Instruction to take our order into account and given them credit for seniority for the period they were out of employment on the deemed situation that they had worked, Our doing so, we again repeat, would not entitle them to salary unless they are otherwise entitled to.
This disposes of the appeal.
We are sorry that we entertained an appeal of this type by special leave and got dragged into a dispute which should not have been brought upto this court.
G.N. Appeal disposed of.
| The appellants, teachers in a minority institution fully financed by State, went on a strike and when they were called hack to duty, they did not return within time, lead ing to appointment of alternate teachers.
They approached the High Court for their absorption.
The High Court having dismissed the matter, the aggrieved teachers have preferred the present appeal by special leave.
By interim orders, this Court has already directed the absorption of the teachers in different institutions.
Seven teachers have been absorbed in the very same institution.
It was contended on behalf of the seven teachers that they should be paid salary for the period of gap before their absorption and that their senior ity should be maintained.
The alternate teachers who worked in the interregunum contended that they should be paid salary for the period they worked.
Disposing the appeal, this Court, HELD 1.
One set of teachers have actually worked while the other set has not.
The teachers had gone on strike and when they were called hack to duty a group of teachers including the seven did not return within time and that.
led to appointment of alternate teachers.
It is clear from the material on record that the alternate teachers did work during the period.
It may not be appropriate to hold that they are not entitled to remuneration for the work done.
However, the institution has admittedly not received any benefit of service during the relevant period from the other set viz. the seven teachers who were absorbed later.
On the principle that.
when work is not done remuneration is not to be paid, no direction is given for payment.
If they are entitled to salary, it is open to them to take appropriate proceeding to claim the same.
It does not 560 finally close their clam against the State or the institu tion.
The alternate teachers who have worked and if they have not been paid, they should be disbursed the salary due to them.
Then iS some contest as to whether they are quali fied or not.
On the basis of the facts on record the teach ers appear to be qualified and that question should not be reopened.
In regard to two teachers Who were prepared to walt to take their chance, they would not be paid any remu neration.
Seven teachers who have now been provided jobs under the orders of this Court and those who were waiting to take their Chance should be equated for the common period of no Work [562F H, 563A C] 2.
However, the seven teachers who have got absorption should be given their seniority for the period they were out of employment.
The Director of Public Instruction is re quired to take this order into account and given them credit for seniority for the period they were out of employment on the deemed situation.
that they had worked.
This would not entitle them to salary unless they are otherwise entitled to the same.
[563D]
|
vil Appeal No. 1106 (NT) of 1976.
From the Judgment and Order dated 22nd/23rd January 1976 of the Gujarat High Court in Income Tax Ref.
No. 122 of 1974.
Joseph Vellappilly, K.J. John and Ms. Deepa Dikshit for the Appellant.
S.C. Manchanda, Ranvir Chandra and Ms. A. Subhashini for the Respondent.
J. The appellant/Company, hereinafter referred to as the assessee, carries on.
the business of manufacture and sale of art silk cloth.
In the year 1957, it purchased machinery worth Rs.2,81,741 and gave it on hire to M/s. Jasmine Mills Pvt. Ltd., Bombay at an annual rent of Rs.33,900.
On August 11, 1966, a fire broke out in the premises of M/s. Jasmine Mills causing extensive damage tO the machinery installed in their premises including the machinery hired by them from the assessee.
The machinery belonging to the assessee became useless for any, further use on account of the damage.
M/s. Jasmine Mills had insured along with its own machinery, the assessee 's machinery as well, and on a settlement of the insurance claim, M/s. Jasmine Mills received a certain amount out of which it paid a sum of Rs.6,32,533 to the assessee on account of the destruction of its machinery.
The difference between the actual cost of the machinery and its written down value worked out to Rs.2,62,781.
The assessee in its income tax return for the assessment year 1967 68 (relevant accounting year being 'the year ending on 31st August, 1966) showed the said amount as profit chargeable to tax under Section 41(2) of the Income Tax Act (hereinafter referred to as the "Act") The IncomeTax Officer, however, subjected to tax also the additional amount of Rs.3,50,792 being the difference be tween the amount of Rs.6,32,533 received on account of the insurance claim and the original 'cost of the machinery, i.e., Rs.2,81,741, treating the same as capital gains chargeable under Section 45 of the Act.
The contention ad vanced by the assessee that the capital gains tax was not attracted to the amount received on account of the insurance claim since there was no transfer.
582 of capital asset as was contemplated by Section 45 read with Section 2(47) of the Act, was negatived by the Income Tax Officer.
The assessee appealed against the order to the Appellate Assistant Commissioner who also negatived the said conten tion of the appellant and" dismissed the appeal.
The asses see 's contention was, however; upheld in the appeal before the Income Tax Appellate Tribunal, the Tribunal holding that: the amount was not received on account of a transfer of the capital asset but on account of the damage to it and that.
Section 45 was attracted only when there was a trans fer of the capital asset.
Being aggrieved, the Revenue applied for reference of the case to the High Court on the,following two questions: (i) whether on the facts and in the circum stances of the case the transfer was justified in law in holding that there Was no transfer of capital asset by the assessee within the meaning Of Section 2(47) of the Act? (ii) whether on the facts and in the circum stances of the case the sum of Rs.3,50,792 being the excess of the cost of the machinery received from M/s. Jasmine Mills Pvt. Ltd. was chargeable to tax as Capital gains under Section 45 of the Act? The High Court answered the first question in the negative, and consequently the second question in the affirmative.
i.e., both questions in favour of the Revenue and against the assessee.
This appeal has been filed by the assessee on a certifi cate granted by the.
High Court.
The short question that falls for our 'consideration is whether the money received towards the insurance claim on account of the damage to or destruction of the capital asset is so received on account of the transfer of the asset within the meaning of Section 45 of the Act and is.
, there fore, chargeable to the capital gains tax under the 'said section.
It would be convenient to reproduce here the provisions of Section 45 of the Act as they stood at the relevant time: "45.
Capital gains Any profits or gains arising from the transfer of a capital asset effected in the previous year shall, save as otherwise provided in sections 53 and 54, be chargeable to income tax under the head 'capital gains ', and shall 583 be deemed to be the income of the previous year in which the transfer took place".
Emphasis supplied, Section 2(47) of the Act which defined transfer at the relevant time read ' as fol lows: "2.
Definitions In this Act, unless the context otherwise requires,. . . . . (47) 'transfer ', in relation to a capital asset, includes the, sale, exchange or relin quishment of the asset or the extinguishment of any rights therein or the compulsory acqui sition thereof under any law.
" A reading of the two sections makes it abundantly clear that the profits or gains which are amenable to Section 45 must arise from the transfer of the capital asset which is effected in the previous year.
The transfer may be brought about by any of the modes of transfer which include ,sale, exchange, relinquishment of the asset or the extinguishment of 'the rights therein, or the compulsory acquisition of the asset under any law.
It may be 'of the asset itself or of any rights in it.
It may further be the result of a volun tary act or a compulsory operation.
Whatever the mode by which it is brought about, the existence of the asset during the process of transfer is a pre condition.
Unless the asset exists in fact, there cannot be a transfer of it.
When an asset is destroyed there is no question of transferring it to others The destruction or loss of the asset, no doubt, brings about the destruction of the right of the owner or possessor of the asset, in it.
But it is nOt On account of transfer.
It is on account of the disappear ance of the asset.
The extinguishment of right in the asset on account of extinguishment of the asset.
itself is not a transfer of the right but its destruction.
By no stretch of imagination, the destruction of the right on account of the destruction of the asset can be equated with ' the extin guishment of right on account of its transfer.
Section 45 speaks about capital, gains arising out of "transfer" of asset and not on account of "extinguishment of right".
by itself.
The capital gains is attracted by transfer and not merely by extinguishment of right howsoever brought about.
The transfer may be effected by various modes and one of the modes is the extinguishment of right on transfer of the asset itself for on account of the transfer of the right or rights in 584 The extinguishment of right or rights must in any case be on account of its or their transfer in order to attract the provisions of Section 45.
If is not, and is on ' account of the destruction or loss of the asset, as in the present case, it is not a transfer and does not attract the provi sions of Section 45 which relate to.
transfer and not1 to mere extinguishment of right but to one by transfer.
Hence an extinguishment of right not brought about by transfer is outside the purview of Section 45.
The High Court erred in ignoring the basic postulate that Section 45 does not relate to extinguishment of right but to transfer.
Having concentrated its attention on the words "extinguishment of right" rather than on "transfer", the High Court, with respect, misdirected itself and proceeded on the basis that every extinguishment of right whether by way of transfer or not, is attracted by Section 45. 5.
Transfer presumes both the existence of the asset and of the transferee to whom it is transferred.
In the case of the damage, partial or complete, or destruction or loss of the property, there is no transfer of it in favour of a third party.
The money received under the insurance policy in such cases is by way of indemnity or compensation for the damage, loss or destruction of the property.
It is not in consideration of the transfer of the property or the trans fer of any right in it in favour of the insurance company.
It is by virtue of the contract of insurance or of indemni ty, and in terms of the conditions of the contract.
Under an insurance contract,, the assured cannot claim more amount than the sum insured.
The sum insured is the maximum liabil ity of the insurer and the assured secures it by paying his premium which is accordingly fixed. 'Even within ' the. maximum limit, the insured cannot recover more than What he establishes to be his actual loss, whatever may be his estimates of the loss that he was likely to bear and whatev er the premium he may have paid calculated on the basis of the said estimate.
The fact that while paying for the total loss of or damage to the property, the insurance company takes over such property or whatever is left of it, does not change the nature of the insurance claim which is indemnity or compen sation for the loss.
The payment of insurance claim is not in consideration of the property taken over by the insurance company, for one is not consideration for the other.
It is incOrrect ' to argue that the insurance claim is the value of the damaged property The claim is assessed on the basis of the damage sustained by the property or the amount necessary to restore it to its original condition.
It is not a consid eration for the damaged property.
In the present case, the insurance was on reinstatement.
basis which meant that the 585 property was to be restored to the Condition in which it was, before the fire.
The insurance company paid the amount for the restoration of the 'machinery which had to be on the basis of its value at the time of the fire.
The machinery in question was purchased in the year 1957 and the fire broke out.
on August 11, 1966.
Although nothing has come On record on the point, taking into consideration the 'ordinary course of events, it is legitimate to presume that the cost of machinery had gone up during the intervening period and the assured and, therefore, the assessee, was entitled to recov er on the basis of the increased value of the machinery (refer to Halsbury 's Laws of England, Fourth edition, Vol. 25 under the heading insurance, in para 654). ' 6.
It is true that the definition of "transfer" in Section 2(47) of the Act is inclusive, and therefore, ex tends to events and transactions which may not otherwise be "transfer" according to its ordinary, popular and natural sense.
It is this aspect of the definition which has weighed with the High Court and, therefore '; the 'High Court has argued that if the ' words "extinguishment of any rights therein" are substituted for the 'word "transfer" in Section 45, the claim or compensation received from the insurance company would be attracted by the said section.
The High Court has, however, missed the fact that the definition also mentions such transactions as sale, exchange etc.
to which the word "transfer" would properly apply ' in its popular and natural import.
Since those associated ' words and expres sions imply the existence of the asset and of the transfer ee, according to the rule of noscitur a sociis, the expres sion ' 'extinguishment of any rights therein" would take colour from the said associated words and expressions, and will have to be restricted t6 the sense analogous to them.
If the legislature intended to extend the definition to any extinguishment of right, it would not have included the obvious instances of transfer, viz., sale, exchange etc.
, Hence the expression "extinguishment of any rights therein".
will have to be confined to the 'extinguishment of rights on account of transfer and cannot be extended 'to mean any extinguishment of right independent of or otherwise than on account of transfer.
The High Court, as stated earlier, read the expres sion "extinguishment of any rights" in the assets as any extinguishment of right whether it resulted in or was on account of transfer.
For the reasons which we have discussed earlier we find that approach is not correct.
For the same reasons, we are unable to accept the reasoning of the High Court that for "transfer" within the meaning of Section 45 the asset need not exist.
We are afraid that the High Court 's reliance on Commissioner of Income Tax vs R.M. Amin, 586 Gujarat to hold that for the. transfer contemplated by Section 45, the asset need not exist is not well merited.
There, the High Court was concerned with a chose in action, viz., the shares, and the amount received by the assessee shareholder on liquidation of the company representing his share in the assets of the company.
The Court there had pointed out that the extinguishment of right of the asses seeshareholder in his share which was an incorporeal proper ty had come about on account of receipt by ' him of the amount representing the value of the shares.
The amount received by the assessee shareholder does not represent any consideration received by him as a result of the extinguishment of his rights in 'the shares.
The share merely represents the right to receive money on distribution of the net assets of the company in liquidation and it is by satisfaction of that right, that the right is extinguished when such monies are received by the shareholder.
The con sideration presumes quid pro quo and, therefore, transfer of the property or.
of the rights in the property, whether the property is corporeal or incorporeal.
When the assets, themselves are being distributed, it is correct,to say that to the extent of distribution, they are wiped out.
It is in that sense that the assets do not exist to the extent that they are distributed.
When the company 's assets are thus distributed, is a sense the assets which are converted into money and which, therefore, exist in the form of money are transferred from the liquidator to the share holder.
His rights in the assets come to an end when he receives his liquidated share of the asset.
In such a case the assets do exist though in the converted form, viz., cash and what is transferred is also the converted form of the asset.
With respect, therefore,"it is not correct to say that in such cases the capital asset does not exist and does not change hand as capital asset.
That the receipt of his share in the asset brings about automatically the extin guishment of the shareholder 's rights in the asset cannot, however, be gainsaid.
The decision of the Gujarat High Court in R.M. Amin 's case (supra) was appealed against and this Court while approving ' the ratio of the said decision fur ther explained the nature of the 'money received by a share holder on the ' liquidation of a company.
This Court reiter ating its earlier view in the case of Commissioner Of In come tax vs Madurai Mills Co. Ltd., , held that the act of the liquidator in distributing the assets of the company does not result in the creation of new rights.
It merely recognises the legal rights which were in exist ence prior to the distribution.
The shareholder receives money in recognition and satisfaction of his 587 right and not by operation of any transaction which amounts to sale, exchange, relinquishment of asset or extinguishment of any of his rights in such asset.
So also when a partner retires from the partnership what he receives is his share in the partnership which is worked out and realised.
It does not represent consideration received ' by 'him as a result of the extinguishment of his interest in the partnership assets.
He has no share in any particular asset of the firm.
Therefore, there is no trans fer of interest in any particular asset of the firm on account of the receipt of his share by a retired partner.
As held in Commissioner of Income tax vs Mohanbhai Pamabhai, no part of the amount received by the assessee as a retired partner is assessable to capi tal gains tax under Section 45. 9.
The High Court has explained these two decisions by giving.
reasons which do not appeal to us.
The COurt has tried to distinguish them from the facts of the present Case pointing out, firstly, t, hat there was no foundation either in law or in fact to believe that the amount which the assessee received from M/s. Jasmine 'Mills was paid to it in satisfaction or in working out of its right, if any, to recover damages under law or contract for the loss or dam age ' caused ' to the machinery.
We do not see any difficulty in holding that it was an amount received by the assessee as damages on account of the loss of its machinery.
It is difficult to describe it otherwise.
The second reason given by the High Court is, with 'respect, equally fragile.
It is held that the alleged right, if any, of the assessee t9 recover damages was not an absolute statutory right but one which was subject to a contract to the contrary and even if there was no such contract, it was merely an inchoate or contingent right in respect of which some investigation or legal proceeding and settlement or adjudication would be necessary for its ' satisfaction or fulfilment.
We do not agree with this reasoning as well.
The facts clearly show that M/s. Jasmine Mills as a bailee had insured the machin ery hired from the assessee, since it was liable to make good the loss of the machinery to the assessee.
This is implied under a contract of bailment unless it is provided to the contrary.
M/s. jasmine Mills further admittedly paid the insurance amount pro rata to the assessee.
In the cir cumstances, we are unable to appreciate the distinction sought to be made by the High Court.
We are also unable to see how it would make any difference to the point involved in the present case whether the Jasmine Mills had insured the assessee 's machinery as bailees or as agents of the assessee.
588 There is further no dispute that the insurance policy con tained the reinstatement clause requiring the in surer to pay the cost of the machinery as on the date of the fire.
As we have pointed out earlier, in an insurance policy with the reinstatement clause, the insurer is bound to pay the cost of the insured property as on the date of the destruction or loss, and it matters very little if the amount so paid by the insurance company is invested for purchasing the de stroyed asset or for any other purpose.
In the circumstances, for the purposes of answering the question in hand, it was not necessary to inquire whether the amount received by the assessee was spent in replacement of the machinery or not.
For the reasons given above, the decision of,the Allahabad High Court in Commissioner of Income tax vs J.K. Cotton Spinning& Weaving Mills Co. Ltd., which proceeds on the same reasoning as the impugned judg ment is also not a good law.
InStead, we approve of the conclusion reached by the Madras High Court in C. Leo Macho do vs Commissioner of Income tax, for the reasons given by us above; 12.
In the result, the ' appeal succeeds and the impugned decision is set aside.
In the circumstances of the case, however, there will be no order as to costs.
R.P, Appeal al lowed.
| The appellant company purchased machinery worth Rs.2,81,741 in the year 1957 and gave it on hire to another company which insured the machinery.
In the year 1966, a fire broke out in the lendee company causing extensive damage to the machinery of the appellant.
On a settlement of the insurance claim the lendee company paid to the appellant a sum of Rs.6,32,533 on account of the destruction of its machinery.
The difference between the actual cost of the machinery and its written down value worked out to Rs.2,62,781 which the appellant (the asses I see) showed in its income tax return for the relevant year as profit chargeable to tax under section 41(2) of the Income Tax Act.
The lncomeTax Officer subjected to tax also the additional amount of Rs.3,50,792 the difference between the amount of insurance claim and the original cost of the machinery treating the same as capital gains chargeable under section 45 of the Act, and rejected the case of the appellant that the capital gains tax was not attracted to the amount received on account of the insurance claim since there was no transfer of capital asset as was contemplated by section 45 read with section 2(47) of the Act.
The appeal of the assessee was dismissed by the Appel late Assistant Commissioner, but its claim was accepted by the Income Tax Appellate Tribunal which held that the amount was not received on account of transfer of the capital asset but on account of damage to it and that section 45 was attracted only when there was a transfer of the capital asset.
The reference at the instance of the revenue was an swered by the High Court against the assessee.
Aggrieved the assessee filed the appeal before this Court on a certificate granted by the High Court.
On the question: whether the money received towards the insurance claim on account of the damage to. or destruction of the capital 578 asset was so received on account of the transfer of the asset within the meaning of section 45 of the Act and was, there fore, chargeable to the capital gains tax under the said section, Allowing the appeal, this Court, HELD: 1.1 The money received under the insurance policy is by way of indemnity or compensation for the damage, loss or destruction of the property.
It is not in consideration of the transfer of the property for the transfer of any right in it in favour of the insurance company.
It as by virtue of the contract of insurance or of indemnity, and in terms of the conditions of the contract.
[584C D] 1.2 In the case of damage, partial or complete, or destruction for loss of property there is no transfer of it in favour of a third party.
The fact that while paying for the total loss of or damage to the property, the insurance company takes over such property or whatever is left of it, does not change the nature of the insurance claim which is indemnity or compensation for the loss.
The payment of insurance claim is not in consideration of the property taken over by the insurance company, for.
one is not consid eration for the other.
The insurance claim is not the value of the damaged property.
The claim is assessed on the basis of the damage sustained by the property or the amount neces sary to restore it to its original conditions.
It is not a consideration for the damaged property.
[584C, F G] 1.3 In the instant case, the amount received by the assessee was the one received by it as damages on account of the loss of its machinery.
The lendee company, as a bailee, had insured the machinery hired from the assessee, since it was liable to make good the loss of the machinery to the assessee.
This was implied under a contract of bailment unless it was provided to the contrary.
The lendee company paid the insurance amount pro rata to the assessee.
[587D G] 1.4 The insurance was on reinstatement basis which meant that the property was to be restored to the condition in which it was, before the fire.
The insurance company paid the amount for the restoration of the machinery which had to be on the basis of its value at the time of the fire.
The machinery in question was purchased in the year 1957 and the fire broke ' out on.
August 11, 1966.
Taking into considera tion the ordinary course of events, it was legitimate to presume that the cast of machinery had gone up during the intervening period and the assured and, therefore, the assessee, was entitled to recover on the basis of the 579 increased value of the machinery.
[584H; 585A B] Halsbury 's Laws,of England, Fourth Edition, Vol.
25, re ferred to.
2.1 The capital gains is attracted by transfer and not merely by extinguishment of right howsoever brought about.
The transfer may be effected by various modes and one of the modes is the extinguishment of right on transfer of the asset itself or on account of the transfer of the right or rights in it.
The extinguishment of right or rights must in any case be on account of its or their transfer in order to attract the provisions of Section 45 which speaks about capital gains arising out of "transfer" of asset and not on account of "extinguishment of right" by itself.
[583G H; 584A] If extinguishment of right or rights is not due to transfer and is on account of the destruction or loss of the asset, it is not a transfer and does not attract the provi sions of section 45 which relate to transfer and not to mere extinguishment of right but to one by transfer.
Hence an extinguishment of right not brought about by transfer is outside the purview ors.
[584A B] Whatever the mode by which a transfer is brought about, the existence of the asset during the process of transfer is a pre condition.
Unless the asset exists in fact, there cannot be a transfer of it.
[583E] Transfer presumes both the existence of the asset and of the transferee to whom it is transferred.
[584C] 2.2 When an asset is destroyed there is no question of transferring it to others.
The destruction or loss of the asset, no doubt, brings.
about the destruction of the right of the owner or possessor of the asset, in it.
But it is not on account of transfer.
It is on account of the disappear ance of the asset.
The extinguishment of right in the asset on account of extinguishment of asset itself is not a trans fer of the right but its destruction.
By no stretch of imagination, the destruction of the right on account of the destruction of the asset can be equated with the extinguish ment of right on account of its transfer.
[583E G] 3.1 Although the definition of "transfer" in Section 2(47) of the Act is inclusive, and, therefore, extends to events and transactions which may not otherwise be "trans fer" according to its ordinary, popular and natural sense, yet it also mentions such transactions as 580 sale, exchange etc.
to which the word "transfer" would properly apply in its popular and natural import.
Since those associated words and expressions imply the existence of the asset and of the transferee, according to the rule of noscitur a sociis, the expression "extinguishment of any rights therein" would take colour from the said associated words and expressions, and will have to be restricted to the sense analogous to them.
[585C E] If the legislature intended to extend the definition to any extinguishment of right, it would not have included the obvious instances of transfer, viz. sale, exchange etc.
Hence the expression "extinguishment of any rights therein" will have to be confined to the extinguishment of rights on account of transfer and cannot be extended to mean any extinguishment of right independent of or otherwise than on account of transfer.
[585E F] 3.2 The High Court, was not correct in reading the expression " 'extinguishment of any rights" in the assets as any extinguishment of right whether it resulted in or was on account of transfer nor was it right in assuming that for "transfer" within the meaning of Section 45 the asset need not exist.
It erred in ignoring the basic postulate that Section 45 does not relate to extinguishment of right but to transfer.
Having concentrated its attention on the words "extinguishment of right" rather than on "transfer", the High Court, misdirected itself and proceeded on the basis that every extinguishment of right whether by way of trans fer or not, is attracted by Section 45.
[585F G; 584B] Commissioner of Income Tax vs Madurai Mills Co. Ltd., and Commissioner of Income Tax vs Mohanbhai Pamabhai, , referred to.
Whether the lendee company had insured assessee 's machinery as bailees or as agents of the assessee would make no difference.
The insurance policy contained the ' rein statement clause requiring the insurer to pay the cost of the machinery as on the date of the fire.
[587G H; 588A] 5.
In an insurance policy with the reinstatement clause, the insurer is bound to pay the cost of the insured property as on the date of destruction of loss, and it matters very little if the amount so paid by the insurance company is invested for purchasing the destroyed asset or for any other purpose.
[588A B] C. Leo Macho do vs Commissioner of Income Tax, , approved.
581 Income tax Commissioner vs
J.K. Cotton Spinning & Weaving Mills Co. Ltd., , disapproved.
|
Civil Appeal No. 3164 (NT) or 1991.
From the Judgment and Order dated 19.4.1984 of the Delhi High Court in I. Tax Ref.
No. 250 of 1975.
H.N. Salve and Pramod Dayal for the Appellant.
J. Ramamurthy, Vijay.
K. Verma and Ms. A. Subhashini for the Respondent.
The Judgment of the Court was delivered by RANGANATH MISRA, CJ.
Special leave granted.
The judgment of the High Court of Delhi is challenged by the assessee in this appeal.
Assessee is a private ' limited company running a cold storage.
The year of assessment is 1973 74.
An 'industrial company ', as defined in sectiOn 2(7)(c) of Finance Act, 1973 for ,the purposes of the First Schedule of that Act was entitled to certain concessions in the matter of taxation.
The appellant laid claim to such benefits by contending that it came within the meaning of 'industrial company '.
The question that was referred by the Income tax Appel late Tribunal to the High Court was: "Whether on the facts and in the circumstanCeS of the case the assessee company running a cold storage could be held to be an industrial company for purposes of section 2C7)(c) of the Finance Act, ' 1973 and the First Schedule thereto?" 591 The Income tax Officer had not accepted the claim of.
the appellant but the Appellate Assistant Commissioner conceded the claim and directed remission of the proceedings to the Income tax Officer for re computation of the tax by treating the appellant as an 'industrial company ', The Tribunal accepted the appeal of the Revenue and held that the appellant was not an 'industrial company '.
The High Court has approved the conclusions reached by the Tribunal. 'Industrial compnay ' has been defined in section 2(7)(c) of the Finance Act., 1973 thus: "Industrial company means a company which is mainly engaged in the business of generation or distribution of electricity or any other form of power or in the construction of ships or in the manufacture or processing of goods or in mining.
(Underlining is ours) The appellant had taken the stand that the activity carried on by it came within the words 'processing of goods '.
The short question for examination, therefore, is whether the cold storage of the appellant can be held to have been engaged in the processing of goods.
This question directly arose for consideration of a Division Bench of the Calcutta High Court in Commissioner of Income tax vs Radha Nagar Cold Storage(P) Ltd., 126 I.T.R. 66.
Sabyasachi Mukharji, J., (as he then was) spoke for the Court in this.case.
Certain English cases were taken into consideration to find out the difference between manufactur ing and processing and to find the true meaning of the word "processing".
The word 'processing ' has not been defined in the Income tax Act.
The word 'process ' has various meanings, some wider than others.
Lord Guthrie in Kilmarnock Equita ble Co operative Society Ltd. vs IRC [19661 at page 681 observed that the word "does not have the widest significance of 'anything done to the goods or materials '.
The Division Bench of the Calcutta High Court ' looked 'for the meaning in the Oxford DictiOnarY, Webster 's New Interna tional Dictionary, Words and Phrases Legally Defined ' Vol. 4 and in Encyclopaedia Britannica Vol. 9.
The High Court was impressed by the statement in Encyclopaedia Britannica, vol. 9 where it was said ' "The only method by which fresh foods may be preserved for a considerable period in the raw state is by subjecting 592 them to as low a temperature as possible without causing damage by freezing.
Storage at temperature above freezing, in the neigh bourhood of 35 F/2 C is known as cold storage.
Storage at such temperature makes possible the holding in good condition of many fresh foods for considerable periods and their shipment to distant markets to consumers.
" The High Court proceeded to state: "The act of cold storage appears to us to bean act whereby foods or ' products stored in the cold storage are prevented from their. natural decay.
The potatoes which are kept in the cold storage are preserved in the original state and their normal decay is prevented.
That, in our opinion, would be processing the goods, that is to say, preser vation applying a method to 'the goods, where by the. goods.
are prevented from taking its/normal course.
There fore, looking from a broad point of view, in the light of the definition provided in the several diction aries to which we have referred, is appears to us, that in the context of the present stat ute, ,which has used the expression "process ing" in contradistinction or differently from the expression "manufacture", the assessee company was engaged in the act of processing the goods in terms of the Finance Act at the relevant time. " The Court referred with approval to a decision of the 'Allahabad High Court in Addl.
Commissioner of Income tax, Kanpur vs Farrukhabad Cold ' Storage (P) Ltd., 16.
The Calcutta High Court 's view directly supports the appel lant 's stand.
In the impugned judgment reported in , after dealing with the cases of the Calcutta and Allahabad High Court,.
reference was.made to the decision of this Court in Chowgule & Co. Pvt. Ltd. and Ant.
vs Union of.
India and Ors., [1981] 1 SCC653 to find out the true meaning of the two words 'manufacture ' and 'processing '.
After discussing some precedents this Court observed thus: "What is necessary in Order to characterise an operation as "processing" is that the 'commodity must., as a result of the operation, experience some change.
, Here, in the present case, diverse quantities of ore possessing different chemi cal and 593 physical compositions are blended together to produce ore of the requisite chemical and physical composition demanded by the foreign purchaser and obviously as a result of this blending, the quantities of ore mixed together in the course of loading through the mechanical ore handling plant experi ence change in their respective chemical and physical compo sitions, because what is produced by such blending is ore of a different chemical and physical composi tion.
When the chemical and physical composi tion of each kind of ore which goes into the blending is changed; there can be no doubt that the operation of blending would amount to "processing" of ore within the meaning of section 8(3)(b) and Rule 13.
It is.no doubt true that the blending of ore of diverse physical and chemical compositions is carried out by the simple act of physically mixing diifferent quantities of such ore on the conveyor belt of the mechanical ore handling ' 'plant.
But to our mind it is immaterial as to how the blending is done and what process is utilised for the purpose of blending.
What is material to consider is whether the different quantities of ore which are.
blended together in the course of loading through the Mechani cal ore handing plant undergo any change in their.
physical and chemical composition as a result of blending and so far as this aspect of the question is concerned, it is.
impossi ble to argue that they do not suffer any change in their respective chemical and physi cal compositions ".
The meaning given to the word 'processing ' and the test laid down to find out whether the operation amounts to processing by the three Judge Bench of 'this Court runs counter to the conclusions.
reached by the Allahabad and Calcutta High Courts.
As we have already pointed out, the two direct decisions on the point are the cases from Allaha bad and Calcutta.
The other cases that have been cited in the Calcutta judgment or at the Bar are cases not relating to the meaning or ambit of the relevant expression in the definition of section 2(7)(c) of the Finance Act, 1973.
We have already noted that processing is a term of wide amplitude and has various aspects and meanings.
In common parlance 'processing ' is understood as an action which brings forth some change or alteration of the goods or material which is subjected to the act Of process ing The dictionary meaning of 594 the term is not Very different from this meaning.
in one sense while various other meanings of wider amplitude are also available.
The view taken by Allahabad and Calcutta High Courts did not find favour with the three Judge Bench of this Court and in clear terms the judgment indicates that processing involves bringing into existence a different substance from what the material was at the commencement of the process.
In a cold storage, vegetables, fruits and several other articles which require preservation by referigeration are stored.
While 'as a result of long storage, scientific examination might indicate loss of moisture content that is,not sufficient for holding that the stored articles have undergone a process within the meaning of section 2(7)(c) of the Finance Act, 1973.
The three Judge Bench decision must be taken to have overruled the view of the Allahabad High Court in Addl.
Commissioner of Income tax, ' Kanpur vs Far rukhabad Cold Storage (P) Ltd., (supra) and that of the Calcutta High Court in Commissioner of Income tax vs Radha Nagar Cold Storage (P) Ltd., (supra).
The appeal has, therefore, to be dismissed and the opinion of the Delhi High Court has to be affirmed.
Parties are directed to bear their own costs.
N.P.V. Apppeal 'dis missed.
| An 'industrial Company ', as defined in Section 2(7)(c) of Finance Act, 1973 was entitled to certain concessions in the matter of taxation.
The appellant, a private limited company running a cold storage, laid claim to such benefits contending that it came within the meaning of 'industrial company ' since the activity carried on by it came within the words 'processing of goods '.
The income Tax Officer, rejected the assessee 's claim but the Appellate Assistant Commissioner conceded the claim, and directed remission of the proceedings to the income Tax Officer for re computation of the tax by treating the appel lant as an 'industrial company '.
The Tribunal accepted the appeal of the Revenue and held that the appellant was not an 'industrial company '.
This was upheld by the High Court.
Dismissing the appeal preferred by the assessee, this Court, HELD: 1.1 The term 'processing ' is of a wider amplitude and has various aspects and meanings.
in common parlance 'processing, is understood as an action which brings forth some change or alteration of the goods or material which is subjected to the act of processing.
The dictionary meaning of the term is not very different from this meaning in one sense while various other meanings of Wider amplitude are also available.
[593G H, 594A] 1.2 In a cold storage, vegetables, fruits and several other articles, which require preservation by re frigeration are stored.
While as a result of long storage, scientific examination might indicate loss of moisture content, that is not sufficient for holding that the stored articles have 590 undergone a process within the meaning of Sec.2(7)(c) of the Finance Act, 1973.
[594C] Chowgule, & Co. Pvt. Ltd. and Anr.
vs Union of India & Ors.
, ; , relied on.
Commissioner of Income tax vs Radha.
Nagar Chid Storage (P) Ltd., and Addl.
Commissioner of Income tax, Kanpur vs Farrukhabad Cold Storage (P) Ltd., 107 I.T.R. 816, referred to.
Kilmarnock Equitable Co operative Society Ltd. vs IRC., [1966] 42TC 675 at Page 681, referred to.
|
tion (Civil) No. 2135 of 1982.
(Under Article 32 of the Constitution of India): S.K. Bhattacharya for the Petitioner.
Mahabir Singh, K.B. Rohtagi, S.K. Dhingra, L.K. Gupta, S.K. Verma, B.D. Sharma, Mrs. section Dikshit and Ms. A. Subha shini (N.P.) for the Respondents.
The following Order of the Court was delivered A letter addressed to this Court complaining about prevalence of bonded labour system in Cutton, Anangpur and Lakkarpur areas of Faridabad District in Haryana State wherein the stone quarries workers are living in most inhu man conditions, was treated as a writ petition under Article 32 of the Constitution.
This Court appointed two Advocates as Commissioners to inquire into the working conditions of the stone quarry workers with particular reference to the cases mentioned in the writ petition.
This Court finding the necessity of an in depth investigation into social and legal aspects of the problem also appointed Dr.
S.B. Patvardhan and Mr. Krishan Mahajan to study the working conditions prevail ing in the, various quarries within the Faridabad district with particular reference to violation of provisions of the Bonded Labour System (Abolition) Act of 1976 and Inter State Migrant workmen (Regulation of Employment & Conditions of Service) Act.
The Commissioners furnished their report to the Court on 28th of June,1982.
Several questions were raised before the Court apart from merit of the dispute; the important ones being (i) whether an application under article 32 of the Constitution was maintainable, particularly when to allegation: of infringe ment of petitioner 's fundamental right was 529 made; (ii) whether a letter addressed to the Court could be treated as a writ petition and be proceeded with in the absence of support by affidavit or verification;.
and (iii).whether the Court had power to appoint Commissioners or an investigative body to inquire into allegations made in the petition and by affidavits and require reports to be made to the.
Court for facilitating exercise of its juris diction under article 32 of the Constitution.
The concept of public interest litigation had not then adequately 'developed and its contours sufficiently deline ated; the practice of accepting letters as a foundation for a writ petition had not also been clearly established; in writ petitions the practice of appointing Commissioners or investigating agencies had not been precedented; the tradi tional concept of defence of locus standi has not been wiped away notwithstanding the decision in S.P. Gupta vs Union of India, [1982] 2 SCR 365.
A 3 Judge Bench heard the matter at considerable length and each of them delivered a separate judgment.
Though the main judgment was delivered by Bhagwati, J. (as he then was) and Justice A.N. Sen concurred with it by a separate judg ment and Pathak, J. (as he then was) while concurring with Bhagwati, J. on some issues gave his own views.
The Court also took note of the position that the Presidential Ordi nance of 1975 for abolition of bonded labour and the subse quent Parliamentary legislation in 1975 were seeking to implement the mandate of article 23 of the Constitution but while statutory provision had been made, taking into account the fact that the pernicious practice of bonded labour had prevailed in this country for centuries; the then current social atmosphere had been tolerating this practice without any serious objection; the concentration of wealth in the hands of a few and the majority being poor it became conven ient for he owners of property and wealth to exploit the poor and in India asocial_ change opposed to traditional methods was difficult to implement, the Court did not treat the writ petition as disposed.
of by its judgment and the application survived for further monitoring.
In paragraph 39 of the judgment of Bhagwati, J. with whom on that aspect the other two learned Judges agreed, it was said: 530 "We accordingly allow this writ petition and issue the above directions to the Central Government and the State of Haryana and the various authorities mentioned in the preceding paragraphs of this judgment so that ' these poor unfortunate workmen who lead a miserable existence in small novels, exposed to the vagaries of weather, drinking foul water, breathing heavily dust laden polluted air and breaking and blasting stone all their life, may one day be able to realise that freedom is not only the monopoly of a few out belongs to them all and that they are also equally enti tled along with others to participate in the fruits of free, freedom and development.
These directions may be summarised as follows: .lm20 (1) The Government of Haryana will, without any delay and at any rate within six weeks from today, constitute Vigi lance Committee in each sub division of a district in compliance with the require ments ' of SeCtion 13 of the keeping in view the guidelines given by us in this judgment.
(2) The Government of Haryana will in struct the district magistrates to take up the work of identification of bonded labour as one of their top priority tasks and to map out areas of concentration of bonded labour which are mostly to be found in stone quarries and brick kilns and assign task forces for identification and release of bonded labour and periodi cally hold labour camps in these areas with a view to educating the labourers inter alia with the assistance of the National Labour Institute.
(3) The State Government as also the Vigilance Committees and the district magistrates will take the assistance of non political social action groups and voluntary agencies.
for the purpose of ensuring implementation of the provisions of the .
(4) The Government of Haryana will draw up within a period of three months from today a scheme or programe for rehabili tation of the freed bonded 531 labourers in the light of the guidelines set out by the Secretary to the Govern ment of India, Ministry of Labour in his letter dated September 2, 1982 and imple ment such scheme or programme to the extent found necessary.
(5) The Central Government and the Gov ernment of Haryana will take all neces sary_ steps for the purpose of ensuring that minimum wages are paid to the work men employed in the stone quarries and stone crushers in accordance with the principles laid down in this judgment and this direction shall be carried out within the shortest possible time so that within six weeks from today, the workmen start actually receiving in their hands a wage not less than the minimum wage.
(6) If payment of wages is made on truck basis, the Central Government will direct the appropriate officer of the Central Enforcement Machinery or any other appro priate authority or officer to determine the measurement of each truck as to how many cubic ft. of stone it can contain and print or inscribe such measurement on the truck so that appropriate and ade quate wage is received by the workmen for the work done by.
them and they are not cheated out of their legitimate wage.
(7) The Central Government will direct the Inspecting Officers of the Central Enforcement Machinery or any other appropriate Inspecting Officers to carry out surprise checks at least once in a week for the purpose of ensuring that the trucks are not loaded beyond their true measurement capacity and if it is found that the trucks are loaded in excess of the true measurement capacity, the In specting Officers carry ing out such checks will immediately bring this fact to the notice of the appropriate authori ties and necesSary action shall be initi ated against the defaulting mine owners and/or thekedars or jamadars.
(8) The Central Government and the Gov ernment of Haryana will ensure that payment of wages is made 532 directly to the workmen by the mine lessees and stone crusher owners or at any rate in the presence of a representa tive of the mine lessees or stone crusher owners and the Inspecting Officers of the Central Government as also of the Govern ment of Haryana shall carry out periodic checks in order to ensure that the pay ment of the stipulated wage is made to the workmen.
(9) The Central Board of Workers Educa tion will organise periodic camps near the sites of stone quarries and 'stone crushers in Faridabad District for the purpose of educating the workmen in the rights and benefits Conferred upon them by social welfare and labour laws and the progress made shall be reported to this Court by the Central Board of Workers ' Education at least once in three months.
(10) The Central Government and the Government of Haryana will immediately take steps for the purpose of ensuring that the stone crusher owners do not continue to foul the air and they.
adopt either of two devices, namely, keeping a drum of water above the stone crushing machine with arrangement for continuous spraying of water upon it or installation of dust sucking machine and a compliance report in regard to this direction shall be made to this Court on or before Febru ary 28, 1984.
(11) The Central Government and the Government of Haryana will immediately ensure that the mine lessees and stone crusher owners start supplying pure drinking water to the workmen on a scale of at least 2 litres for every workman by keeping suitable vessels in a shaded place at conveniently accessible points 'and such vessels shall be kept in clean and hygienic condition and shall be emptied, cleaned and refilled every day and the appropriate.
authorities of the Central Government and the Government of Haryana will supervise strictly the enforcement of this direction and initi ate necessary action if there is any default.
533 (12) The Central Government and the Government of Haryana will ensure that minimum wage is paid to the women and/or children who look after the vessels in which pure drinking water is kept for the workmen.
(13) The Central Government and the Government of Haryana will immediate ly direct the mine lessees and stone crusher owners to start obtaining drink ing water from any unpolluted source or sources of supply and to 'transport it by tankers to the work site with sufficient frequency so as to be able to keep the vessels filled up for supply of clean drinking water to the workmen and the Chief Administrator, Faridabad Complex will set up the points from where the mine lessees.
and stone crusher owners can, if necessary, obtain supply of potable water for being carried by tankers.
(14) The Central Government and the State GoVernment will ensure that conservancy facilities in ,the shape of latrines and urinals in accordance with the provisions contained in Section 20 of the Mines Act, 1950 and Rules 33 to 36 of the Mines Rules, 1955 are provided at the latest by February 15, 1984.
(15) The Central Government and the State Government will take steps to immediately ensure that appropriate and adequate medical and first aid facilities as required by section 21 of the and Rules 40 to 45 A of the Mines Rub s, 1955 are provided to the workmen not later than January 31, 1984.
(16) The Central Government and the Government of Haryana will ensure that every workman who is required to carry out blasting with explosives is not only trained under the Mines Vocational Train ing Rules, 1966 but also holds first aid qualification and carries a first aid outfit while on duty as required by Rule45 of the Mines Rules, 1955.
(17) The Central Government and the State Government will immediately take steps to ensure that 534 proper and adequate medical treatment is provided by the mine lessees and owners .of stone crushers to the workmen employed by them as also to the members of their families free of cost and such medical assistance shall be made avail able to them without any cost of trans portation or otherwise and the doctor 's fees as also the cost of medicines pre scribed by the doctors including hospi talisation charges, if any, shall also be reimbursed to them.
(18) The Central Government and the State Government will ensure that the provi sions of the , the Maternity Benefit (Mines and Circus) Rules, 1963 and the Mines Creche Rules, 1966 where applicable in any particular stone quarry or stone crusher are given effect to by 'the mine lessees and stone crusher owners.
As soon as any workman employed in a stone quarry or stone crusher receives injury or contracts disease in the course of his employment, the concerned mine lessee or stone crusher owner shall immediately report this fact to the Chief Inspector or Inspecting Officers of the Central Government and/or the State Government and such Inspecting Officers shall immediately provide legal assist ance to the workmen with a view to ena bling him to file a claim for compensa tion before the appropriate court or authority and they shall also ensure that such claim is pursued vigorously and the amount of compensation awarded to the workman is secured to him.
(20) The Inspecting Officers of the Central Government as also of the State Government will visit each stone quarry or stone crusher at least once in a fortnight and ascertain whether there is any workman who is injured or who is suf fering from any disease or illness, and if so, they will immediately take the necessary steps for the purpose of pro viding medical and legal assistance.
(21) If the Central Government and the Government of Haryana fail to ensure performance of any of the 535 obligations set out in clauses 11, 13, 14 and 15 by the mine lessees and stone crusher owners within the period speci fied in those respective clauses, such obligation or obligations to the extent to which they are not performed shall be carried out by the Central Government and the Government of Haryana.
The Court went on to further say: "We also appoint Shri Laxmi Dhar Misra, Joint Secretary in the Ministry of Labour, Govern ment of India as a Commissioner for the pur pose of carrying out the following assign ment: .lm20 (a) He will visit the stone quar ries and stone crushers in Faridabad District and ascertain by enquiring from the labourers in each stone quarry or stone crusher in the manner set out by us whether any of them are being forced to provide labour and are bonded labourers and he will prepare in respect of each stone quarry or stone crusher a state ment showing the names and particulars of those who, according to the enquiry made by him, are bonded labourers and he will also ascertain from them whether they want to continue to work in the stone quarry or stone crusher or they want to go away and if he finds that they want to go away, he will furnish particulars in regard to them to the District Magis trate, Faridabad and the District Magis trate will, on receipt of the particulars from Shri Laxmi Dhar Misra, make neces sary arrangements for releasing them and provide for their transportation back to their homes and for this purpose the State Government will make the requisite funds available to the District Magis trate.
(b) He will also enquire from the mine lessees and owners of stone crushers as also from the thekedars and jamadars whether there are any advances made by them to the labourers working in the stone quarries or stone crushers and if so, whether there is any documentary evidence in support of the same and he.
will also ascertain what, according to the mine lessees and owners of stone crushers or the jamadar or the 536 kedar, are the amounts of loans still remaining out.
standing against such labourers.
(c) He will also ascertain by carrying out sample check whether 'the workmen employed in any particular stone quarry or stone crusher are actually in receipt of wage not less than the minimum wage and whether the directions given in this order in regard to computation and pay ment of minimum wage arc being implement ed by the authorities.
(d) He will conduct an enquiry in each of the stone quarries and stone crushers in Faridabad District for the purpose of ascertaining whether there are any con tract labourers or inter State migrant workmen in any of these stone quarries or stone crushers and if he finds as a result of his enquiry that the Contract Labour Act, and/or the Inter State Mi grant Workmen Act is applicable, he will make a report to that effect to the Court.
(e) He will ascertain whether the direc tions given by us in this judgment re garding effective arrangement for supply of pure drinking water have been carried out by the mine lessees and stone crusher owners and pure drinking water has been made available to the workmen in accord ance with those directions.
(f) He will also ascertain whether the mine lessees and owners of stone crushers in each of the stone quarries and stone/crushers visited by him have complied with the directions given by us in this judgment regarding provision of conservancy facilities.
(g) He will also ascertain whether the directions given by us in this judgment in regard to provision of first aid facilities and proper and adequate medi cal treatment including hospitalisation to the workmen and the members of their families are being carried out by, the mine lessees and stone crusher owners and the necessary first aid facilities and proper and adequate medical services including hospitalisation are provided to the workmen and the members of their families.
537 (h) He will also enquire whether the various other directions given by us in this judgment have been and are being carried out by the mine lessees and stone crusher owners.
" This Court indicated its expectation in paragraph 40 of the judgment thus: "We have no doubt that if these direc tions given by us are honestly and sin cerely carried out, it will be possible to improve the life conditions of these workmen and ensure social justice to them so that they may be able to breathe the fresh air of social and economic freedom.
" The proceedings thereafter continued with a view to fulfilling the fond hope and expectation of the Court.
Mr. Laxmidhar Misra, In due course, submitted his report in two parts one dealing with the identification ' of the bonded labour and the second covering the inquiry into the implementation of the 21 directives.
The petitioner Morcha came before the Court with a petition for contempt action alleging that the directions were not being implemented.
That led to the appointment of Mr. Mahabir Jain of the Faculty of National Labour Institute to inquire into the measures and report on the degrees to which the 21 direc tives issued by the Court had implemented and to present to the Court a clear picture of the issues involved f.or ena bling it to make its own assessment and come to a conclusion as to whether the directions had been or were being imple mented and also as to whether action for contempt was appro priate or in the matter of monitoring the social problem, some other course was necessary to be adopted.
In February, 1989, Mr. Jain gave a very detailed report to the Court which is on record and to 'which reference has to be made in a later part of our order.
The Union Territory of Delhi housing the capital of the country is surrounded on three sides by the Haryana State and on the other lies the State of Uttar Pradesh.
The stone quarries of Faridabad have thrived for almost half a century now on account of building activity in the industrial belt of Haryana particularly Ballabgarh and Faridabad and in the Union Territory of Delhi.
The quarrying process involves substantial manual labour and the need of Continuous avail ability of labour at cheap rate has led to the growth of the system of bonded labour in that trade.
For a loan taken at an exorbitant rate of interest 538 the debtor virtually sells himself to the creditor and gets bonded usually for a period of life and renders service for the purpose of satisfying ' the debt.
The creditor anxious to exploit the situation ensures that the debt is never satis fied and often on the traditional basis of pious obligation the liability is inherited by the children of the original debtor.
The system thus provides a built in mechanism for continuation of exploitation of the under privileged section of the society by the privileged few living therein.
The bonded labourers are, paid nominal wages and often their family members are not permitted to take remunerative jobs elsewhere without permission of the master, Normally, such permission is not granted and the impoverished condi tion is allowed to continue to the advantage of the credi tor.
The Constitution fathers were aware of this prevailing inhuman practice and in article 23(1) provided: .lm`5 "Traffic in human beings and beggar and other similar forms of forced labour are prohibited and any contravention of this provision shall be an offence punishable in accordance with law.
" So powerful was the rich men 's lobby that it took 25 years after the enforcement of the Constitution to provide a definite law for the purpose and the Presidential Ordinance was the first positive measure in this direction.
That got replaced Act entitled .
We may point out that the directives in articles 39(c), 41 and 42 are also relevant in this regard.
It is perhaps not necessary to delve into the philosophy involved in the matter as the 3 Judge Bench has gone into it in the judgment of December 1983, and what remains for consideration at this stage is more or less a clear review of the enforcement of the directives and assessment of the outcome for achieving the statutory purpose and the constitutional goal and for the fulfilment of the hopes and expectations of this Court in that regard and if it is necessary to take further action and if so, what such action, should be.
This will require an analytical study of, the reports furnished by Mr. Laxmidhar Misra and Mr. Mahabir Jain.
Mr. Laxmidhar Misra in his letter to the Registry of this Court in January, 1984, ' indicated that the inquiry entrusted to him had two phaSes the first relating to the inquiry into the implementation of the Bonded Labour System.
(Abolition) Act, Inter State Migrant Workmen (Regulation of Employment and Conditions of Service) Act and the Contract Labour (Regulation and Abolition) Act etc.
and the 539 Second related to ascertaining the extent of compli ance of the directions of this Court by the concerned au thorities.
On 4th February, 1984, this Court directed: "So far as ,the consideration of the report of Mr. Laxmidhar Misra is concerned, the same does not brook any delay involving as it does the release and rehabilitation of the bonded labourers and amelioration of the lives and working conditions of the large number of stone quarry workers, we would direct that the matter be expeditiously taken up." Mr. Laxmidhar Misra submitted his report on.
the second aspect too.
His report gave the ultimate indication that the enforcement of ' the Acts covered by the first part of his report had not been adequate.
In regard to the second part, namely, steps for implementation of the Court 's direc tives, he also came to hold that nothing very substantial had been done though some steps had been taken.
On 3.5.1988, this Court required Shri A.K. Srivasta va, Director General of Labour Welfare in the Ministry of Labour to inquire into the matter again and furnish a report on the degree to which the directions issued by the Court had received compliance.
Shri Srivastava was not in a posi tion to undertake this inquiry and ultimately it led to the appointment Of Mr. Mahabir Jain, as already indicated.
On 6th of March, 1989, Mr. Jain furnished his report.
He took into account the 21 directives of the Court.
As the report indicates,he adopted the method of interviews, observations, representations, holding of formal and informal meetings, reference to documents and other available literature as the basis for collection of information.
He spent considerable time in the jhuggi colonies where the bonded labourers dwell in different parts of the quarry area.
He noticed absence of sufficient drinking water facility, no provision for school ing of the children of the bonded labourers and want of appropriate medical facility.
Apart from these, he also found that the jhuggis were very small, unhygienic and did not constitute reasonable accommodation for human use.
He noticed that there was lack of organisation among the jhuggi dwellers which facilitated their exploitation by the stone quarry owners.
Even though camps were being organised at regular intervals.
for workers employed in the stone quar ries and stone crushers by the Regional Directorate of Workers Education Centre, Faridabad, there was no discerni ble ' impact whiCh would catch the eye of the visitor.
He recorded the statements of several people he met 540 including workers, their widows, dependants, relations, outsiders and public officials.
He noticed that adequate safety measures were not available in the mines and several accidents had taken place on that account.
With reference to the Workers ' Education Centre at Faridabad, Mr. Jain observed: "A critical analysis of the camp reports shows mat a few Acts like the , Minimum Wages Act, BOnded Labour System Act, .
Payment of Wages Act and Trade Union Act had been given much emphasis in almost all the camps.
In only one or two camps, topics like eradication of social evils, economic problems, a sense of coopera tion and the need for organisation of the workers had been discussed.
If one goes back to the camp reports of the Centre for Workers Education, Faridabad.
one finds that the basic objectives of the camps were to desensitise the workers about their legal rights and the need for workers organisation.
Compared to those objectives, the discussion of the topics relevant to organisation building had been given less emphasis.
Besides, less emphasis was also on audio/visual method of teaching.
However, topics discussed in different camps were more or less the same.
Therefore, topics which would create awareness among stone quarry workers need to be discussed in the camps.
In regard to the specific direction of the Court, Mr. Jain noticed that Vigilance Committees as required under Section 13 of the Act had been constituted in all districts and sub divisional headquarters of the State of Haryana and a good number of meetings of the Vigilance Committees had been held.
He, however, came to the conclusion on verifying the proceedings of the Vigilance Committee at Faridabad that he did not find any useful information regarding the work of the Vigilance Committee '.
Mr. Jain then referred to the report submitted by Shri Laxmidhar Misra to this Court where he had said that 26 per cent of the bonded labourers had been released and rehabili tated by the State Government; nearly 30.per cent of the identified bonded labourers were not willing to go back to their native places.
At the same time, 41 per cent of.
the bonded labourers had left the work site.
According to 541 Mr. Jain, these facts showed that only one bonded labourer out of every three identified was willing to go back to his or her native place.
Mr. Jain, however, found that most of the bonded labourers who had been released or rehabilitated came back to the mines a feature which clearly indicates that the rehabilitation process was defective and not use ful.
If the rehabilitated bonded labourer had a sense of confidence in the arrangement of rehabilitation, there would indeed be no occasion for him to run away from the rehabili tative process back to bondage.
Mr. Jain found that the task of identifying the bonded labourers had not been sincerely carried out.
It is true that in 1982 the Haryana Government had instructed all the District Magistrates to make rehabil itation schemes for released bonded labourers in accordance with the Government of India 's scheme and contemporaneously or near about that point of time some rehabilitation had been undertaken.
In the absence of constant goading, the exercise had become sporadic and even fell into disuse.
Mr. Jain found that there had been an increase in the number of bonded labourers and stone quarries were again thriving.
The minimum wage programme had not been effectively introduced.
A few prosecutions had been lodged but that was not adequate and had not generated the requisite consciousness.
Payment of wages had not been properly recorded and in the absence of documents cross verification became indeed difficult.
The Commissioner found that even though Mr. Laxmidhar Misra had indicated about deficiency of drinking water, schooling facility, medical treatment and the, like, no attention had been bestowed on improving these aspects and he noticed dearth of these wherever he went.
Portions from the conclu sions of the Jain report may now be extracted.
His report said: "It is a technologically backward industry thriving on continuous plentiful supply of cheap replaceable labour.
The impoverished rural hinterland sends forth an unending stream of uprooted, assetless, illiterate e people from the 'traditionally oppressed communities, mainly the Scheduled Castes and Tribes.
As workers in stone quarries and crushers, they must remain uprooted, asset less, illiterate and oppressed so that they may be easily replaced; so that the industry may continue to get its labour cheap.
" He further found: "It is an industry which in the mineral extraction part allows unchecked operation of self appointed, unregistered 542 middlemen, nicknamed 'contractors ' who perform a variety of functions." His yet further findings were that there was no account ability, the trade was ecologically hazardous, there was lack of planning and the working involved 'an in built system of criminality.
He, therefore, recommended that there should be central registration of all workers, conferment of the status of small producers by allocating permits directly to them, determining the minimum remuneration, facilitating modernisation, total exclusion ' of contractors and middlemen from the trade and protection and restoration of the natural environment.
This matter was heard for ' some time on the basis of these reports of Mr. Jain and we reserved judgment on 1oth of July, 1990.
, Swami Agnivesh at Whose instance this Court had registered the proceeding had undertaken to supply a list of unrehabilitated bonded labourers.
He took quite Some 'time to submit the statements and these reports indicated their number to be 3993.
When we were proceeding to dispose of the matter a communication was received by the Court dated 24.1.1991 from the 'Director General of Labour Welfare in the Ministry of Labour that the total number was 523 upto 30.11.1990.
The gap was so huge that we found it difficult to proceed tO Conclude the matter on the basis of the state ments given by Swami Agnivesh by ignoring the situation.
These aspects were brought to the notice of the parties and after hearing them, by an order of 2 1st FebrUary, 1991 this, Court directed: "With a view to meeting the situation, we direct that a Committee shall immediately be set up ' with Director General, Labour Welfare of the Union Government or a very senior officer from his establishment, the 'Chief Judicial Magistrate, Faridabad, Mrs. Raju Ramachandran, an advocate of the Supreme Court with social service background, an officer from the Haryana Government nor below the rank of Additional District Commissioner and Swami Agnivesh representing the petitioner.
Mr. Rohtagi or his nominee advocate 'appearing for the brick kiln owners would be permitted 'to associate in the activities of the Committee.
This Committee shall within six weeks from now check up the particulars pro vided in the list by the petitioner, identify the persons claimed to have been bonded 543 labour and collect all relevant material in respect of them; so as to assist this Court to make further directions in terms of the re quirement of the scheme to rehabilitate them.
In course of their movement, for the purpose of complying. 'with this order if fresh cases of bonded labour are noticed by them they would collect the particulars separately and report to the Court.
" The Committee obtained extension of time from this Court and ultimately has furnished its report on July 1, 1991.
This Committee adopted the questionnaire form to elicit information on all relevant aspects Which were 18 in number and have collated the material.
In a part of the report it has said: "The Committee members have personally identi fied every person whose name appears in the list prepared by the Committee.
They were approximately 1983 persons so identified but from each dera there were about 20% per sons who were not available for identification either out of fear of the contractor or be cause they had gone out that day for buying provisions or to the doctor.
Some persons could not be identified because the Committee missed finding them in their homes 'and also missed finding them in their places of work.
Some workers from the list given by the peti tioner had left and gone elsewhere and in their place some others had come.
There were some persons whose names had been missed in the list prepared by the Bandhua Mukti Mor cha.
The list of persons prepared by the Committee is all inclusive of the above iden tified categories.
" In this setting it would perhaps be appropriate to proceed on the footing that the total number of identified bonded labour is around 2000 and hot 3993 as stated by the petitioner.
It may be that some of the people whose name appear in the list furnished by Swami Agniyesh are no more in the area.
It may also be that people who had left their work even by then had been included in that list.
The picture placed by the Committee in regard to wages does not give one different from what had been recorded by this Court when the original case was disposed of in 1982.
It may be that the labourers have ' become more ' informed and educated about their rights.
They have, 544 however, no organised base.
are the weaker party and once they are in the trap of bondage the capacity to negoti ate is gone.
That is how, exploitation thrives notwithstand ing the intervention of this Court.
The facility of school ing and medical treatment, availability of water, provisions and scope for recreation are aspects which still require attention.
The Committee has reported: "Inspite of order dated 17th October, 1990 of the Chief Labour Commissioner under section 25(2)(v)(b) of ' the Contract Labour (Regula tion and Abolition) 'Central Rules, 1971 in respect of stone breaker who is a piece rated worker working in the stone mines in the Faridabad area, fixing the piece rated wage at the rate of Rs. 133 per 200 cft.
stone, there is no implementation thereof.
" At another place the Committee has said that though this Court in the main judgment had indicated that untrained workers should not be engaged in the blasting operation with explosives the practice seems to ' be 'still 'continuing and the law as also the direction of this Court were being violated by the contractors.
The 'Committee, therefore, has recommended that the principal employer should be made liable for implementation of the directions both of law and the court.
The contractors working under the Haryana Miner als Ltd. were mostly unregistered and unlicensed.
The Committee has noted that the entire area of opera tion has a dust cover in the atmosphere which is hazardous to the workmen 's health.
No attention has been bestowed by the inspecting authority or the labour law enforcers to secure improved conditions of working.
There has been divi sion of opinion as to whether it is the responsibility of the State Government Or the employer in regard to providing educational facility to the children of the quarry WorkerS/We have not been able to see any reason for the difference.
Quahies are located.
in a particular area away from habitation.
On account of necessity for ' workmen in the area people from different parts Of ,the country are made to live therein along with their families under very insanitary and inconvenient conditions.
Health care of.
workmen and members of their families and education of the children as also the adults in such exclusive locality should be of the employer.
To require a school to be built in such an area where there may not be adequate number of children for the purpose of schooling at the expense of the State exche 545 quer may not be appropriate.
That apart these institutions should be a part of the trade.
In the manner the employer has.to make provision for water and medical care, it should also have the responsibility of providing schooling for the children of the workmen.
Today emphasis is also being given on adult ' education.
If appropriate facility is provided the workmen beyond their working hours can also have scope for learning the three Rs and this could be through a process of adult education with State support under the relevant scheme.
The State of Haryana must come forward to play its role in a better way As already pointed out.these are quarries located nearabout the industrial belt of Haryana and not far away from Delhi.
Ecology.
is not only a focal problem but must be taken to be a problem of Delhi also.
Dust emanating from the working area in Haryana is bound to affect adverse ly the Delhi atmosphere.
In fact, if adequate importance is given to the angle of pollution the industry itself has to be regulated or may have to be stopped.
, The State of Haryana, we must say, has not taken our intervention in the proper spirit and has failed to exercise appropriate control though some eight years back ' this Court had in clear terms laid down the guidelines and had called.
upon the ' public authority to take charge of the situation and provide adequate safeguards.
The operation of stone quarries is more or less concen trated in particular areas.
That is a. feature which facili tates control.
If a local officer of appropriate status had been placed around the corner it would have helped in im proving the lot of the workmen.
If the pollution authority, had been made to visit the area at repeated intervals pollu tion.
control Could have been imposed.
If some authority entrusted with welfare had been made to inspect this area at regular intervals he could have ensured availability of facilities for schooling and hospital as also supply of drinking water to the workmen.
It, is a hot belt and for over 4 to 5 months water scarcity is there in this area.
The Workmen 's job is such that they are exposed to the summer heat.
It is the obligation of the employer, therefore, to provide a definite source of water:" The workmen are engaged almost on full time basis.
As report indicates bulk ,of the workmen are not prepared to return to their States.
What is,necessary; therefore, is provision of a permanent base for residence at or near the work site.
This would necessitate reason ' able housing; supply of water, a reasonable provision store at hand, 546 schooling facility, facility of a hospital, :recreational facilities and attention to the law and order problem.
Perhaps near the area a police station or an outpost could be located.
If the workers were insufficient in number, a doctor could be taken as a visitor.to the. area at frequent intervals and instead of a regular.
school one single teach er could be provided to look after the health of the people.
Court 's judgment to regulate such matters has inherent limitation.
These are not schemes which could be convenient ly monitored by a court far less can the apex court keep track of the matter.
Its Registry has congestion.
To get attention for a matter of this type from the Court is bound to take some time.
Human problems in their normal Way do not.
wait for a time schedule for attention.
In such circum stances, it should be the obligation of the State which on account of running stone quarries within its area must in various ways be getting benefits to look after these as pects.
As a welfare. ' State it is now the obligation of the State of Haryana to cater to these requirements of the area.
Haryana as we find has made substantial.
advances compared to many other States of the country and there is some amount of welcome consciousness in the administration of the State.
We hope and trust that if a direction is issued to the Chief Secretary of the State to regulate these aspects the repos ing of trust by this Court would not turn out to be mis placed.
In these circumstances we call upon the State of Har yana to attend to the needs referred to above of the workmen in a wellconsidered ' and systematic way.
Since those workmen who will be working there have to be protected from the vagaries of employment and the anxiety of the employer to draw work without adequate payments, the authorities of the State of Haryana must take care to protect the workmen from.the hands of the employer by ensuring compliance with the laws and if there be any vacuum.
in the laws, the State of Haryana should rise to play.the role of a welfare State and play it well.
In fact there could be a special cess raised against the quarry activities to be specifically utilised by way of return to the industry and there could be a special fund out of which all the amenities referred to above could be provided.
What is wanting is not power but the mind and alertness regarding one 's duty.
If our directions are worked out there would really be no bonded condition and the workmen would be paid their due share against employment and with the facilities ensured they can live well in the area.
547 At the point of enforcement of the directions as indi cated above if any one turns out to be bonded and is freed and is also prepared to return to his State, the scheme.
framed by the Government of India would be applicable to such person.
We are thankful to Mr. Laxmidhar Misra, Mr. Mahabir Jain and the members of the new Committee for their cooperation.
The society to maintain its own elevation requires willing and voluntary contribution from all those who inhabit it.
In a welfare State it is the society.
which has to develop its welfare means.
No society can have the welfare outlook unless geared up on the basis of amity, friendship, coopera tion, consideration and compassion.
If everyone living in India is willing to believe in the 'live and let live ' principle he would be prepared to devote the same attention to the people around him as he is willing to devote for himself.
This factor, if practised, would immediately bring about sufficient rejuvenation of the ailing society.
It., is this elevated society that everyone must look forward to.
We, therefore, dispose of this petition by directing that the State of Haryana shall now ensure that the people who have been identified numbering about 2000 are continued in work with the improved conditions of service and facili ties as referred to above and such of them who want to go back to their native areas be treated as released from bondage and appropriate action must be taken in accordance with Government of India 's scheme forthwith.
There shall be no order as to costs.
We had called upon the State of Haryana:to deposit Rs.20,000 to meet the expenses of the Committee appointed by us.
The Registry will look into that matter and on the basis of the statement furnished by the Committee put up a note within two weeks for giving direction regarding honorarium to be paid to the members of the Committee.
V.P.R. Petition allowed.
| A letter addressed to this Court complaining about prevalence of bonded labour system in the quarries of Fari dabad District in Haryana_ State was treated as a writ petition under Article 32 of the Constitution.
Two Advocates were appointed as Commissioners to inquire into the working conditions of the stone quarry workers.
Later, this Court, finding the necessity of an in depth investigation into social and legal aspects of the problem, also appointed two Commissioners Dr. 'S.B. Patvardhan and Mr. Krishan Mahajan to study the working conditions provail ing in the various quarries within the Faridabad district with particular reference to violation of provisions of the Bonded Labour System (Abolition) Act of 1976 and Inter State Migrant Workmen (Regulation of Employment & Conditions of Service) Act.
The Commissioner furnished their report on 28th of June, 1982.
The 3 Judge Bench heard the matter and In its Judgment (reported in ; , dealt with various aspects of the problem and taking into account the information collected by Advocate Commissioners and the report made by Dr. Patvardhan.
The Court did not treat the writ petition as disposed of by its judgment and the application survived for further monitoring.
This Court also appoInted Shri Laxmi Dhar Misra, JoInt Secretary 525 in the Ministry of Labour, Government of India as a Commis sioner to carry out the assignments stated in the judgment.
Mr. Laxmidhar Misra, in due course, submitted his report in two parts one dealing with the identification of the bonded labour and the second covering the inquiry into the implementation of the 21 directives.
The petitioner Morcha, filed a petition for contempt alleging that the directions were not being implemented.
Mr. Mahabir Jain of the Faculty of National Labour Institute was appointed to inquire into the measures and report on the degrees to which the 21 directives issued by the Court had been implemented and to present to the Court a clear picture of the issues involved for enabling it to make its own assessment and come to a conclusion as to whether the directions had been or were being implemented and also as to whether action for contempt was appropriate or in the matter of monitoring the social problem, some other course was necessary to he adopted, and in February, 1989, the report was submitted to the Court.
As the 3 Judge Bench had gone into the philosophy in volved in the matter in the Judgment, what remains for consideration at this stage was more or less a clear review of the enforcement of the directives and assessment of the outcome for achieving the statutory purpose and the consti tutional goal and for the fulfilment of the hopes and expec tations.
of this Court in that regard.
The matter was heard for some time on the basis of these reports of Mr. Jain and this Court reserved Judgment on 10th of July, 1990.
When the totter was about to he disposed a communication was received by the Court dated 24.L1991 from the Director General of Labour Welfare in the Ministry of Labour that the total number of unrehabilitated bonded laboures was 523 upto 30.11.1990, whereas the number to he 3993 according to the petitioner and on 21st February, 1991, this court directed a Committee to check up the particulars and to furnish a report, which was furnished on July 1, 1991, from which it was understood that the total number of identified bonded labour is around 2000 and not 3993.
The report indicated that the wages, the facility of schooling and medical treatment, availability of water, provisions and scope for recreation are aspects which still require attention.
No attention has been 526 bestowed by the inspecting authority.
of the labour law enforcers to secure improved conditions of working.
Allowing the petition this Court, HELD: 1.
For a loan taken at an exorbitant rate of interest the debtor virtually sells himself to the creditor and gets bonded usually for a period of life and renders service for the purpose of satisfying the debt.
The creditor anxious to exploit the situation ensures that the debt is never satisfied and often on the traditional basis of pious obligation the liability is inherited by the children of the original debtor.
The system thus provides a built in mecha nism for continuation of the under privileged section of the society by the privileged few living therein.
[537H 538B] 2.
The bonded labourers are paid nominal wages and often their family members are not permitted to take remunerative jobs elsewhere without permission of the master.
Normally, such permission is not granted and the impoverished condi tion is allowed to continue to the advantage of the credi tor, [538B C] 3.
Quarries ace located in a particular area away from habitation.
On account of*necessity for workmen in the area people from different parts of the country are made to live therein along with their families under very insanitary and inconvenient conditions.
Health care of workmen and members of their families and education of the children as also the adults in such exclusive locality should be of the employer.
To require a school to he built in such an area where there may not be adequate number of children for the purpose of schooling at the expense of the State exchequer may not he appropriate.
That apart these institutions should he a part of the trade.
In the manner the employer has to make provi sion for water and medical care, it should also have the responsibility of providing schooling for the children of the workmen.
Today emphasis is also being given on adult education.
If appropriate facility is provided the workmen beyond their.
working hours can also have scope for learning the three Rs and this could he through a process of adult education with State support under the relevant scheme.
[544G 545B] 4.
The State of Haryana must come, forward to play its role in a better way.
These are quarries located near about the industrial belt of Haryana and not far away from Delhi.
Dust emanating from the, working area in Haryana is bound to affect adversely ,the Delhi atmosp 527 here.
If adequate importance is given to the angle of pollu tion the industry itself has to he regula`ed or may have to be stopped.
[545B C] 5.
The State of Haryana has not taken Court 's interven tion in the proper spirit and has failed to exercise appro priate control though some eight years back this Court had in clear terms laid down the guidelines and had called upon the public authority to take charge of the situation and provide adequate safeguards.
[545D E] 6.
The workmen engaged on fur time basis, who are not prepared to return to, their States, are to he provided with a permanent base for residence at or near the work site. 'This would necessitate, reasonable housing, supply of water, a reasonable provision store at Land, schooling facility, of a hospital, recreational facilities and atten tion tO the law and order problem.
Perhaps near the area a police statiOn or an outpost could be located.
If the work ers were insufficient in number, a doctor could be taken as a visitor to the area at frequent intervals and instead of a regular school one single teacher could he provided to look after the health of the people.
[545G 546B] 7.
Court 's judgment to regulate such matters has inher ent limitation.
These are not schemes which could be conven iently monitored by a Court far less can the apex court keep track of the matter.
its Registry has congestion.
To get attention for a matter of this type from the Court is.
bound to take some time.
Human problems in their normal way do not wait for a time schedule for attention.
in such circumstances, it should be the obligation of the State which on account of running stone quarries within its area must in various ways be getting benefits to look after these.
aspects.
As a welfare State it is now the obligation of the State of Haryana to cater to these requirements of the area.
[546B D] 8.
In these circumstances the State of Haryana was called upon to attend to the needs of the workmen in a well considered and systematic way.
Since those workmen who will be working there have to be protected from the vagaries of employment and the anxiety of the employer to draw work without adequate payments, the authorities of the State of Haryana must take care to protect the workmen from the hands of the: employer by ensuring compliance with the laws if there he any vacuum in the laws, the State of Haryana should rise to play the role of a welfare State and.
play it Well.
In fact there could be a special cess raised against the quarry activities to*be specifically utilised by way of return to the industry and there could he a Special fund.out of which all the amenities could be provided.
What is want ing is 'not power but the mind and alertness regarding one 's duty.
[546E G] 528 9.
The State of Haryana shall now ensure that the people who have been identified numbering about.
2000 are continued in work with the improved conditions of service and facili ties and such of them who want to go back to their native areas be treated as released from bondage and appropriate action must be taken in accordance with Government of In dia 's scheme forthwith.
[547D E] Gupta vs Union of India, [1982] 2 SCR 365, referred to.
|
: Criminal Appeal No. 7 of 1979.
From the Judgment and Order dated 13.2.1978 of the Andhra Pradesh High Court in Criminal Appeal No. 812 of 1976 and 807 of 1977.
K. MadhaVa Reddy, TVSN.Chari, Narashima P.V.P.L. and Ms. M. Gupta for the Appellant.
R.K. Garg, T. Rama Mohan Raj, N.M. popli and V.J. Fran cis for the Respondents.
The Judgment of the Court was delivered by AHMADI, J.
Ram Subba Reddy, an advocate, politician ' (an ex MLA) cum trade unionist was done to death when he was sleeping on the terrace of his house in Proddatur, District Cuddapah, on the night 'between 14th and 15th April, 1975.
The incident in question occurred at about 3.30 a.m. in which, apart from the deceased Ram Subba Reddy having re ceived fatal blows by lethal weapons, his daughter PW 1 Krishnaveni, aged about 24 years, received injuries when she attempted to 'go to help her father.
As many as 19 persons were put up for trial before the learned Additional Sessions Judge, Cuddapah on different charges.
Original accused Nos. 1 and 7 to 19 were charged for criminal conspiracy under section 120B; original accused Nos. 1 to 6, 12 and 13 were charged for rioting with deadly weapons under section 148; original accused No. 16 was charged under section 147 along with original accused Nos.
1 to 6, 12 and 13; original accused Nos. 1 to 6, 12 and 13 were also charged for murder under section 302; the said accused alongwith original accused No. 16 were also charged under section 302/149; original accused No. 5 was charged under section 324 and he as well as original accused Nos. 1 to 604 4, 6, 12, 13 and 16 were charged under Section 324/149, I.P.C. To bring home the charges against them the prosecu tion mainly relied on the testimony of PW 1 Krishnaveni, PW 2 Venkata Subbamma, widow of the deceased, PW 3, Venkat Rami Reddy and PW 4 Kasireddy sambasiva Reddy, both of whom it is claimed were sleeping on the ground floor of the house of the deceased and PW 5 Annapu Reddy Venkata Subba Reddy, a neighbour who arrived at the scene of incident on hearing the commotion and who at the instance of PW 1 lodged the FIR Exh.
P 56 at about 4.30 a.m.
The learned Additional Sessions Judge accepted the evidence of PWs 1, 2, 3 and 5, PW 4 having turned hostile, and convicted original accused Nos. 1 and 3 under section 148 and section 302 and 324 with the aid of section 149, I.P.C. and original accused ' No. 5 under sections 148, 302 and 324, I.P.C., substantively.
All the three of them were sentenced to life imprisonment for mur dering Ram Subba Reddy and to rigorous imprisionment for 3 years under section 148, I.P.C. No separate sentence was imposed for causing injuries to PW 1.
The rest were acquit ted of all the charges levelled against them.
No appeal was preferred to the High Court against their acquittal but the three convicted accused preferred an appeal to the High Court challenging their conviction while the State appealed for enhancement of the sentence of accused No. 1 from life imprisonment to capital punishment.
The High Court doubted the testimony of PWs 1, 2, 3 and 5 and their capacity to identify the assailants and, therefore, acquitted them of all the charges levelled against them.
Consequently the State 's appeal for enhancement of accused No. 1 's sentence also failed.
While the State has preferred this appeal against the order of acquittal or ' original accused Nos. 1, 3 and 5, no appeal has been preferred against the dismissal of he State 's appeal for enhancement of the accused No. 1 's sentence.
A few facts leading to this appeal may be noticed.
The deceased was a practising lawyer and a congressman.
He was member of the Legislative Assembly during the 1967 ,1972 term.
He had his own house in which he resided.
AcCused No. 1, a medical practitioner, was a trade union activist be longing to the Communist party of India (Marxist Leninist group) and weilded considerable influence among the working classes.
Accused No. 2 was a lower division clerk in the judicial department, District Cuddapah, but was on cave at the material time.
He was a close associate of accused No. 1.
Accused Nos. 3 and 5 were employees of Andhra Cotton Mills, Proddatur, while accused Nos. 4 and 6 were employees of International Packaging Company, Proddatur, and took part in trade union activities.
In the first quarter of 1974 the workers of the International Packaging Com .
605 pany had served the management with a charter of demands and accused No. 1, who was the President of the Union had served the management with a strike notice on the ' failure of the negotiations which the management countered by declaring a lock out.
Thereafter PW 21 Jutura Ramaniah partner of the company was assaulted on the night of March 30, 1974 for which a case was registered against accused No. 1 and his companions.
The deceased who was a lawyer for the company is stated to have advised accused No. 1 not to resort to vio lence for settlement of such industrial disputes.
As the deceased was representing the company the relations between the deceased and accused No. 1 which were cordial were soured and the latter stopped visiting the former.
In the month of November 1974, on the advise of the deceased, the management brought workers from Bangalore and started the factory.
However the workers ' union could prevail upon those workers not to report for.
work and the unit again same to a standstill within about ten days of commencement.
The dis pute was referred to the arbitration Of three persons but they could not resolve it on account of the uncompromising attitude of the workers led by accused No. 1.
While this unrest continued trouble started brewing with the transport workers union of which accused No. 1 was the President striking work.
Here too the management was repre sented by the deceased.
The atmosphere in the township was surcharged and tense.
With the intervention of the State Minister the dispute between the transport workers and the owners was settled but so far as the International PaCkaging Company is concerned its employees did not participate in the meeting called by the Minister.
A warrant for the deten tion of accused NO. 1 under MISA was issued on February 14, 1975 but the same could not be executed as he went under ground.
On the advice of the Minister the management unilat erally opened the factory w.e.f. March 19, 1975.
The de ceased had throughout taken a very active interest in ensur ing the starting of the factory notwithstanding the stand taken by the union.
The union had also complained about the unilateral imposition of certain conditions on the ' workmen but to no avail.
The workers began to report for work though the union was not reconciled.
On the other hand since the warrant for accused No. 1 's arrest could not be executed a warrant for the attachment of his properties was issued on April 9, 1975.
PW 11 M. Sajjana, Assistant Station Master, Cuddapah, had started an INTUC branch at Cuddapah sometime ' in Decem ber, 1973.
Under its banner a youth conference was organised on January 26, 606 1975.
PW H presided.
over that conference and a decision was taken explore the possibility of starting an INTUC branch at Proddatur with the help of the deceased.
Pursuant thereto PW 11 and others visited Proddatur on March 27, 1975 to discuss the matter with the deceased.
The deceased promised all possible help and agreed to provide space for the office of INTUC in his own office.
Ultimately to counter the militant activities of accused No. 1 who was in control of most of the labour unions in the town a decision was taken to start an INTUC branch in Proddatur w.e.f. April 19,1975.
Pamphlets were issued in this behalf soliciting the co operation ,of workers and others.
This was the last straw on the camel 's back.
The physical condition of the. place.
of occurrence may be noticed to.
appreciate the ocular evidence.
The house faced southward and lay along a public road with open space in the front covered by a.compound,wall in the front with no such wall on the remaining three sides.
In the front was a verandah and thereafter came the drawing room in which was installed a telephone.
Further to the north was.
a room and beyond that was a hall.
Then came another covered verandah with a tin sheet sloping roof at a height of about 7 feet from the ground level.
This was the ground floor accommoda tion.
The staircase.leading ' to the terrace was situate in the hall.
This staircase opened in a room leading to the open terrace.
This terrace room had an asbestos 'sheet projection whereunder there was an electric bulb.
The ter race had a parapet wall all round of the height of about 3 feet.
On the south west side of the terrace room along.
the parapet wall there existed a 24 feet long pial of the.
height of 20 inches and width of 18 inches.
A window in the western wall had a cement shade 4 feet x 2 feet in size, Adjacent to.
that window was a telephone pole hardly five feet away from the wall with the upper end hardly 6 1/2 inches from the cement shade.
The prosecution case is that this telephone pole was used by the assailants to launch the attack on the deceased.
The family of the deceased comprised of his wife PW 2, two daughters, one of whom was married and lived with her husband and, the other PW 1 was a medical student, and three sons none of whom was in town on that day.
Pw. 1 was study ing in the third year at Kakinada and had come home as the college was closed from April 12 to April 20, 1975.
PW 1 deposed that on the date of the incident after dinner she and her parents chit chatted for sometime and thereafter her father went to the terrace as it Was summer and retired for the night.
She continued to talk with her mother and in the meantime PWs 3 and 4 arrived.
They carried their beddings to the verandah and slept 607 there.
PW 3 used to sleep at their house since the last couples of years whereas PW 4 came there occasionally.
After they left for the verandah the witness closed the 'ground floor door to the house, carried an anatomy book and went to the terrace to sleep.
She read in the terrace light which was under the asbestos projection and then went to bed on the cot laid for her keeping the light on as was the usual practice.
Her mother did not sleep on the terrace as she was not allowed to climb the stairs since she had recently undergone an operation.
Her father was sleeping on the bed laid on the floor wearing a banian.
A hurricane lantern was also kept lighted on account of frequent power failures.
At about 3.30 a.m. she woke up hearing the cries of her father and saw accused No. 1 and 6 or 7 others stabbing her father with daggers.
She raised an alarm and tried to go to the rescue of her father but she was prevented by three of them from getting up.
According to her accused No. 3 had gagged her mouth with his hand and had pinned her down to the cot.
Thereafter accused No. 5 tried to stab her with a dagger twice but on both the occasions she warded off the blows and in the process sustained injuries on her left index finger, thumb and palm region extending to another finger.
Till the assailants had finished with her father she was pinned down to her bed and thereafter the assailants went to the west, climbed the parapet wall and went down the terrace.
She then ran down crying that accused No. 1, whom she knew since quite sometime, and his companions had killed her father.
She woke up her mother and informed her of what had hap pened.
On hearing a knock on the main entrance to the house, she opened the door and found PWs 3 and 4 holding a torch.
On inquiry she told them that accused No. 1 and his compan ions had killed her father and she too was injured.
She learnt from them that they had seen accused No. 1 and 4 or 5 others slide down the telephone pole situated to the west of the house.
She then tried to contact the police on phone but found that the same was disconnected.
Since PW 5 a neighbour was there she requested him to go tO the police station and fetch the police.
On receipt of information a Sub Inspector of police and a few constables arrived by about 5.00 or 5.30 a.m. to whom she narrated the incident whereupon her state ment was recorded which has been introduced on record as Exh.
The Sub Inspector held the inquest on the dead body between 7.00 and 10.30 a.m., drew up a panchnama of the scene of occurrence, attached the anatomy text book and other blood stained articles from the terrace, including the electric bulb from the socket of the electric holder on the terrace, At the identification parade held later she identi fied accused Nos. 3 and 5 as the companions of accused No. 1.
In cross examination she ' denied the suggestion that accused Nos. 3 and 5 were shown to her while they were in the sub jail before 608 she was asked to identify them.
It transpires from her cross examination that the defence case was that she had not slept on the terrace, that the cut injuries on her left hand were self inflicted and that she was falsely implicating accused Nos. 3 and 5 as they had supported her rival Padma in a college election when she was in the B.Sc.
class.
It was also suggested that photographs of accused.
Nos. 3 and 5 were shown to her from a group photo obtained from A.C. Mills Union Office.
It may be mentioned that the suggestions made to this witness in regard to the identity of accused Nos. 3 and 5 are self contradictory in the sense that if the suggestion that she was falsely involving these two accused because they had helped Padma who contested the election against her is correct it would follow that they were known to her since long in which case there would be no need to point them out to her while they were in the sub jail or to show their photographs to her.
Suffice it to say that.
nothing very striking, except minor contradictions, has been elicited in her cross examination which would shake her credibility.
PW 2, her mother, corroborates her say in regard to the incident and the involvement of accused No. 1.
PW 3 has deposed that since he and PW 4 anticipated danger to the life of the deceased on account of the dis turbed management labour relationship they slept at the house of the deceased.
PW 3 states that he saw eight persons sliding down the telephone pole.
Amongst them were accused Nos. 1 to 5 and S.V. Subbarayadu whom he identified as accused No. 6.
PW 4 has stated that on the date of the incident he had heard about the murder when he was at his residence at about 4.30 a.m.
He was treated as hostile and was allowed to be cross examined by.
the prosecution.
PW 5, whose house was only about 100 yards away, deposed that when he was sleeping on his terrace he heard cries at about 3.30 a.m. and went to the house of the deceased.
PWs 1 to 4 were present there alongwith other.
neighbours.
PWs 1 and 2 were.weeping while PWs 3 and 4 were trying to console them.
PW 1 asked him to inform the police that her father was murdered.
He then went and informed the police about the incident and returned with the police to the scene of of fence.
Thus the evidence of this witness also corroborates PW 1.
The inquest was!held between 7.00 and 10.30 ' a.m.
The statements of PWs 1 to 5 were also recorded and certain articles were attached from the terrace.
These included blood stained bed sheets, pillows, towel, shawl, shrit, etc., and Cunningham 's text book on.
human anatomy which PW 1 was reading before going to bed.
The telephone connection was found snapped and there were drops of blood from.
the place where the dead body was found till the drawing room down stairs where the telephone was: installed which.
corrobo 609 rated the story of PW 1.
The banian worn by the deceased, was blood stained and had cuts corresponding to injuries found on.
the chest of the deceased.
Several other articles found on the person.
of the deceased were blood stained.
There were as many as 33 injuries on the person of the deceased which is clearly indicative of the involvement of a group of persons in the killing.
This stands corroborated by the post mortem report.
On the cot which was occupied by PW 1 there were blood drops on the bed, bed cover and bed sheet.
The reports of the Chemical Analyser and Serologist, Exhs.
P 18 and P 19. show that all the articles were stained with human blood.
A lantern was burning nearby and the electric light on the terrace was also on.
This inquest panchnama Exh.
P 6 leaves no room for doubt that the inci dent occurred on the terrace portion of the residence of the deceased.
PW 1 was medically examined by the medical officer PW 13 on the same day at about 11.45 a.m. She had incised wounds on the left index finger 1/2" x 1/4", on the left hand below tile wrist 1" x 118" x 1/8", on the middle of the left palm 1" x 1/8" x 1/8" and on the little finger of left hand 1/2" x 1/8" x 1/8".
This would indicate that she received these injuries while trying to ward off the blows.
Identification parades were held on May 23, 1975.
In the first one accused Nos. 7, 10 and 11 were made to stand with non suspects, in the second parade accused Nos. 12, 13 and 16 were made to take their positions along with several others and in the last parade accused Nos.17, 18 and 19 were concerned.
PW 1 could not identify any one from amongst the said accused persons in all the three parades.
Out of the three parades PW 3 identified all the three accused of the second parade.
In the evening an identification ' parade was held concerning accused Nos.
2 to 6 and 9.
PW 1 could iden tify. 'accUsed Nos. 3 and 5 while PW 3 could not identify any of them.
The defence of all the accused was of total 'denial and false involvement.
In fact accused No. 1 contended that.he was out of station from May 13, 1975 and learnt of the murder on his return to Proddatur.
When he learnt of his false involvement he surrendered before the Court.
Accused Nos. 12, 13 and 16contended that they were shown to PW 3 before the identification parade while accused Nos. 3 and 5 pleaded that the police had taken a group photograph in which they figured from the union office and had shown it to PW Accused Nos. 7, 11, 14, 15, 17 and 19 were not examined under section 313 of the Criminal Procedure Code as no evidence incriminating them was tendered on record.
No defence witness came to be examined.
610 The learned Additional Sessions Judge, Cuddapah, came to the conclusion that the prosecution had failed to establish the charge of criminal conspiracy under section 120B, I.P.C. He came to the conclusion that the evidence on record, however, indicated that accused Nos. 1 to 6 had a direct and strong motive to kill the deceased and the likelihood of the others having shared their feelings could not be ruled out altogether.
The direct testimony of PWs 1 to 5 and the other circumstantial evidence adverted to earlier established beyond any manner of doubt that the incident occurred at 3.30 a.m. on the terrace of the residence of the deceased.
The learned Judge held that intimation of the incident was given to the police without loss of time and PW 1 had lodged her complaint by about 6.00 a.m. when the police came to the scene of occurrence alongwith PW 5 who had gone to call them.
The suggestion that injuries found on the person of PW 1 were selfinflicted or that PW 2 was giving false evidence as she was promised financial help to the tune of Rs. 1,50,000 were brushed aside by the learned Judge as totally imaginary ,and unfounded.
The learned Judge, however, did not treat PW 1 's complaint EXh.
P 1 as admissible in evi dence as he came to the conclusion that it was hit by sec tion 162 of the Code since information regarding the inci dent had reached the police station through PW 5.
The learned trial Judge, therefore, accepted the evidence of PWs 1, 2, 3 and 5 as reliable and convicted them as stated earlier while acquitting their companions.
The said three convicted accused preferred an appeal, being Criminal Appeal No. 812 of 1976, in the High Court.
,State also preferred an appeal for awarding capital punish ment to accused No. 1, being Criminal Appeal No. 807 of 1976.
The State 's appeal came to be dismissed and that is where the matter rests.
However, the appeal by the convicted accused came to be allowed and the appellants were acquit ted.
It is against the said order of acquittal that the State has approached this Court by way of special leave.
It would, therefore, be proper to ascertain the grounds on which the impugned order of the High Court is founded.
The High Court came to the conclusion that the complaint of PW 1 was not recorded at the time it purports to have been for if it were so it would not have reached the con cerned Magistrate as late as 1.40 p.m.
In that case even the inquest report Exh.
P 6 would not have been delayed till 10.55 p.m.
The explanation for the delay found in Exh.
P 25 cannot be accepted at its face value.
The evidence of PW 1 is tainted, in that, although she knew accused No. 1 as he visited her father quite often the rest of the assailants were total strangers and yet 611 the names of accused Nos. 2 and 4 appear in her statement Exh.
P 1 which goes to show that she was tutored into giving their names.
That according to the High Court raises a serious doubt regarding her trustworthiness.
On the question of identity of accused Nos. 3 and 5, the High Court points out that even before the identification parade she had told the Magistrate that she would be able to identify only two persons and later pointed an accusing finger at accused Nos. 3 and 5 at the identification parade.
This, says the High Court, reinforces the defence version that she was shown the group photo before she was called to identify the accused persons.
The identification parade was delayed upto May 23, 1975 as till then the photograph was not secured by the police.
In the circumstances the High Court did not find the evidence of PW 1 regarding the identity of accused Nos. 3 and 5 acceptable.
The High Court also held that the injuries on the left hand of PW 1 were in all probability self in flicted, more so because she is not a left hander.
So also the absence of blood stains on the bed lying on the floor of the terrace casts a serious doubt regarding her version of the incident.
The High Court found the prosecution story that the electric light as well as the kerosene lamp were kept on throughout the night rather unusual.
In this view of the evidence, the High Court did not consider PW 1 a truth ful witness.
As regards PW 3 the High Court found his ver sion that he slept at the residence of the deceased since sometime unacceptable.
It also noticed that PW 3 claimed to know accused Nos. 1 to 6 by their names and he gave out those names to the police and yet he could not identify any of them at the test identification parade.
For this reason the High Court did not place reliance on his evidence.
The High Court, therefore, found the evidence led by the prose cution untrustworthy and acquitted the accused/appellants.
Hence the present appeal.
Mr. Madhav Reddy, the learned counsel for the appellant State contended that the presence of PW 1 at the time of the incident was not only deposed to by PWs 2 and 3 but also by PW 5.
The presence of PW 3 at the house at about 4.30 a.m. is deposed to even by the hostile witness PW 4.
He, therefore, submitted that the presence of PWs 1 to 5 is clearly established and is reinforced by the evidence of PW 13, the medicalman, who examined PW 1 at the Government Hospital at about 11.45 a.m. on the same day.
The Sub In spector PW 24 also deposes that PW 5 had told him that PW 1 had sent him to report the murderous assault on her father.
He submitted that once the presence of PWs 1 and 3 was established there was no reason to doubt their testimony merely because PW 3 was honest enough not to falsely involve any one by pointing an accusing finger at the identification 612 parade.
He submitted that even PW 1 was honest enough to identify only two persons, namely, accused Nos. 3 and 5, Whom she had an occasion, to see near her cot on the ter race.
To reject her evidence as regards the identity of these two accused on the specious plea that their photo graphs were shown to her '.
before the identification parade would be, to say the least, unjust.
If she could be shown the photograph why not PW 3 also! He also submitted that it was preposterous to hold that the injuries found on the left hand of PW 1 were self inflicted.
The absence of blood on the bed sheet of the bed on the floor of the terrace clearly explained that the deceased must have rolled onto the ter race floor where the presence of blood was noticed.
He, therefore, submitted that the High Court had reversed the well reasoned judgment of the. trial court on totally imagi nary grounds which had resulted in grave miscarriage of justice.
Mr. R.K.Garg, learned counsel for the respondents/ac cused, submitted that this Court should not interfere with the decision of the High Court ' unless it ' finds the view taken by the High Court as perverse and wholly improper, resulting in miscarriage of justice.
In support he cited State of Jammu & Kashmir vs Hazara Singh & Anr., [1980] Supp, SCC 641.
He also submitted that the investigating agency had shown extra zealousness as the deceased was a prominent lawyer and an ex MLA.
Supporting the view of the ' High Court he urged that the presence of PW 1 was highly doubtful and in any case it would be risky to rely on her interested testimony regarding the identity of accused Nos. 3 and 5.
The 'absence of blood on the bed shows that the same was planted after the event to concoct the story that PW 1 ' was sleeping on the cot and not downstairs with her mother PW 2 who ' had recently undergone an operation. ' Once the evidence of PW 1 is excluded there is no direct testimony since PW 3 had not identified any of the accused at the identification parades.
In short he supported the judgment of the High Court and prayed that we should not interfere in exercise of our extra ordinary powers under Article 136 of the Constitution.
The motive for the commission of the crime was the indus trial unrest occasioned on account of the strike by the workers of the International Packaging 'Company and later by the transport workers.
Indisputably accused No.1 commanded considerable clout over the employees of various industrial units such as the International Packaging Company, Andhra Cotton Mills and the transport industry in Proddatur.
Accused No. 1 was championing the cause of the workmen during the.
prolonged agitation and strike by the workers of the Inter 613 national Packaging Company and also spearheaded the agita tion by the transport workers.
The deceased was the lawyer for the managements and was considered the main obstacle, in the realisation of the workers* demands.
There was, there fore, animosity between the deceased and accused No. 1.
This is more than clear from the oral evidence of PWs 2.3.4, 10.
11.21 to 23 and from the documentary evidence tendered as Exhs.
P 2 to P 5.
P 30 to P 37 and P 40 to P 55.
In view of this overwhelming documentary evidence which corroborates the ocular evidence of the aforesaid prosecution witnesses, it is established beyond any manner of doubt that the rival ry between the trade unions headed by accused No. 1 and the managements.
advised by the deceased had assumed ugly.
proportions.
The starting of the INTUC branch at Proddatur with the active participation of the deceased was perhaps the last straw on the camel 's back which worsened the rela tions between accused No. 1 and the deceased.
This is the motive according tO the prosecution for the crime in ques tion.
But as has often been commented bitter animosity can be a double edged Weapon which may be instrumental for deliberate false involvement or for the witnesses wrongly inferring and strongly believing (without having actually witnessed it) that the crime must have been committed by the rival group.
This possibility has to be kept in mind while evaluating the prosection evidence regarding the involvement of accused No. 1 and his companions in the commission of the crime.
There is no dispute regarding the description of the residential house of the deceased and the location of the telephone pole to the west thereof.
It is not disputed that the said pole could be conveniently used for slidding down from the terrace.
So also the fact that the telephone con nection was snapped is not put in issue.
The fact that the incident occurred on the terrace is not disputed but the fact that the deceased was sleeping on the floor and PW 1 was sleeping on the cot is disputed.
It was suggested in the course of cross examination of the prosecution witnesses that the deceased alone was sleeping on the cot on the terrace and PW 1 was in fact not in town and even if she was in town she must have been sleeping with PW 2.
Lastly the fact that the deceased died a homicidal death on receipt of as many as 33 injuries is not disputed The find of human blood on the various articles attached by the police, i.e. those worn by the deceased as well as PW 1 and those found lying on the terrace, is clearly established by the reports Exhs.
P 18 and P 19 which have not been questioned.
It is in this background that we must consider if the High Court has commit.
ted any grave error requiring interference under Article 136 of the Constitution.
614 On the question of presence of PW 1 in Proddatur on the date of the incident, apart from the oral evidence of PWs 1 to 3 and 5, there is the documentary evidence in the form of the entry Exh.
56 recorded by PW 24 in the general diary on April 15, 1975 at about 4.30 a.m.
That entry was made on the information supplied by PW 5.
It is clearly stated therein by PW 5 that he had been told by PW 1 that her father was murdered at his residence.
It was on receipt of this infor mation that the police went to the house of the deceased, drew up the inquest report and recorded the statements of those present there including PW I. The presence of PW 1 is, therefore, clearly established by this document prepared within an hour from the time of the incident.
This contempo raneous document corroborates the oral evidence of the aforesaid witnesses.
She was examined by the medical officer PW 13 on the same day at about 11.45 a.m.
In addition there to, the find of the Anatomy book and slippers on the ter race, also lends assurance to the prosecution evidence in this behalf.
Therefore, even if it is assumed that the time of recording her statement ' Exh.
P 1 is not correctly re corded, her presence at the scene of offence at the material time is established beyond a shadow of doubt.
Accused No. 1 was a friend Of the deceased till they fell out.
He was a regular visitor to the house of the deceased and, therefore, PW 1 knew him quite intimately.
She has frankly admitted that others were strangers but she was able to identify accused Nos. 3 and 5 because she had an opportunity to see them from close quarters when they were near her cot.
The existence of a cot and a bed on the ter race is indicative of the fact that two persons were sleep ing on the terrace.
There were only three family members present on the date of the occurrence, one of whom was PW 2 who had undergone surgery only recently and was advised not to climb the stairs.
It is, therefore, obvious that the deceased and PW 1 slept on the terrace.
The submission that the bed on the floor was planted is based on the fact that there was no blood on the bed sheet of that bed.
But this submission overlooks the existence of blood drops nearabout the bed.
The dead body of the victim was also found lying on the terrace floor nearby.
The High Court relied on the photograph Exh.
D 4 for holding that the bed was fresh and unused.
But as is apparent from the, crossexamination of PW 24 that the said photograph shows "the bed sheet spread over the bed on the cot is tucked beneath the bed".
Thus the said photograph is not of the bed on the floor.
The High Court seems to have misread the evidence.
Secondly, it is clear that the dead body was lying at some distance from the bed suggesting that the deceased had rolled over during the night or in the course of the attack.
The 615 other articles lying nearby e.g towel, shawl, etc.
were blood stained and there Were fresh drops of blood between the dead body and the western waif leading to the telephone pole.
Since there were Only three family members one of whom, PW 2, had undergone an operation in the recent past, it is difficult to understand how PW 1 alone could shift the dead body of her father from the cot to the place where it was found to concoct evidence against the accused.
It is too much to attribute such intelligence to PW 1 or for that matter PW 3 also.
If the dead body which was bleeding had in fact been shifted there would have been blood drops from the cot to the place where it was found.
Besides, where was the time for the entire exercise? PW 5 was sent to call the police and he had returned with the police after his report was entered in the general diary at 4. 30 a.m. It.
there fore, seems difficult to believe that the bed on the floor was planted to support the prosecution version that PW 1 slept on the terrace that night.
The medical officer PW 13 found four incised wounds on the left hand of PW 1, possible by a sharp cutting weapon like a dagger or knife.
These injuries were indeed minor in nature.
The High Court has concluded that the possibility of these injuries being self inflicted cannot be ruled out, PW 1 says she received these injuries in the process of warding off the blows aimed at her.
PW 13 also deposes that these injuries could have been received while trying to ward off the blows on her.
Thus the medical evidence supports her say.
However, in crossexamination he stated that all the four injuries were cut injuries and not stab wounds.
In response to a suggestion made in cross examination he stated that the possibility of the injuries being self inflicted was not an impossibility.
Merely from this suggestion and PW 1 not being a left hander the High Court concluded that the possibility of the injuries being self inflicted could not be ruled out.
With respect, the High Court failed to realise that when an injury is on an accessible part of, the body which the individual can himself reach, such any injury could also be self inflicted and when a medical witness is asked if it was possible to self inflict it he would have to answer in the affirmative unless the direction 'of the injury or such other factors show otherwise.
But merely because the medical officer says that they could be selfin flicted, there is no reason.
to jump to such a conclusion unless ' circumstances establish such a possibility.
In the present case there was hardly any opportunity to self in flict them.
Her not being a left hander should make no difference because she is bound to.
use that hand to ward off the blows if her assailant is on that side of her bed.
We, therefore, feel that the High Court was not justified in concluding that PW 1 had self inflicted the wounds found on her left hand.
With 616 respect, this conclusion of the High Court is, to say the least, wholly conjectural and totally against the weight Of evidence on record.
The delay in Sending the FIR Exh.
P 1 to the Magistrate has been seriously commented upon by the High Court while rejecting the explanation given in Exh.
This comment has lost its significance as the said document has not.been admitted in evidence by both 'the courts below on the ground that it is hit by section 162 of the Code.
We would have examined the explanation if that document.
had formed part of the record. ' Any way that cannot impinge On the credibil ity of PW 1 if her evidence is otherwise acceptable, which we find it is '.
On the question of identity it is clear from the evi dence of PW 1 that accused No. 1 was known to her quite well Since before the incident.
She could, therefore, have no difficulty in identifying him even in poor light.
Immediate ly after the accused fled she ran down and informed her mother that accused.
No. 1 and his companions had killed her father.
Since PW 1 had not disclosed the name of accused No. 1 as one of the assailants to PW 5, the latter did not speak about him to the police and hence his name does not appear in the FIR recorded at 4.30 a.m.
Accused No. 1 pleaded an alibi: which he miserably failed to probabilise.
The absence of names of assailants in the general diary entry made on the basis Of information supplied by PW 5 at the behest of PW 1 has weighed considerably in the High Court doubting the version regarding the involvement of accused No. 1 in the commission of the crime.
It must, however, be realised that PW 1 had disclosed the name of accused No. 1 at the earliest point of time when the complaint Exh.
P I and the inquest report Exh.
P 6 were recorded.
It must also be realised that,PW 1 was under terrible strain at that time.
Not only had this young girl lost her father in a ghastly assault, she had also to look after her ailing mother: and console her.
She frantically tried to inform the police on telephone but found the instrument dead with the wires snapped.
therefore, asked this young boy aged 'about 16 years, PW 5, to go to the police station and fetch the police.
There was hardly any time to give details of the incident.
Under the circUmstances the absence of the name of accused 'No. 1 as One of the assailants in the entry made in the general diary at the instance of PW 5 is quite understandable.
Once it is accepted that PW 1 had slept on the terrace and had sus tained the injuries in the incident, her evidence regarding the identity of accused No. 1 who was quite well known to her cannot be doubted. 'We are, therefore, of the view that the High Court was not justified in disturbing the view taken by the trial court in this behalf.
617 That takes us to the question of the involvement of accused Nos. 3 and 5.
The evidence of PW 1 is that when she heard the cries of her father she woke up and saw accused No. 1 and six or seven others belabouring him.
This means that she did not know and could not identify the companions of accused No. 1.
However, when she tried to raise an alarm three of the assailants approched her and pinned her down to the bed, and one of them threatended to stab her.
He did carry out his threat as is evident from the injuries sus tained by her.
She Was able to identify two of them 'at the identification parade held on May 23, 1975.
This is proved through the 'evidence of PW 14 who conducted the test iden tification parades Now accused Nos. 3 and 5 had surrendered before the court on May 13, 1975.
PW 14 received the requi sition for arranging a test identification parade on May 17, 1975.
The identification parade was actually held on May 23, 1975.
There ' is no valid explanation tendered by the prose cution for the delay in holding the.
identification parades.
The defence has suggested in the cross examination of PW 1 and PW 25 that in the meantime the accused who were in custody were shown to the witnesses and the police had secured a group photograph in which accused Nos. 3 and 5 figured to facilitate their identification.
The High Court was, however, reluctant to place absolute reliance On the evidence of PW 1 regarding the identity of accused Nos. 3 and 5.
In the absence of a ,valid explanation for the delay we do not think that this approach of the High Court can be said to be manifestly wrong to call for our intervention. ' In the result this appeal is partly allowed insofar as it relates to original accused No. 1 i.e., respondent No. 1 before us.
The High Court 's order acquitting him is set aside.
The appeal is, ' however, dismissed so far as original accused Nos. 3 and 5 i.e., respondent Nos. 2 and 3 before us are concerned We restore the order of conviction and sen tence of original accused NO.
1 respondent No. 1 recorded by the learned Additional Sessions Judge, Cuddapah for his involvement in the crime with several other unknown persons.
We, however, give the benefit of doubt to original accused Nos. 3 and 5, i.e, respondent Nos. 2 and 3 and confirm the order of their acquittal recorded by tire High Court.
The original accused No. 1 respondent No. 1 will submit to his bail forthwith The bail bonds in respect of other two respondents will stand cancelled.
| One Ram Subba Reddy, an advocate, politician and a tradeunionist, was murdered on the night between 14th and 15th April, 1975, at his house in Proddatur, when the de ceased is stated to have received fatal blows by lethal weapons whilst his daughter (PW 1), sleeping nearby received injuries when she attempted to go to help her father.
Ac cording to the prosecution, Accused No. 1 (Respondent No. 1), was a friend and a regular visitor to the house of the deceased, till they fell out on account of trade union activities.
Accused No. 1 was the President of the workmen 's unions of Andhra Cotton Mills, Proddatur, International Packaging Company, Proddotur and Transport Workers, espous ing the cause of workmen and directing their union activi ties while the deceased, a practising Advocate represented the managements of these companies and tendered legal advice to them in connection with the various labour problems arising in those companies.
The deceased who was a lawyer for the companies had advised the accused No. 1 not to resort to violence for settlement of industrial disputes.
The fact that infuriated accused No. ' 1 further was the help which the deceased agreed to provide to PW 11 for setting up an office of INTUC in his own office.
This was intended to counter the militant activities of Accused 1 who was in control of most of the labour unions in the town.
According to the prosecution at about 3.30 a.m. on the day of occurrence, PW 1 who was sleeping on the terrace of the house nearby her father, woke up bearing the cries of her father ans saw accused 1 with 6 or 7 others stabbing her father with daggers.
She raised an alarm and tried to go to rescue her father but she was prevented by three of them from getting up; accused No. 3 had gagged her mouth with his hand and had pinned her down to the cot.
Thereafter accused 5 tried to stab her with a dagger twice but on both the occasions she warded off the blows and in the process sus tained injuries on her left index finger, 601 thumb and palm extending to another finger.
After the as sailants left, she got down and informed her mother PW 2 about the incident; she opened the door to PWs 3 and 4, who were sleeping outside.
She sent a message to the police through PW S, her neighbour, as telephone lines were cut.
The police took up investigation and 19 persons including the respondents were put up for trial before the Additional Sessions Judge, Cuddapah on different charges e.g. criminal conspiracy, rioting and murder, etc.
The learned trial judge came to ie conclusion that the prosecution had failed to establish the Charge of criminal conspiracy under Section 120B, I.P.C. It accepted the testimony of PWs 1to 5 and held (i) that the incident occurred at 3.30 a.m. on the terrace of the residence of the deceased; (ii) the injuries borne on the fingers of PW 1 were not self inflicted as suggested by defence and (iii) that the intimation of the incident was the police without loss of time.
Accordingly the trial Judge convicted Accused Nos. 1 and 3 under Sections 148 and 302 and Sec. 324 with the aid of Section 149, I.P.C. and accused No. S under Section: 148, 302 and 324, I.P.C. and sentenced all the three to life imprisonment for murdering Ram Subba Reddy and to rigorous imprisonment for 3 years under section 148, IPC.
The other 16 accused were acquitted.
The convicted persons appealed to the High Court and the State filed an application for enhancement of the sentence imposed on Accused No. 1 to capital punishment.
The High Court allowed the appeal by the convicted persons and acquitted them.
Hence this appeal by the State against the order of acquit tal, by special leave.
The High Court bold that the evidence of PW 1 is tainted in that the names of accused 2 and 4 who were strangers to her figure in her statement Exh.
P 1 and further her statement regarding identity of Accused 3 and S was unacceptable.
The High Court therefore found the evi dence led by the prosecution untrustworthy.
and thus acquit ted the accused appellants before it.
Partly allowing the appeal, this Court, HELD: On the question of presence of PW 1 in Proddatur on the date of the incident, apart from the oral evidence of PWs 1 to 3 and 5, there is the documentary evidence in the form of the entry exhibit S6 recorded by PW 24 in the general diary on April 15, 1975 at about 4 30 a.m.
That entry was made on the information supplied by PW 5.
It is clearly stated therein by PW S that he had been told by PW 1 that her father was murdered at his residence.
It was on receipt of this information that the police went to the house of the deceased, drew up the inquest report and recorded the state ments of those present there including PW 1.
The presence of PW 1 is, therefore clearly established 602 by this document prepared within an hour from the time of the incident.
This contemperaneous document corroborates the oral evidence of the aforesaid witnesses.
[614A.C] The High Court failed to realise that when an injury is on an accessible part of the body, which the individual can himself reach, such an injury could also be self inflicted and when a medical witness is asked if it was possible to self inflict it he would have to answer in the affirmative unless the direction of the injury or such other factors show otherwise.
But merely because the medical officer says that they could be self inflicted, there is no reason to jump to such a conclusion unless.
circumstances establish such a possibility.
In the present case there was hardly any opportunity to self inflict them.
Her not being a left hander should make no difference because she is bound to use that hand to ward off the blows if her assailant is on that side of her bed.
The High Court was not justified in con cluding that PW 1 had self inflicted the wounds found on her left hand.
This conclusion of the High Court is, to say the least, wholly conjectural and totally against the weight of evidence on record.
[615F 616A] Once it is accepted that PW 1 had slept on the terrace and had sustained the injuries in the incident, her evidence regarding the identity of accused No. 1 who was quite well known to her cannot be doubted.
[616G] The evidence of PW1 is that when she heard the cries of her father she woke up and saw accused No. 1 and six or seven others belabouring him.
This means that she did not know and could not identify the companions of accused No. 1.
However, when she tried to raise an alarm three of the assailants approached her and pinned her down to the bed, and one of them threatened to stab her.
He did carry out his threat as is evidenced from the injuries sustained by her.
She was able to identify two of them at the identification parade held on May 23, 1975.
This is proved through the evidence of PW 14 who conducted the test identification parades.
Now accused Nos. 3 and S had surrendered before the Court on May 13, 1975.
PW 14 received the requisition for arranging a test identification parade on May 17, 1975.the identification parade was actually held on May 23, 1975 There is no valid explanation tendered by the prosecution for the delay in holding the identification parades.
The High Court was reluctant to place absolute reliance on the evidence of PW 1 regarding the identity of accused Nos. 3 and 5.
In the absence of a valid explanation for the delay, the Court did not think that this approach of the High Court can be said to be manifestly wrong to call for intervention.
[617A E] 603 The Court, in the result, partly allowed the appeal in so far as it related to original Accused No. 1 respondent No. 1 set aside the High Court 's order acquitting him and restored the order of trial Judge convicting and sentencing him.
The Court affirmed the High Court 's order of acquittal passed in respect of other accused, giving them the benefit of doubt.
[617E G] State of Jammu and Kashmir vs Hazara Singh & Anr., , referred to.
|
ivil Appeal No. 3447 of 1990.
From the Judgment and Order dated 26.4.1990 of the Madhya Pradesh High Court in Misc.
Petition No. 4059 of 1989.
Rajinder Sachar, Vijay Gupta, Vivek Gambhir, S.K. Gamb hir and Surinder Karnail for the Appellant.
B.S. Banthia, S.S. Khanduja and S.K. Agnihotri for the Respondents.
The Judgment of the Court was delivered by RANGANATHAN, J.
Getting an admission into a professional course has become so difficult and competitive of late that litigation instituted by disappointed candidates has become a regular feature.
431 This appeal, arising out of such a context, throws up for consideration certain aspects which call for a difficult exercise in balancing equities.
We, therefore, proceed to discuss the facts and issues at some length.
The appellant Dr. Ku.
Nilolaf Insaf and respondent No. 4, Dr. Devraj Jain, were competitors for a single seat in the Master 's Degree (M.D.) course in Radiology at Gandhi Medical College, Bhopal.
The appellant got admission to this seat in preference to Dr. Jain because she had obtained average marks of 59.60 per cent in the examinations of the M.B.B.S. course whereas Dr. Jain had obtained only 58.50 per cent.
Dr. Jain successfully challenged the admission granted to the appellant in preference to himself in a writ petition in the Madhya Pradesh High Court.
Dr. Insaf, who has for feited her admission in consequence of the judgment of the High Court, has filed the present appeal.
In order to appreciate the circumstances in which the admission granted to the appellant was quashed by the High Court, though she had admittedly got a higher percentage of marks than Dr. Jain, it is necessary to set out a few fur ther facts.
Dr. Jain and Dr. Insaf both completed their M.B.B.S. course in the years 1983 87.
However, while Dr. Jain had been admitted into and completed that course in the Gandhi Medical College, Bhopal, the appellant had initially joined her M.B.B.S. course in the M.S. Ramayya Medical College, Bangalore, wrote the first examination and complet ed the first year of the M.B.B.S. course there.
Thereafter, in August 1984, she made an application for her transfer to the Gandhi Medical College, Bhopal.
Her request was granted by the Gandhi Medical College with the approval of the State of Madhya Pradesh and with "no objection" from the Ramayya Medical College.
Thereafter she sat in the second and third examinations pertaining to the MBBS degree along with Dr. Jain and completed her MBBS course along with Dr. Jain in 1987 from the Gandhi Medical College, Bhopal.
Thereafter, both of them cleared their internship of one year and also joined a house job in Radiology in the same college and completed the same in August 1989.
It was at this stage that both of them applied for being admitted to the M.D. course with the result already set out.
As already mentioned, it is not in dispute that, if the total number of marks obtained by the two contestants in all the examinations of the M.B.B.S. degree are taken and re duced to an "effective" percentage and a common maximum as per the rules, Dr. Nilofar does get a higher percentage of marks than the respondent.
In fact, we 432 find from the papers filed before us that another candidate, Dr. Km.
Indu Fotedar, had obtained a percentage of 59.04 which was also higher than the percentage obtained by Dr. Jain.
However, she is no longer in the race for a seat in M.D. (Radiology) as she appears to have joined the M.D. course in medicine that was offered to her.
Thus it was that the Radiology seat went to Dr. Insaf.
Dr. Jain 's challenge to the admission granted to the appellant cannot be a direct one as the latter had clearly secured higher percentage of marks than himself in the M.B.B.S. examinations.
He, therefore, attacks her candida ture for the M.D. course on other grounds which may be described as collateral or indirect.
According to him, the transfer of the appellant from the Bangalore Medical College to the Bhopal Medical College was itself invalid and he urges that, since the very admission of the appellant to the M.B.B.S. degree in the Bhopal College was invalid, she could not at all have been considered for admission to the M.D. course which was available only to the institutional candi dates.
The grounds on which the transfer of the appellant from Bangalore to Bhopal is challenged by Dr. Jain are: (a) The appellant had appeared in the pre medical test for admission to medical colleges in Madhya Pradesh.
It is not known whether she passed the test or did not get a sufficiently high rank but the fact is that she did not get admission in any of the medical colleges in Madhya Pradesh.
To overcome this difficulty, she joined the Bangalore Medical College (the admission to which did not perhaps require qualification in a pre medical examination) by paying a capitation fee.
She has thus circum vented the requirement of a pre medical test by getting admitted first at Bangalore and then getting a transfer to Bhopal; (b) According to the rules, no transfer of a candidate to a medical college in Madhya Pradesh was permissible to students of medical colleges outside the State who had secured admission in a college after paying a capita tion fee, development fee or 'donation in any form.
As the appellant had obtained admission in the Bangalore college by paying a capita tion fee, her application for transfer to the Bhopal Medical College could not and ought not to have been entertained; (c) The rules also require, where a person makes an application for a transfer to a medical college in Madhya Pradesh, that the application should state the grounds on which he got admission 433 in a medical college of another State and whether he had appeared for a pre medical test or similar examination of.
that State.
The appellant 's application for transfer did not contain any reference to this crucial aspect which was fundamental to a valid transfer to the college in Madhya Pradesh; (d) Even assuming that the transfer itself was not bad, a comparison between the marks ob tained by the appellant and those obtained by the respondent was not a fair or proper one.
The appellant had appeared for one examination at Bangalore and two examinations at Bhopal whereas Dr. Jain had appeared for all the three examinations at Bhopal/At Bangalore, for the first year, the appellant had three papers whereas in the Bhopal college there were only two papers in the first year.
Having regard to the disparity in the syllabus, the subjects for the examination, the standards of valua tion and quality of teaching the comparison between himself and the appellant was not valid.
If at all a comparison had to be made, it should have been made by excluding the marks got by both in the first examination and taking into account Only the marks obtained by them in the other two examinations which were common to both.
The above contentions found favour with the High Court quashed the admission of the appellant and directed Dr. Jain to be admitted to that seat.
Hence the present appeal.
In our opinion, contentions (a) and (d) cannot stand by themselves and rest, for their validity, on contentions (b) and (c).
While it is true that the appellant does not appear to have qualified in the premedical test for admission to colleges in Madhya Pradesh, it cannot be said that she has circumvented the rules by first getting admitted to the Bangalore college and then seeking a transfer to Bhopal; that course, if permissible under the rules, was unobjec tionable.
So also, the last contention by itself has no force.
It is well known that, in these competitive days, students are not able to get admission, in the first in stance, in an institution at their own place and have, very often, to seek admission elsewhere initially and then try to get a transfer back.
This is also envisaged by the rules which permit the transfer of a student only after the first year course is completed.
In such cases, if a valid transfer is made, the position is as if the candidate has completed the course in the second place and the rules (the validity of which are not in issue) permit a comparison of the aver age of marks obtained by the candidates in all the examina tions after reducing them as a 434 percentage of a uniform maximum.
There can, therefore, be no doubt that such transfers and comparisons can be valid and permissible.
The real question, therefore, is whether there has been a valid transfer on the facts of the present case.
An annexure has been filed before us it was also before the High Court which purports to set out the "rules for transfer of the students from other medical colleges to Madhya Pradesh State medical colleges".
Though the High Court and the parties before it proceeded on the basis that these were "rules" governing transfer, there has been some controversy before us on this to which we shall advert later.
The following rules are relevant for our present purpose: 1.
The applications from students for transfer from Medical Colleges outside the State and studying in 1st M.B.B.S. (Pre Clinical block) will not be considered.
Applications of those candidates who have cleared the 1st M.B.B.S. examination of the university in Anatomy & Physiology (including Biochemistry) and are studying in higher classes will be considered provided the Col lege in which he was studying was a Medical Council of India approved College.
Applications of only those will be consid ered who satisfy the following conditions in accordance with the premedical examination rules of Madhya Pradesh (a) possessed minimum qualification for ap pearing in the pre medical examination at the time of admission.
(b) is a bona fide resident of Madhya Pradesh as per rules of Pre medical Examination of M.P. (c) was within the prescribed age limit as per rules of Premedical Examination of Madhya Pradesh at the time of admission.
Government would consider relaxation of rules in respect of those candidates who are married to a Government Servant employed in the Madhya Pradesh State.
Applications of those candidates for trans fer from 435 Medical Colleges outside the State will not be considered who have secured admission in a College after paying capitation, development fee or donation in any form.
Application should also state the grounds on which he got admission in a Medical College of another State and whether he had appeared for pre medical test or similar examination of that State. 9.
The appellant will submit a 'No Objec tion ' Certificate of the concerned Medical College and the University where he was study ing before his transfer.
The applicant will submit his applications with all the required information first to the Dean, Medical College where he wants to be transferred and the application will then be routed through the Chairman, Pre Medical Examination Board to Government for final orders.
On the basis of these rules, the objec tions to the transfer raised on behalf of Dr. Jain may now be considered: (a) A submission was made that the Bangalore college is not an approved medical college (vide rule 2 above) but this is not substanti ated.
The document relied upon in support of this contention is only a list of medical colleges in India published by the Health Ministry of the Central Government.
There is no mention in it that only these colleges and none else have been approved by the All India Medical Council.
Also, the list does not bear a date.
It appears to be an old one and does not refer to any college recognised after 1979.
There is nothing to show that the Banga lore medical college was established before that.
That apart, it appears that the Banga lore college is affiliated to the Bangalore University, and there is no reason to believe that it was not an approved medical college.
(b) The objection that the transfer is bad because the appellant had not qualified in a pre medical test, conducted either in Madhya Pradesh or in Bangalore, does not appear to be well founded.
While the rules no doubt contain a reference to premedical tests, rules 3, 5 and 13 make it clear that the passing of a pre medical test is not a pre requisite for a transfer.
No doubt rule 4 requires that the application for transfer should say whether the applicant had appeared for a pre medical or similar 436 test in the State from which a transfer is sought.
The omission of the appellant in the present case to mention this in her applica tion may be a defect but, in the absence of any clear rule to the effect that a pass in a pre medical test is an essential condition for transfer, it cannot be treated as a vital defect vitiating the transfer.
(c) There is, however, force in the contention that the transfer in the present case was violative of the first part of rule 4.
This clearly precludes the consideration of an application for transfer from a person who had gained admission to a medical college on payment of a capitation fee, development fee or donation.
Neither the appellant nor the State contradicted Dr. Jain 's averment in the writ petition that the appellant had secured admission in the Bangalore college only on the basis of such payment.
There is, therefore, an infringement of rule 4 atleast in part and we shall proceed to consider the effect of the same.
But before we proceed to do so, we should like to digress a little to make some general observations.
From the facts stated earlier, it is not clear how, in the face of the specific provisions contained in the rules, the appellant 's transfer was considered and sanctioned, particularly when the application had to be scrutinised by a number of authorities: the Bhopal medical college, the Chairman of the Pre medical Board referred to in rule 13, the University of Bhopal and the State Government.
It is difficult to believe that they were not conscious that the limitations imposed by the rules operated in this case.
The application of the appellant (a copy of which has been placed before us) contained a bare and simple request for transfer and nothing more and the authorities did not even care to call for the details required under the rules before taking a decision.
The respondent has alleged that this was done by reason of the influence exerted by the appellant 's father but this is not substantiated.
All that has been brought out is that the appellant is a resident of Bhopal and her father is a doctor practising at Bhopal.
In the circumstances we think that the authorities must have acted bona fide on considerations of sympathy towards, and the hardship of, the appellant in pursuing her course of study for a number of years at distant Bangalore.
They must have thought that their decision would only help the appellant and harm no one.
But the facts of the present case show how even well meant decisions, which seem innocuous at the time they are taken, can rebound in the long run and affect the interests of others in manner that could not have been even conceived of earlier.
It is, 437 therefore, necessary to emphasise that, in matters of this type, the authorities should carefully and strictly apply the relevant rules.
Now reverting to the question as to the impact of this infringement of the rules on the situation in the present case, Sri Sachar, appearing for the appellant, puts forward two aspects for consideration.
In the first place, he sub mits that the rules relied upon for the respondent are merely internal guidelines or instructions not having the force of law and that a deviation therefrom here or there would not affect the validity of the order accepting the application for transfer.
Sri Sachar may be right in saying this but unfortunately, both parties and the High Court have proceeded on the basis that there were "rules" i.e. some instruments having statutory force.
No material has been placed before us either to support or repel this assumption and so we will not be justified in treating them to be otherwise.
However, we think that, even if they are viewed as "rules" they should not be treated as rigid, inflexible and mandatory, having in mind the context and purpose in which they are made.
These are rules setting out circum stances in which the application for transfer will be grant ed and deal with a matter primarily concerning the applicant and the authorities.
The validity of an order for transfer may be challenged contemporaneously by a third party whose claim for admission or transfer is superseded by such order but cannot be al lowed to be challenged by a third party because he finds, in retrospect, at a future point of time, that it has affected his interests as a result of subsequent events.
We would, therefore, hold that the order of the State of Madhya Pra desh permitting the transfer of the appellant cannot be struck down as void.
There has been some irregularity but, in the circumstances in which it was passed, it was one within the competence of the State Government.
The second answer, furnished on behalf of the appellant to Dr. Jain 's challenge is that Dr. Jain was aware, even as early as 1987, that in the order of merit of M.B.B.S. candi dates the appellant ranked higher than the respondent.
Apart from the fact that this was just a matter of arithmetic, an "order of merit" had indeed been published by the University at the time the medical graduates of 1987 were being consid ered for house jobs.
Reference is made in this context to a chart entitled "Merit list for the selection of House Offi cers, Gandhi Medical College, Bhopal, for the year 1988" placed at p. 68 of the paper book before us This list is incomplete but it contains the names, in order of merit, of 58 students who had completed M.B.B.S. in 1987 438 who had, apparently, applied for house jobs in the college.
It sets out their aggregate marks in the M.B.B.S. examina tions with certain adjustments and also the effective per centage thereof.
The appellant 's percentage is shown as 59.60 and his rank as 37; Dr. Indu Fotedar is at 44 with a percentage of 59.04; and Dr. Jain is No. 49 with a percent age of 58.50 Sri Sachar invites our attention to the "Rules for Postgraduation (M.D./M.S. course) in clinical, para clinical and nonclinical disciplines, in medical colleges in Madhya Pradesh".
These rules provide a scheme whereby (a) the marks obtained by candidates in the M.B.B.S. examina tions (sometimes at different colleges and universities which have different maxima for the examinations) are to be standardised to a common maximum; (b) adjusted by giving certain penalty marks (for example, where a candidate has made extra attempts in any examination) and bonus marks (where he has some special distinctions in academics or extra curricular activities: for example, distinction in a subject or National Cadet Corps certificates); and (c) determining the "effective marks" and their percentage.
The process of selection of merit candidates for the post gradu ate course is outlined in rules 8.1 to 8.3.
They read thus: "8.1 Merit candidates in clinical subjects shall be selected from out of those who are completing their house jobs within that ca lender year.
8.2 Candidates under 8.1 shall be selected by the Dean of the Medical College, strictly on the basis of merit from amongst the students passing from that college, on the recommenda tion of the college and Hospital Council or the P.G. Committee of the college. 8.3 The merit list of candidates under 8.1 and 8.2 would be prepared by each Dean of the College every year and notified on the College Notice Board.
Any objection or representation received within 10 days of notification would be considered by the Dean of the College who shall make modifications, if necessary, after placing the objection or representation before the College and Hospital Council or P.G. Committee.
" On the strength of these rules, Sri Sachar contends that the respondent, not having preferred objections to the merit list referred to earlier, is now estopped from challenging the merit list.
439 We find that there is a good deal of confusion about the relevant facts in this regard.
In the High Court, the re spondent 's case was that he had duly filed his objections to the merit list of 1989 in July 1989 and well within time.
The list that is relied upon by him is a list published by the Dean which bears the heading "Particulars of the candi dates who have applied for registration in M.D. Radiology for the year 1989" placed at page 49 of the paper book.
It contains 9 names (including Drs.
Insaf, Jain and Fotedar) and the details of their period of study and internship.
The last two columns are headed "Effective Marks" and "Effective Percentage".
They are not, however, arranged in order of merit but are arranged on a different basis.
The first four names are of candidates who had applied for the M.D. course in Radiology, whereas the others had applied also for admis sion to M.D. courses in other subjects.
It is on the basis of this list apparently, that the selections were made and, in his petition for special leave before us, the appellant also admitted this position.
Sri Sachar, however, contends, that the earlier list produced by him (p. 68) is the merit list referred to in the rules and not this one which does not even purport to be a "merit list".
The merit list of 1988 (p. 68) was clearly one prepared in the context of selection for house jobs in 1988.
The rules regulating admissions for that purpose have not been placed before us.
We can only guess from the contents and columns in the list that they apparently run on the same lines as the rules for admission for M.D.
If this be treated as the merit list referred to in rule 8.3, of the relevant rules, Dr. Jain is clearly precluded from challenging it after one year.
But rule 8.3 refers to merit list for selec tion of candidates for the diploma course being published every year.
None of the parties including the college au thorities have been able to clarify whether (apart from the list at p. 49 of the paper book) any "merit list" for the year 1989 in respect of admission to M.D. courses, on the pattern of the list at p. 68, had at all been published by the Dean of the college.
In this context, we should ' point out that the list earlier published (p. 68) contained all the relevant details for preparation of such a merit list.
There is nothing before us to show that the procedure for adjustment, standardisation and averaging were not the same for preparing a merit list for selection of house officers as for the selection of candidates to the M.D. courses outlined in rule 8.5 (and this appears to be so from the adjustment columns in the list at p. 68).
The only differ ence is that this list is restricted only to the nine candi dates seeking admission to the M.D. course in radiology.
Apparently, having regard to the small number of applicants for the course in question, the authorities merely.
440 prepared a short list containing the relevant extracts regarding effective marks and percentage from the earlier list without calling it a merit list and made the selec tions.
In the circumstances, we think that there can be no practical or legal difficulty in treating the list at p. 49 as the relevant merit list for the present purpose.
Learned counsel for Dr. Jain is, therefore, correct in saying that, in this view, he could and did lodge his objections within the time specified in rule 8.3 and he cannot be precluded from contesting the correctness or validity of the list on the grounds of delay.
On strictly legal considerations, therefore, the respondent cannot be shut out from raising his objections at this stage.
But, it seems to us, questions of this nature cannot be decided on considerations of pure law.
Granting that it is open to Dr. Jain to challenge the merit list, one has to examine whether there are any limits to the scope of such challenge on grounds, if not of law, of justice and equity.
Of course, he can challenge the correctness of the order of merit, he can challenge any errors in the marks taken into account or the adjustments made thereto, and he can even challenge the eligibility of any of the candidates for consideration.
But there are abvious limitations to such challenge.
For example, it would seem difficult to say that one can challenge the correctness of the marks that one of the other candidates has obtained in the examinations and call for the revaluation of some or all of his papers or to permit a contention that one of the candidates has not been properly awarded the M.B.B.S. degree and that, therefore, his application should be ignored.
Their having obtained the marks noted in the list or a degree of a university or secured a transfer are actual events that have happened.
There may have been some irregularity at some earlier stage but it does not go to the root of the matter so as to render the qualification void abinitio capable of being ignored, without anything more, at any time for any purpose.
The position may be different where a person is claiming under a bogus degree.
The appellant has obtained the degree after a regular course; the only grievance is that she should not have been permitted to do part of it in a particular col lege.
The legality or validity of such qualifications must be directly challenged and got set aside in independent proceedings.
To permit a collateral attack on them in other proceedings, as here, will be beset with problems and com plications of a far reaching magnitude.
For obvious reasons, limitations have to be imposed on the grounds available for such challenge.
The need for such circumspection will be better appreciated if another situation of a similar nature is considered.
Suppose the competition between the two present contestants had arisen, 441 not, as it has, just two years after the M.B.B.S. degree, but, say, fifteen years later, when they both apply for a post in a hospital or Government open to M.B.B.S. graduates.
If, in that situation, it should be contended for Dr. Jain that the appellant cannot be considered for the post because her transfer to the Bhopal medical college was bad and, consequently, that the M.B.B.S degree obtained by her was not valid, we think the answer to the contention must pat ently be in the negative.
The need to avoid disturbing settled issues which affect the life and career of an indi vidual after a lapse of time or after the interposition of further events, as a result of which he has rightly de veloped a sense of security, has been emphasised by this Court in Mudgal vs Singh, 1 relying on the earlier decisions in Makashi vs Menon, ; and Malcolm Lawrence Cecil D 'Souza vs Union, [1975] Supp SCR 409.
What should be a reasonable period beyond which, or the intervening developments because of which, such challenge cannot be permitted must depend on the facts and circum stances of each case.
In the present case, there are valid considerations why Dr. Jain should not be allowed to challenge the merit list at this point of time.
We have referred earlier to the plea of Dr. Jain that he has challenged the merit list of 1989 within the period of time mentioned in the rules.
Technical ly, he is right, as we have already held.
But if we look at the position more closely, we find that the precedence of the appellant over Dr. Jain crystallised as soon as the M.B.B.S. results were published.
We do not know whether any merit list of the results of the examination were published or not at that time but it cannot be that Dr. Jain was not aware that the appellant had got higher percentage of marks than himself.
At any rate, this became clear when the merit list was published for the house jobs in August 1988.
It is true that the place accorded to the appellant in that list did not prejudice Dr. Jain in his selection for the house job.
Still, the rules of the university make it clear that the aggregate and average marks in the M.B.B.S. course would also be material for admission to the M.D. course.
The merit list of 1989 is nothing but a reproduction of the merit list of 1988 confined to a narrower group of students of the same batch.
The latter did show the appellant to have obtained more marks than Dr. Jain and, in this sense, was adverse to his interests.
The omission of Dr. Jain to challenge the correctness of the list then lulled the appellant into a sense of security that the merit list was acceptable to all.
We, therefore, think that Dr. Jain should be barred, on equitable considerations, from challenging the order of merit at the present stage.
Another important consideration which prevents us from giving 442 any relief to Dr. Jain even if we accept all his conten tions is this.
The M.D. course, admission to which is the bone of controversy, started in August 1989 and is coming to a close shortly.
Though the appellant lost in the High Court, she was permitted by this Court though, obviously, subject to the result of this appeal to continue attending the classes for M.D. in Radiology.
Now she has almost com pleted her course and, to deprive her of her seat at this stage, apart from irretrievably harming her, will not bene fit Dr. Jain who cannot now be admitted against the M.D. seat of 1989.
This again is a development which militates against the grant of any relief to Dr. Jain.
Before we conclude, we should like to touch upon one more aspect.
The course of events narrated above will show that Dr. Jain has been the victim, partly, of a lapse on the part of the medical college authorities in properly applying the rules governing transfer and, partly, of courts ' delay in disposing of his writ petition and the present appeal.
In the course of the hearing, therefore, we were tempted to consider whether we should give some relief to Dr. Jain by directing the authorities to consider his case for admission to the M.D. course atleast this year.
On careful thought, however, we find it difficult to make any specific direc tions or recommendations for a number of reasons.
In the first place, we are told that Dr. Jain has, in the meantime, undergone and completed a diploma course in Radiology and, in terms of a rule recently promulgated, is not eligible to apply for the M.D. course for another three years, even if he is interested to do so.
Secondly, as noted already, the rules permit admission in M.D. in any year only to candi dates who have finished their house jobs in that year and, Dr. Jain having completed his house job in 1989, may not be eligible to be considered for admission this year.
Thirdly, if any direction of the above nature is given by us, it will operate to the prejudice of some other candidate who is eligible for admission to that course in the normal course.
Fourthly, it would not also have been possible for us even if we had come to the conclusion that Dr. Jain and not the appellant should have been admitted in 1989 to direct the University to carry forward that vacancy and grant him admission to it now.
We therefore refrain from giving any directions to the authorities in the matter as had been mooted in the course of the hearing.
For the reasons above mentioned, we have come to the conclusion that the appeal should be allowed and the appel lant 's admission to the M.D. Radiology course 1989 91 should be upheld.
We direct accordingly.
No costs.
Y.L. Appeal allowed.
| The appellant and Dr. Jain, respondent No. 4, completed their M.B.B.S. course in the years 1983 87.
from Gandhi Medical College, Bhopal.
While Dr. Jain had been admitted into that course in the Gandhi Medical College, Bhopal after he had passed the entrance test, the appellant first sought admission to M.B.B.S. course in the M.S. Ramayya Medical College, Bangalore, after paying the capitation fee and after completing the first year of the course in that Col lege she got herself transferred in 1984 to the Gandhi Medical College, Bhopal, with the approval of the State Government and with no objection from the Ramayya College, Bangalore.
After passing M.B.B.S. both of them cleared their internship of one year and also joined a house job in Radiology in the same college and completed the same in August 1989.
Both of them then applied for a single seat in the Master 's Degree (M.D.) course in Radiology at Gandhi Medical College, Bhopal.
The appellant having secured higher marks got admission to this seat in preference to Dr. Jain.
Dr. Jain, thereupon, challenged the admission of the appellant by means of a writ petition before the High Court on the ground inter alia that the transfer of the appellant from the Bangalore Medical College to the Bhopal Medical College was itself invalid and since the very admission of the appellant to the M.B.B.S. course degree in the Bhopal College was invalid, she could not at all have been considered for admission to the M.D. course which was available only to the institutional candidates.
The High Court allowed the writ petition, quashed the admission of the appellant and directed that Dr. Jain, be admitted to that seat.
Hence this appeal by the appellant.
Allowing the appeal, this Court, HELD: The validity of an order for transfer may be chal lenged 430 contemperaneonsly by a third party whose claim for admission or transfer is superseded by such order but cannot be al lowed to be challenged by a third party because he finds, in retrospect, at a future point of time, that it has affected his interests as a result of subsequent events.
[437E] The order of the State of Madhya Pradesh permitting the transfer of the appellant cannot be struck down as void.
There has been some irregularity hut, in the circumstances in which it was passed, it was one within the competence of the State Government.
[437F] There is the need to avoid disturbing settled issues which affect the life and career of an individual after a lapse of time or after the interposition of further events, as a result of which he has rightly developed a sense of security.
[441B] In the instant case, the merit list of 1989 is nothing but a reproduction of the merit list of 1988 confined to a narrower group of students of the same hatch.
The latter did show the appellant to have obtained more marks than Dr. Jain and, in this sense, was adverse to his interests.
The omis sion of Dr. Jain to challenge the correctness of the list then lulled the appellant into a sense of security that the merit list was acceptable to all.
Dr. Jain, should therefore be barred, on equitable consideration from challenging the order of merit at the present stage.
[441G]
|
ivil Appeal No. 1072 of 1976.
From the Judgment and Order dated the 2.2.1973 of the Madhya Pradesh High Court in First Appeal No. 19 of 1966.
T.U. Mehta, S.N. Singh and T.N. Singh for the Appellants.
V.A. Bobde, Uday U. Lalit, S.K. Gambhir, A G. Rat naparkhi, Ms. Vandana Kakre and R.A. Roman for the Respond ents.
The Judgment of the Court was delivered by K. RAMASWAMY, J.
This appeal by special leave under article 136 of the Constitution of India arises against the decree and judgment dated February 2, 1978 in First Appeal No. 10 of 1966 of the M.P. High Court at Gwalior Bench.
Krishna Rao @ Lala Saheb, for short "respondent" laid the Civil Suit No. 9 A of 1962 before the Addl.
District Judge, Gwalior for partition of the plaint schedule 1 to 3 properties in equal moiety and allotment of one such share to him.
648 Pending this appeal he died and his legal representatives are on record.
The Trial Court by its judgment and decree dated January 31, 1966 granted preliminary decree for parti tion of half share in schedule 1 and 2 and half share in the movable property, namely compensation amount, jewellery and utensils as found in the inventory prepared by the Nazir except the stridhana property of 3rd defendant i.e. mother of appellants Nos. 1 and 2.
The High Court while confirming the decree of the Trial Court directed the respondent to bring into hotch potch his jewellery and the appellants to have a half share therein and dismissed the appeal and the cross objections.
The admitted facts are that one Ghanshyam Sadashiv Baxi Saheb, for short 'Ghanshyam 1 ' was the common ancestor.
He had two sons by name Yesaji 1 and Phatoji.
Yesaji 1 had a son by name Ramakrishna, whose son was Yesaji @ Baba Saheb for short Yesadji2.
Yesaji 2 rendered meritorious military service to Ranaji Scindhia and in recognition thereof the Raja of Gwalior granted permanent Jagir of Chandurpura village under exhibit D 20, together with the buildings situated in 100 Bighas of land and the residential Bada with right of enjoyment and succession from generation to generation.
By virtue thereof the ownership, possession and enjoyment was continued successively for seven generations upto Dwarkanath by rule of primogeniture.
Ghanshyam @Tatya Saheb for short Ghanshyam 2 had two sons by name Dattatraya Rao @ Bapu Saheb for short Dattatraya 1 and the respondent.
Dwarkanath was the son of Dattatraya 1.
The appellant, Dattatraya @ Prakash and Pradip @ Anil, appellants Nos. 1 and 2 are sons of Dwarkanath Aruna Bai, third defendant is his widow.
Ghansh yam 2 died on June 20, 1909.
Dattatrya 1 died on February 6, 1926 and Dwarkanath died on May 19, 1956.
Dwarkanath being minor on his succession to the estate the court of wards took over management and the respondent was appointed as a Superintendent.
On death Of Dwarkanath since appellants 1 and 2 were minors Aruna Bai, their moth er, initially managed the estate with the assistance of the respondent.
Subsequently the respondent came into full control and management till date of suit.
The respondent filed the suit for partition in the year 1962 pleading that all the plaint schedule 1 to 3 properties are coparcenary and he is entitled to a half share therein.
The respondent received maintenance from Jagir income at the rate of Rs. 125 per month.
In the written statement, the appellants, while admit ting the geneology, their residential house at Gwalior as ancestral; they dis 649 puted the nature of the properties as joint family, states of the respondent and the appellant as coparceners.
They admitted that till death of Ghanshyam 2 in 1909 the family was joint and thereafter they were separated by mess and residence in the year 1929.
The house M No. 626 Holka No. 101 at Gwalior was the residential old house but the Veran dah and two rooms on both sides were constructed by Datta traya 1.
The shops in the back side of iron gate at Kampoo Road were not existing during life time of Ghanshyam 2, but the lands were purchased by Dattatraya 1 with the Jagir income and the shops and .the rooms were constructed with the Jagir income.
It was also pleaded that four shops situ ated on eastern side of iron gate were constructed by the appellants ' mother from the compensation of the Jagir lands and the personal amount belonging to them.
Jeherin Araji lands were purchased by Dattatraya 1 from his personal amounts.
The rooms situated on eastern side of Shashikala Ranglekar was purchased and constructed during the minority of Dwarkanath from the income of the Jagir.
The property adjacent to the gate on the north of the Bada namely two rooms, gate, the pucca house along with the well were con structed from the income of the Jagir by Dattatraya 1.
The pator on the south side of the stair case was constructed by Dwarkanath from Jagir 's income, Pucca walls adjacent to the quarters and the southern side of the main residential Bada are estate properties and as per law and.
custom of Gwalior State Dwarkanath became the owner of the property.
The respondent has no right to a share but had only right to maintenance.
After the death of Ghanshyam 2 the respondent continued to receive maintenance from his brother Datta traya 1 who continued in possession and enjoyment of the Jagir as his personal property.
The respondent had right to share only in the private property.
The residential house except Verandah and two rooms shown as No. 1, 2 and 3 in the enclosed map belong to the family and those three items belong to Dattatraya 1.
Accordingly it is their plea that the Jagir being impartible estate is the separate and self acquired properties of Dattatraya 1 and Dwarkanath by rule of primogeniture and the concept of coparcenary and joint family status are inapplicable to it.
The respondent has no share therein, but has only right to maintenance as a junior member of the family as per the law and custom of Gwalior State.
It was further pleaded that the respondent and his wife were given jewellery at the time of their marriage.
The jewellery found by Nazir belong to the family of the appel lants and some of them are stridhana of 3rd defendant.
The respondent is not entitled to any share therein or in the utensils.
The trial court found that till date of death of Ghanshyam 2 in 650 1909, he was Jagirdar.
Dattatraya 1 and Dwarkanath succeeded as Jagirdars by rule of primogeniture.
After the abolition of the Jagir compensation was paid to Dwarkanath during his life time as the eldest member of the family, and the appel lant No. 1 also had been paid balance of the compensation.
If a joint family possesses property which was admittedly joint the presumption would be that the property continued to be joint and the burden lies upon the member who claims and separate property to plead and prove it as separate or self acquired property.
The respondent was living jointly with his brother Dattatraya 1.
Number of sale deeds show the purchase made by Dattatraya 1. that old pators and two shops were remodelled by the court of wards.
The purchase of the plots by Dattatraya 1 and constructions made thereon by him on the ancestral lands are the joint family properties.
The Bada at Gwalior is the residential house and was not a part of the grant in exhibit D 20.
Therefore, the residential Bada on the Kampoo Road is an ancestral property of the family.
Whatever accretions were made therein must be deemed to be incorporated for the benefit of the family unless it is specifically shown that it was self acquired and separate property by Ghanshyam 2 or Dattatraya 1 or Dwarkanath.
After the abolition of the Jagir Dwarkanath received compensation.
The four shops constructed also form joint family property.
The properties given under exhibit D 20 in the village Chandupu ra are the Jagir properties.
This is also ancestral and impartible property.
There is no evidence to show that out of the Jagir income received, any property purchased or constructed were kept as separate properties.
Therefore, whatever accretions made by Dattatraya 1 for Dwarkanath or Aruna Bai are joint family properties.
It was also found that the respondent did not make any contribution, nor improved the properties.
As there is no evidence to show that Dattatraya 1 treated the income of the property as his separate income, the plaint schedule 1 properties are ances tral properties.
The Jagir compensation received from time to time also form the joint family properties.
The relations between the family was smooth and cordial till 1962.
There was no partition earlier thereto.
Merely because succession to the Jagir was governed by the rule of primogeniture, it did not clothe the Jagir with the incidence of separate and self acquired property.
Therefore, they are joint family properties liable to partition.
The jewellery except the stridhana of third defendant are joint family properties.
The High Court substantially upheld the findings of the trial court.
It held that rule of primogeniture and survi vorship was introduced by the Manual of Jagirdars of the Gwalior State (Qwaid Jagirdaran) in the year 1913 (Samwat 1970) and with the abolition of the Jagir in 1951 under the Madhya Bharat Aboli 651 tion of Jagir Act 28, 1951 (Samwat 2008) for short 'the Act ', ' the properties became the ancestral Hindu Joint Family properties and they are partible, irrespective of the fact in whose name it was entered either as Bhumidar in revenue papers or Jagirdar.
The rooms constructed in the ancestral Bada are accretions to the ancestral house and became part and parcel of it.
There is no evidence that the money spent for construction came from separate or own funds of the appellants.
All the rooms became accretions to the ancestral property and became joint family property.
The jewellery are joint family properties to the extent found by the Trial Court and are liable to partition.
The compensa tion paid under the Act also belongs to the joint family property.
It directed to bring into hotch potch the jewel lery of the respondent for partition in equal shares.
Shri T.U. Mehta, learned senior counsel for the appel lants, contended that the courts below erred in holding that the properties are joint family properties, liable to parti tion.
Since it is a Jagir grant, as per the custom and law, the eldest male member succeeds by rule of primogeniture and survivorship.
Therefore, they are the separate properties of the eldest descendant, subject to right of maintenance by the junior members of the family.
Despite they being members of the undivided Hindu Joint Family, the concept of copar cenership cannot be applied to Jagir estate.
The respondent having had the benefit of maintenance right through, is not entitled as coparcener to a partition of the plaint sched uled properties as the joint family properties.
The jewel lery are the exclusive property of the appellants/defend ants Shri Bobde, learned senior counsel for the respondent argued that though the Jagir was granted tO the named indi vidual, the recitals therein unmistakably point to the fact that, it is to be enjoyed by the family from generation to generation.
It would, therefore, be the coparcenary proper ty.
Appellants and the respondent being governed by the Mitakshara Law are entitled to equal moiety.
The jewellery is the joint family property.
There is no partition at any time.
It was further contended that after the abolition of the Jagir under the act, Dwarkanath or appellants received compensation and the properties were acquired from the income of the compensation.
The properties therefore, are impressed with joint family character and are partible.
Thus the decree for partition is not illegal.
The facts, as found or not disputed in the pleadings, are thus: Admittedly, Chandurpura village was granted as Jagir under Sanad (exhibit D 20) and thereafter the family lived in Gwalior for several gen 652 erations in the Bada.
Certain accretions or incorporations were made to the properties of the family from out of the income derived from the estate or compensation received under the Act.
Dattatraya 1, Dwarakanath and 3rd defendant improved the properties.
The respondent, right through, received maintenance from the estate and did not contribute anything for the improvement of the estate.
He had his education from the maintenance granted from the estate and became a Judicial Officer.
After the abolition of the Jagir under the Act compensation received also was used to build shops.
The Jagir remained indivisible and impartible and devolved successively for seven generations on the eldest male lineal descendant and it continued till Dwarkanath 's death in 1956.
They are governed by Mitakshara Hindu Law and rule of primogeniture.
Under the Act the Jagir lands were resumed and Jagir was abolished.
During the management of the estate by the Court of Wards, the respondent admittedly worked as Superintendent.
The family remained undivided till date of suit.
There is no evidence that any Jagirdar in particular, Dattatraya 1 or Dwarkanath treated the accre tions as separate or self acquired property.
From these facts the question emerges whether the plaint schedule properties are coparcenary.
In our view, the Courts below fell in serious misconceptions of law.
Qwaid Jagirda ran only recognised and reiterated the existing law or custom of impartibility and indivisibility of Jagir, etc.
and succession by rule of primogeniture.
High Court also committed error in holding that impartibility came to an end with the abolition of Jagir under the Act and that earlier thereto and subsequent to the Act the properties were copar cenary.
Neither court appreciated the correct legal posi tion.
In Chapter 25 of Mayen 's Hindu Law, 12th Edition, at page 1065, paragraph 744 it is stated that liability to partition is an ordinary feature of joint family property, but it must not be supposed that joint property and partible property are mutually convertible terms.
If it were so, an impartible estate could never be joint property.
There are estates which by special law or custom descend to one member of the family, generally the eldest, to the exclusion of the other members and which are impartible, though they are joint property, in the eye of the law, belonging equally to the other members; and their rights are hedged in by a number of restrictions or limitations.
The common instances of this class are the ancient zamindaries . or feudatory estates held on military service tenure such as . . royal grants . . services such as Jagirs . 653 In Baijnath Prasad Singh vs Tej Bali Singh, 48 Indian Appeals 195=AIR the Judicial Committee held that succession to impartible estate will be regulated according to the ordinary rule of Mitakshara Law.
and that the respondent being a person who in joint family would, being eldest of the senior branch, with head of the family, is the person designated in this impartible estate to occupy the gaddi.
Accordingly it was held that rule of primogeni ture would apply and not the ordinary rule of Mitakshara Law of survivorship that would be applicable to impartible estate.
In Katama Natchiar vs Raja of Shivganga; [1863] 9 Moore Indian Appeals, 588 (P.C.) the Board held that the Zamindari is admitted to be in the nature of a principality .of im partible and capable of enjoyment by only one member of the family at a time and that therefore Mitakshara law of suc cession of the eldest male member would be applicable.
In Sartai Kuari & Anr.
vs Deoraj Kuari, 15 Indian Appeals, 51 the Board held that there was no co parcenary in impartible estate.
Pratap Chandra Deo vs Jagdish Chandra Deo, 54 Indian Appeals 289=AIR ruled that there is no co ownership in an impartible estate and that, therefore, no right of coparcenary.
survivorship would arise in an impart ible estate.
In Anant Bhikkappa Patii vs Shankar Ramchandra Patii, AIR 1943 P.C. 196 at 201 it was held that: "Now an impartible estate is not held in coparcenary, though it may be joint family property.
It may devolve as joint family property as separate property of the last male owner.
In the former case, it goes by survi vorship to that individual, among those male members who in fact and in law are undivided in respect of 'the 'estate, who is singled out by the special custom.
e.g., lineal male primogeniture.
In the latter case, jointness and survivorship are not as such in point; the estate devolves by inheritance from the last male owner in the order prescribed by the special Custom or according to the ordinary law of inheritance as modified by the custom.
" In Amrendra Man Singh vs Sanatan Singh, 60 Indian Appeals 242=AIR it was held that the zamindari proper ty belonged to the adopted son as to the last male owner.
Thus it is settled law that succession to an impartible estate is 654 governed by rule of primogeniture and the eldest male member of the family would succeed by survivorship to the imparti ble estate.
It is seen from the record and it is not contro verted even across the Bar that for seven successive genera tions, the Jagir estate descended on the eldest male member of the family by rule of primogeniture.
The question then is whether the Jagir is partible as Hindu Joint Family property.
In Shiba Prasad Singh vs Rani Prayag Kumari Debi & Ors., 59 Indian Appeals 351=AIR relied on by Sri Mehta, Sir Dinshan Mulla, speaking for the Board held that impartibility is essentially a creation of custom.
In .the case of ordinary joint family property, the members of the family have (1) the right of partition, (2) the right to restrain alienations by the head of the family except for necessity, (3) the right of mainte nance, and (4) the right of survivorship.
The first of these rights cannot exist in the case of an impartible estate though ancestral, from the very nature of the estate.
The second and the third are incompatible with the custom of impartibility.
To this extent the general law of Mitakshara has been superseded by custom and the impartible estate, though ancestral, is clothed with the incidents of self acquired and separate property.
But the right of survivor ship is not inconsistent with the custom of impartibility.
This right, therefore, sail retains its character of joint family property, and its devolution is governed by the general Mitakshara law applicable to such property.
Though the other rights which a co parecener acquires by birth in joint family property, no longer exist, the birth right of the senior member to take by survivorship still remains.
(emphasis supplied) Nor is this right a mere succession is similar to that of a reversioner succeeding on the death of a Hindu widow to her husband 's estate.
It is a right which is capable of being renounced and surrendered.
Therefore, it follows that in order to establish that a family governed by the Mitakshara in which there is an ancestral impartible estate has ceased to be joint it is necessary to prove an intention, express or implied, on the part of the junior members of the family to renounce their right of succession to the estate.
It is not sufficient to show a separation merely in food and worship.
In Chinnathayi @ Veeralakshmi v, Kulasekara Pandiya Naicker & Anr.
1 this Court held that the right to bring about partition of an.
impartible estate cannot be inferred from the power of alienation that the holder there of may possess.
In the case of an impartible estate the power to divide it amongst the members does not exist, though the power in the holder to alienate it is there.
This Court further held that: 655 "To establish that an impartible estate has ceased to be joint family property for pur poses of succession it is necessary to prove an intention, express or implied, on the part of the junior members of the family to give up their chance of succeeding to the estate.
In each case, it is incumbent on the.
plaintiff to adduce satisfactory grounds for holding that the joint ownership of the defendant 's branch in the estate was determined so that it became the separate property of the last holder 's branch.
The test to be applied is whether the facts show a clear intention to renounce or surrender any interest in the impartible estate or a relinquishment of the right of succession and intention to impress upon the zamindari the character of separate property." In Shiba Prasad Singh 's case it was further held thus: "surely then the property will pass not as his separat property, but by survivorship as joint property devolu tion by survivorship being another incident of an impartible estate.
The .fact is that when self acquired property is incorporated with an ordinary joint family estate the pro perty so incorpo rated is impressed with all the incidents whic attach to an ordinary joint family estate and when self acquired property is incorporated with an ancestral impartible estate the property so incorporated is im presse with all the incidents which attach to an ancestral impart ble estate.
The mere possi bility therefore of the holder alienating the property after incorporation is no reason for denying to him the power which the Hindu law gives him of changing the mode of descent to his property.
Nor is there anything in that rule of law which is incon sistent with the custom of impartibility." Accordingly it must be held that the impartible estate though descends by rule of primogeniture and survivorship on the eldest male member of the family, it must also be proved that the junior members gave up expressly or by implication his right to a share therein.
The further question is whether it is competent to the holders ofan ancestral impartible estate to incorporate with the estate other properties acquired or incorporated by him or them with the income ofthe impartible estate.
In Smt.
Rani Prabha Kumari Dibi vs Jagdish Chunder Dhabal, 29 Indian Appeals 82=ILR 29 Calcutta 433 (P.C.) 656 the question was regarding succession to an ancestral im partible estate and four Mauzas that has been purchased on behalf of the last holder out of the savings of the estate.
The Board held that there must be evidence to establish the intention of the holder express Or implied to incorporate the property as part of the estate.
Though the collection of the rents was by the estate servant and the papers were kept in the estate, the Board held that the evidence was not sufficient to hold that the Raja intended to incorporate the four mauzas with ancestral estate for the purpose of his succession.
The 4 Mauzas must, therefore, follow the rule of Mitakshara as to self acquired property.
In Janki Pershad Singh vs Dwarka Pershad Singh, 40 Indian Appeals 170=ILR 35 Allahabad 391 P.C. the movable and immovable properties acquired from the income of the estate and were incorporated as part of the estate, yet the Board held that the question whether the properties acquired by an owner becomes part of the ancestral estate for the purpose of the succession would be considered from the intention of the holder of the es tate.
It was held, on facts, that no sufficient evidence was adduced to establish such an intention.
In Murtaza Husain Khan vs Mohd. Yasin Ali Khan, 43 Indian Appeals 269=AIR as regards immovable properties the same view.
was reiterated.
In Jagdamba Kumari vs Wazir Narain, 48 Indian Appeals 195=AIR the Board held that the income of ancestral impartible estate was the absolute properties of the owner of the estate and not an accretion to the estate as in the case of ordinary joint family estate.
While reversing the judgment of the High Court it held: "It is possible that this confusion is due to the consideration of the position with regard to an ordinary joint family estate.
In such a case the income, equally with the corpus, forms part of the family property, and if the owner mixes his own moneys with the moneys of the family as, for example, by putting the whole into one account at the bank, or by treating them in his accounts as indistin guishable his own earnings share with the property with which they are mingled the character of the joint family property; but no such considerations necessarily, apply to the income from impartible property." In Jagdamba Prasad 's case the Board held that the income received is the absolute property of the owner of the im partible estate and it does not attach to the estate as does the income of ordinary ancestral estate attaches to the estate.
While immovable property can be impressed with the impartible estate "movable property cannot".
It 657 was further held that the income received is the absolute property of the owner of the estate it derives and in no way from the property he might have by his own saving.
It is wrong assumption to make that the income of the property of that nature is so effected 'by the sources from which it came that still retains itself original character.
In Commission er of Income tax, Madras vs Honble Sri Ravu Swetachalapati Ramakrishna Ranga Rao, Rajah of Babbili, the full Bench held that the income received by the holder of the impartible estate was not received as.
a member of the Hindu Undivided Family.
The income is.
his and the junior members have no right therein.
In Shiba Prasad 's case (1932), the Board held that it is possible to incorporate immovable property as a part of the estate, but movable properties are the separate properties and they cannot be incorporated and the doctrine of incorporation does not apply in the words thus: "The rule of succession in such a case.is recognised by the State as part of the law of family, though it is no more than the result of a course of conduct of individual subjects of the State constituting the family.
"Under the Hindu system of law, clear proof of usage.
" even if it be a family usage "will outweigh the written text of the law;" In Commissioner of Income tax, Punjab vs Dewan Bahadur Dewan Krishna Kishore, Rais, Lahore, SirGeorge Rankin speaking, for the Board, held that when a family governed by the Mitakshara, by custom the rule of primogeniture controls the devolution of impartible proper ty, the custom of impartibility does not touch the succes sion since the right of survivorship is not inconsistent with the custom; hence the estate retains its character.
of joint family property and devolves by the general law upon the person who, being in fact and in law joint in respect of the estate, is also the senior member in the senior line.
Hence a holder of the estate receiving income from house property cannot be said to be the owner of such property.
It is the joint family that is the owner and, therefore, he cannot be assessed as an individual in respect of such income.
In Mirza Raja Shri Pushavathi Viziaram Gajapathi Raj Manne Sultan Bahadur & Ors.
vs Shri Pushavathi Visweswar Gajapathi Raj & Ors ; it was held that immov able property subsequently acquired also would become im partible and ceases to be partible and becomes impartible but the theory of incorporation cannot apply to movable property.
In ease there is a family custom even in respect of movable properties, as per the custom those movable pro 658 perties also become part of impartible estate.
Incorporation is a matter of intention.
It is only where evidence has been adduced to show the intention of the acquirer to incorporate the property aCquired by him with the impartible estate of which he is the holder, then an inference can be drawn about such incorporation.
The question, therefore, is one of intention of acquirer.
By custom in the family the jewellery would be treated to form part of the regalia which belong to the holder of the estate and then would form part of impart ible estate.
In that case as per custom in the family cer tain jewellery were treated as part of impartible estate and belonged to the estate.
The income of an impartible estate thus is not income of the undivided family but is the income of the present holder, notwithstanding that he has sons or brothers from whom he is not divided.
The fact that the son 's or brother 's right to maintenance arises out of the eldest brother 's possession of impartible estate and is .a right to .be maintained out of the estate, do not make it a right of a unique or even exceptional character or involve the conse quence at Hindu Law that the income of the estate is not the holder 's income.
Income is not.
jointly enjoyed by the party entitled to maintenance and the party chargeable nor can it be said that the respective chances of each son to succeed by survivorship make them all co owners of the income with their father or make the holder of the estate a manager on behalf of a Hindu family of which he and they are the male members of the family.
It is equally well settled law that the holder of im partible estate can incorporate other properties belonging to him with that estate so as to make them also impartible and descendable to a single heir by survivorship.
It is one of intentions to be proved as a fact whether the accretions are his separate properties or incorporated as part of impartible estate.
The intention may be express or implied by conduct or treatment of the properties.
In Muttu Baduga nadha Tevar vs Periasami @ Udayana Tevar, 23 Indian Appeals 128 (P.C,) the Privy Council held that the doctrine of representation between the father and his three lineal descendants has been on the assumption that he is reborn in them and the eldest to exclude his brother is continued to his lineal male heirs.
In Ravi Janardhana Krishna Ranga Rao vs State of Madras, AIR 1953 Madras 185 relied on by Sri Mehta, it was held that in the case of an estate to which the incident of impartibility attaches.
by custom, custom supersedes the general Mithakshara law excepting in the matter of devolution of the property by right of survivor ship.
When an impartible estate was aCquired by the Govt.
under the 659 .
Madras Estates (Abolition and ConVersion into Ryotwari) Act compensation received retains the incident of impartibility attached to the estate and the principle that conversion would not alter the nature ofthe estate is universal.
In Thakore Shri Vinayasinghji vs Kumar Srinatwarsinghji & Ors.
,[1988] (Supp.) SCC 133 relied on by the appellants, this court held thatthere is no restraint on the power of alienation of the holder of theimpartible estate.
There is a right of survivorship by birth to the seniormembers of the family, but in all other respects it is clothed with thein cidents of self acquired and separate property with the holder ofimpartible estate and unlimited right of acquisi tion not only by transferbut by will.
In Sri Raja Rao Venka ta Mahipati Gangadara Rama RaoBahadur vs Raja of Pittapur, 47 Indian Appeals 354=AIR and in Maharajah of Jeypore & Anr.
vs VikramaDeo Garu, 52 Indian Cases 333=AIR the Board alsoheld that apart from custom and from near relationship to the holder,the junior members of the family have no right to maintenance out ofthe income of the impartible estate.
It is also thus well settled law that the right of joint enjoyment which is ordinary incident to a coparcenary, where the joint estate is partible, is excluded by the rule of primogeniture and impartibility.
The income of an impartible estate and the accumulation of such income are the absolute .property of the holder.
The immovable properties would be incorporated with impartible estate.
It must be proved that the holder had impressed the immovable proper ties as part of the estate.
But the movable properties will not.
Movables are not an accretion to the estate as in the case of an ordinary joint family estate.
It is seen that the grant of Chandurpur Jagir was in perpetuity and the enjoyment is from generation to genera tion Geneology abstracted hereinbefore establishes that devolution by survivorship to the eldest male member contin ued till time of Dwarakanath and the respondent received only maintenance from the Jagir estate.
What was implicit, was made explicit by Quaid Jagirdaran issued in Samwat 1970 by the Maharaja Scindhia of Gwalior State.
In paragraph 2 thereof it has been stated that Jagir grant shall be indi visible and impartible property.
In paragraph 2 of the preamble it is stated that the Jagir in its entirily would continue in the family in which they were conferred.
Thus it is indivisible and impartible and succeeded by lineal eldest descendent of the family by rules of primogeniture.
660 Chandarpura Jagir was granted under exhibit D 20 with 100 Bighas of lands and the buildings situated therein, accre tions made in such estate out of its income are impartible estate governed by the rule of primogeniture and was suc ceeded by Dwarkanath as last eldest male descendant in the family.
Therefore, they were not the joint family properties but are separate properties of Dwarkanath and the respondent has no right to a share therein as a coparcener.
The other lands acquired from the income thereof stand incorporated as part of the Jagir and are not partible.
Section 9 of the Act recognises the existing legal position and that the Junior member has only right to maintenance and directs payment thereof out of the compensation amount and creates a charge thereon.
Therefore, the properties enumerated in items 1 to 3 and 5 of schedule 2 are not partible.
The preliminary decree in that regard is set aside.
There appears to be dispute regarding item 4.
So it is left out to be decided in separate proceedings.
Both the courts found as a fact that the accretions were from out of the income of the Jagir.
Schedule 1 ances tral residential Bada and other properties situated at Gwalior are not covered by the sanad exhibit D 20.
Admittedly, all the, members of the joint family lived therein.
The prior partition in 1929 set up by the appellants was negated by the courts below.
Though Dattatraya 1 and Dwarkanath improved the properties from the income of Jagir estate as part of the joint estate, there is no evidence to establish that either Dattatraya 1 or Dwarkanath treated those proper ties as their separate or self acquired properties.
Both the courts found as a fact that accretions formed part of.
the joint.
family properties.
Equally there is no evidence that the respondent had given up his share therein either ex pressly or by implication by conduct.
His assertion to be a coparcener and the properties to be coparcenary shows that he continued to claim to be a member of the joint family and admittedly the properties are joint.
The accretions stood blended with ancestral joint family properties.
Under section 3 of the Act what was resumed was only Jagir lands.
Resumption means taking back what was given; what was re sumed are the lands and not the property of a person from whom it was taken by the rightful owner.
Therefore.
what was resumed is the right, title and interest in the Jagir lands covered by the provisions of the Act and compensation was paid in lieu thereof.
Under section 5(b)(i) notwithstanding the vesting in the State under section 4 thereof all Open enclosures used for . . domestic purposes and in continuous possession for 12 years immediately before the date of the resumption; (II) all open house sites purchased for valuable consideration; (III) all private 661 buildings, places of worship, wells, etc.
situated in . house sitespecified in clause (I) and (II); (IV) all groves wherever situated andlands appurtenant thereto shall continue to belong to and be held by the Jagirdar and be settled on him; (V) all 'tanks, trees, private wellsand buildings in the occupied lands shall continue to belong to or beheld by the family.
Thus it is clear that all private properties including buildings in the jagir belong to or held by the Jagirdar remained to bethe property of the Jagirdar.
All private properties in the Jagir otherthan impartible Jagir, therefore, rem 'ained to be joint family property.
We, therefore, hold that schedule I properties are partible.
The pre liminary decree for partition of them are Upheld. ' It is seen that 100 bighas of land in Chandurpura was granted as Jagir.
What had remained after the Act is hardly 5.41 bighas.
So the rest of the lands, obviously, was re sumed by the Government, under the Act.
By operation of section 18 of the Act it is Jagirdar who is entitled toreceive compensation money payable under the Act.
Therefore, themon ey received towards compensation of Jagir lands also retains thecharacter as impartible.
Under the Act by operation of section 19 of the Act the Jagirdar is declared to be pucca tenant of Khudkhast lands of Dwarkanath.
From the impugned judgment it is clear that there are plethora of precedents of Madhya Pradesh High Court that after the abolition of the estates under the Act the lands became joint family properties which received approval from Anant Kibe & Ors.
Purushottam Rao & Ors., [1984] (Suppl.) SCC 175 relied on by Sri Bobde.
There in this court held that the combined effect of sections 158(1)(b) and 164 of the M.P. Land Revenue Code was that the incident of impartibility and the special mode of Succession by the rule of primogeniture which were granted in terms of the grant of inam lands under the Jagir Manual stood extin guished.
Bhumiswami right was conferred on the holder of the land i.e. Dwarkanath In Madhya Bharat Land Revenue and Tenancy Act, 1950 by operation of sections 54(7), 69 and 82 the lands become the pucca tenancy of Bhumiswami i.e. Dwarka nath.
Therefore, the devolution of the right of puccatenancy is by succession opened to the appellants Nos. 1 and 2.Accordingly we hold that Item 2, 3 and 5 of schedule 2 lands become the properties of the appellants.
Cash grant of item 1 in schedule 3 of a sum of Rs.6895.00 is to the family the respondent had already received maintenance as a Junior member from the family and so he is not entitled again to a share therein.
The decree is accordingly set aside.
Regarding item 2 by operation of section 18 of the Act the Jagirdar is entitled to it and that, 662 therefore, the respondent had no share 'therein.
The jewel lery and utensils being movable properties are separate and personal propertiesbelonging to the appellants.
Admittedly the respondent was, given jewellery at his marriage etc.
Therefore, the jewellery and utensils are not liable to partition.
The decree for partition of them is set aside.
The appeal is partly allowed.
The judgment and decree of the trial court as confirmed by the High Court to the extent of all the items in schedule 1 for partition in two equal shares and allotment of one such share to the respondent is confirmed.
The decree for partition of schedule 2 and 3 and of the jewellery and utensils is set aside.
The appeal is allowed to the above extent, but parties are directed to bear their own costs.
Y.L. Appeal patly allowed.
| One Yesaji 2, ancestor of the parties rendered meritori ous military service to Ranaji Scindia and in recognition thereof, the Raja of Gwalior granted permanent jagir of Chandurpura village together with the buildings situated in 100 Bighas of land and the residential Bada with right of enjoyment and succession from generation to generation.
By virtue thereof, the ownership, possession and enjoyment was continued successively for seven generations upto Dwarkanath by rule of primogeniture.
Dwarkanath was the nephew (broth er 's son) Of the respondent and father of appellant Nos. 1 and 2.
Dwarkanath being minor at the time of his succession to the estate, the court of wards took over the management and the respondent was appointed as Superintendent and on his death, since appellants 1 and 2 were minors Aruna Rai, their mother, initially managed the estate with the assist ance of the respondent and subsequently the respondent came into full control and management.
The respondent filed a suit for partition .in the year 1962 of the plaint schedule 1 to 3 properties in equal moiety and allotment of one such share to him.
He pleaded that the properties are coparcenary joint family properties and he is entitled to a half share therein.
The respondent received maintenance from the jagir income at the rate of Rs.125 per month.
The appellants defendants disputed the nature of the properties as joint family, status of the respondent and the appellants as coparceners.
They referred to various accretions made to the jagir estate by their father and mother and pleaded that the jagir being an impartible estate is the separate and self acquired properties of Dattatraya 1 Dwarkanath by rule of primogeniture and the concept of coparcenary and joint family status ' are inapplicable to it, and that the respond ent has thus no share therein, but has only a right of maintenance as per the law and the Custom of Gwalior State.
It was also added that the respondent and his wife were given jewellery at.
the time of their mar 645 riage which belonged to the family of the appellants and some of them are stridhana of the 3rd defendant; the re spondent had no share therein or in the utensils etc.
The trial court found that till the date of death of Ghanshyam 2 in 1909, he was jagirdar.
Dattatraya 1 and Dwarkanath suc ceeded as Jagirdars by rule of primogeniture.
After the abolition of the Jagir, compensation was paid to Dwarkanath during his life time as the eldest member of the family and the appellant No. 1 also had been paid balance of compensa tion.
If a joint family possesses property which was admit tedly joint, the presumption would he that the property continued to be joint and the burden lies upon the member who claims as separate property to plead and prove it as separate or self acquired property.
On this reasoning, the trim court granted preliminary decree for partition of half share in schedule 1 and 2 and half share in the moveable property viz., compensation amount jewellery and utensils.
The High Court substantially upheld the findings of the trial court.
It held that rule of primogeniture and survi vorship was introduced by the Manual of Jagirdars of the Gwalior State (Qwaid Jagirdaram) in the year 1913 and with the abolition of the Jagir in 1951 under the Madhya Bharat Abolition of Jagir Act 28, 1951, the properties became the ancestral Hindu Joint family properties and they are parti ble, irrespective of the fact in whose name it was entered either as Bhumidar in revenue papers or Jagirdar.
The High Court while confirming the decree of the trial court, di rected the respondent to bring into hotch potch his jewel lery and the appellants to have a half share therein and accordingly dismissed the appeal and the cross objections.
Hence this appeal by the appellants defendants by special leave.
Partly allowing the appeal, this Court, HELD: Liability to partition is an ordinary feature of joint family property, but it must not be supposed that joint property and partible property are mutually converti ble terms.
[652F] Succession to an impartible estate is governed by rule of primogeniture and the eldest male member of the family would succeed by survivorship to the impartible estate.
[653H 654A] The impartible estate, though descends by rule of primo geniture and survivorship on the eldest male member of the family, it must also be proved that the junior members gave up expressly or by implication his right to a share therein.[655G] The income of an impartible estate is not income of the undivided 646 family but is the income of the present holder, notwith standing that he has sons or brothers from whom he is not divided.
The fact that the son 's or brother 's right to maintenance arises out of the eldest brother 's possession of impartible estate and is a right to be maintained out of the estate, do not make it a right of a unique or even excep tional character or involve the consequence at Hindu Law that the income of the estate is not the holder 's income.
Income is not jointly enjoyed by the party entitled to maintenance and the party chargeable nor can it be said that the respective chances of each son to succeed by survivor ship make them all co owners of the income with their father or make the holder of the estate a manager on behalf of a Hindu family of which he and they are the male members of the family.
[658C E] The right of joint enjoyment which is ordinary incident to a coparcenary, where the joint estate is partible, is excluded by the rule of primogeniture and impartibility.
The income of an impartible estate and the accumulation of such income are the absolute property of the holder.
The immova ble properties would be incorporated with impartible estate.
It must be proved that the holder had impressed the immova ble properties as part of the estate.
But the movable properties will not.
Movables are not an accretion to the estate as in the case of an ordinary joint family estate.
[659E].
The grant of Chandurpur Jagir was in perpetuity and the enjoyment is from generation to generation.
Geneology ex tracted herein before establishes that devolution by survi vorship to the eldest male member continued till time of Dwarkanath and the respondent received only maintenance from the Jagir estate.
What was implicit was made explicit by Qwaid Jagirdaran issued in Samvat 1970 by Maharaja Scindia of Gwalior State.
[659F G] Thus it is indivisible and impartible and succeeded by lineal eldest descendent of the family by rules of primogen iture.
[659H] Baijnath Prasad Singh vs Tej.
Bali Singh, 48 Indian Appeals 195 A.I.R. 1921 P.C. 62; Katama Natchiar vs Raja of Shivganga, [1863] 9 Noore Indian Appeals, 588 (P.C.); Sartaj Kuari & Anr.
vs Deoraj Kuari, 15 Indian AppealS, 51; Pratap Chandra Deo vs Jagdish Chandra Deo, 54 Indian Appeals 289 A.I.R. 1927 P.C. 159; Anant Shikkappa Patil vs Shankar Ramchandra Patil, A.I.R. 1943 P.C. 196 at 201; Amrendra Man Singh vs Sanatan Singh, 60.
Indian Appeals 142 A.I.R. 1933 P.C. 155; Shiba Prasad Singh vs Rani Prayag Kumari Debi & Ors., 59 Indian Appeals 351 A.I.R. 1932 P.C. 216; Chin 647 nathayi @ Veeralakshmi vs Kulasekara Pandiya Naicker & Anr.
, ; ; Smt.
Rani Prabha Kumari Bibi vs Jagdish Chunder Dhabal, 29 Indian Appeals 82=ILR 29 Calcutta 433 P.C.; Janki Pershad Singh vs Dwarka Pershad Singh, 40 Indian Appeals 170=ILR 35 Allahabad 391 P.C.; Murtaza Husain Khan vs Mohd. Yasin Ali Khan, 43 Indian Appeals 269=A.I.R. ; Jagdamba Kumari vs Wazir Narain, 48 Indian Appeals 195=A.I.R. ; Commissioner of Income tax, Madras vs Honble Sri Ravu Swetachalapati Ramakrishna Ranga Rao, Rajah of Babbili, ; Commissioner of Income tax, Punjab vs DeWan Bahadur Dewan Krishna Kishore, Rais, Lahore, A.I.R. 1941 P.C.120; Mirza Raja Shri Pushava thi Viziaram Gajapathi Raj Manne Sultan Bahadur & Ors.
vs Shri Pushavathi Visweswar Gajapathi Raj & Ors., ; ; Muttu Baduganadha Tevar vs Periasami @ Udayana Tevar, 23 Indian appeals 128 P.C.; Ravi Janardhana Krishna Ranga Rao vs State of Madras, A.I.R. 1953 Madras 185; Tha kore Shri Vinayasinghji vs Kumar Srinatwarsinghji & Ors., [1988] (Supp.) S.C.C. 133; Sri Raja Rao Venkata Mahipati Gangadara Rama Rao Bahadur vs Raja of Pittapur, 47 Indian Appeals 354=A.I.R. ; Maharajah of Jeypore & Anr.
vs Vikrama Deo Garu, 52 Indian Cases 333=A.I.R. 1919 P.C. 126; Anant Kibe & Ors.
vs Purushottam Rao & Ors., [1984] (Suppl.) S.C.C. 175, referred to.
|
vil Appeal Nos.
" 5061 62 of 1985.
From the Judgment and Order dated 24.9.
1985 of the Sikkim High Court in W.P. No. 1 of 1983.
K. Swami, T. Topgay, A. Subba Rao (N.P.) B. Parthasarthi and Pari jar Sinha for the appearing parties.
The Judgment of the Court was delivered by KULDIP SINGH, J.
The Sikkim State Civil Service (here inafter called the 'Service ') was constituted with effect from July 1, 1977 by the rules framed under article 309 of the Constitution of India, called the Sikkim State Civil Service Rules, 1977 (hereinafter called the 636 'Rules ').
The question for our consideration in these ap peals is whether the special recruitment made by the State Government in the year 1981/82 and the consequent appoint ment of 29 officers to the service is violative of the rules and as such is liable to be quashed.
The Sikkim Government by a notification dated September 16, 1981 decided to make special recruitment to the service on the basis of written examination cum viva voce test.
The notification mentioned 'exigencies of service ' as a ground for holding the special recruitment.
As a result of the selection, 29 officers were appointed to the service by an order dated December 13, 1982.
Dorjee Tshering Bhutia who was working as Under Secre tary to the Government of Sikkim competed for the selection but failed.
He challenged the notification dated September 16, 1981 and the consequent selection by way of a writ petition under Article 226 of the Constitution of India before the Sikkim High Court.
The learned single Judge of the High Court allowed the writ petition and quashed the notification and the selection.
At the relevant time there being no division bench in the Sikkim High Court to hear the appeal, the State of Sikkim and the selected candidates have, against the judgment of the Learned Single Judge, come up to this court via Article 136 of the Constitution of India.
Hence these two appeals.
Before dealing with the points involved in the appeals it is necessary to notice the provisions of the rules in some detail.
Rule 3 deals with the initial constitution of the service.
It provides that the persons holding the posts mentioned therein would be deemed to be members of the service on the enforcement of the rules.
Rule 4 which pro vides for the method of recruitment to the service is as under: 4.
Method Of Recruitment to the Service: (1) Recruitment to the service after the publishment of these rules shall be by the following methods, namely: (a) Competitive Examinations to be held by the Commission; (b) Selection from among persons serving in connection with the affairs of the State of Sikkim.
(2) The proportion of vacancies to be filled in any year in accordance with clauses (a) and (b) above, shall be 50:50 respectively: 637 Provided that the number of persons, recruited under ClauSe (b) above, shall not at any time exceed 50 percent of the total strength of the Service (3)Notwithstanding anything contained in sub rule (I) if in the opinion of the Government exigencies of the service So re quire, the Government may, after consultation with the Commission, adopt such method of recruitment to the Service other than those specified in the said sub rule, as it may by Notification in this behalf, prescribe.
Rule 5 provides for the constitution of a Selection Committee, consisting of Chairman, Sikkim Public Service Commission and three other officers, to make recruitment under Rule 4(1)(b).
Under Rule 6 the merit list prepared by the Selection Committee is to be forwarded to the Sikkim Public Service Commission for its final approval, Rule 8 lays down that the competitive examination for recruitment to the service is to be conducted by the Sikkim Public Service Commission.
Rule 9, 10 and 11 provide for eligibili ty and other qualifications for admission to the competitive examination.
Rule 12 states that the decision of the Commis sion as to the eligibility or otherwise of a candidate for admission to the competitive examination shall be final.
The Rules provide for two methods of recruitment, com petitive examination and by selection from amongst persons serving in connection with the affairs of the State of Sikkim.
In respect of both these methods, it is the Sikkim Public Service Commission which is the authority Under the Rules to make recruitment to the service.
The competitive examination is to be held by the Commission.
The Selection Committee for recruitment under Rule 4(1)(b) is to be pre sided over by the Chairman of the Public Service Commission and finally the merit list has to be approved by the Public Service CommissiOn.
It is thus Obvious that the Rules can only operate through the Sikkim Public Service Commission.
Without the existence of a Public Service Commission in the State of Sikkim the Rules could not have become functional.
It is not disputed that on July 1, 1977 when the Rules came into force there was no Public Service Commission in the State.
It was for the first time that one Shri K.R.K. Menon was appointed as chairman Of the Commission by a notifica tion dated November 20.
1981 and he took over as such on January 11, 1982.
It is, thus, the admitted position that from July 1, 1977 till January 1.1, 1982 the Public Service Commission in the State of Sikkim had.not been constituted and as such was not functioning.
638 On August 10, 1981 a Cabinet Memorandum was issued by the Sikkim Government suggesting the necessity of inducting officers working with the Sikkim Government into the service by way of selection.
The reasons for holding the said selec tion as stated in the memorandum are as under.
"Officers, who had not been considered for induction into the Sikkim State Civil Service at its initial constitution in 1977, have been representing from time to time for induction into the Sikkim State Civil Service.
Presently these Officers have been grouped in the cate gory of 'GENERAL '.
In order to give them chance for appointment to the State Civil Service, the Government may consider the modalities for selection and the determination of seniority of the officers as proposed in the draft Notification and the draft order enclosed.
The following salient points are submitted for the consideration of the cabi net.
" The Memorandum was considered by the Cabinet in its meeting held on September 1, 1981 and it was decided to hold a written examination and viva voce test for selection to the Service.
Consequently, the notification dated September 16, 1981 was issued, the operative part of which is repro duced hereunder: "NOTIFICATION In pursuance of sub rule (3) of rule 4 of the Sikkim State Civil Service Rules, 1977, the Government being of opinion that the exigencies of the Service as require, hereby adopts the method written examination cum viva voce test as a method of recruitment to the service for that purpose constitutes a Selec tion Committee and prescribe the conditions of eligibility and regulation of seniority among the selected officers as follows: 1.
Constitution of the Selection Committee.
There shall be a Selection Committee comprising of the following officers, namely: 1.
Chief Secretary Chairman 2.
Home Secretary Member 639 3.
Development Commissioner Member 4.
Finance Secretary Member 5.
Establishment Secretary Member The Deputy Secretary in the Estab lishment Department shall act as the Secretary to the Selection Committee.
Functions of the Selection Committee The Selection Committee shall arrange to hold a written examination cum viva voce test for the eligible officers with a view to assess their suitability for appointment to Service.
Provided that any Officer who fails to obtain forty per cent of the total marks at the written examination cum viva voce test shall not be considered for appointment to Service.
Officers eligible to appear at the written Examination cum viva voce test (1) Every person who on the 1st clay of August, 1981 is a gazetted officer under the Government of Sikkim not possessing the technical qualifica tions as specified in the Notification Of the Government of Sikkim in the Establishment Department No. 350/GEN/EST dated 3rd Feb., 1978 shall be eligible to appear at the Writ ten examination cum viva voce test.
By a subsequent notification dated April 24, 1982 the constitution of the Selection Committee was changed and the Chairman, Sikkim Public Service Commission was made to preside over the Interview Board.
The merit list prepared as a result of selection was sent to the Sikkim Public Service Commission for approval and thereafter 29 officers were appointed to the service by a notification dated December 13, 1982.
Dorjee Bhutia challenged the notification dated Septem ber 16, 1981 and the consequent selection before the Sikkim High Court on the following grounds: 1.
The exercise of power, in issuing the impugned notifica tion, 640 under Rule 4(3) of the Rules was illegal as the requisite conditions namely the existence of exigencies of service and consultation with the Public Service Commission, were not satisfied.
The method of selection provided under the notification being contrary to the statutory rules was bad in law.
Rule 4(3) of the Rules was liable to be struck down on the ground of excessive delegation.
The Selection Committee was changed from time to time so much so that the Committee which took the written examina tion was different from the one which took the viva voce test.
The learned Advocate General appearing for the State of Sikkim raised the following points before the High Court: 1.
The rules, though enforced, were inoperative due to nonexistence of Public Service Commission in the State of Sikkim.
The Government could, therefore, issue the notifica tion in exercise of its executive power under Article 162 of the Constitution of India.
The conditions precedent for holding the selection under Rule 4(3) were satisfied.
Necessary opinion to issue the impugned notification was formed on the basis of the reasons contained in the Cabinet Memorandum dated August 10, 1981.
The High Court could not have gone into the sufficiency of reasons.
Consultation with the Public Service Commission under the Rules was directory.
In any case there being no Commission in existence it was not possible to do so.
Dorjee Bhutia having appeared in the written examination and the viva voce test was estopped from challenging the selection.
The writ petition was liable to be dismissed on grounds of laches.
The High Court rejected the arguments advanced on behalf of the State of Sikkim.
It was held by the High Court that the impugned notification was violative of the Rules, the Government could not have acted in its executive power when the statutory rules were holding the 641 field, the two conditions precedent under, Rule 4(3) of the Rules were mandatory, there was no material before the.
State Government to form an opinion that exigencies of service required the issuance of the impugned notification and the Public ServiCe Commission was not consulted.
On these findings the High Court quashed the selection and the consequent appointments.
The learned counsel for the appellant contended that the Rules came into force in the year 1977 which provided re cruitment to the service through the Public Service Commis sion.
The service constituted under the Rules consisted of the top ranking posts in the State Service.
It also served as a feeder cadre for appointments to the Indian Administra tive Service.
After its initial.
constitution no further appointments were made to the service under the Rules be cause in the absence of the Public Service Commission there was no mechanism to operate the Rules.
According to him when recruitment to the service was not made for a long period there were representations from number off officers seeking opportunity to enter the service.
It was under these circum stances that the cabinet decision to hold the special selec tion was taken and the impugned notification was issued.
The learned counsel vehemently contended that the Rules being inoperative the State Government was, within its executive power to issue the notification.
He also justified the Government action under Rule 4(3) of the Rules.
According to .him the. necessary opinion regarding existence of 'Ex igencies of Service ' was formed by the Government on the basis of the reasons contained in the Cabinet Memorandum (quoted above) and the High Court could not have gone into the sufficiency of the said reasons.
He further argued that the requirement of consultation with the Public Service Commission was directory and its non compliance could not have rendered the selection illegal.
The executive power of the State under Article 162 of the Constitution of India extends to the matters with re spect to which the legislature of the State has power to make laws.
The Government business is conducted under Arti cle 166(3) of the Constitution in accordance with the Rules of Business made by the Governor.
Under the said Rules the Government business is divided amongst the ministers and specific functions are allocated to different ministries.
Each ministry can, therefore, issue orders or notifications in respect of the functions which have been allocated to it under the Rules of Business.
642 The executive power of the State cannot be exercised in the field which is already occupied by the laws made by the legislature.
It is settled law that any order, instruction, direction or notification issued in exercise of the execu tive power of the State which is contrary to any statutory provisions, is without jurisdiction and is a nullity.
But in this case we are faced with a peculiar situation.
The Rules, though enforced, remained unworkable for about five years.
The Public Service Commission, which was the authority to implement the Rules, was not in existence during the said period.
There is nothing on the record to show as to why the Public Service Commission was not constituted during all those five years.
In the absence of any material to the contrary we assume that there Were justifiable reasons for the delay in constituting the Commission.
The executive power of the State being divided amongst various function aries under Article 166(3) of the Constitution of India there is possibility of lack of co ordination amongst var ious limbs of the Government working within their respective spheres of allocation.
The object of regulating the recruit ment and conditions of Service by statutory provisions is to rule out arbitrariness, provide consistency and crystilise the rights of employees concerned.
The statutory provision 's which are unworkable and inoperative cannot achieve these objectives.
Such provisions are non est till made operation al.
It is the operative statutory provisions which have the effect of ousting executive power of the State from the same field.
When in a peculiar situation, as in.the present ease, the statutory provisions could not be operated there was no bar for the State Government to act in exercise of its executive power.
The impugned notification to hold special selection 'was issued almost four years after the enforce ment of the Rules.
It was done to remove stagnation and to afford an opportunity to the eligible persons to enter the service.
In our view the State Government was justified in issuing the impugned notification in exercise of its execu tive power and the High Court fell into error in quashing the same.
The fact that the State Government purported to act under rule 4(3) of the Rules in issuing the impugned notifi cation is of no consequence.
When the source of power can be validly traced then the State action in the exercise of such power cannot be struck down on the ground that it was la belled under a different provision.
The view we have taken it is not necessary to go into any other question.
It is not disputed that after the con stitution of the Sikkim Public Service Commission, the Chairman of the Commission was made to preside over the Selection Committee which took the viva 643 voce test.
There after the merit list was sent to the Public Service Commission and the appointment of 29 appellants, in the year 1982, was made with the approval of the Commission.
The selection was thus finally approved by the Commission which is an independent authority.
No infirmity or illegali ty has been pointed out in the process of selection or in preparing the merit list.
We, therefore, allow the appeals, set aside the judgment of the High Court and dismiss the writ petition by Dorjee Tshering Bhutia.
There shall be no order as to costs.
G.N. Appeals al lowed.
| The Sikkim State Civil Service was constituted in 1977, under the Sikkim State Civil Service Rules, 1977.
The Rules provided for two methods of recruitment viz., competitive examination and selection from amongst persons serving in connection with the affairs of the State.
On the basis of representations from officers who were not being considered for induction into the service at.
its initial constitution, the Petitioner State decided to afford an opportunity to them.
On 16.9.81 the State Government issued a notification for special recruitment and constituted a Selection Commit tee.
Written examination cum viva voce test was adopted as the method of recruitment, and the Selection Committee prepared a merit list, on the basis of which 29 officers were appointed to the service in December, 1982.
The Respondent who was working as Under Secertary to the State Government compete in the test but was not successful.
He filed a Writ Petition before the High Court, challenging the notification dated 16.9.1981 and the consequent selec tion.
The main contention raised by him was that the exer cise of power under Rule 4(3) on the basis of which the said notification was issued, was illegal on the ground of exces sive delegation, since the requisite conditions of existence of exigencies of service and consultation with the Public Service Commission were not satisfied.
The Petitioner State contended that the Rules though 633 634 enforced, were inoperative since Public Service Commission was not in existence in the State, and the Government could issue the notification in exercise of its executive power under Article 162 of the Constitution of India; that the conditions precedent for holding the selection under Rule 4(3) were satisfied as the necessary opinion to issue the notification was formed on the basis of the reasons con tained in the Cabinet Memorandum dated 10.8.1981; that the consultation with the Public Service Commission under the Rules was directory and in any case the Service Commission was not in existence at the relevant time and that the Respondent having appeared in the written examination and viva voce test was estopped from challenging the selection.
Rejecting the contentions of the State, the High Court held that the notification was violative of the Rules and quashed the selection and the consequent appointments.
Aggrieved by the High Court 's decision, the State Gov ernment and the selected officers preferred the present appeals by special leave.
The same contentions as were raised in the High Court were urged before this Court.
Allowing the appeals, this Court, HELD: 1.
The State Government was justified in issuing the notification in exercise of its executive power and the High Court fell into error in quashing the same.
[642F] 2.
The executive power of the State cannot be exercised in the field which is already occupied by the laws made by the legislature.
It is settled law that any order, instruc tion, direction or notification issued in exercise of the executive power of the State which is contrary to any statu tory provisions, is without jurisdiction and is a nullity.
In the instant case, the Sikkim State Civil Service Rules, 1977 though enforced, remained unworkable for about five years.
The Public Service Commission, which was the authori ty to implement the said Rules, was not in existence during the said period.
There is nothing on record to show as to why the Public Service Commission was not constituted during all those five years.
In the absence of any material to the contrary it is assumed that there were justifiable reasons for the delay in constituting the Commission.
The executive power of the State being divided amongst various function aries under Article 166(3) of the Constitution of India there is possibility of lack of co ordination amongst var ious limbs of the Government working within their respective spheres of allocation.
The 635 object of regulating the recruitment and conditions of service by statutory provisions is to rule out arbitrari ness, provide consistency and crystalise the rights of employees concerned.
The statutory provisions which are unworkable and inoperative cannot achive these objectives.
Such provisions are non est till made operational.
It is the operative statutory provisions which have the affect of ousting executive power of the State from the same field.
When in a peculiar situation, the statutory provisions could not be operated, there was no bar for the State Government to act in exercise of its executive power.
The notification to hold special selection was issued almost four years after the enforcement of the Rules.
It was done to remove stagna tion and to afford an opportunity to the eligible persons to enter the service.
[642A E] 3.
The fact that the State Government purported to act under rule 4(3) of the Rules in issuing the notification is of no consequence.
When the source of power can be validly traced then the State action in the exercise of such power cannot be struck down on the ground that it was labelled under a different provision.
[642G] 4.
After the constitution of the Sikkim Public Service Commission, the Chairman of the Commission was made to preside over the Selection Committee which took the viva voce test.
Thereafter the merit list was sent to the Public Service Commission and the appointment was made with the approval of the Commission.
The selection was thus finally approved by the Commission which is an independent authori ty.
There could be no infirmity or illegality in the process of selection or in preparing the merit list.
[642H; 643A B]
|
vil Appeal Nos.
1339 40 of 1988.
From the judgment dated 7.7.1987 of the Madras High Court in W.P. Nos. 9781 and 10545 of 1986.
G.L. Sanghi, P.P. Rao, R. Mohan, R. Perumal, V. Krishna murthy, M.N. Krishnamani, V. Sekhar, K.V. Vishwanathan, T. Raja, S.R. Setia, P. Chaudhary, A. Mariarputham and M.A. Krishnamurthy for the appearing parties.
The Judgment of the Court was delivered by K. JAGANNATHA SHETTY, J.
In these appeals by special leave, the legality of the judgment of the Madras High Court dated 7 July 1987 quashing the promotions made to the cadre of professors in law colleges in the State of Tamil Nadu has been called into question.
The appeals arise in the following circumstances: During the period from 197 1 to 1982 the Government appointed temporary junior professors in different law colleges in the State.
The appointments were made under Rule 10(a)(i)(1) of the Tamil Nadu State and SubOrdinate Services Rules, 1955 (Viz.
Preliminary and The General Rules) (hereinafter called 'the Rules ').
In 1979 the State Public Service Com mission invited applications for regular appointment of junior professors.
The temporary junior professors and others applied for the posts.
The Public Service Commission selected 25 candidates out of whom 21 were already working as temporary junior professors.
The selected candidates were arranged in the list called "approved list '. ' in the order of merit.
The list was prepared by the Public Service Com mission on 16 August 1983.
It was approved by the Government 'on 9 December 1983.
On 27 June 1985 the State Government made an order regularising the services of those 21 junior professors.
Their services were regularised with effect from the dates of original appointments as temporary junior professors.
On 10 September 1986 some of the junior professors were promoted and appointed as professors in the law colleges.
promotion was challenged before the Madras High Court on the ground that the claim of the seniors has been over looked ' It, was urged before the High Court that once the temporary services have been regularised retrospectively with effect from the date of entry in the service, the seniority should be reckoned by giving the benefit of regu larised service 621 notwithstanding the ranking in the approved list prepared by the Public Service Commission.
The High Court accepted that plea and queshed the promotion of professors and directed the Government to make a proper order of promotion in the light of the views expressed in the judgment.
The correctness of the judgment of the High Court has been assailed in these appeals.
We must first outline the necessary statutory provisions bearing on the question raised.
Section 10(a)(i)(1) provides as follows: "10.
Temporary appointments: (a)(i)(1) Where it is necessary in the public interest owing to an emergency which has arisen to fill immediately a vacancy in a post borne on the cadre of a service, class or category and there would be undue delay in making such appointment in accordance with these rules and the Special Rules, the ap pointing authority may temporarily appoint a person, otherwise than in accordance with the said rules.
Rule 22 so far as relevant reads: "Reservation of Appointments Where the Spe cial Rules lay down that the principle of reservation of appointments shall apply to any service, class or category, selection for appointment thereto shall with effect on and from the 7th June 197.1, in cases such selec tion is made by the Commission, and 8th Novem ber 1971, in other cases, be made on the following basis (a) The unit of selection for appointment, for the purpose of this rule, shall be one hun dred, of which ,eighteen shall be reserved for the Scheduled Castes and the Scheduled Tribes and thirty one shall be reserved for the Backward Classes and the remaining fifty one shall be filled on the basis of merit.
(b) The claims Of members of the Scheduled Castes and the Scheduled Tribes and the Back ward Classes shall also be considered for the fifty one appointments, which shall be filled on the basis of merit; and where a candidate 622 belonging to a Scheduled Caste, Scheduled Tribe or Back ' ward Class is selected on the basis of merit, the number of posts reserved for the Scheduled Castes and the Scheduled Tribes or for the BackWard Classes, as the case may be, shall not in any way be affected.
XXXXX XXXX XXXX Rule 23, so far.
as material, is as follows: "23(a)(i) Date of Commencement of probation of persons first appointment temporarily If a person appointed temporarily either under sub rule (a) or sub rule.
(d) of rule 10 to fill a vacancy in any service, class or cate gory otherwise than in accordance with the rules governing appointment thereto, such vacancy being a vacancy which may be filled by direct recruitment, is subsequently appointed to the service, class or category in accord ance with the rules, he shall commence his probation; if any, in such category either from the date of his first temporary appoint ment or from such subsequent date, as the appointing authority may determine.
XXXXX XXXXX XXXXX Provided that on the date so determined, the person possesses all the qualifications pre scribed for appointment to the service, class or category, as the case may be.
(ii) A person who commences probation under clause (i) shall also be eligible to draw increments in the time scale of pay applicable to him from the date of commencement of his probation.
Where commencement of probation is ordered from a date earlier than the date of the order and if this has not been enabled by relaxation of any rule, he shall draw incre ments, including arrears, in the time scale Of pay applicable to him from such ' earlier date.
The appointing authority shall include a provision to this effect while issuing orders in all such cases.
Rule 35 omitting immaterial words, is in these terms: "35(a) The seniority of a person in a service, class or cate 623 gory or grade shall unless he has been reduced to a lower rank as a punishment, be determined by the rank obtained by him in the list of approved candidates drawn up by the T.N.P.S.C. or other appointing authoritY, as the case may be, subject to the rule of reser vation.
where it applies.
The date of com mencement of his probation shall be the date on which he joins duty irrespective of his seniority.
" , It is under these Rules the Public Service Commission invit ed applications for selecting candidates for direct recruit ment to the cadre of Assistant professors in Law.
The Public Service Commission prepared the list of selected candidates by following the reservation provided under rule 22.
The list was approved by the State Government. ' Rule 35(a) states that seniority of a person ' be determined by the rank 'obtained by him in the list of approved candidates drawn by the Public Service Commission subject to rule of reservation where it applies.
The contention urged for the respondents, is.
that since their temporary service as junior professors were regula rised, the regularised service should count for the purpose of determining, their seniority and not the rankings in the select ,list approved by the Government.
We find little substance in it.
The order of regularisation is in these terms: "ORDER DATED 27.6.1985 In G.O Ms. No. 2288 Education dated 9.12.1983 the Government approved the selection made by the Tamil Nadu Public Serv ice Commission of the 25 candidates mentioned therein for appointment by direct recruitment as Junior Professor in the Tamil Nadu 'Legal Educational Service These 25 candidates were appointed temporarily as from their taking charge 'in G.O.
Ms. No. 897 Education dated 11.7.
The Government have however, decided to appoint them, regularly with effect from, the dates on which, they were declared fully qualified to hold the post of Junior professor in the Law Colleges in Tamil Nadu prior to their selection by the Tamil.
Public.
Service.
Commission and appointment as Junior ,Profes sors,in Law Colleges with reference to their selection.
The Government accordingly direct that the services of the 21 individuals men tioned in 624 the Annexure to this order as Junior Profes sors in the Tamil Nadu Legal Educational Service, be regularised with retrospective effect from the dates noted against them.
The inter se seniority of the 21 candi dates.indicated in the annexure is in accord ance with the seniority fixed by the Tamil Nadu Public Service Commission.
The inter se seniority position will not be affected in any way with reference to the dates 'of regulari sation mentioned in column 3 of the annexure.
Under Rule 23(a)(ii) of the General Rules for State and Subordinate Services, the incum bents are eligible for increments from the date of their regularisation as they are fully qualified to hold the post on that date.
The increments already sanctioned to them, for their services as temporary.
junior professors prior to regular appointment, is ratified.
XXXXX XXXXX ' ' The first paragraph of the order refers to the selection of 25 candidates by the Public Service Commission for ap pointment as Junior Professors in the ' law colleges and their appointment with effect from their ' taking charges.
The second paragraph of the order deals with the regularisa tion of the services of/21 candidates out of 25 appointed.
The Government directed that the services of the 21 Junior Professors specified in the order be regularised with retro spective effect from the date noted against them.
In the third paragraph it is stated that the inter se seniority of the 21 candidates is in accordance with the seniority fixed by the Public Service Commission and the inter se seniority position will not be affected in any way with reference to the dates of regularisation of their services.
The paragraph four of the order deals with the rights of the candidates to draw increments under rule 23(a)(ii) in the service rendered as temporary Junior Professors.
The High Court has stated that Rule 35(a) could not have been properly invoked by the State Government after the regularisation of :he services of the candidates and it would be against the very concept of order of regularisa tion.
It has been pointed out that by regularisaion the period of temporary service has been converted into a period of regular service and a deeming, fiction is introduced that the candidates whose services have been regularised retro spectively must be 625 treated for all purposes as being in regular service from the respective dates of regularisation.
In our opinion, the view.
expressed by the.
High Court not only runs counter to the terms of the order of the.
regularisation but also is inconsistent with Statutory principle of determining seniority under Rule 35(a).
In the first place the order of regularisation of the services 'of the candidateS expressly states that the inter se seniority of, the candidates would be in accordance with the rankings in the approved list prepared by the Public Service Commis sion and will not be affected in any way by the date of regularisation of services.
When the ' order of regularisa tion of temporary service itself denies such service for the purpose of determining seniority, the Court cannot count that service for the purpose of seniority.
Secondly, Rule 3.5(a) provides for determining the inter se seniority of the candidates selected by the Public Service Commission.
It states that the seniority of a person in a service, class or category or trade shall be determined unless he has been reduced to a lower rank as a punishment, by the rank ob tained by him in the list of approved candidates drawn by the Public Service Commission or other appointing authority as the case may be '.
Since the parties in these cases ap peared for selection before the Public Service Commission for regular recruitment as Junior Professors, the list of approved candidates prepared by the Public Service 'Commis sion in the order.of merit and accepted by the Government should be the basis for determining their inter se seniori ty.
It is not open to the parties to claim that their tempo rary service as Junior Professors upon regularisation should be counted for the purpose of determining the seniority in the cadre.
There is no rule supporting such contention.
The services rendered in the temporary post is available either for earning increments or for commencement of probation.
That would be clear from Rule 23(a).
Consistent with the Rule 23(a), the Government in the order of regularisation has directed that the incumbents are eligible for increments from the date of their regularisation as they are fully qualified to hold the post on that date.
The increments already sanctioned to them during their services as tempo rary Junior Professors prior to.regular appointment has been ratified by the said order.
The High Court was plainly in error in ignoring the statutory Rules and the terms and conditions of the order of regularisation of services.
Apart from that, Rule 10(a)(i)(1) provides for making of temporary appointments when it is necessary in the public interest to do so owing to an emergency which has arisen for filling a vacancy immediately.
Such appointments are made otherwise than in accor 626 dance with the procedure prescribed under the Rules.
In the instant case the respondents were appointed temporarily and otherwise than in accordance with 'the Rules.
They were later selected along with others for direct ,recruitment.by the Public Service CommisSion.
They were not entitled to count their temporary service for seniority.
In A.P.M. Mayakutty etc, vs Secretary, Public Service Department etc., at 942 this Court observed that the serv ices rendered by the applicants under Rule 10(a)(i)(1) cannot be considered for the purpose of seniority as such appointment is a matter of stop gap, emergency or fortuitous arrangement.
The present case cannot ' be an exception to this principle even though their temporary services have been regularised, since regularisation 'was only for limited purposes.
In any view of the matter the decision of the High Court cannot be sustained.
In the result the appeals are allowed and the impugned judgment is set aside with no order as to costs.
V.P.R. Appeals allowed.
| The Government appointed temporary junior professors in different law colleges in the State under Rule 10(a)(1)(1) of the TamilNadu State and Subordinate Services Rules, 1955 during 1971 1982.
In 1979 the State Public Service Commission invited applications for regular appointment of junior professors.
The temporary junior professors and others applied for the posts.
The Commission selected 25 candidates out of whom 21 were already working as temporary junior professors.
On 16.8.1983, the selected candidates were arranged in the list called "approved list" in the order of merit prepared by the Commission which was approved by the Government on 9.12.1983.
On 27.6.1985 the State Government regularised the serv ices of the 21 junior professors with effect from 'the dates of original appointments as temporary junior professors.
Some of the junior professors were promoted on 10.9.1986 and appointed as professors.
The respondents challenged that promotion before the.
High Court contending that once the temporary services were regularised retrospectively with effect from the date of entry in the. service, the seniori ty should he reckoned by glvlng the benefit of regularised service notwithstanding the ranking in the approved list.
The High Court allowing the writ petitions directed the Govern 619 ment to make a proper order of promotion in the light of the views expressed in the judgment, against which appeals were made in this Court.
Allowing the appeals, this Court, HELD: 1.
The order of regularisation of the services of the candidates expressly States that the inter se seniority of the candidates would be in accordance with the rankings in the approved list prepared by the Public Service Commis sion and will not be affected in any way by the date of regularisation of services.
When the order of regularisation of temporary service itself denies such service for the purpose of determining seniority, the Court cannot count that service for the purpose of seniority.
[625B C] 2.
Since the parties in these cases appeared for selec tion before the Public Service Commission for regular re cruitment as Junior professors, the list of approved candi dates prepared by the Public Service Commission in the order of merit and accepted by the Government should be the basis for the determining inter se seniority.
It is not open to the parties to claim that their temporary service aS junior professors upon regularisation should be counted for the purpose of determining the seniority in the cadre.
[625D E] 3.
Rule 10(a)(i)(1) provides for making of temporary appointments.
Such appointments are made otherwise than in accordance with the procedure prescribed under the Rules.
[625H 626A] 4.
In the instant case, the respondents were appointed temporarily and otherwise than in accordance with the Rules.
They were later selected along with others for direct re cruitment by the Public Service Commission.
They were not entitled to count the temporary service for seniority.
The services rented by the applicants under Rule 10(a)(i)(1) cannot be considered for the purpose of seniority as such appointment is a matter of stop gap, emergency or fortuitous arrangement.
Even though their temporary services have been regularised, since regularisation was only for limited purposes.
[626A C] A.P.M. Mayakutty etc.
vs Secretary, 'Public Service Department etc.
, at 942, followed.
The services rendered in the temporary post is avail able either for earning increments or for commencement of probation.
[625E F] 620
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