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iminal Appeals Nos.
145 to 156 of 1968.
Appeals by special leave from the judgment 'and order dated September 6, 1967 of the Kerala High Court in Criminal Appeals Nos. 114 to 124 of 1967.
R.H. Dhebar, Lily Thomas for S.P. Nayar, for the appellant (in all the appeals).
A. section Nambiar, for the respondent (in all the appeals).
The Judgment of the Court was delivered by Bhargava, J.
These twelve connected appeals arose out of twelve prosecutions instituted by the .appellant, Provident Fund Inspector, Trivandrum, against the respondent, Secretary, N.S.S. Co operative Society, Changanacherry, for offences punishable under the Employees ' Provident Funds Act, 1952 (hereinafter referred to as "the Act") on the ground of contravention of the provisions of the Employees ' Provident Fund Scheme, 1952 (hereinafter referred to as "the Scheme").
The specific charges related to the .failure of the respondent (1 ) to pay to the Employees ' Provident Fund the employees ' and the employer 's 'share of contribution together with administrative charges for the twelve quarters comprised between May, 1961 and February, 1964; (2) to submit the returns in Forms 5 and 10 for the same twelve quarters; (3) to send statements of recoveries of contributions in Form.
12 for the same 12 quarters; and (4) to send the initial return in Form 9 showing the particulars as on 30 4 1961 along with Form 2 in the manner specified in the Scheme.
The pay 483 ment of the employer 's and employees ' contribution to the Provident Fund, and the question of sending the various statements arose in respect of a Press which was purchased by the N.S.S. Co operative Society on the 21st March, 1961 from the Travancore Cochin Central Printing and Publishing Co operative Society, Ltd. According to the appellant, this establishment of the Printing Press had 'been set up in the year 1946 and it continued in existence even subsequently when, in March, 1961, the Press was purchased by the N.S.S. Co operative Society.
Until the purchase by the N.S.S. Co operative Society, the establishment was employing only 9 workmen; but, after the N.S.S. Co operative Society started working the Press, the number of workmen increased beyond 20, so that the Act became applicable to this establishment.
The case was that, since the Act became applicable w.e.f. April; 1961, it was the duty of the respondent to comply with the requirements of the Act and pay the contribution and send the various returns which the respondent failed to do On trial, the Magistrate recorded the finding that the establishment as run by the N.S.S. Co operative Society after 1961 could not be held to be an old establishment set up in the year 1946, had emerged as a new establishment in 1961, and, consequently, for a period of three years from April, 1961, the provisions of the Act would not apply to this establishment because of the provision contained in section 16(1)(b) of the Act.
On this view, the Magistrate acquitted the respondent in all the cases.
The respondent appealed to the High Court of Kerala.
The High Court disagreed with the Magistrate and held that, even though there was change of management, change of workers and change of machinery.
when the N.S.S. Co operative Society purchased the Press in 1961, the business that was carried on was the same as it was at the time of purchase, so that it could not be held that a new establishment had come into existence different from the one which existed before the purchase.
The High Court, however, took the view in law that, under section 16(1)(b) of the Act, an establishment is given exemption for a period of 3 years from the date on which it came within the purview of the Act, treating the establishment as an infant establishment standing in need of protection.
The High Court, therefore, held that this establishment was protected from the applicability of the Act for a period of 3 years from 21st March, 1961 which would cover the period in respect of which prosecutions were launched by the appellant.
On this ground, the High Court upheld the orders of acquittal passed by the Magistrate.
The appellant has now come up in these appeals against this decision of the High Court by special leave granted by this Court.
It is quite clear that on the question of law decided by the High Court in favour of the respondent, that decision cannot be 484 upheld in view of the decision of this Court in R. Ramakrishna Rao vs State of Kerala(1) where it was held that, under section 16(1)(b), in the case of 'a new establishment, the period of five years (laid down by subsequent amendment) is counted forward from the date the establishment is set up, but, in the case of an existing establishment, from the date the establishment "has been" set up In the present case, since the establishment was first set up in the year 1946, the period of exemption for purposes of applying section 16(1)(b) of the Act would run from the date on which the establishment had been set up and could not be counted from April, 1961 when the Act became applicable to this establishment.
In view of that decision of this Court, the acquittal of the respondent on the ground given by the High Court cannot be maintained.
However, on behalf of the respondent, it was argued that, on the evidence in this case, the High Court was not justified in recording the finding that this establishment as set up in the year 1946 continued to exist as it was before, even after the purchase by the N.S.S. Co operative Society in 1961.
It was urged that, on facts, the correct finding that should have been recorded was that the old establishment ceased to exist and an entirely new one was set up in the year 1961.
In support of this plea, we were taken by learned counsel for the parties through the evidence which was tendered during the trial before the Magistrate and, after going through it, we are.
inclined to accept the submission made on behalf of the respondent.
The burden of proving that the old establishment had continued and that a new establishment was not set up in the year 1961 was on the appellant, as the appellant had filed criminal cases for prosecution of the respondent.
The first prosecution witness was the Provident Fund Inspector, Raghunathan, but most of his evidence relates to facts discovered by him and not in his personal knowledge.
It is he who made a report for the prosecution of the respondent and in that report itself he admitted that the strength of the establishment was less than 20 till 16th April, 1961 when it was purchased by the N.S.S. Co operative Society.
Headded that there were only 9 employees 'at the date of purchase of these 9 employees, 6 were reemployed by the purchasers.
Significance attaches to the word "reemployed" which implies that there was no continuity of employment even of those 6 employees.
That witness also admitted that, after the purchase, the Press was removed from its original place and additional machineries were purchased and added to the Press.
According to him, he also received information that compensation due to the workers till the date of sale was disbursed by the previous owner, T.C: Central Co operative Printers and publishers.
He added that the (1)[1968] 2 S.C.R.819.
485 persons working in the Press at the time of his evidence were all persons who had been appointed by the N.S.S. Co operative Society.
Thus, his evidence does not prove that the establishment run by the N.S.S. Co operative Society was the same as the establishment which was being run by the previous owner of the Press.
The owner changed, me machinery changed, the location of the Press was altered, and even the employees were not the same as before.
In fact, none of the employees, according to his evidence, was continued in service.
Th`e only witness on whom reliance could be placed on behalf of the appellant to prove continuity of the business was P.W. 2, Sadasivan Nair, who claimed to be one of the employees in this Press of the previous employer and who stated mat he continued to be employed by the N.S.S. Co operative Society.
His evidence has rightly been criticised on the ground that he is a disgruntled person who lost his service some years later when the press was being run by the N.S.S. Co operative Society.
Further, he stated on oath that the Press was taken over with all its workers which is clearly a wrong statement and is contradicted by P.W. 1, the Provident Fund Inspector himself.
It is also significant that, according to the Provident Fund Inspector, compensation was paid to the previous employees by the previous employer which clearly shows that the previous employees were not continued in service, and that they were paid compensation for termination of their services on transfer of the Press presumably in accordance with the provisions of section 25FF of the Industrial Disputes Act.
The prosecution could have easily produced the accounts of the previous owner to show that there were at least some employees who were continued in service and who were not paid compensation, but no such attempt was made on behalf of the appellant.
Even the sale deed in favour of the N.S.S. Co operative Society has not been put in the paper book before us and its absence is significant in view of the statement made by D.W. 1, one of the Directors of the N.S.S. Co operative Society, who stated that the N.S.S. Co operative Society neither purchased the establishment ' as a going concern, nor did it continue to run the same establishment.
According to D.W. 1.
after the purchase of the Press, there was a closure.for a period.of about 3 months and a new business was started in June or July, 1961 when a new establishment was set up.
The workmen employed by the previous owner were not taken over on their old conditions of service.
Fresh appointments were made and all workers were newly recruited, though, at the time of this recruitment, some of the old employees were also taken in service.
This evidence would clearly show that a new establishment was set up by the N.S.S. Co operative Society after the purchase of the press by it from the previous owner and that there was no continuity of the old establishment.
As we have L2SupCI/70 19 486 said earlier, the appellant could have summoned the accounts of the previous owner to show that these facts alleged by D.W. 1 are not correct.
Even the N.S.S. Co operative Society is maintaining accounts and registers; and no attempt was made on behalf of the prosecution to seize or summon those registers.
It is true that the respondent himself,f, on his own initiative, did not produce those registers in defence but, in a criminal case, such a circumstance cannot justify raising a presumption that the registers would have contradicted the evidence of D.W. 1.
D.W. 1 also stated that there was a specific provision in the sale deed that none of the workers, who were working in the press purchased, were to be taken in service and nobody was, in fact, taken.
This statement could easily have been challenged before us if the saledeed had been included in the Paper:book.
In the absence of the sale deed, which has not been brought to our notice, we see no reason to disbelieve the statement of D.W. 1 and we consider that his evidence is decidedly preferable to that of P.W. 2 whose evidence we have mentioned above.
The only other prosecution witness who need be mentioned is P.W. 3 who also employed by the N.S.S. Co operative Society in this Press after the purchase.
He was, however, not an employee in this press before its purchase by N.S.S. Co operative Society.
He was employed in another press which was also purchased by this Co operative Society, so that his evidence about continuity of his service cannot indicate that this particular establishment was a continuation of the old establishment set up by the previous owner.
On a discussion of the entire evidence and in view of the fact that the burden of proof lay on the appellant, we think that the conclusions of fact which must be accepted are; that, at the time of the purchase, a new owner came in place of the previous owner; the work of the Press was stopped on sale and was restarted after a 'break of about three months; the machinery in the Press was also, altered; the persons employed previously were not continued in service, while a fresh recruitment of employees took place amongst whom Only six happened to be previous employees; and compensation was paid to the workmen 'at the time of the sale by the previous owner.
On these facts, no other conclusion can be drawn, except that the old establishment was completely closed when the transfer of ownership took place and an entirely new establishment was set up three months later, so that, in this case, the benefit of non applicability of the Act under s.16(1) (b) of the Act for a period of three years was available to the respondent from June or July, 1961 when the new establishment was set up.
In this connection, learned counsel appearing for the appellant drew our attention to a few decision, including one of this Court ' to urge that we should not hold that this establishment was newly set up in the year 1961.
The first of these decisions is Lakshmi 487 Rattan Engineering Works vs Regional Provident Fund Commissioner, Punjab, and others(1) in which this Court held that a change in location of an establishment or a change in the line of business would not have the effect that a new establishment has been set up, provided there was continuity of working.
That case cannot apply to the facts as found by us in the present case where there was no continuity of the business and there were the additional factors of termination of services of 'all the workmen and a new establishment being set up by ,fresh recruitment of workmen, in addition to alteration in machinery in the Press.
The decisions in Jamnaclas Agarwalla and Another vs The Regional Provident Fund Commissioner, West Bengal & Others,(2) and Messrs Bharat Board Mills Ltd. vs The Regional Provident Fund Commissioner and Others(3), are also inapplicable to the facts before us in the present case.
A good deal of reliance was placed on a decision of 'a learned single Judge of the Madras High Court in Devi Press vs Regional Provident Fund Commissioner, Madras and Another;(4) but even in that case the facts were different.
One of the prominent facts before the Judge was that the particular business transferred was being run under licences and those licences were also transferred by the seller to the purchaser.
In view of this transfer, the learned Judge held that it was a case of sale of a going concern and there was continuity of business.
Without expressing any opinion as to whether the learned Judge was correct in holding that there was continuity of business in that case, the very fact that he held the establishment not to have been newly set up on the ground that it was a case of a transfer of a going concern distinguishes that case from the case before us.
In the present case, the facts established show that the old business was close and was restarted as a new business after recruiting new workmen.
The principle to be applied in arriving at a decision in such a case appears to us to have been rightly explained in a decision of a learned single Judge of the Madras High Court in Vithaldas Jogannathadas and/Another vs Regional Provident Fund Commissioner and Another(5).
The learned Judge held : "If in a particular case, it appears that the new establishment is not genuinely such, but is only ,an old one formally resuscitated in order to avoid the legal obligation, it is always open to the Court to hold that it is the old establishment which is substantially continuing, and that the liability to contribute must be affixed to the apparently new form also.
But where, in reality, the old establishment has come to an end and there is a new establishment, this establishment is entitled to infancy (1) (2) (3) (4) A.I.R. 1965 Mad.
(5) L2SupCI/70 20 488 protection in its own right, even if it happens by coincidence to have employed a large part of the personnel of the previous establishment.
" This principle, applied to the facts of the present case, can only lead ' to the conclusion that the N.S.S. Co operative Society had set up a new establishment and the provisions of section 16(1)(b) of the Act have to be applied on the basis that the new establishment was set up in June or July, 1961, so that there was no liability tO pay.
Provident Fund contributions or to file the various returns during the period to which the prosecutions related.
The acquittal of the respondent was, therefore, fully justified.
The appeals are dismissed.
G.C Appeals dismissed.
| IN-Abs | The respondent cooperative society purchased a Press.
from another cooperative society on 21st March 1961.
The establishment had been set up by the vendor originally in 1946 and at the time of purchase by the respondent only 9 workmen were employed therein.
As the number of workers employed by the respondent went beyond 20 the Employees ' Provident Fund Act, 1952 and the Employees ' Provident Fund Scheme 1952 became applicable to the: respondent 's establishment with effect from April 1961.
For not complying with the provisions of the aforesaid Act and Scheme the Provident Fund Inspector, Trivandrum (appellant herein) launched prosecutions against the respondent.
The specific charges related to the failure, of the respondent (i) to pay to the Employees ' Provident ' Fund the employees ' and the employer 's share of contributions together with administrative charges 'for the twelve quarters comprised between May 1961 and February 1964; (ii) to submit the returns in Forms 5 and 10 for the same twelve quarters; (iii) to send statements of recoveries of contributions in Form 12 for the same quarters; and (iv) to send the; initial return in Form 9 showing the particulars as on 30 4. 1961 along with Form 2 in the manner specified in the SCheme.
On trial the Magistrate recorded the finding that the establishment as run by the respondent after 1961 could not be held to be an old establishment set up in the 1946, it had emerged as a new establishment in 1961, and consequently for a period of three years from April 1961, the provisions of the Act would not apply to.
this establishment because of the provisions.
contained in section 16(1)(b) of the Act.
On this view the respondent was acquitted.
The High Court in appeal did no,t agree with the Magistrate that a new establishment came into being in 1961, but nevertheless upheld the acquittal on the ground that under section 16(1)(b) of the Act an establishment is given exemption for a period of 3 years from the date on which it came within the: purview of the Act.
On appeal to this Court by special leave, HELD.
: (i) In view of the decision of this Court in R. Ramakrishna Rao 's case the finding of the High Court that the exemption under section 16(1)(b) of the Act was available for the first three years from the date when the Act became applicable to an establishment, was wrong [486 A C] R. Ramakrishna Rao vs State of Kerala, ; , applied.
(ii) However the acquittal of the respondent must be upheld.
The burden of proving that the old establishment had continued was on the appellant.
The evidence showed: that, at the time of the purchase a new owner came in place of the previous owner; the work of the Press was stopped on sale and was restarted after a break of about three 482 months; the machinery in the Press was also altered; the persons employed previously were not continued in service, while= a fresh recruitment of employees took place amongst whom only six happened to be previous employees; and compensation was paid to the workmen at the time of the sale.
by the previous owner.
On these facts, no other conclusion could be drawn except that the old establishment was completely closed when the transfer of ownership took place and an entirely new establishment was set up three months ' later, so that in this case the benefit of the Act under section 16(1)(b) of the Act for a period of three years was available to the respondent from June or July 1961 when the new establishment was set up,.
[488 E G] Lakshmi Rattan Engineering Works vs Regional Provident Fund Commissioner, Punjab & Ors.
Jamanadas Agarwalla & Anr.
vs The Regional Provident Fund Commissioner, West Bengal & Ors. , M/s. Bharat Board Mills Ltd. vs The Regional Provident Fund Commissioner & Ors., and Devi Press vs Regional Provident Fund Commissioner, Madras & Anr.
A.I.R. , distinguished.
Vittaldas Jagannathadas & Anr.
vs Regional Provident Fund Conmissioner & Anr. , applied.
|
Appeal No. 1461 of 1969.
Appeal by special leave from the judgment and decree dated January 24, 1969 of the Delhi High Court in S.A.O. No. 203 D of 1966.
B.C. Misra and R.P. Aggarwal, .for the appellant.
Hardev Singh and S.K. Gambhir, for the respondent.
The Judgment of the Court was delivered by Shah, J.
Man Mohan Chawla was since before l958 tenant in certain premises in Delhi belonging to J.S. Sethi.
The contractual rent of the premises was Rs. 160 per month.
Sethi filed petition under section 14(1) of the Delhi Rent Control Act, 1958 for 392 an order in ejectment against Chawla on the plea that the latter had committed default in paying rent for seven months consecutively.
Pursuant to a direction of the Rent Controller, Chawla deposited the rent claimed, and the amount deposited was paid over to Sethi and the proceeding was disposed of.
Chawla again committed default for three consecutive months, and Sethi commenced another proceeding under section 14(1) of the Delhi Rent Control Act for an order in ejectment.
Chawla denied the claim that he had committed default in payment of rent.
He pleaded that he had on March 19, 1963 sent to Sethi Rs. 320 by a postal money order which Sethi had refused to accept.
Sethi denied that a money order sent by Chawla was brought to him by the postal peon.
Chawla also pleaded that the contractual rent was excessive and that the rent of the premises let to him could not exceed Rs. 50 per month and prayed that standard rent may be fixed by the Controller.
The Controller rejected that contention of Chawla and passed an order in ejectment.
The order of ejectment passed by the Controller was confirmed in appeal by the Rent Control Tribunal, and a second appeal to the High Court was also unsuccessful.
Chawla has appealed to.
this Court with special ,leave.
In support of the appeal counsel for Chawla contended: (i) that the Controller was bound to determine the standard rent of the premises in the proceeding instituted by Sethi, and since the Controller failed to do so the order in ejectment was illegal; (ii) the Courts below were in error in holding that Chawla could not obtain the benefit of section 14(2) of the Delhi Rent Control Act, 1958; (iii) that the legal presumption arising from the despatch of a postal money order for Rs. 320 addressed to Sethi had been ignored by all the courts; and (iv) that Chawla had made a deposit of rent for three months and if that deposit be taken into account Chawla was not in arrears for three consecutive months at the date of the initiation of the proceeding.
Not much need be said about contentions (iii) and (iv).
The fourth plea was not raised before the Rent Controller and the Rent Control Tribunal; it was sought to be urged for the first time before the High Court and the High .Court declined to entertain that plea.
We have not permitted counsel to raise that plea, for its determination depends upon proof of facts which were never proved.
All the Courts have held that Chawla had failed to prove his case that a postal money order for Rs. 320 sent by Chawla was duly addressed to Sethi and that Sethi refused to accept the postal money order when it was tendered to him.
The only evidence in support of that case was a postal receipt for despatch of a money order for Rs. 320 to Sethi.
It did not bear the residential address 393 of Sethi.
Sethi deposed that no one had tendered to him the postal money order.
His testimony has been believed.
The third contention must therefore fail.
We may now turn to the first and the second contentions it is necessary to bear in mind that under the Delhi Rent Act, a proceeding for recovery of rent does not lie before the Controller; lies in the civil court.
The Controller is authorised to try a proceeding for ejectment or for determination or for determination of standard rent, or for determination of fair rent in respect of a hotel and lodging house.
The relevant provisions of the Delhi Rent Control Act, 1958 which have a bearing on the two contentions remaining to be determined may first be noticed: Section 2(k) defines "standard rent" as meaning in relation to any premises, "the standard rent referred to in section 6 or where the standard rent has been increased under section 7, such increased rent.
Chapter II deals with the quantum and the procedure for determination of standard rent, and related matters.
Section 6 of the Act deals with the quantum of standard rent.
Insofar as it is relevant, it provides: "(1) subject to the provisions of sub section (2), 'standard rent ', in relation to any premises means (A) in the case of residential premises (1) where such premises have been let out at any time before the 2nd day of June 1944 (a) if the basic rent of such premises per annum does not exceed six hundred rupees the basic rent; or (b) if the basic rent of such premises per annum exceeds six hundred rupees, the basic rent together with ten per cent of such basic rent; (2) where such premises have been let out at, any time on or after the 2nd day of June 1944 (a) in any case where the rent of such premises has been fixed under the Delhi and Ajmer Merwara Rent Control Act, 1947, or the Delhi and Ajmer Rent Control Act, 1952 (i) if such rent per annum does not exceed twelve hundred rupees, the rent so fixed; or 394 (ii) if such rent per annum exceeds twelve hundred rupees, the rent so fixed together with ten per cent of such rent; (b) in any case, the rent calculated on the basis of seven and one half per cent per annum of the aggregate amount of the reasonable cost of construction and the market price of the land comprised in the premises on the date of the commencement of the construction: Provided that where the rent so calculated exceeds twelve hundred rupees per annum, this clause shall have effect as if for the words "seven and one half per cent", the words "eight and one fourth per cent" has been substituted: Section 7 provides for lawful increase of standard rent in certain cases and for recovery of other charges.
Section 9 authorises the Controller to fix the standard rent of the premises.
In so far as it is relevant, it provides: "(1) The Controller shall, on an application made to him in this behalf, either by the landlord or by the tenant, in the prescribed manner, fix in respect of any premises (i) the standard rent referred to in section 6; or (ii) the increase, if any, referred to in section 7; (2) In fixing the standard rent of any premises or the lawful increase thereof, the Controller shall fix an amount which appears to him to be reasonable having regard to the provisions of section 6 or section 7 and the circumstances of the case.
(3) (4) (5) the standard rent shall in all cases be fixed for a tenancy of twelve months: Provided that where any premises are let or re let for a period of less than twelve months, the standard rent for such tenancy shall bear the same proportion to the annual standard rent as the period of tenancy bears to twelve months.
(6) 395 (7) In fixing the standard rent of any premises under this section, the Controller shall specify a date from which the standard rent so fixed shall be deemed to have effect; Provided that in no case the date so specified shall be earlier than one year prior to the date of the filing of the application for the fixation of the standard rent.
" Section 10 provides for fixation of interim rent in an application for determination of standard rent.
That section states: "If an application for fixing the standard rent or for determining the lawful increase of such rent is made under sect,ion 9, the Controller shall, as expeditiously as possible, make an order specifying the amount of the rent or the lawful increase to be paid by the tenant to the landlord pending final decision on the application and shall appoint the date from which the rent or lawful increase so specified shall be deemed to have effect".
Section 12 insofar as it is relevant provides: "Any landlord or tenant may file an application to the Controller for fixing the standard rent of the premises or for determining the lawful increase of such rent, (a) in the case of any premises which were let, or in which the cause of action for lawful increase of rent arose before the commencement of this Act, within two years from such commencement; (b) in the case of any premises let after the commencement of this Act, (i) where the application is made by the landlord, within two years from the date on which the premises were let.
to the tenant against whom the application is made; (ii) where the application is made by the tenant, within two years from the date on which the premises were let to the tenant; and (c) in the case of any premises in which the cause of action for lawful increase of rent arises after the commencement of this Act, within two years from the date on which the cause of action arises: Provided that the Controller may entertain the application after the expiry of the said period of two years, 396 if he is satisfied that the applicant was prevented by sufficient cause from filing the application in time".
An application for fixation of standard rent must be made within two years of the date of the commencement of the Act if the premises were let before the date of the commencement of the Act, and if the premises were let after the commencement of the Act within two years from the date of letting.
The Controller is authorised to entertain the application after expiry of the period of two years if he is satisfied that the applicant was prevented by sufficient cause from filing the application in time.
Section 4 modifies the contract for payment of rent.
It provides: "(1) Except where rent is liable to periodical increase by virtue of an agreement entered into before the 1st day of January 1939, no tenant shall, notwithstanding any agreement to the contrary, be liable to pay to his landlord for the occupation of any premises any amount in excess of the standard rent of the premises, unless, such amount is a lawful increase of the standard rent in accordance with the provisions of this Act.
(2) Subject to the provisions of sub section (1), any agreement for the payment of rent in excess of the standard rent shall be construed as if it were an agreement for the payment of the standard rent only".
By section 5 it is provided: "(1) Subject to the provisions of this Act, no person shall claim or receive any rent in excess of the standard rent, notwithstanding any agreement to the contrary.
Section 14 which is in Ch.
III deals with protection of tenant against eviction.
Insofar as it is relevant the section provides: "(1) Notwithstanding anything to the contrary contained in any other law or contract, no order or decree for the recovery of possession of any premises shall be made by any court or Controller in favour of the landlord against a tenant: Provided that the Controller may, on an application made to him in the prescribed manner, make an order for the recovery of possession of the premises on one or more of the following grounds only; namely : (a) That the tenant has neither paid nor tendered the whole of the arrears of the rent legally recoverable from him within two months of the date on which a 397 notice of demand for the arrears of rent has been served on him by the landlord in the manner provided in section 106 of the ; (2) No order for the recovery of possession of any premises shall be made on the ground specified in clause (a) of the proviso to sub section (1), if the tenant makes payment or deposits as required by section 15: Provided that no tenant shall be entitled to the benefit under this sub section, if, having obtained such benefit once in respect of any premises, he again makes a default in the payment of rent of those premises for three consecutive months.
Section 15, insofar as it is relevant, provides: "(1) In every proceeding for the recovery of possession of any premises on th e ground specified in clause (a) of the proviso to sub section (1) of section 14, the Controller shall, after giving the parties an opportunity of being heard, make an order directing the tenant to pay to the landlord or deposit with the Controller within one month of the date of the order, an amount calculated at the rate of rent at which it was last paid for the period for which the arrears of the rent were legally recoverable from the tenant including the period subsequent thereto upto the end of the month previous to that in which payment or deposit is made and to continue to pay or deposit, month by month, by the fifteenth of each succeeding month, a sum equivalent to the rent at that rate.
(2) (3 ) If, in any proceeding referred to in sub section (1), or sub section (2), there is any dispute as to the amount of rent payable by the tenant, the Controller shall, within fifteen days of the date of the first hearing of the proceeding, fix an interim rent in relation to the premises to be paid or deposited in accordance with the provisions of sub section (1) or sub section (2), as the case may be, until the standard rent in relation thereto is fixed having regard to the provisions of this Act, and the amount of arrears, if any, calculated on the basis of the standard rent shall be paid or deposited by the tenant within one month of the date on which the standard rent 398 is fixed or such further time as the Controller may allow in this behalf.
(4) (5) (6) If a tenant makes payment or deposit as required by sub section (1) or sub section.
(3), no order shah be made for the recovery of possession on the ground of default in the payment of rent by the tenant, but the Controller may allow such costs as he may deem fit to the landlord.
(7) If a tenant falls to make payment or deposit as required by this section, the Controller may order the defence against eviction to be struck out and proceed with the hearing of the application".
Counsel for Chawla maintained that the period of limitation prescribed by section 12 only applies to petitions made to the Controller by a landlord or a tenant for fixing standard rent, but it has no application to a defence raised to a petition for ejectment filed by a landlord under section 14 that the contractual rent exceeds the standard rent and requests that the standard rent be determined.
Counsel contends that since in the present case the Controller failed, though expressly requested by Chawla by his written statement to enquire into the standard rent payable the proceedings were.
vitiated and the order made by the Controller was illegal.
It is common ground that the written statement was filed more than two years after the date on which the tenancy commenced and if an application under section 12(a) or(b) was made on that date it would be barred by the law of limitation.
But counsel said that in terms section 12 applies to a substantive application and not to a defence.
He relied in respect of his contention to various indication, which he contends, are to be found in the Act.
Counsel says that by virtue of the provisions of sections 4 and 5 recovery of rent by a landlord in excess of the standard rent is prohibited.
But in our judgment the prohibition in sections 4 and 5 operates only after the standard rent of premises is determined and not till then.
So long as the standard rent is not determined by the Controller, the tenant must pay the contractual rent: after the standard rent is determined the landlord becomes disentitled to recover an amount in excess of the standard rent from the date on which the determination operates.
We are unable to agree that standard rent of a given tenement is by virtue of section 6 of the Act a fixed quantity, and the liability for payment of a tenant is circumscribed thereby even if the standard rent is not fixed by order of the Controller.
Under the scheme of the Act standard rent of a given tenement is that amount only which the Controller determines.
Until the standard rent is 399 fixed by the Controller the contract between the landlord and the tenant determines the liability of the tenant to pay rent.
That is clear from the terms of section 9 of the Act.
That section clearly indicates that the Controller alone has the power to fix the standard rent, and it cannot be determined out of court.
An attempt by the parties to determine by agreement the standard rent out of court is not binding.
By section 12 in an application for fixation of standard rent of premises the Controller may give retrospective operation to his adjudication for a period not exceeding one year before the date of the application.
The scheme of the Act is entirely inconsistent with standard rent being determined otherwise than by order of the Controller.
In our view, the prohibition against recovery of rent in excess of the standard rent applies only from the date on which the standard rent is determined by order of the Controller and not before that date.
Counsel contends that by section 15(3) it is expressly contemplated that a request may be made ' for determination of standard rent as a defence to an action in ejectment, and since the Legislature has provided no time for making such a defence, the bar of limitation prescribed by section 12 has no application.
But the Legislature has provided for making an application for determination of standard rent and has prescribed a period of limitation in that behalf.
Section 14 enables the landlord to file a petition in ejectment before the Controller on the ground that the tenant has failed to pay or tender the arrears of rent legally recoverable from him within two, months of the date on which a notice of demand for the arrears of rent has been served on him by the landlord In such a case under section 15(1) where the rate of rent is accepted but there is a dispute as to the payment of rent, the Controller will proceed to determine.
whether payment according to the contract has been made.
By sub section (1 ) of section 15 it is provided that the Controller shall make an order directing the tenant to pay to the landlord or deposit with the Controller within one month of the date of the order, an amount calculated at the rate at which rent was last paid.
But the clause in terms provides that this has to be done after giving the parties an opportunity of being heard.
If the Controller was obliged to pass an order calling upon the tenant to pay to the landlord, or to deposit in his Court the amount of rent calculated ' at the rate at which it was last paid for the period for which the arrears of rent were legally recoverable from the tenant, there would be no scope for a hearing to be given to the tenant and it would put a premium upon false claims by landlords.
Even though the expression "shall" is used, it is, in our judgment, directory.
The tenant is entitled to show that he has paid the rent claimed ' from him.
If he proves that he has paid the rent, the demand for deposit of arrears under sub section (1) of section 15 cannot be made.
Sub section (3) of section 15 refers to cases in which there is a dispute 400 as to the amount of rent payable by the tenant.
In that case the Controller has to fix within fifteen days of the date of the first hearing of the proceeding, interim rent for the premises to be paid or deposited in accordance with the provisions of sub section (1) until the standard rent in relation thereto fixed having regard to the provisions of the Act.
The determination of interim rent will be for the period after the date of the application and also for arrears.
Counsel for Chawla contended that the expression "dispute as to the amount of rent payable by the tenant" in sub section
(3) of section 15 means a dispute raised by the tenant as to the "standard rent payable".
We are unable to agree.
The dispute, referred to in section 15(3) is the dispute about contractual rent payable.
When such a dispute is raised the Controller has, within fifteen days of the date of the first heating of the proceeding, to fix interim rent payable by the tenant in accordance with the provisions of sub section
(1) including the arrears, and such payment has to be made until the standard rent in relation thereto is fixed "having regard to the provisions of the Act".
Sub section
(3) provides that "interim rent" is to be paid at the rate at which it was last paid tilt standard rent is determined, but thereby it is not implied that standard rent is to be determined as an issue arising in the action for ejectment: the clause only means that when there is a dispute relating to the rate of contractual rent payable the Controller shall within fifteen days of the date of the first hearing of the proceeding fix the interim rent, and the amount so fixed shall be paid by the tenant until the standard rent in relation to the premises is fixed in an appropriate proceeding under the Act.
The expression "having regard to the provisions of this Act" has in our judgment reference to sections 9 and 12.
Payment of arrears and standard rent under sub section
(3) must be made within one month of the date on which the standard rent is fixed, or within such further time as the Controller may allow in that behalf.
The scheme of sub section
3 of section 15 is only that the interim rent will be paid at the rate ordered by the Controller, and before the proceeding is disposed of standard rent of the premises is fixed by the Controller in an application under section 12, then in order to.
obtain benefit of section 6 the tenant must pay the arrears calculated on the basis of the standard rent within one month from the date on which the standard rent is fixed or within such further time as the Controller may allow.
If in a proceeding under section 14(1)(a) the tenant raises by way of defence a contention that the standard rent be determined the Controller may treat that as an application under section 12 and deal with it according to law.
But the Act, confers no power under section 15(3) upon the Controller.
The power to determine standard rent is exercisable under section l 2 only.
401 Our attention was drawn to a number of decisions of the Punjab and the Delhi High Courts in which it was held that the Rent Controller has in a petition in ejectment jurisdiction to determine, the standard rent payable by the tenant.
In Jiwan Industries Private Ltd. vs Santosh & Company(1).
Bedi, J., held that the Rent Controller could fix the standard rent in a proceeding in ejectment even after the application of the landlord for ejectment of the tenant had been dismissed.
In Messrs Suraj Balram Sawhney & Sons.
vs Dr. D. Kiri(2) Gurdev Singh, J., held that the Controller had jurisdiction under section 15(3) to determine the standard rent in an application for ejectment based on the plea of non~payment of rent, if the tenant raised a contention that the contractual rent is in excess of the standard rent.
The learned Judge was of the view that the language of sub section
(3) of section 15 covers even those cases in which an application for fixation of standard rent it made independently would be barred by time prescribed under section 12 of the Act, since the limitation prescribed under section 12 applies only to an application made for fixation of standard rent and not to a plea taken up by the tenant in defence to an action for his eviction under proviso (a) to sub section
(1) of section 14 of the Act.
If the tenant deposits the arrears of rent, observed the learned Judge, but at the same time contends that the rent claimed from him is in excess of the standard rent the Controller has to go into the question of standard rent and he cannot order payment of the entire arrears of rent deposited unless he finds that the arrears so deposited are not in excess of the arrears calculated at the rate at which, the standard rent is fixed.
In S.K. Chatterjee and Anr.
J.N. Ghoshal(3) S.K. Kapur J., held that the words "any dispute as to the amount of rent payable by the tenant" in sub section
(3) of section 15 refers to the dispute arising between the parties on account of claim of a party for fixation of standard rent.
The learned Judge further held that section 15 (3 ) in terms confers powers to order payment or deposit of arrears at the interim rate of rent.
If the disagreement between the parties be both as to agreed rent and the standard rent, the power will be exercised under section 15(3) because the standard rent will prevail over the agreed rent.
He also held that section 15 provides a code by itself as to the nature of enquiry, the Controller has to fix an interim rent within 15 days of the date of the first hearing of the proceeding.
If this has to be done after a fullfledged enquiry compliance with section 15(3) would become impossible.
This by itself indicates that the authorities constituted under the Act are to makean enquiry in a summary manner.
(1) (2) (1965) 67 P.L.R. (3) (1966) P.L.R. (Delhi Section) 354.
402 V.S. Deshpande, J., in Chander Bhan vs Nand Lal and Anr.(1) observed that his observation in the case which is under appeal in this case that the expression "having regard to the provisions of this Act" used in section 15 (3 ) seemed to refer inter alia to sections 9 and 12 of the Act, and that observation was "not strictly necessary for the decision of that case" inasmuch as there was no dispute as to the rate of rent in that case and hence section 15(3) was not attracted at all.
The learned Judge also observed that there were two distinct provisions in the Act for fixation of standard rent the first in section 9 under which an application for the fixation of standard rent is made, for which limitation is provided by section 12 of the Act; the other is in section 15(3) of the Act, and that applies only when there is "a genuine dispute" between the parties regarding the rate and the amount of rent.
These observations prompt the comment that if the view expressed be correct the period of limitation prescribed by section 12 is rendered practically nugatory.
If a written statement filed in an application for ejectment under section 14(1)(a) raises no defence on the merits and contains a request for determination of standard rent, it would be illogical to hold that if made in a substantive petition it would be barred, but because it is a request made in a written statement in answer to a claim for ejectment it is free of the limitation prescribed by section 12.
It is to be noticed that under section 12 standard rent may be given retrospective operation for not more than one year.
But if a tenant is in arrears for more than one year, on the contention advanced by counsel for Chawla the tenant would be liable to pay arrears at the rate of standard rent determined for a period longer than one year before the date on which he made a claim in his written statement for determination of standard rent and may be entitled to reopen closed transactions.
The legislature could not have intended that the tenant in default should be entitled to evade the statutory period of limitation prescribed by the expedient of refusing to make an application so as to obtain an advantage to which he is not entitled if he moves the Controller in a substantive application for determination of standard rent.
In our view the expression "having regard to the provisions of this Act" occurring in sub section
(3) of section 15 means "having regard to sections 9 and 12 and other relevant provisions of the Act.
In our view Deshpande, J., in the judgment under appeal was right in the view that he took, and that the refinement he sought to introduce in the latter judgment in Chandrabhan vs Nand Lal and Anr.(1) cannot be accepted as correct.
The judgments to which our attention was invited appear to have proceeded upon earlier judgments of the Punjab High Court in Lala Manohar Lal Nathan Mal vs Madan Lal Murari Lal(2) (1)[1969] All India Rent Control Journal 623.
(2) A. I. R. 403 and Smt.
Radhey Piari vs
section Kalyan Singh(1).
But both these cases were decided on the interpretation of sections 8 to 11 of the Delhi and Ajmer Rent Control Act 38 of 1952 in which it was expressly provided that the standard rent shall be fixed on an application made to the Court for that purpose or in an application in any suit or in any proceeding.
We need express no opinion whether the cases under the Delhi and Ajmer Rent Control Act 38 of 1952 were correctly decided.
But the difference in the phraseology used in the Delhi Rent Control Act 59 of 1958 does not appear to have been noticed in the judgments cited at the Bar in support of the contention that to a written statement filed by a tenant when an application is made under section 14(1)(a) the conditions of section 12 do not apply.
We are of the view that the Rent Controller, the Rent Control Tribunal and the High Court were right in the view they have expressed.
The second contention is also without substance.
The tenant had made no attempt to pay the rent which was demanded of him.
Sub section (2) of section 14 enacts that the Controller shall not pass an order for recovery of possession of any premises if the tenant makes payment or deposit as required by section 15.
The bar to the jurisdiction of the Controller arises when the tenant pays or deposits interim rent as required by section 15(3) and an application for fixation of standard rent is not payment or deposit required by section section 15.
In any event by virtue of the proviso to sub section (2) of section 14 Chawla is not entitled to the benefit of sub section
(2) for he had earlier committed default in payment of rent in respect of the premises and a proceeding was instituted against him for recovery of possession.
That proceeding was disposed of after he deposited the amount of rent due by him.
By depositing the amount in court in the previous proceeding, Chawla clearly obtained the benefit under section 14(2) in respect of the premises occupied by him as a tenant.
Thereafter he made another default in payment of rent for three consecutive months.
Chawla was, therefore, not entitled to claim the protection of sub section
(2) of section 14 for he made no payment as required by section 15 and also because he had previously obtained the benefit of sub section
(2) by making a deposit in the earlier proceeding.
The contention of counsel for Chawla that the proceeding started by Sethi against him was dismissed and that Chawla had not obtained any benefit in respect of the premises under sub section
(2) of section 14 does not require serious consideration.
Chawla obtained an order of disposal of the proceeding by depositing the amount ordered to be deposited by him under section 15.
That was clearly a 404 benefit which he obtained under section 14(2).
The plea that "no tenant shall be entitled to the benefit under this sub section" is only directory is without substance.
In any event the High Court was of the view that having regard to the conduct of Chawla he having committed default previously and having obtained the benefit of sub section
(2) in respect of the premises he was not entitled to the same benefit in this proceeding.
Assuming that the proviso to sub section
(2) of section 14 is not mandatory on that question we express no opinion we are clearly of the view that the High Court having declined to grant the benefit of sub section
(2) of section 14 to Chawla, no case is made out for our interference.
The appeal fails and is dismissed with costs.
Appeal dismissed.
| IN-Abs | The appellant was the tenant since before 1958 of certain premises in Delhi belonging to the respondent.
The latter filed a proceeding for electing the appellant under section 14(1) of the Delhi Rent Control Act, 1958, on the plea of non payment of rent for seven months.
Persuant to the direction of the Rent Controller the appellant paid the arrears under section 141.2) of the Act and the proceeding was disposed of.
The appellant again committed default in payment of rent for three consecutive months and the respondent again filed a fresh proceeding for his ejectment under section 14(1).
In his written statement the appellant asked the Rent Controller to fix the standard rent of the premises and further to give him again the benefit of 14(2).
The Rent Controller rejected these pleas and passed an order ' in ejectment.
Appeals before the Rent Control Tribunal and the High Court failed.
In appeal by special leave before this Court the appellant contended that the order of the Rent Controller was illegal because he failed to fix the standard rent as claimed by the appellant.
He also contended that the limitation period prescribed in section 12 of the Act for an application for fixation of standard rent did not apply where the claim made as a defence in a suit for ejectment under section 14(/)(c), and that in any event he was entitled to the benefit of section 14(2).
HELD: (i) The appellant 's plea that the Rent Controller was to fix the standard rent when the appellant asked for its fixation in his written statement must be rejected.
(a) The prohibition in ss 4 and 5 of the Act operates only after the standard rent has been fixed and not before.
Until the Rent Controller has fixed the standard rent under section 9.
the contract between the landlord and tenant determines the liability.
Section 6 cannot be interpreted to mean that standard rent can be regarded as fixed without an order the Controller.
[400 F H] (b) When section 15(3) refers to a ease in which there is a "dispute as to amount payable by the tenant" the dispute referred to is about contractual rent payable and not about the standard real.
The "having regard to the.
provisions of the Act" has reference to sections 9 and 12.
The scheme of sub section
(3) of s 15 is that the interim rent will be paid at the rate ordered by the Controller and if before the proceeding is disposed of standard rent is fixed by the Controller in an application under s.12 then in order to obtain the benefit of s.6 the tenant must pay the arrears calculated on the basis of the standard rent within one month from the date on which the standard rent is fixed or within such further time as the Controller may allow.[402 B G] 391 If in a proceeding under section 14(1)(a) the tenant raises by way of defence a contention that the standard rent be determined the Controller may treat that as an application under section 12 and deal with it according to law.
But the Act confers no power under section 15(3) upon the Controller.
The power to determine standard rent is exercisable under section 12 only.
[402 H] (e) Acceptance of the appellant 's contention would lead to anomalous results.
Under section 12 standard rent may be given retrospective operation for not more than one year.
But if a tenant is in arrears for more than one year, on the contention of the appellant, the tenant would be liable to pay arrears at the rate of standard rent determined for a period longer than one year before the date on which he made a claim in his written statement for determination of standard rent and may be entitled to reopen closed transactions.
The legislature could not have intended that the tenant in default should be entitled to evade the statutory period of limitation prescribed by the expedient of refusing to make an application so as to obtain an advantage to which he is not entitled if he moves the Controller in a substantive application for &.termination of standard rent.
[404 E F] M/s. Suraj Balram Sawhney & Sons vs Dr. D. Kid, , 8.
K. Chatterjee & Anr.
J.N. Ghoshal, (1966) P.L.R. (Delhi Section) 354 and Chander Bhan vs Nand Lal & Anr. , disapproved.
Jiwan Industries Private Ltd. vs Santosh & Company, , Lala Manohar Led Nathan Mal vs Medal Lal Murari Lal, A.I.R. , and Smt.
Radhey Piari vs section Kalyan Singh, A.I.R. 1959 Punjab, 508, referred to. (ii) The earlier proceeding against the appellant was disposed of on his payment of arrears of rent for seven months.
Thereby the appellant had on the earlier occasion obtained the benefit of section 14(2).
Having again made default in payment of rent and not having made any payment under section 15, he was not entitled for a second time to the benefit of section 14 (2).
The words "no tenant shall be entitled to the benefit under this sub section in the proviso sub section
(2) of section 14 are not directory.
Even on the assumption that the proviso is not mandatory there was no justification for interfering with the finding of the High Court that the appellant was not entitled to the benefit of section 14(2).
[405 E G]
|
cellaneous Petition No, 641 of 1954, 72 562 Application for review of the Judgment of this Court in Civil Appeal No. 152 of 1954.
N. C. Chatterjee (G. C. Mathur, with him) for the petitioner.
Veda Vyas (section K. Kapoor and Naunit Lal, with him) for the respondent.
October 18.
The Judgment of the Court was delivered by VENKATARAMA AYYAR J.
This is an application for review of the judgment of this Court in Civil Appeal No. 52 of 1954.
That was an appeal against an order of the Election Tribunal, Himachal Pradesh (Simla), dismissing a petition to set aside the election of the respondent to the Legislative Assembly, Himachal Pradesh, from the Rohru Constituency.
Two points were raised at the hearing of the appeal before us: One was that the respondent was disqualified for election to the Assembly under section 17 of Act No. XLIX of 1951, read with section 7(d) of Act No. XLIII of 195 1, by reason of the fact that he was interested in contracts for the supply of Ayurvedic Medicines to the Himachal Pradesh Government, and the other, that he had appointed Government servants as polling agents, and had thereby contravened section 123(8) of Act No. XLIII of 1951.
On the first question, we held that, on a true construction of section 17, what would be a disqualification for election to either House of Parliament under article 102 would, under that section, be disqualification for election to the Legislatures of States, and that the disqualification under section 7 (d) of Act No. XLIII of 1951 would accordingly be a disqualification under section 17 of Act No. XLIX of 195 1.
A further contention was then raised on behalf of the respondent that even if section 7(d) were to be imported into section 17, that would not disqualify him, because under that section, the disqualification must be to being elected to either House of Parliament, and that under sections 7 and 9 of Act No. XLIII of 1951, a contract to operate as a disqualification to the election to either House of Parliament must be, with the Central Government, whereas 563 the contracts of the respondent were with the Government of Himachal Pradesh.
The answer of the petitioner to this contention was that under article 239 the administration of States was vested in the President acting through the Chief Commissioner or the Lieutenant Governor, and that the contracts of the respondent with the Chief Commissioner, Himachal Pradesh, must be held to be contracts with the Central Government.
We, however, disagreed with this con tention, and held that article 239 had not the effect of merging States with the Central Government, and converting contracts with the States into those with the Central Government.
In this application, Mr. Chatterjee appearing for the petitioner invites our attention to the definition of " Central Government " in section 3(8)(b)(ii) of the .
It is as follows: "Central Governmnet" shall in relation to anything done or to be done after the commencement of the Constitution, mean the President; and shall include in relation to the administration of a Part C State, the Chief Commissioner or Lieutenant Governor or Government of a neighbouring State or other authority acting within the scope of the authority given to him or it under article 239 or article 243 of the Constitution, as the case may be." He argues that by force of this definition, contracts with the Chief Commissioner of Himachal Pradesh must be treated as contracts with the Central Government, and that in consequence, the respondent was disqualified for election under section 17 of Act No. XLIX of 1951, read along with section 7(d) of Act No. XLIII of 1951.
As against this, Mr. Veda Vyas for the respondent relies on the definition of " State " in section 3(60)(b) of the , which runs as follows: " State Government " as respects anything done or to be done after the commencement of the Constitution, shall mean, in a Part A State, the Governor, in a Part B State the Rajpramukh, and in a Part C State the Central Government.
" 564 His contention is that there being in the Constitution a fundamental distinction between the Government of the Union and Government of the States, section 3(8) of the should be so construed as not to destroy that distinction, and that having regard to the definition of " State " in section 3(60), it must be held that to the extent the Central Government administers States under article 239, its character is that of the State Governments.
We are unable to agree that section 3(8) has the effect of putting an end to the status of States as independent units, distinct from the Union Government under the Constitution.
It merely recognies that those States are centrally administered through the President under article 239, and enacts that the expression " Central Government " should include the Chief Commissioner administering a Part C State under the authority given to him under article 239.
Section 3(8) does not affect the status of Part C States as distinct entities having their own Legislature and judiciary, as provided in articles 239 and 240.
Its true scope will be clear if, adapting it, we substitute for the words " Central Government" in section 9 of Act No. XLIII of 195 1, the words " the Chief commissioner acting within the scope of the authority given to him under article 239.
" A contract with the Chief Commissioner would, therefore, under section 9 read with section 3(8) of the , be a contract with the Central Government, and would operate as a disqualification for election to either House of Parliament under sections 7(d) and 9 of Act No. XLIII of 1951, 'and it would be a disqualification under section 17 of Act No. XLIX of 1951, for election to the Legislative Assembly of the State.
It is argued for the respondent that this construction would lead to this anomaly that whereas in the States in Part A or Part B a contract with the State would operate as disqualification only for election to the State Legislatures, such a contract would in States operate as a disqualification to be chosen, both to the State Legislature and to either House of Parliament.
That anomaly is undoubtedly 565 there.
But the contrary conclusion also involves the anomaly already pointed out, that in States a contract with the State Government is not a disqualification for election even to the State Legislature, as it is in Parts A and B States.
Whatever the anomaly, in our view, the proper course is to give effect to the plain language of the statute.
We must accordingly hold that in view of section 3(8) of the , a contract with the Chief Commissioner in a State is a contract with the Central Government, and that would be a disqualification for election to the Legislative Assembly under section 17 of Act No. XLIX of 1951 read with section 7(8) of Act No. XLIII of 1951.
This conclusion, however, can result in no advantage to the petitioner, as the further finding of the Election Tribunal is that no contracts of the respondent with the Himachal Pradesh Government were proved to have been subsisting at the material period.
That finding is, for the reasons already given, not open to attack in this appeal, and is sufficient answer to the objection that the respondent was disqualified under section 17.
The second point that was argued before us in appeal was that the respondent had appointed certain Government servants to act as polling agents, and had thereby committed a major corrupt practice under section 123(8) of Act No. XLIII of 1951.
In rejecting this contention we observed that, "as an abstract proposition of law, the mere appointment of a Government servant as a polling agent in itself and without more" is not an infringement of section 123(8).
The correctness of this conclusion is now challenged by Mr. Chatterjee.
His contention is that having regard to the nature of the duties of a polling agent as laid down by the Rules and furtfier elucidated by the instructions contained in the Election Manual issued by the Government, the polling agent must be held to be interested in the candidate for whom he acts as polling agent, and that his employment would therefore be hit by section 123(8).
Examining closely the duties of a polling agent under the Rules and under the Election Manual, they 566 can be grouped under three categories.
The first category relates to the period of time antecedent to the recording of votes.
The duties of the polling agent at this stage are to see that the ballot boxes are, to start with, empty, that the names of the candidates and their symbols are correctly set out thereon, that the slits in the boxes are in an open position, that the knobs of the slits are properly secured, and that the boxes are properly bolted and sealed.
These are duties which are cast on the presiding officer and the polling officers as well, and as these are matters to be attended to before any recording or votes begins, it is difficult to see how they can be said to assist in the furtherance of the election prospects of any one candidate more than of any other.
The second stage is when the polling is actually in progress.
The duty of the polling agent at this stage is to identify the voters.
Rule 27 provides that when there is a doubt as to the identity of a voter, the presiding officer may interrogate the voter and that be should do so, if so required by a polling agent.
Under rule 30, it is open to the polling agent to challenge any voter on the ground that he is not the person whose name is entered in the voters ' list, and when such objection is taken, it is the duty of the presiding officer to hold an enquiry and pass an order.
The object of these Rules is to prevent personation, and that is a matter in which the duty is cast equally on the presiding officer.
Rule 24 provides that, "The presiding officer may employ at the polling station such persons as he thinks fit to assist him or any polling officer in identifying the electors.
The work of the polling agent under rules 27 and 30 is of the same character, and it cannot in itself be said to further the election prospects of any particular candidate.
The third stage is reached after the polling is over '.
Then the boxes are to be examined with.
a view to find out whether the slits are open and the seals intact, the object of these provisions being to ensure that the ballot boxes had not been tampered with during the time of actual polling.
Then the unused ballot papers, the tendered ballot papers and other material documents are required to be put in separate 567 packages, and the polling agents have the right to seal all of them.
It cannot be said that in carrying out these duties the polling agent advances the election prospects of the candidate, as they admittedly relate to a stage after the completion of the polling.
Indeed, the work of the polling agent both in the first stage and in the last stage is similar in character, and neither can be said to contravene section 123(8).
As regards the second stage, as already stated in our judgment, the duty of polling agent is merely to identify a voter, and that could not by itself and without more be said to further the election prospects of the candidate.
Reliance was placed by Mr. Chatterjee on the following passage in Parker 's Election Agent and Returning Officer, Fifth Edition, at page 20: "The polling agents appointed for the same candidate to attend the several polling stations at any election, are engaged on the same duty and in the same interest, and it is generally very desirable that they should meet, under the presidency of the candidate or his election agent, before the opening of the poll for the purpose of mutual discussion and co operation.
" What that passage means is that as the duty to be performed by the polling agents at the several booths is of the same character, it would be desirable that they should all be assembled and their duties explained to them.
This has no bearing on the question whether those duties are such as must inherently promote the election prospects of the candidate.
A passage which is more in point is the one at page 18, mentioning who could be appointed as polling agents.
It is as follows: "Any competent person, whether an elector or not, may be appointed as polling agent, provided he be not the returning officer, the acting or deputy acting returning officer, or an officer or clerk appointed under P.E.R., r. 27, or a partner or clerk of any of them.
" In this connection, it must be noted that while section 41 of Act No. XLIII of 1951 contains a prohibition against the appointment of certain persons as election agents, there is none such with, reference to the appointment of polling agents under section 46 of the 568 Act.
To hold that Government servants are, as such and as a class, disqualified to act as polling agents would be to engraft an exception to the statute, which is not there.
Accordingly, we reaffirm the view taken by us that the appointment of a Government servant as polling agent does not, without more, contravene section 123(8).
It is scarcely necessary to repeat our observation in the original judgment that "if it is made out that the candidate or his agent had abused the right to appoint a Government servant as polling agent by exploiting the situation for furthering his election prospects, then the matter can be dealt with as an infringement of section 123(8).
" In the result, this petition is dismissed; but under the circumstances, without costs.
Petition dismissed.
| IN-Abs | Held, (modifying the view of law taken in Civil Appeal No. 52 of 1954) that in view of section 3(8) of the , a contract with the Chief Commissioner in a State (in this case Himachal Pradesh Chief Commissioner) is a contract with the Central Government and that would be a disqualification for election to the Legislative Assembly of the State under section 17 of Act XLIX of 1951, read with section 7(d) of Act XLIII of 1951.
|
Appeal No. 2467 of 1966.
Appeal from the judgment and decree dated March 27, 1963 the Kerala High Court in Appeal Suit No. 848 of 1960 '.
Sarjoo Prasad, P.K. Pillai and M.R.K. Pillai, for the: appellants.
V.K. Krishna Menon, R. Thiagarajan and K. Jayaram, for respondents Nos. 1 to 3.
Judgment of the Court was delivered by Ramaswami, J.
This appeal is brought by certificate from the judgment of the High Court of Kerala in A.S. No. 848 of 1962 dated March 27, 1963 reversing the decree of the principal Subordinate Judge, Trivandrum in O.S. No. 182 of 1957 dated May 23, 1960.
The father of the plaintiffs who are appellants herein was a Hindu Nadar namely Raman Nadar.
He had an eider brother named Krishanan Nadar.
On May 9, 1946 the said Krishanan Nadar and Raman Nadar jointly executed a deed of will exhibit P 2 in respect of the assets of Krishanan Nadar.
On the date of the will, Raman Nadar had only three daughters and no sons.
Krishnan Nadar died on December 5, 1947.
After the death of Krishnan Nadar the appellant 's mother ' was married to Raman Nadar, who is the father of the appellants.
It is specifically provided in the will exhibit p 2 that in the event of Raman Nadar begetting a son or sons in future those male issues will succeed to the assets of Krishnan Nadar to the exclusion of the daughters.
The material portion of the will, exhibit p 2, reads as follows: "Deed of will executed by Krishnan aged 51, Nadar, son of Kaliyambi, merchant, Makkavazhi, Kuzhiamvilakathu Veettil, Melkaladi, Airanimuttan, Pakuthy, Nellamn Adhikaram and his brother Raman son of the said Kaliyambi of do.
, aged 39, merchant, on 26th Madam, 1111 M.E. with their own consultation and to their entire satisfaction.
Some properties have been acquired in the name of the 1st named and in the name of the 2nd named out of love and affection towards him and his children, with the self acquired money of the 1st named 'and without the income of the Tarwad properties of the 1st named and without the help of the other members of the Tarwad or the 2nd named.
They are held 473 by the 1st named in his possession and enjoyed by him till this date.
The 1st named has, till the end of his life; absolute freedom, authority and right to alienate (the properties) in whatever manner he likes and to execute deeds.
The first named is unmarried and the second named has married Parvathy alias Snahappoo daughter of Sarah, Maraikkamuttath Veettil, Vazhuthoor Desom, Neyyattinkara Taluk, through whom he has three daughters Ammukutty aged 14, Chellamma aged 10 and Rajammal aged 5 but no son.
As the first named felt himself desirous of making during his life provision for the devolution after his life of the movable and immovable properties belonging to him in absolute rights as aforesaid, the following provisions regarding them are made: The first named till the end of his life will have the right to pay the land revenue to enjoy and dispose in any manner whatsoever all the movable and immovable properties that belong or may belong to himself.
After the life of the first named, all the properties above said will be taken and enjoyed by the second named maintaining his children named above and those born to him later and without alienating or westing the properties.
After the life of the second named, if he leaves behind no sons, the three daughters named above and the daughters, if any, born hereafter may enjoy all the movable and immovable properties that may be found to belong to the first named and the second named, either in common or in equal shares, effecting mutation, taking pattahs and paying the revenue in their own names, but without making any alienation thereof.
If there be sons born to the second named, they will take after the life of the second named all the movable and immovable properties of the first named and the 2nd named and enjoy them for ever, effecting mutation, taking pattahs and paying revenue, and with all powers of disposal; and in that event, the daughters of the 2nd named will not have and should not claim any right and they will not get any right.
" Soon after the death of Krishnan Nadar defendants 3 and 4 and the mother of the 5th defendant as plaintiffs filed O.S. No. 37 of 1124 M.E. for the administration of the estate of the deceased Krishnan Nadar.
The mother of appellants was made one of the defendants in that suit and the allegation was that Raman Nadar had contracted an illicit relationship with her and that he had executed a gift deed exhibit D 1 in her favour in respect of some of the plaint items.
O.S. No. 37 of 1124 was dismissed on the ' ground that the plaintiffs of that suit had lost their rights under the will on the birth of a son to Raman Nadar through his second 474 wife on February 7, 1951 during the pendency of the suit.
The plaintiffs in O.S. No. 37 of 1124 filed A.S. No. 98 of 1955 against the aforesaid decree and that was disposed of by a Division Bench of the Kerala High Court on February 2, 1957.
The High Court observed as follows: "We do not consider it proper to decide this question 'of 'the legitimacy of the son born to the 1st defendant in his second marriage) in this suit.
This can be gone into in 'a suit, if any, instituted by or on behalf of the son.
The 1st defendant had no right to revoke the will after Krishnan Nadar 's death .
The plaintiffs do not and cannot get the right to possession of the properties until after the 1st defendant 's death but a right to maintenance from the income of the properties has been provided for the plaintiffs by exhibit A (the will) and this they are entitled to get.
The 1st defendant is not entitled to do any act which affects this right of the plaintiffs.
" The High Court remanded the suit for fresh disposal to the Additional Subordinate Judge, Trivandrum.
After the suit went back on remand the Additional Subordinate Judge, Trivandrum held that the plaintiffs were not entitled to any relief and dismissed the suit.
The daughters of defendant no.1 preferred an appeal, A.S. No. 340 of 1959 to.
the High Court.
Meanwhile the appellants instituted O.S. No. 182 of 1957 for a declaration that the first defendant had only a life estate in the properties of Krishnan.
Nadar with the remainder vested in them under the will referred to above.
The suit was decreed by the Principal Subordinate Judge, Trivandrum who held that the second marriage of the 1st defendant was legal and the sons born out of that marriage were entitled to Krishnan Nadar 's property subject to the life estate of the 1st defendant.
It was further held that the daughters of the 1st defendant (plaintiffs in O.S. No 37 of 1124) were not entitled to any right over the properties.
The daughters of the 1st defendant preferred an appeal against the.
decree of the Principal Subordinate Judge being A.S. No. 848 of 1960.
The High Court decided this.
appeal and A.S. No. 340 of 1957 by a common judgment on March 27, 1963.
Appeal A.S. No. 848 of 1960 was allowed in whole and suit O.S. No. 182 of 1957 filed by the appellant was dismissed.
A.S. No. 34 of 1959 was partly allowed and appellants 1 and 2 (being the first two plaintiffs in O.S. No. 37 of 1124) were held entitled to maintenance of Rs. 50/ per head per menses from February 18, 1957.
The alienations, Exs.
C, D and E were held not binding upon the plaintiffs in that suit nor to have any force beyond the life of the 1st defendant.
The other prayer sought by the plaintiffs in the appeal was disallowed.
475 In dismissing O.S. No. 182 of 1957 the High Court took the view that the legal validity of the bequests in exhibit P 2 had to be ascertained as on the date of Krishnan Nadar 's death which was December 5, 1947.
The marriage of the first defendant took place on 14 1 1124 (corresponding to August 29, 1948) and the first child of that marriage was born on February 7, 1951.
The sons of the 1st defendant born of his second wife were, therefore, not in existence at the time of the death of the testator Krishnan Nadar.
Krishnan Nadar belonged to the State of Travancore and all his properties were located in that State where the doctrine of pure Hindu Law reigned supreme unaffected by any legislation.
The High Court held that according to pure Hindu Law a gift cannot be made in favour of a person who was not in existence at the date of the gift.
A person capable of taking under a will must either in fact or in contemplation of law be in existence at the death of the testator.
The devise in favour of plaintiffs in O.S. No. 182 of 1957 was void as they were not born at the time of death of Krishnan Nadar.
After the life estate of the 1st defendant, the daughter:rs became entitled to the properties for their life time.
The question involved in this appeal is whether the High Court was right in holding that plaintiffs have not established their title to the disputed properties.
Although there is no authority in Hindu Law to justify the doctrine that a Hindu cannot make a gift or bequest for the benefit of an unborn person yet that doctrine has been engrafted on Hindu Law by the decision of the Judicial Committee.
This doctrine was laid down for the first time in Tagore 's case(1), in which it was held by the Judicial Committee that a Hindu cannot make a gift in favour of a person who is not in existence either in fact or in contemplation of law at the time the gift was to take effect.
The Judicial Committee purported to base its decision on a passage in Dayabhaga, Ch. 1, verse 21 as.
appears from the following passage in the judgment: "This makes it necessary to consider the Hindu Law of Gifts during.
life and wills, and the extent of the testator 's power, whether in respect of the property he deals with of the person upon whom he confers it.
The Law of Gifts during life is of the simplest character.
As to ancestral estate it is said to be improper that it should be aliened by the holder, without the concurrence of those who are interested in the succession, but by the law as prevailing in Bengal at least (1) the impropriety of the alienation does not affect the legal character of the act (factum valet), and it has long been recognised as.
law (1) I.A. (1872) Supp.
476 in Bengal that the legal power of transfer is the same as to all property, whether ancestral or acquired.
It applies to all persons in existence and capable of taking from the donor at the time when the gift is to take effect so as to fall within the principle expressed in the Dayabhaga, cup.
iv. 21, by the phrase 'relinquishment in favour of the donee who is a sentient person ' By a rule now generally adopted in jurisprudence this class would include children in embryo, who afterwards come into separate existence." (pp. 66 67).
But the Judicial Committee was apparently under some misconception with respect to the meaning of the words of Dayabhaga.
The whole sentence in the original is as follows: of which the following is the: correct translation: "Since in a gift the done 's ownership in the thing (given) arises from the very act of the donor, consisting of the relinquishment of his ownership with the intention of passing the same to a sentient being.
" The sentence neither expresses nor implies that the "sentient being" must be in existence.
or be present at the time and place of the relinquishment.
On the contrary the whole argument contained in paragraphs 21 to 24 of Ch.
1 of Dayabhaga shows that a gift is completed by the donor 's act alone, the acceptance of the donee being not necessary.
Indeed, in the very next passage, Dayabhaga speaks of gifts to God as showing that the validity of the gifts does not depend upon acceptance.
Mr. Sarjoo Prasad suggested that the matter required reconsideration.
But it is manifest that the decision of the Judicial Committee in Tagore 's case(1) has stood a great length of time and on the basis of that decision rights have been regulated, arrangements as to property have been made and titles to property have passed.
We are hence of the opinion that this is a proper case in which the maxim communis error facit jus may be applied.
The principle underlying the maxim is that "the law so favours the public good, that it will in some cases permit a common error to pass for right"; as an example of which may be mentioned the case of common recoveries in English law, which were fictitious proceedings introduced by a kind of pea fraus to elude the statute de Donis, and which were at length allowed by the Courts to be a bar to an estate tail, so that these recoveries however clandestinely introduced, became by long use and acquiescence a legal mode (1) I.A. (1872) Supp.
477 of conveyance whereby a tenant in tail might dispose of his lands.
There is a reference made to this principle by Lord Blackburn in his speech in Charles Dalton vs Henry Angus & Co.(1) as follows: "I quite agree with what is said by the late Chief Justice Cookburn (3 Q.B.D. at page 105) that where the evidence proved an adverse enjoyment as of right for twenty years, or little more, and nothing else, 'no one had the faintest belief that any grant had ever existed, and the presumption was known to be a mere fiction '.
He thinks.
that thus to shorten the period of prescription without the authority of the Legislature was a great judicial usurpation.
Perhaps it was The same thing may be said of a11 legal fictions, and was often said (with, 1 think more reason) of recoveries.
But I take it that when a long series of cases have settled the law, it would produce intolerable confusion if it were to be reversed because the: mode in which it was introduced was not approved of even where it was originally a blunder, and inconvenient, communis error facit ]us.
" The doctrine in Tagore 's case(:) has been altered by three Acts, namely, the Hindu Transfers and Bequests Act, 1 of 1914, the Hindu Disposition of property Act of 1916 and the Hindu Transfers and Bequests (City of Madras) Act, 1921.
The legal position under these Acts is that no bequest shall be invalid by reason only that any person for whose benefit it may have been made was not born at the date of the testator 'section death.
This rule, however, is subject to the limitations and provisions contained in sections 113, 114, 115 and 116 of the .
It is, however, not disputed in the present case that on the relevant date none of the three Act was operative and the doctrine or pure Hindu Law was applicable to the Travancore State.
It follows that the principle laid down in Tagore 's case(2) applied and the bequests in favour of the sons of the 1st defendant are void and of no legal consequence.
On behalf of the appellants it was contended that the bequest in favour of the sons of the 1st defendant was in the nature of a family provision and, therefore, fell outside the principle laid down in Tagore 's case(2).
In our opinion, there is no justification in this argument.
Assuming without deciding that a family provision is an exception to the rule of pure Hindu Law stated above a provision in a will whereby the testor directs that his properties after his death shall be taken by his nephews or in their absence (2) 1. A. (1872) Supp.
(1) [1881] 6A.C. 740,812.
478 by his nieces cannot be characterised as a family provision.
The object of such a disposition is obviously not to make a family provision but to chart a course for future devolution of the testators properties.
The argument was stressed on behalf of the appellants that the will exhibit P 2 was a joint will executed by Krishnan Nadar and Raman Nadar and it was designed to take effect only after the death of both the testators.
As the sons of the 1st defendant must necessarily be born before that event the principle in Tagore 's case(1) was not attracted.
Reference was made to the following passage from Jarman on wills 8th edn. "Two or more: persons may make a joint will, which, if properly executed by each, is, so far as his own property is concerned, as much his will, and is as well entitled to probate upon his death, as if he had made a separate will.
But a joint will made by two persons, to take effect after the death of both, will not be admitted to probate during the life of either.
Joint wills are revocable at any time by either of the testators during their joint lives, or, after the death of one of them, by the survivor.
" In our opinion there is no warrant for this argument.
The 'will exhibit P 2 contains separate provisions regarding the devolution of the properties of each of the testators.
In regard to the properties of Krishnan Nadar it devises a life estate to let defendant and the remainder to his sons or in their absence to his daughters.
In regard to the properties of Raman Nadar the devise is to his sons and in their absence to his daughters.
It is therefore, not possible to accept the argument that the will was intended to operate or to come into effect after the death of both the testators.
In regard to the Krishnan Nadar 's properties the life estate devised in favour of the 1 st defendant must necessarily take effect 'and remain in force during the life of the 1st defendant and not after that.
It is true that at the end of the will there is a clause that both the testators have the right to revoke the will during the lives and that the will will take effect only subsequent to their death.
But the true intention o,f the testator has to be gathered not by attaching importance to isolated expressions but by reading the will as a whole with all its provisions and ignoring none of the has redundant or contradictory.
It must, therefore, be held that as the express devise to the: 1st defendant for his life is a disposition intended to take effect after the death of Krishnan Nadar and before the death of 1st defendant, the last clause in the will cannot be literally correct.
It was then contended on behalf of the appellants that in any event the High Court was in error in holding that the title of the (1) I. A. (1872) Supp.
479 plaint properties vested in the daughters of the 1st defendant under the terms of the will, exhibit P 2.
It appears that during the pendency of the appeal defendant No. 1 Raman Nadar died on May 20 1969 and the question, therefore, arises whether the daughters are entitled to a life interest in the plaint properties after the death of defendant No. 1.
It is manifest from the will that the bequest to the daughters is subject to the prior condition that the defendant No. 1 leaves behind no sons at the date of his death.
The relevant portion of exhibit P 2 states: "After the life of the second named, if he leaves behind no sons, the three daughters named above and the daughters, if any, born hereafter may enjoy all the movable and immovable properties that may be found to belong to the.
first named and the second named, either in common or in equal sharps . . " The bequest to the daughters was, therefore, defensible on the sons being born to defendant No. 1.
Hence upon the death of defendant not 1 on May 13, 1969 there was no valid bequest to the daughters.
In other words there was an intestacy and the provisions of the (Act No. 30 of 1956) would be applicable.
The sons of defendant No. 1 cannot take under the will because they were unborn on the date of the death of the testator Krishnan Nadar.
The daughters also cannot take under the will as the bequest in their favour was subject to the defeatisms clause.
It is evident that the appellants would, be entitled to, their lawful share of the properties of Krishnan Nadar under the provisions of the and they are entitled to a declaration to that effect and other consequential reliefs.
But it is not possible for us to finally dispose of this appeal because there was an issue in the trial court as to whether the appellants were the legitimate sons of defendant No. 1.
The case of the defendants 3 to 5 was that there was No. legal marriage between the 1st defendant and the mother of the plaintiffs.
But the assertion of the plaintiffs, was that their mother married the 1st defendant after getting herself converted into Hinduism and such marriage was legally valid and the plaintiffs are the legitimate children of the 1st defendant.
The trial court decided the issue in favour of the plaintiffs but the High Court has not gone into the question nor recorded a finding as to, whether the plaintiffs are the legitimate sons of defendant No. 1.
For these reasons we hold that this appeal must be allowed, the judgment of the Kerala High Court dated March 27, 1963 in A.S. No. 848 of 1960 should be set aside and the appeal should be remanded to the High Court for determining the issue whether 480 the plaintiffs were the legitimate sons of defendant No. 1 and thereafter dispose of the appeal in accordance with law.
The parties will bear their own costs upto this stage.
The application made by the plaintiffs for the appointment of a Receiver will be dealt with by the High Court.
Appeal allowed.
| IN-Abs | K, a Hindu had no issue, but had a brother R who had 3 daughters.
K, and R jointly executed a will bequeting the assets of K to son or sons born in future to R, to the exclusion of the daughters, after the death of K and R. K died in 1947.
The appellants claiming to be the sons of R by his subsequent marriage, filed a suit for a declaration that R had only life interest in K 's properties with the remainder vested in them under the will.
The trial court decreed the suit holding that the second marriage of R was legal and the appellants were entitled to the properties subject to R 's life estate and that R 's daughter had no right in the properties.
R 's daughters filed an appeal to the High Court.
Soon after K 's death, another suit was filed by R 's daughters 'for administration of K 's estate in which the: appellants mother was a party.
This suit was dismissed on the ground that the plaintiffs had lost their right on the birth of appellants.
An appeal to the High Court was pending in this suit also.
The High Court by a common judgment held that the appellants, sons of R, were born after K 's death, so the devise in their favour was void, and that after the life estate of R, his daughters became entitled to the properties for their life time.
HELD: Although there is no authority in Hindu Law to justify the doctrine that a Hindu cannot make a gift or 'bequest for the benefit of an unborn person yet that doctrine has been engraved in Hindu Law by the decision of the Judicial Committee in Tagore vs Tagore.
I.A. (1872) Supp.
This doctrine was laid down for the first time in the case of Tagore.
This decision of the Judicial Committee has stood a great length of time and on the basis of that decision rights have been regulated, arrangements as to property have passed.
Therefore this was a proper case in which maxim communis error facit jus be applied.
The principle underlying the maxim is that "the law so favours the public good, that it will in some cases permit a common error to pass for right".
The bequests in favour of R 's sons were void and of no legal consequence.
[477 A; 478 F G] It is, therefore, not possible to accept the argument that the will was intended to operate or to come into effect after the death of both the testators.
In 'regard to K 's properties the life estate devised in favour of R must necessarily take effect and remain in force during the life of R and not after that; it is true that at the end of the will there is a clause that both the testators have the right to revoke the will during their lives and that the will take effect only sub:sequent to their death.
But the true intention of the testator has to be gathered not by attaching importance to isolated expressions but by reading the will as a whole with all its provisions and ignoring none of them as redundant or contradictory.
It must, therefore, be held that as the express devise to R for his life is a disposition intended to take effect after the death of K and before the death of R the last clause in the will could not be literally correct.
The daughters also could not take under the will as the bequest in their favour was subject to the defeasance clause.
[480 E H] 472 Tagore 's case, I.A. (1872) Supp.
47 and Charles Dalton vs Henry Angus & Co., , 812, referred to.
|
Petitions Nos. 512, 513, 574 & 575, 578 & 579, 581 & 582, 583 & 584, 587 & 588, 605 & 606, 609 & 610 and 1466 and 1467 of 1969.
Applications by defendant No. 1 for rejection of plaints and for stay of the hearing of the suits.
Original suits Nos. 3 of 1967, 1 and 3 to 9 of 1968.
Petitions under article 131 of the Constitution of India.
Niren De, Attorney General, V.A. Seyid Muhammad and B.D. Sharma, for respondent No. 1 (in all the suits).
D.N. Gupta, for defendant No. 2 fin suits 968 ).Nos.
3 to 8 of D.N. Mukherjee, for defendant No. 2 (in suits Nos. 3 of 1967, 1 and 9 of 1968).
D.P. Singh, for the plaintiff (in suits Nos. 3 of 1967, 1, 3, 5 and 6 of 1968).
D. Goburdhun, for the plaintiff (in suits Nos. 4 and 7 of 1968).
U.P. Singh, for the plaintiff (in suit No. 8 of 1968).
R.C. Prasad, for the plaintiff (in suit No. 9 of 1968).
The Judgment of the Court was delivered by Mitter, J.
This group of applications can be divided into two parts.
The object of one group is to get the plaints in nine suits filed in this Court rejected while that of the other group is to stay the hearing of the suits.
The suits are all of the same pattern in each of which the State of Bihar figures as the plaintiff.
The Union of India is the first defendant in all of them while the second defendant in six is Hindustan Steel Ltd. and in three others the Indian Iron and Steel Company Ltd. The cause of action in all the suits is of the same nature.
Briefly stated the plaintiffs case in all the suits is that "due to the negligence or deliberate action of the servants of both defendants there was a short delivery of iron and steel material ordered by the plaintiff to various sites in the State of Bihar in connection with the 524 construction work of the Gandak Project".
As the goods were in all cases booked by rail for despatch to the project site, both defendants are sought to be made liable for short delivery, the first defendant as the owner of the railways and the second defendant as the consignor of the goods under contract with the State of Bihar for supply of the material.
In each case there is a prayer for a decree for a specific sum of money to be passed either against the first defendant "or alternatively against the second defendant".
Normally all suits of this kind are instituted all over India in different courts beginning from the courts of the lowest jurisdiction to the High Courts exercising original jurisdiction.
The only distinguishing feature of this series of suits from others of everyday occurrence in different courts is that a State is the plaintiff in each case.
In all suits of a similar nature which are filed in courts other than this Court, a notice under section 80 of the Code of Civil Procedure is an essential prerequisite.
No such notice has been served in any of these cases.
The applications were set down for trial of three issues sought to be raised by way of preliminary issues.
They are as follows : 1.
Whether the alleged cause or causes of action in this suit are within the scope of article 131 of the Constitution ? 2.
Whether this suit is within the scope of article 131 of the Constitution in view of a non State, viz, defendant No. 2, having been made a party to the suit ? 3.
Whether the suit is barred by the provisions of section 80 C.P.C. for want of notice to defendant No. 1 ? The question before this Court is, whether the dispute in these cases is within the purview of that article (quoted in the foot note.
It must be noted that the article confers jurisdiction on this Court to the exclusion of all other courts in any dispute between the parties mentioned therein.
There is however an over riding provision that such jurisdiction is subject to the provisions of the Constitution and our attention was drawn to a few of these provisions where the disputes specified are to be adjudicated upon in entirely different *article 131.
Subject to the provisions of this Constitution, the Supreme Court shall, to the exclusion of any other court, have original jurisdiction in any dispute (a) between the Government and one or more States; or (b) between the Government of India and any State or States on one side and one or more other States on the other; or (c) between two or more States, 525 manner.
The most important feature of article 131 is that it makes no mention of any party other than the Government of India or any one or more of the States who can be arrayed as a disputant.
The other distinguishing feature is that the Court is not required to adjudicate upon the disputes in exactly the same way as ordinary courts of law are normally called upon to do for upholding the rights of the parties and enforcement of its orders and decisions.
The words in the article "if and in sO far as the dispute involves any question (whether of law or fact) on which the existence or extent of a legal right depends" are words of limitation on the exercise of that jurisdiction.
These words indicate that the disputes should be in respect of legal rights and not disputes of a political character.
Moreover this Court is only concerned to give its decision on questions of law or of fact on which the existence or extent of a legal right claimed depends.
Once the Court comes to its conclusion on the cases presented by any disputants and gives its adjudication on the facts or the points of law raised, the function of this Court under article 131 is over.
article 131 does not prescribe that a suit must be filed in the Supreme Court for the complete adjudication of the dispute envisaged therein or the passing of a decree capable of execution in the ordinary way as decrees of other courts are.
It is open to an aggrieved party to present a petition to this Court containing a full statement of the relevant facts and praying for the declaration of its ' rights as against the other disputants.
Once that is done, the function of this Court under article 131 is at an end.
The framers of the Constitution do not appear to have contemplated the contingency of a party to an adjudication by this Court under article 31 not complying with the declaration made.
Our law is not without instances where a court may be called upon to make an adjudication of the rights of the parties to an agreement or an award simpliciter on the basis of such rights without passing a decree.
A case in point is section 33 of the Indian Arbitration Act.
Further, all adjudications by a court of law even under a decree in a suit need not necessarily be capable of enforcement by way of execution.
Section 42 of the now replaced by section 34 of the new Act enables a person entitled to any legal character or to any right as to any property to institute a suit against any person denying or interested to deny his title to such character or right without asking for any further relief subject to the limitations prescribed by the section.
We If and in so far as the dispute involves any question (whether of law or fact) on which the existence or extent of a legal right depends: Provided that the said jurisdiction shall not extend to a dispute arising out of any treaty, agreement, covenant, engagement, sanad or other similar instrument which having been entered into or execucated before the commencement of the construction, continues in operation after such commencement, or which provides that the said jurisdication shall not extend to such a dispute.
526 need not however lay much stress on this aspect of the case as we are only concerned to find out whether the suits can be entertained by this Court.
Clauses (a), (b) and (c) of the article specify the parties who can appear as disputants before this Court.
Under cl.
(a) it is the Government of India and one or more States under cl.
(b) it is the Government of India and one or more States on one side and one or more other States on the other, while under cl.
(c) the parties can be two or more States without the Government of India being involved in the dispute.
The specification of the parties is not of an inclusive kind.
The express words of cls.
(a), (b) and (c) exclude the idea of a private citizen, a firm or a corporation figuring as a disputant either alone or even along with a State or with the Government of India in the category of a party to the dispute.
There is no scope for suggesting that a private citizen, a firm or a corporation can be arrayed as a party by itself on one side and one or more States including the Government of India on the other.
Nor is there anything in the article which suggests a claim being made by or preferred against a private party jointly or in the alternative with a State or the Government of India.
The framers of the Constitution appear not to have contemplated the case of a dispute in which a private citizen a firm or a corporation is in any way involved as a fit subject for adjudication by this Court under its exclusive original jurisdiction conferred by article 131.
Like many of the provisions of our Constitution this article had a fore runner in the Government of India Act, 1935.
Section 204 of that Act provided for conferment of original jurisdiction on the Federal Court of India.
That section ran as follows : "(1) Subject to the provisions of this Act, the Federal Court shall, to the exclusion of any other court, have an original jurisdiction in any dispute between any two or more of the following parties, that is to say, the Federation, any of the Provinces or any of the Federal States, if and in so far as the dispute involves any question (whether of law or fact) on which the existence or extent of a legal right depends: Provided that the said jurisdiction shall not extend to (a) a dispute to which a State is a party, unless the dispute (i) concerns the interpretation of this Act or of an Order in Council made thereunder, or the extent of the 527 legislative or executive authority vested in the Federation by virtue of the Instrument of Accession of that State; or (ii) arises under an agreement made under Part VI of this Act in relation to the administration in that State of a law of the Federal Legislature, or otherwise concerns some matter with respect to which the Federal Legislature has power to make laws for that State; or (iii) arises under an agreement made after the establishment of the Federation, with the approval of His Majesty 's Representative for the exercise of the functions of the Crown in its relations with Indian States, between that State and the Federation or a Province, being an agreement which expressly provides that the said jurisdiction shall extend to such a dispute; (b) a dispute arising under any agreement which expressly provides that the said jurisdiction shall not extend 'to such a dispute.
(2) The Federal Court in the exercise of its original jurisdiction shall not pronounce any judgment other than a declaratory judgment.
" Clause (a) of the proviso.
to the section defined the categories of disputes which might be raised before the Federal Court while clause (b) permitted the parties to provide for the exclusion of such jurisdiction in the agreement in respect whereof the dispute arose.
It will be noted that the scope of the dispute under subcl.
(i) of cl.
(a) was limited to the interpretation of the Government of India Act or Order in Council or to the extent of legislative or executive authority vested in the Federation while under sub cl.
(ii) the dispute had to relate to the administration in a State of a law of the Federal Legislature or otherwise concerned with some matter relating to the legislative competency of the said legislature.
Under sub cl.
(iii) the dispute could only be one under an agreement made after the establishment of the Federation between the State and the Federation or a Province subject to the condition therein specified.
A dispute of the nature which is raised in this scries of a case was outside the ken of section 204 of the Government of India Act.
It may not be out of place to trace the origin of section 204.
The proceedings of the Joint Committee on Indian Constitutional Re 528 form, Session 1933 34, Vol. 1, Part II, paragraph 309 read as follows: "A Federal Court is an essential element in a Federal Constitution.
It is at once the interpreter and guardian of the Constitution and a tribunal for the determination of disputes between the constituent units of the Federation.
The establishment of a Federal Court is part of the White Paper scheme, and we approve generally the proposals with regard to it.
We have, however, certain comments to make upon them, which we set out below.
" The report of the Joint Committee on Indian Constitutional Reform, Session 1933 34, Vol. 1, Part 1 contained two paragraphs bearing on this matter.
Paragraph 322 was a reproduction of paragraph 309 quoted above.
Paragraph 324 ran as follows: "324.
It is proposed that the Federal Court shall have an original jurisdiction in (i) any matter involving the interpretation of the Constitution Act or the determination of any rights or obligations arising thereunder, where the parties to the dispute are (a) the Federation and either a Province or a State, or (b) two Provinces or two States, or a Province and a State; (ii) any matter involving the interpretation of, or arising under, any agreement entered into after the commencement of the Constitution Act between the Federation and a Federal Unit or between Federal Units, unless the agreement otherwise provides.
This jurisdiction is to be an exclusive one, and in our opinion rightly so, since it would be altogether inappropriate if proceedings could be taken by one Unit of the Federation against another in the Courts of either of them.
For that reason we think that, where the parties are Units of the Federation or the Federation itself, the jurisdiction ought to include not only the interpretation of the Constitution Act, but also the interpretation of Federal laws, by which we meant any laws enacted by the Federal Legislature.
" It is clear from the above that the framers of the Government of India Act, 1935 thought that the Federal Court should 529 be the tribunal for the determination of disputes between the constituent units of the Federation and it sought to lay down the exact nature of the dispute which that Court could be called upon to examine and decide.
The Constitutional Proposals of the Sapru Committee show that they had the said report 'and the said proceedings of the Committee in their mind when they advocated the strengthening of the position of the Federal Court in India and widening its jurisdiction both on the original side and the appellate side but maintaining at the same time that it should "act as an interpreter and guardian of the Constitution, and as a tribunal for the determination of disputes between the constituent units of the Federation.
" It is also to be noted that under section 204 of the Government of India Act, 1935 the Federal Court 's jurisdiction was limited to the pronouncement of a declaratory judgment.
article 109 of the Draft Constitution of India prepared by the Constituent Assembly was in the same terms as article 131 of the Constitution as it came into force in 1950.
The proviso to the original article was substituted by the new proviso in the year 1956.
as a result of the Seventh Amendment by reason of the abolition of the Part B States and the changes necessitated thereby.
Reference was made at the Bar in this connection to the Debates in the Constituent Assembly, Vol.
IV, 13th July 1947 to 21st July, 1947.
They however do not throw any additional light.
So far as the proceedings of the Joint Committee on Indian Constitutional Reform and the report of the Committee on the same are concerned, they make it clear that the object of conferring exclusive original jurisdiction on the Federal Court was that the disputes of the kinds specified between the Federation and the Provinces as the constituent units of the Federation, should not be left to be decided by courts of law of a particular unit but be adjudicated upon only by the highest tribunal in the land which would be beyond the influence of any one constituent unit.
Although article 131 does not define the scope of the disputes which this Court may be called upon to determine in the same way as section 204 of the Government of India Act, and we do not find it necessary to do so, this much is certain that the legal right which is the subject of dispute must arise in the context of the Constitution and the Federalism it sets up.
However, there can 530 be no doubt that so far as the parties to the dispute are concerned, the framers of the Constitution did intend that they could only be the constituent units of the Union of India and the Government of India itself arrayed on one side or the other either singly or jointly with another unit or the Government of India.
There is no decision either of the Federal Court of India or of this Court which throws much light on the question before us.
Reference was made at the Bar to the case of The United Provinces vs The Governor General in Council(1) where the United Provinces filed a suit against the Governor General in Council for a declaration that certain provisions of the , were ultra vires the then Indian Legislature.
A claim was also made that all fines imposed and realised by criminal courts for offences committed within the cantonment areas in the United Provinces ought to be credited to the provincial revenues and that the plaintiffs were entitled to recover and adjust all such sums wrongly credited to Cantonment Funds since 1924.
The Governor General in Council contended inter alia that the dispute was not one which was justifiable before the Federal Court.
On the question of jurisdiction.
Gwyer, C.J. was not inclined to think "that the plaintiffs would in any event have been entitled to the declarations for which they originally asked, in proceedings against the Governor General in Council".
According to the learned Chief Justice "their proper course would have been to take proceedings against a name ' Contouring Board, though . such proceedings could not have been brought to this Court.
" He was of the view that it was competent for the court to entertain a suit for a declaration "that section 106 of the Act of 1924 was ultra vires," and said that as the dispute between the parties depended upon the validity of the assertion of the Province to have the fines under discussion credited to provincial revenues and not to the Cantonment funds the dispute involved a question of the existence of a legal right.
According to him the question might have been raised in proceedings to which a Cantonment Board was a party but "it was convenient to all concerned that it should be disposed of in the proceedings before the court.
" The only other Indian case cited at the Bar in this connection was that of the State of Seraikella and others vs Union of India and another(2) where Mahajan, J. expressed the view that section 80 of the Code of Civil Procedure would not affect suits instituted in the Federal Court under section 204 of the Government of India Act.
(1) (2) ; 531 Our attention was drawn to some provisions of the American Constitution and of the Constitution Act of Australia and several decisions bearing on the interpretation of provision which are somewhat similar to article 131.
But as the similarity is only limited, we do not propose to examine either the provisions referred to or the decisions to which our attention was drawn.
In interpreting our Constitution we must not be guided by decisions which do not bear upon provisions identical with those in our Constitution .
The Constitution makes special provisions for settlement of certain disputes in a manner different from that laid down in article 131.
For instance, article 143 gives an over riding power to the President of India to consult the Supreme Court when he is of the view that the question is of such a nature and of such public importance that it is expedient to do so.
Under el.
(1) of that Article the President is empowered to obtain the opinion of the Supreme Court upon any question of law or fact which has arisen or is.
likely to arise and is of such a nature and of such public importance that the President considers it expedient to obtain such opinion.
In such a case the Court after giving such hearing as it thinks fit has to report to the President its opinion thereon.
Clause (2) of the article shows that this power of the President over rides the proviso to article 131.
article 257 provides for control of the Union over the States in certain cases.
Under clause (2) thereof the executive power of the Union also extends to the giving of directions to a State as to the construction and maintenance of means of communication declared in the direction to be of national or military importance.
Under cl (4) where such directions are given and "costs have been incurred in excess of those which would have been incurred in the discharge of the normal duties of the State if such direction had not been given," the Government of India must pay to the State such sum as may be agreed, or, in default of agreement, as may be determined by an arbitrator appointed by the Chief Justice of India, in respect of the extra costs so incurred by the State, Again, when there is a dispute or complaint with regard to the use, distribution or control of the waters of, or in, any interState river or river valley cl.
(2) of article 262 gives Parliament the power by law to provide that neither the Supreme Court nor any other court shall exercise jurisdiction in respect of such dispute or complaint as is referred to in clause (1 ).
Such a law ousts the jurisdiction of the court which would normally be attracted by 532 article 131.
article 290 contains a provision somewhat similar to article 257(4) with regard to certain expenses and pensions and makes the same determinable by an arbitrator to be appointed by the Chief Justice of India.
Apart from these special provisions a dispute which falls within the ambit of article 131 can only be determined in the forum mentioned therein, namely, the Supreme Court of India, provided there has not been impleaded in any said dispute any private party, be it a citizen or a firm or a corporation along with a State either jointly or in the alternative.
A dispute in which such a private party is involved must be brought before a court, other than this Court, having jurisdiction over the matter.
It was argued by counsel on behalf of the State of Bihar that so far as the Hindustan Steel Ltd., is concerned it is 'State ' and the suits in which the Government of India along with Hindustan Steel Ltd. have been impleaded are properly filed within article 131 of the Constitution triable by this Court in its original jurisdiction.
Reference was made to the case of Rajasthan State Electricity Board vs Mohan Lal(1).
There the question arose between certain persons who were permanent employees of the Government of the State of Rajasthan and later placed at the disposal of the State Electricity Board and one of the questions was whether the appellant Board could be held to be 'State ' as defined in article 12.
This Court by a majority held that the Board was "other authority" within the meaning of article 12 and therefore was a 'State ' to which appropriate directions could be given under articles 226 and 227 of the Constitution.
It will be noted that under article 12 all local or other authorities within the territory of India or under the control of the Government of India are 'States ' for purposes of Part III which defines and deals with the Fundamental Rights enshrined in the Constitution.
The expression "the State" has the same meaning in Part IV of the Constitution under article 36.
No reason was shown as to why the enlarged definition of 'State ' given in Parts III and IV of the Constitution would be attracted to article 131 of the Constitution and in our opinion a body like the Hindustan Steel Ltd. cannot be considered to be "a State" for the purpose of article 131 of the Constitution.
In the result we hold that the suits do not lie in this Court under article 131 of the Constitution and issue No. 2 must be answered in the negative.
It is not necessary to give any answer to issue No. 1 nor to issue No. 3.
On the view we take the ; 533 plaints must be returned for the purpose of presentation to courts having jurisdiction over the disputes.
Let the plaints be returned for presentation to the proper court after endorsing on them the date of presentation of the plaints in this Court and the date on which they were returned.
We make no order as to costs of these applications.
| IN-Abs | The State of Bihar filed a number of suits in this Court under article 131 of the Constitution in connection with the delayed delivery of iron and steel materials for its Gandak project.
In six of the suits the defendants were: The Union of India (Defendant No. 1 ) and Hindustan Steel Ltd. (Defendant No. 2).
In six other suits the defendants were: The Union of India (Defendant No. 1) and The Indian Iron & Steel Co. Ltd. (Defendant No. 2).
The prayers in all the suits were that decrees for specific sums of money be passed either against the Union of India or the second defendant.
Identical preliminary issues were set down for consideration in all the suits, namely: (1) whether the cause or causes of action in this suit are within the scope of article 131 of the Constitution? (2) Whether the suit is within the scope of article 131 of the Constitution in view of a non State viz. defendant No. 2, having been made a party to the suit ? (3) Whether the suit is barred by the provisions of section 80 C.P.C. for want of notice to defendant No. 1.
HELD: (i) The specification of the parties in article 131 is not of the inclusive kind.
The express words in cls.
(a), (b) and (c) of the Article exclude the idea of a private citizen, a firm or a corporation figuring as a disputant either alone or even along with a State or with the Government of India in the category of a party to the dispute.
The contents of the corresponding section, of the Government of India Act, 1935 namely section 204, and the legislative history culminating in the adoption of article 131 of the Constitution support the conclusion that so far as the parties to a dispute are concerned, the framers of the Constitution did intend that they could only be the constituent units of the Union of India and the Government of India itself arrayed on one side or the other either singly Or jointly with another unit or the Government of India.
For other types of controversies or disputes special provision has been made in the sonstitution e.g. in article 143 257, 262 and 290 A dispute in which a private party, is involved must be brought before a court other than this Court having jurisdiction over the matter.
[52.6 D F; 530 B; 531 C, F, H; 532 C] The United Provinces vs The Governor General in Council, and State of Seraikella and Others vs Union of India and another, [151] S.C.R. 474, referred to.
The enlarged definition of 'State ' given in Parts III and IV of the Constitution is not attracted to article 131 of the Constitution and a body like the Hindustan Steel Ltd. could not be considered to be "a State" for the purpose of article 131 of the Constitution.
[532 G] Rajasthan State Electricity Board vs Mohan Lal, ; , distinguished.
523 In view of the above finding on issue No. 2 the suits did not lie in this Court under article 131 of the Constitution and the plaints must be returned; it was accordingly unnecessary to decide issues Nos. 1 and 3.
[532 H] Article 131 does not prescribe that a suit must be filed in the Supreme Court for the complete adjudication of the dispute envisaged therein or the passing of a decree capable of execution in the ordinary way as decrees of other courts are.
Once this Court has given a declaration of its rights to the aggrieved party the function of the Court under article 131 is over.
[525 C F]
|
Appeal No. 1576 of 1966.
Appeal from the judgment and ordered dated October 26.
1965 of the Punjab High Court in Letters Patent Appeal No. 174 of 1964.
Bishan Narain, S.K. Mehta and K.L. Mehta, for the appellant.
Harbans Singh and R.N. Sachthey, for the respondents.
The Judgment of the Court was delivered by Ramaswami, J.
In the month of August, 1942 the appellant company (hereinafter called the Company) was incorporated with its registered office in the city of Jullundur dealing in sale 535 and purchase of land as its substantial business.
By a sale deed executed on November 24, 1944 the company purchased 646 karnals, 9 marlas of land from Harjit Singh for a sum of Rs. 32,326/ .
The land was located in village Monanpura of District Sheikupura, now in West Pakistan.
Out of the consideration for the sale, a sum of Rs. 9,000/ ' was left with the company for payment to the previous mortgagees and the balance of the money was paid to Harjit Singh before the Sub Registrar at the time of registration.
On the basis of the registered sale deed the company was allotted 27 standard acres and 11 1/2 units of land village Bohani, Tehsil Phagwara District Kapurthala in the year 1950 in lieu of the land abandoned in Pakistan.
A sanad No. K2/4/8 dated March 9, 1950 was issued in favour of the company.
There was consolidation of holdings in village Bohani and as a result of consolidation the area allotted to the company came to 23 kanals and 5 marlas.
Out of this the company sold 9 1/2 kanals to Mohan Singh, a Jar of village Bohani for Rs. 1900.00 by registered sale deed dated May 22, 1956.
Another portion of 220 kanals and 15 marlas was sold on September 12, 1958 for Rs. 10,012/ to one Mehnga Singh and his sons.
It was later discovered that the company had been allotted less area of land than it was entitled to as a result of consolidation operations and so.
an additional area of 24 kanals was allotted to the company in village Bohani to make up the deficiency.
On August 30, 1960 the Managing Officer, respondent No. 3, made a report, Annexure C, to the Chief Settlement Commissioner, Respondent No. 2 recommending cancellation of the allotment of land to the company and consequently the grant of permanent rights to it.
The company was heard by the Chief Settlement Commissioner and thereafter the Chief Settlement Commissioner rejected the registered sale deed and balance sheets and relying on the jamabandi, annexure X, came to the conclusion that at the time of partition the company did not own any, land in Pakistan nor was it in occupation of any such land.
By his order dated February 27, 1961 respondent No. 2 set aside the permanent rights acquired by the company to the extent of 27 standard acres, 111/2 units and also cancelled the quasi permanent 'allotment of the ,land made in the name of the company.
On March 29, 1961 a revision petition was filed by the company to the Central Government, respondent No. 1.
But the revision petition was dismissed on May 10, 1961.
On June 8, 1961 the company filed a writ petition under article 226 of the Constitution praying for grant of a writ to quash the order of the Chief Settlement Commissioner dated February 27, 1961.
The writ petition was allowed by Shamshat Bahadur, J.
But the respondent took the matter in appeal under el.
10 of Letters Patent to a Division Bench which reversed the judgment of the learned single Judge and ordered the writ petition to be dismissed.
536 Section 24 of the (44 of 1954) (hereinafter called the Act) states: "(1) The Chief Settlement Commissioner may at any time call for the record o/any proceeding under this Act in which a Settlement Officer, an Assistant Settlement Officer, an Assistant Settlement Commissioner, an Additional Settlement Commissioner, a Settlement Commissioner, a managing officer or a managing corporation has passed an order for the purpose of satisfying himself as to the legality or propriety of any such order and may pass such order in relation thereto as he thinks fit.
(2) Without prejudice to the generality of the foregoing power under sub section (1 ), if the Chief Settlement Commissioner is satisfied that any order for payment of compensation to a displaced person or any lease or 'allotment granted to such a person has been obtained by him by means of fraud, false representation or concealment of any material fact, then, notwithstanding anything contained in this Act, the Chief Settlement Commissioner may pass an order directing that no compensation shall be paid to such a person or reducing the amount of compensation to be paid to him, or as the case may be, canceling the lease or 'allotment granted to him; 'and if it is found that a displaced person has been paid compensation which is not payable to him, or which is in excess of the amount payable to him, Such amount or excess, as the case may be, may on a certificate issued by the Chief Settlement Commissioner be recovered in the same manner as an arrear of land revenue.
In support of the appeal it was contended on behalf of the company that the document described as jamabandi, annexure II to writ petition, was not the jamabandi of the year 1946 47 of the land in dispute and the Division Bench was in error in holding that the Chief Settlement Commissioner could properly rely upon annexure .
It was pointed out that annexure II was not the jamabandi for 1946 47 but it consisted of three notes one saying "Maamur bai", that is, that there is no land of non Muslims in the village.
the second note related to Kartar Chand and Gopal Dass who embraced Islam and the third related to sale of his land by Harjit Singh in favour of S.A. Latif.
All these notes are dated May 3, 1951.
It was pointed out that these notes were made on May 3, 537 1961 for the purposes of exchange of jamabandi and the document did not depict the state of affairs as on August 15, 1947 which was the material date.
It is not necessary to examine this document in detail for we are of opinion that the appeal must be allowed and the order of the Chief Settlement Commissioner must be quashed on the ground that there is no finding of the Chief Settlement Commissioner that the Company had obtained allotment of the land "by means of fraud, false representation or concealment of any material fact" within the meaning of section 24(2) of the Act.
It is true that the Chief Settlement Commissioner had recorded a finding that the company had not proved its title to any land in village Momonpura and the allotment was "undeserved".
But this is not tantamount to a finding that the allotment had been obtained by a false representation or fraud or concealment of material facts.
Such a finding is a condition precedent for taking action under section 24(2) of the Act.
The condition imposed by the section is mandatory and in the absence of any such finding the Chief Settlement Commissioner had ,no jurisdiction to cancel the allotment made to the company under section 24(2) of the Act.
For these reasons we hold that the appeal should be allowed and the judgment of the Division Bench dated October 26, 1965 in Letters Patent Appeal should be reversed and the judgment of Shamshat Bahadur, J., dated November 28, 1963 quashing the order of the Chief Settlement Commissioner dated February 27, 1961 should be restored.
The appeal is accordingly allowed with costs.
R.K.P.S. Appeal allowed.
| IN-Abs | By a sale deed executed on November 24, 1944 the appellant company purchased certain land located in an area now part of West Pakistan.
After the partition of India, the company, on the basis of a registered sale deed, was allotted certain land in Kapurthala in 1950 in lieu of the land abandoned in Pakistan.
On a report made by the Managing Officer, Respondeat No. 3 on August 30, 1960 recommending cancellation of the allotment of land to the company and after hearing the company, the chief Settlement Commissioner rejected the registered sale deed and came to the conclusion that at the time of partition the company did not own any land in Pakistan nor was it in occupation of any such land.
Therefore by his order dated February 27, 1961, he set aside the permanent rights acquired by the company.
HELD: The order of the Chief Settlement Commissioner must be quashed on the ground that there is no finding of the Chief Settlement Commissioner that the company had obtained allotment of the land "by means of fraud, false representation or concealment of any material fact" within the meaning of section 24(2) of the Act.
It is true that the Chief Settlement Commissioner had recorded a finding that the company had not proved its title to any land in the area now part of Pakistan and the allotment was "undeserved".
But this is not tantamount to a finding that the allotment had been obtained by a false representation or fraud or concealment of material facts.
Such a finding is a condition precedent for faking action under section 24(2) of the Act.
The condition imposed by the section is mandatory and in the absence of any such finding the Chief Settlement Commissioner had no jurisdiction to cancel the allotment made to the company under section 24(2) of the Act.
[537 A D]
|
No. 211 of 1969.
Petition under article 32 of the Constitution of India for a writ in the nature of habeas corpus.
Hardev Singh, for the petitioner, Naunit Lal, for the respondent.
518 The Judgment of the Court was delivered by Bhargava, J.
The petitioner in this petition under Article 32 of the Constitution was arrested and detained under an order made under section 3(1)(a)(ii) of the (hereinafter referred to as "the Act") on 24th April, 1968.
On 30th August, 1968, he filed a petition in the High Court of Assam under article 226 of the Constitution for issue of a writ of habeas corpus.
The same day he was released by the Government and, according to him, without being set at liberty, he was again put in detention in pursuance of a fresh order dated 29th August, 1968 passed under section 3(1)(a)(ii) of the Act.
The grounds of detention were also served on the same day.
He made his representation on 17th September, 1968 and his case was referred to the Advisory Board also on the same date.
The report of the Advisory Board was received on 28th October, 1968.
On 7th November, 1968, his order of detention was confirmed by the Government on the basis of the report of the Advisory Board.
This petition was then received in this Court from the petitioner in July, 1969.
challenging his detention trader the order dated 29th August, 1968.
The petition came up for hearing before a Bench of this Court on 29th August, 1969 when, at the request of the counsel for the State of Assam, time was granted by the Court till 8th September, 1969 to send for full material.
Meanwhile, it appears that a fresh order for his detention under section 3(1)(a)(ii) of the Act was issued on 28th August, 1969 and this order was served on the petitioner in Delhi on 29th August, 1969, after the adjournment had been obtained from this Court.
Thereupon, the petitioner, on 1st September, 1969, filed an application for amendment of the writ petition and for adding additional new grounds so as to challenge the validity of his detention under the order dated 28th August, 1969.
The grounds of detention under this new order were also served on the petitioner on 29th August, 1969.
When this petition came up for hearing before us on 9th September, 1969, learned counsel for the State of Assam stated that no material had been received from the Government and wanted time to be granted to meet the facts put forward in the application dated 1st September, 1969.
It appears that, though an officer was sent by the Government of Assam to Delhi to serve the order dated 28th August, 1969 on the detenu which he did on 29th August, 1969, no attempt was made to obtain the material for which time had been obtained from the Court on 29th August, 1969.
If a fresh order had been passed and had been served on the petitioner in supersensible of the previous order which was challenged in the writ petition, the State Government should have sent full material relating to this order, which it became necessary for the petitioner to challenge by amending his writ peti 519 tion.
Detention of a person without trial, even for a single day,, is a matter of great consequence and, hence, we did not consider that, in the circumstances mentioned above, there was any justification for granting further time to the State Government to obtain material and file a reply to this application dated 1st September, 1969.
In view of the facts mentioned above, it is clear that the ' validity of the order of detention dated 29th August, 1968, which was first challenged in the petition, has become immaterial because the petitioner is now under detention by virtue of the fresh order dated 28th August, 1969 served on him on 29th August, 1969.
In the counter affidavit filed it was stated that the first order of detention dated 24th April, 1968 had automatically lapsed, because that order did not receive the approval of the State Government within 12 days as required by section 3(3) of the Act.
This admission would indicate that, after the expiry of those 12 days, the petitioner 's detention was not justified by any valid order passed in law until the second detention order was served on him on the 30th August, 1968 after releasing him from custody.
However, in the present writ petition, we are not concerned with the effect of this procedure adopted by the State Government, because, even if it be assumed that the second order of detention was validly served on the petitioner on 30th August, 1968, the period of that detention expired on 28th August, 1969 in view of section 11 A of the Act which prescribes a maximum period of 12 months for detention under the Act on the basis of an order passed under section 3 of the Act.
On 29th August, 1969, the detention under the second order dated 29th August, 1968 having expired, the State Government passed this third order of detention and served it on the petitioner while he was still in custody in Delhi.
The question is whether the further detention under this third order is valid.
The provision contained in section 11 A(2) of the Act clearly lays down the intention of Parliament that on the basis of grounds found to exist at one time, the maximum period of detention under section 3 should be 12 months and no more.
On the expiry of that period, that order of detention would lapse; but a fresh order of detention is permitted to be passed under section 13(2) of the Act which is as follows : "13.
(2) The revocation or expiry of a detention order shall not bar the making of a fresh detention order under section 3 against the same person in any case where fresh facts have arisen after the date of revocation or expiry on which the Central Government 520 or a State Government or an officer, as.
the case may be, is satisfied that such order should be made." "This provision clearly lays down that a fresh detention order can be made on the revocation or expiry of a previous detention order only in cases where fresh facts have arisen after the date of revocation or expiry.
This principle was explained by this Court in Hadibandhu Das vs District Magistrate, Cuttack and Another(1) where it was held : "On January 28, 1968, the State of Orissa purported to revoke the first order and made a fresh order.
The validity of the fresh order dated January 28, 1968, made by the State of Orissa is challenged on the ground that it violates the express provisions of Section 13(2) of the .
In terms that subsection authorises the making of a fresh detention order against the same person against whom the previous order has been revoked or has expired in any case where fresh facts have arisen after the date of revocation or expiry, on which the detaining authority is satisfied that such an order should be made.
The clearest implication of Section 13(2) is that after revocation or expiry of the previous order, no fresh order may issue on the grounds on which the order revoked or expired had been made.
In the present case, the order dated December 15, 1967 passed by the District Magistrate, Cuttack was revoked on January 28, 1968, and soon thereafter a fresh order was served upon the appellant.
It is not the case of the State that any fresh facts which had arisen after the date of revocation on which the State Government was satisfied that an order under Sec.
3(1)(a)(ii) may be made.
There was a fresh order, but it was not based on any fresh facts.
" In view of this decision, we have to see whether, in the present case, the requirements laid down by section 13(2) of the Act for making a fresh order were or were not satisfied.
The main requirement is that the order must be made not merely on the past grounds, but no fresh facts which have arisen after the date of expiry.
In the present case, we have compared the grounds of detention served in pursuance of the order dated 28th August, 1969, with the grounds of detention which were served on the petitioner pursuance of the second detention order dated 29th August, 1968, and we find that the two are identical, except that two (1) ; 521 small paragraphs have been added when serving the grounds of detention in respect of the detention order dated 28th August, 1969.
These paragraphs are as follows: "That though in preventive custody, he has been maintaining links with Shah Syed Hussain and other associates, who went underground in Nagaland, through his friends and relatives.
Shah Syed Hussain and his gang since received some arms and explosives from Naga rebels for committing acts of sabotage and creating large scale disturbances, particularly in the plains areas along Assam Nagaland border.
That, in the circumstances, Shri Khetra Gogoi 's being at large will jeopardise the security of the State and the maintenance of public order in this region.
" The first one of these two paragraphs is the only one that purports to mention some ground in addition to the grounds which were included amongst the grounds which were the basis of the order dated 29th August, 1968.
We have found it very difficult to appreciate how a person in preventive custody could continue to maintain links with his associates outside jail who had gone underground even through his friends and relatives.
of the (present) petitioner was able to maintain such links, it casts a sad reflection on the persons in charge of him while he was in custody and, in any case, it would appear that his detention could serve no useful purpose.
It appears (to us) to be, in fact, very doubtful whether any such contacts could possibly have been maintained.
However, even if we accept that such links were maintained, this additional ground mentioned does not satisfy the requirements of section 13(2) of the Act, because the only allegation is that the links were maintained during the period of preventive detention.
Under section 13(2) what is required is that fresh facts should have arisen after the expiry of the previous detention.
Facts arising during the period of detention are, therefore, not relevant when applying the provisions of section 13(2).
In the present case, the fresh order was passed on 28th August, 1969, a day before the expiry, and it is obvious that no fresh facts could by that date arise and yet be held to have arisen after the date of expiry.
The order dated 28th August, 1969 was, therefore, not at all justified under section 13(2) of the Act and that order being in violation of the provisions of the Act has to be held to be invalid, so that the detention under that order is illegal.
The petition is allowed.
The petitioner shall be set at liberty forthwith.
Y.P. Petition allowed.
| IN-Abs | Section 11 A(2) of the lays down in part that the maximum period of detention under section 3 should be 12 months and no more, and after the expiry of that period, that order.
of detention would lapse.
A fresh detention order under section 13(2) can be made on the revocation or expiry of a previous detention order only in cases where fresh facts have arisen after the date of revocation or expiry.
The petitioner, was put in detention in pursuance of an order dated August 29, 1968.
He presented a petition under article 32 of the Constitution for the issue of a write of habeas corpus, while this petition was pending, another order of detention was issued on August 28, 196.9, a day before the expiry of the previous order.
The grounds of detention in this latter order was identical to that of August 28, 1968 excepting the charge that the petitioner, though in preventive custody was maintaining links with certain named hostile persons through friends and relatives and that his liberty would jeopardise the security of the State and public order in the region.
The petitioner challenged the latter order of detention by adding additional grounds.
: The order of detention dated August 28, 1969 was not justified under section 13(2) of the Act, being in violation of the provisions of the Act, and was invalid.
Under sec.
13(2) what is required is that fresh facts should have arisen.
after the expiry of the previous detention.
Facts arising during the period of detention, are, therefore, not relevant when applying the provisions of section 13(2).
In the present case, the fresh order was passed on 28th August, 1969, a day before the expiry, and it was obvious that no fresh facts could by that date arise and yet be held to have arisen after the date of expiry.
It is very difficult to appreciate how a person in preventive custody could continue to maintain links with his associates outside jail, who had gone underground, even through his friends and relatives.
If the petition was able to maintain such links, it cast a sad reflection on the persons in charge of him while he was in custody and, in any case, it would appear that his detention could serve no useful purpose.
Even if it be accepted that such links were maintained, this additional ground mentioned did not satisfy the requirements of section 13(2) of the Act, because the only allegation was that the links were maintained during the period of preventive detention.
|
l Appeals Nos. 1818 to 1820 of 1968.
Appeals from the judgment and order dated January 22, 1968 of the Rajasthan High Court in D.B. Civil Misc.
Writ Nos.
599 of 1966, 100 and 94 of 1967 respectively.
H.R. Gokhale, D.P. Gupta and B.R. Agarwala, ,for the appellants (in all the appeals).
G.C. Kasliwal, Advacate General, Rajasthan, Vijay Krishna Makhija, I. M. Bhardwaj and K.B. Mehta, for respondents Nos. 1 and 3 (in all the appeals).
K.B. Mehta, for respondents Nos. 2 and 4 (in all the appeals).
The Judgment of the Court was delivered by Dug J.
These three appeals (Civil Appeals Nos. 1818 1819 and 1820 of 1968) with certificate of fitness presented by Dr. Ram Pal Chaturvedi are directed against a common judgment of the Rajasthan High Court and as they, raise common questions, they are being disposed of by one: judgment.
Civil Appeal No. 1818 of 1968 is concerned with the challenge to the appointment of Dr. D.G. Ojha as Principal of Sardar Patel Medical ' College, Bikaner.
He was appointed a Professor of Surgery and Officiating Principal of the said College on March 2, 1964.
At the time of his appointment, he was officiating as Director of Medical and Health Services, Rajasthan at Jaipur.
Civil Appeal No. 1819 of 1968 is concerned with the challenge to the appointment of Dr. P.D. Matbur on July 13, 1965 as Professor of Surgery and Officiating Principal of Rabindra Nath Tagore Medical College, Udaipur.
This order of appointment was subsequently superseded and Dr. Mathur was appointed as Professor of Surgery and Principal of Rabindra Nath Tagore Medical College, Udai 561 pur with effect from the date of his, taking over charge.
It may be pointed out that Dr. Mathur 's appointment as a professor of Surgery was not challenged either in the High Court or before us and his appointment as Principal alone was assailed in this Court Civil Appeal No. 1820 is concerned with the challenge to the appointment of Dr. Rishi dated July 28, 1966 as Principal of Medical College, Jodhpur.
The appointment was made on a purely temporary and ad hoc basis till further orders.
On December 31, 1966, this order was partially modified in so far as Dr. Rishi 's remuneration is concerned, but his appointment as Professor of Surgery and Principal of Medical College was reaffirmed to be on a purely temporary and ad hoc basis.
The challenge to these three appointments by means of writ petitions failed in the Rajasthan High Court and the present appeals are directed against the common order of that Court.
In the High Court, it was common ground between the parties that Dr. Ojha, Dr. Rishi and Dr. Matbur did possess academic qualifications prescribed by the University Ordinance and it was also not disputed there that these respondents had acquired the qualifications prescribed by Rule 30(4) of the Rajasthan Medical Service (Collegiate Branch) Rules, 1962 (hereafter called the Collegiate Branch Rules).
The High Court made the following observations in the impugned order : "We would, however, observe that Rule 30(4) empowers the State Government to make only a temporary ' or officiating appointment and the appointments of Dr. Ojha, and Dr. Rishi will be deemed to be temporary or officiating even though these words may not have been used in the orders of their appointments as Professors of Surgery.
Learned Advocate General has also conceded that the Government cannot make permanent appointments under R. 30(4) and the omission of the words 'temporary ' or 'officiating ' in the orders was by mistake.
It is, therefore, not necessary to pursue the matter any further as these appointments will be considered only as temporary or officiating." These observations deserve to be borne in mind while dealing with the present appeals.
The High Court further took the view that the qualifications relating to teaching experience were directory and not mandatory and in view of the fact that the University was not objecting to the impugned, appointments, that Court did not consider it proper, in its judicial discretion, to interfere in proceedings for quo warranto at the instance of the appellant.
In this connection, it was observed It hat the breach, of the relevant Ordinance No. 65 could have afforded a ground for the University to withdraw affiliation of the Colleges concernd, but it was not open to the appellant to found his claim on this grievance.
562 In this Court the question raised principally centres round the validity and effect of the proviso to sub rule (4 ) of Rule 30 contained in Part 'VIII of the Collegiate Branch Rules.
These rules were made by the Governor of Rajasthan under Article 309 of the Constitution of India and were duly published in the Rajasthan Gazette (Extraordinary) dated November 5, 1962 and came into force with effect from the date of their publication.
The argument canvassed before Us was that these rules could not override the provisions of Ordinance No. 65 made under the University of Rajputana Act of 1946.
This Ordinance lays down the minimum qualifications for teachers of various stages of University Education in the affiliated Colleges.
Part VIII deals with the Faculty of Medicine etc., and according to paragraph (A)(3), teachers in Medical Colleges for M.B.,B.S. and Post graduate Courses must possess the special academic qualifications and teaching experience prescribed therein.
The requisite qualification by way of teaching experience prescribed for professors/Additional Professors/ Associate Professors in Surgery is, to reproduce the language of the Ordinance, "at least five years as Assistant Professor or Reader or Lecturer in a Medical College." The minimum qualifications for Principals of affiliated Colleges in the Faculty of Medicine etc., are prescribed in Part X(B) (3) and they read as under: "Master 's Degree or equivalent Post Graduate qualification or a higher one in one of the branches in which the College is affiliated with a minimum professional experience of 20 years, of which at least 10 years must have been spent as a teacher of Post Graduate Classes and 5 years in administrative work.
" We may now turn to the Collegiate Branch Rules and examine the appellant 's argument.
These Rules framed under article 309 of the Constitution for regulating the recruitment to posts in, and the conditions of service of persons appointed to, the Rajasthan Medical Service (Collegiate Branch) directly govern the impugned appointments and their binding, character is beyond question.
Rule 6 providing for the composition and strength of the Rajasthan Medical Service (Collegiate Branch) lays down that the Service shall consist ' of two wings viz., Clinical and non Clinical and the right of promotion shall be confined to each wing.
The nature of conditions included in each wing ' are as specified in column 2 of the Schedule attached to the Rules.
Procedure for promotion is dealt with in Part V of, these Rules.
Rule 23 provides that the persons enumerated in Column 4 of the SchedUle shall be eligible on the basis of, seniority cum merit, for promotion to posts speci fied in column 2 subject to their possessing minimum qualifications and experience as laid down by the Rajasthan University for the teaching staff in Medical Colleges.
In selecting candidates for 563 promotion, regard is to be had to six factors mentioned in sub rule ( 2 ) which include, inter alia academic qualifications and experience.
In the Schedule in the non Clinical wing, the selection posts consisting of Professors and Additional Professors are to be filled 100 per cent by promotion from Readers.
There is nothing specific in this Schedule in regard to the posts of Principals and these rules do not provide specifically for their appointments.
Rule 30, on the basis 6f which arguments were principally addressed in these three appeals, may now be reproduced in extenso : "30.
Temporary or officiating appointments.
(1) A temporary vacancy in a Senior or Selection post, may be filled by Government by appointing thereto in an officiating ' capacity an officer whose name is included in the ' list prepared under Rule 24(3) or in the lists under Sub Rules (2) ' and (3) of Rule 23: Provided that till the preparation of the first list or in case the list is exhausted, a vacant post may be filled by Government by appointing thereto a member of the Service eligible for appointment to the post by promotion or by appointing thereto temporarily person eligible for appointment by direct recruitment to the service under the provisions of these Rules.
(2) A temporary vacancy in the Junior posts may be filled by Government by appointing thereto temporarily a person eligible for appointment by direct recruitment to the service under the provisions of these Rules.
( 3 ) NO appointment made under Sub Rule ( 1 ) and (2) above, shall be continued beyond a period of six months without referring it to the Commission for their concurrence and shall be terminated immediately on their refusal to concur.
(4) Notwithstanding anything contained in Subrules (1 ) or (3) above or any other provisions in the rules, any selection or senior posts falling vacant may be filled in temporarily by appointment of any Specialist (Jr. or Senior) in the service of the State, who is a postgraduate and has teaching experience and practice in the speciality, for such periods as are required by the University Ordinance for the time being in force on the date of such appointment Provided that : Two years of service rendered in the speciality shall be reckoned as equivalent to one year teaching experience gained in the Speciality.
564 Sub rule (4), it maybe pointed out, was added on August 22, 1966 with retrospective effect during the pendency of the writ petitions in the High COurt, with the result that the writ petitions were allowed to be amended so as to include a challenge to the validity of this amendment.
The amendment was assailed on the grounds of mala hides and unconstitutional discrimination.
The validity of the retrospective operation of this sub rule was not questioned before us by Shri Gokhale, though a lukewarm challenge was suggested before the close of the arguments on the grounds of mala fides.
It may be noted that the requirement of teaching experience as laid down in the University Ordinance also finds place in sub rule (4) of Rule 30 as added in 1966 and it is only the proviso which has the effect of modifying to some extent this condition.
The narrow question requiring consideration therefore is whether the proviso, according to which two years of service rendered in the speciality is to be reckoned as equivalent to one year 's teaching experience gained in the speciality, must, as contended on behalf of the appellant, yield to the requirement in the Ordinance which prescribes the minimum qualification of teaching experience and, therefore, must be ignored.
We are unable to uphold the contention.
The Collegiate Branch Rules having been made pursuant to the power conferred by article 309 of the Constitution, they must be given full effect subject to the provisions of any Act made by the appropriate Legislature regulating the recruitment and conditions of service of persons appointed to the Rajasthan Medical Service (Collegiate Branch).
Such Act need not specifically deal with the aforesaid Medical Services but it must be an Act as contemplated by article 309 by or under which provision is made regulating the recruitment and conditions of service taking within its fold the said Medical Services.
This takes us to the question of scope and effect of Ordinance No. 65.
The University of Rajputana Act of 1946 (hereafter called the Act) under which Ordinance No. 65 was made was enacted to incorporate the University of Rajputana.
The name of the University was changed in 1956 to the University of Rajasthan.
The Syndicate of this University constituted under s.21 of the Act is empowered under s.29 read with s.30 to make ordinances, consistent with the Act and statutes, to provide for the matters listed in s.29.
These matters include in clause VI "emoluments and conditions of service of University ,teachers:." But on this, basis alone it is not easy for us to hold that Ordinance No. 65 is, a provision under an Act, regulating the recruitment and conditions.
of service of persons appointed to Rajasthan Medical Service, as contemplated by article 309 of the Constitution.
Shri Gokhale referred us to entry 41 in List II of 7th Schedule of the Constitution which deals with the subject, inter alia, of "State Public Services" and submitted that the Act fell within this entry and therefore came within the 565 purview of article 309.
We are not impressed by this submission.
In our opinion, on a consideration of the pith and substance of the Act and on a comparison of the language used in the entries Nos. 11 and 49 of List II, the field of legislation of the Act more ' appropriately falls under entry NO. 11 which deals with the subject of "education including university.
" The appointments of Dr. Ojha, Dr. Mathur and Dr. Rishi thus seem to us to be fully justified by the Collegiate Branch Rules and their appointments cannot be held to be invalid by reason merely of ' non compliance with the provisions of Ordinance No. 65 in regard to the condition of teaching experience.
The field of operation of this Ordinance appears to us to be restricted to the question of affiliation of the Colleges concerned with the Rajasthan University.
It is noteworthy that the University has not thought fit to object to these appointments.
If there is violation of a provision of this Ordinance then that may appropriately be taken into account by the Rajasthan Univesity for the purpose of withdrawing or refusing to continue affiliation of the colleges in question.
But clearly that would not render the impugned appointments null and void; a fortiori that cannot confer any right on Dr. Ram Pal Chaturvedi to approach the High Court by means of petition for writ of Quo warranto to challenge the appointments of these three persons.
We are unable to hold that these persons are usurpers and are holding the posts of Principals without the sanction of authority.
On the view that we have taken on the scope and effect of the Collegiate Branch Rules it is unnecessary to consider the argument strongly pressed by Shri Gokhale that the provisions of Ordinance No. 65 are mandatory and we refrain from expressing any opinion either way.
The appellants challenge on the ground of mala fides is also unsustainable, Except for the bald assertion at the Bar nothing convincing has been said to persuade us to hold that r. 30 '(4) added in 1966 was made for a collateral purpose in colourable exercise of the rule making power.
The appeals must, therefore, fail and are dismissed with costs, One set of costs.
R.K.P.S. Appeals dismissed.
| IN-Abs | The appellant filed writ petitions in the High Court of Rajasthan challenging the appointment of the Principals of three Medical Colleges affiliated to the University of Rajasthan on the ground that the persons appointed did not have the teaching experience necessary for ,these posts as laid down in Ordinance No.65 made by the Senate of the University under the University of Rajputana Act, 1946.
The appointments were defended on the basis of the proviso to sub r.
(4) of R 30 of the Rajasthan Medical Service (Collegiate Branch) Rules, 1962 made by the Governor of Rajasthan under article 309 of the Constitution.
Suh r.
(4) was added to R. 30 of the, Collegiate Branch Rules with retrospective effect during the pendency of the appellant 's writ petitions.
and provided that two years ' service rendered in lathe speciality would be reckoned as equivalent to one year 's teaching experience.
In view of this sub rule the High Court dismissed the appellant 's writ petitions.
In appeals to this Court by ocruficate it was contended on behalf of the appellants that (i) Ordinance No. 65 must prevail over R. 30(4) in the matter of teaching experience required; (ii) the retrospective amendment of R. 30 by the addition of Sub Jr.
(4) was mala fide; (iii) the provision in Ordinance 65 as regards teaching experience was mandatory.
HELD: Dismissing the appeals, The contention that the proviso to sub r.
(4) must yield to the Ordinance could not be accepted.
The Collegiate Branch Rules having been made pursuant to the power under article 309 of the Constitution must be given full effect subject to the provisions of any Act made by the appropriate Legislature regulating the recruitment and conditions of service of persons appointed to the Rajasthan Medical Service (Collegiate Branch).
Such Act need not specifically deal with the State Medical Service but it must be an Act as contemplated by article 309 by or under which provision is made regulating the recruitment and conditions of service taking within its fold the said Medical services.
[564 D E] Ordinance 65 made under the University of Rajputana Act and dealing inter alia with "emoluments and conditions of service of University teachers" was not a provision under an Act regulating the recruitment and conditions of service of persons appointed to Rajasthan Medical Service as contemplated by article 309 ' of the Constitution.
The University of Rajputana Act falls under Entry 11 List II which deal 's with the subject 560 education including universities ' and not under entry 41 List II dealing with 'State Public services '.
The field of operation of the Ordinance is restricted to the question of affiliation of the Colleges concerned with the Rajasthan University. ' If there is any violation of a provision of the Ordinance, then that may appropriately be taken into account by the Rajasthan University for the purpose of withdrawing or refusing to continue affiliation of the colleges in question.
No such action had been taken by the University in the present case.
The personsl appointed could not be said to be holding their posts without authority of law.
The appellant had no right to challenge their appointments.
[564 G, 565 D] (ii) The plea of mala fide was unsustainable.
There was noting to show that r. 30(4) was made for a collateral purpose in colourable exercise of the rule making power.
[565 F] [In view of the above findings no opinion was expressed on the question whether the powers of Ordinance No. 65 were mandatory].
|
Appeal No. 810 of 1967.
Appeal by special leave from the judgment and order dated August 3, 1966 of the Kerala High Court in Income tax Referred Case No. 49 of 1965.
K. Javaram, for the appellant.
S.T. Desai, R.N. Sachthey and B.D. Sharma for the respondent.
Sardar Bahadur Saharya. ,for the Intervener.
The Judgment of the Court was delivered by Shah, J.
In computing the income of the appellant 's father to tax for the assessment year 1959 60 the Income tax officer included Rs. 75,000 received under an agreement for cutting and removing trees from 500 acres of Mangayam Katchithode forest.
The Appellate Assistant Commissioner after calling ,for a report on certain facts confirmed the order.
But the Tribunal held that the receipt was of a capital nature and deleted it from the taxable income.
At the instance of the Commissioner of Income tax, the Tribunal referred the following question to the High Court of Kerala: "Whether on the ,facts and in the circumstances of the case, the Income tax Appellate Tribunal was correct in holding that Rs. 75,000/ being income from felling of trees from forests is not subject to income tax ?" The High Court answered the question in the negative.
We are of the view that the facts found by the Tribunal are not sufficient to enable us to record an answer to the question referred.
The Income tax officer held that the income was taxable because 500 acres of forest land was leased for "clear felling" by the father of the appellant and this fetched an income of Rs. 75,000/ .
What the expression "clear falling" meant was not investigated by the Income tax officer.
The Appellate Assistant Commissioner in dealing with the contention raised by the appellant that the receipt was of the nature of a Capital, observed: "The claim is based on the reasoning that the clear felling of ' forest trees amounts to sterilisation of a capital asset.
In other words clear felling is said to involve total destruction of the 549 forest.
It is admitted that the trees are of spontaneous growth and it has not been established that removal of trees has in any way affected the value of the property.
As a matter of fact, _clear felling is resorted to make the land more productive and more valuable.
At any rate the claim has not been substantiated beyond doubt and hence there is no scope for any relief.
" The Tribunal relying upon the observation of the Income tax officer "that the trees were not cut together with the roots but only 6" above the ground and that they were later on destroyed" held that there was "nothing to show that there was a diminution of capital assets".
On the other hand, the Income tax officer had given a clear finding that this was a case of "clear felling".
After making 'an extensive quotation from the Judgment of the High Court of Bombay in Commissioner of Income tax vs
N. Patwardhan(1), the Tribunal stated that the observations applied to the facts in the case before them, and on that account they upheld the claim of the 'appellant.
The High Court observed that "it was agreed that the Mangayam Katchithode forest was within the ambit of the Madras Preservation of Private Forests Act, 1949, and the statutory rules on the subject and that the expression "clear feeling" is an expression with a definite and specific meaning as far as such forests are concerned".
They then proceeded to quote r. 7 framed under the Madras Preservation of Private Forests Act, 1949, and after setting out conditions (b) & (c) observed that "the felling of the trees under the "clear felling" method will not permit a removal of the trees along with their roots.
On the other hand, the clear indications were that the felling of the trees under the clear indications were that the felling of the trees under the regeneration and future growth of the trees concerned.
In other words, what is contemplated by the clear felling method is not sterilisation of an asset but the removal of a growth ,above a particular height, leaving intact the roots and the stumps in such a manner as to ensure regeneration, future growth, further felling and subsequent income.
" On that view the Court held that the receipt of Rs. 75,000/ was a revenue receipt and not a capital receipt as held by the Appellate Tribunal.
The departmental authorities.
the Tribunal and the High Court have expressed different views on the import of the expression "clear ,felling" and about the true effect of the agreement.
The Income tax officer taxed the amount of Rs. 75,000/ on the footing that the 500 acres of forest lands were leased for clear felling.
The Appellate Assistant Commissioner held that the trees being of spontaneous growth and the falling of the trees not having (1) 550 affected the value of the property as a result of the clearance, the lands became more productive and the receipt was a revenue income.
The Tribunal held that the case being one of "clear felling" and the trees having been cut 6" above the ground and "that they were later on destroyed" it was a case of clear felling 'and the receipt was of capital nature.
The High Court was of the view that the "clear felling" of forest lands meant cutting trees and not removal of the roots so that there would be regeneration, future growth of the roots and the stumps and on that account the receipt was of revenue nature.
It appears that before the Income tax Officer the agreement dated Sept. 11, 1957 was not produced.
After the Appellate Assistant Commissioner remanded the case to the Income tax Officer the latter submitted the "remand report" and at that time the agreement was produce.
The Tribunal in support of its conclusion referred to the preamble of the document and the conditions thereof.
The learned Judges of the High Court observed that they did not place any reliance on the extracts in the lease given in paragraph 2 of the statement of the case for coming to the conclusion they had reached.
Why the High Court thought it fit to discard the recitals, is not clear from the record.
The facts found being not clear, it is difficult to record any conclusion whether the receipt was of a revenue nature or of a capital nature.
We therefore call upon the Tribunal to submit to this Court a supplementary statement setting out the terms of the agreement between the father of the appellant relating to the rights conveyed to, the lessees in the forest lands and especially about the import of the term relating to "clear felling".
The Tribunal will submit the supplementary statement of the case only on the basis of the evidence on the record and will not take any additional evidence.
The report to be submitted within three months from the date on which the papers reach the Tribunal.
Shah, J.
By our order dated February 13, 1969, we called for a supplementary statement of the case setting out the terms of the agreement conveying the rights in the forest trees to the lessees, and the true import of the expression "clear felling".
The Income tax Appellate Tribunal has submitted a supplementary statement o,f the case.
The Tribunal has set out the relevant terms of the agreement and has also observed that the import of the expression "clear felling" is that "all trees except casuring are to be felled at 'a height not exceeding six inches from the ground, the barks being left intact on the stump and adhering to it all round the stump without being torn off or otherwise changed".
There is no suggestion that there were any casurina trees in the forest lands let out to the lessees.
It is common ground also that the trees in the forest were of spontaneous growth.
The 551 Tribunal has found that by the use of the expression "clear felling" it was stipulated that the trees are to be cut so that 6" of the trunk with the barks intact and adhering to it all round the stump is left.
This is with a view to permit regeneration of the trees.
The question whether receipts from sale of trees by an owner of the land who is not carrying on 'business in timber may be regarded as income liable to tax has given rise to.
some difference of opinion in the High Courts.
In Commissioner of Income tax, Madras vs
T. Manavedan Tirumalpad,(1) a Full Bench of the Madras High Court held that the receipts ,from sale of timber trees by the owner of unassessed forest lands in Malabar were revenue and not capital.
The Court observed that if income from the sale of coal from a coal mine or stone won from a quarry or from the sale of paddy grown on land be regarded as income, but for the special exemption granted under the Income tax Act, there is no logical reason for holding that income from sale of trees is not income liable to tax.
In re Ram Prasad(2) a Division Bench of the Allahabad High Court held that receipt from sale of timber is income liable to be taxed and is not a capital receipt.
The case arose under the Government Trading Taxation Act 3 of 1926.
In Maharaja of Kapurthala vs Commissioner of Income tax, C.P. and U.P.(3) the Oudh Chief Court held that net receipt from the sale of forest trees is income liable to income tax, eventhough the ,forest may be gradually exhausted by fellings.
The Court further observed that income from the sale of forest trees of spontaneous growth growing on land which is assessed to land revenue is not agricultural income within the meaning of section 2(1 ) (a) of the Income tax Act and is not exempt from income tax under section 4(3)(viii) of the Act.
In Raja Bahadur Kamakshya Narain Singh vs Commissioner of Income tax, Bihar and Orissa(4) a similar view was expressed by the Patna High Court.
In Fringford Estates Ltd., Calicut vs Commissioner of Income tax, Madras(b) it was held that profits realised from the sale of timber were trade profits and were liable to income tax.
In that case the assessee Company formed with the object of purchasing, clearing and improving of estates and the cultivation and sale of tea, coffee etc.
in such estates, purchased a tract of land part of which had already been cultivated with tea and the rest was a jungle capable of being cleared and made fit for plantation.
The (1) I.L.R. 54 Mad.21.
(2) I.L.R.52 All.
(3) (4).
(5) 552 Company entered into an agreement with a timber merchant for clearing a part of the forest of all trees and for sale of the trees m the market.
This was held to be a part of the business activity of the Company.
The cases on the other side of the line are to be found in Commissioner of Income tax, Bombay South vs N.T. Patwardhan(1) in which a Division Bench of the Bombay High Court held that when old trees which stood on the land of the assessee were disposed of with their roots "once and for all", the receipts were capital.
The Court observed (p. 318): "The asset of the man was the land with the wild growth of trees on it.
If the land with the trees had been sold, there could have been no doubt that the sale was a realisation of capital and it would not have been possible to argue that the transaction in so far as it involved a sale of the trees was a sale producing income and the remaining part of the transaction was a capital sale.
In the present case the land is retained by the assessee but a part of the asset is disposed of in its entirety by selling the trees with roots once and for all.
" In State of Kerala vs Karimtharuvi Tea Estate Ltd.(2) the Kerala High Court held in a case arising under the Kerala Agricultural Income tax Act, 1950, that the amount realised by sale as firewood of old and useless gravelia trees grown and maintained in tea gardens for the purpose of affording shade to tea plants is capital receipt and not revenue receipt.
The Court observed: "The gravelia trees were grown and maintained for the sole purpose of providing shade to the tea bushes in the tea estates of the assessee.
That such shade is essential for the proper cultivation of tea cannot be disputed and the trees should hence be considered to be as much a part of the capital assets of the company as the tea bushes themselves or the equipment in its ,factories.
Some of the gravelia trees became old and useless with the efflux of time and they naturally had to be cut down and sold.
The sale proceeds of such trees cannot possibly amount to a revenue receipt." In Commissioner of Income tax, Mysore V.H.B. Van Ingen(3) the Mysore High Court held that the assessee who had purchased a coffee estate of which a part had been planted with coffee plants and the rest was jungle, and had cleared the jungle (1)41 I.T.R. 313.
(2) 5 I.T.P 129.
(3) 553 for the purpose of planting coffee and had sold the trees felled, price realised by the sale of the trees was a capital and not a revenue receipt, because the trees had grown spontaneously, and the assessee had purchased the estate including the trees.
It is not necessary for the purpose of this case to enter upon a detailed analysis of the principle underlying the decisions and to resolve the conflict.
On the finding in the present case it is clear that the trees were not removed with roots.
The stumps of the trees were allowed to remain in the land so that the trees may regenerate.
If a person sells merely leaves or fruit of the trees or even branches of the trees it would be difficult (subject to the special exemption under section 4(3)(viii) of the Income tax Act, 1922) to hold that the realization is not of the nature of income.
Where the trunks are cut so that the stumps remain intact and capable of regeneration, receipts from sale of the trunks would be in the nature of income.
It is true that the tree is a part of the land.
But by selling a part of the trunk, the assessee does not necessarily realise a part of his capital.
We need not consider whether in case there is a sale of the trees with the roots so that there is no possibility of regeneration, it may be said that the realisation is in the nature of capital.
That question does not arise in the present case.
The appeal fails and is dismissed with costs.
G.C. Appeal dismissed.
| IN-Abs | In computing the income of the appellant 's father for the assessment year 1959 60 the Income tax Officer included Rs. 75,000 received under an agreement for cutting and removing trees from 500 acres of forest land in Madras State.
The Income tax Officer held that the income was taxable because the land was leased for clear felling by the father of the appellant.
What the expression 'clear felling ' meant was not investigated by the Income tax Officer.
The Appellate Assistant Commissioner confirmed the assessment order.
But the Tribunal held that the receipt was of a capital nature and deleted it from the taxable income.
In reference the High Court differed from the Tribunal.
In appeal 'against the High Courts order this Court directed the Tribunal to submit to this Court a supplementary statement of case setting out the terms of the agreement between the father of the appellant relating to the rights conveyed to the lessees and especially about the import of the ' term relating to 'clear felling.
The Tribunal in its supplementary statement of case set out the relevant terms of the agreement and observed that the import of the expression 'clear felling ' is that 'all trees except casurina are to be felled at a height not exceeding six inches from the ground, the barks being left intact on the stump and adhering to it all round the stump without being torn off or otherwise changed.
" It was not suggested that there were any casurina trees in the forest land let out to the lessees and it was common ground that the trees in the forest were of spontaneous growth.
HELD: The appeal must be dismissed.
the finding in the present case it was clear that the trees were not removed with roots.
The stumps of the trees were allowed to remain in the land so that the trees may regenerate.
If a person sells merely leaves or fruit of the trees or even branches of the trees it would be1 difficult (subject to the special exemption under section 4(3)(viii) of the Income tax Act, 19 '22) to hold that the realisation is not of the nature of income.
It is true that the tree is a part of the land.
But by selling a part of the trunk, the assessee does not necessarily realise a part of his capital.
[553 B C] Commissioner of Income tax, Madrs, vs
T. Manavedan Tirumalpad, I.LR. , In re: Ram Prasad, I.L.R. 52 All.
419, Maharaja of Kapurthala vs Commissioner of Income tax, C.P. & U.P. , Raja Bahadur Kamkshya Narain Singh vs Commissioner of Income tax, Bihar & Orissa, , Fringford Estate Ltd., Calicut vs Commissioner of Income tax, Madras, , Commissioner of Income tax, Bombay South vs
N.T. Patwardhan, ,State of Kerala vs Karimtharuvi Tea Estate Ltd. and Commissioner of Income tax, Mysore vs
H.B. Van Ingen, , referred to.
548 [Question whether in case of sale of trees with the roots so that there is no possibility of regeneration the realisation may be said to be, in the nature of capital, left open.] [553 D]
|
Appeal No. 444 of 1966.
Appeal by special leave from the judgment and order dated October 9, 1963 of the Allahabad High Court in F.A.F.O. No. 268 of 1957.
N.D. Karkhanis and O.P. Rana, for the appellant.
R. Gcpalakrishnan, for respondents Nos. 1 (i), to (iv), (vii) and (xi), The Judgment of the Court was delivered by Shah, J.
One Radhey Lal instituted Suit No. 4 of 1950 in the Court of the Civil Judge, Jaunpur, for a declaration that he was the "owner in possession" of the estate left by Dhan Devi.
To that suit Ram Krishan Burman was impleaded as a party defendant.
This suit was decreed ex parte.
Ram Krishan then filed Suit No. 14 of 1956 in the Court of the Civil Judge, Jaunpur, against the heirs of Radhey Lal (who had died since the passing of the decree in Suit No. 4 of 1950), claiming that he was "appointed an heir by Dhan Devi" of properties described in lists B, J & D in the plaint, that the dispute concerning the inheritance to the estate left by Dhan Devi was settled between him and Radhey Lal, that Radhey Lal admitted his title to the properties in Lists B, J & D and it was agreed that in the properties in Lists A, B, J & D Radhey Lal had 11/16th share and that he had 5/16th share, that a memorandum was drawn up in that behalf, and that Radhey Lal represented to him that a compromise decree will be obtained in that suit, but thereafter taking advantage of his ignorance Radhey Lal obtained a decree ex parte.
The following substantive reliefs were claimed by the plaintiff: "(a) that a declaratory decree in favour of the plaintiff and against the defendants declaring the plaintiff as the owner of the properties in Lists, A, B, J & D be passed; (b) in case in the opinion of the Court prayer (a) cannot be granted, then, alternatively, declaration declaring the plaintiff as the owner of properties in B, J and D being the stridhana of Rani Dhan Dai Kaur be 590 issued, decree in Suit No. 4 of 1950 has no adverse effect on the rights of the plaintiff;" The plaintiff valued the properties in dispute at Rs. 5,99,503/6/3, but on the footing that he had claimed a mere declaration paid Rs. 18/12/0 as.
court fees as in a claim under Sch.
II el. 17(iii) of the Court Fees Act.
The Inspector of Stamps reported to the Civil Judge that in his view the case fell within section 7(vi A) as incorporated by the U.P. State Legislature, and court fee was chargeable according to the value of the subject matter, and the plaintiff was liable to pay Rs. 3,528/8/ as court fee on the plaint.
The Civil Judge ordered the plaintiff to amend the plaint and to pay the court fee remaining due.
The plaintiff appealed against the order of the Civil Judge to the High Court of Allahabad.
The High Court held that the court fee paid by the plaintiff was proper, and set aside the order holding that the case did not fall within section (iv A) of the Court Fees Act.
The State of U.P. has appealed to this Court with special leave.
Section 7 (iv A) of the Court Fees Act as enacted by the U.P. State Legislature, insofar as it is relevant, reads: "In suits for or involving cancellation of or adjudging void or voidable a decree for money or other property having a market value, or an instrument securing money or other property having such value.
(1) where the plaintiff or his predecessor in title, was a party to the decree or the instrument, according to the value of the subject matter, and There is no dispute that the plaintiff claimed a declaration adjudging void the decree in Suit No. 4 of 1950 declaring Radhey Lal box be the "owner in possession of the estate of Dhan Devi".
The plaintiff by his plaint had claimed two declarations in the alternative, and prima facie, the plaint was of the description in Sch.
II CL 17(iii) of the Court Fees Act.
But counsel for the State of U.P. contends that the reliefs claimed fell within section 7(iv A) of the Court Fees Act.
Counsel says that the expression "decree for money or other property" does not mean a decree awarding money or other property, but a decree concerning or relating to money or other property, and he says that where the Court declares the plaintiff 's title to money or property simpliciter, the decree is one for money or for other property.
We are unable to 591 agree with that contention.
The expression "for" occurs twice in the opening part of the clause.
Evidently the expression "for" when it occurs for the first time means "for obtaining a decree ordering (payment or recovery of)".
The expression "for" also occurs in several other clauses of the Court Fees Act.
In section 7 of the Court Fees Act as amended by the U.P. Legislature which deals with computation of court fee payable in certain classes of suits, following clauses occur: "(i) In suits for money (ii) (a) In suits for maintenance and annuities or other sums payable periodically : (b) In suits for reduction or enhancement of maintenance and annuities or other sums payable periodically (iii) In suits for movable property other than money, where the subject matter has a market value (iv) In suits (b) for accounts (iv) B.
In suits (a)for a right to some . to arise out of land.
(iv) C.
In suits (a) for the restriction of conjugal fights, (b)for establishing or annulling or dissolving a marriage, (c) for establishing a fight to the custody or guardianship of any person.
(v) A.
In suits for possession . (v) B.
In suits for possession between rival tenants.
(vi) A.
In suits for partition.
(vii) In suits for the interest of an assignee of land: ' revenue.
(ix) In suits against a mortgage for the recovery of the property mortgaged.
(x) In suits for specific performance 592 (xi) In the following suits between landlord and tenant (a)for the delivery by a tenant of the counter part lease, (c) for the delivery by a landlord of a lease, (cc) for the recovery of immovable property from a tenant.
(f) for abatement of rent, (g) for commutation of rent, In all these clauses the expression "for" is used as meaning "for obtaining a decree ordering (payment or recovery of)".
If the expression "for" occurring for the first time in section 7 (iv A) means in the context in which it occurs obtaining a decree for cancellation of or adjudging void or voidable a decree, it would be difficult to hold that the expression "decree for money or other property" has a wider connotation and means a decree which concerns or relates to money or other property.
A decree for declaration of title to money or other property is not a decree for money or other property.
In our judgment the expression "decree for money or other property" means only a decree for recovery of money or other property.
It does not include a decree concerning title to money or other property.
It was urged that in any event the plaintiff had sued for adjudging void or voidable an "instrument" securing money or other property having market value.
But a decree in invited is not an instrument securing money or other property: such a decree is a record of the formal adjudication of the Court relating to a right claimed by a party to a suit.
It does not by its own force secure money or property.
A consent decree in certain cases may be regarded as an instrument securing money or other property, where the decree proceeds upon a contract which had that effect, but that is only because a consent decree is a record of the contract between the parties to which is superadded the seal of the Court.
In our view the High Court was right in holding that the court fee paid on the plaint was proper.
It may be pointed out that the plaintiff had claimed nothing more than a declaration with regard to certain properties.
593 We are also unable to accept the contention of counsel for the State that the relief for declaration was a mere device or subterfuge intended to conceal the true purport of the claim.
It iS evident that the District Magistrate, Jaunpur was in possession of the property in dispute and if the civil court declared the title of the plaintiff, he would be entitled to secure recognition of his rights.
Before parting with the case we must observe that we have felt greatly perturbed by the course which this litigation has taken.
The suit was filed in 1956.
And after 13 years only the question of court fee payable on the plaint is decided.
In the meanwhile the original plaintiff died.
The delay is largely attributable to the rigid attitude of the State which has by insisting upon a comparatively small claim, held up the proceedings for all these long years by raising contentions which had no merit.
We trust the Court of First Instance will take up this suit for hearing with the least practicable delay and dispose of the suit according to law.
The State to pay in this appeal the costs of the heirs of the original plaintiff.
G.C. Appeal dismissed.
| IN-Abs | As the reversioner of a Hindu widow 's estate one 'R ' instituted suit No. 4 of 1950 in the court of the Civil Judge Jaunpur, for a declaration that he was the 'owner in possession ' of the said estate. 'B ' who claimed to be an heir of the widow was impleaded as a party defendant.
The suit was decreed ex parte. 'B ' then filed suit No. 14 of 1956 in the same court against the heirs of 'R ' who died after the, passing of the decree in his suit.
In suit No., 14 of 1956 'B ' claimed that as heir of the said widow he was entitled to her stridhuna properties.
He averred that in suit No. 4 of 1950 'R ' had arrived at an oral compromise with him promising him 5/16th share in the, whole estate.; that the oral compromise was later reduced into a memorandum; that 'R ' had represented to him that a compromise decree would be obtained in the suit; and that taking advantage of his ignorance 'R ' had obtained an ex parte decree against him.
On these allegations 'B ' prayed that he be declared the owner of all the properties left by the widow, and in the alternative he be declared owner of her stridhan properties, the decree in suit No. 4 of 1950 having no adverse effect on his rights.
On the footing that he had claimed a mere declaration 'B ' paid Rs. 18/12/ as court fees as in a claim under Sch.
II cl.
17(iii) of the Court Fees Act.
The Inspector of Stamps, however, reported to the Civil Judge that in his view the case fell within section 7(iv A) of the Act as incorporated therein by the U.P. State Legislature and court fee was payable on the value of the subject matter of the suit.
The Civil Judge ordered the plaintiff to amend the plaint and pay the court fee remaining due.
In appeal the High Court decided in favour of the respondent.
The State of U.P. appealed.
It was contended on behalf of the appellant: (i) that the plaintiff sought a declaration adjudging void the decree in suit No. 4 of 1950 which was a decree "for money or other property" within the meaning of section 7(iv A) since that expression must include a decree concerning or relating to money or other property, (ii) that in any case the decree in suit No. 4 was an 'instrument ' securing money or other property having market value and section 7(iv A) was therefore attracted; (iii) that the relief for declaration was a mere device intended to conceal the true purport of the claim.
HELD: The appeal must be dismissed.
(X) A decree for declaration of title to money or other property is not a decree for money or property.
The expression "decree for money or other property" means only a decree for recovery of money or other property.
It does not include a decree concerning title to money or other property.
[592 E F] (ii) A decree ad invitum is not an instrument securing money or other property: such a decree is a record of the formal adjudication of the 589 court relating to a right claimed by a party to the suit.
It does not by its own force secure money or property.
[592 G] (iii) The relief for declaration was not a mere device or subterfuge intended to conceal the true purport of the claim for the property in dispute was in the possession of the District Magistrate, and if the Civil Court declared the plaintiff 's title he would be entitled to secure recognition of his rights by the District Magistrate.
[593 A B]
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Appeals Nos.
2416 and 2417 of 1966.
Appeals from the judgment and order dated March 19, 1963 of the Punjab High Court in Regular First Appeal No. 281 of 1960.
Rameshwar Nath and Mahinder Narain, for the appellants (in C.A. No. 2416/1966) and Respondents Nos. 1, 2 and 4 (in C.A. No. 2417 of 1966).
N.C. Chatterjee and H.P. Wanchoo, for the respondent No. 1 (in C.A. No. 2416 of 1966) and the appellant (in C.A. No. 2417 of 1966).
The Judgment of the Court was delivered by Hidayatullah, C.J.
These are appeals by certificate granted by the Punjab High Court against the judgment and decree dated March 19, 1963.
The property in dispute is a building in Jullundur City in which there is located a cinema.
It was formerly ' called 'Chitra Talkies ' and now is known as 'Odeon Cinema '.
The building was constructed in 1933 on land measuring 3 kanals and 17 marlas.
The original owner one Azim Baksh migrated to 583 Pakistan in 1947 and this property was declared evacuee property.
Before migration Azim Baksh had dealt with this property in several ways.
On January 21, 1946 he had mortgaged the building with possession for Rs. 70,000/ with Malawa Ram and Gamda Mal.
On January 22, 1946 Azim Baksh took the building on leaseon a rent of Rs. 162.8 annas for 11 months from the mortgagees.
He executed a rent note.
On February 8, 1946 this rent note was cancelled.
An endorsement was made on the rent note to the following effect: "With the consent of Lal Gainda Ram and Malawa Ram, the said rent deed has been cancelled.
Rent for one month may be included in the mortgage amount.
The mortgagees are entitled to carry on the aforesaid cinema in any way they like or may give the same on lease to any body else.
I shall have no objection".
Previously Azim Baksh had rented this building to Sant Ram and Sita Ram on Rs. 150/ per month.
After the release of the property the mortgagees leased it to Sita Ram and Sohan Lal on Rs. 200/ per month.
This lease was terminated on July 26, 1950.
On August, 1951 the mortgagees leased it to 'the All India Film Corporation Ltd., appellant No. 1 (defendant No. 2), on Rs. 250/ per month vide exhibit D.2 W.2/1.
The lease was for 5 years in the first instance from September 15, 1951 to September 14, 1956.
It was, however, renewable for 10 years by yearly renewals.
There was a condition that renewal on the same terms was not to be refused.
By this lease, the lessee was given full right to use the property whether by itself or through agents or in partnership or by sub leasing.
Malawa Ram and Gainda Mal partitioned their property and this house fell to the share of Gainda Mal.
The lessee company in its turn sub let the premises to defendants 3 to 9 on a monthly rent of Rs. 1,250/ .
This was on May 16, 1952.
Before subleasing the premises, the head lessee company had equipped the house with cinema machinery etc.
and the sub lease included the use of machinery etc.
Gainda Mal applied under Evacuee Interest Separation Act, 1951 for separation of his interest.
The Competent Officer by his order, August 25, 1955, determined the mortgage charge as Rs. 90,807.4 annas and ordered sale of the building and land together with another plot.
The respondent in this appeal Raja Gyan Nath purchased the cinema with the land (3 kanals 17 marlas) for Rs. 65,000/ on December 3, 1955.
The sale certificate was issued on March 3, 1956.
The mortgage charge was paid off on April 19, 1958.
584 The purchaser Raja Gyan Nath then filed a suit for possession of this property from the head lessee and the sub lessees on August 5, 1959 and for mesne profits at the rate of Rs. 1,250/ per month.
The sub lessees claimed the benefit of the East Punjab Urban Rent Restriction Act (3 of 1949).
Later the plaintiff gave up his claim to the cinema machinery, furniture and fittings.
The trial Judge decreed the claim in full except that mesne profits were reduced to Rs. 500/ per month and half of the costs were disallowed.
Defendants 2, 4, 10 and 11 appealed against the decree to the High Court.
The plaintiff cross objected asking for mesne profits at Rs. 1,250/ with interest at 6% per year and the remaining costs.
The High Court affirmed the decree, but reduced mesne profits further from Rs. 500/ to Rs. 250/ per month.
The mesne profits were to run from the date of suit till possession with interest at 6% per annum.
The High Court granted a certificate to both sides and they have filed their respective appeals.
In the High Court only three points were urged: (1) Whether the defendants were protected by the East Punjab Urban Rent Restriction Act (3 of 1949) ? (2) What were the mesne profits ? and (3) Whether plaintiff was entitled to possession before the expiry of the full term of the lease with right to renewals ? These are the only points which have been urged before us in these appeals.
The first question to consider is this: Did the tenancy created by the mortgagee in possession survive the termination of the mortgagee interest so as to be binding on the purchaser ? A general proposition of law is that no person can confer on another a better title than he himself has.
A mortgage is a transfer of an interest in specific immovable property for the purpose of securing repayment of a loan.
A mortgagee 's interest lasts only as long as the mortgage has not been paid off.
Therefore on redemption of the mortgage the title of the mortgagee comes to an end.
A derivative title from him must ordinarily come to an end with the termination of the mortgagee 's title.
The mortgagee by creating a tenancy becomes the lessor of the property but his interest as lessor is coterminous with his mortgagee interest.
Section 111 (c) of the Transfer of Property Act provides that a lease of immovable property determines where the interest of the lessor in the property terminates on, or his power to dispose of the same, extends only to the happening of any event by the happening of such 585 event.
The duration of the mortgagee 's interest determines his position as the lessor.
The relationship of lessor and lessee cannot subsist beyond the mortgagee 's interest unless the relationship is agreed to by the mortgagor or a fresh relationship is recreated.
This the mortgagor or the person succeeding to the mortgagor 's interest may elect to do.
But if he does not, the lessee cannot claim any rights beyond the term of his original lessor 's interest.
These propositions are well understood and find support in two rulings of this Court in Mahabir Gope and others vs Hatbans Narain Singh(1) and Asaram and others vs Mst.
Ram Kali(2).
To the above propositions there is, however, one exception.
That flows from section 76(a) which lays down liabilities of a mortgagee in possession.
It is provided there that when during the continuance of the mortgage, the mortgagee takes possession of the mortgaged property, he must manage the property as a person of ordinary prudence would manage it if it were his own.
From this it is inferred that acts done bona fide and prudently in the ordinary course of management, may bind even after the termination of the title of the mortgagee in possession.
This principle applies ordinarily to the management of agricultural lands and has seldom been extended to urban property so as to tie it up in the hands of lessees or to confer on them rights under special statutes.
To this again there is an exception.
The lease will continue to bind the mortgagor or persons deriving interest from him if the mortgagor had concurred to grant it.
Applying these principles to the facts of this case, we find that the property, the subject of the lease, was a house in the city of Jullundur suitable for a cinema theatre.
This was leased for five years on a rent of Rs. 250/ p.m.
This sum included the use of a passage for which the rent was Rs. 100/ p.m.
In effect the rent of the building was Rs. 150/ .
This was lower rent than the rent it had fetched before.
The mortgagee further agreed to renewal of the lease on the same terms for a further period of 10 years.
It is in evidence that a plot only 8 marlas formed the passage and the rent was Rs. 100/ and on that basis land of 3 kanals and 17 marlas with a building fit for cinema ought to have fetched much more.
Such a building in a growing city ought not to have been tied down for a period of fifteen years, to a rent of Rs. 150/ or even Rs. 250/ p.m.
The learned subordinate Judge pointed out that the annual rent of the building was assessed at Rs. 10,800/ for the years 1950 55.
This shows how low was the actual rent.
The history of the building in the hands of the head lessee shows that after an investment of Rs. 60,000/ the rent went upto Rs. 1,250 p.m. with additional rights (1) ; (2) 586 to the head lessee.
The building without the fittings and the land of the passage fetched Rs. 65,000/ .
Therefore a tenant willing to pay a better rent could easily have been found.
The case is thus not covered by the exception because we cannot hold that such a long lease on such a small rent was an act of prudence, whether it was a bona fide act or not, and whether the exception can apply to urban property.
This brings us to the next question.
It is whether the tenants could take advantage of the provisions of the East Punjab Urban Rent Restriction Act, 1949 ? The answer to this question deFends on whether we can say that there was a tenancy to protect.
We have shown above that the lease came to an end with the mortgagee 's interest in the property.
Although this was not a ,case of a redemption plain and simple because a straight redemption was refused, the property was put to sale and the purchaser paid off the mortgage in full.
The interests of the mortgagor and mortgagee united in the person of the purchaser anti the mortgage ceased to subsist.
In this view of the matter the purchaser, ,speaking in his character as a mortgagor, could claim that the mortgagee 's action came to an end and there did not subsist any relationship between him and the tenants.
The respondents attempted to argue that the Rent Restriction Act defines landlord and tenant with reference to the payment of rent.
A landlord means a person entitled to receive rent and a tenant means any person by whom or on whose account rent is payable.
These definitions apply if the tenancy, either real or statutory, could be said to survive after the termination of the mortgage.
The scheme of section 10 of the is that in the case of a mortgagor or a mortgagee, (a) the Competent Officer may pay to the Custodian or the claimant the amount payable under the mortgage debt and redeem the property, or (b) the Competent Officer may sell the mortgaged property for satisfaction of the mortgage debt and distribute the sale proceeds thereof, or (c) the Competent Officer may partition the property between the mortgagor and the mortgagee proportionate to their shares, or (d) adopt a combination of any of these measures.
It is obvious that method Co) was followed.
The property was sold and the mortgage was satisfied.
This led to the extinction of the mortgagees ' interest and the purchaser acquired full title to the property.
The termination of the mortgagee interest terminated the relationship of landlord and tenant and it could not, in the circumstances, be said to run with the land.
There being no landlord and no tenant, the provisions of the Rent Restriction Act could not apply any further.
Nor could it be said that when the mortgagor cancelled the rent note and autho 587 rised the mortgagee to find any other tenant, the intention was to allow expressly a tenancy beyond the term of the mortgage.
In this view of the matter the decision of the High Court and the court below cannot be said to be erroneous.
There remains to consider the question of mesne profits.
The High Court reduced the mesne profits to Rs. 250/ p.m. which was the actual rent paid for the building and the passage.
There is some doubt as to whether this sum included Rs. 100/ for the use of the passage.
However, we think that the matter is between the purchaser and the head lessee.
The rent of Rs. 250/ , although on a low side, was the actual rent on which the premises were held.
The High Court was, therefore, not wrong in limiting mesne profits to that figure.
The result is that both the appeals fail and will be dismissed with costs.
There will be a right to set off the costs and the resulting difference alone will be payable.
Y.P. Appeals dismissed.
| IN-Abs | The mortgagee of a property in which a cinema was run.
leased it to the first appellant on a monthly rental of Rs. 250/ for a period of 5 years renewable for 10 years by yearly renewals on the same terms.
The lessee was given the full right to use the property whether by itself or through.
agents or in partnership or by sub leasing.
The lessee sublet the premises after equipping the house with cinema machinery on a monthly rental of Rs. 1,250/ .
The property had been declared evacuee property, and the lessee applied under the for separation of his interest.
The Competent Officer ordered sale of the property, which was purchased for Rs. 65,000/ by the respondent.
Then (before the expiry of the term of the lease) the respondent filed a suit against the head lessee and the sub lessee for possession of the property.
On the questions (i) whether the respondent was entitled to possession before the expiry of the full term of the lease; and (ii) whether the subleases were protected under the East Punjab Urban Rent Restriction Act, 1949.
HELD: (i) No person can confer on another a better title than he himself has.
A mortgage is a transfer of an interest in specific immovable property for the purpose of securing repayment of a loan.
A mortgagee 's interest lasts only as long as the mortgage has not been paid off.
Therefore on redemption of the mortgage the title of the mortgagee comes to an end.
A derivative title from him must ordinarily come to an end with the termination of the mortgagee 's title.
The mortgagee by creating a tenancy becomes the lessor of the property, but his interest as lessor is coterminous with his mortgage interest.
The relationship of lessor and lessee cannot subsist beyond the mortgagee 's interest unless the relationship is agreed to by the mortgagor or a fresh relationship is recreated.
This the mortgagor or the person succeeding to the mortgagor 's interest may elect to do.
But if he does not, the lessee cannot claim any rights beyond the term of his original lessor 's interest.
[584 F] The exception to the above propositions is the one that flows from section 76(a) which lays down liabilities of a mortgagee in possession.
It is provided there that when during the continuance of the mortgage, the mortgagee takes possession of the mortgaged property, he must manage the property as a person of ordinary prudence would manage it if it were his own.
From this it is inferred that acts done bona fide and prudently in the ordinary course of management, may bind even after the termination of the title of the mortgagee in possession.
This principle applies ordinarily to the management of agricultural lands and has seldom been extended to urban property so as to tie it up in the hands of lessees or to confer on them rights under special statutes.
To this again there is an exception.
The base will continue to bind the mortgagor or persons deriving interest from him if the mortgagor had concurred to grant it.
[585 C] 582 The present case was not covered by the exception because such a long lease on a small rent could not be said to be an act of prudence, whether it was a bona fide act or not, and whether the exemption can apply to urban property.
Mahabir Gope and Ors.
vs Harbans Narain Singh, [1952] S.C.F. 775 and Asaram & Ors.
vs Mst.
Ram Kali, [1958] S.C.R: 986, followed.
(ii) A landlord means a person entitled to receive rent and a tenant means any person by whom or on whose account rent is payable.
These definitions apply if the tenancy, either real or statutory, could be said to survive after the termination of the mortgage.
The scheme of section 10 of the is that in the case of a mortgagor or a mortgagee, (a) the Competent Officer may pay to the Custodian or the claimant the amount payable under the mortgage debt and redeem the property or (b) the Competent Officer may sell the mortgaged property for satisfaction of the mortgage debt and distribute the sale proceeds thereof, or (c) the Competent Officer may partition the property between the mortgagor and the mortgagee proportionate to their shares, or (d) adopt a combination of any of these measures.
It is obvious that method (b) was followed.
The property was sold and the mortgage was satisfied.
This led to the extinction of the mortgagee 's interest and the purchaser acquired full title to the property.
The termination of the mortgagee interest terminated the relationship of landlord and tenant and it could not, in the circumstances, be said to run with the land.
There being no landlord and no tenant, the provisions of the Rent Restriction Act could not apply any further.
Nor could it be said that when the mortgagor cancelled the rent note and authorised the mortgagee to find any other tenant, the intention was to allow expressly a tenancy beyond the term of the mortgage.
[586 E]
|
Appeal No. 445 of 1966.
Appeal by special leave from the judgment and order dated March 9, 1964 of the Andhra Pradesh High Court in Letters Patent Appeal No. 2 of 1963.
M. C. Chagla and T. Satyanarayana, for the appellants.
P. Ram Reddy and K. Jayaram, for the respondents.
The Judgment of the Court was delivered by Shah, J.
One Appanna died on March 12, 1953, leaving him surviving no wife or lineal descendant.
Subba Rao claiming to be the father 's sister 's son of Appanna instituted suit No. 64 of 1953 in the Court of the Subordinate Judge, Eluru.
for partition and separate possession of his half share in the properties described in Schs.
A, B, C, D & E. The plaintiff claimed that Appanna died intestate, and that he and his brother Venugopala Rao were the nearest heirs entitled to the entire estate of Appanna.
To this suit were impleaded Pothana Apparao (husband of the sister of Mangamma wife of Appanna), his children, certain relations of Mangamma and the tenants on the lands in suit.
Venugopala Rao was impleaded as the 24th defendant.
The suit was defended by Pothana Apparao and others contending, inter alia, that Appanna had made and executed a will on July 14, 1948, devising his property in favour of various legatees and the plaintiff 's suit for a share in the property was on that account not maintainable.
The, Trial Court held that Appanna of his free will and while in a sound state of mind had executed the will on July 14, 1948, whereby he disposed of his properties described in Schs.
A, B, C, D & E, but the Court held that the disposition of the property in Schs.
C & E lapsed because Mangamma who was a legatee of the properties died before the testator, and that the direction in the will that whatever remained out of the Sch.
E property after the life time of Mangamma shall pass to Venkataswamy and Seshagirirao defendants Nos. 3 & 2 respectively or their descendants was void and incapable of taking effect.
The learned Judge accordingly passed a decree in favour of the plaintiff and the 24th defendant for possession of properties described in Schs.
C & E. 30 In appeal to the High Court of Andhra Pradesh, Chandrasekhar Sastry, J., allowed the appeal filed by Pothana Apparao and his two sons Venkataswamy and Seshagirirao, and dismissed the claim of the plaintiff in respect of Schs.
C & E properties.
An appeal under the Letters Patent filed by the plaintiffs against the judgment of Chandrasekhar, J. was dismissed.
It has been concurrently found by all the Courts that when he was in a sound and disposing state of mind Appanna executed on July 14, 1948, the will set up by the defendants.
In an appeal with special leave this Court will not ordinarily allow a question about due execution to be canvassed, and our attention is not invited to any exceptional circumstances which may justify a departure from the rule.
The only question which survives for consideration relates to the true effect of the dispositions made by the will in respect of Sch.
C and Sch.
E properties.
The relevant provisions of the will may first be set out: "I am now about forty years of age.
I do not have male or female issue.
My wife is alive.
and with the fear that I may not survive I have made the following Provisions in respect of my immovable and movable properties to be given effect to.
I have given power to my wife Mangamma to sell the immovable property mentioned in the C Schedule hereunder and utilise the amount for celebrating the marriage and other auspicious functions of Tholeti Narsimha Rao 's daughter Seetharatnam mentioned in the B Schedule and for constructing a Ramamandiram in Rajavaram village in my name.
"The immovable property mentioned in the E Schedule hereunder shall be enjoyed by my wife Mangamma with all powers of disposition by way of gift, sale, etc.
, Whatever remains out of the said E Schedule mentioned immovable property after her life time, (the said property) shall pass either to the said Ven kataswamy and Seshagiri or their descendants. .
In the event of my wife taking a boy in adoption the property mentioned in the E schedule hereunder shall pass to the said adoptee with all powers of disposition by way of gift, sale etc.
after her life time. . .
If, for any reason, the properties and rights do not pass to the individuals mentioned in the aforesaid 31 paras, such properties and rights shall be enjoyed by my wife Mangamma with absolute rights.
" Appanna had directed his wife Mangamma to sell the pro perties described in Sch.
C and to utilise the proceeds for two purposes, "celebrating the marriage and other auspicious functions" of Seetharatnam, and "for constructing a Ramamandiram in Rajavaram village" in his name.
But the marriage of Seetharatnam was celebrated during the lifetime of Appanna, and expenses in that behalf were defrayed by Appanna, and no expenses remained to be incurred after the death of Appanna.
Mangamma had no beneficial interest in Sch.
C property.
She was merely appointed to sell the property and to utilise the proceeds for the purposes specified in the will.
The Trial Judge clearly erred in holding that the estate lapsed because Mangamma died during the lifetime of Appanna.
In the view of Chandrasekhar Sastry, J., since there was a joint bequest for two purposes, and one of the purposes for which the Sch.
C properties were devised was accomplished by Appanna the bequest in its entirety must enure for the remaining purpose i.e. constructing a Ramamandiram, and the plaintiffs ' claim for possession of the C Schedule properties must fail.
The learned Judges of the High Court agreed with that view.
But there was no "joint bequest" of the properties.
In the absence of allocation of the amounts to be utilised for "celebrating the marriage and other auspicious functions" of Seetharatnam and for constructing a Ramamandiram, it must be presumed that the fund was to be utilised in equal moieties for the two purposes.
Failure of one of the purposes will result in a moiety of the amount devised falling into the residue.
In Jogeswar Narain Dea vs Ram Chund Dutt and Others(1) a devise under the will of a Hindu testator who had given a fouranna share of his estate to his daughter and her son for their maintenance with power of making alienation thereof by sale or gift fell to be construed.
The Judicial Committee held that on a true construction of the will each took an absolute interest in a two anna share in the estate.
In dealing with the contention that there was a joint estate granted to the daughter and her son the Judicial Committee observed : ". .
Mr. Branson. maintained upon the authority of Vydinada vs Nagammal (ILR that,.
by the terms of the will the Rani and the appellant became, in the sense of English law, joint tenants of the 4 annas share of Silda, and not tenants in common; and that her alienation of her share before it was severed, and without the consent of the other (1) L. R. 23 1.
A. 37,43.
32 joint tenant,, was ineffectual.
The circumstances of that case appear to be on all fours with the circumstances which occur here, and, if well decided, it would be a precedent exactly in point.
There are two substantial reasons why it ought not to be followed as an authority.
In the first place, it appears to their Lordships that the, learned Judges of the High Court of Madras were not justified in importing into the construction of a Hindu will an extremely technical rule of English conveyancing.
The principle of joint tenancy appears to be unknown to Hindu law, except in the case of coparcenary between the members of an undivided family." That principle applies here.
The fund was devised for the construction of a Ramamandiram at Rajavaram village and for "celebrating the marriage and other auspicious functions"of Seetharatnam.
Since no part of the fund was needed forthe benefit of Seetharatnam, the legacy failed pro tanto and fell into the residue.
Under the will Mangamma was made the owner of the residue, but by her death during the lifetime of Appanna the residuary bequest lapsed and vested as on intestacy in the plaintiff and the 24th defendant.
The devise of a moiety of the fund to be applied for the construction of a Ramamandiram however stands good and the trust must be carried out.
Mangamma is dead, but on that account the charitable trust is not extinguished The Trial Court must give appropriate directions for utilisation of that moiety for constructing a temple according to the direction of Appanna in the will.
The testator gave to his wife Mangamma an absolute interest in the E Schedule properties, for she was invested with all powers of disposition "by way of gift, sale etc.
" The will then proceeded to direct that whatever remained out of the E Schedule properties after her death shall pass to Venkataswamy and Seeshagirirao.
If Mangamma had survived Appanna, probably the devise in favour of Venkataswamy and Seshagirirao may have failed, but that question does not arise for consideration.
Section 105 of the , which applies to the wills of Hindus provides : "(1) If the legatee does not survive the testator, the legacy cannot take effect, but shall lapse and form part of the residue of the testator 's property, unless it appears by the will that the testator intended that it should go to some other person.
. " 33 Mr. Chagla for the plaintiffs contends that the estate in the E Schedule properties devised in favour of Mangamma lapsed, for, there was nothing in the will which expressly provided that in the event of Mangamma dying during the testator 's lifetime, the devise in favour of Venkataswamy and Seshagirirao shall be accelerated.
Counsel relies upon the judgment of Wickens, V. C., in Browne vs Hope(1) and contends that a legacy does not lapse, if the testator does two things he, in clear words, excludes lapse; and he clearly indicates the person who is to take the legacy in case the legatee should die in his lifetime.
In Browne 's case(1) the testator gave, by his will, the residue of his estate to trustees to pay and transfer the same to seven named legatees in equal shares as tenants in common, and their respective executors, administrators and assigns; and he declared that such shares shall be vested interests in each legatee immediately upon the execution thereof, and that the shares of the married women shall be for their separate use.
It was held that the share of one of the legatees a married woman who died after the date of the will but before the testator, did not belong to her husband, who was her legal personal representative, and it lapsed.
Counsel says that the rule of interpretation as enunciated by Vice Chancellor Wickens is incorporated in section 105 of the .
He submits that a legacy will not lapse only if the testator by express direction excludes lapse, and indicates clearly the person who shall take the legacy if the legatee dies during his lifetime.
We are concerned to construe the provisions of section 105 of the .
That section enacts that a legacy shall lapse and form part of the residue of the testator 's property if the legatee does not survive the testator except where it appears by the will that the testator intended that the legacy shall on the legatee not surviving him go to some other person.
We are unable to agree that the intention of the testator that a legacy shall not lapse may be given effect to only if the testator expressly directs that if the legatee dies during his lifetime the legacy shall go to some other person, and that intention to exclude lapse cannot be inferred.
Section 105(1) does not say, nor does it imply, that the testator must have expressly, envisaged the possibility of lapse in consequence of the legatee dying during his lifetime and must have made a provision for that contingency.
In In re.
Lowman Devenish vs Pester (2 ) a testator, who under a settlement was absolutely entitled to a moiety of the proceeds of a certain real estate under a trust for sale, by his will devised,, (1) L. R. 14 Equity Cases, 343.
(2) 34 that real estate by its proper description, together with certain real estate of his own, to trustees, to the use of H. for life, with remainder to trustees to preserve the contingent remainders, with remainder to the use of the first and other sons of H successively in tail male, with remainder to the use of the first and other sons of his niece E successively in tail male, with remainder to the use of the first and other sons of his niece M successively in tail male, with remainder to the use of the first and other sons of his niece F successively in tail male, with remainder over.
H survived the testator and died a bachelor.
M also survived the testator and died unmarried.
E was still alive but unmarried and seventy years of age.
F had two sons, the eldest of whom died before the testator.
It was held that when there are in a 'Will successive limitations of personal estate in favour of several persons absolutely, the first of those persons who survives the tes tator takes absolutely, although he would have taken nothing if any previous legatee had survived and had taken : the effect of the failure of an earlier gift is to accelerate, not to destroy, the later gift.
This rule was applied in In re.
Dunstan, Dunstan vs Dunstan(1).
A testatrix by her will gave freeholds absolutely to A, subject to the bequest that whatever out of the freeholds should remain after A 's death shall be given to a named charity.
It was held that if A had survived the testatrix the gift to the charity would have been repugnant and void, and A would have taken the freeholds absolutely.
But since A died in the lifetime of the testatrix, the doctrine of repugnancy did not apply, and the gift to charity was accelerated and took effect.
Mangamma died during the lifetime of the testator : thereby the estate in Sch.
E properties granted to Venkataswamy and his brother Seshagirirao was accelerated.
The plaintiffs are therefore not entitled to any share in Sch.
E properties.
The decree of the High Court is modified.
It is declared that there is intestacy in respect of a half share in the fund arising by sale of Sch.
C properties, and the plaintiff and the 24th defendant are entitled to take that half share in the fund.
It is directed that the Trial Court will issue appropriate directions for application of the other half of the fund arising by sale of Sch.
C properties for constructing Ramamandiram at Rajavaram village as directed by the testator in his will.
Subject to this modification the appeal will be dismissed.
The appellant will pay 3/4th of the costs of the contesting respondents in this Court.
Y.P. Appeal dismissed.
| IN-Abs | A Hindu executed a will directing his wife to sell, Sch.
C property and utilise the amount for celebrating the marriage of one Sitharathnam and for constructing a Ramamandiram in his name, and further devised that his wife shall enjoy Sch.
E property absolutely and after her life time whatever remained out it, it will pass to two named persons.
The wife predeceased the testator, and the marriage of Sitharathnam was celebrated in the testator 's life time and expenses in that behalf were defrayed by the testator.
The appellants who were the testator 's nearest heirs, claimed the properties contending that the disposition of the Sch.
C & E properties lapsed, because the wife who was the legatee of the properties died before the testator and that there was nothing in the will providing for the acceleration of Sch.
E property in case of the legatee 's dying in the testator 's life time.
HELD : (i) The wife had no beneficial interest in Sch.
C property.
She was merely appointed to sell the property and to, utilise the proceeds for the purposes specified in the will.
There was no "joint bequest" of Sch.
C properties.
In the absence of allocation of the amounts to be utilised for celebrating the marriage of Sitharathnam and for constructing a Ramamandiram, it must be presumed that the fund was to be utilised in equal moieties for the two purposes.
Failure of one of the purposes will result in a moiety of the amount devised falling into the residue.
Since no part of the fund was needed for the marriage of Sitharathnam the legacy failed pro tanto and fell into the residue.
Under the will the wife was made the owner of the residue, but by her death during the life time of testator the residuary bequest lapsed and vested as on intestacy in the nearest heirs of the testator.
The devise of a moiety of the fund to be applied for the construction of a Ramomandiram however stood good and the trust had to be carried out.
The wife died during the life time of the testator but on that account the charitable trust was not extinguished.
[31 E; 32 D] Jogeshwar Narain Deo vs Ram Chund Dutt and Others, L.R. 23 I.A. 37, 43, referred to.
(ii) The wife died during the life time of the testator : thereby the estate in Sch.
E properties granted to the named persons was accelerated.
The nearest heirs of the testators were therefore not entitled to any share in Sch.
E properties.
Section 105 of the , enacts that a legacy shall lapse and form part of the residue of the testator 's property if the legatee does not survive the testator except where it appears by the will that the testator intended that the legacy shall, on the legatee not surviving him, go to some other person.
It could not be said that the intention 29 of the testator that a legacy shall not lapse may be given effect to only if the testator expressly directs that if the legatee dies during his life time the legacy shall go to some other person, and that intention to exclude lapse cannot be inferred.
Section 105(1) does not say, nor does it imply, that the testator must have expressly envisaged the possibility of lapse in consequence of the legatee dying during his life time and must have made a provision for that contingency.
[33 F] Browne vs Hope, L.R. 14 Equity Cases 343; Lowman Devenish vs Pester, ; Dunstan, Dunstan vs Dunstan, , referred to.
|
Appeal No. 1648 of 1966.
Appeal from the judgment and decree dated July 9, 1964 of the Andhra Pradesh High Court in Writ Appeal No. 116 of 1963.
D. Narsaraju, A. Subba Rao and A.V.V. Nair, for the appellants.
P. Ram Reddy and .A. V. Rangam, for the respondents.
The Judgment of the Court was delivered by Grover J.
This is an appeal by certificate from a judgment of the Andhra Pradesh High Court given in a petition filed under article 226 of the Constitution by the appellants.
The facts may be stated.
The previous Maharajah of the impartible estate of Pithapuram in East Godavari District granted a lease on June 22, 1887 in favour of his third wife late Rani Subbayyamma Bahadur in respect of lands in various villages covering an area of acres 2669.65 cents.
The Rani executed a will on November 8, 1914 bequeathing all her property including the lease hold rights to the first appellant and on her death he succeeded to her estate.
On December 10, 1956 the first appellant transferred his lease hold rights in acres 2519.63 cents to the second 'appellant and reserved to himself the rights in and over the remaining area of acres 150.52 cents.
The third appellant an assignee from the second appellant.
L3 Sup.
CI/70) 4.
540 On the enactment of the Madras Estates (Abolition & Conversion into Ryotwari) Act, (Act XXVI of 1948), hereinafter called ' the Act, the title of which was changed to the Andhra Pradesh (Andhra Area) Estates (Abolition and Conversion into Ryotwari) Act, 1948, XXVI of 1948, the Pithapuram Estate was notified and abolished with effect from September 7, 1949.
The lands in question were taken over by the Government under the provisions of the Act and the Manager who had been ,appointed ordered that the rent should be collected direct from the tenants in possession of the lease hold lands under section 55(1) of the Act from the fasli year 1357 onwards on the reduced rates notified under the Madras Estates Land (Reduction of Rent) Act later called Andhra Pradesh (Andhra Area) Estates Land (Reduction of Rent) Act, Act XXX of 1947.
The first appellant filed a petition before the Estates Abolition Tribunal Vizianagram for payment of the proportionate share of compensation out of compensation payable for the estate of Pithapuram.
That petition was opposed by the Government and the principal land holder, according to whom, the claim of the first appellant was governed by section 20 of the Act.
This objection was upheld by the Tribunal.
On January 8, 1959 the High Court confirmed the order of the Tribunal in appeal holding that the first appellant 's rights were covered by section 20 of the Act.
In March 1960 the appellants filed a petition under article 226 of the Constitution praying for Various reliefs.
On September 9, 1960 the Government decided that as the lease was covered by section 20 of the Act the Board of Revenue be asked to terminate the same and to pay all the ,amounts collected as also the compensation payable under section 20 to the appellants.
On September 17, 1960 the Board of Revenue issued a notice to the appellants calling upon them to show cause as to why the lease hold rights in respect of acres 2669.65 cents should not be terminated.
The appellants sent a reply on October 17, 1960 representing that they had ,no objection to the termination of the lease provided the Government paid compensation to the appellants together with all the ,amounts so far collected by the Government from the lease hold lands without deducting any collection charges together with interest accruing thereon till the date of the payment.
On November 17, 1960 the Board formally terminated the lease and informed the appellants that compensation and all the amounts collected from the lease hold lands would be paid to them after deducting fist at 4 annas per acre and cesses etc.
but that no interest would be paid on the amounts collected by the Government and further that the Government was also entitled to deduct the collection charges.
On January 25, 1961 the Board made an order directing that the appellants should be ' paid a sum of Rs. 24,949.20 which was stated to be the net of collection made by the Government on the lease hold lands after deducting the cist at 4 annas per acre, cesses 'at 50% of the total 541 cesses payable and collection charges at 10% of the gross revenue collected.
The Board further observed that the actual extent of the lease hold lands came only to acres 2277.82 cents after the survey of which the portion transferred by the first appellant to the second appellant came to acres 2025.91 cents.
The amounts sanctioned by the Board represented the amounts collected on account of an area of acres 2025.91 cents.
The appellants raised objections to the extent of the land as also the amount of collections determined by the Board.
On October 23, 1961 the Board determined that a sum of Rs. 44,351.80 should be paid to the second appellant towards compensation payable under section 20 of the Act.
The payment, however, which was made was not for that amount and 'a sum of Rs. 4,000/ was deducted on the plea that some excess collection had been made by the lessee prior to the notified date.
Ultimately the second appellant was paid out of these amounts a sum of Rs. 1,499.16.
It was held that with regard to the extent of acres 150.52 cents on which the first appellant claimed compensation this area belonged to the Government and was not part of the estate.
The appellants raised various objections but without success.
A learned single judge of the High Court, who heard the writ petition, held that the proper course for the 'appellants to follow for the determination of the extent of the land was by way of a suit and that such a suit was not barred by section 20(2) of the Act.
It was held that there could have been no settlement under section 22 of the Act for Fasli 1369 ' and therefore the settlement rate in respect of that year should not be taken into consideration for computing the rate of compensation.
The deduction of 50% of cesses from the gross annual income was upheld.
No direction was given regarding payment of interest on the arrears of rent which had been withheld from 1950 to 1961.
It was held that the deduction of 10% towards incidental charges out of gross income instead o,f the net income was an error apparent on the face of the record and the order of the Board had to be revised accordingly.
The excess collections which had been made by the appellants from their tenants were to be deducted from the amount of rent due to the appellants and not from the compensation payable to them.
To a limited extent, therefore, the order of the Board was set aside and the case was remitted to it for disposal.
The appellants preferred an appeal to the High Court which was dismissed.
The first contention that has been raised on behalf of the 'appellants has a two fold aspect; first is that once there is notification of an estate under section 3 of the Act and the Government took possession of the lease hold lands the lessee ceased to have any rights relating thereto.
He was reduced to the position of a land 542 holder and whatever rights were preserved to him subsisted under section 20 of the Act.
The Government, from the notified date, became entitled to collect the rent as reduced under Act XXX of 1947.
But that was only till the ryotwari settlement was made and thereafter it was the settled rent which was payable.
Therefore for the period 1959 60 intervening between the ryotwari settlement and the termination of the lease the appellants were entitled to the rent at the rate at which it had been settled and not at the rate at which the reduced rent was payable under Act XXX of 1947.
According to the learned counsel for the appellants this would make a difference of about Rs. 2,200/ to which the appellants should have been found entitled apart from the other amounts which have been determined to be payable by way of rents which have been collected by the Government.
This ,contention does not appear to have been raised in this form either before the learned single judge or before the division bench of the High Court nor has it been clearly stated in the statement of case of the appellants.
It can be disposed of on the short ground that since it had not been raised before the High Court it is not open to the appellants to agitate it for the first time before this Court.
At any rate, there seems to be little force in the submission which has been made.
It cannot be disputed that the appellants were entitled to the amount collected by the Government under Act XXX of 1947 because even after the notification of the estate under section 3 of the Act the provisions of that Act including section 3 (4) relating to reduction of rents and the collection of the arrears of rent and the obligation to pay the same to the land holder continued to remain applicable.
Under section 16 every person whether land holder or a ryot who became entitled to ryotwari patta was liable to pay to the Government such assessment as might be lawfully imposed on the land.
That assessment had to be made by way of a ryotwari settlement under section 22.
Till the settlement was made the rent payable under Act XXX of 1947 was to constitute the land revenue payable to the Government from the notified date under section 23 of the Act.
But the assessment 'as settled under section 22 was a matter between the Government and the ryot and if, by virtue of the settlement, the Government was entitled to more amount than the rent which was payable under Act XXX of 1947 the appellants had no justification or right for claiming the excess amount.
The right of the lessee as land holder till terminated under section 20 of the Act was only to receive the rents collected under section 3(4) of Act XXX of 1947.
The other aspect with relates to the rate at which the compensation for termination of the lease hold rights payable to the 'appellants should have been computed was undoubtedly raised before the High Court.
What was urged and has now been reiterated is that as soon as a ryotwari settlement was brought into 543 force the provisions of Act XXX of 1947 ceased to be applicable owing to the provisions of section 23 of the Act.
Therefore for the purpose of compensation it was the settlement rate which should have been taken into account and not the rent payable under Act XXX of 1947.
Sub section (2) of section 20 provides that the person whose right has been terminated by the Government under the third proviso to sub section
(1 ) of the said section shall be entitled to compensation from the Government which shall be determined by the Board of Revenue in such manner as may be prescribed having regard to the value of the right and the unexpired portion of the period for which the right was created.
Rules have been framed in exercise o,f the power conferred by section 67 read with section 20(2) of the Act.
These rules are in the following terms: Rule 1. "The person, whose right has been terminated by the Government under the third proviso to sub section
(1) of section 20 of the Andhra Pradesh (Andhra Area) Estates (Abolition and Conversion into Ryotwari) Act, 1948, shall be entitled to compensation from the Government, which shall (i) in the case of 'a perpetual right, be equal to twenty times the net annual income derived by such person by virtue of such right; and (ii) in the case of a fight which was created for a specified number of years, be limited either to twenty times the net annual income derived by such person by virtue of such fight or the net annual income multiplied by the number of years of the unexpired portion of the period of such right, whichever is less.
Rule 2.
For purposes of rule 1, the net annual income of a person shall be the average net income during the three fasli years preceding the fasli year in which such right is terminated . . " The argument on behalf of the appellants is that the rates of rent prevailing in Fasli years 1367 and 1368 were the rents fixed under Act XXX of 1947 and the rate prevailing in Fasli year 1369 was the one settled under section 22 of the Act.
Therefore the average net income should have been computed with reference to the net reduced rate prevailing in Fasli years 1367 and 1368 and the settlement rate fixed in Fasli year 1369.
The view of the High Court was that till the determination of the lease under the third proviso to section 20(1 ) of the Act the rights which the appel 544 lants had acquired under the patta were preserved and if the Government had not undertaken to make these collections the tenants would have paid the land holder only the rents as reduced by Act XXX of 1947.
The ,fact that the Government had made the collections did not confer higher rights upon the appellants.
After referring to the provisions in section 23 that the land revenue payable to the Government with effect from the notified date shall, until the ryotwari settlement effected in pursuance of section 22 had been brought into force in the estate, be calculated in the manner set out in the section the question was examined by the High Court whether the rent that could be collected from the lease hold land would fall within the connotation of the land revenue payable to the Government.
Its considered opinion was that the rent payable to the land holder fell outside the range of section 22.
Therefore only the rent as fixed under Act XXX of 1947 in the three preceding years could be taken into account.
It must be remembered that the settlement rates represent what is payable to the Government as revenue in respect of the land granted on patta by the Government in the ryotwari settlement.
They do.
not represent what is due to persons like the appellants from their tenants.
We consider that it is not possible to equate the rents payable by the tenants to the appellants with the land revenue payable to the Government.
No exception could thus be taken to the manner and the measure of computing compensation.
The next contention raised is that in determining the compensation payable to the appellants it is the unexpired portion of the period for which lease was created that should have formed the basis and not the period provided by rule 1 (ii).
The unexpired portion of the lease, in the present case, was nearly 26 years.
It is submitted that rule 1 (ii) itself is contrary to the intendment of section 20(2) of the Act.
In this connection it is noteworthy that section 20(2) of the Act simply says that the rules must be framed having regard to the value of the right and the unexpired portion of the period for which the right was created.
That did not, in any way, fetter the power of the rule making authority to frame rule 1 (ii) in the manner in which it has been done.
Even where the lease creates a perpetual right the compensation payable has to be equal to 20 times the net annual income.
Where it is created for a specified number of years it has to be limited either to 20 times the net annual income or the net income multiplied by the number of years of unexpired portion of the period of lease "whichever is less".
If the unexpired portion is 26 years, as in the present case, the compensation could not be more than what it would be in the case of a perpetual lease.
Section 20(2)does not say that the amount of compensation must be arrived at only by multiplying the net income by the number of years of the un 545 expired portion of the lease.
As observed by the High Court it only envisages that this should be taken into account along with the value of the right.
We find no repugnancy between rule 1 (ii) and section 20(2) of the Act.
The next question on which a good deal of stress has been laid relates to the deduction made on account of the cesses.
It has been submitted that owing to section 3 (b) of the Act the estate vested in the Government and after such vesting there would be no land holder and therefore there was none to whom cesses were to be paid.
So the lessees even if originally liable to pay the cess ceased to be so Iiable after the vesting of the estate in the Government by virtue of section 3(f) which provides that the relationship of a land holder and a ryot shall, as between them, be extinguished.
It is pointed out that by virtue of the provisions of section 16 (1 ) of the Act the land holder or the ryot who became entitled to the 'ryotwari patta would be liable to pay to the Government such assessment as might be lawfully imposed on the land and these cesses were collected from the ryots by the Government.
Therefore the appellants were under no liability to pay the cess after the notified date.
Now in the patta dated June 22, 1887, there was a provision that the lessees would pay the local cess and other cesses payable by the ryots in accordance with the rules framed by the Government previously and to be framed in the future.
The High Court was right in saying that cess could not be excluded from the calculation of the net income because it had to be paid by the lessees along with the rent reserved under the lease.
This is substantiated by the definition of "rent" in section 3 (ii) of the Madras Estates Land Act which under section 2( 1 ) of the Act becomes incorporated in it.
The High Court referred also to numerous sections in the Act for the purpose of which rent includes any local tax, cess etc.
and it was observed that the word "rent" was of a comprehensive nature and there was no warrant for restricting its content.
Under rule 2 it was the average net income which had to be taken into consideration.
If the word "rent" is to be taken in a comprehensive sense as including taxes and cesses then the net income could only be arrived 'at by taking into account the cesses payable by the lessee.
In our judgment cesses had to be deducted from the annual gross income in arriving at the net annual income which could form the basis of compensation.
Lastly it has been contended that the appellants are entitled to interest on the amounts of unpaid rents in the hands of the Government for the period 1950 to 1961 as under section 55 of the Act after the notified date the land holder is not entitled to collect any rent which accrued due to him from any ryot before and is outstanding on that date.
It is the manager appointed under section 6 546 who alone would be entitled to collect the said 'amounts together with interest.
The amounts were collected but no payment was made to the appellants.
On the language of section 55 as well as under the general principles of law, it is submitted, the appellants should have been held to be entitled to the payment of interest on the amounts withheld by the Government.
Section 55 (1 ) clearly provides that it is the duty of the manager appointed under section 6 to collect not only the rent but also any interest payable thereon together with any cost which might have been decreed and he has to pay the same to the land holder.
It would appear that on the analogy of this provision an obligation existed on the part of the Government to pay interest to the land holders in case the amounts collected were not paid as and when collected.
In National Insurance Co. Ltd., Calcutta vs Life Insurance Corporation of India(1), the appellant carried on life insurance business in addition to other insurance business.
On the passing of the , which was intended to nationalise all life insurance business, "its controlled business" stood vested in the Life Insurance Corporation of India from the appointed date but the company was entitled to compensation.
The Life Insurance Tribunal to whom the dispute between the company and the Life Insurance Corporation had been referred awarded certain amount 'as compensation out of which a set off was to be allowed on a sum which was specified.
It was held that the company was entitled to interest on the balance at 4% per annum.
Reference was made in this case to a number of English and Indian decisions in which the rule has been laid down that though under the statute there is no provision for payment of interest it should, nevertheless, be awarded, the principle being that if the owner of an immovable property loses possession of it he is entitled to claim interest in place of the right to retain possession.
It may be mentioned that even under the Interest Act, 1839 the power to award interest on equitable grounds was expressly saved by the proviso to section 1.
In our opinion, and this position has not been seriously controverted on behalf of the respondents, the appellants should have been held entitled to interest at the rate of 6% per annum.
In the result the appeal is allowed only to the extent that it is declared that the appellants should have been paid interest at the rate of 6% per annum on the amount of rents collected by the manager on behalf of the Government and the final figure of compensation should have been determined after taking into account the amount of interest which accrued due to such of the appellants as were entitled to it.
In view of the entire circumstances there will be no order as to costs.
V.P.S. Appeal dismissed but interest allowed.
(1) [1963] Supp. 2 S.C.R. 971.
| IN-Abs | The appellants were the transferees of lease hold rights granted by the proprietor of an impartible estate in respect of lands in the estate.
The estate was notified and abolished in 1948 under the Andhra Pradesh (Andhra Area) Estates (Abolition and Conversion into Ryotwari) Act, 1948.
The Manager who was appointed collected the rent as reduced under the Madras Estates Land (Reduction of Rent) Act.
direct from the tenants in possession of the lease hold lands from the fasli year 1357, but did not pay it over to the appellants.
Ryotwari settlement was introduced in the lands in 1959 (fasli 1369), and in 1960 (fasli 1370), the lease, which was covered by section 20 of the Abolition Act, was terminated, the unexpired portion of the lease period being 26 years.
The appellants were paid in 1961: (1) certain sums towards the amount collected as rent till the termination of the lease, and (2) compensation.
No interest was paid on the rent collected by the Manager.
On the question regarding the correctness of the basis of the calculations made by the respondent, HELD: (1) The respondent was right in holding that the appellants were entitled only to the rents collected, under section 3(4) of the Rent Reduction Act, and not to the assessment made by way of ryotwari settlement under section 22 of the Abolition Act.
That assessment was a matter between the Government and the tenant and if, by virtue of it, the Government was entitled to more amount as land revenue than the rent payable under the Rent Reduction Act, the appellants had no right to such excess amount.
[542 F H] (2) (a) Under section 20(2) of the Abolition Act rules for determining compensation had to be framed having regard to the value of the right and the unexpired portion of the period for which the right was created.
Rule 1 (ii) framed under the section, provides that in the case of a right which was created for a specified number of years, the compensation shall be limited either to twenty times.
the net annual income or the net annual income multiplied by the unexpired portion of the period of such right, whichever is less; and, under r. 2, net annual income is the average net income during 3 lash years preceding the lash year in which the right was terminated.
Since the rule is framed having regard to the unexpired period, there is no repugnancy between the section and the rule.
[543 B G; 544 E H; 545 A] 539 (b) The settlement rates under the ryotwari settlement represent what is payable to the Government as revenue and do not represent what is due as rent to the appellants from their tenants.
Therefore, the respondent was right in determining the net annual income under r. 1 (ii) by taking into account only the rent as fixed under the Rent Reduction Act in the three preceding fasli years 1367 1369 and not the settlement rate for the fasli year 1369.
[544 D E] (c) The definition of rent in the Madras Estates Land Act, 1908, incorporated into the Abolition Act, and the sections of the Abolition Act show that 'rent ' includes any local tax, eess etc.
The original patta granted by the proprietor of the impartible estate provided that the lessees should pay the cesses.
Hence, the net income could only be arrived at by taking into account the eesses payable by the lessee.
Therefore, the respondent was justified in deducting from the annual gross income the cesses, for arriving at the net annual income which is the basis of compensation.
[54 5 E G] (3) On general principles of equity as well as under the Interest Act, 1839, the appellants were entitled to interest on the amount of rents collected by the Manager on behalf of the Government and not paid to the appellants, even though, under the statute, there is no provision for payment of interest.
[546 E G] National Insurance Co. Ltd. Calcutta vs
L. I. C. India, [1963] Supp.
2 S.C.R. 971, followed.
|
Appeals Nos. 182 and 183 of 1954.
Appeals under article 132(1) of the Constitution of India from the Judgment and Order, dated the 17th November, 1953, of the High Court of Judicature at Allahabad in Civil Miscellaneous Writ No. 414 of 1953, connected with Civil Miscellaneous Writs Nos. 537, 579 to 582, 587 to 595, 597 to 603, 617 to 620, 622, 623, 626 to 629, 633, 634, 638, 639, 651 to 654, 677 all of 1952 and 339 to 342, 351 to 355, 363, 372 to 374, 397, 416 to 464, 504 and 505 of 1953.
G. section Pathak (V. D. Bhargava and Naunit Lal, with him) for the appellants.
K. L. Misra, Advocate General for the State of U.P., and Jagdish Swarup (J. K. Srivastva and C. P. Lal, with them) for the respondents.
October 13.
The Judgment of the Court was delivered by MUKHERJEA J.
The appellant in these two analogous appeals, along with many others, have been carrying on the business of plying motor vehicles, as ,stage carriages ' on hire, on the Bulandshabr Delhi route from a number of years past.
The running of these vehicles has been regulated so long by the Motor Vehicles Act of 1939 which provides, inter alia, for granting of driving licences, the registration of vehicles and exercising control over transport vehicles through permits granted by Regional Transport Authorities.
Section 42(3) of the Act exempts transport vehicles, owned by or on behalf of the Central Government or the Provincial Government from the necessity of obtaining permits unless the vehicles were used in connection Path the business of an Indian State Railway.
It appears, that some time after 1947 the Government of U. P. conceived the idea of running their own buses on the public thoroughfares.
They first started running buses only as competitors with the private operators but later on they decided to exclude all private bus owners from the field and establish a complete State monopoly in respect to the road transport business.
They sought to achieve this object by 711 calling in aid the provisions of the Motor Vehicles Act itself.
Under section 42(3) of the Act as mentioned above, the Government had not to obtain permits for their own vehicles and they could run any number of buses as they liked without the necessity of taking out permits for them.
The Transport Authorities, in furtherance of this State policy, began cancelling the permits already issued to private operators and refusing permits to people who would otherwise have been entitled to them.
Upon this, a number of private bus owners filed petitions in the Allahabad High Court under article 226 of the Constitution praying for appropriate relief, by way of writs, against what was described as the illegal use of the provisions of the Motor Vehicles Act by the Government of U. P.
These petitions were heard by a Full Bench of five Judges and four judgments were delivered dealing with various questions that were raised by the parties.
A majority of the judges expressed the opinion that the State, purporting to act under section 42(3) of the Motor Vehicles Act, could not 'discriminate against other persons in their own favour and that the sub section, in so far as it purports to exempt State Transport buses from the obligation to obtain permits for their use, conflicts with article 14 of the Constitution.
All the judges concurred in holding that nationalisation of an industry was not possible by a mere executive order without appropriate legislation and such legislation would probably have to be justified under article 19(6) of the Constitution.
As a result of this decision the Transport Authorities were directed to deal with the applications for permits, made by the various private bus owners, in accordance with the provisions of the Motor Vehicles Act, without in any way being influenced by the consideration that the State Government wanted to run buses of their own on certain routes.
In view of this pronouncement of law, the State Government, which wanted to have the exclusive right to operate Road Transport Services within its territory, sought the assistance of the Legislature and the U. P. Road Transport Act (Act II of 1951) was passed and 712 became law on and from the 10th of February, 1951.
It is the constitutional validity of this enactment which is the subject matter of contest in these present proceedings.
The preamble to the Road Transport Act (hereinafter called "The Act") says: "Whereas it is expedient in the interest of the general public and for the promotion of the suitable and efficient road transport to provide for a State Road Transport Services in Uttar Pradesh, it is enacted as follows.
" Section 2 gives definitions of certain terms, while section 3, which is the most material section in the Act, embodies virtually its whole purpose.
It provides that where the State Government is satisfied that it is necessary, in the interest of general public and for sub serving the common good, so to direct, it may declare that the Road Transport Services in general, or any particular class of such service on any route or portion thereof, shall be 'run and operated by the State Government exclusively or by the State Government in conjunction with railway or partly by the State Government and partly by others in accordance with the provisions of this Act.
Section 4 provides for publication of a scheme framed in accordance with the above declaration and objections to such scheme can be made by interested persons in the manner laid down in section 5.As soon as the scheme is finalised, certain consequences follow which are detailed in section 7.
So long as the scheme continues in force, the State Government shall have the exclusive right to operate Road Transport Services, or if the scheme so provides, a certain fixed number of transport vehicles belonging to others can also be run on those roads.
The State Government shall be authorised in all such cases to direct the dispensation of the State Transport vehicles from the necessity of taking out permits, or to cancel, alter or modify any existing permits or to add any fresh condition to any permit in respect of any transport vehicle.
The remaining portion of the Act purports to lay down how the provisions of the Act are to be worked out and implemented.
Sections 8 and 9 provide respectively for the appointment of a Transport Commission and Advisory Committees.
Under section 10 the State Government may delegate its powers under the Act to an officer or authority subordinate to it.
Section 12 makes it an offence for any person to drive a public service vehicle or allow such vehicle to be used in contravention of the provisions of section 7.
It is not necessary to refer to the provisions of the remaining sections as they are not material for our present purpose.
By a notification dated the 25th of March, 1953, the U. P. Government published a declaration in terms of section 3 of the Act, to the effect, that the State carriage services, among others, on the Bulandshar Delhi route, shall be run and operated exclusively by the State Government.
A further notification issued on the 7th of April following set out what purported to be a scheme for the operation of the State carriage services on these routes.
Thereupon the two appel lants as well as several other private bus owners numbering 106 in all, who plied transport buses on these routes, presented petitions under article 226 of the Constitution before the High Court at Allahabad praying for writs, in the nature of mandamus, directing the U. P. Government and the State Transport Authorities not to interfere with the operation of the stage carriages of the petitioners and to refrain from operating the State Road Transport Service except in accordance with the provisions of the Motor Vehicles Act.
The constitutional validity of the Act was challenged on a number of grounds, the principal contentions being: (1)that the Act was discriminatory in its character and contravened the provisions of article 14 of the Constitution; (2)that it conflicted with the fundamental rights of the petitioners guaranteed under article 19(1)(g) of the Constitution; and (3)that it was an invalid piece of legislation as it purported to acquire the interest of the petitioners in a commercial undertaking without making any provision for compensation as is required under article 31(2) 714 of the Constitution.
It was further argued that the Act violated the guarantee of freedom of inter State and intra state trade embodied in article 301 of the Constitution.
All these writ petitions were heard by a Division Bench of the High Court consisting of Mukherji and Chaturvedi JJ.
By two separate but concurring judgments dated the 17th of November, 1953, the learned Judges repelled all the contentions of the petitioners and dismissed the writ petitions.
It is against this decision that these two appeals have come up to this Court on the strength of certificates granted by the High Court and Mr. Gopal Swarup Pathak appearing in support of the appeals has reiterated practically all the grounds which were urged on behalf of his clients in the Court below.
We will take up these points in proper order and it will be convenient first of all to address ourselves to the two allied questions, viz., whether the appellants could claim any fundamental right under article 19(1)(g) of the Constitution which can be said to have been violated by the impugned legislation, and whether the Act has deprived them of any 'property ' which would attract the operation of article 31 of the Constitution? Mr. Pathak argues that a right to carry on any occupation, trade or business is guaranteed to all citizens by article 19(1)(g) of the Constitution.
The appellants in the present cases were carrying on the business of plying buses on hire on a public highway until now and the Act which prevents them from pursuing that trade or business conflicts therefore with the fundamental right guaranteed under article 19(1)(g) of the Constitution.
It is said also that this beneficial interest of the appellants in the commercial undertaking is 'property ' within the meaning of article 31(2) of the Constitution and as the Act does not conform to the requirements of that article, it must be held to be void.
Mr. Pathak put forward another and a somewhat novel argument that the right of the appellants to use a public highway for purposes of trade is in the nature of an easement and as such can be reckoned as property 715 in law; consequently there has been a deprivation of property by the impugned legislation in this sense also.
This contention seems to us to be untenable and it was rightly abandoned by the learned counsel.
The Advocate General appearing for the State of 'U. P. did not and could not dispute that a right to pursue any trade, business or occupation of one 's choice is guaranteed by the Constitution.
He says however that this does not mean that a citizen can carry on his trade or business anywhere he likes and such right is also guaranteed by the Constitution.
He must have a legal right to use a particular place for purposes of his trade or business, before he can resist any encroachment upon it on the strength of the constitutional guarantee.
His argument in substance is, that the bus owners, as members of the public, have no legal right to ply buses on hire on any public road.
The only right which a member of the public can assert in respect of a highway is the right of passing and repassing over it.
The State in which all public ways vest under the law has the sole right to determine whether it would allow any citizen to carry on a trade or business upon a public highway and if so, to what extent.
The citizen has no inherent right in this respect apart from any State sanction.
The position, therefore is, that the rights of the appellants, as indeed those of the other bus owners, are created entirely by State legislation and by State legislation they could be deprived of the same.
There is no question of any conflict with the fundamental right guaranteed under article 19(1)(g) of the Constitution in such cases.
The argument requires careful consideration.
It is not disputed that the Bulandshahr Delhi route is a part of the Grand Trunk Road which is a public highway.
According to English law, which has been applied all along in India, a highway has its origin, apart from statute, in dedication, either express or implied, by the owner of land of a right of passage over it to the public and the acceptance of that right by the public (1).
In the large majority of cases this dedication is presumed from long and uninterrupted (1) Vide Pratt & Mackenzie on Law of Highways, 19th edn.p. 13.716 user of a way by the public, and the presumption in such cases is so strong as to dispense with all enquiry into the actual intention of the owner of the soil and it is not even material to enquire who the owner was ().
The fact that the members of the public have a right of passing and repassing over a highway does not mean however that all highways could be legitimately used as foot passages only and that any other user is possible only with the permission or sufferance of the State.
It is from the nature of the user that the extent of the right of passage has to be inferred and the settled principle is that the right extends to all forms of traffic which have been usual and accustomed and also to all which are reasonably similar and incidental thereto ( 2).
The law has thus been stated in Halsbury 's Laws of England(1): "Where a highway originates in an inferred dedication, it is a question of fact what kind of traffic it was so dedicated for, having regard to the character of the way and the nature of the user prior to the date at which they infer dedication; and a right of passage once acquired will extend to more modern forms of traffic reasonably similar to those for which the highway was originally dedicated, so long as they do not impose a substantially greater burden on the owner of the soil.
" There can be no dispute that the Grand Trunk Road which, as a public highway, has been in existence since the 15th Century A. D. has been used for all sorts of vehicular traffic that were in vogue at different times.
Motor vehicles were certainly not known when the road came into existence but the use of motor vehicles in modern times as means of locomotion and transport could not, on the principle stated above, amount to an unwarrantable extension of the accustomed user to which the highway is subjected.
If there is any danger to the road by reason of such user, or if such user by one interferes with the user by others, it is up to the State to regulate the motor traffic or reduce the number or weigh of vehicles on the road in any way it likes, and to that no objection can possibly be taken.
But the right of the public to use motor vehicles on the public road cannot, in any sense, be regarded as a right created by the Motor Vehicles Act.
The right exists anterior to any legislation on this subject as an incident of public rights over a highway.
The State only controls and regulates it for the purpose of ensuring safety, peace, health and good morals of the public.
Once the position is accepted that a member of the public is entitled to ply motor vehicles on the public road as an incident of his right of passage over a highway, the question is really immaterial whether he plies a vehicle for pleasure or pastime or for the purpose of trade and business.
The nature of the right in respect to the highway is not in any way affected thereby and we cannot agree with the learned AdvocateGeneral that the user of a public road for purposes of trade is an extraordinary or special use of the highway which can be acquired only under special sanction from the State.
The learned Advocate General in support of his contention has referred us to a few American cases on the point.
In the case of Packard vs Banton(1), Sutherland J. observed as follows: " The streets belong to the public and are primarily for the use of the public in the ordinary way.
Their use for purposes of gain is special and extraordinary and generally at least may be prohibited or conditioned as the Legislature deems proper.
" This decision was approved in Frost vs Railroad Commission(1), and again in Stephenson vs Binford(3), where Sutherland J. practically reiterated his observations in the previous case as follows: " It is a well established law that the highways of the State are public property; that their primary and preferred use is for private purposes; and that their use for purposes of gain is special and extraordinary which generally at least the Legislature may prohibit or condition as it sees fit.
We do not think that this is the law of India under our Constitution.
The cases referred to above were noticed by the Allahabad High Court in the Full Bench decision of Motilal vs Uttar Pradesh Government(1), and two of the learned Judges constituting the Full Bench expressed their opinion that this 'doctrine of exceptional user ' might have been evolved by the American Courts in the same way as they evolved the 'doctrine of police powers. ' They both held that this American rule did not embody the English or the Indian law on the subject.
This identical point was investigated with considerable thoroughness in a recent decision of the Madras High Court in C. section section Motor Service vs State of Madras(2), and it was pointed out by Venkatarama Ayyar J. who delivered the judgment of the Court, that the rule of special or extraordinary use of highways in America had its roots in the doctrine of 'franchise ', which is still a recognised institution in that country.
The doctrine of 'franchise ' or 'privilege ' has its origin in English Common Law and was bound up with the old prerogative of the Crown.
This doctrine continued to live in the American legal world as a survival of the pre independence days, though in an altered form.
The place of the royal grants under the English Common Law was taken by the legislative grants in America and the grant of special rights by legislation to particular individuals or companies is regarded there as a 'franchise ' or 'Privilege ' differing from the ordinary liberties of a citizen.
The carrying on of transport buses by common carriers on the public road in America is a 'franchise ' and not a common law right, which could be claimed by all citizens and a distinction is made, as the cases cited above will show, between contract carriers who carry passengers or goods under particular contracts and common carriers whose business is affected with public interest.
Over the latter the State claims and exercises a plenary power of control.
Ayyar J. has, in our opinion, rightly pointed out that this doctrine of 'franchise ' has no place in our Constitution.
Under the Indian Constitution the contract (i) I.L.R. 1951 All. 257.(2) 719 carries as well as the common carriers would occupy the same position so far as the guaranteed right under article 19(1) (g) is concerned and both are liable to be controlled by appropriate regulations under clause (6) of that article.
The law on the point, as it stands at present, has been thus summed up by the learned Judge : "The true position then is, that all public streets and roads vest in the State, but that the State holds them as trustees on behalf of the public.
The members of the public are entitled as beneficiaries to use them as a matter of right and this right is limited only by the similar rights possessed by every other citizen to use the pathways.
The State as trustees on behalf of the public is entitled to impose all such limitations on the character and extent of the user as may be requisite for protecting the rights of the public generally ;. . but subject to such limitations the right of a citizen to carry on business in transport vehicles on public pathways cannot be denied to him on the ground that the State owns the highways.
" We are in entire agreement with the statement of law made in these passages.
Within the limits imposed by State regulations any member of the public can ply motor vehicles on a public road.
To that extent he can also carry on the business of transporting passengers with the aid of the vehicles.
It is to this carrying on of the trade or business that the guarantee in article 19(1) (g) is attracted and a citizen can legitimately complain if any legislation takes away or curtails that right any more than is permissible under clause (6) of that article.
The legislation in the present case has excluded all private bus owners from the field of transport business.
Prima facie it is an infraction of the provision of article 19(1) (g) of the Constitution and the question for our consideration therefore is whether this invasion by the Legislature of the fundamental right can be justified under the provision of clause (6) of article 19 on the ground that it imposes reasonable restrictions on the exercise of the right in the interests of the general public.
720 Article 19(6) of the Constitution, as it stands after the amendment of 1951, makes a three fold provision by way of exception to or limitation upon clause (1) (g) of the article.
In the first place it empowers the State to impose reasonable restrictions upon the freedom of trade, business, occupation or profession in the interests of the general public.
In the second place it empowers the State to prescribe the professional and technical qualifications necessary for practicing any profession or carrying on any occupation, trade or business.
Thirdly, and this is the result of the Constitution (First) Amendment Act of 1951 it enables the State to carry on any trade or business either by itself or through a corporation owned or controlled by the State to the exclusion of private citizens wholly or in part.
It is not disputed that the third provision which was introduced by the amendment of the Constitution in 1951 was not in existence when the impugned Act was passed and the High Court rightly held that the validity of the Act is not to be decided by applying the provision of the new clause.
The learned Judges held however that quite apart from the new provision, the creation of a State monopoly in regard to transport service, as has been done under the Act, could be justified as reasonable restrictions upon the fundamental right enunciated in article 19(1) (g) of the Constitution imposed in the interests of the general public.
The question is, whether the view taken by the High Court is right? To answer this question three things will have to be considered.
The first is, whether the expression "restriction" as used in article 19(6) and for the matter of that in the other sub clauses of the article, means and includes total deprivation as well? If the answer is in the affirmative, then only the other two questions would arise, namely, whether these restrictions are reasonable and have been imposed in the interests of the general public ? According to the meaning given in the Oxford Dictionary, the word "restriction" connotes a 'limitation ' imposed upon a person or a thing, a 'condition or regulation ' of this nature, though the use of the word in the sense of suppression is not 721 altogether unknown.
In the case of Municipal Corporation of the City of Toronto vs Virgo(1), Lord Davey while discussing a statutory power conferred on a Municipal Council to make bye laws for regulating and governing a trade made the following observation: " No doubt the regulation and governance of a trade may involve the imposition of restrictions on its exercise. where such restrictions are in the opinion of the public authority necessary to prevent a nuisance or for the maintenance of order.
But their Lordships think that there is a marked distinction to be drawn between the prohibition or prevention of a trade and the regulation or governance of it, and indeed a power to regulate and govern seems to imply the continued existence of that which is to be regulated or governed.
" This line of reasoning receives support from the observations made by some of the learned Judges of this Court in their respective judgments in the case of A. K. Gopalan vs The State (2).
The question for consideration in that case was the constitutional validity of the Preventive Detention Act and one of the contentions raised by the learned counsel for the appellant in attacking the validity of the legislation was, that it invaded the right of free movement guaranteed under article 19(1)(d) of the Constitution ; and as the restrictions imposed by it could not be regarded as reasonable restrictions within the meaning of clause (5) of the article, the enactment should be held to be void.
This argument was repelled by the majority of the Judges inter alia on the ground that a law which authorises the deprivation of personal liberty did not fall within the purview of article 19 and its validity was not to be judge d by the criteria indicated in that article but depended on its compliance with the requirements of articles 21 and 22 of the Constitution.
The expression Personal liberty" as used in article 21, it was said, was sufficiently comprehensive to include the particular freedoms enumerated in article 19(1) and its deprivation therefore in accordance with the provision of article 21 would result in automatic extinction of the other freedoms also.
In this connection reference was made to (1) ,93.(2) ; 722 the several sub clauses of article 19 and Patanjali Sastri J. expressed his views in the following words: "The use of the word 'restrictions ' in the various sub clauses seems to imply, in the context, that the rights guaranteed by the Article are still capable of being exercised, and to exclude the idea of incarceration though the words 'restriction and deprivation ' are sometimes used as inter changeable terms, as restriction may reach a point where it may well amount to deprivation.
Read as a whole and viewed in its setting among the group of provisions relating to 'right to freedom ', Article 19 seems to my mind to presuppose that the citizen to whom the possession of these fundamental rights is secured retains the substratum of personal freedom on which alone the enjoyment of these rights necessarily rests.
" The point for consideration in that case was undoubtedly different from the one that has arisen in the present case and the question whether the restrictions enumerated in the several sub clauses of article ' 19 could go to the length of total deprivation of these liberties was neither raised nor decided in that case.
But a distinction was drawn by the majority of learned Judges between negation or deprivation of a right and a restriction upon it and although it was said.
that restriction may reach a point where it might amount to deprivation, yet restrictions would normally pre suppose the continued existence no matter even in a very thin and attenuated form of the thing upon which the restrictions were imposed.
Kania C.J. in his judgment (vide page 106) expressly said: Therefore Article 19(5) cannot apply to a substantive law depriving a citizen of personal liberty.
I am unable to accept the contention that the word 'deprivation ' includes within its scope 'restriction ' when interpreting Article 21.
" Against this view it may be urged that the use of the words 'deprivation" and "restrictions" as interchangeable expressions is not altogether unusual in ordinary language and the nature and extent of restrictions might in some cases amount to a negation of the right.
The Orissa, High Court in the care of Lokanath 723 Misra vs The State of Orissa (1) accepted this view and made a distinction between "regulation" and "restriction".
In the opinion of the learned Judges the observations of Lord Davey in Municipal Corporation of the City of Toronto vs Virgo (supra) referred to above could be distinguished on the ground that the expression used in that article was not 'restriction ' but regulation ' and 'governing '.
It is said that the framers of the Constitution were aware of the distinction between the power to 'regulate ' and the power to 'restrict ' and this would be apparent from a scrutiny of sub clause 'a) of clause (2) of article 25 of the Constitution where the words "regulating" and "restricting" occur in juxtaposition indicating thereby that they were not intended to convey the same meaning.
On behalf of the respondents much reliance has also been placed on a decision of this Court in Cooverjee vs The Excise COMMISSIONER, etc.
(2) where the point for consideration was the validity of the Excise Regulation I of 1915.
It was contended, inter alia, on behalf of the appellant in that case that the Excise Regulation and the auction sales made thereunder were ultra vires, as the law purported to grant monopoly of that trade to a few persons and this was inconsistent with article 19(1)(g) of the Constitution.
This contention was negatived and this Court held that for the purpose of determining reasonable restrictions within the meaning of article 19(6) of the Constitution on the right given under article 19(1)(g), regard must be had to the nature of the business and the conditions prevailing in a particular trade.
The State has certainly the right to prohibit trades which are illegal or immoral or injurious to the health and welfare of the public.
The relevant portion of the judgment runs as follows: " Article 19(1)(g) of the Constitution guarantees that all citizens have the right to practise any profession or to carry on any occupation or trade or business, and clause (6) of the article authorises legislation which imposes reasonable restrictions on this right in the interests of the general public.
It was not disputed that in order to determine the reasonableness (1) A.I.R. 1952 Orissa 42, (2) ; 724 of the restriction regard must be had to the nature of the business and the conditions prevailing in that trade. .
It can also not be denied that the State has the power to prohibit trades which are illegal or immoral or injurious to the health and welfare of the public.
Laws prohibiting trades in noxious or dangerous goods or trafficking in women cannot be held to be illegal as enacting a prohibition and not a mere regulation.
" It is contended on behalf of the respondents that these observations clearly indicate that the expression "reasonable restriction" as used in article 19(6) of the Constitution might, in certain circumstances, include total prohibition.
It may be mentioned here that the Excise Regulation is not a prohibitory statute which prohibits trading in liquor by private citizens altogether.
It purports to regulate the trade in a particular way, namely, by putting up the right of trading in liquor in specified areas to the highest bidder in auction sale.
The general observations occurring in the judgment cited above must therefore have to be taken with reference to the facts of that case. ' Be that as it may, although in our opinion the normal use of the word "restriction" seems, to be in the sense of "limitation" and not "extinction", we would on this occasion prefer not to express any final opinion on this matter.
If the word, "restriction" does not include total prohibition then the law under review cannot be justified under article 19(6).
In that case the law would be void unless it can be supported by article 31.
That point will be dealt with under the other point raised in the appeal.
If however the word "restriction" in article 19(6) of the Constitution be taken in certain circumstances to include prohibition as well, the point for consideration then would be, whether the prohibition of the right of all private citizens to carry on the business of motor transport on public roads within the State of Uttar Pradesh as laid down by the Act can be justified as reasonable restrictions imposed in the interests of the general public.
As has been held by this Court in the case of Gooverjee vs The Excise, Commissioner, etc.(1) whether (I) ; 725 the restrictions are reasonable or not would depend to a large extent on the nature of the trade and the conditions prevalent in it.
There in nothing wrong in the nature of the trade before us, which is perfectly innocuous.
The learned Judges of the High Court have upheld the validity of the legislation substantially on two grounds.
In the first place, they have relied on what may be said to be an abstract proposition of law, that prohibition with a view to State monopoly is not per se unreasonable.
"In my opinion", thus observes one of the learned Judges, "even this total stoppage of trade on public places and thoroughfares cannot always be said to be an unreasonable restriction".
In the second place, it has been said that the transport services are essential to the life of the community and it is conducive to the interests of the general public to have an efficient system of transport on public roads.
It is pointed out that the preamble to the Act indicates that the legislation was ' passed in the interests of the general public who are undoubtedly interested in a suitable and efficient road transport service, and it was not proved by the petitioners that the monopoly, which was contemplated in favour of the State in regard to this particular business, was not conducive to the common welfare.
As a proposition of law, the first ground may not admit of any dispute but we think that the observations of Lord Porter in the Privy Council case of Commonwealth of Australia and Others vs Bank of New South Wales and Others (1) upon which considerable reliance has been placed by the High Court would indicate the proper way of approach to this question ' "Their Lordships do not intend to lay it down", thus observed Lord Porter, "that in no circumstances could the exclusion of competition so as to create a monopoly either in a State or Commonwealth agency or in some other body be justified.
Every case must be judged,on its own facts and in its own setting of time and circumstance, and it may be that in regard to some economic activities and at some stage of social development it might be maintained that prohibition with a view to State monopoly was the only practical and reasonable (1) , 311.93 726 manner of regulation".
In order to judge whether State monopoly is reasonable or not, regard therefore must be had to the facts of each particular case in its own setting of time and circumstances.
It is not enough to say that as an efficient transport service is conducive to the interests of the people, a legislation which makes provision for such service must always be held valid irrespective of the fact as to what the effect of such legislation would be and irrespective of the particular conditions and circumstances under which the legislation was passed.
It is not enough that the restrictions are for the benefit of the public, they must be reasonable as well and the reasonableness could be decided only on a conspectus of all the relevant facts and circumstances.
With regard to the second point also we do not think that the learned Judges have approached the question from the proper stand point.
There is undoubtedly a presumption in favour of the constitutionality of a legislation.
But when the enactment on the face of it is found to violate a fundamental right guaranteed under article 19(1)(g) of the Constitution, it must be held to be invalid unless those who support the legislation can bring it within the purview of the exception laid down in clause (6) of the article.
If the respondents do not place any materials before the Court to establish that the legislation comes within the permis sible limits of clause (6), it is surely not for the appel lants to prove negatively that the legislation was not reasonable and was not conducive to the welfare of the community.
In the present case we have absolutely no materials before us to say in which way the establishment of State monopoly in regard to road transport service in the particular areas would be conducive to the general welfare of the public.
We do not know the conditions of the bus service at the present moment or the conveniences or inconveniences of the public in regard to the same; nor we are told how the position is likely to improve if the State takes over the road transport service and what additional amenities or advantages the general public would enjoy in that event.
We mention these matters only to show 727 that these are relevant facts which might help the Court in coming to a decision as to the reasonableness or otherwise of the prohibition, but unfortunately there are no materials in the record relating to any one of them.
One thing, however, in our opinion, has a decided bearing on the question of reasonableness and that is the immediate effect which the legislation is likely to produce.
Hundreds of citizens are earning their livelihood by carrying on this business on various routes within the State of Uttar Pradesh.
Although they carry on the business only with the aid of permits, which are granted to them by the authorities under the Motor Vehicles Act, no compensation has been allowed to them under the statute.
It goes without saying that as a result of the Act they will all be deprived of the means of supporting themselves and their families and they will be left with their buses which will be of no further use to them and which they may not be able to dispose of easily or at a reasonable price.
It may be pointed out in this connection that in Part IV of the Constitution which enunciates the directive principles of State policy, article 39(a) expressly lays down that the State shall direct its policy towards securing "that the citizens, men and women equally, have the right to an adequate means of livelihood.
" The new clause in article 19(6) has no doubt been introduced with a view to provide that a State can create a monopoly in its own favour in respect of any trade or business; but the amendment does not make the establishment of such monopoly a reasonable restriction within the meaning of the first clause of article 19(6).
The result of the amendment is that the State would not have to justify such action as reasonable at all in a Court of law and no objection could be taken to it on the ground that it is an infringement of the right guaranteed under article 19(1)(g) of the Constitution.
It is quite true that if the present statute was passed after the coming into force of the new clause in article 19(6) of the Constitution, the question of reasonableness would not have arisen at all and the appellants ' case on this point, at any rate, would have been inarguable.
These are however 728 considerations which cannot affect our decision in the present case.
The amendment of the Constitution, which came later, cannot be invoked to validate an earlier legislation which must be regarded as unconstitutional when it was passed: As Professor Cooley has stated in his work on Constitutional Limitations(1) "a statute void for u`constitutionality is dead and cannot be vitalised by a subsequent amendment of the Constitution removing the constitutional objection but must be re enacted".
We think that this is sound law and our conclusion is that the legislation in question which violates the fundamental right of the appellants under article 19(1)(g) of the Constitution and is not shown to be protected by clause (6) of the article, as it stood at the time of the enactment, must be held to be void under article 13(2) of the Constitution.
We now come to the second point which is in a manner connected with the first and the question is: If the effect of prohibition of the trade or business of the appellants by the impugned legislation amounts to deprivation of their property or interest in a commercial undertaking within the meaning of article 31(2) of the Constitution, does not the legislation offend against the provision of that clause inasmuch as no provision for compensation has been made in the Act ? It is not seriously disputed on behalf of the respondents that the appellants ' right to ply motor vehicles for gain is, in any event, an interest in a commercial undertaking.
There is no doubt also that the appellants have been deprived of this interest.
In the opinion of the High Court, in the circumstances of the present case, there is no scope for operation of article 31(2) of the Con stitution and the reason for taking this view is thus given in the judgment of one of the learned Judges: "The question is whether by depriving the private operators of their right to run buses on certain routes and by deciding to run the routes itself the State acquired the right which was of the petitioners ? To me it appears that it could not be said that there was by the State any acquisition of the right which was formerly of the petitioners, whether such right was (1) VOl.729 property or an interest in a commercial or industrial undertaking.
The vehicles which were being operated by the private operators have not been acquired by the State nor has any other tangible property which was used by the petitioners for their business been acquired.
What has been done is that the petitioners have been prohibited from operating their buses on certain routes.
This right of the petitioners has in no way been vested in the State inasmuch as the State always had an equal right with the petitioners to run their buses on these routes.
" According to the High Court, therefore, mere depriv ation of the petitioners ' right to run buses or their interest in a commercial undertaking is not sufficient to attract the operation of article 31(2) of the Constitution as the deprivation has been by the authority of law within the meaning of clause (1) of that article.
Clause (2) could be attracted only if the State had acquired or taken possession of this very right or interest of the petitioners or in other words if the right of the petitioners to run buses had been acquired by or had become vested in the Government.
The State, it is pointed out, has an undoubted right to run buses of its own on the public thoroughfares, and they do not stand on the rights of the petitioners.
This argument, we think, is not tenable having regard to the majority decision of this Court in the case of State of West Bengal vs Subodh Gopal Bose and Others (1) and Dwarkadas Shrinivas vs The Sholapur Spinning and Weaving Co. Ltd. (2).
In view of that majority decision it must be taken to be settled now that clauses (1) and (2) of article 31 are not mutually exclusive in scope but should be read together as dealing with the same subject, namely, the protection of the right to property by means of limitations on the State 's powers, the deprivation contemplated in clause (1) being no other than acquisition or taking possession of the property referred to in clause (2).
The learned Advocate General co n. needed this to be the true legal position after the pronouncements of this Court referred to above.
The fact that the buses belonging to the appellants have (1) ; (2) ; 730 not been acquired by the Government is also not material.
The property of a business may be both tangible and intangible.
Under the statute the Government may not deprive the appellants of their buses or any other tangible property but they are depriving them of the business of running buses on hire on public roads.
We think therefore that in these circumstances the legislation does conflict with the provision of article 31(2) of the Constitution and as the requirements of that clause have not been complied with, it should be held to be invalid on that ground.
The next point that requires consideration is, whether the Act or any of its provisions are discriminatory in their character and conflict with the rule of equal protection embodied in article 14 of the Constitution ? Mr. Pathak has raised a two fold contention on this point.
He has argued in the first place that no discrimination could be made in favour of the State as against private individuals in the matter of carrying on the business of plying buses for hire on public roads.
The State as a person, it is conceded, comes under a different class or category from private citizens; but the contention is that when the State carries on trade as merchants it occupies the same position as private traders and its acts in this respect cannot be regarded as acts of the sovereign.
Much reliance has been placed by the learned counsel in sup port of this view on the judgment of Sir Barnes Peacock in P. and O. Steam Navigation Co. vs The Secretary of State(1).
The other objection taken by the learned counsel is, that the Act gives an unguided and unfettered discretion to the State to associate such persons as it likes in the transport business and thereby allows it to discriminate between one citizen and another.
No rules are laid down to regulate the choice of the State in such cases.
So far as the first ground is concerned, it is well settled that mere differentiation does not make a legislation obnoxious to the equal protection clause.
The Legislature has always the power to make classification and all that is necessary is that the classification should not be arbitrary but must bear a reasonable (1) (1861) 5 B.H.C.R.Appendix 1. 731 relation to the object which the legislation has in view.
There is no doubt that classification is inherent in the concept of a monopoly; and if the object of legislation is to create monopoly in favour of the State with regard to a particular business, obviously the State cannot but be differentiated from ordinary citizens and placed in a separate category so far as the running of the business is concerned and this classification would have a perfectly rational relation to the object of the statute.
No doubt if the creation of a monopoly in favour of the State is itself bad on the ground of violating some constitutional provisions, the statute would be invalid for those reasons and the question of discrimination would not be material at all.
In our opinion, the argument of Mr. Pathak that the State ceases to function as a State as soon as it engages itself in a trade like ordinary trader cannot be accepted as a sound proposition of law under the Constitution of India at the present day.
In the last century, when the laissez faire doctrine held the field, the primary function of a State was considered to be maintenance of law and order and all other activities were left to private competitors.
That conception is now changed and in place of the 'police State ' of old, we are now having a 'welfare State. ' Chapter IV of our Constitution which lays down the Directive Principles of State Policy clearly indicates what the functions of a State should be and many things which could not have been considered as State functions when the case of P. and 0.
Steam Navigation Co. vs The Secretary of State (Supra), was decided would certainly come within the legitimate scope of State duties Vide in this connection Lokanath Misra vs State of Orissa(supra).
The other contention of Mr. Pathak in regard to article 14 though somewhat plausible at first sight does not appear to us to be sound.
Section 3 of the Act authorises the State Government to declare that the road transport service in general or on particular routes should be run and operated by the State Government exclusively or by the State Government in conjunction with railway or partly by the State Government and partly by others in accordance with the provisions of 732 the Act The whole question is how is the last part of the section to be implemented and carried out? If the State can choose any and every person it likes for the purpose of being associated with the transport service and there are no rules to guide its discretion, plainly the provision would offend against article 14 of the Constitution.
The learned Advocate General pointed out however that the State is only to choose the routes or portions of routes on which the private citizens would be allowed to operate and the number of persons to whom permits should be given, and that the granting of permits would necessarily be regulated by the provisions of Motor Vehicles Act.
This does not appear to us to be an unreasonable construction to be put upon the relevant portion of section 3 of the Act and it receives support from what is laid down in section 7(c) of the Act.
On this construction the discretion to be exercised by the State would be a regulated discretion guided by statutory rules.
We hold therefore that the appellant cannot make any grievance on this score and that the statute does not offend against article 14 of the Constitution.
The last point that remains to be considered is, whether the Act conflicts with the guarantee of freedom of inter State and intrastate trade, commerce and intercourse provided for by article 301 of the Constitution ? Article 301 runs as follows: " Subject to the other provisions of this Part, trade ' commerce and intercourse throughout the territory of India shall be free.
" Article 302 authorises the Parliament to impose such restrictions on the freedom of trade, commerce and intercourse between one State and another or within any part of the territory of India as may be required in the public interests.
Under article 304(b) it is competent even for the Legislature of a State to impose reasonable restrictions upon the freedom of trade, commerce and intercourse mentioned above in the interests of the public, but it is necessary that any bill or amendment for this purpose should first receive the sanction of the President before it is moved or introduced in the Legislature of a State.
Article 301 733 corresponds to section 92 of the Australian Constitution and is even wider than the latter inasmuch as the Australian Constitution provides for the freedom of inter State trade only.
The High Court has negatived the contention of the appellants on this point primarily on the ground that article 301 of the Constitution has no application to the present case.
What is said is, that article 301 provides safeguards for carrying on trade as a whole as distinguished from the rights of an individual to carry it on.
In other words, this article is concerned with the passage of commodities or persons either within or outside the State frontiers but not directly with individuals carrying on the commerce or trade.
The right of individuals, it is said, is dealt with under article 19(1) (g) of the Constitution and the two articles have been framed in order to secure two different, objects.
The question is not quite free from difficulty and in view of the fact that we have declared the Act to be unconstitutional on the two grounds mentioned above, we do not consider it necessary to record our decision on this point.
We would only desire 'to indicate the contentions that have been or could be raised upon this point and the different views that are possible to be taken in respect to them so that the Legislature might take these matters into consideration if and when they think of legislating on this subject.
We desire to point out that in regard to section 92 of the Australian Constitution, which so far as inter.
State trade is concerned adopts almost the same language as article 301 of our Constitution, it has been definitely held by the Judicial Committee in the case of Commonwealth of Australia vs The Bank of New South Wales (supra), that the rights of individuals do come within the purview of the section.
It is true, as Lord Porter observed, that section 92 does not create any new juristic rights but it does give the citizens of the State or the Commonwealth, as the case may be, the right to ignore and, if necessary, to call on the judicial power to help him to resist legislative or executive actions which offend against the section.
It follows from this, as his Lordship pointed out, that 94 734 the application of section 92 does not involve calculations as to the actual present or possible future effect upon the total value of inter State trade, the difficulty in applying such a criterion being too obvious.
If this view is adopted in regard to article 301 of our Constitution it can plausibly be argued that the legislation in the present case is invalid as contravening the terms of the article.
The question of reasonable restrictions could not also arise in this case, as the bill was not introduced with the previous sanction of the President as required by the proviso to section 304(b).
It is true that the consent of the President was taken subsequently but the proviso expressly insists on the sanction being taken previous to the introduction of the bill.
It may be argued that freedom of trade does not, as Lord Porter observed in the Australian Bank case referred to above, mean unrestricted or unrestrained freedom and that regulation of trade is quite compatible with its freedom.
As against this it may be pointed out that the Constitution itself has provided in articles 302 and 304(b) how reasonable restrictions could be imposed upon freedom of trade and commerce and it would not be proper to hold that restrictions can be imposed aliunde these provisions in the Constitution.
The question would also arise as to what interpretation should be put upon the expression "reasonable restrictions" and whether or not we would have to apply the same tests as we have applied in regard to article 19(6) of the Constitution.
One material thing to consider in this connection would be that although the Constitution was amended in 1951 by insertion of an additional clause in article 19(6) by which State monopoly in regard to trade or business was taken out of the purview of article 19(1) (g) of the Constitution, yet no such addition was made in article 301 or article 304 of the Constitution and article 301, as it stands, guarantees freedom of trade, commerce and intercourse subject only to Part XIII of the Constitution and not the other parts of the Constitution including that dealing with fundamental rights.
735 The Australian Constitution indeed has no provision like article 19(1) (g) of the Indian Constitution and it is certainly an arguable point as to whether the rights of individuals alone are dealt with in article 19(1) (g) of the Constitution leaving the freedom of trade and commerce, meaning by that expression 'only the free passage of persons and goods ' within or without a State to be dealt with under article 301 and the following articles.
We have thus indicated only the points that could be raised and the possible views that could be taken but as we have said already, we do not desire to express any final opinion on these points as it is unnecessary for purposes of the present case.
The result is that in our opinion the appeals should be allowed and the judgment of the High Court set aside A writ in the nature of mandamus shall issue against the respondents in these appeals restraining them from enforcing the provisions of the U. P. State Road Transport Act, 1951, against the appellants or the men working under them.
There will be no order as to costs.
Appeals allowed.
| IN-Abs | A highway has its origin, apart from statute, in dedication either express or implied, by the owner of land of a right of passage over it to the public and the acceptance thereof by the public.
Dedication is presumed by long and uninterrupted user of a way by the public.
The presumption in such cases is so strong as to dispense with all enquiry into the actual ownership of the land or the intention of the owner about its user.
All public streets and roads vest in the State, but the State holds them as trustees on behalf of the public.
The members of the public are entitled as beneficiaries to use them as a matter of right and this right is limited only by the similar rights possessed by every other citizen to use the pathways.
The State as trustees on behalf of the public is entitled to impose all such limitations on the character and extent of the user as may be requisite for protecting the rights of the public generally; but subject to such limitations the the right of a citizen to carry on business in transport vehicles on public pathways cannot be denied to him on the ground that the State owns the highways.
G. section section Motor Service vs State of Madras ([19521 referred to with approval.
Within the limits imposed by State regulations any member of the public can ply motor vehicles on a public road.
To that extent he can also carry on the business of transporting passengers with the aid of vehicles.
It is to this carrying on of the trade or business that the guarantee in article 19(1) (g) is attracted and a citizen can legitimately complain if any legislation takes away or curtails that right any more than is permissible under clause (6) of that article.
Article 19(6) as the result of the Constitution (First Amendment) Act, 1951, enables the State to carry on any trade or business either by itself or through corporations owned or controlled by the State to the exclusion of private citizens wholly or in part.
This provision of article 19(6), which was introduced by the amendment of the Constitution in 1951, was not in existence when the U. P. Road Transport Act, 1951 (U. P. Act II of 1951), was passed and therefore the validity of the impugned Act is not to be decided by applying the provisions of the now clause.
Amendment of the Constitution which came later cannot be invoked to validate an earlier legislation which must be regarded as unconstitutional when it was passed, because a statute void for unconstitutionality is dead and cannot be vitalised by a subsequent amendment of the Constitution removing the Constitutional objection but must be reenacted.
Although the normal use of the word "restriction" seems to be in the sense of limitation and not extinction but (without expressing any final opinion on the matter) if the word " I restriction" does not include total prohibition then the impugned Act cannot be justified under article 19(6) of the Constitution and it would 709 be void unless supported by article 31.
If however the word Is restriction" in article 19(6) be taken in certain circumstances to include prohibition as well then the prohibition of the right of all private citizens to carry on the business of motor transport on public roads within the State of Uttar Pradesh as laid down by the impugned Act, cannot be justified as reasonable restrictions imposed in the interests of the general public.
Whether the restrictions are reasonable or not would depend to a large extent on the nature of the trade and the conditions prevalent in it.
There is nothing wrong in the nature of the motor transport trade in the present case which is perfectly innocuous.
The U. P. Road Transport Act, (II of 1951) which violates the fundamental rights of the private citizens guaranteed under article 19(1) (g) of the Constitution and is not protected by clause (6) of article 19 as it stood at the time of enactment must be held to be void under article 13(2) of the Constitution.
The effect of the prohibition of the trade or business of the citizens by the impugned legislation amounts to deprivation of their property or interest in a commercial undertaking within the meaning of article 31(2) of the Constitution and therefore U. P. Road Transport Act, 1951, offends against the provision of that clause inasmuch as no provision for compensation has been made in the Act.
The impugned Act is not void on the ground that it offends against the equal protection rule embodied in article 14 of the Constitution.
The contention whether the impugned Act conflicts with the guarantee of freedom of inter State and intra state trade, commerce and intercourse provided for by article 301 of the Constitution discussed and the points that could be raised and the possible views that could be taken indicated without expressing any final opinion thereupon.
Cooverjee vs The Excise Commissioner, etc.
([1954] S.C.R. 873) distinguished.
West Bengal vs Subodh Go pal Bose and Others ([1954] S.C.R. 587) and Dwarkadas Shrinivas vs The Sholapur Spinning and Weaving Co. Ltd. ([1954] S.C.R. 674) followed.
Packard vs Banton (68 L.E. 596; ; , Frost vs Railroad Commission (70 L.E. 1101), Stephenson vs Binford (77 L.E. 288), Motilal vs Uttar Pradesh Government (I.L.R. 1951 All. 257), Municipal Corporation of the City of Toronto vs Virgo ([1896] A.C. 88), A. K. Gopalan vs The State ([1950] S.C.R. 88), Lokanath Misra vs The State of Orissa (A.I.R. 1952 Orissa 42), Commonwealth of Australia and Others vs Bank of New South Wales and Others ([1950] A.C. 235) and P. and 0.
Steam Navigation Co. vs The Secretary of State (1861 5 B.H.C.R.
Appendix 1) referred to.
91 710
|
l Appeal No. 1613 of 1966.
Appeal from the judgment and decree dated August 19, 1963 of the Punjab High Court, Circuit Bench at Delhi in Letters Patent Appeal No. 50 D of 1960.
V.A. Seyid Muhammad, S.P. Nayar and B.D. Sharma ', for the appellants.
S.T. Desai, K.L.Arora, Bishambar Lal and H.K. Puri, for the respondent.
The Judgment of the Court was delivered by Ramaswami, J.
This appeal is brought by certificate from the judgment of the Division Bench of the Punjab High Court dated August 19, 1963 in Letters Patent Appeal No. 50 D of 1960.
An auction was held for the sale of licence of country liquor shop in Bela Road for the year 1949 50 on March 23, 1949.
The auction took place in pursuance of the conditions of "Auction of Excise Shops in Delhi for the year Clauses 31 and 33 of the conditions were to the following effect: "31.
The Chief Commissioner is under no obligation to grant any license until he is assured of financial status of the bidder.
At the conclusion of the auction an enquiry will be made into the financial position of any bidder not known to the excise staff and any such bidder shall if necessary be called upon to furnish security for the observance of the terms of his licence as required by sub section (2) of section 34 of the Punjab Excise Act 1 of 1914, as extended to Delhi Province.
596 33.
All final bids will be made subject to the confirmation by the Chief Commissioner who may reject any bid without assigning any reasons.
If no bid is accepted for any shop,_ the Chief Commissioner reserves the right to dispose.
it off by tender or otherwise as he thinks The respondent offered the highest bid of Rs. 4,01,000/ for the shop.
Under the Excise Rules the bidder had to deposit one sixth of the purchase price within seven days of the auction but the deposit was not made by the respondent.
In these circumstances the Chief Commissioner did not confirm the bid of the respondent and resale of the Excise Shop was ordered.
On May 3, 1949 the shop was again auctioned when Messrs Daulat Ram Amar Singh offered the highest bid of Rs. 2,20,000/ which was confirmed by the Chief Commissioner, on July 7, 1949.
Holding the respondent liable for the loss of Rs. 1,81,000 being the difference between the bid of the respondent and of Messrs Daulat Ram Amar Snigh the Collector of Delhi started proceedings for the recovery of Rs. 1,81,000,./. On July 22, 1949 the respondent filed a suit in the court of Senior Subordinate Judge, Delhi praying for a permanent injunction restraining the appellants from taking any proceedings to recover the amount.
The trial judge decreed the suit holding that the sale was subject to confirmation by the Chief Commissioner under cl. 33 and since the auction in favour of the respondent was not accepted by him there was no binding obligation between the parties.
The decree of the trial court was upheld by the lower appellate court.
In second appeal False, J., took the view that cl. 3 3 was not in consonance with the statutory rules and the contract came into existence when the bidding was closed in favour of the respondent on March 23, 1949.
The respondent was therefore held liable to make good the loss which the Government sustained in resorting to the resale of the excise shop.
The resportdent preferred an appeal under Letters Patent.
The Division Bench allowed the appeal reversing the decision of the single Judge and restored that of the trial court.
Clause 21 of rule 5.34 states: "A person to whom a shop has been sold shall pay one sixth of the annual fee within seven days of the auction (any deposits already made shall be credited to this sum, and any excess shall be either returned to him or credited to future payments).
By the 7th of the month in which he begins his business under his license and by the 7th of every subsequent month the licensee shall pay one twelfth of the annual fee till the whole fee is paid.
But he may at any time pay the whole amount due if he wishes.
If the total amount due is less than Rs. 100 it shall be payable in one sum unless the Collector for 597 special reasons, allows payment to be made in instalments.
If any person whose bid has been accepted by the officer presiding at the auction fails to make the deposit of one sixth of the annual fee, or if he refuses to accept the license, the Collector may resell the license, either by public auction or by private contract, and any deficiency in price and all expenses of such resale or attempted resale shall be recoverable from the defaulting bidder in the manner laid down in section 60 of the Punjab Excise Act, 1 of 1914, as applied to the Delhi Province.
Rule 22 states: "When a license has been cancelled, the Collector may resell it by public auction or by private contract and any deficiency in price and all expenses of such resale or attempted resale shall be recoverable from the defaulting licensee in the manner laid down in section 60 of the Excise Act as applied .to the Delhi Province.
" On behalf of the appellants it was contended by Dr. Seyid Muhammad that the respondent was under a legal obligation to pay one sixth of the annual fee within seven days of the auction under cl. 21 of r. 5.34 and it.
was due to his default that a resale of the excise shep was ordered.
Under cl. 22 of r. 5.34 the respondent was liable for the deficiency in price and all expenses of such resale* which was caused by his default.
We are unable to accept this argument.
The first portion of cl. 21 requires the "person to whom the shop has been sold" to deposit one sixth of the total annual fee within seven days.
But the sale is deemed to have been made in favour of the highest bidder only on the completion of the formalities before the conclusion of the sale.
Clause 16 of r. 5.34 states that "all sales are open to revision by the Chief Commissioner".
Under cl. 18, the Collector has to make a report to the Chief Commissioner where in his discretion he is accepting a lower bid.
Clause 33 of the Conditions, exhibit D 28, states that "all final bids will be made subject to the confirmation by the Chief Commissioner who may reject any bid without assigning any reasons.
" It is, therefore, clear that the contract of sale was not complete till the bid was confirmed by the Chief Commissioner and till such confirmation the person whose bid has been provisionally accepted is entitled to withdraw his bid.
When the bid is so withdrawn before the confirmation of the Chief Commissioner the bidder will not be liable for damages on account of any breach of contract or for the shortfall on the resale.
An acceptance of an offer may be either absolute or conditional.
If the acceptance is conditional the offer can be withdrawn at any moment until absolute acceptance has taken place.
This view is borne out by the 598 decision of the Court of Appeal in Hussey vs HornePayne(1).
In that case V offered land to P and P accepted 'subject to the title being approved by my solicitors '.
V later refused to go on with the contract and the Court of Appeal held that the acceptance was conditional and there was no binding contract and that V could withdraw at any time Until P 's solicitors had approved the title.
Jessel, M.R. observed at p. 626 of the report as follows: "The offer made to the Plaintiff of the estate at that price was a simple offer containing no reference whatever to title.
The alleged acceptance was an acceptance of the offer, so far as price was concerned, 'subject to the title being approved by our solicitors '.
There was no acceptance of that additional term, and the only question which we are called upon to decide is, whether that additional term so expressed amounts in law to an additional term or whether it amounts, as was very fairly admitted by the counsel for the Respondents, to nothing at that is, whether it merely expresses what the law would otherwise have implied.
The expression 'subject to the title being approved by our solicitors ' appears to me to be plainly an additional term.
The law does not give a right to the purchaser to say that the title shall be approved by any one, either by his solicitor or his conveyancing counsel, or any one else.
All that he is entitled to require is what is called a marketable title, or, as it is sometimes called, a good title.
Therefore, when he puts in 'subject to the title being approved by our solicitors ', he must be taken to mean what he says, that is, to make a condition that solicitors of his own selection shall approve of the title.
" It was submitted on behalf of the appellant that the phrase "person to whom a shop has been sold" in cl.
21 of r. 5.34 means a " 'person whose bid has been provisionally accepted".
It is not possible to accept this argument.
As we have already shown the first part of cl.
21 deals with a completed sale and the second part deals with a situation where the auction is conducted by an officer lower in rank than the Collector.
In the latter case the rule makes it clear that if any person whose bid has been accepted by the officer presiding at the auction fails to make the deposit of one sixth of the annual fee, or if he refuses to accept the licence, the Collector may resell the licenee, either by public auction or by private contract and any deficiency in price and all expenses of such resale shall be recoverable from the defaulting bidder.
In the present case the first part of cl. 21 applies.
It is not disputed that the (1) at 676.
599 Chief Commissioner has disapproved the bid offered by the respondent.
If the Chief Commissioner had granted sanction under cl. 33 of exhibit D 23 the auction sale in favour of the respondent would have been a completed transaction and he would have been liable for any shortfall on the resale.
As the essential pre requisites of a completed sale are missing in this case there is no liability imposed on the respondent for payment of the deficiency in the price.
For these reasons we hold that the judgment of the Punjab High Court dated August 19, 1963 in L.P.A. No. 50 D of 1960 is correct and this appeal must be dismissed with costs.
G.C. Appeal dismissed.
| IN-Abs | The respondent gave the highest bid at an auction for the sale of license for a country liquor shop in Delhi for the year 1949 50.
Under cl. 31 of the conditions of sale for that year, the Chief Commissioner was under no obligation to grant a license until he was assured of the financial status of the bidder.
Under el.
33 all final bids were made subject to confirmation by the Chief Commissioner who could reject any bid assigning any reasons.
However under cl. 21 of r. 5.34 of the Delhi Liquor License Rules a person to whom a shop had been sold had to pay one sixth of the annual fee within seven days of the auction.
The respondent not having paid one sixth of the annual fee as required by the said cl. 21, the Chief Commissioner did not confirm his bid.
Resale of the excise shop was ordered.
At the new auction it was sold at a lower price.
The Collector Delhi thereupon held the respondent liable to pay the difference between his bid and the bid for which the shop was later sold, and commenced proceedings for the recovery of the sum.
The respondent filed a suit in the Court of the Senior Subordinate Judge, Delhi praying for a permanent injunction restraining the appellants (Union of India & Ors.) from taking any proceedings for the recovery of the amount.
The trial judge decreed the suit.
The decree was upheld by the first appellate court.
In second appeal the Single Judge decided against the respondent.
The Division Bench decided in his favour.
The appellants came to this Court with certificate.
It was contended on behalf of the appellants that the respondent was under a legal obligation to pay one sixth of the annual fee within seven days of the auction under el.
21 of r. 5.34; it was due to his default that a resale of the excise shop was ordered; and under cl. 22 of r. 5.34 the respondent was liable for the deficiency in price and all expenses of such resale which was caused by his default.
HELD: (i) An acceptance of an offer may be either absolute or conditional.
If the acceptance is conditional the offer can be withdrawn at any moment until absolute acceptance has taken place.
[H 597] From cl. 33 of the conditions of sale it is clear that the contract of sale is not complete till it is confirmed by the Chief Commissioner and till such confirmation the person whose bid has been provisionally accepted is entitled to withdraw his bid.
If the bid is so withdrawn before the confirmslion of the Chief Commissioner the bidder will not be liable for damages on account of any breach of contract or for the shortfall on resale.
[G H 597] Hussers vs Horne Payne, , 676, referred to.
595 (ii) The phrase "person to whom a shop has been sold" in el.
21 r. 5.34 cannot be accepted to mean a "person whose bid has bern provisionally accepted".
The first part of el.; 21 deals with a completed sale and the second part with a situation where the auction is conducted by an officer lower in rank than the Collector.
In the latter case the rule makes it clear that if any person whose bid has been accepted by the officer presiding at the auction fails to make the deposit of one sixth of the annual fee, or if he refuses to accept the licence.
the Collector may resell the licence either by public auction or by private contract and any deficiency in price and all expenses of such resale shall be recoverable from the defaulting bidder.
[F G 598] In the present case the first part of d. 21 was applicable.
If the Chief Commissioner had not disapproved the bid offered by the respondent under el.
33 of the conditions of sale, the auction sale in favour of the respondent would have been a completed transaction and he would have been liable for any shortfall on the resale.
As the essential prerequisites of a completed sale were lacking in this case there was no liability imposed on the respondent for payment of the deficiency in the price.
[598 H; 599 A B]
|
Appeals Nos. 312 and 313 of 1966. 787 Appeals by special leave from the judgment and decree dated February 5, 1963 of the Gujarat High Court in Appeal No. 1009 of 1960 from original decree.
S.T. Desai, G. L. Sanghi, B.R. Agarwala and M. 1.
Patel, for the appellant (in C.A. No. 312 of 1966) and the respondent (in C.A. No. 313 of 1966).
K.L. Hathi, for respondents Nos.
1 to 8 (in C.A. No. 312 of 1966) and the appellants (in C.A. No. 313 of 1966).
N.S. Bindra and S.P. Nayar, for respondent No,. 9 (in C.A. No. 312 of 1966).
The Judgment of the Court was delivered by Ramaswami, J.
These appeals are brought, by special leave, from the judgment of the High Court of Gujarat dated February 5, 1963 in appeal No. 1009 of 1960 arising out of Civil Suit No. 64 of 1958 filed by Mussamiya Imam Haider Bax Razvi, appellant in Civil Appeal No. 312 of 1966 (hereinafter referred to as the plaintiff) against the respondents in Civil Appeal No. 312 of 1966 and the appellants (excepting the Charity Commissioner) in Civil Appeal No. 313 of 1966 (hereinafter referred to as the defendants).
The lands in dispute are located in the village Isanpur and form part of a 'Devasthan ' inam.
The 'Sanads ' were created in the name of the ancestors of the plaintiff as the Sarjudanashi of the estate of Shah Alam which was an estate consisting of 'Roza ', a mosque, a grave yard and several other properties.
The estate was last held by the father of the plaintiff who expired on or about March 9, 1948 leaving behind him the plaintiff who was then a minor as his only heir.
On August 26, 1948 the Collector of Ahmedabad was appointed as the guardian of the properties of the plaintiff by an order of the District Court, Ahmedabad.
Subsequently, on or about January 15, 1953, the then Bombay Government assumed management of the estate under the Court of Wards Act, 1905 (Bombay Act No: 1 of 1905) and appointed the Collector of Ahmedabad as the manager of the same.
The case of the plaintiff is that the defendants fraudulently entered into a conspiracy with the Collector 's subordinate staff for getting possession of the disputed lands.
In this connection the first defendant wrote to the District Collector, Ahmedabad on July 25, 1956 representing that certain persons formed or will form a Co operative Society for carrying on agriculture and therefore required the lands for that purpose.
Defendants 1, 2, 3 and 5 also made applications for that purpose alleging that they were Rabari, kept cattle and were residents of Ahmedabad but none of them had any agricultural land.
On account of the fraud of the defendants the Collector was prevailed upon to make an order 788 dated July 28, 1956 in breach of the provisions of sections 63 and 64 of the Bombay Tenancy and Agricultural Lands Act (Bombay Act 67 of 1948), hereinafter referred to as the 'Act ', and the Rules made thereunder granting possession of the lands to the defendants who were neither carrying on agriculture on cooperative basis nor ever formed a Co operative Society.
It was contended on behalf of the plaintiff that the lease granted to the defendants was void and the plaintiff was entitled to a decree for recovery of possession of the lands from the defendants and also for a sum of ' Rs. 10,000 for damages for use and occupation of the land prior to the date of the suit and ,for future mesne profits at the rate of Rs. 500 per month.
The main written statement was filed by the first defendant and his contention was that the Civil Court had no jurisdiction to hear the suit.
It was said that valid lease had been created in favour of the defendants and as a result of the coming into force of the Amending Act (Bombay Act No. 13 of 1956) the defendants had become statutory owners of the lands in question.
The suit came up for hearing before the 5th Joint Civil Judge, Senior Division at Ahmedabad who by his judgment dated July 30, 1960, held that the Civil Court had jurisdiction to hear the suit and the provisions of the Act did not apply to the suit lands and therefore the defendants were trespassers.
The learned Judge accordingly granted a decree in favour of the plaintiff for recovery of possession of the lands from defendants 1 to 8.
He also granted the plaintiff a decree for a sum of Rs. 10,000 as damages for use and occupation of the lands with interest at 6 per cent p.a. from August 1, 1956 till the date of the suit i.e., July 11, 1958.
The learned Judge further ordered that the plaintiff was entitled to recover mesne profits to be determined under O.20, r. 12, Civil Procedure Code.
Defendants 1 to 8 took the matter in appeal to the High Court of Gujarat, being First Appeal No. 1009 of 1960.
The High Court held: (1 ) that the defendants had failed to establish that they had become statutory owners of the suit lands on or before the date of the suit, (2) that the plaintiff had failed to establish that the lease created either on July 28, 1956 or on August 24, 1956 was vitiated by fraud, and (3) that the Civil Court had no jurisdiction to deal with the question as to whether the defendants were or were not tenants from the date of the suit and this question could only be decided by the Revenue Authorities.
For these reasons the High Court directed that under section 85A of the ' Act the following issue should be referred to the Mamlatdar having jurisdiction in the matter for his decision and that the officer shall communicate his decision, or, if there are appeals from the decision, the final decision, to the High Court as soon as possible.
The issue was as follows: "Do the defendants prove that they are tenants of the lands in suit?" The High Court further directed that the hearing of the appeal 789 should stand adjourned until after the relevant communication was received from the Revenue Authorities.
It is necessary at this stage to set out the relevant provisions of the Act as it stood at the material time.
Section 2(18) states: "2.
In this Act, unless there is anything repugnant in the subject or context, (18) 'tenant ' means a person who holds land on lease and include (a) a person who is deemed to be a tenant under section 4; (b) a person who is a protected tenant; and (c) a person who is a permanent tenant; and the word 'landlord ' shall be construed accordingly;" Section 32(1) is to the following effect: "32.(1).
On the first day of April 1957 (hereinafter referred to as 'the tillers ' day") every tenant shall, subject to the other provisions of this section and the provisions of the next succeeding sections be deemed to have purchased from his landlord, free of all encumbrances subsisting thereon on the said day, the land held by him as tenant, if (a) such tenant is a permanent tenant thereof and cultivates land personally; (b) such tenant is not a permanent tenant but cultivates the land leased personally; and (i) the landlord has not given notice of termination of his tenancy under section 31; or (ii) notice has been given under section 31, but the landlord has not applied to the Mamlatdar on or before the 31st day of March 1957 under section 29 for obtaining possession of the land, or (iii) the landlord has not terminated the tenancy on any of the grounds specified in section 14, or has so terminated the tenancy but has not applied to the Mamlatdar on or before the 31st day of March 1957 under section 29 for obtaining possession of the lands.
Provided that if an application made by the landlord under section 29 for obtain Sup.
C.1. 69 4 790 ing possession of the land has been rejected by the Mamlatdar or by the Collector in appeal or in revision by the Gujarat Revenue Tribunal under the provisions of the Act, the tenant shall be deemed to have purchased the land on the date on which the final order of rejection is passed.
The date on which the final order of rejection is passed is hereinafter referred to as 'the postponed date '.
Provided further that the tenant of a landlord who is entitled to the benefit of the proviso to sub section (3) of section 31 shall be deemed to have purchased the land on the 1st day of April 1958, if no separation of his share has been effected before the date mentioned in that proviso.
" Section 32 F reads as follows: (1) Notwithstanding anything contained in the preceding sections, (a) where the landlord is a minor, or a widow or a person subject to any mental or physical disability or a serving member of the armed forces the tenant shall have the right to purchase such land under section 32 within one year from the expiry of the period during which such landlord is entitled to terminate the tenancy under section 31.
Provided that where a person of such category is a member of a joint family, the provisions of this sub section shall not apply if at least one member of the joint family is outside the categories mentioned in this sub section unless before the 31st day.
of March 1958 the share of such person in the joint family has been separated by metes and bounds and the Mamlatdar on inquiry is satisfied that the share of such person in the land is separated, having regard to the area, assessment, classification and value of the land in the same proportion as the share of that person in the entire joint family property and not in a larger proportion.
(b) Where the tenant is a minor or a widow or a person subject to any mental or physical disability or a serving member of the armed forces, then subject to the provisions of clause 791 (a) the right to purchase land under section 32 may be exercised ( i ) by the minor within one year from the date on which he attains majority; (ii) by the successor in title of the widow within one year from the date on which her interest in the land ceases to exist; Provided that where a person of such category is a.member of a joint family, the provisions of this sub section shall not apply if at least one member of the joint family is outside the categories mentioned in this sub section unless before the 31st day of March 1958 the share of such person in the joint family has been separated by metes and bounds and the Mamlatdar on inquiry is satisfied that the share of such person in the land is separated, having regard to the area, assessment, classification and value of the land, in the same proportion as the share of that person in the entire joint family property, and not, in a larger proportion.
Section 63 (1) reads thus "63.
(1 ) Save as provided in this Act, (a) no sale ,(including sales in execution of a decree of a Civil Court or for recovery of arrears of land revenue or for sums recoverable as arrears of land revenue), gift, exchange or lease of any land or interest therein, or (b) no mortgage of any land or interest therein, in which the possession of the mortgaged property is delivered to the mortgagee, shall be valid in favour of a person who is not an agriculturist (or who being an agriculturist will, after such sale, gift, exchange, lease or mortgage, hold land exceeding two thirds of the ceiling area determined under the Maharashtra Agricultural Lands (Ceiling on Holdings Act, 1961, or who is not an agricultural labourer ): Provided that the Collector or an officer authorised by the State Government in this behalf may grant permission for such sale, gift, exchange, lease or mortgage, on such conditions as may be prescribed.
Explanation.
For the purpose of this sub section the expression 'agriculturist ' includes any person who as 792 a result of the acquisition of his land for any public purpose has been rendered landless, for a period not exceeding tea years from the date possession of his land is taken for such acquisition.
Section 70 is to the following effect: "70.
For the purposes of this Act the following shall be the duties and functions to be performed by the Mamlatdar (a) to decide whether a person is an agriculturist; (b) to decide whether a person is a tenant or a protected tenant (or a permanent tenant); (c) to decide such other matters as may be referred to him by or under this Act.
" Section 85 states: "(1) No Civil Court shall have jurisdiction to settle, decide or deal with any question which is by or under this Act required to be settled, decided or dealt with by the Mamlatdar or Tribunal, a Manager, the Collector or the Maharashtra Revenue Tribunal in appeal or revision or the State Government in exercise of their powers of control.
(2) No order of the Mamlatdar, the Tribunal, the Collector or the Maharashtra Revenue Tribunal or the State Government made under this Act shall be questioned in any Civil or Criminal Court.
Explanation.
For the purposes of this section a Civil Court shall include a Mamlatdar 's Court constituted under the Mamlatdars ' Courts Act., 1906." Section 85A provides as follows: "( 1 ) If any suit instituted in any Civil Court involves any issues which are required to be settled, decided or dealt with by any authority competent to settle, decide or deal with such issues under this Act (hereinafter referred to as the 'competent authority ') the Civil Court shall stay the suit and refer such issues to such competent authority for determination.
(2) On receipt of such reference from the Civil Court, the competent authority shall deal with and decide such issues in accordance with the provisions of this Act and shah communicate ifs decision to the Civil Court and such court shall thereupon dispose of the suit in accordance with the procedure applicable there Explanation.
For the purpose of this section a Civil Court shall include a Mamlatdar 's Court constituted under the Mamlatdars ' Courts Act, 1906.
" Section 88 reads "(1) Save as otherwise provided in sub section (2), nothing in the foregoing provisions of this Act shall apply (a) to lands belonging to, or held on 'lease from, the Government; (b) to any area which the State Government may, from time to time, by notification in the Official Gazette, specific as being reserved for nonagricultural or industrial development; (c) to an estate or land taken . . . under the management of the Court of Wards or of a Government Officer appointed in his official capacity as a guardian under the ; (d) to an estate or land taken under management by the State Government under Chapter IV or section 65 except as provided in the said Chapter IV or section 65, as the case may be, and in sections 66, 80A, 82, 83, 84, 85, 86 and 87: Provided that from the date on which the land is released from management, all the foregoing provisions of this Act shall apply there to; but subject to the modification that in the case of a tenancy, not being a permanent tenancy, which on that date subsists in the land (a) the landlord shall be entitled to.
terminate the tenancy under section 31 or under section 33B in the case of a certificated land ' lord within one year from such date; and (b) within one year from the expiry of the period during which the landlord or certificated landlord is entitled to terminate the tenancy as aforesaid, the tenant shall have the right to purchase the land under section 32 (or under section 33C in the case of an excluded tenant); and 794 Rule 36 of the Bombay Tenancy and Agricultural Lands Rules, 1956 is to the following effect: "Conditions on which permission for sale etc.
of land.
under section 63 may be granted ( 1 ) The Collector or other officer authorized under the proviso to sub section (1 ) of section 63 shall not grant permission for the sale, gift, exchange, lease or mortgage of any land in favour of a person who is not either an agriculturist or an agricultural laboratory or who, being an agriculturist, cultivates personally land not less than the ceiling area whether as owner or tenant or partly as owner and partly as tenant unless any of the following conditions are satisfied : (a) such a person bona fide requires the land for a non agricultural purpose; or (b) the land is required for the benefit of an industrial or commercial undertaking or an educational or charitable institution; or (c) such land being mortgaged, the mortgagee has obtained from the Collector a certificate that he intends to take the profession of an agriculturist and agrees to cultivate ,he land personally; or (d) the land is required by a Co operative Society; or The first question to be considered in this case is whether the High Court was right in taking the view that the plaintiff failed to establish that the lease created on August 24, 1956 was vitiated by fraud.
It was contended by Mr. S.T. Desai on behalf of the plaintiff that the trial court had reached the finding that there was a conspiracy between the defendants and the Collectables staff and the Collector was induced by fraud and misrepresentation to grant lease in favour of the defendants.
It was argued that there was no justification for the High Court to interfere with the finding of the trial Judge on this point.
Mr. S.T. Desai took us through the relevant documentary evidence on this issue but having perused that evidence, we are satisfied that the High Court was right in holding that the plaintiff had not established that there was any fraud or misrepresentation made to the Collector or that there was a conspiracy between the defendants and the City Deputy Collector or his subordinates.
In this connection, the High Court has referred to the circumstance that the offer made by the Collector in his letter, exhibit 51 embodies 795 the conditions which are capable of being explained on the ground that the Collector was aware of the fact that there was no Co operative Society in existence and that the defendants were not members of any! Co operative Society.
The High Court also referred to the application, exhibit 5 3 which contains an endorsement of the City Deputy Collector that the defendants were given the lands for cultivation on co operative basis.
The High Court also referred to the circumstance that neither the plaintiff nor his personal guardian had appeared in the witness box to support the allegation of fraud.
We are accordingly of the opinion that the High Court was right in expressing the view that the lease in favour of the defendants was not vitiated by fraud and Counsel on behalf of the plaintiff has been unable to make good his submission on this aspect of the case We pass on to consider the next question arising in this case, namely, whether the defendants had become statutory owners of the suit lands because of the provisions of section 32, section 32 F or section 88(1) of the Act.
It is necessary to state at the outset that the Amending Act No. 13 of 1956 came into force on August 1, 1956.
It is not disputed by the parties that the Act as it stood before the Amending Act 13 of 1956, applied to the suit land.
One of the sections which was amended by the Amending Act 13 of 1956 was section 88.
One of the effects of the amendment of section 88 was that sections 1 to 87A were not applicable to "an estate or land taken under the management of the Court of Wards".
So, it is not in dispute that after August 1, 1956 the provisions contained in sections 1 to 87A of the Act did not apply to the suit lands.
It is also admitted that after the cessation of the management by the Court of Wards the provisions of the Act again became applicable to the suit lands.
It has been found by the High Court upon examination of the evidence that the Court of Wards withdrew its superintendence on May 11, 1958 when the order for the release of the management was actually passed and not on May 11, 1957 when the plaintiff attained majority.
It is evident therefore that the Act applied to the suit lands before August 1, 1956, that sections 1 to 87A did not apply during the period between August 1, 1956 and May 11, 1958 which was the date on which the management of the estate by the Court of Wards ceased, and that the provisions of the Act again applied to the suit lands after the cessation of such management.
On behalf of the defendants the argument was presented that there was a valid lease granted on July 28, 1956 and the defendants were tenants on April 1, 1957 i.e., the date of 'the tillers day ' under section 32 of the Act and accordingly the defendants became statutory owners of the lands in suit under that section.
Mr. Hathi on behalf of the defendants challenged the finding of the High Court that there was no valid lease created on July 28, 1956, but having gone through the relevant documentary 796 and oral evidence, we are satisfied that the defendants have not substantiated their case that there was any valid lease of the lands on July 28, 1956 and the High Court was right in taking the view that the lease was created only on the execution of the ' 'Kabuliyat ' dated August 24, 1956.
It follows from this finding that the defendants were not tenants on the 'tillers ' day ' mentioned in section 32 of the Act.
The other question which arises in! this connection is whether the defendants became statutory owners because of the provisions contained in the first proviso to section 88 of the amended Act.
The High Court has found that the defendants were not subsisting tenants on May 11, 1958 which was the date on which there was a cessation of the management.
The reason was that the 'Kabuliyat ' dated August 24, 1956 was a period of.
one year and having regard to the fact that the Act was not applicable to the plaintiff 's estate from August 1, 1956 to May 11, 1958, the tenancy would expire on May 31, 1957 as provided for in the 'Kabuliyat ' itself.
The High Court therefore found that on the basis that the tenancy was created by the 'Kabuliyat ' dated August 24, 1956, the tenancy came to an end on May 31, 1957, so that there was no subsisting tenancy on the date of the cessation of the management.
If there wag.
no subsisting lease on May 11, 1958, the High Court was right in taking the view that the defendants had failed to establish that they had become statutory owners of the land by virtue of the first proviso to section 88 of the new Act.
We proceed to consider the next question arising in this case, namely, whether the Civil Court had jurisdiction to decide the question whether the defendants were tenants of the suit lands on July 28, 1956 or on May 11, 1958 and whether the lease was created in favour of the defendants on July 28, 1956 as claimed by them or on August 24, 1956 as claimed by the plaintiff.
Mr. Hathi addressed the argument that the question whether the defendants were tenants with effect from July 28, 1956 or thereafter was an issue which was expressly triable by a Revenue Court under section 70 of the Act and the jurisdiction of the Civil Court was barred.
It was argued that the issue of ownership was not the primary issue before the High Court and the main question was whether the defendants were or were not the tenants of the suit lands on the material date, namely, July 28, 1956 or on May 11, 1958 and such a question lay within the scope of the jurisdiction of the Revenue Authorities.
In other words, it was argued that the determination of the question whether the lease was created which subsisted after August 1, 1956 or which subsisted also on May 11, 1958 was not a matter within the scope of the jurisdiction of the High Court.
We are unable to accept the argument put forward by Mr. Hathi as correct.
Section 70 (b) of the Act imposes a duty on the Mamlatdar to decide whether a person is a tenant, but the sub section 797 does not cast a duty upon him to decide whether a person was or was not a tenant in the past whether recent or remote.
The main question in the present case was the claim of the defendants that they had become statutory owners of the disputed lands because they were tenants either on the 'tillers ' day ' or on the date of the release of the management by the Court of Wards.
In either case, the question for decision will be not whether the defendants were tenants on the date of the suit but the question would be whether they were or were not tenants in the past.
The question whether the defendants were tenants on July 28, 1956 or on May 11, 1958 was not an independent question but it was put forward by the defendants as a reason for substantiating their plea of statutory ownership.
In other words, the plea of tenancy on the two past dates was a subsidiary plea and the main plea was of statutory ownership and the jurisdiction of the Civil Court cannot therefore be held to be barred in this case by virtue of the provisions of section 70 of the Act read with the provisions of section 85 of the Act.
We are accordingly of the opinion that section 85 read with section 70 of the Act does not bar the jurisdiction of the Civil Court to examine and decide the question whether the defendants had acquired the title of statutory owners to the disputed lands under the new Act.
In this context, it is necessary to bear in mind the important principle of construction which is that if a statute purports to exclude the ordinary jurisdiction of a Civil Court it must do so either by express terms or by the use of such terms as would necessarily lead to the inference of such exclusion.
As the Judicial Committee observed in Secretary of State vs Mask & Co.(1) "It is settled law that the exclusion of the jurisdiction of the civil courts is not to be readily inferred, but that such exclusion must either be explicitly expressed or clearly implied.
" In our opinion, there is nothing in the language or context of section 70 or section 85 of the Act to suggest that the jurisdiction of the Civil Court is expressly or by necessary implication barred with regard to the question whether the defendants had become statutory owners of the land and to decide in that connection whether the defendants had been in the past tenants in relation to the land on particular past dates.
We are also of the opinion that the jurisdiction of the Civil Court is not barred in considering the question whether the provisions of the Act are applicable or not applicable to the disputed land during a particular period.
We accordingly reject the argument of Mr. Hathi on this aspect of the case.
(1) 67 I.A. 222, 236. 798 The next contention on behalf of the plaintiff is that the High Court was in error in referring to the Mamlatdar under section 85A of the Act, the issue whether "the defendants were tenants of the land in suit".
It was pointed out by Mr. S.T. Desai that the High Court had rejected the contention of the defendants that the tenancy was created on July 28, 1956 but the defendants were tenants only with effect from August 24, 1956.
The High Court has further found that there was no subsisting tenancy on May 11, 1958 when there was a cessation of the management of the Court of Wards.
The suit was brought by the plaintiff on July 11, 1958 and the argument put forward on behalf of the plaintiff is that there was no plea on behalf of the defendants that there was any intervening act, event or transaction between May 11, 1958 and July 11, 1958 under which a fresh tenancy was created.
In other words, the argument on behalf of the plaintiff was that the only plea set up on behalf of the defendants was the plea of tenancy on July 28, 1956 which was the basis of the plea of statutory ownership.
It was said that there was no other plea of tenancy set up by the defendants subsequent to May 11, 1958 when the management of the Court of Wards ceased.
In our opinion, the argument is well founded and must be accepted as correct.
On behalf of the defendants Mr. Hathi referred to paragraphs 4 and 6 of the written statement of the first defendant dated September 18, 1958, but, in our opinion, both these paragraphs must be read together and the plea of tenancy in para 4 is based upon the: claim of the defendants that they were "lawful ' tenants of the suit lands and they got this right before August 1, 1956".
The plea of tenancy is therefore based upon the alleged lease of July 28, 1956 which is rolled up in the plea of substantive claim of statutory ownership.
On a proper interpretation of the language of paragraphs 4.
and 6 of the written statement we are satisfied that there is no independent plea of tenancy set up by the defendants as subsisting on ' the date of the suit and there was no issue which survived for being referred for the decision of the Mamlatdar under section 85A of the Act.
We are accordingly of the opinion that the High Court was in error in referring any fresh issue to the Mamlatdar but instead should have granted a decree to the plaintiff for recovery of possession the lands and also as to damages and mesne profits as decreed by the trial court.
For the reasons expressed we hold that Civil Appeal No. 312 of 1966 must be allowed and the judgment of the High Court dated February 5, 1963 should be set aside and the decree of the 5th Joint Civil Judge, Senior Division at Ahmedabad dated July 30.
1960 should be restored.
Civil Appeal No. 313 of 1966 is dismissed.
The plaintiff will be entitled to the costs of 799 this Court (one set of hearing fees) but we do not propose to make any order with regard to the costs incurred by the parties in the High Court.
The application filed by the defendants for leave to produce additional evidence in this Court is rejected.
C.A. 312 of 1966 allowed.
V.P.S. C.A. 313 of 1966 dismissed.
| IN-Abs | The appellant succeeded to the estate consisting of the suit lands when he was a minor.
The State Government assumed management of the estate under the Bombay Court of Wards Act, 1905 and appointed the Collector as the manager of the estate.
While the estate was under the management of the Court of Wards on July 25, 1956.
the first respondent wrote to the Collector that the respondents were forming a cooperative society.
for carrying on agriculture, and that the suit lands were required for that purpose.
The Collector passed an order on July 28, 1956.
The kabuliyat was executed on August 24, 1956 by the respondents, though no cooperative society was formed.
The lease was therefore created on August 24, 1956 and according to the kabuliyat, expired on 31st May, 1957.
The Court of Wards withdrew its superintendence on May 11, 1958.
Under section 32 of the Bombay Tenancy and Agricultural Lands Act, 1948 every tenant shall be deemed to have become a statutory owner of the land on 1st April, 1957 known as the "tillers ' day". ' The Act was amended by Amending Act 13 of 1956 which came into force on August 1, 1956.
The effect of the amendment was that sections 1 to 87A were not applicable to an estate or land taken under the management of the Court of Wards.
Under section 88 of the Act, after cessation of the management by the Court of Wards, the provisions of the Act would apply to such estate.
Therefore, sections 1 to 87A of the Act were not applicable to the suit lands from August 1, 19 '56 to May 11, 1958.
The appellant filed a suit on July 11, 1958 for recovery of possession of the suit lands and mesne profits on the ground that the lease was fraudulently obtained by the respondents.
The respondents contended that they became statutory owners under section 32 or section 88 of the Act and that the civil court had no jurisdiction to hear the suit.
The trial court decreed the suit.
On appeal, the High Court held: (1) that the appellant had failed to establish that the lease was vitiated by fraud; (2) that the respondents had failed to establish that they had become statutory owners of the suit lands on or before the date of suit; (3) that the civil court had jurisdiction to decide whether the resportdents were tenants on the relevant dates namely July 28, 19 '56 or May 11, 1958, before the suit was filed, and whether they had become statutory owners, (4) but that the civil court had no jurisdiction to deal with the question as to whether the defendants were or were not tenants on the date of the suit that such question could only be decided by the Revenue authorities and that the question should be referred to the Mamlatdar accordingly.
786 In appeal to this Court, HELD: (1) On the evidence adduced, the High Court was right in its view that the lease in favour of the respondeats was not vitiated by fraud.
The evidence showed 'that the lease was granted with the knowledge that there was no cooperative society.
[795 A C] (2) (a) As during the period August 1, 1956 to May 11, 1958 sections 1 to 87A of the Act were not applicable to the suit lands, section 32 was not applicable, and therefore, the respondents could not have become statutory owners on the "tillers ' day", mentioned in section 32.
[795 G; 796 A] (b) As provided by the Kabuliyat itself the tenancy expired on May 31, 1957.
That is, there was no subsisting lease on May 11, 1958 which was the date of cessation of the management by the Court of Wards.
If there was no subsisting lease on May 11, 1958 the respondents were not tenants, and the High Court was right in its view that the respondents had failed to establish that they had become statutory owners of the land under section 32 by virtue of the first proviso to section 88.
[796 s E] (3) Section 70(b) of the Act imposes a duty on the Mamlatdar to decide whether a person is a tenant and not to decide whether a person was or was not a tenant in the past.
In the present case, the contention of statutory ownership of the respondeats was based on the question whether the respondents were tenants on July 28, 1956 or on May 11, 1958 and not whether they were tenants on July 11, 1958 the date of the suit.
The question would be therefore whether they were or were not tenants in the past.
Further, the question.
was put forward by the respondents not as an independent question but as a reason for substantiating their plea of statutory ownership.
Therefore, the plea of tenancy on the past two dates was a subsidiary plea and the main plea was of statutory ownership and the jurisdiction of the civil court cannot be held to be barred by virtue of the provisions of sections 70 and 85, as there is no exclusion, expressly or by necessary implication, of the jurisdiction of the civil court to decide the question whether the respondents had acquired title as statutory owners.
Nor is the jurisdiction of the civil court barred for considering the question whether the provisions of the Act are or are not applicable to the suit land during a particular period.
[796 H; 797 A E; G H] Secretary of State vs Mask & Co., 67 I.A. 222, 236, referred to.
(4) In the written statement, the only plea set up on behalf of the respondents Was the plea of tenancy on July 28, 1956 which was the basis of statutory ownership.
The High Court found that the tenancy was created on August 24, 1956 and that the tenancy did not subsist on May 11.
1958 when there was a cessation of the management by the Court of Wards.
There was no plea of any intervening act or transaction between May 11, 1958 and July 11, 1958, the date of suit, under which a fresh tenancy was created and which was subsisting on the date of the suit.
There was thus no issue which survived for the decision of the Mamlatdar under section 85A of the Act.
Therefore, the High Court should have decreed the suit and was in error in referring the issue whether the respondents were tenants of the land on the date of suit to the Mamlatdar.
[798 A G]
|
Appeal No. 1016 of 1966.
Appeal by Special 'leave from the order dated October 15, 1965 of the Board of Revenue, U.P. in Revision No. 2 E of 1964 Saharanpur.
J.P. Goyal ' and S.M. Hanif, for the appellants.
S.V. Gupte, G.D. Gupta and B. P. Maheshwari, for respondents Nos. 1 to. 3.
delivered by Vaidialingam, J.
The question that 'arises for consideration in this appeal, by special leave:, is as to whether the bhumidhari rights and trees belonging to the appellants can be proceeded against and sold for realisation of the: debts due to the respondents under the U.P.
Encumbered Estates Act, 1934 (Act XXV of 1934) as amended (hereinafter referred to as the Encumbered Estates Act).
The contention of the appellants iS that they cannot be sold, whereas, according to the respondents, they can be sold.
The predecessors in interest of the appellants were Landlords owning immovable properties, including agricultural land, trees, groves and well, situate in the various villages in the District of Saharanpur.
They were very heavily indebted, the debts being both secured and unsecured, payable by them to the creditors.
The respondents were among the secured creditors to whom large amounts were due.
On or about March 26, 1936 the appellants predecessors in interest filed an application under section 4 of the Encumbered Estates Act to the Collector for determination of their debts.
As required by section 6 of the said Act, the Collector forwarded this application to the Special Judge, Saharanpur, appointed under s.3 of the said Act and the said application was registered as Suit No.23 of 1936.
After complying with the other formalities under the Encumbered Estates Act, the Special Judge, on December .23, 1936 passed a decree under s.14(7).
of the Encumbered Estates Act.
The said decree was amended on 568 January 23, 1938.
The Special Judge granted a decree in favour of respondents 1 ' to 3 for two sums= of Rs. 36,000/. and Rs. 25,000/ on loans secured over properties mentioned in Schedules A, B and C of the decree.
They were also granted a decree for Rs. 9,000/ which was the decree debt for the payment of which the mother of the 'daughter had stood surety.
Over and above these amounts, the respondents were given a decree for Rs. 3,500/ for an unsecured debt.
The liquidation proceedings which were started under the Encumbered Estates Act and were pending before the Collector were stayed till 1954 in view of the contemplated legislation for abolition of zamindari, the Uttar Pradesh Zamindari Abolition and Land Reforms Act, 1950 (U.P. Act 1 of 1951) (hereinafter referred to as the Abolition Act), and the appellant 's estate vested on July 1, 19 '52 in the State by virtue of the notification issued under section 4( 1 ) of that Act.
The liquidation proceedings pending before the Collector under the Encumbered Estates Act were reopened in the year 1955.
On May 15, 1959 the respondents made an application to the ASsistant Collector of Saharanpur (to whom the powers of the Collector, for the purposes of section 24 of the Encumbered Estates Act had been delegated) to recover the amounts decreed to them by the Special Judge by proceeding against the bhumidhari rights, and trees belonging to the appellants and to auction the same under section 24 of the Encumbered Estates Act.
The appellants filed objections, briefly, to the following effect.
The decree holder iS not entitled to proceed against the bhumidhari rights or the trees in their possession.
The decree holder 's debts are secured debts and they are entitled only to three fourths of the Zamindari Abolition and Rehabilitation Grants and that they are not entitled to 'get anything more under the decree. ' The list forwarded by the Special Judge does not refer to any of their rights now sought to be attached and therefore no execution can be levied against such properties.
Bhumidhari rights accrued only after the 'abolition of the zamindari and, as such, they cannot be proceeded against for realisation of the decreed amounts.
The Assistant Collector, by his order dated February 21, 1961 upheld the objections of the appellantsdebtors and ' dismissed the 'application of the decree holders res pondents for sale of bhumidhari and other rights in the properties mentioned by them.
The basis.
on which the Assistant Collector declined to allow execution to proceed was that bhumidhari rights represent the proprietary rights which the zamindars, on the abolition of the estate, were allowed to retain, by the Abolition Act.
In substance, those rights were the original proprietary rights, though a new name of bhumidhari rights was given to them.
The respondents challenged this order of the Assistant Collector in appeal, under section 45(3) of the Encumbered Estates Act, 569 before the Commissioner, Meerut Division, who by his order dated March 24, 1965 ' reversed the order of the ASSistant Collector and held that the trees and bhumindhari rights of the appellants could be sold in execution of the decree.
The view of the Commissioner is that such rights are rights other than proprietary rights.
The prOhibitiOn contained in the Encumbered Estates (Act is only 'regarding the sale of proprietary rights and bhumidhari fights not being proprietary rights could be proceeded with in execution. ' The appellants filed a revision, under section 46(2) of the Encumberedestates Act, before the Board of Revenue.
The two contentions, that were raised by the appellants, before the Board of Revenue were: (i) bhumidhari rights are proprietary rights in land and as such, no execution can levy against such rights; (ii) the bhumidhari rights sought to be proceeded against have not been mentioned in the list of properties sent by the Special Judge to.
the Collector under section 19 of the Encumbered Estates Act and therefore they cannot be sold in liquidation proceedings under Chapter V of the Encumbered Estates Act.
Both these contentions were rejected by the Board of Revenue who, by their order dated October 15, 1965 confirmed the order of the Commissioner and dismissed the appellant 's revision petition.
The Board of Revenue has held that bhumidhari rights are not proprietary rights and so long as there is no prohibition under the Abolition Act to proceed against them, the decree holder was entitled to attach and sell those rights.
The Board further held that the properties have been mentioned in the list sent by the Special Judge and the nature of the rights, viz., bhumidhari rights, could not have been mentioned on the date when the list was sent because such rights were obtained by the appellants long thereafter.
It is against this order of the Board that the appellants have come up to this Court in appeal.
Mr. Goyal, learned counsel for the appellants, urged that the decree obtained by the respondents.
under the Encumbered Estates Act, as provided under section 14(8) thereof, 'shall not be executable within U.P. except under the provisions of this Act ' Section 19 of the Encumbered Estates Act provides for the Special Judge informing the Collector of the nature and extent of the property mentioned in the notice under section 11, which he has found to be liable for attachment and sale in satisfaction of the debts of the applicant.
Section 24 provides for the Collector realising the value of such of the debtor 's property other than the proprietary rights in land as shall have been reported by the Special Judge, under the provisions.
of sub section
(2) 'of section 19 to be liable to attachment or sale.
Having due regard to these provisions, the counsel urged that the bhumidhari rights granted to the 570 appellants under the Abolition Act, having not been admittedly reported by the Special Judge, cannot be proceeded against in execution under the Encumbered Estates Act.
The counsel further urged that bhumidhari rights are special and new rights given under the Abolition Act to the former proprietors of the estate: which vested in the State.
Those rights cannot be proceeded against for realisation of the debts due to the respondents.
Counsel referred us to the material provisions of the Encumbered Estates Act and the Abolition Act in support of the above contentions.
Mr. Goyal also urged that the rights of the respondents, if any, are only to proceed against the compensation awarded under the Abolition Act.
In support of his contention that the bhumidhari rights are new and special rights, Mr. Goyal referred us to two decisions of this Court in Rana Sheo Ambar Singh vs Allahabad Bank Ltd., Allahabad(1) and Krishna Prasad vs Guari Kumari Devi(2).
On the other hand, Mr. Gupte, learned counsel for the respondents, urged that the respondents are executing the decree strictly in accordance with the provisions of the Encumbered Estates Act.
In this connection, counsel pointed out that whatever rights of the respondents, as mortgagees, originally might " have been, the decree passed under the Encumbered Estates Act, under section 14(7)(b)(i), in favour of the respondents is only a simple: money decree.
Therefore the provisions dealing with the rights of a mortgagee in respect of an estate under the Zamindari Abolition Act dO not have any material bearing.
He also referred to section 18 of the Encumbered .Estates Act to show that the effect of a decree of a Special Judge under section 14(7) is to extinguish the 'previously existing.
rights of mortgage or security.
The properties which are: sought to be proceeded against are clearly referred to by the Special Judge in the decree sent to the Collector under section 19 of the Encumbered Estates Act.
Under cl.
(b) of section 19 (2) it was only necessary to state the nature and extent of the property and the Special Judge has informed the Collector of those particulars.
SeCtion 24 gives power to the Collector to realise the value of such.
of the debtors ' property as has been reported by the Special Judge under sub section
(2) of section 19.
It is against such property that the respondents are proceeding against for realisation of their dues.
Mr. Gupte further urged that the fact that at the time when execution is levied, the right of the appellants is the bhumidhari rights in those identical properties is not of any consequence.
The decisions.
relied on by Mr. Goyal, the counsel points out, had no occasion to deal with the rights of a creditor under the Encumbered Estates Act.
He further pointed out that there is nO provision in the Abolition Act.
barring attachment and sale of bhumidhari rights.
The counsel (1) [1962] 2S.C.R. 441.
(2) [1962] Supp.
3 S.C.R. 571 finally urged that the main purpose of the Encumbered Estates Act was to help to preserve the proprietary rights of land owners in U.P. and at the same time to evolve a machinery to liquidate their rights.
It could not be the intention of the Legislature on the one hand tO preserve property rights in land even though it is encumbered with heavy debts and on the other to provide the creditors no machinery for realisation of their dues.
It will be seen from the rival contentions set out above that the main question that arises for consideration is as to whether the bhumidhari rights of the appellants obtained by them under the Abolition Act can be proceeded with for realisation of the decree obtained by the respondents under the provisions of the Encumbered Estates Act.
This takes us to a consideration of the material provisions of the Encumbered Estates Act and the Abolition Act.
The object of the Encumbered Estates Act is to provide for relief of encumbered estates in U.P. Section 2 defines among other expressions, 'debt ', 'land ' and 'landlord ' Section 3 deals with the appointment of a Special Judge.
Section 4 provides for the landlord who is subject to or whose immovable property or any part thereof is encumbered with private debts,.
for making an application within the time mentioned therein to the concerned Collector requesting that the provisions of the Encumbered Estates Act be applied to him.
The landlord has to state in the application the amount of private debts as also his public debts, both decreed and undecreed.
Section 6 deals with the transmission to the Special Judge of the application received by the Collector under section 4.
The Collector has also to inform the Special Judge of any public debts outstanding against the landlord.
Section 7 deals with the consequence of acceptance of an application by the Collector.
In brief, all pending proceedings excepting proceedings by way of appeal or revision stand stayed and all attachments and other execution processes are declared null and void.
No fresh suit or other proceeding excepting an appeal or revision against a decree or order can be instituted in any civil or revenue Court.
Section 8 deals with the Special Judge who has received an application under section 6 calling upon the applicant landlord to submit a written statement containing full particulars regarding the public or private debts to which the landlord is subject or his immovable property is encumbered, the nature and extent of the landlord 's proprietary rights in land, the nature and extent of his property liable to attachment and sale under section 60, C.P.C., and the names and addresses of his creditors.
Under section 9, the Special Judge has to publish in the Gazette a notice calling upon all persons having claims in respect of private debts, both decreed and undecreed, against the landlord or his property.
Section 10 provides that every claim made under Sup.
CI/70 6 572 section 9 should contain full particulars of the claim and also to the extent possible the nature and extent of the landlord 's propfietory rights in land as also the nature and extent of the landlord 's property other than proprietary rights.
Section 11 requires the Special Judge to publish a notice specifying the property mentioned by the landlord under section 8 and by a claimant under section 10.
It also provides for any person having any claim to the property mentioned in such notice of making an application to the Special Judge specifying his claim and for investigation by the Special Judge whether the property specified in the claim or any part thereof is liable to attachment, sale or mortgage in satisfaction of the applicant.
Section 14 empowers the Special Judge, after giving the necessary notices in that behalf, to examine each claim and determine the amount, if any, due from the landlord to the claimant on the date of the application under section 4.
Section 14 (7) (b) provides for the Special Judge, on finding that an amount is due to the claimant, to pass a simple money decree.
Sub section
(8) states that every decree passed under sub section
(7) shall be deemed to be a decree of a Court of competent jurisdiction but shall not be executable within U.P. except under the provisions of the Encumbered Estates Act.
Section 18, dealing with the effect of the finding of the Special Judge states that the existing relationship between the debt and the property which is charged or mortgaged for that debt are extinguished and the decree that is given by the Special Judge is stated to substitute for the previous rights a right to recover the amount of the decree in the manner and to the extent thereafter provided.
It has already been noted that under section 14 it is only a simple money decree that is passed by the Special Judge.
Section 19 provides for the transmission of the decrees passed by the Special Judge to the Collector for execution in accordance with the provisions of Chapter V.
The Special Judge is also to inform the Collector of the nature and extent of the property mentioned in the notice under section 11 which he has found to be liable to attachment or sale in execution of the debts of the applicant.
In the case before us there is no con troves that the Special Judge has complied with this provision.
Chapter V deals with execution of decrees and liquidation of debts and section 24 provides for the Collector to whom the decree has been transmitted by the Special Judge under section 19 to proceed to realise the value of such of the debtor 's property other than proprietary rights in land as shall have been reported by the Special Judge under the provisions of section 19(2) to be liable to attachment and sale.
In this connection, it may be stated that the question that will arise for consideration is whether bhumidhari rights are 'the debtor 's property other than proprietary rights in land '.
If they are not proprietary rights in land then 573 under this section they are liable to be sold under auction because the nature and extent of the property has been mentioned by the Special Judge in his report under section 19(2) to be liable to attachment and sale.
From the provisions referred to above, the Scheme of the Encumbered Estates Act appears to be as follows.
Any landlord who is encumbered with private debts can make an application to the prescribed authority for applying the provisions of that Act.
The Special Judge, after making the necessary publication, calls for claimants against the landlord and also ascertains the property of the debtor.
He then examines the claimants and determines the amounts of debt due and passes a decree under section 7 of the Encumbered Estates Act if amounts are found to be due; but even though the amount may have been charged on the property, the Special Judge passes only a simple money decree.
Under section 14(8) the decree so passed is deemed to be a decree of a Civil Court of competent jurisdiction and it shall not be executable except under the provisions of the Encumbered Estates Act.
Once the matter goes within the jurisdiction of the Special Judge the existing relations between the debt and the property which is charged or mortgaged for that debt are extinguished and the decree is only a simple money decree and not a mortgage decree.
The mode of execution is then described in section 19 under which the Special Judge transmits the decrees for execution to the Collector informing the latter among other matters of the nature and extent of the property which he has found to be liable to attachment or sale in satisfaction of the debts.
The Collector, under section 24, has to realise the value of the debtor 's property other than proprietary rights in land.
In the case before us we have already referred to the various stages leading up to the respondents obtaining a decree and the decree being transmitted for execution, as well as the final order of the Board of Revenue, accepting the right of the respondents to levy execution against the bhumidhari rights in the land.
Under the Abolition Act, there is no controversy, that the estate of the appellants vested in the State on July 1, 1952 by virtue of the notification issued under section 4.
Section 3 defines the various expressions.
Section 4 deals with vesting of estates in the State on the issue of a notification thereunder.
Section 6 deals with the various consequences of the vesting of an estate in the State.
Clause (h) of section 6 provides that no claim or liability enforceable or incurred before the date of vesting by or against such intermediary for any money, which is charged on or is secured by a mortgage of such estate or part thereof, shall, except as provided in section 73 of the Transfer of Property, 1882, be enforceable against the interests of such third person.
Section 574 18 deals with settlement of certain items with intermediaries of cultivators as bhumidhars.
It is the claim of the appellants that under this section they have been given rights of a bhumidhar in respect of the properties which are now sought to be sold by the respondents in execution.
Section 199 provides that no bhumidhar shall be liable to ejectment.
We have not referred very elaborately to the provisions of the Abolition Act or its scheme, because these have been considered in the previous judgment of this Court in Rana Sheo Ambar Singh 's Case(1).
It is enough to state that no provision in the Abolition Act prohibiting the attachment and sale of the bhumidhari rights have been brought to our notice by Mr. Goyal.
In Rana Sheo Ambar Singh 's Case(1) the facts were briefly as follows.
The proprietor of an estate had executed a simple mortgage of his proprietary interest in the estate consisting of 67 villages to the Allahabad Bank Ltd. The Bank obtained a decree and while execution proceedings were pending, the zamindan Abolition Act was passed by virtue of which the estate vested in the State and, consequently, the decree holder Bank could no longer sell the rights of the proprietor in the 67 villageS, mortgaged to it.
The Bank made an application to the executing Court to realise the amounts due to it by proceeding against the rights of the judgment debtor as remained in him after the coming into force of the Abolition Act.
One of the rights of the judgment debtor which were sought to be proceeded against was the bhumidhari rights created under section 18 of the Abolition Act.
The case of the Bank was that the judgment debtor 's proprietary rights in grove land and sir and khudkast lands had been continued under section 18 of the Abolition Act and that, in any event, they constituted substituted security in place of the original proprietary rights mortgaged.
The judgment debtor raised objections to execution being taken against his bhumidhari rights.
The High Court upheld the view of the executing Court that execution could proceed against the bhumidhari rights.
This Court reversed the judgment of the High Court and held that the proprietary rights in sir, khudkast lands and groves vested in the State on the issue of a notification under section 4.
This conclusion was reached after rejecting the contention of the decree holder that the proprietary rights in sir, khudkast and grove lands did not vest in the State and that those rights were continued in the landlord under section 18.
This Court further held that the Legislature was creating a new right under section 18 and the old proprietary right in sir, khudkast and intermediaries ' grove land had already vested in the State under section 6, and further observed, at p. 448: "We are of opinion that the proprietary rights in sir and khudkast land and in grove land have vested (1) [1962] 2 S.G.R. 441 575 in the State and what is conferred on the intermediary by s.18 is a new right altogether which he never had and which could not therefore have been mortgaged in 1914.
" In the later part of the judgment it was further held that the bhumidhari rights created under section 18 are not compensation and that they are special rights conferred on the intermediary by virtue of his cultivatory possession of lands comprised therein and that the decree holder cannot enforce his rights under the mortgage by sale of the bhumidhari rights created in favour of the landlords under section 18, so far as sir, grove land and khudkast lands are concerned and that he can only follow the compensation money under section 6(h); The court finally rejected the contention that bhumidhari rights can be followed as substituted security.
It will be seen that in the decision cited above this Court was considering the rights of a mortgagee as such to proceed against the bhumidhari rights and it was in that connection, in view of the specific provision under section 6(h) of the Act and the nature of the new rights created under section 18, that this Court held that the mortgagee was not entitled to levy execution against the bhumidhari rights.
The said decision also lays down that the bhumidhari rights granted under s.18 were new rights created by the legislature and the old proprietary fight in the land had already vested under section 6 in the State.
It is also clear from the said decision that bhumidhari rights created under s.18 are not compensation and that they are special rights conferred on the intermediary by virtue of his cultivatory possession of the lands comprised therein and bhumidhari rights cannot also be considered as substituted security.
The point to be noted, and which has been emphasised in that decision, is that all proprietary rights in the land had vested in the State and that no part of the proprietary rights remained in the landlord after the vesting of the estate in the State.
It is further to be seen from that decision that the bhumidhari rights are no part of proprietary rights which the landlord had, prior to vesting.
In Krishna Prasad 's Case(1) the question that arose for consideration was whether under the Bihar Land Reforms Act, 1950 (hereinafter called the Bihar Act) it was open to a mortgagee decree holder of an estate which ' had vested in the State to levy execution personally against the mortgagor by attachment and sale of other properties of the mortgagor.
It was held by this Court, after a review of the provisions of the Bihar Act which were more or less substantially the same as those of the Abolition Act, that the compensation payable on acquisition of (1) [1962] Supp.
3 S.C.R. 562.
576 a mortgaged estate had been made a kind of substituted security against which the mortgage claim could be enforced under the Bihar Act.
It was further held that execution, by way of a personal decree, could only be done eventually if the realisation from the compensation amount was found insufficient to satisfy the decree.
We may also refer to the decision of this Court in Shivashankar Prasad Sah vs Baikunth Nath Singh(1).
That decision had, again, to deal with the rights of a mortgagee decree holder to proceed against the Bakasht land of the judgment debtors and that right had to be decided under the Bihar Act.
Section 6 of tiffs Act, corresponds more or less to section 18 of the Abolition Act.
In dealing with the scheme of the Bihar Act and in particular, the effect of section 6 this Court observed: "Reading sections 3, 4 and 6 together, it follows that all Estates notified under s.3 vest in the State free of all encumbrances.
The quondum proprietors and tenureholders of those Estates lose all interests in those Estates.
As proprietors they retain no interest in respect of them whatsoever.
But in respect of the lands enumerated in section 6 the State settled on them the rights of raiyats.
Though in fact the vesting of the Estates and the deemed settlement of raiyats in respect of certain classes of lands included in the Estates took place simultaneously, in law the two must be treated as different transactions; first there was a vesting of the Estates in the State absolutely, and free of all encumbranches.
Then followed the deemed settlement by the State of raiyat 's rights on the quondum proprietors.
Therefore in law it would not be correct to say that what vested in the State are only those interests not coming within section 6.
" Finally this Court held that the mortgagee decree holder 's only remedy was to establish their claim under the Bihar Act and get compensation and that they cannot levy execution against the Bakasht land.
In our opinion, none of the decisions referred to above, assists the appellants.
Those decisions were directly concerned with the rights of the mortgagees as such to levy execution either as against the bhumidhari rights.
or personally against the mortgagor or against his other properties.
The right to levy execution was claimed by the decree holders as mortgagees after the estate mortgaged to them had vested in the State, under the relevant Acts.
Under those circumstances, this Court held that the (1) Civil Appeal No. 368 of 1966 decided on 7. 3. 1969.
577 mortgagees ' remedy was only to proceed against the compensation money as provided under the material provisions of the statute governing the same.
None of those decisions had occasion to consider the question that now arises for consideration before us, viz., the rights of a decree holder under the Encumbered Estates Act.
We have already referred to the nature of the decree that has been obtained by the respondents.
Though at an earlier stage they were mortgagees, it was a simple money decree that was granted to them under section 14(7) of the Encumbered Estates Act and their rights as against the mortgage securities had been extinguished under s.18 of the Encumbered Estates Act.
In this view, s.6(h) of the Abolition Act, relied on by Mr. Goyal, does not assist him.
It is no doubt true that the decree obtained by the respondents shall not be executable except under the provisions of the Encumbered Estates Act.
The nature and the extent of the property liable to attachment and sale in satisfaction of the debts due to the respondent, as required under s.19(2)(b) of the Encumbered Estates Act have all been furnished in the decree granted under s.14(7) by the Special Judge and transmitted to the Collector under s.19.
Therefore, when the respondents approached the Assistant Collector on May 15, 1959 with an application to recover their debts from the bhumidhari rights of the appellants, they were only in the position of holders of simple money decrees.
If so, execution can be levied normally from any property or rights which are liable to be attached or sold unless there is any prohibition imposed by the statute.
Section 18, after extinguishing the rights in the property that may have been held under a mortgage or security, specifically provides that ' where any decree is given by the Special Judge they are in substitution of the original rights of a mortgagee or security holder and the decree holder has got the right to recover the amount of the decree in the manner and to the extent prescribed.
Section 24 gives a right to the decree holders to recover their dues from the property of a debtor other than proprietary rights in land.
Therefore the question is whether the bhumidhari rights conferred on the appellants under section 18 of the Abolition Act are property other than proprietary rights in land.
If they are rights other than proprietary rights, they can be proceeded against under section 24 read with section 18 of the Encumbered Estates Act.
The decisions of this Court, referred to above, clearly lay down that the proprietary rights of the landlord in the land vest in the State on the passing of the relevant Abolition Acts.
It has also been emphasised in Rana Sheo Ambar Singh 's Case(1) and as is also clear from section 6 of the Abolition Act that all rights, (1) ; 578 title and interest of all the intermediaries in every estate shall cease and be vested in the State, on the issue of a notification under section 4 of the Abolition Act.
If so, it follows that after the estate vested in the State, the appellants had no proprietary rights left in them; and the bhumidhari rights, as held by this Court, being new rights created for the first time in favour of the appellants under section 18 of the Abolition Act and not proprietary rights, the respondents are entitled to proceed against those rights under section 24 of the Encumbered Estates Act.
Mr. Goyal next urged that the bhumidhari rights have not been mentioned in the decree granted under section 14(7) nor have they been reported by the Special Judge under section 19(2) as being liable to attachment and sale as is necessary under section 24.
True it is that these rights, as such, have not been mentioned.
But a perusal of section 19(2)(b) clearly shows that it was not necessary that the interest or rights of the debtor should be mentioned in the decree, because the requirement is only regarding the nature and extent of the property and that has been mentioned in the decree granted in favour of the respondents by the Special Judge under section 14(7), and it has been reported to the Collector under section 19(2).
If so, the requirements of sections 19 and 24 have been complied with.
Hence it follows that this contention of Mr. Goyal cannot be accepted.
There is also another reason for rejecting the said contention.
Bhumidhari rights have been created in favour of the appellants only on July 1, 1952, the date of vesting, on the issue of a notification under section 4 of the Abolition Act, whereas the amended decree in favour of the respondents has been passed under s.14(7) as early as January 23, 1938.
When the Encumbered Estates Act permits the respondents to levy execution against the property of the debtor other than proprietary rights in land and when there is no prohibition in the Abolition Act against execution of decrees obtained under the Encumbered Estates Act against such rights, it follows that the decree holder respondents are entitled to proceed against the bhumidhari rights and therefore the appellate order of the Additional Commissioner, dated March 24, 1965 and the revisional order of the Board of Revenue, dated October 15, 1965 upholding the right of the respondents in this regard, are correct.
The further question that arises is whether the respondents are entitled to levy execution against the trees in the possession of the appellants in execution of their decree.
No doubt, the general objection that was taken by the appellants before the Assistant Collector was that the groves formed part of the sir property and .
therefore the question of their being auctioned does not arise and that the groves do not form part of the list mentioned in the decree passed by the Special Judge.
On the other hand, according to.
579 the respondents, the trees never vested in the State under the Abolition Act and, as the appellants continued to be the owners of the same, execution can be levied against the trees.
The contention of the appellants that the trees have not been mentioned in the list need not detain us because the amended decree passed by the Special Judge clearly refers to trees standing on the lands described in the Schedules.
Then the question is whether the trees belong to the respondents.
Section 3(26) of the Abolition Act states that the words and expressions, mentioned therein and which have not been defined in the Act but used in the U.P. Tenancy Act, 1939 shall have the meaning assigned to them in the latter Act.
Two, among the various expressions referred to in section 3(26) are 'grove ' and 'grove holder '.
Therefore we have to look into the U.P. Tenancy Act to find out the meaning of the expression 'grove ' Section 3(6) of the U.P. Tenancy Act, 1939 (U.P. Act XVII of 1939) defines the expression 'grove land ' as follows: "3(6). 'grove land ' means any specific piece of land in a mahal or mahals having trees planted thereon in such numbers that they preclude or when full grown will preclude, the land or any considerable portion thereof from being used primarily for any other purpose and the trees on such land constitute a grove.
" From the above, it will be seen that 'grove ' is something different ' from 'grove land ' because the definition says that the trees on such land, viz., 'grove land ', constitute a 'grove '.
Section 6 of the Abolition Act, dealing with the consequences of the vesting of an estate in the State, among other things, states in cl.
(a): "6(a) all rights, title and interest of all the intermediaries (i) in every estate in such area including land (cultivable or barren), grove land, forests whether within or outside village boundaries, trees (other than trees in village abadi, holding or grove), fisheries, tanks, ponds, water channels, ferries, pathways, abadi, sites, hats, bazars and melas (other than hats, bazars and melas held upon land to which clauses (a) to (c) of sub section (1) of Section 18 apply), and (ii) in all sub soil in such estates including rights, if any, in 1 mines and minerals, whether being worked or not, shall cease and be vested in the State of Uttar Pradesh free from all encumbrances.
" 580 Clause (a), referred to above, deals with grove lands and trees, separately.
The grove land referred to above, will be the grove land defined in section 3(6) of the U.P. Tenancy Act.
Clause (a) also refers to the right, title and interest of intermediaries in trees ceasing and vesting in the State.
From among the trees, such of the trees as constitute a grove have been excluded from the operation of cl.
(a) of section 6.
Therefore, the excluded category of trees forming the grove cannot be considered to have vested in the State on the abolition of the estates.
Section 18, which creates bhumidhari rights deals, among other items, with "intermediary 's grove".
The expression "intermediary 's grove" is defined in section 3 (13) of the Abolition Act as grove land held or occupied by an intermediary as such.
We do not find any material on record to draw an inference that the appellant raised any contention that the trees constituted an 'intermediary 's grove '.
From what is stated above, it will be seen that the trees constituting the grove, have not vested in the State and therefore they could not have formed the subject of creation of bhumidhari rights under section 18.
Therefore the trees constituting the grove, being the debtor 's property, are liable to be proceeded with in execution under section 24 of the Encumbered Estates Act.
Even if it is to be held that the appellants have got bhumidhari rights over the trees constituting the grove, as already held by us, these rights can be proceeded with under section 24 of the Encumbered Estates Act.
Therefore, from either point of view, the trees constituting the grove are liable to be proceeded against, for realisation of the decree by the respondents.
The result is the appeal fails, and is dismissed with costs.
V.P.S. Appeal dismissed.
| IN-Abs | The predecessors in interest of the appellants were landlords owning an estate including agricultural land, trees, groves etc., in U.P., and were heavily indebted to the respondents.
Most of the debts were secured.
On the application of the landlords proceedings were taken under the U.P.
Encumbered Estates Act, 1934, and a decree was passed under section 14(7) of the Act in favour of the respondents in 1938.
The nature and extent of property liable to attachment and sale, as required by section 19(2)(b) of the Act, were furnished to the executing authority.
By virtue of a notification under the U.P. Zamindari Abolition and Land Reforms Act.
1950, the estate vested in the State, and new rights, namely, bhumidhari rights in the lands in the estate, were created in 1952 in favour of the appellants who were the successors in interest of the landlords.
In 1959.
the respondents applied under section 24 of the Encumbered Estates Act to recover the amount decreed to them, by proceeding against the bhumidhari rights and trees belonging to the appellants.
On the question whether: (1 ) the bhumidhari rights, and (2) the trees, could be proceeded against, HELD: (1) Though the respondents were mortgagees their rights as such were extinguished under the Encumbered Estates Act and the decree in theft favour under the Act was only a simple money decree which was not executable except under the provisions of the Act.
Under section 24 execution can be levied from any property or rights, other than proprietary rights in land, which are reported under section 19 as liable to be attached and sold.
On the passing of the U.P. Abolition Act the proprietary rights of the landlords in the land vested in the State and thereafter, the appellants had no proprietary rights left in them.
The bhumidhari rights being new rights created for the first time in favour of the appellants under the Abolition Act, are not proprietary rights.
In the present case, the requirements of sections 19 and 24 have been complied with, even though the bhumidhari rights were not mentioned as being liable to attachment and sale because.
, (i) under section 19(2)(b) the requirement is only to report the nature and extent of the property liable to attachment and sale and not the interests or rights of the debtor in the property; and (ii) the decree under the Encumbered Estates Act was passed in 1938 while the bhumidhari rights were created only in 1952, and hence, could not be specifically mentioned in the decree.
When the Encumbered Estates Act permits the respondents to levy execution against the property of the debtor other than the proprietary rights in land, and when there is no prohibition in the Abolition Act against execution of a, decree obtained under the Encumbered Estates Act, against the bhumidhari rights, the respondents were entitled to proceed against such rights.
[575 A B; 577 B E; G; 578 A.F] 567 Rang Sheo Am,bar Singh vs Allahabad 'Bank Ltd. ; , followed.
(2) Unders; 6(a) of the Abolition Act and section 3.(6)of the U.P. Tenancy Act, 1939. ',the right title and interest of intermediaries in trees and grove land, but not in trees constituting a grove, cease, and vest in the State.
Since the trees constituting a grove have not vested in the State ,and could not have formed the subject of creation of bhumidhari rights they are the debtor 's property and, are liable to be proceeded against in execution under section 24 of the Encumbered Estates Act.
Even if the appellants got bhumidhari rights over the trees constituting the grove, they could be proceeded against; because, bhumidhari rights could be proceeded against in execution.
[580 B, C E]
|
Appeal No. 2111 of 1966.
Appeal by special leave from the judgment and decree dated July 9, 1965 of the Madhya Pradesh High Court, Indore Bench in Second Appeal No. 254 of 1962.
Rameshwar Nath and Mahinder Narain, for the appellant.
M. C. Bhandare, K. Rajendra Chaudhuri and K. R. Chaudhuri, for the respondents.
The Judgment of the Court was delivered by Shah., J.
Of Khasra Nos. 33 & 34 of Maheshwar, District Khargone, Madhya Pradesh, Nathu Prasad hereinafter called the plaintiff is the recorded pattedar tenant.
On May 20, 644 1955 he granted a sub lease of the land, for a period of five years, to Ranchhod Prasad and Onkar Prasad hereinafter collectively called 'the defendants '.
On June 30, 1960 the plaintiff commenced an action in the Court of the Civil Judge, Maheshwar against the defendants claiming that the sub lease being in contravention of section 73 of the Madhya Bharat Land Revenue and Tenancy Act 77 of 1950 the 'defendants were trespassers in the land.
The defendants contended that the lease was valid, and since the plaintiff had received consideration, he was estopped from setting up the plea of invalidity of the lease.
The Trial Court decreed the action, holding that the defendants were tres passers and could not acquire Bhumiswami rights claimed by them.
The District Court agreed with the Trial Court.
In second appeal the High Court of Madhya Pradesh allowed the appeal and dismissed the plaintiff 's action.
In the view of the High Court the defendants had acquired rights as occupancy ,tenants under section 185(1)(ii)(b) of the Madhya Pradesh Land Revenue Code.
In so holding the High Court relied upon the judgment of the Madhya Pradesh High Court Rao Nihalkaran vs Ramchandra(1).
With special leave, the plaintiff has appealed to this Court.
Section 73 of the Revenue Administration and Ryotwari Land Revenue and Tenancy Act, Samvat 2007 (Act No. 66 of 1950) provides : "No Pakka tenant shall sub let for any period whatsoever any land comprised in his holdings except in the cases provided for in section 74.
Explanation Section 74 deals with sub letting by disabled persons.
Since the plaintiff is not a disabled person, the section need not be read.
Section 75 provides : "A sub lease of the whole or any part of the holding of a Pakka tenant effected properly and legally prior to the commencement of this Act shall terminate after the expiry of the period of sub lease or 4 years after the commencement of this Act, whichever period is less." Section 76 provides. "(1) If the sub lessee does not hand over possession of the land sub let to him after the sub lease ceases to be in force under sections 74 and 75 to the lessor or (1) 645 his legal heir " he shall be deemed to be a trespasser and shall be liable to ejectment in accordance with the provisions of this Act.
(2) . .
" Section 78 provides "(1) Any possession who in contravention of the provisions of this Act, obtains possession of any land by virtue of a bequest, gift, sale, mortgage or sub lease, or of any agreement purporting to be a bequest, gift, sale, mortgage or sub lease shall be deemed to be a trespasser and shall be liable to ejectment in accordance with the provisions of section 58. .
" The Madhya Bharat Legislature enacted the Madhya Bharat Ryotwari Sub lessee Protection Act, 1955 (Act 29 of 1955).
The Act came into force on October 19, 1955.
The Act was en acted to provide for stay of proceedings under section 76(1) for the ejectment of sub leases of ryotwari land after the termination of sub leases according to section 75 of the Madhya Bharat Land Revenue and Tenancy Act Samvat 2007.
"Ryotwari sub lessee" was defined in cl.
(b) of section 2 as meaning "a person to whom a pakka tenant of any Ryotwari land has sub let on sub lease any part of his Ryotwari land".
Section 3 of Act 29 of 1955 provides: "Nothwithstanding anything contained in section 76 of the Madhya Bharat Land Revenue and Tenancy Act, Samvat 2007, during the continuance of this Act but subject to the provisions contained in section 4 below, no Ryotwari sub lessee other than a sub lessee under section 74 of the Madhya Bharat Land Revenue and Tenancy Act, Samvat 2007, and a sub lessee deemed to be a trespasser under section 78 of the said Land Revenue and Tenancy Act, shall be ejected from his land.
" Section 3 clearly grants protection during the continuance of the Act to sub lessees.
But sub lessees under section 74 of the Madhya Bharat Land Revenue and Tenancy Act and a sub lessee deemed to be a trespasser under section 78 of that Act are outside that protection.
The Madhya Pradesh Land Revenue Code (Act 20 of 1959) was enacted by the State Legislature and was brought into force in the whole of the State of Madhya Pradesh.
By that Code.
Act 29 of 1955 was repealed.
The expression "tenant" was defined in section 2 (y) as meaning "a person holding land from a Bhumiswami as an occupancy tenant under Chapter XIV.
" Section 185, insofar as it is relevant, provides; 646 " (i) Every person who at the coming into force of this Code holds (ii) In the Madhya Bharat region (a) any Inam land as a tenant, or as a sub tenant or as an ordinary tenant ; or Explanation (b) any land as ryotwari sub lessee as defined in the Madhya Bharat Ryotwari Sub lessee Protection Act, 1955 (29 of 1955); or shall be called an occupancy tenant and shall have all the rights and be subject to all the liabilities conferred or imposed upon an occupancy tenant by or under this Code.
" By section 185 of the Madhya Pradesh Land Revenue Code a person who is holding land ,is a ryotwari sub lessee under Act 29 of 1955 is deemed to be an occupancy tenant and is entitled to all the rights and is subject to all the liabilities conferred or imposed upon an occupancy tenant by or under the Madhya Pradesh Land Revenue Code.
A person inducted as a sub lessee, but who by express pro vision contained in section 73 read with section 78 of Act 66 of 1950 is declared a trespasser, does not acquire the status of an occupancy tenant under section 185 (1) (ii) (b) of the Madhya Pradesh Land Revenue Code.
Act 29 of 1955 conferred protection only upon a ryotwari sub lessee, and a ryotwari sub lessee was defined in that Act as meaning a person in whose favour the land was settled.
A person, the lease, in whose favour was declared void by virtue of Act 66 of 1950, could not claim the status of a sub lessee.
That is so enacted in section 3 which excludes from the protection granted by Act 29 of 1955, amongst others, a sub lessee deemed to be a trespasser under section 78 of Act 66 of 1950.
A person inducted as a sub lessee contrary to the provisions of section 73 of Act 66 of 1950 did not therefore acquire any right under a contract of sub letting and his possession was not protected under Act 29 of 1955.
Such a person is not a ryotwari sub lessee as defined in the Madhya Pradesh Ryotwari Sub lessee Protection Act 29 of 1955, and it is only on "Ryotwari sub lessee" as defined in that Act that the right of occupancy tenant is conferred by section 185 (1) (ii) (b) of the Madhya Pradesh Land Revenue Code.
Krishnan, J., regarded himself bound by the following observation made by a Division Bench of the Madhya Pradesh High Court in Rao Nihalkaran 's case(1) (1) 647 "By section 3 of this Act (Act 29 of 1955) a bar was created to the ejectment of these sub lessees whose continuance had become precarious under the existing law.
The bar was to operate during the continuance of that Act which was for a definite duration notwithstanding anything contained in section 76 and 78 of the Madhya Bharat Land Revenue and Tenancy Act barring exceptions contained in section 74 of that Act.
" The observation that protection was given to sub lessees, notwithstanding anything contained in section 78 was apparently made through oversight; it is contrary to the express provisions of the Act.
The High Court was, in our judgment, in error in holding that the defendants had acquired the status of occupancy tenants by virtue of section 185(1)(ii)(b) of the Madhya Pradesh Land Revenue Code (Act 20 of 1959).
The appeal is allowed.
The order passed by the High Court is set aside and the decree passed by the District Court is restored.
There will be no order as to costs in this Court and in the High Court.
R.K.P.S. Appeal allowed.
| IN-Abs | The respondents were inducted as sub lessees in contravention of 'section 73 of the Revenue Administration and Ryotwari Land Revenue and Tenancy Act, 1950.
On the question whether they acquired rights as occupancy tenants under section 185 (1) (ii) (b) of the Madhya Pradesh Land Revenue Code.
HELD : A person inducted as a sub lessee, but who by express provision contained in section 73 read with section 78 of Act 66 of 1950 is declared a trespasser, does not acquire the States of an occupancy tenant under section 185(1)(ii)(b) of the Madhya Pradesh Land Revenue Code.
Act 29 of 1955 conferred protection only upon a ryatwari sub lessee, and a ryotwari sub lessee was defined in that Act as meaning a person in whose favour the land was settled.
A Person, the lease in whose favour was declared void by virtue of Act 66 of 1950, could not claim the status of a. sub lessee.
That is so enacted in section 3 which excludes from the protection granted by Act 29 of 1955, amongst others, a sub lessee deemed to be a trespasser under section 78 of Act 66 of 1950.
A person inducted as a sub lessee contrary to the provisions of section 73 of Act 66 of 1950 did not, therefore, acquire any right under a contract of sub letting, and his possession was not protected under Act 29 of 1955.
Such a person is not a ryotwari sub lessee defined in the Madhya Bharat Ryotwari Sub lesse protection Act 29 of 1955, and it is only on 'Ryotwari sub lessee ' as defined in that Act that the right of occupancy tenants conferred by section 185(1)(ii)(b) of the Madhya Pradesh Land Revenue Code.
[646 E] The observation contra in Rao Nihalkaran vs Ramchandra , disapproved.
|
Appeal No. 2203 of 1966.
Appeal by special leave from the judgment and order dated November 8, 1965 of the Judicial Commissioner 's Court, Tripura in Writ Petition No. 27 of 1961.
M. K. Ramamurthi and Shyamala Pappu, for the appellant.
V. A Seyid Muhammad, section P. Nayar and B. D. Sharma, for the,respondents.
640 The Judgment of the Court was delivered by Shah, J.
The appellant joined the Tripura Civil Service on October 30, 1949, and was posted as a probationer Divisional Purchasing Officer, Dharmnagar.
In 1953 the Tripura Civil Service was split into two cadres senior officers being absorbed as Sub Divisional Officers and junior officers as Sub Treasury Officers.
The appellant was absorbed as Sub Treasury Officer with effect from April 1, 1950.
On May 10, 1954, the appellant was appointed officiating Sub Divisional Officer with effect from September 10, 1953.
By order dated May 12, 1954, the appellant was reverted to the post of Sub Treasury Officer with effect from May 6, 1954.
The appellant made several representations to the Chief Commissioner but without success.
The appellant was suspended by order dated May 6, 1957, for failure to obey the orders of the Additional District Magistrate and he was dismissed with effect from July 3, 1958, by the order of the Chief Commissioner.
The appellant moved a petition in the Court of the Judicial Commissioner at Tripura challenging the orders of suspension and dismissal.
On February 19, 1960 the Court set aside the impugned orders.
By order dated November 7, 1960 the Chief Commissioner reinstated the appellant to the post of Superintendent of Surveys and by the same order reverted him to his substantive post of Sub Treasury Officer with retrospective effect, from June 7, 1957.
The appeal of the appellant to the President having been rejected, he moved a petition in the Court of the Judicial Commissioner for a writ quashing the orders dated May 12, 1954 and November 7, 1960.
The appellant contended that in order of reversion cannot be made to have retrospective operation.
The petition insofar as it relates to the first order was belated.
Again there is no ground for holding that retrospective operation was in fact given to that order of reversion.
By the order dated May 12, 1954 the appellant was reverted to the post of SubTreasury Officer, but the order did not state the date from which the order was to be effective.
In summarising the averments made in the petition, the Judicial Commissioner stated that the petitioner had alleged that the order dated May 12, 1954, was to have effect from May 6, 1954.
A copy of that petition is not filed in this Court and we are unable to accept, especially having regard to the terms of the order, that any retrospective operation was sought to be given.
In any event the Judicial Commissioner was justified in refusing to entertain any contention as to the validity of the order of reversion made nearly seven years before the date on which the petition was filed, 641 The second order dated November 7, 1960, passed by the Chief Commissioner consists of two parts (i) that the appellant be reinstated in the post of the Superintendent of Surveys with effect from the afternoon of May 7, 1957; and (ii) that the appellant be reverted to the substantive post of Sub Treasury Officer with retrospective effect from June 7, 1957.
The appellant, as already stated, was suspended on May 6, 1957.
The order of suspension and the order of dismissal which followed it were set aside by the Judicial Commissioner, and the Chief Commissioner therefore reinstated the appellant with effect from the afternoon of May 7, 1957 to the post occupied by the appellant on the date on which he was suspended.
But the appellant was not holding the post of Superintendent of Surveys substantively : he was merely officiating in that post.
He was therefore reverted with effect from June 7, 1957 to his substantive post.
The order was passed because the post was filled by another officer approved by the U.P.S.C. Counsel for the appellant relied upon the observations made by section R. Das, C.J., in Parshotam Lal Dhingra vs Union of India(1) : "But the mere fact that the servant has no title to the post or the rank and the Government has, by contract, express or implied, or under the rules, the right to reduce him to a lower post does not mean that an order of reduction of a servant to a lower post or rank cannot in any circumstances be a punishment.
The real test for determining whether the reduction in such cases is or is not by way of punishment is to find out if the order for the reduction also visits the servant with any penal consequences.
Thus if the order entails or provides for the forfeiture of his pay or allowances or the loss of his seniority in his substantive rank or the stoppage or postponment of his future chances of promotion.
then that circumstance may indicate that although in form the Government had purported to exercise its right to terminate the employment or to reduce the servant to a lower rank under the terms of the contract of employment or under the rules, in truth and reality the Government has terminated the employment as and by way of penalty." These observations.
in our judgment, do not assist the appellant.
The order reverting the appellant from June 7, 1957, to his substantive post does not entail forfeiture of his pay or allowances or loss of seniority in his substantive rank or stoppage or postponement of his future chances of promotion, (1) , 863.
642 Counsel for the appellant urged that whenever a person is reinstated as from the date on which his services were terminated he must be restored to the same office which he was holding at the date of the termination of employment or suspension and must receive salary upto the date of reinstatement which that office carried.
We find no warrant for the submission.
If the appellant had not been suspended, it was open to the Chief Commissioner still to revert him to his substantive post.
We see no reason for holding that the Chief Commissioner could not do so when he reinstated the appellant.
There is no ground for thinking that the order was made maliciously.
The reason for reversion was that since June 7, 1957 another officer was occupying the post of the Superintendent of Surveys.
The post having been already filled, the appellant cannot claim that when he was reinstated lie should have been paid emoluments attached to the office of Sub Divisional Officer on the footing that he continued to occupy that office which he was holding in an officiating capacity.
The appeal therefore fails and is dismissed.
Having regard to the circumstances of the case there will be no order as to costs.
V.P.s.
Appeal dismissed.
| IN-Abs | The appellant, who was a junior officer in the State service, was appointed as an officiating senior officer on May 10, 1954.
On May 12, 1954, an order was passed reverting him to the, post of junior officer.
On the ground that he refused to obey the order of reversion, on May 6, 1957 he was suspended, and ultimately dismissed.
The orders of the suspension and dismissal were set aside by the Court of Judicial Commissioner.
By order dated November 7.
1960, he was reinstated in the post of the senior officer which he was holding on the date of his suspension.
with effect from the afternoon of May 7, 1957.
By the same order, he was reverted to his substantive post of junior officer with retrospective effect from June, 7, 1957, as another officer was already occupying the post.
The appellant, thereupon, challenged both the orders dated May 12, 1954, and November 7, 1960, but the Judicial Commissioner dismissed the petition.
In appeal to this Court, HELD : (1) The order dated November 7, 1960 reverting the appellant to his substantive post did not entail forfeiture of the appellant 's pay or allowances, or loss of seniority in his substantive rank, or stoppage or postponement of his future chances of promotion.
The appellant could not claim the salary of the senior post from the date of suspension or dismissal till date of reinstatement, because, the appropriate authority, when reinstating the appellant could revert him, as from an earlier date, to his substantive post from the officiating post, provided the order was not passed mala fide.
[641 H; 642 B C] Parshotam Lal Dhingra vs Union of India, ; , referred to.
(2) There is nothing to show that any retrospective operation was given to the order dated May 12, 1954 In any event, the Judicial Commissioner was justified in refusing to entertain any contention as to its validity seven years after the order was passed.
[640 H]
|
iminal Appeal No. 80 of 1968.
Appeal from the judgment and order dated November 6, 1967 of the Delhi High Court in Criminal Revision No. 189 of 1967.
Hardev Singh, for the appellant.
Bishan Narain and B. P. Maheshwari, for respondent No. 1.
L. M. Singhvi and R. N. Sachthey, for respondent No. 2.
683 The Judgement of the Court was delivered by Jaganmohan Reddy, J.
This appeal by certificate granted by the Delhi High Court under article 134(1)(c) of the Constitution is against its judgment which confirmed the conviction of the accused of an offence under section 9 of the (hereinafter referred to as the Act) and against the enhancement of the sentence of imprisonment from the one till the rising of the court to six months R.I. which is the minimum prescribed under the Act together with a fine of Rs. 1,000/ , in default to undergo six months R.I.
The appellant is a sweetmeat seller.
It is alleged that on September 1, 1965, Shri B. section Sethi, Food Inspector appointed by the Central Government under section 9 of the Act visited his shop and found that the appellant was selling coloured laddus.
The Food Inspector purchased 1,500 grams of these laddus by way of a sample by paying him Rs. 9/ as the price thereof.
This sample was subdivided into three parts and was put into three separate bottles as required under section II of the Act.
One bottle was given to the accused, another was sent to the Public Analyst and the third was retained by the Food Inspector.
The sample sent to the Public Analyst was analysed and a report was received from him on September 10, 1965 to the effect that the laddus were adulterated with unpermitted colour.
Thereupon a complaint was filed against the accused and he was convicted by the magistrate on October 17,1966 and sentenced to imprisonment till the rising of the court and to pay a fine of Rs. 1,000/ , in default to undergo six months ' R.I.
It would appear that the Municipal Corporation filed before the Sessions Judge a revision for the enhancement of the sentence because the accused having been found guilty under the provisions of section 7 read with section 16 of the Act should have been awarded the minimum sentence of six months and a fine of Rs. 1,000 but instead he was sentenced to imprisonment till the rising of the court and a fine of Rs. 1,000/ which was not in accordance with the mandatory provisions of section 16 of the Act.
The Sessions Judge, after hearing the parties accepted the contention of the Municipality and referred the case to the High Court recommending that the accused having been found guilty under the provisions of section 16 of the Act should have been awarded a minimum sentence of six months and a fine of Rs. 1,000/ , Before the High Court several contentions were raised on behalf of the accused one of which was that as his request for summoning the Public Analyst for crossexamination had not been acceded to, he had been prejudiced, as such the entire proceedings against him were vitiated.
The High Court however rejected this contention on the ground that section 510 of the Code of Criminal Procedure had no application in that it only dealt with Chemical Examiner or an Assistant Chemical L3Sup, CI/70 13 684 Examiner and other experts mentioned therein.
It was also observed that where the accused desired to challenge the report of the Public Analyst under the Act, he had to follow the procedure provided in section 13(2) for sending the sample to the Director of Central Food Laboratory for his examination, because any report given by him will supersede the report of the Public Analyst and would be final and conclusive as to the facts stated therein.
Before us also a similar contention was urged by the learned Advocate for the accused Shri Hardev Singh who had produced before us the application made on behalf of the accused under section 510(2) for calling the Public Analyst which was summarily rejected on 28th August 1966.
This contention urged before us has to be determined in the light of the relevant provisions of the Act.
It cannot be disputed that any person selling food with im permissible colouring matter contravenes the provisions of section 7 which prohibits the selling of any adulterated food and would be punishable under section 16 of the Act.
What is adulterated article of food has been defined in section 2 (i) and so far as it is related to colouring sub cl.
(i) of cl.
(i) of section 2 provides that an article of food shall be deemed to be adulterated "if any colouring matter other than that prescribed in respect thereof and in amounts not within the prescribed in respect thereof and in amounts not within the prescribed limits of variability is present in the article".
Rules 23 and 27 of the Prevention of Food Adulteration Rules, 1955 prohibit the addition of any colouring matter except permitted by the Rules, and of inorganic colouring matters and pigments to any article of food.
What is permitted and to what extent has been stated in rr.
24 to 26 and 28 to 3 1, but in so far as this case is concerned we may merely refer to rr.
26 and 28 the former of which gives a list of natural colouring matters that can be, used and the latter with coal tar dyes.
We are told that the laddus which were being sold by the accused had yellow colour.
If so, item 2 of r. 28 prescribes that the only permitted colours are Tartrazine with colour index 640 belonging to Chemical class of Xanthene and Sunset Yellow FCF belonging to the chemical class Azo, and these alone can be used.
It will therefore be incumbent on the Public Analysts to say whether the colour used is that which is permissible under any of the rules and if as in the report he has stated that the sample of the laddus purchased by the Food Inspector was coloured with unpermitted colour, it would mean that the accused has not used any of the colours permitted under the rules.
The report of the Public Analyst is as follows: "Butyro Refractometer reading at 40 C of the fact extracted from sweets 50 0 Baudouin test of the extracted fact Positive Reichert value of the extracted fact 7.59 Colour unpermitted.
1 1 1 the same is adulterated due to 7.0 excess in Butyro Refractometer reading at 40 0 C of the fact ex 685 tracted from sweets, 20.41 deficiency in Reichert value of the extracted fact, Baudouin test of extracted fact being positive, and also coloured with unpermitted colour." The learned Advocate for the accused submits that the refusal of the court to grant the application of the accused to call the Public Analyst Shri Sudhama Rao for cross examination has greatly prejudiced him, as such the conviction ought to be quashed.
It is contended that the accused has a valuable right of cross examination to test the contents of the report given by the Public Analyst and the court has to summon him if so desired.
On the other hand it is contended both by Shri Bishan Narain for the Delhi Municipality as well as Dr. Singhvi for the Union of India that no such right has been conferred under the Act when the provisions of section 13(5) have not only made the document signed by the Public Analyst to be used in evidence of the facts stated therein in any proceedings under the Act or under section 272 to 276 of the Indian Penal Code but has given a right to the accused to have the, sample sent to the Director of the Central Food Laboratories under section 13(2) whose report supersedes that of the, Public Analyst and is final and conclusive.
In view of these provisions it is said that the legislature inferentially took away the right of the accused to summon the Public Analyst either for examination or cross examination, as such the analogy of section 510(2) of the Criminal Procedure Code which specifically gives a right to summon and examine the chemical examiner and other experts therein stated, as to the subject matter of their respective reports has no relevance.
Dr. Singhvi further contends that there are a class of cases which permit of trials by certificates where the general rule of evidence that every document in order to be admissible has to be proved by the person signing it has no application as the statute permits it to be proved without calling the author of it.
While it cannot be disputed that there are certain classes of cases where certificates have been treated as conclusive evidence, there were yet others though admissible without calling the functionaries that gave them were none the less only prima facie evidence.
In cases where the certificates are not to be treated as conclusive evidence and they are only prima facie evidence, the party against whom they are produced has a right to challenge the subject matter of the certificate.
The statutes have also in some cases recognised this right, such as for instance in sub section
(2) of section 510 Criminal Procedure Code in respect of reports given under the hand of several experts named in sub section
(1) notwithstanding the fact that they may be used in evidence in enquiry, trial or other proceedings under the Code.
Sub section
(2) provides : "The court may if it thinks fit, and shall, on the application of the prosecution or the accused, summon and examine any such person as to the subject matter of the report".
Similarly sub section
686 1) of section 110 of the English Food and Drugs Act, 1955 while providing that the production by one of the parties of the certificate of a Public Analyst in the form prescribed in section 92(5) or of a document supplied to him by the other party as being a copy of such certificate shall be sufficient evidence of the facts stated therein unless in the first mentioned case the other party requires that the analyst shall be called as a witness.
Sub section (2) of section 110 also gives a like opportunity in the case of a certificate of an officer who took a sample of the milk.
It appears to us that where certificates are not made final and conclusive evidence of the facts stated therein, it will be open to the party against whom certificates which are declared to be sufficient evidence either to rebut the facts stated therein by his own or other evidence or to require the expert to be produced for cross examination which prayer the court is bound to consider on merits in granting or rejecting it.
There is no presumption that the contents are true or correct though such a certificate is evidence without formal proof.
In any case where there is evidence to the contra the court is bound to consider that evidence along with such a certificate with or without the evidence of the expert who gave it being called and come to its own conclusion.
It is true that sub section
(2) of section 13 of the Act has given a right both to the accused as well as the complainant on payment of the prescribed fee to apply to the court after the prosecution has been instituted to send part of the sample preserved as required under sub cl.
(1) or sub cl.
(iii) of cl.
(c) of sub section
( 1) of section 11 to the Director of the Central Laboratory for a certificate, and the court is bound to send it under its seal to the said Director who has to submit a report within one month from the date of the re ceipt.
This certificate under sub section
(3) supersedes the Public Analyst 's certificate and is conclusive and final under sub sec.
But nothing contained in these sub sections relating to certificate of the Director of the Central Food Laboratory in any way limits the right of the accused under section 257 of the Code of Criminal Procedure to require the Public Analyst to be produced.
The court may, as we said earlier, reject the prayer for good and sufficient reasons such as for instance where it is made for the purpose of vexation or delay or for defeating the ends of justice.
In Mangaldas Raghavji vs State(1) this Court held that where the accused had not done anything to call the Public Analyst the court could legally act on the report of the Public Analyst.
Mudholkar, J. speaking for the Court observed at p. 900 : "It is true that the certificate of the Public Analyst is not made conclusive but this only means that the court of fact is free to act on the certificate or not as it thinks fit.
(1) ; 687 Again at p. 902 it was said, "As regards the failure to examine the Public Analyst as a witness in the case no blame can be laid on the prosecution.
The report of the Public Analyst was there and if either the court or the appellant wanted him to be examined as a witness appropriate steps would have been taken.
The prosecution cannot fail solely on the ground that the Public Analyst had not been called in the case.
" In Sukhmal Gupta vs The Corporation of Calcutta (unreported, Criminal Appeal No. 161 of 1966 decided on 3rd May 1968) the Assistant Public Analyst who had analysed the sample was examined and was cross examined by the defence.
It was contended that the Public Analyst was not called.
There does not appear to have been any attempt to have him called, nor was any prejudice shown.
On the other hand, the accused could have availed of the valuable right given to him under section 13(2) but he did not do so, nor did lie put any question in cross examination that the tea was liable to deterioration and could not be analysed by the Director of Central Food Laboratory.
In these circumstances the evidence of the Assistant Public Analyst and the report of the Public Analyst was accepted in maintaining the conviction.
In this case we would have remanded it to give the accused an opportunity to examine the Public Analyst, but it appears to us that even before us no attempt was made as to why the evidence was required and what is the specific point which needs to be elucidated.
The accused knows what colour he added, he could have easily said that that colour was one of the permitted colours, but he did not say so in his examination under section 342, nor did he produce any evidence of those whom he employed as to the colour which was added.
In our view, the application was made more to delay the disposal of the case; otherwise he could have easily made an application under section 13(a) as soon as a complaint was lodged against him on 19th Jan. 1966 which was within 3 1/2 months from the purchase of the sample and the receipt of the report.
There is nothing to show that either the Laddus or the colour would have deteriorated even if he had made his application under section 13(2) when he made the application under section 510(2) on 29th August 1966.
In these circumstances, we do not consider this to be a fit case for interference.
The appeal is accordingly dismissed.
R.K.P.S. Appeal dismissed.
| IN-Abs | The appellant was convicted for selling food with impermissible colouring matter.
He contended that as his request for summoning the Public Analyst for cross examination had not been acceded to he had been prejudiced and as such the entire proceeding against him were vitiated The High Court rejected the contention on the ground that section 510 of the Code of Criminal Procedure bad no application in that it only dealt with the experts mentioned therein.
The Court also observed that when the accused desired to challenge the report of the Public Analyst under the Act, he had to follow the procedure provided in section 13(2) for sending the sample to the Director of Central Food Laboratory whose report would be final and conclusive.
Dismissing the appeal, HELD: Where certificates are not made final and conclusive evidence of the facts stated therein, 'It will be open to the party against whom certificates are given either to rebut the facts stated therein by his own or other evidence or to require the expert to be produced for cross examination which prayer the court is bound to consider on merits in granting or rejecting it.
The court may reject the prayer for good and sufficient reasons such as for instance where it is made for the purpose of vexation or delay or for defeating the ends of justice.
[685 B C; F G] The present case is not a fit case for interference.
No attempt was made to establish why the evidence was required and as to the specific point which needed to be elucidated.
The accused knew what colouring matter he added; he could have easily said that that colour was one of the permitted colours; but he did not say so in his examination under section 34 nor did he produce any evidence of those whom he employed as to the colouring matter which was added.
The application was made more to delay the disposal of the case.
[687 E] Mangaldas Raghavji vs State, ; and Sukhmal Gupta vs The Corporation of Cakutta, Cr. A. No. 161/66 dated 3 5 68, referred to.
|
Appeal No. 2227 of 1966.
689 Appeal from the judgment and decree dated December 10, 1963 of the Kerala High Court in Appeal Suit No. 1094 of 1959.
section V. Gupta and Lily Thomas, for the appellants.
Rameshwar Nath, for respondent No. 2.
Sardar Bahadur, Vishnu Bahadur Saharya and Yougindra Khushalani, for respondent No. 3.
The Judgment of the Court was delivered by Hegde, J.
The question for decision in this appeal by certificate is short but important and that question is what are the principles governing the assessment of damages under sections 1A and 2 of the (Act XIII of 1855) (to be hereinafter referred to as the Act) ? One Krishnamoorthy son of plaintiffs 1 and 2 aged about 8 years was hit by a bus owned by the 1st defendant (who died during the pendency of this suit) and driven by the second defendant on February 26, 1956.
As a result of that accident Krishnamoorthy sustained very severe injuries.
He became unconscious almost immediately after the accident and died in the hospital on the early morning of February 28, 1956.
Krishnamoorthy was the eldest son of plaintiffs 1 and 2.
Both the courts have come to the conclusion that he was a bright boy and was at the top of his class in his school.
At the time of his death he was in Standard III.
His parents are affluent.
They could have afforded to give him good education.
Hence there was a bright future for him.
The plaintiffs claimed a sum of Rs. '30,000 as damages under sections IA and 2 of the Act.
The District Judge computed the damages under sections IA and 2 at Rs. 5,000.
In appeal the High Court determined the damages under section 1A at Rs. 5,000 and under section 2 at Rs. 1,000.
Aggrieved by that decision, the plaintiffs have brought this appeal.
We shall first read section 1A and 2 for the purpose of ascertaining the principles governing the assessment of the damages under those sections.
Section IA reads : "Whenever the death of a person shall be caused by wrongful act, neglect or default and the act, neglect or default is such as would (if death had not ensued) have entitled the party injured to maintain an action and recover damages in respect thereof, the party who would have been liable it death had not ensued shall be liable to an action or suit for damages notwithstanding the death of the person injured, and although the death shall have been caused under such circumstances as amount in law to felony or other crime.
Every such action or suit shall be for benefit of the wife, husband, parent and child, if any, of the person 690 whose death shall have been so caused, and shall be brought by and in the name of the executor, administrator or representative of the person deceased;" Section 2 reads thus : "Provided always that not more than one action or suit shall be brought for, and in respect of the same subject matter of complaint.
Provided that, in any such action or suit, the executor, administrator or representative of the deceased may insert a claim for and recover any pecuniary loss to the estate of the deceased occasioned by such wrongful act, neglect or default, which sum, when recovered, shall be deemed part of the assets of the estate of the deceased.
" The rights under the two provisions are quite distinct and independent.
Under the former section the damages are made payable to one or the other relations enumerated therein whereas the latter section provides for the recoupment of any pecuniary loss to the estate of the deceased occasioned by the wrongful act complained of.
Sometimes, the beneficiaries under the two provisions may be the same.
Section IA is in substance a reproduction of the English Fatal Accidents Acts 9 and 10 Vict.
93 known as the Lord Campbell 's Acts.
Section 2 corresponds to one of the provisions in the English Law Reform (Miscellaneous Provisions) Act, 1934.
The scope of section 1 of the Campbell 's Acts was considered by the House of Lords in Davies and Anr.
vs Powell Dufferyn Associated Collieries Ltd.(1), Dealing with the mode of asse ssment of damages under that section Lord Russel of Killowen observed "The general rule which has always prevailed in regard to the assessment of damages under the is well settled, namely, that any benefit accruing to a dependant by reason of the relevant death must be taken into account.
Under those Acts the balance of loss and gain to a dependant by the death must be ascertained, the position of each dependant being considered separately.
" Lord Wright stated the law on the point thus "The general nature of the remedy under the Fatal Accidents general Acts has often been explained.
These Acts provided a new "cause of action and did not merely regulate or enlarge an old one", as Lord Summer observed in Admiralty Commissioners vs section section (1) 691 America(1).
The claim is, in the words of Bowen L.J., in The Vera Cruz (No. 2)(2) for injuriously affecting the family of the deceased.
It is not a claim which the deceased could have pursued in his own life time, because it is for damages suffered not by himself, but by his family after his death.
The Act of 1846, section 2 provides that the action is to be for the benefit of the wife or other member of the family, and the jury (or judge) are to give such damages as may be thought proportioned to the injury resulting to such parties from the death.
The damages are to be based on the reasonable expectation of pecuniary benefit or benefit reducible, to money value.
In assessing the damages all circumstances which may be legitimately pleaded in diminution of the damages must be considered : Grand Trunk Ry.
Co. of Canada vs Jennings(4).
The actual pecuniary loss of each individual entitled to sue can only be ascertained by balancing, on the one hand, the loss to him of the future pecuniary benefit, and, on the other, any pecuniary advantage which from whatever source comes to him by reason of the death.
" In ascertaining pecuniary loss caused to the relations mentioned in section IA, it must be borne in mind that these damages are not to be given as solatium but are to be given with reference to a pecuniary loss.
The damages should be calculated with reference to a r easonable expectation of pecuniary benefit from the continuance of the life of the deceased see Franklin vs The South East Railway Company (4 In that case Pollock, C.B. observed : "We do not say that it was necessary that actual benefit should have been derived, a reasonable expectation is enough and such reasonable expectation might well exist, though from the father, not being in need, the son had never done anything for him.
On the other hand a jury certainly ought not to make a guess in the matter, but ought to be satisfied that there has been a loss of sensible and appreciable pecuniary benefit, which might have been reasonably expected from the continuance of the life." In Taff Vale Railway Company vs Jenkins(5), the Judicial Committee observed that it is not a condition precedent to the maintenance of an action under the Fatal Accidents Act, 1846, (1) ,52 (3) 13 Appeal Cases.800, 804.
(4) 157, English Reports 3 H & N.T. 448.
(5) (2) , 101: 692 that the deceased should have been actually earning money or money 's worth or contributing to the support of the plaintiff at or before the date of the death provided that the plaintiff had a reasonable expectation of pecuniary benefit from the continuance of the life.
Therein Lord Atkinson stated the law thus : "I think it has been well established by authority that all that is necessary is that a reasonable expectation of pecuniary benefit should be entertained by the person who sues.
It is quite true that the existence of this expectation is an inference of fact there must be a basis of fact from which the inference can reasonably be drawn; but I wish to express my emphatic dissent from the proposition that it is necessary that two of the facts without which the inference cannot be drawn are, first, that the deceased earned money in the past, and second, that he or she contributed to the support of the plaintiff.
These are, no doubt, pregnant pieces of evidence, but they are only pieces of evidence; and the necessary inference can I think be dr awn from circumstances other than and different from them." in an action under the Act, it is not sufficient for the plaintiff to prove that he lost by the death of the deceased a mere speculative possibility of pecuniary benefit.
In order to succeed, it is necessary for him to show that he has lost a reasonable proba bility of pecuniary advantage.
In Barnett vs Cohen and ors.(1), McCardie J. speaking for the Court quoted with approval the following observations of Lord Haldane in his judgment in Taff Vale Ry.
Co. vs Jenkins(2) : " "The basis is not what has been called solatium, that is to say, damages given for injured feelings or on the ground of sentiment, but damages based on compensation for a pecuniary loss.
But then loss may be prospective, and it is quite clear that prospective loss may be taken into account.
It has been said that this is qualified by the proposition that the child must be shown to have been earning something before any damages can be assessed.
I know of no foundation in principle for that proposition either in the statute or in any doctrine of law which is applicable; nor do I think it is really established by the authorities when you examine them. . .
I have already indicated that in my view the real question is that which Willes, J. defines in one of the cases quoted to us, Dalton vs South (1) (2) 693 Eastern Rv. Co.(1) 'Aye or No, was there a reasonable expectation of pecuniary advantage ?" Proceeding further the learned judge referred to the observations of Pollock, C. B. in Taff Vale Ry.
Co. vs Jenkins(2) : " "It appears to me that it was intended by the Act to give compensation for damage sustained, and not to enable persons to sue in respect of some imaginary damage, and so punish those who are guilty of negligence by making them pay costs." " Dealing with the facts of the case before him McCardie, J. observed : "In the present action the plaintiff has not satisfied me that he had a reasonable expectation of pecuniary benefit.
Ms child was under four years old.
The boy was subject to all risks.
of illness, disease, accident and death.
His education and upkeep would have been a substantial burden to the plaintiff for many years if he had lived.
He might or might not have turned out a useful young man.
He would have earned nothing till about sixteen years of age.
He might never have aided his father at all.
He might have proved a mere expense.
I cannot adequately speculate one way or the other.
In any event he would scarcely have been expected to contribute to the father 's income, for the plaintiff even now possesses 1,0001, a year by his business and may increase it further, nor could the son have been expected to aid in domestic service.
The whole matter is beset with doubts, contingencies and uncertainties.
Equally uncertain, too, is the life of the plaintiff himself in view of his poor health.
He might or might not have survived his son.
That is a point for consideration, for, as was pointed out by Bray J., when sitting in the Court of Appeal in Price vs Glynea and Castle Coal Co.(3): "Where a claim is made under Lord Campbell 's Acts, as it is here, it is not only a question of the expectation of the life of the claimant".
Upon the facts of this case the plaintiff has not proved damage either actual or prospective.
His claim is pressed to extinction by the weight or ht or multiplied contingencies.
The action therefore fails.
" The mode of assessment of damages is not free from doubt.
It is beset with certain difficulties.
It depends on many impon derables.
The English courts have formulated certain basis for (1) ; (2) (3) , 198.
694 calculating damages under Lord Campbell 's Acts.
The rules ascertained by the English courts are set out in Winfield on Torts 7th Edn.
at pp.
135 and 136 as follows : "The starting point is the amount of wages which the deceased was earning, the ascertainment of which to some ex tent may depend on the regularity of his employment.
Then there is an estimate of how much was required or expended for his own personal and living expenses.
The balance will give a datum or basic figure which will generally be turned into a lump sum by taking a number of years ' purchase.
That sum, however, has to be taxed down by having regard to the uncertainties, for instance, that the widow might have again married and thus ceased to be dependent, and other like matters of speculation and doubt".
The number of years ' purchase is left flud, from twelve to fifteen has been quite a common multiple in the case of a healthy man, and the number should not be materially reduced by reason of the hazardous nature of the occupation of the deceased man.
These principles are, however, only appropriate where the deceased was the bread winner of the family.
Obviously they cannot be applied, for example, where the claim is in respect of a mere expectation of pecuniary benefit from the deceased or where the decased 's contribution to the family was in kind and not in cash.
In truth, each case must depend upon its own facts.
In Dolbey vs Godwin(1), the plaintiff was the widowed mother of the deceased, an unmarried man 29 years of age, and he had contributed substantially to her upkeep.
The Court of Appeal held that it would be wrong to assess the damages on the same basis as if the plaintiff were the widow of the deceased, principally on the ground that it was likely that he would have married in due course and that then his contributions to his mother would have been reduced.
" The mode and manner of ascertainment of damages in fatal accidents cases came up for consideration in Nance vs British Columbia Electric Rly.
Co. Ltd.(2).
In that case Viscount Simon, formulated the following tests for ascertaining the damages : (1) First estimate what was the deceased man 's expectation of life if he had not been killed when he was; and (2) What sums during those years, he would have probably applied to the support of the dependant.
In fixing the expectation of life of the deceased regard must be had not only to his age and bodily (1) , 1103.
(2) 695 health but premature termination of his life by a later accident.
In estimating future provision for his dependant the amounts he usually applied in this way before his death are obviously relevant, and often the best evidence available though not conclusive, since if he had survived, his means might have expanded or shrunk, and his liberality might have grown or wilted.
After making the calculations on the basis of the two tests, his Lordship observed that deduction must further be made for the benefit accruing to the dependant from the acceleration of his interest in his estate and further allowance must be made for the possibility that the dependant himself might have died before he died.
In Gobald Motor Service Ltd. and anr.
vs R. M. K. Veluswami and ors.(1), this Court held that the actual extent of the pecuniary loss to the aggrieved party may depend on a data which cannot be ascertained accurately but must necessarily be an estimate, or even partly a conjecture.
Shortly stated, the general principle is that the pecuniary loss can be ascertained only by balancing on the one hand the loss to the claimants of the future pecuniary benefit and on the other any pecuniary advantage which from whatever sources come to them by reason of the death, that is, +the balance of loss and gain to a dependant by the death must be ascertained.
Therein it was further observed that where the courts below have on relevant material placed before them ascertained the amount of damages under the head of pecuniary loss to the dependants of the deceased, such findings cannot be disturbed, in second appeal except for compelling reasons.
The law on the point arising for decision may be summed up thus : Compulsory damages under section IA of the Act for worngful death must be limited strictly to the pecuniary loss to the beneficiaries and that under section 2, the measure of damages is the economic loss sustained by the estate.
There can be no exact uniform rule for measuring the value of the human life and the measure of damages cannot be arrived at by precise mathematical calculations but the amount recoverable depends on the particular facts and circumstances of each case.
The life expectancy of the deceased or of the beneficiaries whichever is shorter is an important factor.
Since the elements which go to make up the value of the life of the deceased to the designated beneficiaries are necessarily personal to each case, in the very nature of things, there can be no exact or uniform rule for measuring the value of human life.
In assessing damages, the court must exclude all considerations of matter which rest in speculation or fancy though conjecture to some extent is inevitable.
As a general rule parents are entitled to recover the present cash value of the prospective service of the deceased minor child.
In addition they may receive (1) ; 696 compensation for loss of pecuniary benefits reasonably to be expected after the child attains majority.
In the matter of ascertainment of damages, the appellate court should be slow in disturbing the findings reached by the courts below, if they have taken all the relevant facts into consideration.
Now applying the above rules to the facts of the present case, it is seen that the deceased child was only 8 years old at the time of his death.
How he would have turned out in life later is at best a guess.
But there was a reasonable probability of his becoming a successful man in life as he was a bright boy in the school and his parents could have afforded him a good education.
It is not likely that he would have given any financial assistance to his parents till he was at least 20 years old.
As seen from the evidence on record, his father was a substantial person.
He was in business and his business was a prosperous one.
As things stood he needed no assistance from his son.
There is no material on record to find out as to how old were the parents of the deceased at the time of his death.
Nor is there any evidence about their state of health.
On the basis of the evidence on record, we are unable to come to the conclusion that the damages ordered by the High Court are inadequate.
In the result this appeal fails and the same is dismissed.
But in the circumstances of the case we make no order as to costs.
G.C. Appeal dismissed.
| IN-Abs | The appellants filed a suit claiming a sum of Rs. 30,000 as damages under sections 1A and 2 of the for the death of their son aged 8 years.
The boy had stood first in Standard III and his future was claimed to be bright.
The trial court computed the damages under sections 1A and 2 at Rs. 5,000.
In appeal the High Court determined the damages under section 1A at Rs. 5,000 and under section 2 at Rs. 1,000.
In appeal by certificate before this Court.
HELD : Compulsory damages under section IA of the Act for wrongful death must be limited strictly to the pecuniary loss to the beneficiaries and under section 2 the measure of damages is the economic loss sustained by the estate.
There can be no exact uniform rule for measuring the value of human life and the measure of damages cannot be arrived at by precise mathematical calculations but the amount recoverable depends on the particular facts and circumstances of each case.
The life expectancy of the deceased or of the beneficiaries whichever is shorter is an important factor, Since the elements which go to make up the value of the life of the deceased to ' the designated beneficiaries are necessarily personal to each case in the very nature of things, there can be no exact or uniform rule for measuring the value of human life.
In assessing the damages the court must exclude all considerations of matter which rest in speculations or fancy though conjecture to some extent is inevitable.
As a general rule parents are entitled to recover the present cash value of the prospec tive service of the deceased minor child.
In addition they may receive compensation for loss of pecuniary benefits reasonably to be expected after the child attains majority.
In the matter of ascertainment of damages, the appellate court should be slow in disturbing the findings reached by the courts below, if they have taken all the relevant facts into consideration.
[695 F 696 A] Davies and Anr.
vs Powell Dufleryn Associated Collieries Ltd. , Franklin vs South East Railway Company, ; H. & N. 448, Taff Vale Railway Company vs Jenkins, , Bartlett V. Cohen & Ors. , Nance vs British Columbia Electric Rly.
Co. Ltd. and Gobald Motor Service Ltd. & Anr.
vs R.M.K. Veluswami & Ors.
; , applied.
(ii) In the present case although the deceased was a bright child, it was uncertain how much assistance he would have given after growing up to his parents.
The father was a prosperous business man and hardly needed assistance.
There was no material on record as to the age of the parents and their state of health.
On the basis of the evidence on record it could not be said that the damages ordered by the High Court were inadequate.
[696 C]
|
Appeal.
1644 of 1966.
Appeal by special leave from the judgment and order dated January 18, 1966 of the Allahabad High Court in Civil Revision Application 24 of 1966.
V. A. Sevid Muhammad and section P. Nayar, for the appellant.
section C. Agarwal, R. K. Garg, D. P. Singh and section Chakravarty.
for respondents Nos. 1 to 28 and 30 to 57.
727 The Judgment of the Court was delivered by Dua, J.
This appeal by special leave is directed against the order of a learned Single Judge of the Allahabad High Court affirming on revision under section 115 Civil P.C. the order of the learned Additional District Judge, Jhansi, who had allowed the respondent 's appeal from the order of the learned City Magistrate, Jhansi, made on an application presented by the respondents under section 15 of the IV of 1936.
The City Magistrate was the " 'authority" appointed under section 15 and the district court was the court of appeal under section 17 of the said Act.
The respondents through the Assistant Secretary of the National Railway Mazdoor Union Work shop Branch, Jhansi had asserted in their application under section 15 that they were workers within the meaning of section 2(1) of the (63 of 1948) and complained that they were denied wages for overtime work done by them on the erroneous ground that they were not workers within the aforesaid provision.
The learned Magistrate held that the respondents had been entrusted with purely clerical duties and they were not connected in any manner with the manufacturing process.
On this conclusion their application was dismissed.
On appeal the learned Additional District Judge disagreed with this view and came to the conclusion that the work done by the respondents was incidental to or connected with the manufacturing process.
It was observed in the order that some of the respondents were entrusted with the duty of checking the time work of each worker in the workshop, a few others were timekeepers and the remaining respondents prepared account sheets on the basis of the time sheets and did other work incidental to the running of the work shop including payment of wages to the staff of the workshop and the office.
The High Court on revision as already observed, affirmed the order of the learned Additional District Judge.
On appeal in this Court the short question we are called upon to decide is whether the respondents, who are time keepers fall within the purview of the definition of "worker" as contained in section 2 (1) of the .
The respondents have raised a preliminary objection that the appeal is incompetent on the ground that respondent No, 29 (T. A. Kolalkar) had died after the order of the High Court but his name continued to appear in the array of respondents.
As his legal representatives had not been brought on the record, the appeal against him is incompetent and since there was a joint application on behalf of all the respondents which was dealt with and decided by a common order by the learned Magistrate, the appeal against the other respondents must also be held to be incompetent.
The impugned order having become final as the 728 deceased T. A. Kolalkar, the present appeal against other respondents should, according to the argument, be held to be incompetent because the reversal of the impugned order as against them would give rise to conflicting decisions on the point.
Recently this Court disallowed.a similar objection in Indian Oxygen Ltd. vs Shri Rani Adhar Singhand others(1) and when the attention of the respondent 's learned counsel was drawn to that decision, the objection was not seriously pressed.
We now turn to the merits of the appeal.
The word "worker" is defined in section 2(1) of the to mean "a person employed directly or through any agency, whether for wages or not, in any manufacturing process, or in cleaning any part of the machinery or premises used for a manufacturing process, or in any other kind of work incidental to, or connected with, the manufacturing process, or the subject of the manufacturing process.
" This definition seems to us to be fairly wide because it takes within its sweep not only persons employed in any manu facturing process but also in cleaning any part of the machinery or premises used for a manufacturing process and goes far beyond the direct connection with the manufacturing process by extending it to other kinds of work which may either be incidental to or connected with not only the manufacturing process itself but also the subject of the manufacturing process.
The word " manufacturing process" is defined in section 2(k) of the in fairly wide language.
It means any process for : "(i) making, altering, repairing, ornamenting, finishing, packing. oiling, washing, cleaning breaking up, demolishing, or otherwise treating or adapting any article or substance with a view to its use, sale, transport, delivery or disposal, or (ii) pumping oil, water or sewage, or (iii) generating, transforming or transmitting power; or (iv) composing types for printing by letter press, lithography, photogravure or other similar process or book binding; (v) constructing, reconstructing, repairing, refitting, finishing or breaking up ships or vessels;" Now the conclusion of the learned Additional District Judge on the nature of work of the respondents, which, in our opinion, (1) Civil Appeal No. 1444 of 1966 decided on 24th Sept. 1968.
729 being one of fact, must be held to be binding on the High Court on revision and also not open to reassessment on the merits in this Court on special leave appeal from the order of the High Court on revision, is that, the time keepers prepare the pay sheets of the workshop staff, maintain leave account, dispose of settlement cases and maintain records for statistical purposes.
Fourteen of the respondents, according to this conclusion, are timekeepers who maintain attendance of the staff, job card particulars of the various jobs under operation and time sheets of the staff working on various shops dealing with the production of Railway spare parts and repairs etc.
Four of the respondents are head time keepers entrusted with the task of supervising the work of other respondents.
The question arises if on this conclusion it can be held that as a matter of law the respondents fall outside the definition of "worker" as contemplated by section 2( 1) of the and that the High Court erred in dismissing the revision.
The appellant 's learned counsel has submitted that the expression "incidental to" or "connected with" connotes a direct connection with the manufacturing process and therefore if the duties assigned to the respondents have no such direct connection with the manufacturing process then they cannot fall within the purview of the word "worker".
In support of his submission lie has referred to some law dictionaries.
In Law Lexicon in British India by Ramanathan Iyer "incidental power" is stated to be, power that is directly and immediately appropriate to the existence of the specific power granted and not one that has a slight or remote relation to it.
The word "incidental" in the expression "incidental labour" as used in Mechanic 's Lien Statutes allowing liens for work and labour performed in the construction, repairs etc.
of a building etc.
is stated in this Law Lexicon to mean labour directly done for and connected with or actually incorporated in the building or improvement : service indirectly or remotely associated with the construction work is not covered by this expression.
Reference has next been made by the counsel to the Law Dictionary by Ballentine where also the expression "incidental power" is stated in the same terms.
In Stroud 's Judicial Dictionary the meaning of the words "incident" and "incidental" as used in various English statutes have been noticed.
We do not think they can be of much assistance to us.
The decision in Haydon vs Taylor(1) noticed in this book at first sight appeared to us to be of some) relevance, but on going through it, we do not find it to be of much help in construing the statutory provisions with which we are concerned.
Similarly the decision in Frederick Hayes Whymper vs John Jones Harney(2) seems to be of little guidance.
(1) ; (2) 730 On behalf of the respondents our attention has been drawn to a decision of this Court.
in Nagpur Electric Light and Power Co. Ltd. V. Regional Director Employees State Insurance Corporation Etc.(1).
This decision deals with the Employees State Insurance Act and on a comparison of the definition of the word "employee" as contained in section 2(9) of that Act with the definition of the word "worker" in section 2 (1) of the , it is observed That the former definition is wider than the latter.
It is further added that the benefit of the does not extend to field workers working outside the factory whereas the benefit of the Employees State Insurance Act extends inter alia to the em ployees mentioned in section 2 (9) (i) whether working inside the factory or establishment or elsewhere.
Reliance has, however, been Placed on behalf of the respondents on the observations at page 99 of the report where reference is made to the clerks entrusted with the duty of time keeping and it is observed that all these employees are employed in connection with the work of the factory.
A person doing non manual work has been held in this case to be included in the word "employee" within the meaning of section 2 (9) (i) if employed in connection with the work of the factory.
The ratio of this decision which is concerned with the construc tion of different statutory language intended to serve a different object and purpose is of no direct assistance in construing the definition of the word "worker" as used in the .
The respondents ' counsel has then submitted that the previous history of the Act throws helpful light on the legislative intendment and in this connection he has referred to the definition of the word "worker" in the XXV of 1934.
The word "Worker in section 2 (h) of that Act was defined to mean : "a person employed, whether for wages or not, in any manufacturing process, or in cleaning any part of the machinery or premises used for a manufacturing process, or in any other kind of work whatsoever incidental to or connected with the manufacturing process or connected with the subject of the manufacturing ,process, but does not include any person solely employed in a clerical capacity in any room or place where no manufacturing process is being carried on.
" It is argued that the deletion of the words conveying exclu sion of persons solely employed in a clerical capacity in a place where no manufacturing process is carried on suggests that the present definition of "worker" is wide enough to take within its fold even those persons who are employed solely in clerical capacity if otherwise they fall within the definition.
The appellant counsel has, on his part, by reference to tile definition in the Act (1) 731 of 1934, argued that the deletion of the word "whatsoever" after " any other kind of work" is indicative of the legislative intention to restrict the scope of "any other kind of work" in the current Act.
The was enacted to consolidate and amend the, law regulating labour in factories.
It is probably true that all legislation in a welfare state is enacted with the object of promoting general welfare; but certain types of enactments are more responsive to some urgent social demands and also have more immediate and visible impact on social vices by operating more directly to achieve social reforms.
The enactments with which we are concerned, in our view, belong to this category and, there .
fore, demand an interpretation liberal enough to achieve the legislative purpose, without doing violence to the language.
The definition of "worker" in the , therefore, does not seem to us to exclude those employees who are entrusted solely with clerical duties, if they otherwise fall within the definition of the word "worker".
Keeping in view the duties and functions of the respondents as found by the learned Additional District Judge, we are unable to find anything legally wrong with the view taken by the High Court that they fall within the definition of the, word "worker".
Deletion of the word "whatsoever" on which the appellant 's counsel has placed reliance does not seem to make much difference because that word was, in our view, redundant.
We have not been persuaded to hold that the High Court was in error in affirming the decision of the learned Additional District Judge.
In the result this appeal fails and is dismissed with costs.
R.K.P.S. Appeal dismissed.
| IN-Abs | In an application under section 15 of the the respondents claimed that they were workers within the meaning of section 2(1) of the .
The Additional District Judge found that some of the respondents were time keepers who maintained attendance of the staff.
job card particulars of the various jobs under operation and the time sheets of the staff working on various shops dealing with the production of Railway spare parts and repairs etc.
and that other respondents were head time keepers entrusted with the task of supervising the work of other respondents.
He, therefore, came to the conclusion that the work done by the respondents was "incidental to" or "connected with" the manufacturing process.
The High Court in revision affirmed this order.
On the question whether the respondents fell within the purview of the definition of "worker" in section 2(1) of the .
HELD : (ii) The conclusion of the Additional District Judge on the nature of the work of the respondents being one of fact must be held to be binding on the High Court on revision and also not open to reassessment on the merits in this Court on special leave appeal from the order of the High Court.
(ii) The definition in section 2(1) is fairly wide because it takes within its sweep not only persons employed in manufacturing process but also in cleaning any part of the machinery or premises used for a manufacturing process and goes far beyond the direct connection with the manufacturing process by extending it to other kinds of work which may either be incidental to or connected with not only the manufacturing process itself but also the subject of the manufacturing process.
The definition therefore does not exclude those employees who were entrusted solely with clerical duties, if they otherwise fell within the definition of the word " worker".
All legislation in a welfare state is enacted with the object of promoting general welfare, but certain types of enactments are more responsive to some urgent social demands and also have more immediate and visible impact on social vices by operating more directly to achieve social reforms.
The belongs to this category and, therefore.
demands an interpretation liberal enough to achieve the legislative purpose, without doing violence to the language.
[728 C D; 731 B D]
|
l Appeals Nos. 1302 to 1906 of 1968.
752 Appeals by special leave from the judgment and orders dated September 26, 27 and 29, 1967 of the Mysore High Court in Writ Petitions Nos.
907, 1004, 1005, 1175 and 1245 of 1967.
Jagadish Swarup, Solicitor General, C. R. Somasekharan 'and R. B. Datar for the appellants (in all the appeals).
M. Veerappa and G. Narayana Rao, for respondent No. 1 (in all the appeals).
section section Javali and section P. Nayar, for respondent No. 2 (in all the appeals).
The Judgment of the Court was delivered by Vaidialingam, J.
These five appeals, by special leave, by the City Municipal Council, Mangalore and the Commissioner of the City Municipal Council, are directed against the orders passed by the Mysore High Court in Writ Petitions Nos.
907, 1004, 1005, 1175 and 1245 of 1967, quashing the demand notices issued by the appellants against the first respondent in each of these appeals for payment of property tax for the half year ending September 30, 1966.
As the grounds of attack levelled against the demand notices by the said respondents are common, we will only refer to the averments contained in Writ Petition No. 907 of 1967 out of which Civil Appeal No. 1302 of 1968 arises.
buildings situated in Ward 11 and Ward XX, within Mangalore Municipality in the South Canara District, which originally formed part of the Madras State and which, on reorganisation of the States, became part of the State of Mysore.
The Mysore Municipalities Act, 1964 (Act XXII of 1964) (hereinafter referred to as the Mysore Act) came into force from April 1, 1965 as per the notification, dated September 23, 1965 issued by the State Government.
Certain sections had already come into force.
Till the Mysore Act came into force, the Mangalore Municipality was governed by the Madras District Municipalities Act, 1920 (Act V of 1920) (hereinafter called the Madras Act).
The Madras Act had provided for levy of property tax the procedure to be adopted for the same and as to how the annual value of a building was to be arrived at as well as the percentage at which the property tax was to be levied.
Similarly the Mysore Act had also provided for levy of property tax, prescribing the ascertainment of annual ratable value and also the rate at which the tax was to be levied.
Although the Mysore Act came into force from April 1, 1965 the appellants issued demand notices for property tax under the said Act for the assessment year 1965 66.
In those demand notices, the Municipal Council determined the ratable annual 753 value under section 101 (2) of the Mysore Act and assessed the tax on the basis of that annual ratable value, but at rates under the Madras Act.
The tax was paid as per the demand notices.
But on March 16, 1967 the appellant issued the impugned notices of demand under the Madras Act for payment of property tax for the year 1966 67.
The tax demanded on the basis of the Madras Act was considerably higher than that originally demanded and paid under the Mysore Act for the assessment year 1965 66.
Notwithstanding the protest made by the first respondent, the appellants threatened to collect the tax as per the demand notices and hence the first respondent filed Writ Petition No. 1907 of 1967 challenging the demand notices.
The main grounds of attack against the.
demand notices, as raised in the said Writ Petition were that after the passing of the Mysore Act the appellants had no power to levy property tax under the Madras Act and therefore the demands were illegal.
The demand notices were further attacked on the ground that section 382 of the Mysore Act, which related to the repeal of many Acts including the Madras Act and the saving provisions contained therein did not justify the issue of the demand notices.
The first respondent accordingly prayed for quashing the demand notices issued under the Madras Act.
He had also raised certain contentions regarding the levy of health cess included in the notices; but it is unnecessary to refer to those averments as the High Court has held against the first respondent and that question does not arise in these appeals.
The appellants pleaded that under the Mysore Act property tax, among other things, has been imposed after following the procedure prescribed in sections 95 to 97 therein and the imposition of tax has come into force from April 1, 1967, but for the period in question viz., the year 1966 67 the demands were legal and valid in view of the provisions contained in section 382 of the Mysore Act.
Notwithstanding the repeal of the Madras Act, the provisions contained in section 382 of the Mysore Act clearly saved the right of the appellants to levy property tax under the Madras Act to adopt both the annual value as well as the rate of tax as per the assess ment registers maintained under the said Act.
In particular, the appellants relied upon the second proviso in section 382(1) of the Mysore Act and the third proviso inserted in the said section with retrospective effect, by the Mysore Municipalities (Amendment) Act ', 1966 (Mysore Act XXXIV of 1966).
According to the appellants, as necessarily the imposition of property tax under the Mysore Act, after following the procedure contained therein will take time, the Legislature had made consequential provisions in section 382 with a view to enable the imposition of property tax under the repealed enactments during the interim period.
The High Court has, by and large, accepted the contentions of the first respondent.
According to the High Court, although 754 the higher rate of tax under the Madras Act is preserved by proviso 3 to section 382(1) of the Mysore Act, the provision for the determination of the annual value under section 82(2) of the Madras Act is not saved.
The High Court is further of the view that the second proviso to section 382(1) of the Mysore Act only continues the old impost and the third proviso preserves the old rates and that they do not continue the old annual value.
The net result of the decision of the High Court is that the Municipal Council has to determine the annual ratable value of the building as provided by section 10 1 (2) of the Mysore Act and to assess the property tax at the rate at which it is assessed under the Madras Act.
Finally the High Court quashed the demand notices issued by the appellants.
The learned Solicitor General, appearing for the appellants, urged that the High Court was in error in interpreting the second and third provisos to section 382(1) of the Mysore Act.
it was urged that as the levy of property tax after adopting the procedure indicated in the Mysore Act will take time, the Legislature had, by incorporating the necessary provisions in section 382, particularly the second and third provisos to sub section
(1), preserved the right of the, Municipal Council concerned to adopt not only the annual value but also the rate of property tax payable according to the assessment registers maintained under the Madras Act, till they are superseded by anything done under ' the Mysore Act.
The learned Solicitor General, further urged that the view of the High Court that the annual ratable value has to be determined under the Mysore Act and the computation of the rate 'of tax has to be under the Madras Act, was anomalous and was not warranted by the provisions of the Mysore Act.
On the other hand, Mr. Veerappa, learned counsel appearing for the first respondent in all the appeals, has supported the view taken by the High Court and urged that a proper interpretation had been placed on section 382 of the Mysore Act.
According to the learned counsel, normally, after the coming into force of the Mysore, Act, no assessments could be made under ' the Madras Act, but section 382 of the Mysore Act, repealing the Madras Act, had made certain special provisions the existence of which alone would attract certain actions taken under the Madras Act.
In order to appreciate the contentions, noted above, it is necessary to refer broadly to the scheme of the two Acts relating to the levy of property tax.
We shall first advert to the, Madras Act.
Under section 78(1) power given to the Municipal Council to levy, among other taxes, a property tax.
Under sub section
(3), a resolution of a municipal council determining to levy a tax has to 755 specify the rate at which such tax is to be levied and the date from which it shall be lived.
Section 81(1) provides that it a Council by resolution determines that a property tax shall be levied, such tax shall be levied on all buildings and lands within the municipal limits save those exempted by the statute or by any other law.
Sub section (2) states that the tax shall be levied at such percentages of the annual value or the buildings or lands as may be fixed by the Municipal Council, Subject to section 78.
under this section, we are informed that 25 % has been fixed as the maximum rate.
Sub section
(2) of section 82 provides that the annual value of the lands and buildings shall be deemed to be the gross annual rent at which they may reasonably be, expected to be let from month to month or from year to year less a deduction in the case or buildings, or ten per cent of that portion of such annual rent which is attributable to buildings alone.
it further provides that the sale deduction shall be in lieu or all allowance for repairs or on any other account.
Section 86 provides that the property tax shall be levied every halt year and shall, excepting as otherwise provided in schedule IV, be paid lay the owner within thirty days of the commencement of the half year.
Section 124 provides that the rules and tables embodied in Schedule IV shall be read as part of Chapter VI, dealing with Taxation and Finance.
Schedule IV deals with Taxation and Finance Rules.
Rule 2 provides for the preparation and maintenance of assessment books showing the persons and property liable to taxation under the Act and the assessment books being made available for inspection by the tax payers.
Rule 6 provides for the value of any land or building for purposes of property tax being determined by the executive authority.
Under rule 7, the executive authority has to enter in the assessment books the annual or capital value of all lands and building and the tax payable thereon.
Rule 8(1) states that the assessment books shall be completely revised by the executive authority once in every five years.
Sub rule (2) thereof provides for amending the assessment books at any time between one general revision and another in the manner indicated therein.
A. perusal of the provisions referred to above, shows that under the Madras Act the property tax is levied on the annual value of buildings which is deemed to be the gross annual rental value less a deduction of ten per cent of that portion of annual rent is attributable to the buildings alone.
The Municipal Council has to pass a resolution determining to levy the property tax and that resolution should also specify the rate at which such tax is to be levied as also the date from which it shall be levied and the tax is levied every half year.
The executive authority has to maintain the assessment books containing entries regarding the annual value as well as the tax payable thereon.
The executive authority is under an obligation to completely revise the assessment once in very five years.
L5SupCI 3 756 There is no controversy that the Madras Act was applicable to the City of Mangalore, even after it formed part of the Mysore State on me reorganization of the States.
The Madras Act, as we have mentioned earlier, was repealed by the Mysore Act, which came into force with effect from April 1, 1965.
Coming to the Mysore Act, Chapter VI deals with Municipal Taxation.
section 94 enables a municipal council to levy a tax on buildings or lands or both situated within the municipality, after complying with tile procedure indicated therein and subject to any general or special orders of Government and at rates not exceeding those specified in Schedules I to VII.
The maximum rate has been fixed at 24 % of the annual ratable value.
Section 2(1) defines annual retable value ' as the gross annual rent for which any building or land exclusive of furniture or machinery might reasonable be expected to be let from month to month or year to year.
Section 95 deals with the procedure to be adopted preliminary to imposing a tax.
Section 10 1 (2) provides that the annual ratable value of a building shall be the gross annual rent as defined in cl. (1) of section 2, less a deduction of sixteen and two thirds per cent of such annual rent.
It further states that the said deduction shall be in lieu of all allowances for repairs or on any other account whatsoever.
Section 103 deals with the preparation of an assessment list.
Section 382(1) repeals the various enactments referred to therein, including the Madras Act.
The first proviso, which saves certain matters, does not come into the picture in this case.
The second proviso as well as the third proviso, introduced by the Mysore Municipalities (Amendment) Act, 1966 are relevant for our purpose and they ire as follows "(2) Provided further that subject to the preceding proviso anything done or any action taken (including any appointment or delegation made, tax, fee or cess imposed, notification, order, instrument, or direction issued, rule, regulation, form, bye law or scheme framed, certificate obtained, permit or licence granted or registration effected) under the said laws shall be deemed to have been done or taken under the corresponding 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 : (3) Provided further that notwithstanding anything contained in the preceding proviso where any tax, duty, fee or cess other than a duty on transfers of immovable properties has been imposed under the said laws at a rate higher than the maximum rate permissible under this Act.
such tax,.
fee or cess may continue to be 757 imposed and collected at such higher rate unless and Until superseded by anything done or any action taken under this Act.
" The third proviso has been introduced with retrospective effect by the Amending Act.
It is not really necessary for us to consider more elaborately the scheme of the Mysore Act because.
even according to the appellants, the procedure indicated therein whatever may be the procedure, about which we express no opinion has not been taken before the issue of the demand notices which were under challenge before the High Court.
On the other hand, the appellants have exclusively relied on the second and third provisos to section 382 (1) of the Act.
The learned Solicitor General has urged that the assesment books under the Madras Act were prepared on April 1, 1964 and, if so, under the second and third provisos to section 382(1) the property tax can be levied and collected as per the provisions of the Madras Act.
In particular, the learned Solicitor General placed reliance upon the provisions of the Madras Act relating to the maintenance of assessment books and the assessment books having to be revised only once in every five years and pointed out that in this case the assessment books having been prepared on April 1, 1964 they will have currency for a period of five years till March 31, 1969.
The second proviso to section 382(1) no doubt saves any tax which had been imposed under the Madras Act.
Similarly, under the third proviso, the Municipal Council will have authority to collect tax even at a rate higher than the maximum rate permissible under the Mysore Act; but the essential requisite for attracting the two provisos is that the tax should have been imposed under the Madras Act, as per the second proviso and tax at a higher rate should have been imposed again under the Madras Act as per the third proviso.
We are not inclined to accept the contention of the learned Solicitor General that by merely preparing the assessment registers under the Madras Act on April 1, 1964 it can be stated that a tax has been imposed under the second proviso or a tax at a higher rate has been imposed under.the third proviso.
We have already referred to the material provisions of the Madras Act relating to the ' levy of property tax.
Those provisions show that the municipal tax is an annual tax leviable for a particular official year and the assessment list on the basis of which the tax is assessed is for such official year.
This was the view expressed by this Court in Municipal Corporation vs Hiralal(1), while interpreting certain provisions of the Madhya Bharat Municipalities Act, 1954.
No doubt the wording in the Madhya Bharat Act in section 76, dealing with assessment list was slightly different but in our opinion the (1) ; 758 principle enunciated in that decision regarding the municipal tax being an annual tax leviable for a particular official year and the assessment list, on the basis or which the tax is assessed having currency for each such official year, is applicable also to the interpretation of the Madras Act.
No resolution passed by the Municipal Council regarding the levy of the property tax and the rate at which it is to be levied, having currency for the year 1966 67, has been brought to our notice.
The learned Solicitor General has drawn our attention to the minutes, dated September 15, 1966 as well as the Council 's resolution No. 1280 dated December 20, 1966 relating to the levy of property tax in the City of Mangalore for the period in question, under the Mysore Act.
Those proceedings will not assist the appellant as the necessary procedure, under the Mysore Act, has not been followed and therefore that resolution cannot have any legal validity, so as to justify the imposition of tax.
Normally, the municipal council will have to prepare a fresh assessment list, every year.
By virtue of section 124 of the Madras Act, the rules and tables embodied in Schedule IV have to be read as part of Chapter VI dealing with Taxation and Finance.
Though, ordinarily, the Municipality would have to prepare a fresh assessment list every year, rule 8 of Schedule IV permits the Municipal Council to continue the same assessment list for the next four succeeding years and to revise it once every five years.
But, in order to enable the Municipal Council to levy and collect a tax, it has to pass a resolution determining to levy a tax, the rate at which such tax has to be levied as also the date from which it shall be levied.
That the tax is an annual tax is also borne out by sub section
(2) of section 82.
If the contention of the learned Solicitor that the assessment list, once prepared, has to be adopted for five years, is accepted, it will result in the annual value on a particular building or house being static for five years, during which a municipal council can go on adopting the assessment list prepared in an earlier year and the owner or occupier of the building being deprived of the.
right to object to the valuation regarding the annual value or the tax assessed thereon.
This will be the result even though the annual value may have decreased for one reason or the other.
It follows that the contention that the preparation of the assessment books amounts to imposing of a tax so as to justify the issue of the demand notice, cannot be accepted.
Having due regard to the second and third provisos to section 382(1) and the other material provisions of the Mysore Act, the position is that a property tax must have been imposed by the Madras Act and even though the rates of such tax were higher than under the Mysore Act, the said higher tax could be collected.
But no such tax having been imposed under the Madras Act, the 759 second and third provisos to section 382(1) do not apply and hence the demands for payment of property tax for the period are not justified.
Though we are not in agreement with some of the reasons given by the High Court for issuing the writ, the conclusion arrived at by the High Court that the second and third provisos to section 382(1) of the Mysore Act do not justify the issue of the demand notices for the period in question, is correct.
The result is that the appeals fail and are dismissed with costs.
There will be only one hearing fee.
| IN-Abs | The first respondent was the owner of some buildings within the appellant Municipality.
The appellant was governed by the Madras District Municipalities Act,, 1920, till April 1, 1965, when the Mysore Municipalities Act, 1964 came into force and thereafter by the Mysore Act.
For the year 1966 67 the appellant issued notices of demand for payment of property tax under the Madras Act.
The tax was higher than under the Mysore Act.
The first respondent challenged the levy by a writ petition, and the appellant justified the levy under section 382(1) of the Mysore Act and its provisos.
The High Court quashed the demand notices.
In appeal to this Court, HELD : Under the second and third provisos to section 382(1) of the Mysore Act if a property tax has been imposed by the Madras Act, even though the rate of such tax is higher than that under the Mysore Act, the higher tax could be collected.
The provisions of Madras Act namely sections 78, 81, 82, 124 and r. 8 of 'Schedule IV of the Act, show that the municipal tax is an annual tax leviable for a particular official year and the assessment list on the basis of which the tax is assessed is for such official year.
Though, ordinarily, the Municipality would have to prepare a fresh assessment list every year, r. 8 of Schedule IV of the Madras Act which, by virtue of section 124 has to be read as part of Chapter VI of the Act dealing with Taxation and Finance permits the Municipal Council to continue the same assessment list for the next 4 succeeding years and to revise it once every 5 years.
But, in order to enable the Municipal Council to levy and collect a tax, under section 78 it has to pass a resolution determining to levy a tax, the rate at which such tax has to be levied as also the date from which it shall be levied.
In the present case, no such resolution was passed by the Municipal Council.
Therefore, by merely preparing the assessment registers under the Madras Act on April 1, 1964, which will have currency for a period of 5 years till March 31, 1969, it cannot be said that a tax or that a tax at a higher rate had been imposed.
No such tax having been imposed under the Madras Act, the provisos to section 382(1) of the Mysore Act do not apply and the demands for payment of the property tax were not justified.
[757 E H; 758 D H; 759 A] Municipal Corporation vs Hiralal, ; , followed.
|
Appeals Nos. 1619 and 1620 Appeals from the judgment and order dated April 17, 1964 of the Andhra Pradesh High Court in Appeal Suits Nos.
21 of 1959 and 362 of 1958 respectively.
D. Narsaraju, B. Parthasarathy and Subba Rao, for the appellants (in both the appeals).
A. V. Rangam, for respondents Nos.
1 3, (in the appeals).
K. R. Chaudhuri and K. Rajendra Chaudruri, for respondent No. 6 (in both the appeals).
The Judgment of the Court was delivered by Dua, J.
These two appeals (Civil Appeals Nos. 1619 and 1620 of 1968) on certificate by the High Court arise out of the same suit and are directed against a common judgment and decree of the High Court disposing of two cross appeals pre sented in that Court and will, therefore, be disposed of,by one judgment.
The principal question canvassed lies within a narrow compass.
It relates to the jurisdiction of the Civil Courts to entertain and decide the present suit questioning the legality of the notification exhibit A 13 dated November 2, 1949 reducing the rates of rent in respect of the delta dry ryoti lands in village Kalipatnam under the, Madras Estates Land (Reduction of Rent) Act XXX of 1947, (hereafter called the Reduction of Rent Act).
The trial Court decreed the suit in part but the High Court to which both parties preferred appeals held that the Civil Courts had no jurisdiction to entertain the suit.
It is this short question which requires determination in these appeals.
It is unnecessary to state at length the past history of the landed estate in question.
The necessary relevant facts in brief may only be mentioned.
Shree Raja Kandrrgula Srinivasa Jagannadha Rao Panthulu Bahadur was the Inamdar of village Kalipatnam in Narsapuram Taluk in the West Godavari District.
On November 2, 1948, the Government issued a notification (exhibit A 13) under section 3(2) of the Reduction of Rent Act reducing the rates of rent payable in respect of delta dry ryoti lands in Kalipatnam village.
The Inam Settlement Officer, Vijayawadha, then took proceedings to determine whether Kalipatnam was an, inam estate" as defined in section 2 (7) of the Madras Estates (Abolition and Conversion into Ryotwari) Act XXVI of 1948.
After inquiry he made the order dated May 31, 1950 (exhibit A 1) holding that the suit village was an inam estate.
Feeling aggrieved by these two orders the appellant instituted the suit.
out of which the present appeals arise.
Me short question canvassed before us, as observed earlier, is whether the Civil Courts have jurisdiction to entertain the suit.
CI/70 15 716 It may be stated at the outset that the appellant counsel.
conceded at the bar that the question as to the kind of grant can only be decided by the Tribunal appointed under the Reduction of Rent Act and Civil Courts have no jurisdiction to adjudicate upon such a controversy.
The suit challenging the validity of exhibit A 1 declaring Kalipatnam village as an inam estate was accordingly conceded to be incompetent.
Challenge to exhibit A 1 was thus not pressed in this Court.
It was, however, submitted that any finding by the, Civil Court on the kind of grant would have to be completely ignored, by the Tribunal while considering this question under the Reduction of Rent Act.
The submission seems to us to be justified.
We are thus left only with the relief,sought in respect of exhibit A 1 3.
The appellant questioned the validity of this notification on the ground that it cannot be considered in law to have been made under section 3 (2) of the Reduction of Rent Act so as to be immune from challenge in the Civil Courts.
In order to appreciate and determine this argument it is desirable to the first to the provisions of the Reduction of Rent Act.
This Act was enacted in order to provide for the reduction of rents payable by ryots 'in estates governed by the Madras Estates Land Act, 1908 approximately to the level of the assessments levied on lands in ryotwari areas in the neighbourhood and for the collection of such rents exclusively by the State Government.
The purpose of collection of rent exclusively by the State 'Government was added in 1951 with retrospective effect.
The heading of the Act, as originally enacted, was changed, on the creation of Andhra Pradesh, to, A.P. (Andhra Area) Estates Land (Reduction of Rent) Act XXX of 1947.
Suitable adaptations necessitated by the creation of the separate Andhra Pradesh were also duly made.
Section 2 of this Act which empowers the State Government to appoint a _Special Officer for any estate.
or estates for the purpose of recommending fair and equitable rates of rent for the ryoti land provides as under "Appointment of Special Officer to recommend rates of rent in estates.
2 (a)(1) The State Government may a point a Special Officer for any estate or estates for the purpose of recommending fair and equitable rates of rent for the ryoti land in such estate or estates. (b) The Special Officer so appointed shall recommend fair and equitable "rates of rent for all lands in such estate or estates which became ' ryoti lands after the commencement the Act.
717 (2) The Special Officer shall first determine in respect of each village (hereinafter in this section referred to as "Principal village") in an estate : (a) the average rate of cash rent per acre prevailing at the commencement of this Act for each class of ryoti land which was in existence in the principal village at such commencement, such as wet, dry and garden; Provided that where no cash rents are prevalent in the principal village in respect of any class of land the Special Officer shalt determine the average rate of cash rent per acre prevailing at such commencement for such class of land in the nearest village in the estate in which cash rents are prevalent for such class of land and in which conditions are generally similar to those obtaining in the principal village, or where there is no such village in the estate, in the nearest village in the nearest estate in respect of which village both the requirements specified above are satisfied; (b) the average rate of assessment per acre prevailing at such commencement in respect of each of the s classes of land in the nearest ryotwari area in which conditions are generally similar to those obtaining in the principal village.
(3) The Special Officer shall then compare the average rates of cash rent as determined under clause (a) of sub section (2) with the average rates of assessment as determined under clause (b) of that sub section, and after making due allowance for any difference in the conditions prevailing in the two cases.
and also in cases falling under the proviso to clause (a) of sub section (2), for any difference in the conditions prevailing in the village referred to in that proviso and in the principal village, determine (i) the extent, if any, to which the rates of rent payable for each class of ryoti land in the principal village should, in his opinion, be reduced and (ii) the rates of rent payable for each such class of lands after such reduction.
Explanation 1.
The Special Officer shall have power only to determine that the rents payable for any class of ryoti land in the principal village shall be reduced; and he shall have no power to determine that such rents shall be enhanced.
718 Explanation 2.
The) extent of reduction, if any, determined by the Special Officer under this sub section shall also apply where rent in the principal village is paid in kind or on the estimated value of a portion of the crop or at rates varying with the crop, whether in cash or in kind, or partly in one of these ways and partly in another, or partly in one or more of these ways and partly in cash.
In every such case the Special Officer shall also determine the rent payable, whether in kind or in cash or partly in kind and partly in cash, as the case may be.
(3 A) In the case of lands in an estate which became ryoti lands after the commencement of this Act, the Special Officer shall determine for each class of such lands in the principal village the rates of rent per acre payable therefore under this Act.
The rates of rent so determined shall be the same as those fixed under sub section (2) of section 3 for similar ryoti lands in the same, village; Provided that where the rates of rent payable in respect of ryoti lands in the principal village have not been fixed under sub section (2) of section 3, or where there are no similar ryoti lands in the principal village, the rates of rent so determined shall be the same as those fixed under sub section (2) of section 3 for similar ryoti lands in the nearest village in the estate, or, if there is no such village, in the nearest village in the nearest estate in which conditions are generally similar to those obtaining in the principal village.
(4) Where the conditions in a group of two or more village,, in an estate are generally similar the Special Officer may perform the functions under subsections 2, 3 and 3 A in respect of such group of villages as a whole, instead of separately in respect of each village in the group.
" Section 3 so far as relevant for our purpose may now be reproduced.
"Power of State Government to reduce rates of rent after considering Special Officer 's recommendations.
3(1) "After completing his work in any estate, the Special Officer shall submit his recommendations to the State Government through the Board of Revenue specifying in case of ryoti lands which were in existence at the commencement of this Act, (i) the 719 extent, if any, to which the rents for each class of such lands in each village or group of villages in the estate, should in his opinion, be reduced and (ii) the rate of rent payable for each such class after such reduction, and in the case of lands in each village or group of villages in the estate which became ryoti land after the commencement of this Act, the rate of rent determined by him in accordance with the provisions of sub section (3 A) of section 2.
(2) After considering the recommendations of the Special Officer and the remarks of the Board of Revenue thereon, the State Government shall, by order published in the Fort.
St. George Gazette, fix the rates of rent payable in respect of each class of ryoti land in each village in the estate." "Provided that where the rate of rent so fixed in respect of any class of ryoti lands which were in existence at the commencement of this Act, or in respect of any class of lands which became ryoti lands in any fasli year after such commencement exceeds the rate of rent payable in respect thereof at such commencement or in that fasli year, as the case may be, only the latter rate of rent shall be payable in respect of such land.
It is not necessary to reproduce the rest of the sections.
Section 7 empowers the State Government to make rules to carry out the purpose of the Act and section 8 ousts the jurisdiction of the Courts of Law to question the validity of certain orders and proceedings.
Section 8 reads as under : "Validity of certain orders and proceedings not to be questioned.
The validity of the following orders and proceedings shall not be liable to be questioned in any Court of Law.
(i) any order made under section 3 sub section (2); (ii) any recovery of rent effected by the Provincial Government under section 3 sub section (4) or any payment made by them to the landholder under the same subsection: (ii a) any order made under sections 3a and 3c; 720 (iii) any determination of the net income or average net income, or average net income made under section 5, sub section (2).
" The precise question requiring decision by us is whether the present sut questioning the validity of the fixation of rent in Ex A 13 is excluded from the jurisdiction of the Civil Courts by virtue of section 8 (1).
There is no dispute that clause (i) is the only relevant clause to be considered in this connection.
The appellant 's learned counsel submitted that the exclusion of jurisdiction of the Civil Courts cannot be extended to orders which were not made in, strict compliance with the provisions of section 3 (2) because unless so made they cannot be considered to be hit by section 8 (1).
According to the respondent 's learned counsel, on the other hand, exhibit A 13 was made, pursuant to the power conferred by section 3(2) and 'is therefore covered by section 8(1).
He further submitted that there being a complete machinery provided 'by the statute itself for challenging the orders made in proceedings taken thereunder, the Civil Courts are precluded from considering the correctness of those orders.
According to him sections 3A and 3B provide for rectification of errors committed by the Special Officer and that looking at the statutory scheme it must be held that an order purporting to be made under section 3 (2) of the Reduction of Rent Act is immune from challenge in the Civil Courts.
The general principle on which the jurisdiction of Civil Courts can successfully be excluded in respect of decisions by special Tribunals is well settled.
The difficulty usually arises in its application to, given cases.
As observed by the Privy Council in Secretary of State vs Mask and Company(1) the exclusion of the jurisdiction of the Civil Courts must either be explicitly expressed or clearly implied.
Further even if the jurisdiction, is so excluded the Civil Courts have jurisdiction to examine into the cases where the provisions of the Act have not been complied with or the statutory Tribunal has not acted in conformity with the fundamental principles of judicial procedure.
It is unnecessary to refer to other cases dealing with this question.
We need only refer to the recent decision of this Court in Dhulabhai and others vs The State of Madhya Pradesh and another(2) in which after an exhaustive discussion of the case law the legal position was summarised by the Court speaking through Hidayatullah, C.J. as follows : (1) Where the statute gives a finality to the orders of the special tribunal the Civil Courts ' jurisdiction must be held to be excluded if there is adequate remedy to do what the Civil Courts would (1) [1940] 67 I.A. 222.
(2) ; 721 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.
(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 ex amination 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.
(3) Challenge to the provisions of the particular Act as ultra vires cannot be brought before Tribunals constituted under that Act.
Even the High Court cannot go into that question on a revision or reference from the decision of the Tribunals.
(4) When a provision is already declared unconstitutional or the unconstitutionality of any provision is to be challenged, a suit is open.
A writ of certiorari may include a direction for refund if the claim is clearly within the time prescribed by the Limitation Act but it is not a compulsory remedy to replace a suit.
(5) Where the particular Act contains no machinery for refund of tax collected in excess of constitutional limits or illegally collected a suit lies.
(6) Questions of the correctness of the assessment apart from its constitutionality are for the decision of the authorities and a civil suit does not lie if the orders of the authorities are declared to be final or there is an express prohibition in the 722 particular Act.
In either case the scheme of the particular Act must be examined because it is relevant enquiry.
(7) An exclusion of the Jurisdiction of the Civil Court is not readily to be inferred unless the conditions above set down apply." According to the appellant 's counsel the first proposition covers the present case.
He submitted that there is no statutory definition to which one can turn for the purpose of determining wet, dry and garden lands as contemplated by the Reduction of Rent Act.
The matter has therefore necessarily to be decided by holding an inquiry into the factual position.
This, the counsel argued, was not done.
We were taken through the relevant portions of exhibit B 24 which is a report from the Special Assistant to the Special Officer for rent reduction.
It is observed therein that there are no wet or garden lands in village Kalipatnam and that the entire land is delta dry in which wet paddy is raised under Kalipatnam project channel.
The ryots pay to the Government Rs. 51 per acre by way of water rate.
It was emphasised by the appellant 's learned counsel that the fact that wet paddy is raised in this land, which is described as delta dry and that water rate is paid to the Government, must conclusively show that the land is not delta dry but wet.
It is the factual position and not bare entry in the settlement register which should be the guiding factor.
Support for this submission was also sought from the recent unreported decision of this Court in O. K. Muthuswamy Mudaliar & Ors.
vs State of Madras(1) in which the following observations occur : "The mere fact that the lands are registered dry does not affect their value.
The lands are fertile and are cultivated with wet crop.
They are irritable with the waters of the river Bhavani.
There is abundant supply of water throughout the year.
The landowners had the right to take water for the irrigation of 400 acres.
" In this connection the appellant 's learned counsel also criticised the following observation in the judgment of the High Court "In the Statements exhibit B 5 and exhibit B 6.
furnished by the plaintiff himself, the classification of the land is shown as dry though it is also mentioned that the lands were cultivated with double crop of paddy.
If a proprietor owns a certain land but does not own the water source from which water is being taken for irrigating that land, he will not be in a position to classify it as wet land for the benefit of claiming rent for himself in the same way as he would be if he owned a water source and supplied water therefrom as a guaranteed supply to 723 lands registered under that source as ayacut.
In the present case, water, was Government water which was brought from Government project.
" On behalf of the appellant it was submitted that this observation is unsound and is not supportable 'by any provision of law.
The respondent 's counsel was unable to support this observation of the High Court.
Reverting to exhibit B 24 Kalipatnam village was compared with Losaragutlapadu, an adjacent village.
In regard to that village also it is mentioned that there is an extensive wet cultivation in delta dry land under project channels as in Kalipatnam.
Shri J. Sambamurthy, to whose inspection note dated July 1, 1948 reference is made in exhibit B 24 appeared as D.W. 5 and the counsel took us through his statement.
In cross examination he deposed as follows : "I cannot say whether there are 4,000 acres of land which are double crop land.
There are some lands in which double crops are grown.
I cannot say their extent.
There are small extents of garden lands.
There are single crop lands under extension channel.
AR these lands are treated as dry lands rents reduced.
The Kalipatnam is at the tail end of the delta.
The Losaragutlapadu is in Bhimavaram taluk.
Yanamadula Drain intervenes Kalipatnam and Losaragutlapadu.
Gollavanithippa lands have come under cultivation previously.
It is part of Losaragutlapadu.
I cannot say whether there are 11,000 acres of land uncultivated in Losaragutlapadu.
Probably it is forest area.
There were small extents of land in Muthyalapalli and Vempa under the Project Channel.
exhibit B 4 shows that there are lands of double crop.
Under the Act the plaintiff has to furnish a statement of lands etc.
The plaintiff 's agent furnished Exhibit B 6.
The soil of Losaragutlapadu was examined.
This is contained in Exhibit B 24.
The Settlement Officer classified the soils under contained Diglot Registers.
An extract of it is contained in Exhibit B.24.
I cannot say readily now without reference to Settlement Manual what the figures given in the Diglot Register are relating to the soils.
That statement contained in the file relates to the Losaragutlapadu.
A similar statement for Kalipatnam was not taken.
There is no such statement for that village.
I did not write to the Settlement Department to prepare such a statement for suit village.
I do not know whether the Government 724 analise the soil through Agricultural Department before the project was started. .
I examined the soils at one or two, places and I consulted the Settlement Register at that time.
I cannot say whether those one or two places were under extension project.
I remember I have taken description of the soil from the Settlement Register and Manual.
I do not know about the construction of the project.
" Shri J. Satyanarayana, Tahsildar, who appeared as D.W. 7 stated in his cross examination that the lands in Kalipatnam were sanctioned with two crops, though he could not say whether they were under cultivation since 1948.
He was also unable to say whether the settlement register from Kalipatnam was available in Taluk Office.
According to him water rate in the year 1958 was increased 50 % for all lands including Kalipatnam.
The cess was also increased proportionately.
He was unable to explain the figures, given under the description of the soil in exhibit B 24 and indeed he expressed his ignorance about the existence of any register for Kalipatnam on this subject.
The appellant 's argument strongly pressed before us was that the class of land had been determined to be delta dry land exclusively on the basis of the settlement register which did not contain any entry with respect to Kalipatnam.
The entry in the settlement register with respect to the soil of Losaragutlapadu could not be taken to cover the soil in Kalipatnam in the absence of evidence that the soil in these two villages was similar in this respect.
Stress was also led on the submission that description in the settlement register could not be considered to be conclusive and that proper factual inquiry was necessary because the termination affects the appellant 's proprietary rights.
The submission appears to us to possess merit.
The Special Officer had an obligation under s.2 of the Reduction of Rent Act to determine in respect of Kalipatnam village the average rate of cash rent per acre for each class of ryoti land in existence at the time of the commencement of the Act, such as, wet, dry and garden.
This had to be determined on the basis of relevant material.
The Special Officer, however, proceeded to found his determination only on the report of the Special Assistant (exhibit B 24) which, as discussed above, only took into account the entry in the settlement register with respect to the soil of Losaragutlapadu.
This really means that the determination of the Special Officer is solely based on the settlement register containing no entry in regard to Kalipatnam.
This material is irrelevant and cannot constitute a rational basis for founding thereon the determination of the Special Officer.
His determination must, therefore, be held 725 to be based on no evidence, with the result that it must be held to be in violation of the fundamental principles of judicial procedure.
A fortiori the order of the Government made under section 3 (2) exclusively on the basis of the recommendation of the Special Officer must in consequence be held to be not in conformity with the provisions of the Reduction of Rent Act and, therefore, outside the purview of section 3 (2) of that Act.
Section 8 (1) would accordingly be inapplicable and the jurisdiction of Civil Courts cannot be excluded.
The notification exhibit A 13 must, therefore, be struck down as contrary to law and ultra vires the Reduction of Rent Act.
We accordingly allow the appeals with costs and strike down the report of the Special Officer as also the notification exhibit A 13.
As observed earlier challenge to Exhibit A 1 was not pressed at the hearing by the appellant.
It would be open to the authorities concerned to proceed to reduce the rent in accordance with law.
One set of costs.
Y.P. Appeals allowed.
| IN-Abs | Sub section (2) of section 3 of the Madras Estates Land (Reduction of Rent) Act XXX of 1947 authorises the State Government to fix the rates of rent payable in respect of each class of ryoti land in each village in the estate after considering the recommendations of the special officer and the remarks of the Board of Revenue thereon and by virtue of section 8(1) no order under this subsection is liable to be questioned in a court of law.
The appellants filed a suit questioning the legality of the notification reducing the rates of rent in respect of the delta dry ryoti lands in a village.
They contended that the class of land had been determined to be delta dry land exclusively on the basis of the settlement register which did not contain any entry with respect to the village in question, that the settlement register could not be considered to be conclusive, and that proper factual inquiry was necessary, because, the determination affected the appellant 's proprietary rights.
The trial court decreed the suit.
The High Court held that the civil courts had no jurisdiction to entertain the suit.
Allowing the appeals, HELD : The Special Officer had an obligation, under section 2 of the Reduction of Rent Act, to determine in respect of a village the average rate of cash rent per acre for each class of ryoti land in existence at the time of the commencement of the Act, such as, wet, dry and garden.
had to be determined on the basis of relevant material.
The Special Officer, however, proceeded to found his determination only on the report of the Special Assistant which only took into account the entry in the settlement register with respect to the soil of another village.
This really meant that the determination of the Special Officer was solely based on the settlement register containing no entry in regard to the village in question.
This material is irrelevant and cannot constitute a rational basis for founding thereon the determination of the Special Officer.
His determination must, therefore, be held to be based on no evidence, with the result that it must be held to be in violation of the fundamental principles of judicial procedure.
A fortiori the order of the Government made under section 3(2) exclusively on the basis of the recommendation of the Special Officer must in consequence be held 10 be not in conformity with the provisions of the Reduction of Rent Act and.
therefore, Outside the purview of section 3(2) of that Act.
Section 8(1) would accordingly be inapplicable and the jurisdiction of civil courts cannot be excluded.
[724 F 725 C] Secretary of State vs Mask and Company, (1940) 67 I.A. 222 and O. K. Mitthuswamy Nudaliar & Ors.
vs State of Madras, C.A. Nos.
1011 1017 '65, dt. 31 7 68.
referred to.
Dhujabhai and Ors.
vs State of Madhya Pradesh & Ors.
; , followed.
|
315 of 1954.
Petition under article 32 of the Constitution for enforcement of Fundamental Rights.
H.J. Umrigar, Narain Andley, J. B. Dadachanji and Rajinder Narain for the petitioner.
M. C. Setalvad, Attorney General for India, and C. K. Daphtary, Solicitor General for India (G. N. Joshi, Porusa Mehta and P. G. Gokle, with them) for the respondents.
October 2 1.
The Judgment of the Court was delivered by MEHR CHAND MAHAJAN C.J.
The petitioner in this matter is a resident of Akola in the State of Madhya Pradesh and carries on business in various lines, i.e., oil mills, banking, money lending, etc.
It is alleged that during the war years he made huge profits but evaded payment of tax.
In the year 1948 the Central Government, acting under section 5(1) of the Taxation on Income (Investigation Commission) Act, 1947, referred his case to the Investigation Commission for investigation and report, in respect of the profits made by him during the period commencing with 1st of January, 1939, and ending on 31st of December, 1947.
The Commission, after investigation, reported on the 28th of February, 1951, that the income of the petitioner concealed and withheld from taxation was in the sum of Rs. 27,25,363 and the tax payable by him amounted to Rs. 18,44,949.
During the pendency of the investigation the peti tioner applied for settlement under the provisions of section 8 A of Act XXX of 1947.
This application was forwarded along with the report by the Commission to the Central Government.
In the settlement application the applicant proposed that he was prepared to pay the sum of RE;.
18,44,949 as under: 775 On or before 25 6 1951 Rs.
3,44,949 On or before 25 3 1952 Rs. 5,00,000 On or before 25 3 1953 Rs.
5,00,0000 On or before 25 3 1954 Rs.
5000,000 and that, he be given credit for a sum of Rs, 32,034 4.6 already paid by him, The Central Government accepted this proposal and the claim for evaded income tax was thus finally settled by mutual agreement.
The assessee, subsequently, asked for more time to pay these instalments and this was, also granted from time to time.
Commencing from 16th of July, 1951, ,and till the 10th April, 1954.
the petitioner paid a total sum of about Rs. 14,00,000 towards discharge of the liability voluntarily agreed to by him on account of the tax evaded.
A sum of Rs. 4,50,000 still remains due and is payable in instalments up to the 25th of March, 1955.
By one of the terms of the settlement the petitioner undertook not to transfer, mortgage, charge or alienate or encumber in any manner whatsoever any of his movable or immovable properties, barring stock intrade of the business, except with the permission of the Commissioner of Income tax and except for the purpose of the payment of the tax due under the settlement.
In June, 1954, after the decision by this Court of Suraj Mal Mohta vs A. V. Visvanatha Sastri and Another(1), the petitioner preferred this petition under the provisions of article 32 of the Constitution alleging that he had been advised that the entire proceedings under the Act which had resulted in the imposition upon him of a liability of Rs. 18,44,949 and in the payment already made of an aggregate amount of Rs. 13,99,175 were wholly illegal, ultra vires, void and unconstitutional and that the Income tax authorities were not legally entitled to recover the amount of Rs. 4,50,000 from him.
In the grounds of the petition it was stated that sections 5, 6, 7 and 8 of Act XXX of 1947 were invalid and ultra vires in so far as they contravene the provisions of articles 14, 19(1) (f) and 31 of the Constitution and that under the Act (1) ; 776 there was no reasonable or equitable basic for classifica tion, and that the Act gave to the execrative unrestrained and absolute right to pick and choose and to differentiate between the same class of taxpayers.
It was also alleged that the procedure prescribed by the Act for discovering concealed profits was substantially different and was more prejudicial to the assessees than the procedure prescribed under the Indian Income tax Act by section 34.
In the concluding paragraph of the petition it was prayed that an appropriate writ or direction be issued quashing the entire proceedings, and all orders passed under the Act by the Central Government and the respondent Commission, and restraining them from taking any proceedings whatsoever under the Act against the petitioner.
It was further prayed that a direction be issued for restoration to the petitioner of a sum of Rs. 13,99,715 10 6 with interest at 6 per cent and that the respondents be further restrained from taking any action against the petitioner for the recovery of the sum of Rs. 4,50,000 with interest.
In our judgment this petition is wholly misconceived.
Whatever tax the petitioner has already paid, or whatever is still recoverable from him, is being recovered on the basis of the settlement proposed by him and accepted by the Central Government.
Because of his request for a settlement no assessment was made against him by following the whole of the procedure of the Income tax Act.
In this situation unless and until the petitioner can establish that his consent was improperly procured and that he is not bound thereby he cannot complain that any of his fundamental rights has been contravened for which he can claim relief under article 32 of the Constitution.
Article 32 of the Constitution is not intended for relief against the I voluntary actions of a person.
His remedy, if any, lies in other appropriate proceedings.
The learned counsel for the petitioner contended that apparently the application for a settlement seems to have been made under the pressure of circumstances and in view of the coercive machinery of Act XXX of 1947 and the settlement arrived in such circumstances 777 was not binding and could not, be enforced.
Whatever be the merits of such a contention, it obviously cannot be raised in an application made under the provisions of article 32 of the Constitution.
The forum for investigating such allegations is elsewhere.
The result is that this petition fails and is dismissed with costs.
Petition dismissed.
| IN-Abs | The petitioner, a business man, was alleged to have made huge profits during the years of War and the Central Government acting under section 5(1) of the Taxation on Income (Investigation Commission) Act, 1947 (XXX of 1947) referred his case to the Investigation Commission for investigation and report.
During the pendency of the investigation the petitioner 's application for settlement under the provisions of section 8 A of Act XXX of 1947 was accepted by the Central Government and in pursuance thereof the tax was made payable by installments and the claim for evaded income tax was thus finally settled be mutual agreement.
When the installments in the sum of Rs. 4 lacs odd still remained due the petitioner preferred the present petition under article 32 of the Constitution alleging that the entire proceedings under Act XXX of 1947, were illegal, ultra vires, void and unconstitutional, that the Income tax authorities were not competent to recover the amount.
due from him and that sections 5, 6, 7 and 8 of the Act were ultra vires as they infringed articles 14, 19(1) (f) and 31 of the Constitution.
Held, that the petition under article 32 was not competent as whatever had already been paid or whatever was still recoverable from the petitioner was being recovered.
on the basis of the 99 774 settlement between him and the Government.
Article 32 is not intended for relief against the voluntary actions of a person.
Suraj Mall Mohta Co. vs A. V. Visvanatha Sastri (A.I.R. referred to.
|
iminal Appeal No. 49 of 1969.
Appeal by special leave from the judgment and order dated December 2, 1968 of the Allahabad High Court in Criminal Appeal No. 1277 of 1968.
R. L. Kohli, for the appellant.
O. P. Rana, for the respondent.
The Judgment of the Court was delivered by Sikri, J.
The only question which arises in this appeal by special leave is whether the appellant, Sheo Nath, should be convicted under section 396, I.P.C., or section 411, I.P.C., or section 412, I.P.C. The facts as found by the High Court are these.
A dacoity was committed at the shop of Ram Murat in Dhaneja village by 15 to 20 persons on August 19, 1966, at about 11.30 p.m.
One dacoit, Ram Shankar, was armed with a gun while others carried 797 spears, Gandasas and lathis.
During the course of the dacoity Ram Murat was injured.
One Pancham, who lived in a house not far from Ram Murat 's shop, and two others came running on heating the noise.
Pancham was shot down with the gun by dacoit Ram Shankar.
The dacoits then escaped with clothes, ornaments, cash, etc., looted from Ram Murat 's shop.
After the dacoits left Ram Murat dictated a report about the occurrence in which lie named Ram Shankar Singh, Jaintri Prasad Singh, Nanhe Singh and Sulai accused as having been among the culprits and this report was sent to the Jalalpur police station, five miles away, where it was received and recorded at 6 a.m. next morning.
On August 22, 1966, i.e., three days after the dacoity, the house of Sheo Nath, appellant, was searched and three lengths of cloth were recovered which were subsequently identified by Ram Murat and a tailor named Bismillah as having been stolen from Ram Murat 's shop in the dacoity.
The High Court, agreeing with the learned Sessions Judge, relied on the evidence of three eye witnesses regarding the manner in which the occurrence took place and regarding the participation of the four named accused persons.
Sheo Nath had not been named by the eye witnesses or in the dying declaration of Panchain and no witness claimed to have identified him taking part in the dacoity.
But, relying on the discovery of three lengths of cloth and their identification, the High Court convicted Sheo Nath under section 396, I.P.C. The High Court observed : "From the material on record we are fully con vinced that the Exhs. 2 and 3 were stolen from the shop of Ram Murat in the course of the dacoity committed in the night between 19 to 20 August 1966, and since they were recovered from the possession of Sheonath appellant only 2 or 3 days later, it is legitimate to infer that he was one of the dacoits vide illustration (a) to section 114 of the Evidence Act.
Sheo Nath, therefore, has been rightly convicted under section 396, I.P.C." The learned counsel for the appellant contends that in the circumstances of the case the High Court should not have convicted the appellant under section 396, I.P.C., but only under section 411 I.P.C. Section 114 of the Evidence Act and illustration (a) read as follows : " 114.
The Court may presume the existence of any fact which it thinks likely to have happened, regard being had to the common course of natural events, human conduct and public and private business, in their relation to facts of the particular case.
illustrations.
798 The Court may presume (a) that a man who is in possession of stolen goods after the theft, is either the thief or has received the goods knowing them to be stolen, unless he can account for his possession." This Section was considered by this Court in Sanwal Khan vs State of Rajasthan(1).
This Court, after considering some High Court cases, observed : "In our judgment no hard and fast rule can be laid down as to what inference should be drawn from a certain circumstance.
Where, however, the only evidence against an accused person is the recovery of stolen property and although the circumstances may indicate that the theft and the murder must have been committed at the same time, it is not safe to draw the inference that the person in possession of the stolen property was the murderer.
Suspicion cannot take the place of proof.
" In Wasim Khan vs State of Uttar Pradesh(2) this Court held that " recent and unexplained possession of the stolen property while it would be presumptive evidence against a prisoner on the charge of robbery would similarly be evidence against him on the charge of murder." On the facts of that case this Court held that the appellant was rightly convicted of the offence of murder and robbery.
But, apart from the possession of stolen property, there were other circumstances indicating that the appellant was guilty of murder and robbery.
The circumstances were that the appel lant in that case had travelled with the deceased on his bullock cart alone and the deceased never reached his home and was found murdered.
The appellant was found in possession of the goods ,of the deceased three days after and the appellant made no effort to trace the whereabouts of the deceased or lodge information of his disappearance from the bullock cart.
In the present case three presumptions are possible from the recovery of the stolen goods from the appellant three days after the occurrence of the dacoity (1) that the appellant took part in the dacoity; (2) that he received stolen goods knowing that the goods were stolen in the commission of a dacoity; and (3) that the appellant received these goods knowing them to have been stolen.
(1) A.I.R. 1956 S.C. 54.
(2)[1956] S.C.R. 191.
799 The choice to be made, however, must depend on the facts proved in this case.
It is quite clear that all the property which was, stolen by the dacoits was not recovered from the appellant.
We may repeat that clothes, ornaments, cash, etc. were stolen.
The only articles that were found with the appellant were a length of muslin (Exh. 2) and a length of charkhana doriya (Exh. 3).
The appellant is stated to be a cloth merchant and he may well have acquired these goods as a receiver.
It has not been shown that in the village in which the appellant lived it was known that a dacoity had taken place and goods had been stolen in the dacoity.
On the facts of this case it seems to us that the, only legitimate presumption to be drawn is that the appellant knew that the, goods were stolen but he did not know that they were stolen in a dacoity.
The appellant, therefore, can only be convicted under section 411, I.P.C.
In this connection we may refer to a decision of the Rajas than High Court in Bhurgiri vs The State(1) (Wanchoo, C.J., and Dave, J.).
Wanchoo, C.J., after holding that the recovery of ornaments from Bhurgiri had been established, observed : "The next question is whether on this evidence Bhurgiri can be convicted for dacoity.
The, recovery took place five days after the dacoity.
It is not impossible that during that period the property might have passed from the dacoits to a receiver.
Under these circumstances, we are of opinion that it would not be safe to convict Bhurgiri of dacoity on the evidence of this recovery alone.
It would be more proper to convict him as a guilty receiver.
Then the question arises whether he should be convicted under section 411 or 412, I.P.C. So far as section 411 is concerned, he is clearly guilty under that section.
The presumption under section 114 applies, and we can safely presume that he is a guilty receiver of stolen property particularly when we find that the property was kept in the Bara, and not at his own house.
He must have, had reason to believe that it was stolen when he received the property, and that is why he left it in the Bara.
But we feel that it would not be proper to convict him under section 412 because that section requires that the receiver should know or have reason (1) I.L.R. [1954] Rai.
476, 482 83. 800 to believe that the property had been transferred by the commission of dacoity.
The prosecution, in our opinion has to show something more than the mere possession of stolen goods for a conviction under section 412.
If the prosecution is only able to show mere possession, the proper section to use is 411.
" In the result the appeal is allowed and the appellant convicted under s.411,I.P.C., instead of section 396, I.P.C.,and sentenced to undergo rigorous imprisonment for three years.
R.K.P.S Appeal allowed.
| IN-Abs | The house of the appellant, a cloth merchant, was searched and three lengths of cloth were recovered which were subsequently identified as having been stolen from a shop in a dacoity in which clothes, ornaments, cash etc.
were stolen.
The appellant was not named by the eye witnesses or in the dying declaration as having taken part in the dacoity.
Relying on the discovery of the cloth and their identification the High Court convicted him under section 396 Penal Code.
The Court observed that it was legitimate to infer that he was one of the dacoits in view of illustration (a) to Section 114 of the Evidence Act.
In the appeal to this Court it was contended that the High Court should have convicted the appellant only under section 411 Penal Code.
Allowing the appeal, HELD : On the facts the only legitimate presumption to be drawn is that the appellant knew that the goods were stolen but he did not know that they were stolen in a dacoity.
All the property which was stolen by the dacoits was not recovered from the appellant.
The appellant, a cloth merchant, may well have acquired these goods as a receiver.
It has not been shown that in the village in which the appellant lived it was known that a dacoity had taken place and goods had been stolen in the dacoity.
[799 B C] Wasim Khan vs State of Uttar Pradesh, [1956] S.C.R. 191 distinguished; Sanwal Khan vs State of Rajasthan A.I.R. 1956 S.C. 54, referred to.
|
iminal Appeals Nos.
60 and 63 of 1965.
Appeals from the judgment and order dated November 20, 1963 of the Gujarat High Court in Criminal Appeals Nos. 957 and 796 of 1963 respectively.
Urmila Kapur and section P. Nayar, for the appellant.
The respondent did not appear.
The Judgment of the Court was delivered by Dua, J.
These two criminal appeals (Nos. 60 and 63 of 1965) with certificate raise a common question and are, therefore, being disposed of by a common judgment.
The Gujarat High Court also recorded the main judgment only in Criminal Appeal No. 60 of 1965.
The question which arises for determination is whether, several accused persons jointly tried have been acquitted by the trial Court, the state can ' prefer one appeal against the acquittal of all of them.
The High court held such a joint appeal not to be maintainable under Cr.
P.C. and so holding rejected the appeal by the State without going into the merits.
The Division Bench of the ,High Court speaking through Raju, J. recorded a very lengthily order though the reasoning in support of the non maintainability of the joint appeal is confined to a couple of pages only.
The High Court in its order referred to ss 258, 410, 417, 419 and 423 of the Code and came to the conclusion that the scheme of Chapter XXXI of the Code as disclosed by these sections and particularly by section 419 is against the maintainability of a joint appeal by the State against an order acquitting several accused persons tried jointly.
Section 419 was construed by the High Court to contain a bar against a joint appeal.
The major portion of the impugned order dealt with the question of binding character of the Full Bench decision of that High Court since reported as Lalu Jela vs State of Gujarat(1) on the Division Bench hearing the present appeals.
After a lengthy ,discussion the Division Bench came to the conclusion that the Full Bench decision holding a joint appeal to be maintainable in law was not binding on it.
On the view that we propose to take on the question of main tainability of a joint appeal against a common order acquitting (1) A.I.R. 1962 Guj.
877 several accused persons tried jointly, we do not consider it necessary to embark on a lengthy discussion on the question of binding charter of decisions of Full Benches and of Division Benches on future Benches of co ordinate jurisdiction of the same High Court.
We may only make a passing reference to the decisions of this Court cited at the bar in support of such binding character.
In Mahadeolal Ranodia vs The Administrator General of West Bengal(1), this Court observed as follows : "We have noticed with some regret that when the earlier decision of two judges of the same High Court in Beorajan 's an 's case was cited before the learned judges who heard the present appeal they took on themselves to say that the previous decision was wrong, instead of following the usual procedure in case of difference of opinion with an earlier decision, of referring the question to a lar ger Bench.
Judicial decorum no less than legal propriety forms the basis of judicial procedure.
If one thing is more necessary in law than any other thing, it is the quality of certainty.
That quality would totally disappear if judges of co ordinate jurisdiction in a High Court start overruling one another 's decision.
If one Division Bench of a High Court is unable to distinguish a previous decision of another Division bench and holding the view that the earlier decision is wrong itself gives effect to that view, the result would be utter confusion.
" Other decisions cited containing similar observations are : jai Kaur and others vs Sher Singh etc.
(2 ) and Atma Ram vs State of Punjab and others(3).
We are aware of a still more recent decision of this Court in Jaisri Sahu vs Rai Dewan (4) in which re Ference is made to a Privy Council decision in Budha Singh vs Laltu Singh(5).
The question of competency of a joint appeal by several per sons convicted by one order at a joint trial was referred for authoritative decision to a Full Bench of the Gujarat High Court in Lalu Jela 's case(6).
The argument before the Full Bench was that r. 6 in Chapter XXVI of the Bombay High Court Appellate Side Rules (which are applicable to the proceedings in Gujarat High Court) was inconsistent with Chapter XXXI of the Code of Criminal Procedure, with the result that a joint appeal to the High Court by several persons convicted at a joint trial was not maintainable.
The Full Bench on an exhaustive discussion held such (1) [1960]3.S.C.R. 78 (2) (3) (4) (5) I.L.R , 37 All, 604 (P.C.).
(6) A.I.R. 1962 Guj.
125. 878 an appeal to be competent and did not consider r. 6 to be inconsistent with Chapter XXXI of the Code.
The decision of this Court in Rabari Ghela Jadav.
State of Bombay(1) was explained and distinguished.
If we agree with the principle accepted in the Full Bench decision then the present appeals would on the reasoning of that decision seem prima facie to possess merit and in the absence of some other cogent reason to the contrary the appeals would have to succeed.
Chapter XXVI of the Bombay High Court Appellate Side Rules, 1960 deals with "criminal business" and r. 6 is in the following words "Joint appeal or application by persons affected by the same judgment.
All persons aggrieved,by a judgment or an order passed in a criminal case, may join in one appeal or application for revision, and one copy of the judgment or order complained of shall be sufficient." This rule, of course, does not in terms cover the case of an appeal by the State against several accused persons jointly tried and acquitted by the trial Court by a common order, but if an appeal by persons jointly tried and convicted is competent, then on principle it is difficult to negative the maintainability of one appeal by the State against a common order acquitting several persons tried jointly.
This rule deals with a matter of procedure and not of Substantive rights and seems to be based on sound commonsense.
Procedure has been described to be a hand maid and not a mistress of law, intended to subserve and facilitate the cause of justice and not to govern or obstruct it.
Like all rules of procedure, this rule demands a construction which would promote this cause.
So construed a joint appeal, in compliance of this rule must be sustained.
The power to frame this rule is specifically conferred on the High Court by section 554(2)(c) Cr.
P.C. and r. 6 does not seem to us to be inconsistent with any provisions of the said Code.
Holding this rule to be valid, in agreement with the decision of the Full Bench, the competency of a joint appeal by several accused persons convicted at one trial must be upheld.
On the same reasoning a joint appeal by the State against several accuses.
persons acquitted at a joint trial has also to be held not to be contrary to any provision of the Code and therefore not legally prohibited.
Section 419 of the Code on which the High Court seems to have relied in support of the non maintainability of a joint appeal by the State, lays down inter alia that every appeal shall be made in the form of a petition in writing presented by the appellant (1) A.I.R, 1960 S.C. 748.
879 or his pleader and every such petition shall, unless the court otherwise directs, be accompanied by a copy of the judgment or order appealed against.
This section does not seem to us to prohibit a joint appeal by the State against more than one accused persons.
The contrary view taken by the, High Court on the construction of this section is clearly unacceptable.
Section 417 which provides for an appeal in a case of acquittal empowers the State Government to direct the public prosecutor in any case to present an appeal from an order of acquittal.
This section also does not suggest any bar or prohibition against presentation of a joint appeal against several accused persons acquitted in a case.
On the other hand, it provides for an appeal in a case, and not against an accused person, who has, been acquitted.
The plain reading of this sections therefore.
, seems to be wide enough to permit a joint appeal.
Sections 258, 410 and 423 of the Code also do not seem to indicate any bar as is suggested by the order of the High Court.
This Court in Rabari Ghela Jadav 's case(1), on the basis of which the judgment of the High Court mainly proceeds, merely lays down that the Appellate Court hearing an appeal cannot admit it only on a question of sentence and that such a restricted order of admission being invalid, the appellant would be entitled to insist that his appeal should be heard on the merits.
This decision, in Our opinion, does not militate against the maintainability of a joint appeal.
The Full Bench decision of the Gujarat High Court rightly distinguished and explained this decision.
As observed earlier, once we accept the Full, Bench to lay down the correct rule of law, then there cannot be much difficult in upholding the maintainability of a joint appeal by the State against several accused persons acquitted at a joint trial.
There being no legal bar (at least we are aware of none either in the Cr.
P.C. or elsewhere), such an appeal cannot be held to suffer from any serious legal infirmity.
And then the matter being one of mere form it calls for a liberal approach requiring the appeal to be heard on the merits.
To hold it to be unmaintainable on this ground would defeat the larger cause of justice.
Unfortunately, we did not have the advantage of arguments on behalf of the respondents because they were unrepresented, but on considering the scheme of the relevant provisions of the Code of Criminal Procedure, we are of the view that the High Court was wrong in holding the joint appeal not to be maintainable and in summarily rejecting the same.
We accordingly allow the appeal, set aside the order of the High court and remit the case back to it for decision of the appeal on the merits.
G.C. Appeal allowed.
(1) A.I.R. 1960 S.C. 748.
| IN-Abs | The respondents were tried jointly and acquitted by a common judgment.
State of Gujarat filed a Joint appeal against their acquittal in.
the High Court.
Rule 6 of the Bombay High Court Appellate Side Rules, 1960 (which were applicable to the proceedings in the Gujarat High Court) provided for joint appeals by persons aggrieved by a common judgment or order.
There was however no, rule specifically providing for similar joint appeals by the State.
A Division Bench of the High Court dismissed the joint appeal by the State against the respondents on the ground that such an appeal was not maintainable.
The Division Bench held that the decision by a Full Beach of the High Court in Lalu lela 's case in which a contrary view had been taken was not binding on the Division Bench.
In appeal to this Court against the judgment of the Division Bench.
HELD : (i) The Division Bench was in error in not treating as binding the earlier decision of a Full Bench of the same court on the same question.
1877 A F] Mahadeolal Kanodia vs The Administrator General of West Bengal, ; , Jai Kaur & Ors.
vs Sher Singh etc. , Atma Ram vs State of Punjab & Ors. , Jaisri Sahu vs Rai Dewan, [19621 2 S.C.R. 559 and Budha Singh vs Laltu Singh, I.L.R. 37 All. 604 (P.C.), applied.
(ii) Rule 6 of the Bombay High Court Appellate Side Rules does not in terms cover the case of an appeal by the State against several accused persons jointly tried and acquitted by the trial court by a common order, but if an appeal by persons jointly tried and convicted is competent, then on principle it is difficult to negative the maintainability of one appeal by the State against a common order acquitting several persons tried jointly.
Like all rules of procedure this rule demands a construction which would ' promote the cause of justice and not obstruct it.
(878 D F] A joint appeal by the State against several accused persons acquitted at a joint trial is not contrary to any provision of the Code of Criminal Procedure and is therefore not legally prohibited.
Sections 258, 410, 417, 419 or 423 of the Code do not indicate any bar as was suggested by the order of the High Court.
Indeed the plain reading of section 417 which pro%ides for an appeal in a case and not against an accused person, seems to be wide enough to permit ,A joint appeal.
The matter being one of mere form it calls for a liberal approach requiting the appeal to be beard on its merits.
The order of the High Court must accordingly be set aside.
[878 G H; 879 C F] 876 Rabari Ghela jadav V. State of Bombay, A.I.R. 1960 S.C. 748, ,explained.
Lalu Jela.
vs State of Gujarat, A.I.R. 1962 Guj. 125, approved.
|
Appeal No. 2312 of 1966.
Appeal from the judgment and order dated November 7, 1962 of the Mysore High Court in Writ Petition No. 781 of 1960.
M. C. Chagla, section section Javali and section P. Nayar, for the appellants.
M. K. Nambyar, G. L. Sanghi and J. B. Dadachanji for respondents Nos.
1 to 5.
The Judgment of the Court was delivered by Shah, J.
The Madras Religious and Charitable Endowments Act 19 of 1951 was enacted to provide for the better administra tion and governance of Hindu Religious and Charitable Institutions and Endowments in the State of Madras.
This Court in The Commissioner of Hindu Religious and Charitable Endowments, Madras vs Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt(1) held that sections 21, 30(2), 31, 55, 56 and 63 to 69 of Act 19 of 1951 were ultra vires, in that they infringed the guarantee of the fundamental rights in articles 19(1)(f), 25 and 26 of the Constitution of India.
This Court also held that section 76(1) providing for imposing liability for payment of contribution which was of the nature of a tax and not a fee, was beyond the legislative competence of the State Legislature.
The Legislature then amended the Act by Madras Act 27 of, 1954.
On August 11, 1955, the Government of Madras framed Rules under the Act prescribing a graduated scale of rates of contribution under section 76(1).
(1) ; 919 The respondents who are trustees of the Venkataramana Temple at Mulki, District South Kanara, moved a petition in the High Court of Madras for an order restraining the Commissioner of Hindu Religious and Charitable Endowments from enforcing the provisions of the Amending Act 27 of 1954.
Under the scheme of reorganization of State of Madras, the petition was transferred for trial to the High court of Mysore.
The High Court of Mysore by order dated March 16, 1959, held that sections 21, 30(2), 31, 63 to 69 and 89 as amended by Act 27 of 1954 were invalid : Devraja Shenoy vs The State of Madras(1).
The Assistant Commissioner of Religious Endowments Mysore, issued on September 30, 1959 directing the respondent to pay the arrears of contributions and audit fee under the Commissioner 's demand notice dated June 25, 1957.
The respondents moved another petition in the High Court of Mysore challenging the validity of the demand.
The High Court upheld the plea on the ground that no rules had been framed under section 100 of the Act, and therefore, the demand for levy of contribution was Premature, and that audit fee demanded by the Commissioner was without determination under section 76(2) of the Act and was "on that account without competence or authority of law".
With certificate granted by the High Court, the Commissioner of Hindu Religious & Charitable Endowments has preferred this appeal.
The provisions of the Act which are relevant may first be read: section 71 "(1) The trustee of every religious institution shall keep regular accounts of all receipts and disbursements.
(2) The accounts of every religious institution, the annual.
income of which as calculated for the purposes of section 76 for the fasli year immediately preceding is not less than sixty thousand rupees, shall be subject to concurrent audit, that is to say, the audit shall take place as and when expenditure is incurred.
(3) (4) The audit shall be made (a) in the case of a religious institution the annual income of which calculated as aforesaid for the fasli year immediately preceding is not less than one thousand rupees, by auditors appointed in the prescribed manner, (b) (1) 920 section 76 "(1) In respect of the services rendered by the Government and their officers and for defraying the expenses incurred on account of such services every religious institution shall from the income derived by it, pay to the Commissioner annually such contribution not exceeding five per centum of its income as may be prescribed.
(2) Every religious institution, the annual income of which, for the fasli year immediately preceding as calculated for the purposes of the levy of contribution under sub section (1), is not less than one thousand rupees, shall pay to the Commissioner annually, for meeting the cost of auditing its accounts, such further sum not exceeding one and a half per centum of its income as the Commissioner may determine.
(3) (4) The Government shall pay the salaries, allowances, pensions and other beneficial remuneration of the Commissioners, Deputy Commissioners, Assistant Commissioners and other officers and servants (other than exe cutive officers of religious institutions) employed for the purposes of this Act and the other expenses incurred.
for such purposes, including the expenses of Area Committees and the cost of auditing the accounts of religious institutions.
(5) section 100 "(1) The Government may make rules to carry out all or any of the purposes of this Act and not inconsistent therewith.
(2) In particular, and without prejudice to the generality of the foregoing power, they shall have power to make rules with reference to the following matters (c) the method of calculating the income of a religious institution for the purpose of levying contribution and the rate at which it shall be levied; Rules were framed by the State of Madras on August 11, 1955 authorising the imposition of a graded levy of contribution.
The Rules framed by the Government of the State of Madras remained in force in the State of Mysore after reorganization of the State.
of Madras, and applied to the temples in the South Kanara District which was incorporated in the Mysore State.
It is true that the High Court of Mysore declared invalid certain provisions of 921 the Act imposing control upon the administration of temples governed by the Act.
But on that account the power to make rules was not restricted, nor were the rules framed by the Government rendered invalid.
The decision of the High Court that no rules for the levy of contribution were framed was largely influenced by the observations made in the judgment in devraja Shenoy 's case(1).
It was observed in that case that since the respondents had applied for restraining the State from enforcing any of the provisions of the Act, an investigation into the sustainability of that claim would have involved determination of the validity of section 76(1) and of any demand for contribution under its provisions and since the Advocate General appearing for the State, in that case had informed the Court that the question did not fall to be determined because rules prescribing the contribution payable by the respondent temple "had yet to be made, which meant that until such rule was made no contribution could be demanded", the conclusion reached by the Court was in truth "a decision on one of the material questions arising in that case, and binding on all the parties to that case.
" The Court proceeded to observe : "In that view of the matter it is incontrovertible that what was stated in the previous case on behalf; of the State was that the amount of contribution payable by the petitioners (respondent) temple should be prescribed by a rule which remained to be made which means that what was decided by this Court was that no such contribution could be recovered from that temple until such a rule was made.
The impugned demand made on June 25, 1957 before this Court rendered its decision in Devraja Shenoy 's case(1) on March 10, 1959 having no efficacy or effect, since it was a plainly premature demand made even before the liability to Day the contribution came into existence, has to be and is accordingly quashed.
" This view, in our judgment, proceeds upon an incorrect view of the true nature of the contribution leviable under section 76(1) of the Act.
The assumption made by the Court that under the Act the Government had to make under section 100 rules applicable to each temple separately and prescribing the method for determining contribution finds no support in the provisions of the Act or its scheme.
The true nature of the contribution eligible under section 76(1) under Madras Act 19 of 1951 was explained by this Court in H. H. Sudhindra Thirtha Swamiar vs Commissioner for Hindu Religious & Charitable Endowments, Mysore (2) It was pointed out that (p. 323) (1) (2) [1963] Supp. 2 S.C.R. 302.
922 "A levy in the nature of a fee does not cease to be of that character merely because there is an element of compulsion or coerciveness present in it, nor is it a postulate of a fee that it must have direct relation to the ac tual services rendered by the authority to individual who obtains the benefit of the service.
If with a view to provide a specific service, levy is imposed by law and expenses for maintaining the service are met out of the amounts collected there being a reasonable relation between the levy and the expenses incurred for rendering the service, the levy would be in the nature of a fee and not in the nature of a tax.
It is true that ordinarily a fee is uniform and no account is taken of the varying abilities of different recipients.
But absence of uniformity is not a criterion on which alone it can be said that it is of the nature of a tax.
A fee being a levy in consideration of rendering service of a Particular type, co relation between the expenditure by the Government and the levy must undoubtedly exist, but a levy will not be regarded as a tax merely because of the absence of uniformity in its incidence, or because of compulsion in the collection thereof, nor because some of the contri butories do not obtain the same degree of service as others may.
" Under the Act a fee though levied for rendering services of a particular type is not to be, co related to the services performed for each individual who is intended to obtain the benefit of the services.
The co relation must be between the expenses incurred by the authority levying the fee for generally providing the service and the aggregate of the levy from persons who are to be made subject thereto.
It is a necessary corollary that under the Act general rules prescribing the levy of fee from religious endowments have to be made, and not rules governing individual endowments.
The Act does not contemplate separate rules to be made in respect of each religious institution likely to obtain the benefit of services rendered by the State for which the contribution is to be levied.
The concession by the Advocate General at the hearing in Devraja Shenoy 's case(1) does not oblige the State to frame separate rules in respect of each individual religious institution.
The rules under the Act have to be general.
And such rules were in fact framed and were in operation.
We are unable therefore, to agree with the High Court that appropriate rules were not in existence at the time when the demand was made, and on that account the demand was premature.
If services are provided, assuming that the Venkataramana temple either does not need the services, or does not obtain the.
(1) (196)) Mys.
L. J. 245.
923 benefit of the services, the contribution would still be recoverable.
We are also unable to accept the argument raised that because the rules were framed at a time when several different kinds of services were intended to be rendered and the Court later struck down certain provisions of the Act under which services were to be rendered, the rules framed in 1955 were rendered inapplicable.
The order passed by the High Court upholding the claim of the respondent temple on this part of the. case must therefore, be set aside.
The High Court has not investigated the question whether there is a reasonable relation between the expenditure incurred by the Government for providing services and the amounts intended to be collected from the religious institutions for whose, benefit the services are to be rendered.
Since this is a matter to be decided on evidence, we do not propose to enter upon that question in this appeal.
The second question relates to the levy of audit fee.
Under section 76(2) of the Act audit fee is not to be prescribed by rules : the Commissioner has to determine the fee for auditing the accounts of each religious endowment.
The power of the Commissioner is subject to a three fold restriction : (1) that the annual income of the religious institution for the relevant year preceding the year is Rs. 1,000/ or more; (2) that the fee does not exceed 11/5% of the income; and (3) that the fee is levied for meeting the cost of auditing the accounts of the religious institution.
In the present case, conditions (1) & (2) are satisfied.
But the High Court was of the view that the Commissioner had not determined the cost of auditing the accounts of the respondent temple, and proceeded to observe "It is sufficient to say that the demand made of the petitioners ' temple for the payment of a sum of Rs. 1, 1 62 8 3 nP towards the audit of its accounts in respect of the year 1963 fasli does not rest upon any determination made under Section 76(2) and is therefore one made without competence or the authority of law.
" In so observing, in our judgment, the High Court erred.
It was not the case of the respondents in their petition that the Commissioner had not determined the audit fee under section 76(2).
In paragraph 12 of the petition it was merely asserted that the fee determined by the Commissioner at the rate of 1 1/2% of the income was excessive.
It is true that the Commissioner may not under section 76(2) of the Act impose a flat rate of audit fee on the religious institutions governed by the provisions of the Act : he has to determine audit fee for meeting the costs of auditing the accounts as a per 924 centage of the income of each religious institution.
The Commissioner has to determine, having regard to the facts and circumstances of each case, the fee (being not more than the maximum prescribed) for meeting the cost of audit of the institution.
That im.plies that the Commissioner has to form an estimate of the reasonable cost which may be incurred in making an effective audit of the accounts of the religious institution, and to state it in terms of a percentage of the income.
The percentage of income levied as audit fee must of necessity be based on an estimate, and the demand will not be struck down merely because it turns out that the amount demanded is not precisely equivalent to the cost actually incurred for auditing the accounts.
Since the High Court has proceeded upon the ground of ab sence of determination by the Commissioner, which was never pleaded, and the High Court has not determined whether the audit fee ;demanded was in truth for meeting the cost of auditing, the accounts of the Venkataramana temple, the order passed by the High Court in respect of this part of the case must also be set aside.
The order of the High Court is set aside and it is directed that the case do stand remanded to the High Court and that the High Court do dispose of the case according to law and in the light of the observations made in this judgment.
Costs of this appeal will be costs in the High Court.
Y.P. Case remanded.
| IN-Abs | In 1955 the Government of Madras framed Rules under the Madras Hindu Religious and Charitable Endowments Act, 1951, as amended by Act 27 of 1954, prescribing a graduated scale of rates of contribution under section 76(1) of the Act.
The rules remained in force in the State of Mysore after reorganisation of the State of Madras and applied to the temples in the South Kanara district which was incorporated in the Mysore State.
On a petition by the respondents, trustees of a temple in the South Kanara district, the High Court of Mysore in Devraja Shenoy vs The State of Mysore declared invalid certain provisions of the amended Act imposing control upon the administration of temples governed by the Act.
Thereafter the Assistant Commissioner of Religious Endowments directed the respondents to pay the arrears of contribution and audit fee.
The respondents again moved the High Court challenging the validity of the demand.
The High Court upheld their plea on the ground that no rules had been framed under section 100 of the Act, and, therefore, the demand for recovery of contribution was premature.
The decision of the High Court was largely influenced by some observations made in the judgment in Devraja Shenoy 's case.
The court observed that since what was stated in that case on behalf of the State wag that the amount of contribution payable by the petitioner (respondent) temple had to be prescribed by a rule which 'remained to be made it meant that what was decided was that no contribution could be recovered from the temple until such a rule was made.
Regarding the demand for arrears of audit fee the court held that the Commissioner had not "determined" the cost of auditing the account of the respondent temple under section 76 (2) of the Act and the demand was "on that account without competence or authority of law.
" In appeal to this Court, HELD : (i) It is true that the High Court declared invalid certain provisions of the Act imposing control over the administration of temples governed by the Act.
But on that account the power to make rules was not restricted nor were the rules framed by the government rendered invalid.
The assumption made by the High Court that the Government had to make under section 100 rules applicable to each temple separately and prescribing the levy for determining contribution, finds no support in the provisions of the Act or its scheme.
Under the Act a fee though levied for rendering services of a particular type need not be co related to the services performed for each individual who is intended to obtain the benefit of the services.
The co relation must be between the expenses incurred by the authority levying the fee for generally providing the service and the aggregate of the levy from persons who are to be made subject thereto.
It is a necessary corollary that general rules prescribing the levy of fee from religious endowments have to be made and not rules governing individual endowments.
Such general rules were in fact framed and were in operation when the 918 demand was made.
The concession made by the Advocate General at the hearing in Devraja Shenoy 's case did not oblige the State to frame separate rules in respect of each individual religious institution.
Even if the respondent! temple did not need the services or did not obtain benefit of the services provided the contribution would still be recoverable.
Because the rules were framed at a time when several different kinds of services were intended to be rendered and the court later struck down certain provisions of the Act under which services were to be rendered, the rules framed in 1955 cannot be held to be inapplicable.
[921 A B, G; 922 E, G 923 B] H. H. Sudhindra Thirtha Swatniar vs Commissioner for Hindu Religious & Charitable Endowments, Mysore, [1963] Supp.
2 S.C.R. 302, referred to.
(ii) It was not the case of the respondents in their petition in the High Court that the Commissioner had a not "determined" the audit fee under section 76(2).
It was merely asserted that the fee demanded was excessive.
Since the High Court proceeded upon the ground of absence of determination by the Commissioner which was never pleaded and the High Court had not determined whether the audit fee demanded was for meeting the cost of auditing the accounts of the respondent temple, the order passed by the High Court must be set aside and the case remanded.
[924 C]
|
Appeal No. 1551 of 1966.
Appeal by special leave from the Award dated February 28, 1966 of the Industrial Tribunal, Madras 'in I. D. No. 21 of 1965.
H. R. Gokhale and D. N. Gupta, for the appellant.
M. K. Ramamurthi, Shyamala Pappu and vineet Kumar, for the respondents.
The Judgment of the Court was delivered by Shelat, J.
On demands for revision of wage scales, dearness allowance, medical benefit, bonus for the year 1963 64, gratuity 937 etc.
having been made by the workmen of the appellant company in its Madras and the other branches in that region and disputes thereabout having arisen between the company and its said workmen, the Government of Madras referred them by its notification dated April 6, 1965 for adjudication to the Industrial Tribunal, Madras.
The Tribunal granted some and rejected the rest of the demands.
Aggrieved by the award the company filed this appeal under special leave granted by this Court.
Though the award dealt with a number of demands counsel for the appellant company restricted its challenge against the award on three subjects only.
Consequently, we are, concerned in this appeal with those three subjects only, namely, bonus for the year 1963 64, medical benefits and revision by the Tribunal of the company 's existing gratuity scheme.
As regards the bonus, the company had already paid to the workmen bonus at the rate of 4 months ' basic pay as against the demand for the maximum bonus calculated in accordance with the , and on consolidated as against the basic wages.
The Tribunal conceded that demand and granted bonus at 209% of the consolidated wages.
In view, however, of this Court 's decision in Jalan Trading Co. vs Mill Mazdoor Union,(1) Mr. Ramamurthi for the workman conceded.
that the Act cannot apply in respect of the year in question and that the bonus payable for that year will have to be calculated on the basis of the Full Bench Formula as approved by this Court.
The award to that extent, therefore, has to be set aside and remanded to the Tribunal for determining the bonus in accordance with the said Formula.
On the question of medical facilities, the workmen 's demand is contained in paras 27 to 31 of their statement of claim filed before the Tribunal according to which the workmen wanted the company to reimburse all medical expenses incurred by them on production of bills therefore.
In paras 27 and 28 of the statement, it was stated that the company had a scheme for medical benefit for its workmen at Calcutta made under the consent award of 1962 and that there was no reason "why this amenity should be refused to the workmen in this region".
Para 30 of the statement stated that there was a discussion between the parties regarding this demand when the company agreed to appoint a medical officer for consultation by the workmen and also to meet the cost of medicines upto Rs. 100 for a workman per year.
This offer, however, was rejected on three grounds: (1) that the condition as to the ceiling was discriminatory, (2) that the ceiling was too low and (3) that there was no warrant for not extending the benefit to workmen of the branch offices outside Madras.
(1) ; 938 This demand is dealt with by the Tribunal in para 14 of the award.
It is clear therefrom that the union 's contention before the Tribunal was that there was no reason why "this amenity of medical facility which the company has granted to its Calcutta workmen should be refused to the workmen of the Madras region".
The contention thus clearly was that the company having made a scheme for its Calcutta employees, it was discriminatory to refuse such a scheme to its workmen in Madras region.
It is equally clear that the offer made by the company and referred to in the statement of claim by the workmen was rejected as it contained a ceiling which was not in its Calcutta scheme, and it was, therefore, that its offer was considered discriminatory.
In view of these contentions the Tribunal agreed that a scheme for medical benefit for this region was called for.
The Calcutta scheme was not produced before the Tribunal and therefore the Tribunal proceeded to frame its own scheme.
The Tribunal rejected the demand for reimbursement of all medical expenses in respect of which bills would be produced as it felt that such a provision would lead to abuses including the obtaining of false bills.
Instead, the Tribunal directed that the company should pay the cost of such medicines as are prescribed by the company 's doctor, if supported by genuine bills, and should also pay all cost of hospitalisation if and when it was recommended by the company 's doctor.
Counsel for the company objected to this part of the award on the grounds (1) that the Tribunal was not justified in throwing on the company the entire burden of medical expenses including the cost of hospitalisation even in cases of major diseases which workmen might suffer or contact, (2) that it was no part of the employer 's obligation to provide for such expenses and that too to an unlimited degree, and (3) that the award should have provided a ceiling both in respect of the cost of medicines and of hospitalisation.
The argument was that the grievance of the workmen was that denial of the medical amenity to them as the one given to its Calcutta workmen was discriminatory, and therefore, if the Tribunal decided to concede the demand, it should have been on the same lines as the Calcutta scheme.
Mr. Rama murthi, on the other hand, contended that (a) it was an accepted principle that though a company may have an all India organisation, it was not necessary that if should have uniform conditions of service in all the regions and that, therefore, merely because the company has a medical scheme for its Calcutta office it did not follow that scheme must also be applied to its workmen in Madras region, and (b) that the scheme framed by the Tribunal was fair and should not be interfered with in order only to bring it in line with that of Calcutta.
939 In a recent decision concerning this very company and its, workmen in Bangalore, Hyderabad and Kerala branches (Remington Rand of India vs The Workmen)(1), this Court had to consider this very question.
The Tribunals in those cases.
had, as in this case, made schemes which imposed the burden of medical facilities on the company without any ceiling and extended therein such benefit to the family members of the workmen also.
In those cases, on our finding the company 's Calcutta scheme to be fair and reasonable, we substituted it for the schemes framed by the, respective Tribunals.
The Calcutta scheme is thus in operation in those areas also.
Counsel for the workmen has not shown to us any substantial difference between those areas and the Madras region affecting, the question of medical benefit.
We,, therefore, find no legitimate reason why the Calcutta scheme should not be applied to these workmen.
It is true that medical benefit is excepted in that scheme for certain diseases of a contagious and epidemic nature.
That presumably was done on the ground that for such diseases the primary duty to give relief is of the State and not of the employer.
For the reasons given in that decision, we set aside the directions given by the Tribunal in this.
behalf and substitute them by the following scheme : 1.
When a workman during the course of his duty requires medical attention, and where such attention is given by the company 's doctor (i.e. a doctor or doctors nominated by the company including a doctor nominated as a part time doctor) and medicines are prescribed by him, the cost of such prescription should be borne by the company; 2.
In the event of a workman falling sick at his residence and the illness is other than a venereal disease, leprosy, smallpox, typhoid or cholera, he should be paid the cost of the medicines prescribed; 3. Bills or cash vouchers pertaining to such prescription should be produced for counter signature of the company 's doctor before payment is authorised; 4.
Disease of a serious nature requiring hospitalisation will be subject to consideration by the company; 5.
At the time of employment the company will be entitled to get the prospective employees examined by the company 's doctor and their employment will be subject to being found medically fit; 6.
All company employees who are presently employed or those employed in future will be medically (1) C.A. Nos. 856.
1475 and 2119 of 1968, decided on December 10, 1968.
940 examined by the company 's doctor once a year or at such other periodical intervals determined by the company but the results of such medical examinations will not be prejudicial to the workmen 's employment; 7.
In case a workman is found medically unfit to continue in service, the company will decide his case in consultation with the union 's secretary; and 8.
This scheme will come to an end as and when the Employees ' State Insurance Scheme is extended to the employees concerned.
The question of laying down any ceiling need not be con sidered as the company, we are told, is agreeable to extend this scheme in this region.
The third item in respect of which the company challenges the award is the revision made by the Tribunal of the existing gratuity scheme.
The workmen 's demand in this respect was : (1) that the maximum limit of 15 months ' salary should be enhanced to 20 months ' salary, and (2) that the provision in the existing scheme that no gratuity would be payable to a workman dismissed on the ground of misconduct should be substituted by a provision that even in such cases gratuity should be payable but the company would be entitled to deduct from such gratuity amount the amount of financial loss, if any, resulting from such misconduct.
The Tribunal 's view was that these demands were reasonable and accordingly made modifications in the existing scheme.
At first, Mr. Gokhale objected to this part of the award.
first ly on the ground that the Tribunal ought not to have allowed gratuity even in cases of dismissal for misconduct, and secondly, that the qualifying period in the case of termination of service by the company otherwise than for misconduct should be 10 years and not the graded periods from 5 to 15 years as provided in the award.
On second thoughts he did not press the second objection.
and therefore, nothing need be said about it.
He, however, contended that if gratuity even in cases of dismissal for misconduct is to be made payable, a provision should be made that it would be forfeited if the misconduct is a gross one involving violence, riotous behaviour etc.
and for the rest of the cases, the qualifying period should be 15 years of continuous service.
These objections involve a principle, and therefore, need serious consideration.
The principle invoked by Mr. Gokhale is, firstly, that since gratuity is paid as a reward for long and meritorious service it would be inconsistent with that principle to award gratuity in cases of dismissal for misconduct, for.
such cases cannot be treated as cases of meritorious service, and 941 secondly, the provision in such cases for deduction only of financial loss resulting from misconduct committed by the workman is neither proper nor consistent with the principle on which gratuity is made payable by an employer.
A workman may be guilty of gross misconduct, such as riotous behaviour or assault on a member of the staff.
Such misconduct may not result in any financial loss to the company, and therefore, the workman would be paid full gratuity amount.
The contention was that it would be a serious anomaly that while a workman, who has caused some damage to the company 's property and is dismissed on the ground that he was guilty of misconduct would have the gratuity amount payable to him reduced to the extent of that damage, another workman, who, for instance, assaults and causes injury, even a serious injury, to another employee would, though liable to be dismissed, be entitled to the full gratuity merely because the misconduct of which he is guilty, though graver in nature, does not result in pecuniary loss to the company.
In support of his contention, Mr. Gokhale leaned heavily on two recent decisions of this Court in Calcutta Insurance Co. Ltd. vs Their Workmen(1) and The Delhi Cloth & General Mills Company Ltd. vs The Workmen(2).
Relying on these decisions, he urged, that in cases of dismissal for misconduct, the qualifying period should not be as prescribed by the Tribunal but must be 15 years of continuous service.
Mr. Ramamurthi, on the other hand, contended that the principle that gratuity is a reward for long and meritorious service and that for a single misconduct after such service, such misconduct should not result in deprivation of gratuity except to the extent of the actual monetary loss caused to the employer has been long accepted in industrial adjudication and should not be abandoned, and that the two decisions relied on by Mr. Gokhale should not be construed as having the cumulative result of enhancing the qualifying period and also depriving gratuity in cases of dismissal for misconduct.
The first decision, according to him, lays down an increase in the qualifying period from 10 years, which generally used to be the period for earning gratuity, to 15 years, and the second lays down Certain exceptions to the accepted rule that deduction of monetary loss resulting from misconduct was sufficient.
He argued that neither of the two decisions lays down that both the consequences must follow where a workman is dismissed for misconduct, even if such misconduct has not resulted in any monetary loss to the employer.
In view of these contentions it becomes necessary for us to examine the earlier decisions cited before us before we come to (1) ; (2) ; 942 the cases of Calcutta Insurance Co. Ltd.(1) and the Delhi Cloth & General Mills Co. Ltd.(2).
The question as, to whether gratuity should be, payable even though the concerned workman is dismissed for misconduct appears to have been raised for the first time is The Garment Cleaning Works vs Its Workmen(3).
The objection there raised related to cl. 4 of the gratuity scheme: framed by the Tribuml which provided that even if a workman was dismissed or discharged for misconduct, gratuity would still be payable except that if such a misconduct resulted in financial loss, to the works, gratuity should be paid after, deducting such loss.
The contention urged by counsel, but which failed,, was that such a clause was, inconsistent with the principle on, which gratuity claims were based, namely, that they were in the nature of retiral benefit based ' on.
long and meritorious, service.
Therefore, if a workman was guilty of misconduct and was dismissed or discharged, it would be a blot on his long and meritorious service and in such a case it would not be open to him to claim gratuity.
This was a general argument and was repelled as such is clear from what the Court said at page 715 of the Report : "On principle, if gratuity is earned by an employee for long and meritorious service it is, difficult to understand why the benefit thus earned by long and meritorious service should not be available to the employee even though at the end of such service he may have been found guilty of misconduct which entails his dismissal.
Grautuity is not paid to the employee gratuitously or merely as a matter of boon.
It is paid to him for the service rendered by him to the employer, and when it is once earned it is difficult to understand why it.
should neceasarily be denied to him whatever may be, the nature of misconuct for his dismissal Therefore we do, not.
think that it would be possible to accede to the general argument that in all cases where the &mice of an employee is terminated for misconduct gratuity should riot be paid to him.
" The words "why it should necessarily be denied to him whatever may be the nature of misconduct occurring in the earlier part of the passage and the words "general argument that in all cases where the service of an employee is terminated for misconduct gratuity should not be paid" and the reference by the Court to certain awards made by tribunals where simple misconduct was distinguished from grave misconduct and forfeiture of gratuity (1)[1967] 2 S.C.R. 596.
(2) ; (3) 943 was provided for the letter occurring after this passage clearly show firstly that the Court was dealing with and repelled the general proposition that without any distinction between simple and gross misconduct there should be forfeiture in all cases of dismissal for misconduct of whatsoever nature, and secondly, that though the Court approved the scheme which provided that gratuity should be paid after deducting financial loss resulting from the workman 's misconduct, the Court did not lay down any principle that gratuity should be paid in cases of grave misconduct involving even violence which though it may not result in financial damage may yet be more serious than the one which results in monetary loss.
The decision thus is not an authority for the proposition that even if a workman were guilty of misconduct, such as riotous behaviour or an assault on another employee, in dustrial adjudication should not countenance a provision for forfeiture of gratuity in such cases merely because it does not result in monetary loss or that such a provision would be inconsistent with the principle that gratuity is not a boon or a gratuitous payment but one which is earned for long and meritorious service.
In Motipur Zamindari (P) Ltd. vs Workmen(1) the only question considered was whether the award was justified in providing forfeiture of gratuity in a case where the misconduct involved moral turpitude.
The Court following Garment Cleaning Works ( 2 ) directed that instead of forfeiture, the clause should provide deduction of the amount of monetary loss, if any, caused by such misconduct.
It is clear that no one canvassed the question as to whether a provision in a gratuity scheme that a workman should forfeit gratuity in the event of his committing misconduct involving violence or riotous behaviour within or around the works premises would be justified or not.
Nor was it con sidered whether it would be anomalous to provide for exaction of compensation from gratuity amount in case of misconduct involving moral turpitude while not making any provi sion against misconduct, such as the use of violence or force, which though not resulting in monetary loss, yet is unquestionably of a graver nature.
The case of Employees vs Reserve Bank of India(3) was again a case wherethere was a general clause in the gratuity scheme providing forfeiture in cases of dismissal for misconduct whatsoever and where in view of the decision in Garment Cleaning Works (2 )" the Bank conceded to:substitute the rule by providing deduction from gratuity the amount of monetary loss occasioned by the misconduct for which dismissal is ordered.
Thus, in none of the cases cited before us the question as to; what should be the minimum qualifying period in cases of dismissal (1) (2)[1962].2 S.CR.,711.
(3) ; , at 58. 944 for misconduct and the question as to whether a provision for forfeiture of gratuity in the event of such dismissal having been ordered for misconduct involving violence were either canvassed or considered.
On the other hand, in a recent decision between this very company and its workmen in Bangalore region (Remington Rand of India Ltd. vs Their Workmen)(1), the gratuity scheme made by the Tribunal provided for a qualifying period in cases of termination of service otherwise than for misconduct, but no qualifying period was provided for cases where termination of service was by way of punishment for misconduct.
This Court accepted the objection of the company on the ground of this omission and laid down the qualifying period of 15 years ' service in such cases.
In this decision the Court followed the earlier decision in Calcutta Insurance Co.(2) In another such case (Remington Rand of India vs The Workmen(3), where the dispute concerned the workmen of the company in Kerala region 15 years service was provided as the qualifying period in cases of dismissal for misconduct.
In the case of Calcutta Insurance Co.(2) on a contention having been raised that the qualifying period for earning gratuity in cases of retirement and resignation should be 15 years ' service and that no gratuity should be payable in cases of dismissal for misconduct, the Court examined the earlier decisions commencing from the Indian Oxygen & Acetylene Co. Ltd.(4) to the case of Garment Cleaning Works(5) 'and registered its demurrer against the observation made in the latter case that as gratuity was earned by an employee for long and meritorious service, it should consequently be available to him even though at the end of such service he may have been found guilty of misconduct entailing his dismissal.
In so doing the Court at page 608 of the Report remarked : "In principle, it is difficult to concur in the above opinion.
Gratuity cannot be put on the same level as wages.
We are inclined to think that it is paid to a workman to ensure good conduct throughout the period he serves the employer.
"Long and meritorious service" must mean long and unbroken period of service meritorious to the end.
As the period of service must be unbroken, so must the continuity of meritorious service be a condition for entitling the workman to gratuity.
if a workman commits such misconduct as causes financial loss to his employer, the employer would under the general law have a right of action against the employee for (1) [19681 (2) ; (3) , at 168.
(4) (1956] (5) 945 the loss caused and making a provision for withholding payment of gratuity where such loss caused to the employer does not seem to aid to the harmonious employment of laborers or workmen.
Further, the misconduct may be such as to undermine the discipline in the workers a case in which it would be extremely difficult to assess the financial loss to the employer.
" Continuity, in other words, must govern both the service and its, character of meritoriousness.
The Court further observed that a mere provision in a gratuity scheme enabling an employer to, deduct from the gratuity amount the actual loss caused as a. result of misconduct for which the workmen incurs the punishment of dismissal or discharge cannot subserve industrial peace and harmony, firstly, because an employer even without such a. provision has under the law the right of action for claiming damages, a right not taken away by industrial law, and secondly,.
because a misconduct resulting in dismissal may be such as may undermine discipline in the workmen, in which case it would be extremely difficult to assess the financial loss.
As regards the qualifying period, the Court laid down 10 years service in cases, of resignation or retirement and "following the principles laid down in the former decisions of this Court" provided 15 years ' service for qualifying for gratuity in cases of dismissal for mis conduct.
In the case of Delhi Cloth & General Mills Co. Ltd. (1) an objection was raised on behalf of the workmen to cl. 3 of the gratuity scheme framed by the Tribunal.
That clause provided as follows : "On termination of service on any ground whatsoever except on the ground of misconduct as in cl. 1 (a) and 1 (b) above.
" Cl. 1 (a) and 1 (b) provided for payment of gratuity in the eventof the death of an employee while in service or on his being physically and mentally incapacitated for further service and ' laid down the rates and the qualifying periods as follows : (a) After 5 years continuous service and less than 10 years ' service 12 days ' wages for each completed year of service (b) After continuous service of 10 years 15 days ' wages for each completed year of service.
The effect of cl. 3, therefore, was that in case of termination of service an employee would be entitled to get gratuity at the above (1) C.A. Nos.2168, 2569 of 1966 and 76, 123 and 560 of 1967, decided on September 27, 1968.
946 rates if he had put in service for the aforesaid periods, but would forfeit it if the termination was due to any misonduct committed by him.
The objection was that this provision was inconsistent with the decisions so far given by this Court, that according to those decisions the only provision permissible to the Tribunal was to enable Ox employer to deduct actual monetary loss arising from misconduct, and that therefore, the mere fact that a work man 's service was terminated for misconduct was no ground for depriving him altogether of gratuity earned by him as a result of his long and meritorious service, until the date, when he commits such misconduct.
In examining, the validity of this contention the Court analysed the previous decisions and pointed out that none of them laid down a general principle, that an industrial tribunal cannot _justifiably provide that an employer need not be made to pay gratuity even where, the workman had incurred termination of service on account of his having committed misconduct, not merely technical but of a grave character.
The Court observed that in some decisions this Court, no doubt, had held that the fact that dismissal of a workman on account of his having committed misconduct need not entail forfeiture and that it would be sufficient to forfeit partially the gratuity payable to him to the extent of monetary loss caused to the employer.
But then no decision had laid down as a principle that a provision for such forfeiture cannot be justified, however grave the misconduct may be, provided it had not caused monetary loss.
The Court noticed that the trend in the earlier decisions was to deny gratuity in all cases where the, workman 's service was terminated for misconduct but that in later years in cases such as the Garment Cleaning Works(1) "a less rigid approach" was adopted.
The Court then observed: "A bare perusal of the Schedule (Model Standing Orders) shows that the expression "misconduct ' covers a large area of human conduct.
On the one hand arc the habitual late attendance, habitual negligence and neglect of work on the other hand are riotous or disorderly behaviour during working hours at the establishment or any act subversive of discipline, wilful insubordination or disobedience.
Misconduct falling under several of these latter heads of misconduct may involve no direct loss or damage to the employer, but would render the functioning of the establishment impossible or extremely hazardous.
For instance, assault on the manager of an establishment may not directly involve the, employer in any loss or damage, which could be equated in terms of money, but it would render the working of the establishment impossible.
One may also (1) 947 envisage several acts of misconduct not directly involving the establishment in any loss, but which are destructive of discipline and cannot be tolerated.
In none of the cases cited any detailed examination of what mis conduct would or would not involve to the employer loss capable of being compensated in terms of money was made.
It was broadly stated in the cases which have come before this Court that notwithstanding dismissal for misconduct a workman will be entitled to gratuity after deducting the loss occasioned to the employer.
If the cases cited do not enunciate any broad principle we think that in the application of those cases as precedents a distinction should be made between technical misconduct which leaves no trail of.
indiscipline, misconduct resulting in damage to the employer 's property, which may be compensated by forfeiture of gratuity or part thereof, and serious misconduct which though not directly causing damage,, such as acts of violence against the management or other employees or riotous or disorderly behaviour, in or near the place of employment is conducive to grave indiscipline.
The first should involve no forfeiture: the second may involve forfeiture of an amount equal to the loss directly suffered by the employer in consequence of the misconduct and the third may entail forfeiture of gratuity due to the workmen.
The precedents of this Court, e.g., Wenger & Co. vs Its Workmen [1963(2) L.L.J. 388], Remington Rand of India Ltd. 's case [1968(1) L.L.J. 542] and Motipur Zamindari (P) Ltd. 's case [1965(2) L.L.J. 139] do not compel us to hold that no misconduct however grave may be visited with forfeiture of gratuity.
In our _judgment, the rule set out by this Court in Wenger & Co. 's case and Motipur Zamindari (P) Ltd. 's case applies only to those cases where there has be en by actions wailful or negligent any loss occasioned to the property of the employer and the miscon duct does not involve acts of violence against the management or other employees, or riotous or disorderly behaviour in or near the place of employment.
In these exceptional cases the third class of cases the employer may exercise the right to forfeit gratuity; to hold otherwise would be to put a premium upon con duct destructive of maintenance of discipline.
" In this view, the Court modified cl. 3 of the scheme by adding an explanation, the effect of which was that though the employer could not deprive the workman of the gratuity in all cases of misconduct, he could do so where it consisted of acts involving violence against the management or other 'employees or riotous 5Sup.
Cl/70 15 948 or disorderly behaviour in or near the place of employment and also gave right to the employer to deduct from gratuity such amount of loss as is occasioned by the workman 's misconduct.
We may mention that the Court did not alter the qualifying period in cases of misconduct since no objection appears to have been raised on that ground.
As against the contention that a provision in accordance with these two decisions should be introduced in the scheme under examination, Mr. Ramamurthi submitted that the two decisions should not be construed as if they laid down principles which should have the cumulative effect, firstly, as to the qualifying period, and secondly, as to deprivation of gratuity in cases specified in the Delhi Cloth & General Mills case(1).
It is true that this decision does not lay down that the qualifying period in cases of misconduct should be 15 years as was held in Calcutta Insurance Company(2).
But, as aforesaid, that was because that ques tion was not raised, while in the Calcutta Insurance Co. case(2) it was expressly raised and the Court laid down that in such cases it would be proper to provide 15 years continuous service as a criterion.
Once the principle that gratuity is paid to ensure good con duct throughout the period that the workman serves his employer is accepted as laid down in Calcutta Insurance Co.(2) some distinction in the matter of the qualifying period between cases of resignation and retirement on the one hand and dismissal for misconduct on the other becomes logically necessary.
Such a distinction cannot legitimately be assailed as unreasonable.
Similarly, if the object underlying schemes of gratuity is to secure industrial harmony and satisfaction among workmen it is impossible to equate cases of death, physical incapacity, retirement and resignation with cases of termination of service incurred on account of misconduct.
Besides, a longer qualifying period in the latter cases would ensure restraint against wailful use of violence and force neglect etc.
No serious argument was advanced that such a distinction would not be reasonable.
The objection was against the insertion of both and not against the merit of such distinction.
As regards the clause as to misconduct, it is not possible to disagree with the proposition laid down in the Delhi Cloth & General Mills case( ) that acts amounting to misconduct as defined in the standing orders, where they are made, or the model standing orders, where they are applicable, differ in degree of (1) 11969] 2 S.C.R. 307.
(2) (19671 2 S.C.R. 596.
949 gravity, nature and their impact on the discipline and the working of the concern, and that though grave in their nature and results, all of them may not result in loss capable of being calculated in terms of money.
Amongst them there would be some which would forthwith disentitle the workman from retaining his employment and justifying his dismissal.
For the reasons given in the Delhi Cloth & General Mills ' case(1) with which we, with respect, concur, we must agree with counsel for the company that it is necessary to modify the scheme and to add in cl. 5 thereof a proviso that in cases where there has been termination of service on account of an employee found guilty of act or acts involving violence against the management or other employees or riotous or disorderly behaviour in or near the company 's premises, the company would be entitled to forfeit the gratuity which would otherwise be payable to the concerned workman.
5 should also be modified so as to introduce therein 15 years continuous service as the qualifying period for earning gratuity in cases where the service of the employee has been terminated on account of misconduct and that such gratuity should be payable at the rate prescribed in cl. 3(d) of the scheme.
The appeal is allowed and the award is set aside to the extent aforesaid.
The gratuity scheme and the scheme for medical benefit, as revised by the Tribunal, are modified as stated above.
So far as the question of hours is concerned, that question is remanded to the Tribunal to decide it in accordance with the observations made hereinabove.
The Tribunal will give liberty to the parties to adduce for that purpose such further evidence as they think necessary.
There will be no order as to costs.
Y.P. Appeal allowed.
| IN-Abs | An industrial dispute between the appellant company and its workmen relating,.
inter alia, to bonus, medical benefits anti gratuity was, referred by the State Government of.
Madras on April 6, 1965 to the Industrial Tribunal for adjudication.
Tribunal awarded bonus at 2O,% of the consolidated wages as provided in the .
As to medical benefit& the Tribunal diverted that the company should pay the cost of medicines prescribed by the company 's doctor and the full cost of hospitalisation when it was.
recomanded by the company 's doctor.
The Tribunal modified, the company '& gratuity scheme in accordance with the workmen 's demands.
The company appealed to, this Court against the award The question of bonus had to be considered, in, the light of this Courts decision in Japan Trading, Company 's law.
On the question.
of medical benefits the Court had to consider whether the company 's scheme for its Calcutta employees could be extended to Madras Region.
In regard to gratuity the main questions for consideration were as, to, the qualifying, period for payment of gratuity to workmen who were guilty of misconduct, and whether gratuity should be payable for workmen whose misconduct consisted of violence, riotous behaviour etc.
HELD: (i) In View of this Court 's decision in Jalian Trading Company 's case the.
Payment of Bonus Act, 1965 was not applicable in respect of the year in question, and the bonus payable had to be calculated in accordance with, the Full Bench, Formula.
The award to that extent therefore had to be set aside and remanded, to the Tribunal for determining the bonus in accordance with the said Formula [937 E] Jalam Trading Co. vs Mill Mazdoor Union, ; , referred to.
(ii) In the appellant company 's earlier cases relating to its Bangalore, Hyderabad and Kerala Branched this Court had held that the Company 's Calcutta scheme relating to medical benefit for its workmen was fair and reasonable and had made the said scheme applicable to these areas also.
No substantial difference had been shown between these areas and the Madras region affecting the question of medical benefit.
These areas and the no legitimate reason why the Calcutta scheme should not be applied to the workmen in the present case.
[The Court framed an eight point scheme for medical benefit based on the Calcutta scheme] [939 A 940 C] Remington Rand of India vs The Workmen, C.A. Nos.
856/68 etc.
10 12 1968, applied.
(iii.) Once the principal, that gratuity is paid to ensure good conduct throughout the period that the workman serves his employer as laid drown 936 in Calcutta Insurance Co. some distinction in the matter of the qualifying period between cases of resignation and retirement on the one hand and dismissal for misconduct on the other becomes logically necessary.
Such a distinction cannot legitimately be assailed as unreasonable.
Similarly if the object underlying the scheme of gratuity is to secure industrial harmony and satisfaction among workmen it is impossible to equate cases of death, physical incapacity, retirement and resignation with cases of termination of service incurred on account of misconduct.
Besides, a longer qualifying period in the latter cases would ensure restraint against wailful use of violence and force, neglect etc.
[948 E] As laid down in Delhi Cloth & General Mills case that acts amounting to misconduct as defined in the standing orders, when they are made, or the model standing orders, where they are applicable differ in degree of gravity, nature and their impact on the discipline and the working of the concern, and that though grave in their nature all of them may not result in loss capable of being calculated in terms of money.
Amongst, them there would be some which would forthwith disentitle the workman from retaining his employment and justifying his dismissal.
For the reasons given in the Delhi Cloth & General Mills case it was necessary to modify the scheme of gratuity and to add in cl. 5 thereof a proviso that in cases where there has been termination of service on account of an employee found guilty of act or acts involving violence against the management or other employees or riotous or disorderly be haviour in or near the company 's premises, the company would be entitled to forfeit the gratuity which would otherwise be payable to the concerned workmen.
Clause 5 should also be modified so as to introduce therein 15 years continuous service as the qualifying period for earning gratuity in cases when the service of an employee has been terminated on account of misconduct and that such gratuity should be payable at the rate prescribed in cl. 3(d) of the scheme.
[948 G 949 D] Calcutta Insurance Co. Ltd. vs Their Workmen, ; and Delhi Cloth & General Mills Co. Ltd. vs The Workmen, ; , applied.
Garment Cleaning Works vs Its Workmen, , Motipur Zamindari (P) Ltd. vs Workmen, , Employees vs Reserve Bank of India, ; , 58, Remington Rand of India Ltd. vs ' Their Workmen, , Remington Rand of India vs The Workmen, , 168 and Indian Oxygen & Acetylene Co Ltd. case , considered.
|
Appeal No. 2170 of 1967.
Appeal from the judgment and order dated September 5, 1963 of the Calcutta High Court in Civil Rule No. 2864 of 1952.
Purshottam Chatterjee and G. section Chatterjee, for the appellant.
D. B. Mukherjee and section C. Majumdar, for respondent No. 1.
The Judgment of the Court was delivered by Grover, J.
This is an appeal by certificate from a judgment of the Calcutta High Court arising, out of a petition filed by the appellant under section 26F of the Bengal Tenancy Act, 1885 claiming a right of preemption over certain lands purchased by respondent No. 1.
926 The facts may be briefly stated.
On July 23, 1950, the ap pellant purchased certain portion of land in C.S. Dag No. 3605 of Monza Kasba from the occupancy raiyats respondents Nos. 2 and 3 and one Bhabesh Chandra Kundu deceased.
By another deed the appellant purchased from the said vendors another plot of land measuring 31 acres.
By a Kabala dated October 8, 1950 the said vendors sold 10 acres of land in the same Dag number to respondent No. 1 for Rs. 2,700.
The appellant filed an application before the Second Subordinate Judge, Alipore district 24 Parganas under section 26F of the Bengal Tenancy Act claiming the right of preemption over the land purchased by respondent No. 1.
The latter took up the position that the appellant was not a co sharer in the land which had been purchased by her and that he along with his uncle Dinabandhu Chatterjee had acted as brokers in the transaction and received Rs. 300 as brokerage; the appellant had thus waived his right of preemption.
The learned trial Judge disbelieved the case set up by respondent No. 1 and allowed the application of the appellant for preemption.
Respondent No. 1 filed an appeal in the court of,the Additional District Judge, Alipore.
He held that the appellant 's claim for preemption was barred owing to waiver on his part.
The appellant filed a petition for revision in the High Court but the same was dismissed on the ground that it was open to the appellant to waive his right and that there had been actual waiver.
The main point which was sought to be raised before us was that waiver could be brought about only by a contract and since no consideration had passed it could not be said that there had been any waiver in the present case.
Moreover waiver could not be proved by estopped.
Learned counsel for the appellant relied on the observations of Lord Russel of Killowen in Dawson 's Bank Limited vs Nippon Menkwva Kabushiki Kaisha(1).
While stating the distinction between estopped and waiver, it was said, that "waiver is contractual, and may constitute a cause of action; it is an agreement to release or not to assert a right.
" According to the appellant all that had been found was that by his act and conduct he had waived his right of preemption.
It was pointed out that there was no evidence for any consideration having moved from respondent No. 1 in the matter of abandonment of the appellant 's right of preemption.
In the well known work of Sir William P. Anson "Principles of the English Law of Contract", 22nd Edn., it has been stated at p. 107 that at Common Law the waiver of existing obligations does not appear to require the presence of detriment in order to make it effective.
(1) 62 I.A. 100, 108. 927 In India the general principle with regard to waiver of contractual obligations is to be found in section 63 of the Indian Contract Act.
Under that section it is open to a promise to dispense with or remit, wholly or in part, the performance of the promise made to him or he can accept instead of it any satisfaction which he thinks fit.
Under the Indian law neither consideration nor an agreement would be necessary to constitute waiver.
This Court has already laid down in Waman Shriniwas Kini vs Ratilal Bhagwandas & Co.(1) that waiver is the abandonment of a right which normally everybody is at liberty to waive.
"A waiver is nothing unless it amounts to a release.
It signifies nothing more than an intention not to insist upon the right.
" It is well known that in the law of preemption the general principle which can be said to have been uniformly adopted by the Indian courts is that acquiescence in the sale by any positive act amounting to relinquishment of a preemptive right has the effect of the forfeiture of such a right.
So far as the law of preemption is concerned the principle of waiver is based mainly on Mohammedan Jurisprudence.
The contention that the waiver of the appellant 's right under section 26F of the Bengal Tenancy Act must be founded on contract or agreement cannot be acceded to and must be rejected.
A faint attempt was made to assail the finding of the High Court that on the facts which had been proved waiver had been established.
We find no reason or justification for interfering with the conclusion of the High Court on the point.
The appeal fails and it is dismissed with costs.
R.K.P.S. Appeal dismissed.
(1) [1959] Supp.
2 S.C.R. 217, 226.
| IN-Abs | The appellant filed an application under section 26(f) of the Bengal Tenancy Act claiming right of preemption over the land purchased by the respondent.
The respondent took up the position that the appellant was not a co sharer in the land which had been purchased by her and that he along with his uncle had acted as brokers in the transaction and received brokerage; the appellant had thus waived his right of preemption.
The trial Judge allowed the application.
The appeal Court held that the appellant 's claim was barred owing to waiver on his part.
A revision to the High Court was unsuccessful.
In appeal to this Court it was urged that waiver could be brought about only by a contract and since no consideration had passed it could not be said that there had been any waiver.
HELD, : Under the Indian Law neither consideration nor an agreement would be necessary to constitute waiver.
A waiver signifies nothing more than an intention not to insist upon the right.
It is well known that in the law of preemption the general principle which can be said to have been uniformly adopted by the Indian courts is that acquiescence in the sale by any positive act amounting to relinquishment of a preemptive right has the effect of forfeiture of such a right.
So far as the law of preemption is concerned the principle of waiver is based mainly on Mohammedan Jurisprudence.
The contention that the waiver of the appellant 's right under section 26F of the Bengal Tenancy Act must be founded on contrast or agreement cannot therefore be acceded to.
[927 A D] Wanman Shrinwas Kini vs Ratilal Bhagwandas & Co., [1959] Supp. 2, S.C.R. 217, 226 and Dawson 's Bank Limited vs Nippon Menkwa Kabushiki Kaisha, 62 I.A. 100, 108 referred to.
|
minal Appeal No. 191 of 1967.
Appeal by special leave from the judgment and order dated March 14, 1967 of the Rajasthan High Court in Criminal Appeal No. 720 of 1965.
B. D. Sharma, for the appellant.
The respondent did not appear.
The Judgment of the Court was delivered by Sikri, J.
Hari Ram, respondent, filed a complaint against Lala Ram, appellant, alleging that Lala Ram had attacked him 899 with a Kassi on June 10, 1964, at about 6 p.m.
Poonaram, who was standing there prevented the blow from falling on Hari Ram by receiving it on his hand.
The respondent, however, made a second attack and inflicted an injury on the left shoulder of Hari Ram.
Hari Ram and Poonaram got themselves examined by the Civil Assistant Surgeon of the city and the injury report was submitted alongwith the complaint.
The learned Magistrate acquitted the accused.
Hari Ram filed an application under section 417(3) of the Criminal Procedure Code for leave to appeal against the order of the Magistrate.
Leave was granted by the High Court, and thereupon Hari Ram filed the appeal.
The High Court accepted the appeal and convicted the appellant, Lala Ram, under section 324, I.P.C., and sentenced him to four months ' rigorous imprisonment.
The attention of the High Court was not drawn to the Proba tion of Offenders Act, 1958, during the hearing of the a peal but subsequent to the delivery of the judgment an application was filed under section 561 A, Cr.
P.C., read with sections 3, 4 and 6 of the Probation of Offenders Act.
It was alleged in the application that the appellant was 20 years old and the High Court should have given him the benefit of the Probation of the Offenders Act.
The High Court did not accede to this application.
The appellant having obtained special leave from this Court, the appeal is now before us.
The main contention of law which arises before us is whether the appeal to the High Court was filed within limitation.
The application for leave to appeal to the High Court under section 417 (3) against the order of acquittal of the Magistrate, dated August 31, 1965, was filed on November 1, 1965.
It was claimed by the applicant that two days were necessary for obtaining the certified copy of the order of the Magistrate and the applicant was entitled to deduct these two days taken for obtaining the certified copy of the order of the Magistrate.
There is no doubt that the application would be in time, if these two days are deducted.
But the learned counsel for the appellant contends that section 12(2) of the Indian Limitation Act is not attracted to applications under section 417(3), Cr.
P.C. Section 417(3) and (4) read as follows "417.
(1) Subject to the provisions of sub section (5), the, State Government may, in any ease, direct the Public Prosecutor to present an appeal to the High Court from an original or appellate order of acquittal passed by any Court other than a, High Court.
(3) If such an order of acquittal is passed in any case instituted upon complaint and the High Court, on L5SupCI/70 12 900 an application made to it by the complainant in this behalf, grants special leave to appeal from the order of acquittal, the complainant may present such an appeal to the High Court.
(4) No application under sub section (3) for the grant of special leave to appeal from an order of acquittal shall be entertained by the High Court after the expiry of sixty days from the date of that order of acquittal.
It is contended that the period of 60 days mentioned in s.417(4) is not a period of limitation within the meaning of s.12(2) of the Limitation Act.
Section 12(2) of the Limitation Act reads as follows : "12(2) In computing the period of limitation for an ,appeal or an application for leave to appeal or for revision or for review of a judgment, the day on which the judgment complained of was pronounced and the, time requisite for obtaining a copy of the decree, sentence or order appealed from or sought to be revised or reviewed shall be excluded.
" The learned counsel says that what s.417(4) provides is a prohibition and it bars the jurisdiction of the High Court to deal with the application if a period of 60 days has expired from the date of the order of acquittal.
In our opinion there is no force in these contentions.
In Kaushalya Rani vs Gopal Singh(1) this Court, while dealing with the question whether s.5 of the Limitation Act applies to applications under s.417(3) described this period of 60 days ment ioned in s.417(3) as follows: "In that sense, this rule of 60 days bar is a special law, that is to say, a rule of limitation which is specially provided for in the Code itself, which does not ordinarily provide for a period of limitation for appeals or applications.
" This Court further observed "Once it is held that the special rule of limitation laid down in sub section
(4) of section 417 of the Co de is a especial law ' of limitation, governing appeals by private prosecutors, there is no difficulty in coming to the con clusion that s.5 of the Limitation Act is wholly out of the way, in view of s.29 (2) (b) of the Limitation Act." (1) ; 987.
901 This Court approved the judgment of the Full Bench of the Bombay High Court in Anjanabai vs Yashwantrao Dauletrao Dudhe(l).
The Full Bench of the Bombay High Court had observed in Anjanabai 's case "Sub section (4) prescribes a period of limitation for such an application.
It states that no such application shall be entertained by the High Court after the expiry of sixty days from the date of the order of acquittal.
This period of limitation is prescribed not for all appeals under the Criminal Procedure Code, or even for all appeals from the orders of acquittal.
It is prescribed only for applications for special leave to appeal from orders of acquittal.
It is therefore a special provision for a special subject and is consequently a special law within the meaning of s.29(2) of the Limitation Act.
" It is quite clear that the Full Bench of the Bombay High Court and this Court proceeded on the assumption that s.417(4) of the Criminal Procedure Code prescribes a period of limitation.
The learned counsel, however, contends that there was no discussion of this aspect.
Be that as it may, it seems to us that s.417 (4) itself prescribes a period of limitation for an application to be made under s.417(3).
It was not necessary for the legislature to have amended the Limitation Act and to have inserted an article dealing with applications under s.417(3), Cr.
P.C.; it was open to it to prescribe a period of limitation in the Code itself.
The learned counsel also suggests that the word "entertain" which occurs in s.417 (4) means "to deal with or hear" and in this connection he relies on the judgment of this Court in Lakshmi Rattan Engineering Works vs Asstt.
Commissioner Sales Tax (2).
It seems to us that in this context "entertain" means "file or received by the Court" and it has no reference to the actual hearing of the application for leave to appeal; otherwise the result would be that in many cases applications for leave to appeal would be barred because the applications have not been put up for hearing before the High Court within 60 days of the order of acquittal.
In the result we hold that the application under s.417(3) to the High Court was within time.
The learned counsel then contends that the High Court should not have interfered with the order of acquittal passed by the Magistrate.
He has taken us through the evidence of Poonaram who was injured and the statement of P.W. 3, Ananda, who was present and who seems to be an independent witness.
We agree (1) I.L.R. [1961]Bom.135, '137.
(2) ; 902 with the High Court that the Magistrate was not entitled to reject the evidence of the eye witnessess.
No reason has been shown to us why we should interfere with the finding of fact arrived at by the High Court.
The learned counsel further contends that no offence was committed because the accused had a right of private defence of property.
Assuming that he had a right of private defence of property he had ample opportunity of having recourse to the authorities and there was no need for the appellant to have taken the law into his own hands.
The only question that remains now is the question whether the benefit of s.6 of the Probation of Offenders Act should be extended to the appellant.
In spite of opportunity being given no good proof has been furnished to establish that the appellant was at the relevant time under the age of 21 years.
For the aforesaid reasons the appeal fails and is dismissed.
R.K.P.S. Appeal dismissed.
| IN-Abs | An application for leave to appeal to the High Court under section 417(3) Code of Criminal Procedure against an order of acquittal by a Magistrate dated August 31, 1965 was filed on November 1, 1965.
It was claimed that two days were necessary for obtaining the certified copy of the order of the Magistrate.
The application would be in time if these two days were deducted.
The High Court accepted the appeal and convicted the appellant.
In appeal to this Court against his conviction the appellant contended that the period of 60 days mentioned in section 417(4) was not a period of limitation within the meaning of section 12 of the Limitation Act and that the sub section barred the jurisdiction of the High Court to deal with the application if a period of 60 days had expired from the date of the order of acquittal.
HELD : The application under section 417(3) to the High Court was within time.
Section 417(4) itself prescribes a period of limitation; it was open to the legislature to prescribe a period of limitation in the code itself.
In the context of section 417(4) the word "entertain" means "file or receive by the court" and it has no reference to the actual hearing of the application for leave to appeal; otherwise the result would be that in many cases applications for leave to appeal would be barred because the applications have not been put up for hearing before the High Court within sixty days of the order of acquittal.
[901 D F] Kaushalya Rani vs Gopal Singh, , 987, Anjanabai vs Yeshwantrao Daplatrao Dudhe, I.L.R. (1961) Bom.
135, 137 and Lakshmi Rattan Engineering Works vs Asstt.
Commissioner Sales Tax; , , referred to.
|
minal Appeal No. 203 of 1966.
Appeal by special leave from the judgment and order dated April 5, 1966 of the Patna High Court in Criminal Appeal No. 602 of 1963.
D. P. Singh, for the appellant.
Nur ud din Ahmed and D. Goburdhun, for the respondents.
The Judgment of the Court was delivered by Bachawat, J.
The prosecution case was that Bhaiya Ramanuj Pratap Deo was the proprietor of village Phatpani and owned and possessed bakasht and gairmazura lands therein including plot No. 1311 and the mahua trees standing thereon.
On April 10, 1962 at 3 p.m. his employee PW 33 Bindeshwari Singh was in charge of collection of mahua fruits in plot No. 1311 and the victims Ram Swarup Singh and Ramdhari Singh were supervising the collection.
PW 1 Dhaneshwari, PW 2 Deokalia, PW 3 Dewal, PW 4 Rajmatia, PW 6 Udal Singh, PW 7 Border Singh, PW 8 Meghan Chamar, PW 9 Ram Dihal Kharwar, PW 10 Ram Torai Kharwar, PW 11 Manan Singh and PW 13 Jhagar Kharwar were collecting mahua fruits when suddenly accused Mathua Pandey, Kundal Pandey and Muneshwardhar Dubey armed with garassas, Chandradeo Pandey, Dayanand Pandey and Nasir Mian armed with bhalas and Bife Bhogta, Thegu Bhogta, Nageshwardhar Dubey and Uma Shankar Dubey armed with lathis surrounded Ramswarup and Ramdhari and assaulted them with their weapons.
Dewal also was assaulted by Bife and Thegu and suffered minor injuries.
Ramdhari died on the spot.
Ramswarup died while preparations were being made to carry him to the hospital.
Bindeshwari lodged the first information report at 8 p.m. on the same date.
On April 14, 1962 'accused Mathu gave a report 360 at Nagaruntari hospital.
He said that on April 10, 1962 at 3 p.m. while he was returning home, he was assaulted with lathis, garassas and bhalas by the employees of the Bhaiya Saheb.
The following injuries were found on the dead body of Ram swarup Singh : "(1) abrasion 1 1/2"x 1 1/4" with ecchymosis on anterior aspect of right knee joint,, (2) another abrasion 1/2" x 1/4 " with ecchymosis on anterior aspect of right leg, (3) a small abrasion with ecchymosis on anterior aspect of left knee joint, (4) an incised wound 4" x 1" x scalp on anterior aspect of the left side of the head, (5) a lacerated wound 31" X 1/3" X scalp with ecchymosis on right side of head and ' (6) a penetrating wound with clean cut margins 2 1/2" X 1" X abdominal cavity placed transversely on right hypochondrium just right to mid line with stomach and loop of large bowel bulging out of it.
" On opening the abdominal wall it was found that the peritoneum was con gested and the stomach was perforated on its anterior wall.
Injuries 1, 2, 3 and 5 were caused by hard and blunt substance such as lathi.
Injury No. 4 was caused by sharp cutting weapon such as garassa.
Injury No. 6 on the abdominal cavity was caused by some sharp pointed weapon with sharp cutting margin such as bhala.
The death was due to shock and internal haemorrhage caused by the abdominal wounds.
The following injuries were found on the dead body of Ramdhari Singh : "(1) the helix of left ear was cut; (2) a lacerated wound 1/2" x 1/10" x 1/10" with ecchymosis on the outer part of the left eye brow, (3) a punctured wound with clean cut margins 2 1/2"X I" X 1 1/2" on left thigh below its middle, (4) a punctured wound with clean cut margin 1" X 1/4" X 1" on posterior aspect of the left thigh in its middle, and (5) a penetrating wound with clean cut margins 2 1/4" x 3/4" x abdominal cavity on right side of the abdomen.
The loops of intestines were bulging out of this opening.
Injury No. 2 was caused by hard and blunt substance such as lathi.
The other injuries were caused by a sharp pointed weapon with sharp cutting edge such as bhala.
Death was due to shock and internal haemorrhage caused by injury No. 5 the abdominal wound.
The trial court convicted the accused respondents Mathu, Chandradeo, Kundal, Dayanand, Bife, Thegu, Nasir, Munesh wardhar, Nageshwardhar, Umashankardhar under section 302 read with section 149 of the Indian Penal Code for the murders of Ram dhari and Ramswarup and sentenced them to rigorous imprison ment for life each.
Bife, Thegu, Nageshwardhar and Umashan kardhar were convicted under section 147 of the Indian Penal Code and sentenced to rigorous imprisonment for six months each.
The remaining respondents were convicted under section 148 of the Indian Penal Code and sentenced to rigorous imprisonment for one year 361 each.
Bife and Thegu were convicted under section 323 of the Indian Penal Code for causing hurt to Dewal and sentenced to rigorous imprisonment for six months each.
The sentences of each respondent were to run concurrently.
The trial court held that (1) Bhaiya Saheb was in possession of plot No. 1311; (2) while Ramswarup and Ramdhari were collecting mahua on the plot, the respondents armed with bhalas, garassas and lathis inflicted fatal injuries on them with a view to forcibly prevent them from collecting the mahua, (3) Thegu and Bife assaulted Dewal with lathis, (4) the accused persons knew that there was likelihood of murders being committed in prosecution of the common object, and (5) the assailants inflicted the injuries on Ramswarup and Ramdhari with the intention of murdering them.
The respondents filed an appeal in the High Court of Patna.
The High Court allowed the appeal and set aside all the convictions and sentences.
The High Court, found that (1) respondent Chandradeo was the thikadar of plot No. 1311 and was in possession of the mahua trees standing thereon, (2) on the date of the occurrence,, the members of the prosecution party including Ramdhari and Ramswarup committed theft on the fruits of the mahua trees, and the respondents had the right of private defence of property against the theft; (3) Ramswarup carrying a tangi and Ramdhari carrying a danta caused severe injuries to respondent Mathu on his head, leg, and that while doing so they were not defending themselves; Mathu became unconscious.
He regained consciousness on April 14, 1962.
(4) the theft of mahua fruits was committed under such circumstances as might reasonably cause apprehension that death or grievous hurt would be the consequence if the right of private defence was not exercised.
Accordingly, the respondents ' right of private defence of property extended under section 103 of the Indian Penal Code to voluntarily causing death to Ramdhari and Ramswarup subject to the restrictions mentioned in section 99; (5) the person or persons who caused the two deaths exceeded the right of private defence as they inflicted more harm than was necessary for the purpose of defence.
These findings are based on adequate evidence and are not shown to be perverse.
In this appeal under article 136 of the Constitution from an order of acquittal passed by the High Court, we are not inclined to interfere with the above findings.
The question is whether in these circumstances the High Court rightly acquitted the appellants.
, The fatal wounds on the abdominal cavities of Ramdhari and Ramswarup were caused by bhalas.
The prosecution case was that Chandradeo, Dayanand and Nasir were armed with bhalas.
The High Court rightly held that the prosecution failed to established that Chandradeo was armed with a bhala.
The prosecution witnesses said generally that all the respondents surrounded Ram 362 dhari and Ramswarup and.
assaulted them.
The prosecution case has been found to be false in material respects.
It is not possible to record the finding that Chandradeo, Dayanand and Nasir were armed with bhalas.
Some of the respondents were armed with bhalas but it is not possible to say which of them were so armed and which of them inflicted the fatal wounds on Ramdhari and Ramswarup.
Accordingly we cannot convict any of the respondents under section 302.
The only question is whether they can be convicted under section 302 read with either section 149 or section 34.
In order to attract the provisions of section 149 the prosecution must establish that there was an unlawful assembly and that the crime was committed in prosecution of the common object of the assembly.
Under the fourth clause of section 141 an assembly of five or more persons is an unlawful assembly if the common object of its members is to enforce any right or supposed right by means of criminal force or show of criminal force to any Person.
Section 141 must be read with sections 96 to 106 dealing with the right of private defence.
Under section 96 nothing is an offence which is done in the exercise of the right of private defence.
The assertion of a right of private defence within the limits prescribed by law cannot fall within the expression "to enforce any right or supposed right" in the fourth clause of section 141.
In Kapildeo Singh vs The King(1) the High Court had affirmed the appellant 's conviction and sentence under section 147 and section 304 read with section 149, without considering the question as to who was actually in possession of the plot at the time of the occurrence.
The High Court observed that the question of possession was immaterial and that the appellants party were members of an unlawful assembly, "as both sides were determined to vindicate their rights by show of force or use of force.
" The Federal Court set aside the conviction and sentence.
It held that the High Court judge stated the law too loosely "if by the use of the word 'vindicate ' he meant to include even cases in which a party is forced to maintain or defend his rights".
The assembly could not be designated as an unlawful assembly if its object was to defend property by the use of force within the limits prescribed by law.
The charges against the respondents were that they "were members of an unlawful assembly in prosecution of the common object of which, viz., in forcibly preventing Ramdhari Singh and Ramswarup Singh from collecting mahua from Barmania field of village Phatnapi and if necessary in causing the murder of the said two persons, for the purpose, "that some of them caused the murders of Ramdhari and Ramswarup and that thereby all of them committed offences under section 302 read with section 149.
We have found that respondent Chandradeo was in possession of plot (1) 363 No. 1311 and the mahua trees standing thereon.
The object of the respondent 's party was to prevent the commission of theft of the mhua fruits in exercise of their right of private defence of property.
This object was not unlawful.
Nor is it possible to say that their common object was to kill Ramdhari and Ramswarup.
Those who killed them exceeded the right of private defence and may be individually held responsible for the murders.
But the murders were not committed in prosecution of the common object of the assembly or were such as the members of the assembly knew to be likely to be committed in prosecution of the common object.
The accused respondents cannot be made constructively responsible for the murders under section 302 read with section 149.
In Kishori Prasad & Ors.
vs State of Bihar(1) the High Court convicted the appellants under section 326/149 of the Indian Penal Code though the appellant Hirdaynarain was in lawful possession of the western portion of plot No. 67 and the attempt by the prorecution party to cultivate the same was high handed.
This Court set aside the conviction and sentence.
Ramaswami J. observed "In a case where the accused person could invoke the right of private defence it is manifest that no charge of rioting under section 147 or section 148, Indian Penal Code can be established for the common object to commit an offence attributed in the charge under section 147 or section 148, Indian Penal Code is not made out.
If any accused person had exceeded the right of private defence in causing the death of Chitanu Rai or in injuring Gorakh Prasad it is open to the prosecution to prove the individual assault and the particular accused person concerned may be convicted for the individual assault either under section 304, Indian Penal Code or of the lesser offence under section 326, Indian Penal Code.
The difficulty in the present case is that the High Court has not analysed the evidence given by the parties and given a finding whether any or which of the appellants are guilty of causing the death of Chitanu Rai or of assaulting Gorakh Prasad.
As we have already said, none of the appellants can be convicted of the charge of rioting under section 148 or of the constructive offence under section 326/149, Indian Penal Code.
" We accordingly hold that the respondents cannot be convicted under section 302 read with section 149, Indian Penal Code.
Nor is it possible to convict them under section 302 read with section 34.
The High 'Court rightly found that the respondents wanted to prevent the (1) Cr.
No. 191 of 1966 decd.
on 5 12 1968.
364 collection of mahua fruits and that a common intention of all of them to murder Ramdhri and Ramswarup was not established.
The case of Gurudittamal vs State of U.P.(1) is distinguish able.
In that case the Court found that (1) the accused persons who were in possession of a field had exceeded the right of private defence of property by murdering four persons who were peacefully harvesting the crops standing on the field and (2) each of the four appellants killed one member of the prosecution party and each of them individually committed an offence under section 302 (see paragraph 6 and end of paragraph 14).
In these circumstances, the Court upheld their conviction and sentence under section 302.
The Court also found that the appellants had the common intention to kill the victims and could be convicted under section 302 read with section 34 (see paragraph 12 and 9).
In the present case, none of the respondents can be convicted under section 302.
As a common intention to murder Ramdhari or Ramswarup is not established, they cannot be convicted under section 302 read with section 34.
In the result, the appeal is dismissed.
R.K.P.S. Appeal dismissed.
(1) A.I.R. 1965 S.C. 257.
| IN-Abs | In proceedings against the accused respondents the prosecution case was that on certain land belonging to one B where some of his men were gathering fruits, the respondents, armed with bhallas, lathis, etc., attacked these men killing two of them and injuring others.
The trial court convicted the respondents under section 302 read with section 149 I.P.C. of the murder of the two deceased persons and of offences for inflicting injuries on other persons.
The respondents ' appeal to the High Court was allowed and that Court set aside all the convictions and sentences.
The High Court found that the land in question was in the possession of one of the respondents and that on the date of occurrence, the members of the prosecution party including the murdered victims committed thefts of fruits on the land and that the respondents had the right of private defence of property against the theft; the theft of the fruits was committed under such circumstances as might reasonably cause apprehension that death or grievous bodily hurt would be the consequence if the right of private defence was not exercised.
Accordingly, the respondents ' right of private defence of property extended under section 103 I.P.C. to voluntarily causing death of the two murdered victims subject to the restrictions mentioned in section 99.
In appeal to this Court against the acquittal of the respondents, it was contended that they were members of an unlawful assembly prosecuting the common object of forcibly preventing the two deceased from collecting 'fruit from the land in question and if necessary in causing the murder of the said two persons for the purpose; that some of them caused the murder of the two victims and that thereby all of them committed offences under section 302 read with section 149.
HELD : The respondents could not be convicted under section 302 read with section 149 I.P.C., nor was it possible to convict them under section 302 read with section 34.
In order to attract the provisions of section 149 the prosecution must establish that there was an unlawful assembly and that the crime was committed in prosecution of the common object of the assembly.
Under the fourth clause of section 141 an assembly of five or more persons is an unlawful assembly if the common object of its members is to enforce any right or supposed right by means of criminal force or show of criminal force to any person.
Section 141 must be read with Ss. 96 to 106 dealing with the right of private defence.
Under section 96 nothing is an offence which is done in the exercise of the right of private defence.
The assertion of a right of private defence within the limits prescribed by law cannot fall within the expression "to enforce any right or supposed right" in the fourth clause of section 141.
[362 C] 359 As it had been found 'in the present case that the land in question was in the possession of one of the respondents, the object of the respondents ' party was to prevent the commission of theft of the fruits in exercise of their right of private defence of property.
This object was not un lawful.
Nor was it possible to say that their common object was to kill the two deceased victims.
Those who killed them exceeded the right of private defence and may be individually held responsible for the murders.
But the murders were not committed in prosecution of the common object of the assembly or were such as the members of the assembly knew to be likely to be committed in prosecution of the common object.
The accused respondents could not be made constructively responsible for the murders under section 302 read with section 149.
[363 B] Kapildeo Singh vs The King, ; Kishori Prsad & Ors.
vs State of Bihar Cr.
Appeal No. 191 of 1966 decd.
on 5 12 1968; and.
Gurudittamal vs State of U.P.
A.I.R. 1965 S.C. 257; referred.
|
Appeal No. 1869 of 1968.
Appeal under section 116 A of the Representation of the People Act, 1951 from the judgment and order dated August 12, 1968 of the Rajasthan High Court in Election Petition No. 16 of 1967.
section V. Gupte, M. M. Tiwari, H. K. Puri, Bishamber Lal, M. K. Garg, K. K. Jain and section P. Vij, for the appellant.
M. C. Chagla and section M. Jain, for respondent.
Niren De, Attorney General, G. C. Kasliwal, Advocate General.
Rajasthan and K. B. Mehta, for the State of Rajasthan.
The Judgment of section M. SiKRi, A. N. RAY and P. JAGANMOHAN REDDY, JJ.was delivered by SIKRI, J., M. HIDAYATULLAH, C.f. and G. K. MITTER, J. gave a separate opinion.
Hidayatullah, C.J. We regret our inability to agree that the appellant Mrs. Kanta Kathuria was not holding an office of profit under the Government of Rajasthan when she stood as a candidate for election to the Rajasthan Legislative Assembly from the Kolayat Constituency.
Mrs. Kathuria is an advocate practicing at Bikaner.
She contested the above election held on February 18, 1967 against seven other candidates.
She was declared elected on February 22, 1967.
One of the defeated candidates filed the election petition, from which this appeal arises, questioning her election on several grounds.
We are concerned only with one of them, namely, that on the date of her nomination and election she was disqualified to be chosen to fill the seat as she held the office of Special Government Pleader, which was an office of profit under the Government of Rajasthan.
838 Article 191 of the Constitution, which is relevant in this connection, reads : "191 : Disqualifications for membership (1) A person shall be disqualified for being chosen as, and for being, a member of the Legislative Assembly or Legislative Council of a State (a) if he holds any office of profit under the Government of India or the Government of any State specified in the First Schedule, other than an office declared by the Legislature of the State by law not to disqualify its holder; Mrs. Kathuria was appointed by the Government of Rajasthan as Special Government Pleader to conduct arbitration cases between the Government and Modern Construction Company arising out of the construction of Rana Pratap Sagar Dam and Jawahar Sagar Dam.
The order was passed on June 26, 1965 (exhibit 1).
The order reads: "ORDER Sub: Construction of R.P.S. Main Dam Contract of M/s.
M.C.C. (Pvt.) Ltd., Arbitration in disputes arising out of.
In pursuance of Rule 8 (b) of Order XXVII of the First Schedule to the Code of Civil Procedure, 1908 read with clause (7) of Section 2 of the Code, the Governor is pleased to appoint Smt.
Kanta Kathuria, Advocate Bikaner as Special Government Pleader to conduct the above noted case on behalf of the State of Rajasthan alongwith Shri Murali Manohar Vyas, Government Advocate, Jodhpur.
By order, Sd.
D. section Acharya 26 6 65 (D. section Acharya) Joint Legal Remembrancer".
By subsequent orders, which we do not consider necessary to quote here, her remuneration was fixed at Rs. 1501 per day for each date of hearing, Rs. 75/ per day for days of travel and dates on which the case was adjourned, and days spent on preparation of the case.
Mrs. Kathuria began appearing in the case from March 27, 1965.
It is an admitted fact that she was paid for work between that date and November 28, 1966 a sum of 839 Rs. 26,325/ and again from February 26, 1967 to March 2, 1967 a sum of Rs. 900/ and that the arbitration proceedings were continuing on the date of the filing of the election petition.
Therefore for over two years she was employed as Special Government Pleader and was still employed when her election took place.
It is also admitted by her that prior to this employment, she had never paid income tax in excess of Rs. 1200/ in any year.
On these facts, the High Court held that Mrs. Kathuria was disqualified.
Before this appeal came on for hearing before us, the Governor of Rajasthan by Ordinance 3/68 (December 24, 1968) removed the disqualification retrospectively.
The Ordinance was followed by Act V of 1968 (April 4, 1969).
The operative portions of the Act which are the same as of the Ordinance read "Prevention of disqualification of membership of the State Legislative Assembly (1) It is hereby declared that none of the following offices, in so far as it is an ' office of profit under the State Government, shall disqualify or shall be deemed ever to have disqualified the holder thereof from being chosen as, or for being, a member of the Rajasthan Legislative Assembly, namely (a) the office of a Government Pleader or Special Government Pleader or Advocate for the Government, appointed specially to conduct any particular suit, case or other proceeding by or against the State Government, before any court, tribunal, arbitrator or other autho rity; (b) the office of a Government Pleader, a Special Government Pleader or Advocate for the State Government, appointed specially to assist the Advocate General, Government Advocate or Pleader, or Special Government Pleader, or Advocate for Government, in any particular suit, case or other proceeding by or against the State Government before any court, tribunal, arbitrator or other authority; (c) the office of a panel lawyer if the holder of such office is not entitled to any retainer or salary, by whatever named called; (4) the office of a Pradhan or Pramukh as defined in the Rajasthan Panchayat Samitis and Zila Parishads Act, 1959 (Rajasthan Act 37 of 1959).
840 (2) Notwithstanding any judgment or order of any Court or Tribunal, the aforesaid offices shall not disqualify or shall be deemed never to have disqualified the holders thereof for being chosen as, or for being, members of the Rajasthan Legislative Assembly as if this Act had been in force on the date the holder of such office filed his nomination paper for being chosen as a member of the Rajasthan Legislative Assembly.
" The Ordinance and the Act seem to have been passed to nullify the decision in this case.
One of the contentions of the answering respondent is that the Legislature of Rajasthan could not remove the disqualification retrospectively since the Constitution contemplates disqualifications existing at certain time in accordance with the law existing at that time.
We shall deal with this matter later.
When the Government of Rajasthan appointed Mrs. Kathuria it bad two courses open to it.
Firstly, Government could have engaged Mrs. Kathuria to conduct the particular arbitration case or cases, or even to assist the Government Advocate in those cases.
Alternatively Government could create a special office of Special Government Pleader and appoint Mrs. Kathuria or any other lawyer to that office.
It is obvious that Government did not choose the first course.
There were as many as 26 arbitration cases then pending and more were likely to arise.
Government thought that they should be conducted by the Government Advocate but as the work involved was too much as additional office had to be created and given to a lawyer.
An office was therefore, created and given to Mrs. Kathuria.
In a recent case (Civil Appeal No. 1832 of 1967 Mahadeo vs
Shantibhai &, Others s decided on October 15, 1968), we held that a panel lawyer engaged to watch cases on behalf of the Central & Western Railway Administrations, held an office of profit.
The duty of the panel lawyer was to watch cases coming up for hearing against the Railways at Ujjain and to appear in court and ask for an adjournment.
The lawyer was paid Rs. 51 for each such adjournment if he was not entrusted with the case later.
In dealing with this matter reliance was placed by us on the meaning to the word 'office ' given in the Statesman (P) Ltd. vs H. R. Deb & Ors(1) In the Statesman case, this Court approved of the observations of Lord Wright in Mcmillan vs Guest(2) to the following effect : "The word 'office is of indefinite content.
Its various meanings cover four columns of the New English (1) ; (2) 841 Dictionary, but I take as the most relevant for purpose of this case the following 'A position or place to which certain duties are attached, especially one of a more or less public character.
" Our brother Sikri has also relied upon the same case and has referred to the observations of Lord Atkin where he approved of the observations of Rowlatt, J. in Great Western Railway Co. vs Baler(1).
Justice Rowlatt said thus : "Now it is argued, and to my mind argued most forcibly, that shows that what those who use the language of the Act of 1842 meant, when they spoke of an office or employment which was a subsisting permanent, substantive position, which had an existence independent from the person who filled it, which went on and was filled in succession by successive holders, and if you merely had any man who was engaged on whatever terms, to do duties which were assigned to him, his employmen t to do those duties did not create an office to which those duties were attached.
He hereby was employed to do certain things and that is an end of it, and if there was no office or employment existing in the case as a thing, the so called office or employment was merely an aggregate of the activities of the particular man for the time being".
We say with profound respect for this most succinct exposition, that we entirely agree.
The distinction that we are making is precisely the distinction which has been brought out by Rowlatt, J. If Mrs. Kathuria had been briefed as a lawyer and given all the Government litigation in Rajasthan to conduct on behalf, of the Government she could not have been described as holding an office of profit.
The aggregate of her work and her activities could not have created an office nor could she have been described as anything but an advocate.
What happened here was different ' An office was created which was that of a Special Government Pleader.
Now it is admitted that the office of a Government Pleader is an office properly so called.
Therefore an office going under the names 'Additional Government Pleader ', 'Assistant Government Pleader ', 'Special Government Pleader ' will equally be an office properly so called.
It matters not that Mrs. Kathuria was to conduct a group of arbitration cases and against the same party.
For that matter Government is always at liberty to create offices for special duties.
They might have even created another office of Special Government Pleader for Land Acquisition cases (1) 8 Tax Cases 231, 235.
842 or a group of cases or Railway cases or a group of cases arising out of a particular accident and so on and so forth.
What matters is that there was an office created apart from Mrs. Kathuria.
It is in evidence that it was first held by Mr. Maneklal Mathur another advocate.
It is likely that if Mrs. Kathuria had declined some one else would have been found.
Therefore, there was an office which could be successively held; it was independent of Mrs. Kathuria who filled it was a substantive position and as permanent as supernumerary offices are.
Every one of the tests laid down by Rowlatt, J. is found here.
We would, therefore, hold that the High Court was right in its conclusion that Mrs.,Kathuria held an office.
Since there is no dispute that it was for profit and under the State, the election of Mrs. Kathuria must be held to be void as she was disqualified to stand for the election.
This brings us to the next question.
Does the Act of the Rajasthan Legislature remove the disqualification retrospectively, in other words; can such a law be passed by the Legislature after, the election is over ? The first question is whether the new law is remedial or declaratory.
If it was declaratory then it would be retrospective; if remedial only, prospective unless legally made retrospective.
That it has been made expressly retrospective lends support to its being remedial.
Its retrospective operation depends on its being effective to remove a disability existing on the date of nomination of a candidate or his election.
Of course, there is no difficulty in holding the law to be perfectly valid in its prospective operation.
The only dispute is in regard to its retrospective operation.
Our brother Sikri has cited an instance of the British Parliament from May 's well known treatise when the Coatbridge and Springburn Elections (Validation) Bill was introduced to validate the irregular elections.
Halsbury 's Laws of England (3rd Edn.
14 p. 5) has the following note : "If a person is elected when disqualified, his dis qualification for being a member of Parliament may be remedied or he may be protected from any penal consequences by an Act of Validation or indemnity.
" The position of the British Parliament is somewhat different from that of the Indian Parliament and the Legislatures of the States.
British Parliament enjoys plenary sovereignty and the7 Acts of the British Parliament no court can question.
In India the sovereignty of the Indian Parliament and the Legislatures is 843 often curtailed and the question, therefore, is whether it is in fact so curtailed.
At the hearing our attention was drawn to a number of such Acts passed by our Parliament and the Legislatures of the States.
It seems that there is a settled legislative practice to make validation laws.
It is also well recognised that Parliament and the Legislatures of the States can make their laws operate retrospectively.
Any law that can be made prospectively may be made with retrospective operation except that certain kinds of laws cannot operate retroactively.
This is not one of them.
This position being firmly grounded we have to look for limitations, if any, in the Constitution.
Article 191 (which has been quoted earlier) itself recognises the power of the Legislature of the State to declare by law that the holder of an office shall not be disqualified for being chosen as a member.
The Article says that a person shall be disqualified if he holds an office of profit under the Government of India or the Government of any State unless that office is declared by the Legislature not to disqualify the holder.
Power is thus reserved to the Legislature of the State to make the declaration.
There is nothing in the words of the article to indicate that this declaration cannot be made with retrospective effect.
It is true that it gives an advantage to those who stand when the disqualification was not so removed as against those who may have kept themselves back because the disability was not removed.
That might raise questions of the propriety of such retrospective legislation but not of the capacity to make such laws.
Regard being had to the legislative practice in this country and in the absence of a clear prohibition either express or implied we are satisfied that the Act cannot be declared ineffective in its retrospective operation.
The result, therefore, is that while we hold that Mrs. Kathuria held an office of profit under the State Government, we hold further that this disqualification stood removed by the retrospective operation of the Act under discussion.
As regards the supplementary point that the petition was bad for non joinder of Mr. Mathura Das Mathur against whom cor rupt practices were alleged in the petition, we are of opinion that section 82 of the Representation of People Act, 1951, in its clause (b) speaks of candidates at the same election and not persons who are candidates at other elections.
As Mr. Mathur was a candidate from another constituency he need not have been made a party here.
For the above reasons we would allow the appeal but make no order about costs since the election of the appellant is saved 844 by a retrospective law passed after the decision of the High Court.
Sikri, J.
This appeal arises out of an election petition filed under section 80 of the Representation of the People Act, 1951, hereinafter referred to as the 1951 Act, by Shri Manik Chand Surana, a defeated candidate, challenging the election of Smt.
Kanta Kathuria, before the High Court.
The High Court (Jagat Narayan, J.) allowed the election petition on the ground that the appellant held an office of profit within the meaning of article 191 of the Constitution on the day on which she filed the nomination paper and was thus disqualified for being chosen as a member of the Rajasthan Legislative Assembly.
This judgment was given on August 12, 1968.
An appeal was filed in this Court on August 20, 1968.
During the pendency of the appeal, the Rajasthan Legislative Assembly Members (Prevention of Disqualification) Act, 1969 (Act No. 5 of 1969) (hereinafter referred to as the impugned Act), was passed, which received the assent of the Governor on April 4, 1969.
The impugned Act inter alia provides : "2. Prevention of disqualification of membership of the State Legislative Assembly.
(i) It is hereby declared that none of the following offices, in so far as it is an office of profit under the State Government shall disqualify or shall be deemed ever to have disqualified the holder thereof from being chosen as, or for being, a member of the Rajasthan Legislative Assembly, namely : (a) the office of a Government Pleader or Special Government Pleader or Advocate for the Government, appointed specially to conduct any particular suit, case or other proceeding by or against the State Government, before any court, tribunal, arbitrator or other authority; (b) the office of a Government Pleader, a Special Government Pleader or Advocate for the State (Government appointed specially to assist the Advocate General, Government Advocate or Pleader, or Special Government Pleader, or Advocate for Government in any particular suit, case or other proceeding by or against the State Government before any court, tribunal, arbitrator or other authority; 845 (2) Notwithstanding any judgment or order of any Court or Tribunal, the aforesaid offices shall not disqualify or shall be deemed never to have disqualified the holders thereof for being chosen as, or for being, members of the Rajasthan Legislative Assembly as if this Act had been in force on the date the holder of such office filed his nomination paper for being chosen as a member of the Rajasthan Legislative Assembly.
" We may note another fact on which an argument is sought to; be made by the learned Counsel for the appellant.
It was alleged in the election petition that the appellant was a close friend of one Shri Mathura Dass Mathur who was a Minister in the Slate of Rajasthan at the time of the election, who contested elections as a candidate in a constituency different from that of the appellant.
Shri Mathur visited the constituency during the election very frequently and during these visits the appellant accompanied by Shri Mathur visited several places in the Constituency where.
Shri Mathur in the presence of the appellant offered and promised to get several works done in those areas if the electors were to cast votes for the appellant at ' the said election.
In spite of these allegations of corrupt practice, Shri Mathur was not made a party to the petition.
The learned Counsel for the appellant, Mr. Gupte, contends that the High Court erred in holding that the appellant held an office of profit within the meaning of article 191 of the Constitution.
In the alternative he contends that the Rajasthan Act No. 5 of 1969 is retrospective and the disqualification if it existed, cannot now be deemed to have existed because of this Act.
The last point raised by him is that the petition was not in accordance with law as the respondent, Shri Surana, had not impleaded Shri Mathur as respondent to the petition.
The facts relevant for appreciating the first point are these The appellant was an advocate at all material times.
Disputes arose between M/s. Modern Construction, Company Private Ltd. and the State of Rajasthan in connection with some works relating to the Rana Pratain Sagar Dam.
These disputes were referred to arbitration.
Shri Murli Manohar Vyas, Government Advocate in the High Court of Rajasthan at Jodhpur was appointed by the Government to represent it in these arbitration proceedings.
The Government Advocate wanted one more advocate to assist him.
On his suggestion, Shri Manak Lal Mathur advocate was appointed to assist the Government Advocate.
As there was a possibility that Shri Manak Lal Mathur may not be available to 846 help the Government Advocate, the appellant was, on the suggestion of the Government Advocate, appointed to assist him in the ,absence of Shri Mathur.
proposal was approved by the Rajasthan Law Minister on March 30, 1965 and on June 26, 1965, and the Government issued the following order : "Sub : Construction of R.P.S. Main Dam Con tract of M/s M.C.C. (PVT) Ltd. Arbitration in dispute arising out of In pursuance of rule 8 (b) of Order XXVII of the First Schedule to the Code of Civil Procedure, 1908 read with clause (7) of section 2 of the Code, the Governor is pleased to appoint Smt.
Kanta Kathuria Advocate, Bikaner, as Special Government Pleader to conduct the above noted case on behalf of the State of Rajasthan along with Shri Manohar Vyas, Government Advocate Jodhpur.
" Later, on Sept. 3, 1965, the Government laid down the fees payab le to the appellant.
It was stated in the order dated Sept. 3, 1965 that" Smt.
Kanta Kathuria who has been appointed to assist the Government advocate in the absence of Shri Mathur will get her share of fee in proportion to the assistance rendered by her out of the daily fee of Rs. 150/ to Shri Manak Lal Mathur." As Shri Manak Lal Mathur was not able to appear in the case, on Nov. 18, 1965 the Governor sanctioned the payment of daily fee of Rs. 1501 to the appellant instead of Shri Manak Lal Mathur, for days of actual hearing.
The appellant appeared from March 27, 1965 to November 28, 1966, but she did not appear from Nov. 29, 1966 to Feb. 25, 1967.
She again started appearing in the case from February 26, 1967.
The appellant claimed travelling allowance, incidental charges and daily allowance, but the Government decided that the appellant was not entitled to any travelling allowance or daily allowance in addition to the fees.
By a notification, the Election Commission of India called upon the electors of the Kolayat Assembly Constituency of the Rajasthan Legislative Assembly to elect a member to the Rajasthan Legislative Assembly and invited nomination papers for the elections to be held on February 18, 1967.
The appellant was declared duly elected by the Returning officer on, February 22, 1967, the appellant having secured 11926 and the respondent having secured 8311 votes.
847 The relevant portion of article 191 reads as follows 191.
(1) A person shall be disqualified for being chosen as, and for being, a member of the Legislative Assembly or Legislative Council of a State (a) if he holds any office of profit under the Government of India or the Government of any State specified in the First Schedule, other than an office declared by the Legislature of the State by law not to disqualify its holder; (e) if he is so disqualified by or under any law made by Parliament.
(2) For the purposes of this article, a person shall not be deemed to hold an office of profit under the Government of India or the Government of any State specified in the First Schedule by reason only that he is a Minister either for the Union or for such State.
It seems to us that the High Court erred in holding that the appellant held an office.
There is no doubt that if her engagement as Special Government Pleader amounted to appointment to an office, it would be an office of profit under the State Government of Rajasthan.
The word 'office ' has various meanings and we have to see which is the appropriate meaning to be ascribed to this word in the context.
It seems to us that the words 'its holder ' occurring in article 191 (1 ) (a), indicate that there must be an office which exists independently of the holder of the office.
Further, the very fact that the Legislature of the State has been authorised by article 191 to declare an office of profit not to disqualify its holder, contemplates existence of an office apart from its holder.
In other words, the Legislature of a State is empowered to declare that an office of profit of a particular description or name would not disqualify its holder and not that a particular holder of an office of profit would not be disqualified.
It seems to us that in the context, Justice Rowlatt 's definition in Great Western Railway Company vs Bater(l) is the appropriate meaning to be applied to the word 'office ' in article 191 of the Constitution.
Justice Rowlatt observed at page 235 "Now it is argued, and to my mind argued most forcibly, that shows that what those who use the (1) 8 Tax Cases 231. 848 language of the Act of 1842 meant, when they spoke of an office or an employment, was an office or employment which was a subsisting, permanent, substantive position, which had an existence independent from the person who filled it; which went on and was filled in succession by successive holders; and if you merely had a man who was engaged on whatever terms, to do duties which were assigned to him, his employment to do those duties did not create an office to which those duties were attached.
He merely was employed to do certain things and that is an end of it; and if there was no office or employment existing in the case, as a thing the so called office or employment was merely an aggregate of the activities of the particular man for the time being.
And I think myself that is sound.
I am not going to decide that, because I think I ought not to in the state of the authorities, but my own view is that the people in 1842 who used this language meant by an office, a substantive thing that existed apart from the holder.
" This definition was approved by Lord Atkinson at page 246.
This language was accepted as generally sufficient by Lord Atkin and Lord Wright in McMillan vs Guest (H.M. Inspector of Taxes) (1).
Lord Atkin observed at page 201 : "There is no statutory definition of 'office '.
Without adopting the sentence as a complete definition, one may treat the following expression of Rowlatt, J., in Great Western Railway Co. vs Baler, [1920] 3 K.B., at page 274, adopted by Lord Atkinson in that case, [1922] 2 A.C., at page 15, as a generally sufficient statement of the meaning of the word : an office or employment which was a subsisting, permanent, substantive position, which had an existence independent of the person who filed it, which went on and was filled in succession by successive holders.
" Lord Wright at page 202 observed "The word 'office ' is of indefinite content; its various meanings cover four columns of the New English Dictionary, but I take as the most relevant for purposes of this case the following : A position or place to which less public character.
This, I think, rough corresponds with such approaches to a definition as have (1) 24 Tax Cases 190.
849 been attempted in the authorities, in particular Great Western Railway Co. vs Abater, [1922] 2 A.C. I. where the legal construction of these words, which had been in Schedule E since 1803 (43 Geo. 111, c. 122, Section 175), was discussed.
" In Mahadeo vs Shantibhai & Ors.(1) Mitter J. speaking for this Court, quoted with approval the definition of Lord Wright.
In our view there is no essential difference between the definitions given by Lord Wright and Lord Atkin.
The Court of Appeal in the case of Mitchell vs Ross(2), thought that both the noble and learned Lords had accepted the language employed by Rowlatt J. as generally sufficient.
In Mahadeo 's case(1), this Court was dealing with a panel of lawyers maintained by the Railway Administration and the lawyers were expected to watch cases.
Clause (13) of the terms in that case read as follows : "You will be expected to watch cases coming up for hearing against this Railway in the various courts at UJB and give timely intimation of the same to this office.
If no instructions regarding any particular case are received by you, you will be expected to appear in the court and obtain an adjournment to save the ex parte proceedings against this Railway in the court.
You will be paid Rs. 51 for every such adjournment if you are not entrusted with the conduct of the suit later on." That case in no way militates against the view which we have taken in this case.
That case is more like the case of a standing Counsel disqualified by the House of Commons.
It is stated in Rogers [on Elections Vol.
[1] at page 10 : "However, in the Cambridge case (121 Journ.
220), in 1866, the return of Mr. Forsyth was avoided on the ground that he held a new office of profit under the Crown, within the 24th section.
In the scheme submitted to and approved by Her Majesty in Council was inserted the office of standing counsel with a certain yearly payment (in the scheme called 'salary ') affixed to it, which Mr. Forsyth received, in addition to the usual fees of counsel.
The Committee avoided the return.
It is urged that there can be no doubt that the Government Pleader holds an office and there is no reason why a person who assists him in the case should also not be treated as a holder of 1) (2) 850 office, specially as the notification appointed the appellant as Special Government Pleader.
We see no force in these conten tions.
Rule 8B. of Order 27, C.P. Code reads as follows :7 "In this Order unless otherwise expressly provided 'Government ' and 'Government leader ' mean respectively (a) in relation to any suit by or against the Central Government or against a public officer in the service of that Government, the Central Government and such pleader as that Government may appoint whether generally or specially for the purposes of this Order; (c) in relation to any suit by, or against a State Government or against a public officer in the service of a State, the State Government and the Government pleader, as defined in Clause 7 of Section 2 or such other pleader as the State Government may appoint, whether generally or specially, for the purposes of this Order." This rule defines who shall be deemed to be a Government Pleader for the purpose of the Order. 'Government Pleader ' is defined in Sec. 2 of Clause (7) C.P. Code thus "(7) 'Government Pleader ' includes any officer appointed by the State Government to perform all or any of the functions expressly imposed by this Code on the Government Pleader and also any pleader acting under the directions of the Government Pleader :" It follows from reading Order 27 rule 8B and Clause (7) of Sec.
2 C.P. Code together that even if a pleader who is acting under the directions of the Government Pleader would be deemed to be a Government Pleader for the purpose of Order 27.
Therefore, no particular significance can be attached to the notifica tion made under rule 8B appointing the appellant as Special Government Pleader.
We cannot visualise an office coming into existence, every time a pleader is asked by the Government to appear in a case on its behalf.
The notification of his name under rule 8B, does not amount to the.
creation of an Office '.
Some reliance was also placed on rule 4 of Order 27 C.P. Code, which provides that "The Government Pleader in any Court shall be the agent of the Government for the purpose of receiving 851 processes against the Government issued by such Court.
" This rule would not apply to the facts of this case because the appellant was appointed only to assist the Government Advocate in a particular case.
Assuming it applies, it only means that processes could be served on the appellant, but processes can be served on an Advocate under Rule 2 of Order XLV of the Supreme Court Rules, 1966.
This does not mean that an Advocate on Record would hold an office under the client.
The learned Counsel for the respondent, Mr. Chagla, urges that we should keep in view the fact that the object under lying article 191 of the Constitution is to preserve purity of public life and to prevent conflict of duty with interest and give an interpretation which will carry out this object.
It is not necessary to give a wide meaning to the word "office" because if Parliament thinks that a legal practitioner who is being paid fees in a case by the Government should not be qualified to stand for an election as a Member of Legislative Assembly, it can make that pro vision under article 191 (1) (e) of the Constitution.
The case of Sakhawat Ali vs The State of Orissa(1) provides an instance where the Legislature provided that a paid legal practitioner should not stand in the municipal elections.
In view of the above reasons, we must hold that the appellant was not disqualified for election under article 191 of the Constitution.
But assuming that she held an office of profit, this disqualification has been removed retrospectively by the Rajasthan Legislative Assembly by enacting the impugned Act.
Mr. Chagla, learned Counsel for the respondent, contends that the Rajasthan State Legislature was not competent 'to declare retrospectively ' under article 191 (1) (a) of the Constitution.
It seems to us that there is no force in this contention.
It has been held in numerous cases by this Court that the State Legislatures and Parliament can legislate retrospectively subject to the provisions of the Constitution.
Apart from the question of fundamental rights, no express restriction has been placed on the power of the Legislature of the State, and we are unable to imply, in the context, any restriction.
Practice of the British Parliament does not oblige us to place any implied restriction.
We notice that the British Parliament in one case validated the election : [Erskine May 's Treatise on the Law, Privileges Proceedings & Usage of Parliament Seventeenth (1964) Edition] "After the general election of 1945 it was found that the persons elected for the Coatbridge Division of (1) SupCI 9 852 Lanark and the Springbourn Division of Glassgow were disqualified at the time of their election because they were members of tribunals appointed by the Minister under the Rent of Furnished Houses Control (Scotland) Act, 1943, which entitled them to a small fee in respect of attendance at a Tribunal.
A Select Committee reported that the disqualification was incurred inadvertently, and in accordance with their recommendation the Coatbridge and Springburn Elections (Validation) Bill was introduced to validate the irregular elections [H.C. Deb.
(1945 46) 414, c. 564 6].
See also H.C. 3(1945 46); ibid.
71 (1945 46) and ibid.92 (1945 46).
" We have also noticed two earlier instances of retrospective legislation, e.a., The House of Commons (Disqualification) 1813 [Halsbury Statutes of England p. 467] and Sec.
2 of the Re election of Ministers Act, 1919 (ibid.
p. 515).
Great t stress was laid on the word 'declared ' in article 191(1) (a), but we are unable to imply any limitation on the powers of the Legislature from this word.
Declaration can be made effective as from an earlier date.
The apprehension that it may not be a healthy practice and this power might be abused in a particular case are again no grounds for limiting the powers of the State Legislature.
It is also urged that by enacting the impugned Act the State Legislature has amended the 1951 Act.
We are unable to appreciate this contention.
The State Legislature has exercised its powers under article 191 to declare a certain office not to have ever disqualified its holder.
The impugned Act does not amend or alter the 1951 Act, in any respect whatsoever.
It is said that under the 1951 Act as it existed before the impugned Act was passed, the appellant was not qualified to be chosen for this particular election.
By enacting the impugned Act the appellant 's disqualification has been removed and the 1951 Act is, so to say, made to speak with another voice.
But that is what the State Legislature is entitled to do, as long as it does not touch the wording of the 1951 Act.
The answer given by the 1951 Act may be different but this is because the facts on which it operates have by valid law been given a different garb.
It is further urged that the impugned Act violates article 14 of the Constitution because the Central Government might have appointed Government Pleaders under rule 8B of Order 27 and the impugned Act nowhere mentions the alleged offices held by 853 them.
No material has been placed to show that any such offices exist.
We cannot, therefore, entertain this point.
In view of the above reasons We are of the opinion that the impugned Act is valid and removes the disqualification if it existed before.
There is force in the third point raised by the learned counsel for the appellant.
Section 82 of the Representation of the People Act, 1 of 1951, reads as follows "81.
A petitioner shall join as respondents to his petition (a) where the petitioner, in addition to claiming a ,declaration that the election of all or any of the returned candidates is void, claims a further declaration that be himself or any other candidate has been duly elected.
all the contesting candidates other than the petitioner and where no such further declaration is claimed, all the returned candidates; and (b) any other candidate against whom allegations of any corrupt practice are made in the petition.
In this context the words 'any other candidate ' plainly mean a candidate in the election for the constituency which is the subject matter of the petition.
In the result the appeal is allowed, the judgment of the High Court set aside and the petition dismissed.
In the circumstances of the case the parties will bear their own costs throughout.
V.P.S. Appeal allowed.
| IN-Abs | Disputes between the State of Rajasthan and a company were referred to arbitration and the Government Advocate was appointed to represent the State.
Another advocate was appointed to assist the Government Advocate but as the advocate was table to appear, the appellant was no appointed under 0.27, r. 8B of the Civil Procedure Code, as Special Government Pleader.
The appellant then stood for election to the State Legislative Assembly and was declared elected.
The election was challenged and one of the grounds of challenge was that the appellant held an office of profit within the meaning of article 191 of the Constitution.
The High Court set aside the election.
While the appeal was pending in this Court, Rajasthan Act 5 of 1969 was passed declaring among others that the holder of the office of a Special Government Pleader was not disqualified from being chosen or for being a member of the State Legislative Assembly; and by section 2(2), the Act was made retrospective removing the appellant 's disqualification retrospectively.
On the questions : (1) Whether the appellant was holding an office of profit and hence was disqualified; (2) Whether the disqualification was removed by Act 5 of 1969; and (3) Whether the election petition was in accordance with law, because, another candidate from another constituency, again t whom corrupt practices were alleged, was not impleaded as a party, HELD : (1) (Per Sikri, Ray and Jaganmohan Reddy, JJ.) : The appellant was not holding an office of profit.
(a) Before a person becomes subject to the disqualification in article 191(1) there must be an office which exists independently of his being the holder of the office.
The word 'office ' means an office or employment which was a subsisting, permanent, substantive position which had an existence independent of the person who filled it, which went on and was filled in succession by successive holders; but if a person was engaged on whatever terms to do the duties which were assigned to him, his employment to do those duties did not create an office to which those duties were attached.
Hence an office does not come into existence every time a pleader is asked by the Government to appeal, in a case on its behalf.
A B; 850 G H]
Cl/70 8 836 (b) A reading of section 2(7) and 0.27, r. 8B of the Civil Procedure Code A shows, that even an advocate who is.
acting under the directions of the Government Pleader could be deemed to be a Government Pleader.
Therefore, the notification of the appellant 's name under r. 8B as Special Government Pleader did not amount to the creation of an office.
[850 F G] (c) Assuming that a Government Pleader is an agent of the Government for purposes of receiving processes against the Government, the fact that processes could be served on an advocate, would not mean that the advocate was holding an office under his client.
[851 A B] (d) It is not necessary to give a wider meaning to the word 'office ' because, if Parliament thinks that a legal"practitioner who is being paid fees in a case by the Government should not be qualified to stand for an election as a member of the Legislative Assembly, it can make that provision under article 191 (1) (e) of the Constitution.
[851 C D] Great Western Railway Co. vs Bater, 8 Tax Cases 231 and McMillan vs Guest (H. M. Inspector of Taxes) 24 Tax Cases 190, applied.
Mahadeo vs Shantibhai & Ors.
[1969]2 S.C.R. 422 distinguished.
Sakhawat Ali vs State of Orissa, , referred to.
(Per Hidayatullah, C.J. and Mitter, J. dissenting) : The High Court was right in holding that the appellant held an office of profit.
[842 C] It was not a case of the appellant merely being briefed as a lawyer and given the Government litigation.
On the other hand an office, that of Special Government Pleader was created, and since the office of a Government Pleader is an office of profit, the office of Special Government Pleader will equally be an office of profit.
It was an office which could be successively held, it was independent of its holder, it was a substantive position and as permanent as other supernumerary offices.
[841 FG; 842B] Mahadeo vs Shantibhai & Ors.
and The Statesman (P.) Ltd. vs H. R. Deb & Ors. ; applied.
McMillan vs Guest, and Great Western Railway Co. vs Bater, 8 Tax Cases 231, 235, referred to.
(2) (By Full Court) : The Act 5 of 1969 has removed the disqualification retrospectively.
Per Hidayatullah, C.J. and Mitter, J. : It is well recognised that Parliament and the Legislature of a State can make their laws operate retrospectively subject to limitations, if any, in the Constitution.
Any law that can be made prospectively may be made with retrospective operation except those which cannot operate retroactively.
In article 191 itself, power is reserved to the State Legislature to make a declaration that the holder of an office shall not be disqualified and there is nothing in the words of the Article to indicate that such a declaration cannot be made with retrospective effect, therefore, whatever may be the propriety of such legislation regard being had to legislative practice and the absence of a clear prohibition, express or implied.
the Act must be declared to have retrospective effect.
[843 B C, D F] 837 Per Sikri, Ray and Jaganmohan Reddy, JJ. : Parliament and the State legislatures can legislate retrospectively subject to the provisions of the Constitution.
No limitation on the powers of the Legislature to make a declaration validating an election, effective from an earlier date, is expressly stated nor could it be implied in article 191(1). ]851 F G; 852 D E] The apprehension that it may not be a healthy practice and might be abused is no ground for limiting the powers of the State Legislature.
[852 B] The impugned Act does not amend or alter the Representation of the People Act, 1951, in any respect whatsoever.
By enacting the impugned Act, the disqualification if any, which existed in the 1951 Act has been removed, but that is what the State Legislature is entitled to do under article 191 so long as it does not touch the wording of the 1951 Act.
[852 F G] (3) (By Full Court) : The words 'any other candidate ' in section 82(b) of the Representation of the People Act, 1951, who should be impleaded, refers to a candidate in the election for the constituency which is the subject matter of the petition, and not to a candidate from another constituency.
[843 G H; 853 D E]
|
Appeal No. 1406 of 1969.
Appeal from the judgment and order dated April 17, 1969 of the Delhi High Court in Civil Writ No. 611 of 1968.
The appellant appeared in person.
Jagadish Swarup, Solicitor General, R. L. Mehta and R. N. Sachthey, for the respondents.
The Judgment of the Court was delivered by Ray, J.
This appeal by certificate from the judgment of the High Court at Delhi challenges the order dated 5th July, 1968 placing the appellant under suspension.
The appellant canvassed two grounds : first, that the order of suspension was passed on a report which was made mala fide, and, therefore, the order of suspension was bad; secondly, the order of suspension was made under sub rule (1) of Rule 7 of the All India Service (Appeal and Discipline) Rules, 1955, and is, therefore, liable to be quashed.
The appellant was appointed to the Indian Police Service in the year 1935.
He was posted as Inspector General of Police of the State of Andhra Pradesh, on 1 November, 1956.
He was ,confirmed as Inspector General of Police, Andhra Pradesh in the year 1957.
On 14 May, 1966, he reached the age of 55 years. 'He, however, continued to work as Inspector General of Police, Andhra Pradesh up to 1 August, 1967.
He was then posted as Special Inspector General of Police for the revision of Police Standing Orders.
123 Some time in the year 1967 the Chief Minister of Andhra Pradesh ordered that the Chief Secretary should make an enquiry with regard to certain allegations against the appellant.
The Chief Secretary recommended that the Vigilance Commissioner in the State of Andhra Pradesh might be requested to look into the matter.
The Vigilance Commissioner advised that the enquiry should be conducted by an independent agency like the Central Bureau of Investigation.
The Central Bureau of Investigation thereafter made an enquiry.
The appellant was given allegations to answer.
The appellant submitted explanation and was examined.
The Central Bureau of Investigation made a report on the enquiry.
On 1 1 July., 1968 the Government of India, Ministry of Home Affairs made an order placing the appellant under suspension.
The appellant alleged as follows.
The Chief Minister of the State of Andhra Pradesh was inimical and hostile to the appellant since the time of the General Elections in the year 1967.
The investigation by the Central Bureau of Investigation was conducted by persons who were hostile to the appellant.
The Ministry of Home Affairs ' Government of India, should not have relied on the report because the initiation and the conduct of the enquiry were motivated mala fide on the part of the Chief Minister of the State and other persons.
The other contention of the appellant was that under sub rule (1) of Rule 7 of the All India Service (Appeal and Discipline) Rules, 1955 the order of suspension could be made only if disciplinary proceeding was initiated and the Government was satisfied that there should be an order and in the present case the order did not satisfy the provisions of the rule, and therefore, the order is bad.
The pre eminent question in this appeal is whether the order of suspension is in infraction of Rule 7.
Rule 7 is as follows "(1) If having regard to the nature of the charges and the circumstances in any case the Government which initiates any disciplinary proceeding is satisfied that it is necessary or desirable to place under suspension the member of the Service against whom such proceedings are started that Government may (a) if the member of the Service is serving under it pass an order placing him under suspension, or (b) if the member of the Service is serving another Government, request that Government to place him under suspension, pending the conclusion of the inquiry and the passing of the final order in the case 124 Provided that in cases where there is a difference of opinion between two State Governments the matter shall be referred to the Central Government whose decision thereon shall be final.
(2). . . . . (3) A member of the Service in respect of or against whom, an investigation, inquiry or trial relating to a criminal charge is pending may, at the discretion of the Government under which he is serving, be placed under suspension until the termination of all proceedings relating to that charge, if the charge is connected with his position as a Government servant or is likely to embarrass him in the discharge of his duties or involves moral turpitude".
Rule 7 sub rule (1) contemplates suspension when disciplinary proceeding is initiated and the Government is satisfied that it is necessary to place a member of the Service under suspension.
It was contended by the appellant that the order of suspension was made under sub rule (1) in the present case without any disciplinary proceedings.
The order does not have any reference to sub rule (1) of Rule 7.
The order recites first that there are ' serious allegations of corruption and malpractice against the appellant, secondly that the enquiry made by the Central Government revealed that there is a prima facie case and thirdly that the Government of India after considering the available material and having regard to the nature of the allegations against the appellant, the circumstances of the case is satisfied that it is necessary and desirable to place the appellant under suspension.
At the hearing of the appeal Mr. Solicitor General produced the correct copy of the First Information Report dated 17 August, 1967 under section 154 of the Code of Criminal Procedure.
It will appear from the report that the appellant was charged with offences under the Prevention of Corruption Act, 1947 and the time of occurrence was the period 1960 to 1967.
Sub rule (3) of Rule 7 states that a member of the Service in respect of, or against whom, an investigation, inquiry or trial relating to a criminal charge is pending may, at the discretion of the Government under which he is serving, be placed under suspension until the termination of all proceedings relating to that charge.
The appellant contended that the appellant was not suspended under sub rule (3) of Rule 7.
That is a contention The facts are that there was an investigation and the trial is awaiting relating to a criminal charge against the appellant.
The order of suspension has to be read in the context of the entire case and 1 2 5 combination of circumstances.
This order indicates that the Government applied its mind to the allegations, the enquiries and ;the circumstances of the case.
The appellant has failed to establish that the Government acted mala fide.
There is no allegation against any particular officer of the Government of India about acting mala fide.
The order or suspension was made under subrule (3) and does not suffer from any vice of infringement of Rule 7.
The appellant made allegations against the Chief Minister of Andhra Pradesh and other persons some of whose names were disclosed and some of whose names were not disclosed.
Neither the Chief Minister nor any other person was made a party.
The appellant filed an affidavit in support of the petition.
Neither the petition nor the affidavit was verified.
The affidavits which were filed in answer to the appellant 's petition were also not verified.
The reason for verification of affidavits are to enable the Court to find out which facts can be said to be proved on the affidavit evidence of, rival parties.
Allegations may be true to knowledge or allegations may be true to information received from persons or allegations may be based on records.
The importance of verification is to test the genuineness and authenticity of allegations and also to make the deponent responsible for allegations.
In essence verification is required to enable the Court to find out as to whether 'it will be safe to act on such affidavit evidence.
In the present case, the affidavits of all the parties suffer from the mischief of lack of proper verification with the result that the affidavits should not be admissible in evidence.
The affidavit evidence assumes importance in the present case because of allegations of mala fide acts on the part of the respondents.
The appellant alleged that the Union of India made the order of suspension because of the pressure of the Chief Minister of the State of Andhra Pradesh.
The appellant, however, did not name any person of the Union of India who acted in that manner and did not implied the Chief Minister as a party.
In order to succeed on the proof of mala fides in relation to the order of suspension, the appellant has to prove either that the order of suspension was made mala fide or that the order was made for collateral purposes.
In the present case, the appellant neither alleged nor established either of these features.
The appellant contended that the report of the Central Bureau of Investigation was made mala fide.
The appellant appeared before the investigation authorities.
We ate not concerned with the correctness and the propriety of the report.
We have only to examine whether the order of suspension was warranted by the rule and also whether it was in honest exercise of powers.
The order of suspension satisfied both the tests in the present case.
126 In view of the fact that the criminal case is pending, it is desirable not to express any opinion on the merits and demerits of the charges as also the rival contentions of the parties because such an opinion may cause prejudice.
The appellant raised a contention as to the vires of the and the validity of the investigation.
In view of the fact that sanction for the trial is pending pursuant to the investigation under the First Information Report dated 17 August, 1967 the appellant did not want a decision on this point in this appeal because the appellant would raise that contention in the criminal case.
We have, therefore, left open the contention as to the to enable the appellant to agitate that contention, if so advised, in the criminal trial.
The appeal, therefore, fails and is dismissed.
In view of the fact that there was no order as to costs in the High Court, we are of opinion that each party should bear its costs in this Court.
G.C. Appeal dismissed.
| IN-Abs | The appellant was appointed to the Indian Police Service in 1935.
in November 1956 he was posted in Andhra Pradesh as Inspector General of Police and in August 1967 he was posted as Special Inspector General of Police for revision of Police Standing Orders.
In that year the Chief Minister of Andhra Pradesh ordered the Chief Secretary to make an enquiry with regard to certain allegations against the appellant.
The Chief Secretary recommended that the matter be referred to the Vigilance Commissioner who advised that the matter be investigated by the Central Bureau of Investigation.
Thereafter the said Bureau made an enquiry, considered the appellant 's explanations and made a report.
In July 1968 the Government of India, Ministry of Home Affairs placed the appellant under suspension.
The appellant filed a writ petition in the High Court at Delhi and failing there filed an appeal in this Court.
The appellant 's contentions that fell for consideration were (i) that under sub r.
(1) of R. 7 of the All India Service (Appeal and Discipline) Rules, 1955 the order of suspension could be made only if disciplinary proceeding was initiated and the Government was satisfied that there should be an order; in the present case the order did not satisfy this condition and was therefore bad; (ii) that the Chief Minister of Andhra Pradesh was hostile to him and the investigation by the Central Bureau of Investigation was conducted by persons hostile to him; the Ministry of Home Affairs should not have relied on the report since the enquiry was initiated and conducted mala fide.
HELD, : (i) The order in question had no reference to sub r.
(1) of R. 7, but was an order under R. 7(3) which states that a member of the service in respect of or against whom an investigation inquiry or trial is pending may, at the discretion of the Government under which he is serving be placed under suspension until the termination of all proceedings relating to the charge.
The appellant, as appeared from the First Information Report against him stood charged with offences, under the Prevention of Corruption Act and the time of occurrence was the period 1960 to 967.
There was an investigation and the trial was awaiting relating to the criminal charge against the appellant.
The order of suspension had to be read in the context of the entire case and the combination of circumstances.
This order indicated that the Government applied its mind to the allegations, the enquiries and the circumstances of the case.
The appellant had failed to establish that the Government acted mala fide.
There was no allegation against any particular officer of the Government of India about being mala fide.
The order of suspension, thus made under sub r.
(3) did not suffer from any vice of infringement of R. 7(1).
[124 D 125 B] (ii)The affidavits of the parties in the present case suffered from the mischief of lack of verification with the result that the affidavits should C.I./70 9 122 not be admissible in evidence.
The importance of verification is to test the genuineness and authenticity of allegations and also to make the deponent responsible for allegations.
in essence verification is required to enable the court to find out as to whether it will be safe to act on such affidavit evidence.
[125 C E] The affidavit evidence assumed importance in the present case because of allegations of mala fide acts on the part of the respondents.
The appellant did not name any person of the Union of India who acted in that manner and did not implied the Chief Minister as a party.
In order to succeed on the proof of mala fides in relation to the order of suspension, the appellant had to prove either that the order of suspension was made mala fide or that the order was made for collateral purposes.
The appellant had neither alleged nor established either of these features.
[125 F G] The allegation of mala fide against the Central Bureau of Investigation did not arise for consideration because what was in question was not its report but the order of suspension which satisfied R. 7(3) and was in honest exercise of powers.
[125 H]
|
Appeal No. 2373 of 1966.
Appeal from the judgment and order dated September 1964 of the Bombay High Court Nagpur Bench in Special Civil Appli cation No. 471 of 1964.
178 C.B. Agarwala, G., L. Sanghi, P. N. Kukde and A. G. Ratna parkhi, for the appellants Nos. 1, 2 and 4 to 6.
R. M. Hazarnavis and A. G. Ratnaparkhi, for appellant No.3.
section T. Desai, M. section Gupta and section K. Dhingra, for respondent No. 1.
N. section Bindraand section P. Nayar, for respondents Nos. 2 and 3.
The Judgment of the Court was delivered by Shah, J.
Gendalal hereinafter called 'the mortgage ' filed Suit No. 11 of 1939 for recovery of the amount due under a deed of mortgage of proprietary rights in certain villages executed in 1929 by Prahlad father of the appellant.
A preliminary mortgage decree was passed declaring that Rs. 2,16,309/11/9 were due on the mortgage.
The decree was made absolute for sale.
The mortgage commenced in 1948 proceedings for executing the decree.
On March 31, 1951, the Madhya Pradesh Abolition of Pro prietary Rights (Estates, Mahals, Alienated Lands) Act 1 of 1951 was brought into force.
By virtue of section 3 of that Act the proprietary rights of holders of estates, mahals, alienated villages.
and alienated lands stood vested in the State.
Chapter IV of the Act provided for "determination of debts".
The mortgagor Prahlad applied on April 26, 1951 to the Claims Officer under section 19 of that Act for "determination of the debt" due to the mortgagee and for scaling down the debt.
The mortgagee contended that the debt had, by adjudication of the Court, been merged into a decree and there was no "secured debt" which could be determined or scaled down.
The Claims Officer held that there was a debt due to the mortgagee, that it was a secured debt, and that he had jurisdiction to "determine the debt".
On November 19, 1951 the Claims Officer directed the mortgagee to submit a statement of the claim under section 22 of the Act.
Against the order of the Claims Officer, the mortgagee appealed to the Board of Revenue.
Following the judgment of the Nagpur High Court in Ramkishan vs Board of Revenue, Madhya Pradesh(1), the Board of Revenue set aside the order holding that the Claims Officer had no jurisdiction to decide the question Whether there was a secured debt, and that the Civil Court alone was competent to decide that question.
In the execution application filed by the mortgagee the Additional District Judge held that there was a secured debt within the meaning of section 19 read with section 17(1) of the Act due to the mortgagee under the mortgage, notwithstanding the decree passed by the Civil Court.
(1) I.L.R 179 On October 3, 1955, the High Court of Nagpur in Jethalal Bhawanji vs Prabhakar Sadashiv(1) overruled the Judgment in Ramkrishna 's case (2 ) , and held that the Claims Officer had jurisdiction to decide whether a debt was a secured debt.
The mortgagee then filed on January 23, 1958, a statement of his claim.
On March 26, 1958, the appellant son of the original mortgagor Prahlad contended that the debt stood discharged because the mortgagee had failed to file a statement of his claim as ordered on November 19, 1951 by the Claims Officer.
By order dated December 24, 1962 the Claims Officer upheld the contention of the appellant.
Against that order the mortgagee preferred an appeal to the Commissioner, Nagpur Division.
At the hearing of the appeal, the appellant contended that the Commissioner had no jurisdiction to hear the appeal.
The Commissioner rejected the contention of the appellant and set aside the order of the Claims Officer discharging the debt.
A petition moved by the appellant in the ' High Court of Bombay at Nagpur challenging the order passed by the Commis sioner was summarily dismissed.
With certificate granted by the High Court, this appeal has been preferred.
Counsel contended that the mortgagee failed to file a state ment of account pursuant to the order dated November 19, 1951 by the Claims Officer, and by virtue of section 22 of the Madhya Pradesh Abolition of Proprietary Rights (Estates, Mahals, Alienated Lands) Act 1 of 1951 the debt stood discharged.
But the order of the Claims Officer holding that there was a secured debt was set aside in appeal by the Board of Revenue.
Any proceeding consequent upon that adjudication was, in view of the judgment of the Board of Revenue, unauthorised.
That decision of the Board of Revenue became final between the parties.
It cannot be contended that because in another proceeding the High Court of Nagpur expressed the view that the judgment on which the Board of Revenue relied was erroneous, the direction of the Claims Officer requiring the mortgagee to file his statement of account was revived, and if the directions of the Claims Officer word not complied with, the debt due to the mortgagee was discharged.
The order of the Claims Officer was reversed by the Board of Revenue, and all directions given by the Claims Officer, pursuant to his order calling upon the mortgagee to file a statement of his claim, stood annulled.
The Nagpur High Court in Jethalal Bhawanji 's case(1), it is true, decided that the Claims Officer was competent under section 23 of M.P. Act 1 of 1951 to determine whether a debt is a secured debt.
But the first order of the Claims Officer was annulled by order of the Board of (1) I.L.R. (2) I.L.R. (19541 Nag.
180 Revenue and thereafter that officer did not pass any order under section 22 of Act 1 of 1951 directing that the proceeding shall continue, and further directing that a notice shall issue calling upon the mortgagee to file a statement of the claim.
Until a notice, valid in law, directing that a statement be filed was served upon the mortgage and he failed to comply with it, the debt could not be discharged.
Section 22 enacts a penal provision and unless the conditions precedent are satisfied, the debt could not by operation of the statute be discharged).
The High Court was right in dismissing the petition.
The appeal fails and is dismissed with costs.
| IN-Abs | A mortgagor applied to the Claims Officer under section 19 of the Madhya Pradesh Abolition of Proprietary Rights (Estates, Mahals and Alienated Lands) Act 1 of 1951 for determination of the debt due to the mortgagee and for scaling down the debt.
The mortgagee contended that the debt, by adjudication of court, had been merged into a decree and there was no secured debt which could be determined or scaled down.
The Claims, Officer held that there was a debt due to the mortgagee, that it was a secured debt and that he had jurisdiction for "determining the debt" and directed the mortgagee to submit a statement of the claim under section 22 of the Act.
On appeal by the mortgagee, the Board of Revenue, following the judgment of the High Court in Ramkishan vs Board of Revenue, Madhya Pradesh I.L.R. , held that the Claim Officer had 'no jurisdiction to decide whether the debt was a secured debt.
Upon the High Court overruling Ramkrishna 's case in Jethalal Bhawanji vs Prabhakar Sadasiv I. , the mortgagee field a statement of his claim before the Claims Officer.
The mortgagor contended that the debt stood discharged under section 22 of the Act as the mortgagee had failed to file a statement of his claim as originally directed by the Claims Officer.
The Claims Officer upheld the contention.
The Commissioner in appeal set aside the order of the Claims Officer discharging the debt and a petition in the High Court against the Commissioner 's order was summarily dismissed.
Dismissing the appeal to this Court, HELD : Section 22 enacts a penal provision and unless the conditions precedent are satisfied, the debt could not by operation of the statute be discharged.
In the present case the order of the Claims Officer was reversed by the Board of Revenue, and all directions given by the Claims Officer, pursuant to his order calling upon the mortgagee to file a statement of his claim, stood annulled.
Thereafter the Claims Officer did not pass any order under section 22 of the Act 1 of 1951 directing that the proceeding shall continue and further directing that a notice shall issue calling upon the mortgagee to file a statement of the claim.
Until a notice, valid in law, directing that a statement be filed was served upon the mortgagee and he failed to comply with it, the debt could not be discharged.
[179 G 180 B]
|
iminal Appeal No. 72 of 1952.
Appeal by Special Leave from the Judgment and Order dated the 30th November, 1950, of the High Court of Judicature at Nagpur (Dev and Rao JJ.) in Contempt of Court Proceedings Miscellaneous Petition No. 16 of 1950.
Dr. Bakshi Tek Chand, (Hardyal, Hardy, B. R. Mandlekar, B. D. Kathalay, Ganpat Rai and K. L. Arora, with him) for the appellant.
C. K. Daphtary, Solicitor General for India (T. P. Naik and I. N. Shroff, with him) for respondent No. 1.
T. L. Shevde, Advocate General for the State of Madhya Pradesh, (T. P. Naik and I. N. Shroff, with him) for respondent No. 2.
B. Sen and I. N. Shroff for respondent No. 3. 1954.
October 15.
The Judgment of the Court was delivered by MEHR CHAND MAHAJAN C.J.
This appeal by special leave arises out of contempt proceedings taken against two very senior members of the Nagpur Bar and one of their clients.
Shri Shareef, one of the appellants, at one time was Minister for Law and Justice in the State.
Dr. Kathalay, the second appellant, is a Doctor of Laws and an author of legal works.
The matter which resulted in the issue of the show cause notices for contempt took a protracted course and has to a certain extent resulted in embittered feelings.
What happened was this: Shri Zikar who was charged along with the two appellants for contempt made an application under article 226(1) of the Constitution for enforcement of his fundamental right, alleging that he was a citizen Of Bharat and that the Custodian of Evacuee Property and the police were taking wrongful action against him and treating him as a national of Pakistan which he never was.
He prayed for an interim order of prohibition against the State from deporting him after the expiry of the permit.
The High Court granted the interim order of prohibition against the action complained.
At the hearing of the case on 11th August, 759 1950, a preliminary objection was raised on behalf of the State that Zikar had suppressed material facts in the petition filed by him and that the petition was therefore liable to be dismissed without going into the merits.
Shri Shareef, who was counsel for Zikar, combated this contention and further submitted that the preliminary objection could not be adequately dealt with without going into the merits of the case.
On behalf of the State another affidavit was filed on 17th August, 1950, stating certain facts, and Zikar was also directed to file an affidavit in reply by the 21st August, 1950, and this be did by that date.
The relevant proceedings of that date are recorded in these terms: " Shri Shareef for the petitioner.
Shri Naik for the respondent.
He files an affidavit and copies of applications dated 25th February, 1949 and 19th January, 1950.
Shri Shareef files a statement and an affidavit.
His attention was drawn to paragraph 4 of the affidavit and he was asked whether his client has really understood the contents which are in English adding that he might change in the Supreme Court and say that he had not understood them.
Shri Shareef then said that he has explained the contents to his clients.
Paragraph 6 of the statement and the affidavit is uncalled for as the appellant only desired to file an affidavit with reference to paragraph 10 of the affidavit of the non applicant: Vide order sheet dated 17th August, 1950.
A remark was made by one of us " Whether paragraph 6 was inserted for founding an argument before the Supreme Court.
" Shri Shareef replied he has stated facts. . .
Thereafter Shri Naik continued his arguments on the preliminary point till we rose for lunch.
When we reassembled Shri Shareef informed us that he wants time to apply for transfer of this case to another Bench because of the observations made by us regarding paragraphs 4 and 6 of his affidavit.
Case is therefore adjourned to 25th August, 1950 to enable Shri Shareef to make an application in the meanwhile.
" On the 23rd August, 1950, an application for the transfer of the case from the Bench hearing it to 760 another Bench of the High Court was made on the following grounds: 1 "The observations and references to the Supreme Court by Rao and Deo JJ.
created a bona fide belief in the applicant 's mind that they were prejudiced against him and had made up their minds and indicated that he shall have to go in appeal to the Supreme Court.
The observations and references to the Supreme Court were absolutely unnecessary and left no doubt in the applicant 's mind that he would not receive justice at the hands of the Hon 'ble Judges.
Prayer: In the interest of dispensation of impartial justice, the case be transferred to another Civil Division Bench for disposal.
" This application was not only signed by Zikar but also by the two appellants as counsel for the applicant and was rejected in due course and with that matter we are no longer concerned.
The preliminary objection raised by the State was upheld and the petition under article 226 was dismissed.
The learned Judges then ordered notices to issue to the applicant and his two counsel to show cause why they should not all be committed for contempt for scandalizing the Court, with a view to perverting the due course of justice by making statements in the transfer application impeaching the impartiality of the Judges.
Dr. Kathalay filed his written statement in reply to the show cause notice, on the 4th October, 1950.
He averred that he could not honestly admit that he scandalized the Court and committed contempt either in fact or in law and contended that in his whole career at the Bar for forty years he observed the highest traditions of this learned profession, upholding always the dignity of the Courts and that he had no animus against the Judges of the Division Bench.
He asserted that by signing the application he did not scandalize or intend to scandalize the Court and that he bona fide thought that an application could be made for transferring a case in the High Court from one Bench to another and that the question did not concern him alone but 761 the Bench and Bar generally and a question of great principle emerged, viz., whether a counsel was guilty of contempt in signing such an application, or whether it was his professional duty to do so if his client was under that bona fide impression.
In the last paragraph of the reply it was stated " Whatever the circumstances, I do see how much this application for transfer dated the 23rd August, 1950, has hurt the feelings of the Hon 'ble Judges and I very much regret that all this should have happened.
" Shri Shareef also put in a similar written statement.
He asserted that when the transfer application was made he did not know or believe the law to be that it could not be made, and rightly or wrongly he was always under the impression that an application could be made for transferring a case in the High Court from one Bench to another.
He also expressed similar regret for what had happened.
Further written statement was filed by Shri Shareef on 16th October, 1950.
In paragraph 7 of that statement he said as follows: ' "I was grieved to know that the accusation against me in these proceedings should be of malice and mala fides for my taking up Zikar 's brief in connection with his application for transfer, dated the 23rd August, 1950.
If I am thus defending the proceedings, I am doing so for vindicating my professional honour and personal self respect, and it would be a misfortune if this was all going to be construed as aggravating the contempt, as hinted by the Hon 'ble Court during my counsel 's arguments, though remotely.
But even as I am making my defence, it is, I admit, quite likely that I committed an error of judgment in acting as I did, causing pain to the Hon 'ble Judges, which I deeply regret, as I have already done before and so has my counsel on my behalf in the course of his arguments." (The Judges in the Judgment under appeal have taken exception to the last sentence of this paragraph.) Dr. Kathalay also put in a similar reply.
The High Court in a very lengthy judgment in which very large number of authorities were considered and 762 discussed, held that the application for transfer constituted contempt because the Judges were scandalized with a view to diverting the due course of justice.
The two advocates who signed and prosecuted the application were found guilty of contempt.
As regards the plea of error of judgment, this is what the learned Judges said: " The attitude of defiant justification adopted by them in spite of our pointing out at a very early stage in these proceedings that we would be prepared to consider any mistake on their part renders it difficult for the court to accept the belated plea of an error of judgment.
Even the expression 'error of judgment ' was not so much mentioned in the argument until the last day of the argument.
We have already shown in para.
100 how it was introduced in the two statements on 16th October, 1950, quite contrary to fact.
If the two advocates felt that there was an error of judgment on their part, it would have been more appropriate to make a candid and clear admission of that and make reparation for the injury done by an adequate apology.
We cannot treat the expression 'I very much regret that all this should have happened ' as an apology at all.
Nor were we ever asked to treat it as such.
What is it that the two advocates regret ? So man things have happened since 21st August, 1950.
Any expression of regret to merit consideration must be genuine contriteness for what the contemners have done.
" In the result the learned Judges passed the following order : " We accordingly sentence Shri M. Y. Shareef to pay a fine of Rs. 500 or in default to undergo simple imprisonment for two weeks and we Sentence Dr. D.W. Kathalay to pay a fine of Rs.
1000 or in default to undergo simple imprisonment for one month.
We are not sure if the sentences we have awarded are adequate to the gravity of the offence, but on this occasion we refrain from being stern and bringing the full power of the court into play considering the misconceptions about the advocate8 ' responsibility that seem to have so far prevailed at any rate in a section of the Bar." 763 Leave to appeal to this Court was refused but was granted here.
On the 12th May, 1954, when the appeal was heard by this Court, we recorded the following order: "The appellants have tendered an unqualified apology to this court and to the High Court, and they are prepared to purge the contempt for which they have been convicted.
In our opinion, the apology is a sincere expression of their regret for what happened in court at the time the transfer application was made and for the allegations made therein.
We therefore adjourn this appeal for two months and direct that the apology tendered here be tendered to the Division Bench before which the contempt is said to have been committed.
We are sending it to the High Court with the full confidence that the learned Judges will consider the apology in the spirit in which it has been tendered and they will pass appropriate orders and send an intimation to this court as to what orders they pass.
" When the case went back to the High Court, it again took an unfortunate turn.
The learned Judges posed the question that they had to consider in this form " The question is whether remission of the punishment awarded is called for in view of the statement now filed by the contemners," and it was answered thus: " We are constrained to observe that the spirit in which the apology was tendered here is not much different from that originally shown.
The idea of the contemners is that because they have filed the apology as directed, they have a right to expect the acceptance of it by the court.
How else can the absence of any prayer or what the contemners desire be explained ? We record that there was hardly anything apologetic the way the apology was tendered. . . .
We neither gave the extreme penalty which we might well have given, nor did we give the maximum of the lesser penalty.
But for the manner of justification and the contumacy, there might not have been a sentence of fine at all." 764 Having approached the matter thus, the learned Judges referred to a large number of cases for the admitted proposition of law that a " sincere apology does not entitle a contemner as of right to a remission of the sentence.
" It was further thought that acceptance of apology would lead to an invidious distinction being made in the case of two advocates and Zikar.
In the result the apology was not accepted and the report concluded with the following observations : " If in the circumstances of this case the apology were to be accepted, we would be encouraging the notion that it is the contemners 's right to get his apology accepted when he chooses and in whatever manner he tenders even in a case where he has aggravated the original offence.
We will be unsettling established principles, and setting a bad precedent.
Above all, we would be dealing a blow to the authority of the court, the consequence of which cannot be viewed with equanimity.
" When the appeal came back to us, we asked Dr. Tek Chand who appeared for the two advocates whether his clients were even now genuinely sorry for signing the transfer application and whether the expression of regret made in this Court was a genuine expression of their feelings, Dr. Tek Chand replied in the affirmative and emphatically said " Absolutely".
In this situation, the question for consideration in the appeal now is whether the two appellants have purged the contempt by tendering an unqualified apology in this Court as well as to the High Court, the genuineness of which has been again emphasized by their counsel before us, or whether the sentence of fine awarded to them by the High Court should necessarily be maintained for upholding the authority and dignity of the Court The proposition is well settled and self evident that there cannot be both justification and an apology.
The two things are incompatible.
Again 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 intended to be evidence of real contriteness.
The appellants having tendered an 765 unqualified apology, no exception can be taken to the decision of the High Court that the application for transfer did constitute contempt because the judges were scandalized with a view to diverting the due course of justice, and that in signing this application the two advocates were guilty of contempt.
That decision therefore stands.
The fact however remains, as found by the High Court, that there was at the time these events happened considerable misconception amongst a section of the Nagpur Bar about advocates ' responsibilities in matters of signing transfer applications containing allegations of this character.
It cannot be denied that a section of the Bar is under an erroneous impression that when a counsel is acting in the interests of his client, or in accordance with his instructions he is discharging his legitimate duty to his client even when he signs an application or a pleading which contains matter scandalizing the Court.
They think that when there is conflict between their obligations to the Court and their duty to the client, the latter prevails.
This misconception has to be rooted out by a clear and emphatic pronouncement, and we think it should be widely made known that counsel who sign applications or pleadings containing matter scandalizing the Court without reasonably satisfying themselves about the prima facie existence of adequate grounds there for, with a view to prevent or delay the course of justice, are themselves guilty of contempt of Court, and that it is no duty of a counsel to his client to take any interest in such applications; on the other hand, his duty is to advise his client for refraining from making allegations of this nature in such applications.
Once the fact is recognized as was done by the High Court here, that the members of the Bar have not fully realized the implications of their signing such applications and are firmly under the belief that their conduct in doing so is in accordance with professional ethics, it has to be held that the act of the two appellants in this case was done under a mistaken view of their rights and duties, and in such cases even a qualified apology may well be considered by a Court.
In border 98 766 line cases where a question of principle about the rights of counsel and their duties has to be settled, an alternative plea of apology merits consideration; for it is possible for a judge who hears the case to hold that there is no contempt in which case a defence of unqualified apology is meaningless, because that would amount to the admission of the commission of an offence.
In this case the learned judges themselves had to wade through a large volume of English and Indian case law before they could hold that the act of the appellants constituted contempt and thus it could not be said that the matter was so patent that on the face of it their act amounted to contempt.
Moreover, it appears from the proceedings that the counsel were genuinely under the belief that their professional duties demanded that, when their client was under a bonafide belief that the Court was prejudiced against him and decided to apply for transfer, the were bound to take his brief and sign the application.
We cannot help observing that the admitted reference by the judges to the Supreme Court in their remarks during the course of the hearing was unfortunate and seems to indicate an unnecessary and indecorous sensitiveness which may well have been misunderstood by the party and the advocates.
The counsel seem to have genuinely believed that they were right in what they did, though as a matter of fact if they had studied the law more deeply, they would not have done so.
In these circumstances it cannot be said that what they did was wailful and their conduct in getting the law settled in this matter by raising the defence that they did was contumacious.
The authorities relied upon by the High Court have no application to cases of this character.
How else is the validity of a defence of this kind to be settled, except by an argument that the counsel was entitled in the interests of his client to advise a transfer and give grounds for that transfer which were bona fide believed by the client.
Every form of defence in a contempt case cannot be regarded as an act of contumacy.
It depends on the circumstances of each case and on the general impression about a particular rule of ethics amongst the members 767 of the profession.
The learned Judges, as already said, have themselves said that such an impression was prevalent since along time amongst a section of the Bar in Nagpur.
It was thus necessary to have that question settled and any effort on the part of these two learned counsel to have that point settled cannot be regarded as contumacy or a circumstance which aggravates the contempt.
We think that the expression of regret in the alternative in this case should not have been ignored but should have been given due consideration.
It was made in the earliest written statement submitted by the counsel and cited above.
Once however the High Court found that they were guilty of contempt, they would have been well advised to tender an unqualified apology to that Court forthwith.
But perhaps they were still under the delusion that they were right and the Court was in error, and that by coming to this Court they might be able to have the q uestion of principle settled as they contended.
As soon as we indicated to the learned counsel that they were in error, they and their counsel immediately tendered an unqualified apology which, as already indicated, was repeated again in absolute terms at the second hearing.
We have not been able to appreciate why the learned Judges of the High Court should have doubted the genuineness of this apology.
It certainly was not the object and could not be the object of the learned Judges of the High Court to humiliate senior counsel and to expect something more from them than what they had already done in this Court.
While unhesitatingly deprecating very strongly the conduct of the appellants in scandalising the Court by becoming parties to an unnecessary and untenable transfer application, we still feel that in the matter of measure of punishment the High Court should have after an unqualified apology was tendered taken a different view.
We have no doubt that whatever the learned Judges of the High Court did in this case, they did in the firm belief that the dignity of the Court had to be maintained and the members of the Bar, howsoever big or learned, cannot be allowed to scandalize the judges or to divert the course of justice 768 by attempting to take a case out from one Bench to another Bench of the Court when they find that the Bench is expressing opinions seemingly adverse to their clients.
We have firm hope that this kind of conduct will not be repeated by counsel in any High Court in this country, and no more test cases of this kind would have to be fought out.
In the peculiar circumstances of this case and in view of the circumstance that the learned Judges themselves were of the opinion that there would not have been a sentence of fine at all if there was no plea of justification and there was no contumacy, we are of the opinion that the unqualified apology was sufficient to purge the contempt committed by the two appellants as we have reached the conclusion contrary to that arrived at by the High Court that the plea of justification in this case did not amount to contumacy.
It has also to be kept in view that condemnation for contempt by a High Court of senior members of the Bar is itself a heavy punishment to them, as it affects them in their professional career and is a great blot on them.
There has been nothing said in the lengthy judgment of the High Court that these counsel in their long career at the Bar have ever been disrespectful or discourteous to the Court in the past.
This one act of indiscretion on their part in signing the application should not have been viewed in the very stringent manner in which the High Court viewed it in the first instance and viewed it again after we had sent the case back to it.
It is not the practice of this Court in special leave cases and in exercise of our over riding powers to interfere with a matter which rests in the discretion of the High Court except in very exceptional cases.
After a careful consideration of the situation that arises in this case we have reached the decision that the dignity of the High Court would be sufficiently upheld if the unqualified apology tendered in this Court in the first instance and reiterated in absolute terms by Dr. Tek Chand again at the next hearing is accepted and that apology is regarded as sufficient to purge the contempt.
The matter has become very stale and the ends of justice do not call for maintaining the punishment of fine on two senior 769 counsel for acting wrongly under an erroneous impression of their rights and privileges.
For the reasons given above we allow this appeal to the extent that the sentence of fine passed on both the appellants is set aside, and the unqualified apology given by them to this Court and the High Court is accepted.
We also desire to issue a strong admonition and warning to the two counsel for their conduct.
There will be no order as to costs in these proceedings throughout.
Appeal allowed.
| IN-Abs | A section of the Bar seems to be labouring under an erroneous impression that when an advocate is acting in the interests of his client or in accordance with his instructions he is discharging his legitimate duty towards him even when he signs an application or a pleading which contains matter scandalizing the Court and that when there is conflict between his obligations to the Court and his duty to the client, the later prevails.
It should be widely made known that an advocate who signs an application or pleading containing matter scandalizing the Court which tends to prevent or delay the course of justice is himself guilty of contempt of Court unless he reasonably satisfies himself about the prima facie existence of adequate grounds there for and that it is no duty of an advocate to his client to take any interest in such applications ; on the other hand, his duty is to advise his client for refraining from making allegations of this nature in such applications.
It is well settled that in a matter relating to the contempt of Court there cannot be both justification and an apology.
The two things are incompatible.
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 intended to be evidence of real contri teness.
In border line cases where a question of principle about the rights of an advocate and his duties has to be settled an alternative plea merits consideration, for it is possible for a judge who hears the case to hold that there is no contempt in which case a defence of unqualified apology is meaningless, because that would amount to the admission of the commission of an offence.
Every form of defence in a contempt case cannot be regarded as an act of contumacy.
It depends on the circumstances of each case and on the general impression about a particular rule of ethics amongst the members of the profession.
97 758
|
Appeal No. 97 of 1966.
Appeal from the judgment and decree dated January 11, 1962 of the Madhya Pradesh High Court in First Appeal No. I 1 5 of 1958.
M. section Gupta, for the appellants.
I. N. Shroff for respondent No.1 .
The Judgment of the Court was delivered by P. Jaganmohan Reddy, J.
This appeal is by certificate granted by the High Court of Madhya Pradesh under Article 133 (i) (a) of the Constitution of India against its judgment and decree by which it reversed the judgment and decree of the Addl.
209 District Judge, Ambikapur.
The High Court held that the claim of the appellant on the promisory note executed by the Maharaja of Surguja an erstwhile Ruler whose state was merged in Madhya Pradesh, could not be enforced against the Ist Respondent the State of Madhya Pradesh because after the cession of the erstwhile State, the new State had not expressly or impliedly undertaken to meet that liability.
In other words, the plea of 'an act of 'State ' raised by the 1st respondent was accepted.
The circumstances in which the suit was filed by the appellants and the array of parties may now be stated.
Appellants 1, 2, 3 and deceased Hira Lal were brothers and members of a Joint Hindu family.
Appellant 4 is the wife of Hira Lal, appellants 5 to 7 are his sons and appellant 8 is the grand son.
All these appellants along with appellants I to 3 constitute a Joint Hindu family which was carrying on business of construction of buildings under the name and style of Hira Lal & Bros. at Ambikapur in the erstwhile State of Surguja.
The allegations in the suit filed by the appellant against the respondent State was that they had constructed buildings of the District Court and the Secretariat at Ambikapur in 1936.
The work was completed but in so far as payment was concerned, there was a difference of opinion about the measurements etc.
but ultimately it was decided to pay to the appellants Rs. 80,000 on account of the said construction and accordingly the Maharaja of Surguja 2nd respondent executed a promisory note in favour of the appellants on 27 9 1947 for Rs. 80,000 with interest @ Rs. 3 per annum.
Thereafter the Madhya Pradesh Government took over the administration of the State of Surguja on 1 1 48 after the merger of the Chattisgarh State and consequently the Court building as well as Secretariat building.were taken possession of by the Government.
When the appellants claimed the money from the State of Madhya Pradesh, it neither accepted the claim nor paid them.
The appellants after giving a notice u/s 80 of the Code of Civil Procedure filed a suit.
On the pleadings, the Trial Court had framed several issues but it is unnecessary to notice them in any great detail except to say that the claim of Rs. 80,000 was held to be valid, that this amount was payable on account of the construction of the build, , things known as Court, and Secretariat buildings, that the promote was not without consideration, that the first defendant was the successor in interest of Surguja State and is liable to pay the claim with interest and that the amount was not due to the plaintiffs on account of the personal obligation and liability of the 2nd respondent.
The Court also found against the first respondent on the issue relating to jurisdiction and negatived the defence that it is not liable because of an act of State.
In so far as the defendant the Maharaja of Surguja was concerned, it held that the suit was 210 not maintainable against him without the consent of the Central Govt.
as required under section 86 of the Civil Procedure Code and that the liability was not a personal obligation of the Maharaja but an obligation" incurred on account of his State.
In the result as we said earlier the Court awarded a decree for Rs. 87,200 with full cost against the first defendant and discharged the second defendant.
In appeal the High Court noticing that it is the admitted case of the parties that the District Court and the Secretariat building were public property and were in the possession of the first defendant as such and that that the liability in respect thereof was incurred by the Maharaja was not merely his personal liability but was a liability incurred on behalf of the State of Surguja, however, reversed the judgment of the Trial Court by holding "the the liability of the State of Surguja under the pronote was at best a contractual liability and this liability could only be enforced against the State of Madhya Pradesh if after the cession of the erstwhile State of Surguja, the new State had expressly or impliedly, undertaken to meet that liability" which it had not done.
When this appeal came up on an earlier occasion, a Civil Miscellaneous Petition 429 of 1969 was filed by the appellant; that inasmuch as the petitioners had been advised to approach the State Govt.
again for making proper representation and to canvass their claim before the appropriate authority on the basis of the concurrent findings of the Courts below and or any other appropriate orders, permission may be accorded to them to pursue this course.
The Respondents advocate did not oppose this petition and accordingly the matter was adjourned.
But it would appear that no concrete results could be achieved.
In this appeal what we have to consider is whether the plea of an act of State is sustainable having regard to the concurrent findings of the Court namely that the Court and Secretariat buildings were constructed by the appellants, that the erstwhile Maharaja the second respondent had admitted the claim and executed a. promisory note, that the liability was incurred in respect of public buildings for which the State of Surguja was liable.
The fact that appellants were asked to supply details of their claim and the first respondent was prepared to consider it has been urged as being tantamount to the acceptance of the liability.
In our view no such inference can be drawn.
It is open to the State to examine and to satisfy itself whether it is going to honour the liability or not, but that is not to say that it had waived its defence of an act of State if such a defence was open to it.
What constitutes an act of State has been considered and the principles enunciated in numerous cases both of the Privy Council and of this Court have been stated.
Many of these, decisions were examined and discussed by the High Court in its judgment and it is unnecessary for (1) 211 us to re examine them in any great detail.
These decisions lay down clearly that when a territory is acquired by a sovereign state for the first time that is an act of State.
As pointed out in Raja Rajender Chand vs Sukhi & other( ') that it matters not how the acquisition has been brought about.
It may be by conquest, it may be by cession following on treaty, it may be by occupation of territory hitherto unoccupied by a recognised ruler.
In all cases the result is the same.
Any inhabitant of the territory can make good in the Municipal Courts established by the new sovereign only such rights as that sovereign has, through his officers, recognised.
The principle upon which the liability of an erstwhile ruler is contested by the plea of an act of State "is an exercise of sovereign power against an alien and neither intended nor purporting to be legally founded.
A defence of this kind does not seek to justify the action with reference to the law but questions the very jurisdiction of the Courts to pronounce upon the legality or justice of the Action 's vide State of Saurashtra vs Memon Haji Ismail( ').
In Vaje Singh Ji Joravar Singh and others vs Secretary of State for India in Council( '), it was observed : "After a sovereign State has Acquired territory, either by conquest, or by cession under treaty, or by the occupation of territory theretofore unoccupied by a recognized ruler, or otherwise, an inhabitant of the territory can enforce in the Municipal Courts only such proprietary rights as the sovereign has conferred or recognized.
Even if a treaty of cession stipulates that certain, inhabitants shall enjoy certain rights that gives them no right which they can so enforce.
The meaning of a general statement in a proclamation that existing rights will be recognized is that the Government will recognize such rights as upon investigation it finds existed.
The Government does not thereby renounce its right to recognize only such titles as it considers should be recognized, nor confer upon the Municipal Courts any power to adjudicate in the matter".
"It is the acceptance of the claim which would have bound the new sovereign State and the act of State would then have come to an end.
But short of an acceptance, either express or implied, the time for the exercise of the Sovereign right to reject a claim was still open", 212 It appears to us that an act of State is an exercise of sovereign power over a territory which was not earlier subject to its sway.
When such an event takes place, and the territory is merged, although sovereign might allow the inhabitants to retain their old laws and customs or undertake to honour the liabilities etc., it could not be itself bound by them until it purported to act within the laws by bringing to an end the defence of 'act of State '.
The learned advocate for the appellant was unable to refer us to any authority which will justify any variation of this rule, in the case of liability incurred in respect of a public property of the erstwhile State which the successor State has taken over and retains as part ,of its public property.
The judgment of the High Court is in accord with the well recognized principles of law declared from time to time by this Court.
In our view the defence of 'Act of State ' however unreasonable and unjust it may appear to be can be successfully pleaded and sustained by Ist respondent to non suit the appellants.
The appeal is dismissed accordingly but without costs.
R.K.P.S. Appeal dismissed.
| IN-Abs | The appellants constructed certain public buildings in a princely state and the Maharaja admitted the claim of the appellants and executed a promissory note for the amount claimed.
The princely State was merged with State of Madhya Pradesh and the State Government (respondent) took over the possession of the public buildings.
On the question of the liability of the respondent to pay the amount of the promissory note, HELD: (1) The fact that the appellants were asked by the respondent to supply details of their claim did not amount to an acceptance of the liability.
It was open to the respondent to examine and satisfy itself whether it should honour the liability or not and it could not be said that the State had waived its defence.
of Act of State.
(2) An Act of State is an exercise of sovereign power over a territory which was not earlier subject to its sway.
When such an event takes place and territory is merged, although the sovereign might allow the inhabitants to retain their old laws and customs or undertake to honour the liabilities, it could not be itself bound by them until it purported to act within the laws by bringing to an end the defence of Act of State. 'he rule applies even in case of a public property of the erstwhile State which the successor State takes over and retains as part of its public property.
[212 A] Raja Rajender Chand vs Sukhi & Ors.
State of Saurashtra vs Memon Haji Ismali, A. I.R. and Vaje Singh ji Joravar Singh & Ors.
vs Secretary of State for India, 51 I.A. 357, referred to.
|
Appeal No. 1122 of1966.
Appeal from the judgment and decree dated January 29, 1964 of the Calcutta High Court in Appeal from original order No. 28 of 1960.
B. P. Maheshwari and Sobhag Mal Jain, for the appellant.
Niren De, Attorney General, N. section Bindra and section P. Nayar, for the respondent.
The Judgment of the Court was delivered by Vaidialingam, J.
This appeal, by the plaintiffs appellants, on certificate granted by the Calcutta High Court, is directed against the judgment and decree of the Division Bench of that Court, dated January 29, 1964 in Appeal from Original Order No. 28 of 1960, affirming the judgment and decree, dated July 16, 1959 of the learned Single Judge in Suit No. 2745 of 1947.
The circumstances leading up to the institution of the said suit may be stated.
The appellants, who were dealing also in the purchase of new and second hand machinery, on coming to know from an adver tisement in a Daily that the defendant respondent was offering for sale aero scrap, addressed a letter, dated November 6, 1946 to the respondent intimating their desire to purchase the materials advertised for sale, and stating that one of their representatives 129 would be contacting them shortly.
Obviously the parties must have met and decided about the purchase, as is seen from the letter, dated November 18, 1946 addressed by the General Manager of the respondent, to the appellants.
That letter refers to a discussion that the parties had on that day and the respondents confirmed having sold to the appellants the entire lot of aero scrap lying at Panagarh, on the terms and conditions mentioned in the letter.
The material was stated to be in Dump No. 1 near the flight line at Panagarh and the approximate quantity was 4000 tons of aero scrap, more or less.
The letter refers to the appel lants having agreed to pay Rs. 10 lakhs as price of the materials in the said Dump No. 1, against which the receipt, by cheque, of a sum of Rs. 2,50,000 was acknowledged by the respondent.
There is a further reference to the fact that the appellants had agreed to pay the balance of Rs. 7,50,000 that day itself.
The letter also refers to the fact that the price mentioned does not include sales tax to be paid by the appellants and to certain other matters, which are not relevant for the purpose of the appeal.
The letter further says : "The company 's terms of business apply to this contract and a copy of this is enclosed herewith".
We shall refer to the relevant clauses in the company 's terms of business, referred to in this letter, a little later.
It is enough to note, at this stage that those terms of business have been made part of the terms and conditions governing the contract.
On the same day, the appellants sent a reply to the respondent, acknowledging the letter.
The appellants said that they noted that the respondent wants to sell the aero scrap as it is and that it wanted the appellants to pay the full value, viz., the balance of Rs. 7,50,000 at once.
The appellants confirmed the arrangement contained in the respondent 's letter; but regarding payment, the appellants said that they agree to pay the balance amount in two instalments viz., Rs. 2,50,000 on or before November 22, 1946 and the balance of Rs. 5,00,000 on or before December 14, 1946.
,They also further stated that they shall commence taking delivery after making full payment.
The, respondent by its letter dated November 20, 1946 acknowledged the receipt of the appellants ' letter dated November 18, 1946 together with the modifications contained therein.
But the respondent emphasised that the other terms and conditions will be as mentioned in its letter of November 18, 1946.
On November 22, 1946, the appellants sent a communication, purporting to be in continuation of their letter dated November 18, 1946.
In this letter they state that the transaction has been closed without inspecting the materials, merely on the assurance of the respondent that the quantity of aero scrap was about 4,100 tons.
The appellants further state that they have since obtained 130 information that the quantity stated to be available is not on the spot and therefore they cannot do the business.
Under the circumstances, they request the respondent to treat their letter, dated November 18, 1946 as cancelled and to return the sum of Rs. 2,50,000 already paid by them.
The respondent sent several letters to the appellants asking them to pay the balance amount and take delivery of the goods; but the appellants refused to pay any further amount to the respondent.
The respondent ultimately forfeited the entire sum of Rs. 2,50,000 which, according to it, was earnest money and then cancelled the contract.
Now that we have referred to the material correspondence that took place between the parties as well as the final action of the defendant of forfeiting the amount, it is now necessary to advert to certain clauses in the Company 's terms of business which, as mentioned earlier, have been made by the defendant 's letter dated November 18, 1946 as part of the terms and conditions of the contract.
We have also referred to the fact that the appellants in their reply dated November 18, 1946 have accepted the same.
The respondent 's terms of business contain various clauses, of which clauses 9 and 10 are relevant for our purpose.
They are "9.
Deposits The buyer s hall deposit with the Company 25% of the total value of the stores at the time of placing the order.
The deposit shall remain with the Company as earnest money and shall be adjusted in the final bills, no interest shall be payable to the buyer by the Company on such amounts held as earnest money.
Time and method of payment.
(a) The buyer shall, before actual delivery is taken or the stores despatched under conditions, pay the full value of the stores for which his offer has been accepted less the deposit as hereinbefore contained after which a Shipping Ticket will be issued by the Company in the name of the buyer.
The buyer shall sign his copy of the Shipping Ticket before the same is presented to the Depot concerned for taking delivery of the stores concerned.
(b) If the buyer shall make default in making payment for the stores in accordance with the provisions of this contract the.
Company may without prejudice to its rights under Clause 11 thereof or other remedies in law 131 forfeit unconditionally the earnest money paid by the buyer and cancel the contract by notice in writing to the buyer and resell the stores at such time and in such manner as the Company thinks best and recover from the buyer any loss incurred on such resale.
The Company shall, in addition be entitled to recover from the buyer any cost of storage, warehousing or removal of the stores, from one place to another and any expenses in connection with such a resale or attempted resale thereof.
Profit, if any, on resale as aforesaid, shall belong to the Company.
" From the above clauses, it will be seen that a buyer has to deposit with the company 25% of the total value and that deposit is to remain with the company as earnest money to be adjusted in the final bills.
The buyer is bound to pay the full value less the deposit, ' before taking delivery of the stores.
In case of default by the buyer, the company is entitled to forfeit unconditionally the earnest money paid by a buyer and cancel the contract.
The appellants instituted suit No. 2745 of 1947 in the Original Side of the Calcutta High Court against the respondents for recovery of the sum of Rs. 2,50,000 together With interest.
The plaintiffs pleaded that there had been no concluded agreement entered into between the parties and even when the matter was in the stage of proposal and counter proposal, the plaintiffs had withdrawn from the negotiations.
They alleged that even if there was a concluded contract, the same was vitiated by the false and an true representations made by the respondents regarding the quantity of scrap material available and the plaintiffs had been induced to enter into the agreement on such false representations.
Hence the plaintiffs were entitled to avoid the contract and they have avoided the same.
They pleaded that the respondents were never ready and willing to perform their part of the contract.
Even on the assumption that the plaintiffs had wrongfully repudiated the contract, such repudiation was accepted by the defendant by putting an end to the contract.
The respondents were not entitled to forfeit the sum of Rs. 2,50,000 as the latter cannot take advantage of their own wrongful conduct.
In any event, the sum of Rs. 2,50,000 represents money had and received by the defendants to and for the use of the plaintiffs.
The plaintiffs, in consequence, prayed for a decree directing the defendants to refund the sum of Rs. 2,50,000 together with interest at 6% from November 18, 1946.
The defendants contested the claim of the plaintiffs.
They pleaded that a concluded contract has been entered into between 132 the parties as per two letters dated November 18 and November 20, 1946.
The appellants had agreed to buy the lot of scraps lying in Dump No. 1 for Rs. 10,00,000 of which Rs. 2,50,000 was paid as deposit.
The defendants had agreed to the balance amount being paid in instalments as asked for by the plaintiffs in their letter of November 18, 1946.
The defendants further pleaded that there has been no misrepresentation made by them but the plaintiffs, without any justification, repudiated the contract by their letter dated November 22, 1946.
As the plaintiffs wrongfully repudiated the contract, the defendants, as they are entitled to in law, forfeited the sum of Rs. 2,50,000 paid by the plaintiff as earnest money, under the terms of business of the Company which had become part of the contract entered into between the parties.
The defendants further pleaded that they have always been ready and willing to perform their part of the contract and that they, in fact, even after the plaintiff repudiated the contract, called upon them to pay the balance amount and take delivery of the articles.
But the plaintiffs persisted in their wailful refusal to perform their part and therefore the defendants had no alternative but to forfeit the earnest money and conduct a resale of the goods.
The defendants further pleaded that the appellants had to pay them a sum of Rs. 42,499 for the loss and damage sustained 'by the defendants They further urged that the plaintiffs were not entitled to claim the refund of the sum of Rs. 2,50,000 or any part thereof which had been paid as earnest money and forfeited according to law, and the terms of contract, by the defendants.
Though the plaintiffs have raised various contentions in the plaint, it is seen from the judgments of the learned Single Judge and the Division Bench, on appeal, that the appellants conceded that they committed breach of contract and that the defendants have been at all material times ready and willing to perform their part of the contract.
The plea that the plaintiffs entered into the contract under a mistake of fact and that they were induced, to so enter into the contract due to the misrepresentation of the defendants regarding the quantity of scrap available, was also given up.
The appellants have also accepted the position that there has been a concluded contract between the parties and the said contract was concluded by the correspondence between the parties consisting of the letters dated November 18, 1946 and November 20, 1946.
The plaintiffs have further abandoned the plea that the defendants were not ready and willing to perform their part of the contract.
Therefore the two questions that ultimately survived for consideration by the Court were: (1) as to whether the sum of Rs. 2,50,000 was paid by the plaintiffs as and by way of part payment or as earnest deposit; and (2) as to whether the defendants were entitled to forfeit the said amount.
133 The learned Single Judge and, on appeal, the Division Bench, have held that the sum of Rs. 2,50,000 paid by the appellants was so paid as and by way of deposit or earnest money and that it is only when the plaintiffs pay the entire price of the goods and perform the conditions of the contract that the deposit of Rs. 2,50,000 will go towards the payment of the price.
It is the further view of the Courts that the amount representing earnest money is primarily a security for the performance of the contract and, in the absence of any provision to the contrary in the contract, the defendants are entitled to forfeit the deposit amount when the plaintiffs have committed a breach of contract.
In this view the defendant 's right to forfeit the sum of Rs. 2,50,000 was accepted and it has been held that the plaintiffs are not entitled to claim refund of the said amount.
The plaintiffs ' suit, in the result, was dismissed by the learned Single Judge and, on appeal, the decree of dismissal has been confirmed.
On behalf of the appellants Mr. Maheshwari, learned counsel, has raised two contentions : (1) That the amount of Rs. 2,50,000 paid by the plaintiffs and sought to be recovered in the suit is not by way of a deposit or as earnest money and that, on the other hand, it is part of the purchase price and therefore the defendants are not entitled to forfeit the said amount.
(2) In this case, it must be considered that the sum of Rs. 2,50,000 has been named in the contract as the amount to be paid in case of breach or in the alternative the contract contains a stipulation by way of penalty regarding forfeiture of the said amount and therefore the defendants will be entitled, if at all, to receive only reasonable compensation under section 74 of the Contract Act and the Courts erred in not considering this aspect.
Under this head, the counsel also urged that even a forfeiture of earnest money can only be, if the amount is considered reasonable and in this case the amount which represents 25 % of the total price cannot be considered to be reasonable and hence the appellants are entitled to relief in law.
The learned Attorney General, on behalf of the respondents, pointed out that the material correspondence between the parties, by which the contract was concluded, read along with the terms of business will clearly show that the sum of Rs. 2,50,000 paid by the appellants was as earnest.
It was further pointed out that the position in law is that the earnest money is part of the purchase price when the transaction goes through and is performed and that on the other hand it is forfeited when the transaction falls through by reason of the fault or failure of the vendee.
The learned Attorney General invited us to certain decisions laying down the salient features of 'earnest deposit ' and the right of the party to whom the amount has been paid to forfeit when the opposite party has committed a breach of contract.
Regarding the second contention of 134 the appellant, the learned Attorney General pointed out that the appellants never raised any contention that the amount of Rs. 2,50,000 deposited by the appellants is to be treated as a sum named in the contract as the amount to be paid in case of breach or that the contract must be considered to contain any stipulation by way of penalty.
He also pointed out that the question of reasonableness or otherwise of the earnest deposit forfeited in this case, was never raised by the appellant at any stage of the proceedings in the High Court.
Therefore section 74 of the Contract Act has "no application.
The first question that arises for consideration is whether the payment of Rs. 2,50,000 by the appellants was by way of deposit or earnest money.
Before we advert to the documents evidencing the contract in this case, it is necessary to find out what in law constitutes a deposit or payment by way of earnest money and what the rights and liabilities of the parties are, in respect of such deposit or earnest money.
Borrows, in Words & Phrases, Vol.
11, gives the characteristics of "earnest".
According to the author, "An earnest must be a tangible thing.
That thing must be given at the moment at which the contract is concluded, because it is something given to bind the contract, and, therefore, it must come into existence at the making or conclusion of the contract.
The thing given in that way must be given by the contracting party who gives it, as an earnest or token of good faith, and as a guarantee that he will fulfil his contract, and subject to the terms that if, owing to his default, the contract goes off, it will be forfeited.
If, on the other hand, the contract is fulfilled, an earnest may still serve a further purpose and operate by way of part payment.
" Benjamin, in his book on 'Sale, 8th Edition, after referring to clause 17 of the Statute of Frauds and section 4(1) of the Sale of Goods Act, 1893 providing for giving "something in earnest to bind the contract, or in part payment", says, at p. 219 : " give something in earnest ' or 'in part payment, ' are often treated as meaning the same thing, although the language clearly intimates that the earnest is something to bind the bargain, ' or, 'the contract, ' whereas it is manifest that there can be no part payment till after the bargain has been bound, or closed.
" The author further states that there are two distinct alternatives, viz., a buyer may give the seller money or a present as a token or evidence of the bargain quite apart from the price, i.e., earnest, or 135 he may give him part of the agreed price to be set off against the money to be finally paid, i.e., part payment and that if the buyer fails to carry out the contract and it is rescinded, cannot recover the earnest, but he may recover the part payment.
But this does not affect the seller 's right to recover damages for breach of contract unless it as by way of deposit or guarantee in which case it is forfeited.
It is further stated that an earnest does not lose its character because the same thing might also avail as a part payment.
Regarding "deposit", the author states at p. 946, that a deposit is not recoverable by the buyer, for a deposit is a guarantee that the buyer shall perform his contract and is forfeited on his failure to do so and if a contract distinguishes between the deposit and installments of price and the buyer is in default, the deposit is forfeited.
Halsbury, in "Laws of England", Vol.
34, III Edition, in paragraph 189 at p. 118, dealing with deposit, states : "Part of the price may be payable as a deposit.
A part payment is to be distinguished from a deposit or earnest.
A deposit is paid primarily as security that the buyer, will duly accept and pay for the goods, but, subject thereto, forms part of the price.
Accordingly, if the buyer is unable or unwilling to accept and pay for the goods, the seller may repudiate the contract and retain the deposit.
" Earl Jowitt, in his Dictionary of English Law, says "Giving an earnest or earnest money is a mode of signifying assent to a contract of sale or the like, by giving to the vendor a nominal sum (e.g., a shilling) as a token that the parties are in earnest or have made up their minds.
" In Howe vs Smith(1) Fry, L.J., discussed the history of "earnest", which is identical with a deposit.
In that case, the plaintiff agreed to purchase a property for the price mentioned in the agreement and paid pound 500 on the signing of the agreement Al as a deposit and in part payment of the purchase money." There where other stipulations in the agreement regarding title to the property and the payment of the balance of the purchase money.
The plaintiff, apprehending that the defendant vendor would resell the property, brought an action against him for specific performance of the agreement; but the suit was dismissed on the ground (1) L.R. [1884] Ch. D. 89.
136 that there had been inordinate delay on the plaintiffs part in insisting on the completion of the contract.
The plaintiff appealed.
Before the Court of Appeal a request was made on his behalf for leave to amend the plaint that if specific performance could not be decreed, he should get a return of the deposit of pound 500.
Leave was granted by the Appellate Court and the question hence arose as to whether the plaintiff was entitled to get a refund of the said amount.
In dealing with the deposit claimed back by the plaintiff, Cotton, L.J., at p. 95, observes "What is the deposit ? The deposit, as I understand it, and using the words of Lord Justice James (in L. R. 10 Ch.
512), is a guarantee that the contract shall be performed.
If the sale goes on, of course, not only in accordance with the words of the contract, but in accordance with the intention of the parties in making the contract, it goes in part, payment of the purchasemoney for which it is deposited; but if on the default of the purchaser the contract goes off, that is to say, if he repudiates the contract, then, according to Lord Justice James, he can have no right to recover the deposit.
" Bowen, L.J., at p. 98, states "We have therefore to consider what in ordinary parlance, and as used in an ordinary contract of sale, is the meaning which business persons would 'attach to the term 'deposit '.
Without going at length into the history, or accepting all that has been said or will be said by the other members of the Court on that point, it comes shortly to this, 'that a deposit, if nothing more is said about it, is, according to the ordinary interpre tation of business men, a security for the completion of the purchase.
But in what sense is it a security for the completion of the purchase ? It is quite certain that the purchaser cannot insist on abandoning his contract and yet recover the deposit, because that would be to enable him to take advantage of his own wrong" Fry, L.J., at p. 101, observes "Money paid as a deposit must, I conceive, be paid on some terms implied or expressed.
In this case no terms are expressed, and we must therefore inquire what terms are to be implied.
The terms most naturally to be implied appear to me in the case of money paid on the signing of a contract to be that in the event of the contract being performed it shall be brought into 137 account, but if the contract is not performed by the payer it shall remain the property of the payee.
It is not merely a part payment, but is then also an earnest to bind the bargain so entered into, and creates by the fear of its forfeiture a motive in the payer to perform the rest of the contract.
" Ultimately, the Court of Appeal rejected the claim of the plaintiff for refund of the deposit.
In Soper vs Arnold(1) the House of Lords had to consider the right of the plaintiff therein to claim a refund of the deposit made by him.
In that case the plaintiff had contracted to purchase a piece of land and entered into an agreement with the vendee.
The agreement provided that the purchaser viz., the plaintiff, should make a deposit and it further provided that if the vendee failed to comply with the conditions, the deposit should be forfeited.
The plaintiff, accordingly, paid the deposit but as he was not in a position to complete the contract by paying the balance purchase money, the contract could not be fulfilled.
When in another litigation it was subsequently found that the vendor 's title to the property was defective, the plaintiff brought an action to recover his deposit on the ground of mistake and failure of consideration.
The suit was dismissed and the Court of Appeal also confirmed the said decision.
The House of Lords also finally rejected the plaintiff 's claim.
In discussing the nature of the deposit made by the plaintiff under the agreement, Lord Macnaghten at p. 435 observes "The deposit serves two purpose if the purchase is carried out it goes against the purchase money, but its primary purpose is this, it is a guarantee that the purchaser means business; and if there is a case in which a deposit is rightly and properly forfeited it is, I think, when a man enters into a contract to buy real property without taking the trouble to consider whether he can pay for it or not." In Farr, Smith & Co. vs Messrs, Ltd. (2) dealing with the question as to whether the payment was by way of earnest given to bind the contract, or it was a part payment towards the price.
Wright J., observes at p. 408 : "Certain characteristics, however, seem to be clear, An earnest must be a tangible thing, in which definition it may be that a deposit is included, but in the old cases it was always some tangible thing.
That thing must be given at the moment at which the contract is concluded, (1) L.R. [1889]14 A.C. 429, (1) L.R. (1928] 1 K.B.D. 397.
CI/70 10 138 because it is something given to bind the contract, and, therefore, it must come into existence at the making or conclusion of the contract.
The thing given in that way must be given by the contracting party who gives it, as an earnest or token of good faith, and as a guarantee that he will fulfil his contract, and subject to the terms that if, owing to his default, the contract goes off, it will be forfeited.
If on the other hand, the contract is fulfilled, an earnest may still serve a further purpose and operate by way of part payment." The learned Judge, quoting the observations of Hamilton, J., in Sumner and Leivesley vs John Brown & Co.(1), observes at p. 409: " Earnest '.
meant something given for the purpose of binding a contract, something to be used to put pressure on the defaulter if he failed to carry out his part.
If the contract went through, the thing given in earnest was returned to the giver, or, if money, was de ducted from the price.
If the contract went off through the giver 's fault the thing given in earnest was forfeited.
" The Judicial Committee had to consider in Chiranjit Singh vs Har Swarup(2) the question as to whether a payment maade by way of earnest money by a buyer could be recovered when the buyer had committed breach of contract.
In that case the plaintiff had entered into a contract with the defendant for purchase of a property.
One of the terms of the contract of sale was "Willing on old terms namely earnest twenty thousand balance in two moieties.
first payable on executing conveyance, last within six months net cash we receive 4 lakhs 76,000.
" The plaintiff did not pay the earnest money eo nomine but sent two cheques amounting to Rs. 1,65,000 and obtained a receipt ?hat this amount was paid towards the sale price of the estate in question out of the total consideration of Rs. 4,76,000.
Later the plaintiff informed the defendant that he was not in a position to complete the purchase and gave opportunity to the latter to sell the property to any other party.
Therefore it was clear that the plaintiff purchaser was unable or unwilling to complete the contract of purchase.
The, plaintiff, notwithstanding his default, sued to recover the entire sum of Rs. 1,65,000 paid by him.
The High Court held that as the plaintiff had broken the contract, he must lose the earnest money of Rs. 20,000 but was entitled to a refund of the balance amount of Rs. 1,45,000 from and out of the amounts paid by him on that account.
The plaintiff, dissatis (1) 25 Times L. R, 745.
(2) A.I.R. 1926 P.C. 1.
139 fled with the decision of the High Court, carried the matter in appeal to the Judicial Committee for obtaining relief of repayment of earnest money also.
The Judicial Committee agreed with the High Court that from and out of the amounts paid by the plaintiff, a sum of Rs. 20,000 was earnest money and there was nothing in the contract to suggest that the seller had agreed to sacrifice the stipulated earnest.
Regarding the legal incidents of earnest money, the Judicial Committee stated "Earnest money is part of the purchase price when the transaction goes forward; it is forfeited when the transaction falls through, by reasons of the fault or failure of the vendee.
" Holding that the above principle applied squarely to the contract before them, they dismissed the paintiff 's appeal for refund of earnest.
From a review of the decisions cited above, the following principles emerge regarding "earnest": (1) It must be given at the moment at which the contract is concluded.
(2) It represents a guarantee that the contract will be fulfilled or, in other words, 'earnest ' is given to bind the contract.
(3) It is part of the purchase price when the transetion is carried out.
(4) It is forfeited when the transaction falls through by reason of the default or failure of the purchaser.
(5) Unless there is anything to the contrary in the terms of the contract, on default committed by the buyer, the seller is entitled to forfeit the earnest.
Having due regard to the principles enunciated above, we shall now consider, the relevant claims in the contract between the parties in the case, before us, to ascertain whether the amount of Rs. 2,50,000 paid by the appellant constitutes earnest money and if so whether the respondents were justified in law in forfeiting the same.
We have already referred to the letter, dated November 18, 1946 written by the respondents to the appellants confirming the sale of scrap lying in Dump No. 1.
That letter states that the total price for which the appellants agreed to purchase the scrap material is Rs. 10,00,000 against which a sum of Rs. 2,50,000 had been paid and the balance amount was to be paid that day itself.
In the reply sent by the appellant on the same day, they 140 confirmed the arrangement referred to by the respondents but, regarding the payment of the balance amount, they agreed to pay the same in two instalments.
The letter of November 18, 1946 to the appellants clearly refers to the fact that the Company 's Terms of Business applied to the contract and a copy of the said terms was also sent to the respondents.
The respondents, by confirming the arrangement, by their letter of November 18, 1946 were fully aware that the terms of business of the respondent company formed part of the contract.
entered into between the parties.
We have also referred, earlier, to clauses 9 and 10 of the Terms of Business of the respondents.
Clause 9 requires the buyer to deposit 25%of the total value of the goods at the time of placing the order.
That clause also further provides that the deposit shall remain with the company "as earnest money", to be adjusted in the final bills.
It further provides that no interest is payable to the buyer by the company "on such amounts held as earnest money".
There is no controversy in this case that the appellants deposited the sum of Rs. 2,50,000 under this clause nine, representing 25% of the purchase price of Rs. 10,00,000.
It is therefore clear that this amount deposited by the appellant is a deposit "as earnest money", Mr, Maheshwari drew our attention to the letter, dated Nov ember 18, 1946 sent by the respondents to the appellants wherein the respondents have stated that the appellants have agreed to pay Rs. 10,00,000 for all the materials in Dump No. 1 against which a cheque for Rs. 2,50,000 has been paid and that the appellants further agreed to 'pay the balance of Rs. 7,50,000 that day itself.
This statement, according to the learned counsel, will clearly show that the sum.
of Rs. 2,50,000 has been paid as part payment towards the total price, pure and simple, and there is no question of any payment by way of earnest money.
But this contention ignores the last recital in the said letter wherein it has been specifically stated that the terms of business of the respondent company applied to the contract.
This condition has also been accepted by the appellants; in their reply, dated November 18, 1946.
Therefore the position is this, that the terms of business of the respondent company have been incorporated as part of the letter and has been embodied in the terms of contract between the parties.
Clause 9, to which we have already referred, clearly shows that 25% of the total value is to be deposited and that amount is to remain with the respondents as earnest money.
It is again emphasized in clause 9 that the amount so deposited as earnest will not bear any interest, but will be only adjusted in the final bills.
Therefore the amount of Rs. 2,50,000 deposited by the appellants, representing 25% of the total of Rs. 10,00,000, is "earnest money" under clause 9 of the Terms of Business.
141 We have also earlier referred to clause 10 of the Terms of Business, which relates to the time and method of payment.
Under clause 10(b) a right is given to the respondents when the buyer makes default in making payment according to the contract, to forfeit unconditionally the earnest money paid by the buyer.
That clause further provides that this forfeiture of earnest money is without proudly to the other rights of the respondents in law.
We have referred to the fact that though the appellants raised pleas that they have not committed any breach of contract and that on the other hand the respondents were the parties in 'breach, these contentions were not pursued and had been abandoned before the High Court.
Further, as noted by the High Court, the appellants conceded that they had committed a breach of the contract.
If so, as rightly held by the High Court, under clause 10(b) the respondents were entitled to forfeit the earnest money of Rs. 2,50,000.
Before closing the discussion on this aspect, it is necessary to note that in the case before the Privy Council, in Chiranjit Singh 's Case, though the contract stipulated that a sum of Rs. 20,000 should be paid as earnest, the buyer did not pay any amount by way of earnest, as such, but he paid by two cheques the sum of Rs. 1,65,000 against the purchase price of Rs. 4,76,000.
The receipt of the sum of Rs. 1,65,000, granted by the seller was also stated to be only towards the sale price.
But, nevertheless, the High Court, as well as the Judicial Committee, treated a sum of Rs. 20,000 out of the sum of Rs. 1,65,000, as earnest money paid under the terms of the agreement, and a claim to recover that amount of earnest money was negatived.
In the case before us, the contract read with the Terms of Business of the company, clearly refers to the earnest money being paid and to the fact of Rs. 2,50,000 having been paid as earnest.
Therefore, there is no ambiguity regarding the nature of the above payment and the right of the respondents to forfeit the same, under the terms of the contract, when the appellants admittedly had committed breach of the contract, cannot be assailed.
The first contention for the appellants therefore fails.
The second contention of Mr. Maheshwari, noted earlier, is really based upon sections 73 and 74 of the Contract Act.
According to the learned counsel, under section 73, the respondents wilt be entitled only to compensation for any loss or damage caused to them by the breach of the contract, committed by the appellants.
Counsel very strongly relied upon section 74 of the Contract Act.
According to him, the sum of Rs. 2,50,000, referred to in the contract, must be treated as the amount to be paid in case of a breach.
In the alternative, counsel also urged that the provision in the contract regarding the forfeiture of the said amount, should be treated as a term containing a stipulation by way of a penalty.
Under any of 142 these circumstances, the remedy of the aggrieved party would be to get compensation which is adjudged reasonable by the Court.
Counsel also urged that "earnest money", unless it is considered to be a reasonable amount, could not be forfeited in law.
The learned Attorney General very strongly urged that the pleas covered by the second contention of the appellant had never been raised in the pleadings nor in the contentions urged before the High Court.
The question of the quantum of earnest deposit which was forfeited being unreasonable or the forfeiture being by way of penalty, were never raised by the appellants.
The Attorney General also pointed out that as noted by the High Court the appellants led no evidence at all and, after abandoning the various pleas taken in the plaint, the only question pressed before the High Court was that the deposit was not by way of earnest and hence the amount could not be forfeited.
Unless the appellants had pleaded and established that there was unreasonableness attached to the amount required to be deposited under the contract or that the clause regarding forfeiture amounted to a stipulation by way of a penalty, the respondents had no opportunity to satisfy the Court that no question of unreasonableness or the stipulation being by way of penalty arises.
He further urged that the question of unreasonableness or otherwise regarding earnest money does not at all arise when it is forfeited according to the terms of the contract.
In our opinion the learned Attorney General is well founded in his contention that the appellants raised no such contentions covered by the second point, noted above.
It is therefore unnecessary for us to go into the question as to whether the amount deposited by the appellants, in this case, by way of earnest and forfeited as such, can be considered to be reasonable or not.
We express no opinion on the question as to whether the element of unreasonableness can ever be considered regarding the forfeiture of an amount deposited by way of earnest and if so what are the necessary factors to be taken into account in considering the reasonableness or otherwise of the amount deposited by way of earnest.
If the appellants were contesting the claim on any such grounds, they should have laid the foundation for the same by raising appropriate pleas and also led proper evidence regarding the same, so that the respondents would have had an opportunity of meeting such a claim.
In this view, it is unnecessary for us to consider the decision of this Court in Maula Bux vs Union of India(1) relied on by the appellants and wherein there is an observation to the effect : "Forfeiture of earnest money under a contract for sale of property movable or immovable if the (1) ; amount is reasonable, does not fall within section 74 (of the Indian Contract Act).
That has been decided in several cases.
Kunwar Chiranjit Singh vs Har Swarup (AIR 1926 P.C. 1); Roshan Lal vs The Delhi Cloth and General Mills Co. Ltd. Delhi (ILR 33 All.
166); Muhammad Habibullah vs Muhammad Shafi (ILR 41 All. 324); Bishan Chand vs Radha Kishan Das (ILR 19 All. 489).
These cases are easily explained, for forfeiture of reasonable amount paid as earnest money does not amount to imposing a penalty.
But if forfeiture is of the nature of penalty, section 74 applies.
Where under the terms of the contract the party in breach has undertaken to pay a sum of money or to forfeit a sum of money which he has already paid to the party complaining of a breach of contract, the undertaking is of the nature of a penalty.
" The learned Attorney General has pointed out that the decisions referred to in the, above quotation do not lay down that the test of reasonableness applies to an earnest deposit and its forfeiture.
He has also pointed out that this Court, in the above decision, did not agree with the view of the High Court that the deposit, the recovery of which was sued for by the plaintiff therein, was earnest money.
The learned Attorney General also referred 'Us to various decisions, wherein, according to him, though the amounts deposited by way of earnest were fairly large in proportion to the total price fixed under the contract, nevertheless the forfeiture of those amounts were not interfered with by the Courts.
But, as we have already mentioned, we do not propose to go into those aspects in the case on hand.
As mentioned earlier, the appellants never raised any contention that the forfeiture of the amount amounted to a penalty or that the amount forfeited is so large that the forfeiture is bad in law.
Nor have they raised any contention that the amount of deposit is so unreasonable and therefore forfeiture of the entire amount is not justified.
The decision in Maula Bux 's Case(1) had no occasion to consider the question of reasonableness or otherwise of the earnest deposit being forfeited.
Because , from the said judgment it is clear that this Court did not agree with the view of the High Court that the deposits made, and which were under consideration, were paid as earnest money.
It is under those circumstances that this Court proceeded to consider the applicability of section 74 of the Contract Act.
Mr. Maheshwari has relied upon the decision of this Court in Fateh Chand vs Balkishan Das(1) wherein, according to him, this (1) ; (2) ; 144 Court has held, under similar circumstances, that the stipulation under the conrtact regarding forfeiture of the amount deposited is a stipulation by way of penalty attracting section 74 of the Contract Act.
On this assumption, counsel urged that there is a duty, statutorily imposed upon Courts by section 74 of the Contract Act not to enforce the penalty clause but only to award reasonable compensation.
This aspect, he urges, has been totally missed by tile High Court.
We are inclined to accept this contention of the learned counsel.
This Court had to consider, in the said decision, two questions : (i) Whether the plaintiff therein was entitled to forfeit a sum of Rs. 1,000 paid as earnest money on default committed by the buyer; and (ii) whether the plaintiff was further entitled to forfeit the entire sum of Rs. 24,000 paid by the buyer under the contract which recognised such right.
This Court held that the plaintiff was entitled to forfeit the sum of Rs. 1,000 paid as earnest money, when default was committed by the buyer.
But, regarding the second item of Rs. 24,000 this Court held that the same cannot be treated as earnest and therefore the rights of the parties would have to be adjudged under section 74 of the Contract Act.
In view of this conclusion the Court further had to consider the relief that the plaintiff had to get when breach of contract was committed by the buyer and, in dealing with this question, it observed at p. 526 "Section 74 of the Indian Contract Act deals with the measure of damages in two classes of cases (i) where the contract names a sum to be paid in case of breach and (ii) where the contract contains any other stipulation by way of penalty.
We are in the present case not concerned to decide whether a covenant of forfeiture of deposit for due performance of a conrtact falls within the first class.
The measure of damages in the case of breach of a stipulation by way of penalty is by section 74 reasonable compensation not exceeding the penalty stipulated for.
" Again, at p. 528 it observed "In our judgment the expression 'the contract contains any other stipulation 'by way of penalty ' comprehensively applies to every covenant involving a penalty whether it is for payment on breach of contract of money or delivery of property in future, or for forfeiture of right to money or other property already delivered.
Duty not to enforce the penalty clause but only to award reasonable compensation is statutorily imposed upon courts by section 74.
In all cases, therefore, where there is 145 a stipulation in the nature of penalty for forfeiture of an amount deposited pursuant to the terms of contract which expressly provides for forfeiture, the court has jurisdiction to award such sum only as it considers reasonable, but not exceeding the amount specified in the contract as liable to forfeiture." The Court further observed at p. 529 : "There is no ground for holding that the expression 'contract contains any other stipulation by way of penalty ' is limited to cases of stipulation in the nature of an agreement to pay money or deliver property on breach and does not comprehend covenants.
under which amounts paid or property delivered under the contract, which by the terms of the contract expressly or by clear implication are liable to be forfeited.
Section 74 declares the law as to liability upon breach of contract where compensation is by agreement of the parties predetermined, or where there is a stipulation by way of penalty.
But the application of the enactment is not restricted to cases where the aggrieved party claims relief as a plaintiff.
I The section does not confer a special benefit upon any party; it merely declares the law that notwithstanding any term in the contract predetermining damages or providing for for feiture of any property by way of penalty, the court will award to the party aggrieved only reasonable compensation not exceeding the amount named or penalty stipulated.
The jurisdiction of the Court is not deter mined by the accidental circumstance of the party in default being a plaintiff or a defendant in a suit.
Use of the expression 'to receive from the party who has broken the contract" does not predicate that the jurisdiction of the court to adjust amounts which have been paid by the party in default cannot be exercised in dealing with the claim of the party complaining of breach of contract.
" This Court applied section 74 of the Contract Act, and ultimately fixed a particular amount which the plaintiff would be entitled to as reasonable compensation in the circumstances.
Mr. Maheshwari placed considerable reliance on the above extracts in support of his contention and urged that the recitals regarding forfeiture of the amount of Rs. 2,50,000 shows that the contract contains a stipulation by way of penalty and therefore s.74 is attracted.
It is not possible to accept this contention.
As we have already pointed out, this Court, in the above decision, 146 recognised the principle that earnest money can be forfeited, but in dealing with the rest of the amount which was not, admittedly, earnest money, s.74 was applied.
In the case before us the entire amount, as evidenced by the contract and as held by us earlier, is earnest money and therefore the above decision does not apply.
Mr. Maheshwari finally urged that s.64 of the Contract Act may apply and he also relied on the decision of the Judicial Committee in Murlidhar Chatterjee vs International Film Co.(1).
On the basis of that ruling he urged that the respondents are bound to restore the benefit that they have obtained under the contract.
In our opinion there is no scope for applying s.64 of the Contract Act and it follows that the decision of the Judicial Committee, referred to above, and dealing with s.64 has no relevance.
We have already pointed out that the appellants raised a contention that they had been induced to enter into the agreement on a misrepresentation made by the respondents regarding the quantity of material available.
If the.
appellants had proceeded on that basis, then the contract would have been voidable at their instance under s.19 of the Contract Act.
But they have abandoned that plea and have admitted that the breach of contract was committed by them.
Hence section 64 cannot be invoked by the appellants.
In this view, the second contention also fails.
In the result ', the appeal fails and is dismissed with costs.
V.P.S. Appeal dismissed.
(1) L. R. 70 I.A, 35.
| IN-Abs | The respondent agreed to sell and the appellant agreed to buy some aero scrap for Rs. 10,00,000.
The appellant paid Rs. 2,50,000 on the date of the contract and it was agreed between the parties that the balance should be paid in two instalments.
It was also agreed that the respondent 's terms of business were made part of the terms and conditions gov erning the contract.
According to cl. 9 of the respondent 's terms of business the buyer has to deposit with the respondent 25% of the total value and that deposit is to remain with the respondent as earnest money to be adjusted in the final bills and no interest shall be payable to buyer on the amount.
Under cl. 10 of the terms and conditions, if the buyer makes default in making payment according to the contract, the respondent has a right to cancel the, contract and forfeit unconditionally the earnest money without prejudice to any other Tights of the respondent in law.
The appellant committed breach of the contract by refusing to pay the rest of the money and to take delivery of the aero scrap.
The respondent thereupon cancelled the contract and forfeited the deposit of Rs. 2,50,000.
A suit by the appellant for recovery of the amount was dismissed.
In appeal to this Court, HELD : (1) For a deposit by a purchaser to be treated as earnest money the 'following conditions must be satisfied : (i) it must be given at the moment at which the contract is concluded; (ii) it represents a guarantee that the contract will be fulfilled or, in other words, 'earnest ' is given to bind the contract; (iii) it is part of the purchase price when the transaction is carried out; (iv) it is forfeited when the transaction falls through by reason of the default or failure of the purchaser; and (v) unless there is anything to the contrary in the terms of the contract, on default committed by the buyer, the seller is entitled to forfeit the earnest.
[139 D F] In the present case, the payment of Rs. 2,50,000 could not be treated merely as part payment towards the total price, because, the terms of business of the respondent applied to the contract, and under those terms, since the conditions regarding earnest money are satisfied, the amount deposited by the appellant was earnest money and the respondent was entitled to forfeit if.
[140; 141 F] Howe vs Smith , Soper vs Arnold, I.R. , Farr, Smith & Co. vs Messers, Ltd. L.R. [1928] 1 K.B.D. 397, Sumner and Leivesley vs John Brown & Co. and Chiranjit Singh vs Har Swarup, A.I.R. , applied.
128 Roland Burrows, Words and Phrases Vol.
11, Benjamin on Sale, Halsbury 's Laws of England (111 Edition) Vol. 34, p. 118, para.
189 and Jowitt 's Dictionary of English Law, referred to.
(2) In Fateh Chand vs Balkishan Das, ; , this Court recognised the principle that earnest money could be forfeited, and that section 74 of the Contract Act applied only to the amount paid by the buyer which was not earnest money.
In the present case, since the entire amount paid by the appellant was earnest money under the contract, this decision has no application.
[145 H; 146 A] (3) As the plea of misrepresentation was abandoned by the appellant and the breach off contract was admittedly committed by the appellant,s. 64 of the Contract Act could not be invoked by the appellant.
[146 D] Murlidhar Chatterjee vs International Film Co. L.R. 70 I.A. 35, not applicable.
[The question as to whether the element of unreasonableness can even be taken into account when considering the forfeiture of an amount deposited by way of earnest, and if so what factors should be taken into account left open.] [142 F G] Maula Bux vs Union of India, ; , explained.
|
Appeal No. 1438 of.1967.
Appeal by special leave from the judgment and decree dated September 27, 1962 of the Madhya Pradesh High Court, Gwalior Bench in Civil Appeal No. 310 of 1960.
section T. Desai and P. C. Bhartari, for the appellants.
19 B. C. Misra, Bhajan Ramrakhyani and Urmila Kapoor,for respondents Nos.
1 to 4, 8 and 10 to 12.
The Judgment of the Court was delivered by Dua, J.
This is the plaintiffs ' appeal by special leave from a common judgment and decree of a learned Single Judge of the Madhya Pradesh High Court at Gwalior dated September 27, 1962 partially allowing the defendants ' second appeal and dismissing that of the plaintiffs.
It is not necessary to state the detailed facts of the case.
Facts necessary for the purpose of this appeal alone may briefly be stated.
In May, 1939 Ramle Singh and Jomdar Singh created a mortgage of the suit land in favour of Munshi Singh for a sum of Rs. 2,242/14/ .
It is said that in May, 1943 notice given by the mortgagors for redemption of the mortgage was refused by the mortgagee.
In June, 1943 the suit giving rise to the present appeal was instituted for redemption of the mortgage.
Some other persons who were found to be in possession of the land, claiming to be tenants, were also impleaded as defendants.
On May 25, 1951 Madhya Bharat Zamindari Abolition Act XIII of 1951 was enforced.
It appears that an application to amend the plaint as a result of the new enactment was disallowed by the trial Court, but on revision the Madhya Pradesh High Court by its order dated October 10, 1955 reversed the order of the trial Court and permitted the plaintiffs to amend the plaint.
The pleadings after the amendment gave rise to nearly 17 issues on the merits.
On October 10, 1958 the suit was decreed in respect of the relief for redemption but claim in regard to mesne profits was disallowed.
Preliminary decree for redemption was accordingly granted.
In the course of its judgment the trial Court observed under issue No. 10 as follows : "I have in preceding paras shown that as per allegations in the written statements and the patwari papers, it appears that the suit lands have been in possession of Hanumantsingh, Shambhoosingh, khemsingh, Mansingh and ' Namdassingh.
It will be discussed later whether they and descendants of Munshisingh are joint owners or not.
Before abolition of zamindari, the records show half of the suit lands as the Khundkasht of the above defendants and half as the tenancy holding of Namdas (Kastkari).
These entries however do not confer any title on the parties.
Their right to remain in possession is limited i.e. till such time as the property is redeemed by the mortgagers i.e. the plaintiffs.
These entries or the rights shown therein cannot prejudice the right of the plaintiffs.
" 20 The Court while deciding issues Nos. 16 and 17 observed thus A "I have discussed these issues earlier in a different context.
I may briefly add that Abolition of Zamindari Act does not affect the right of the plaintiffs to recover possession of lands which were placed in possession of the mortgagees (1956, M.B.L.J. Rameshwar vs Bhogiram).
Defendants Hanumantsingh and others did not acquire possession of the suit lands by virtue of the sale in favour of their father Daulat Singh because they had purchased only an equity of redemption as, will appear from the judgment in Civil Suit No. 21/2001 filed on record.
Entries as Pacca Krishak cannot affect the rights under the mortgage bond.
I find accordingly." Three appeals were presented in the District Court against the.
decree founded on this judgment, one of them being by the plaintiffs challenging refusal by the trial Court to grant mesne profits.
In October, 1960 the plaintiffs ' appeal was partly allowed and mesne profits decreed from the date of deposit of the mortgage amount in Court.
The other two appeals were dismissed.
That Court disposed of all appeals by a common judgment and came to the conclusion that the lands had been mortgaged with possession by Samle Singh and Jomdar Singh with Munshi Singh and that they were under self cultivation of the plaintiffs before the mortgage, the mortgagees having come into possession by reason of the mortgage.
The matter was taken by the defendants to the High Court on second appeal, the plaintiffs having also preferred an appeal in that.
Court against the decree of the first appellate Court declining to give full relief claimed in regard to mesne profits.
In the High Court also three appeals were presented.
The High Court partially allowed the defendants ' appeal in view of the provisions of the Madhya Bharat Zamindari Abolition Act XIII of 1951.
The plaintiffs were held entitled to redeem the mortgage by paying the mortgage money but disentitled to get possession of the mortgaged land.
The proprietary rights including the right to get possession having vested in the State under the aforesaid Act, the plaintiffs, according to the High Court, could only claim compensation from the Government on the basis of their proprietary rights after redeeming the mortgage by making payment of the mortgage money.
In support of this view the High Court relied on this Court 's decision in Haji Sk.
Subhan vs Madho Rag(1), considering that decision to be decisive of the point in issue.
That decision, however, appears to us to be directly concerned with the Madhya Pradesh Abolition of Proprietary Rights (Estates, Muhals, alienated land) Act, 1950 (Madhya Pradesh Act 1 of 1951).
Before us the short question raised on behalf of the appellants is that reliance on the Madhya Bharat Zamindari Abolition Act XIII of (1) [1962] Supp. 1 S.C.R. 123.
2 1 1951 for the first time in the High Court was improper and that in any event without affording an opportunity to the appellants to show that the said Act did not apply to the case in hand, their suit could not have been dismissed.
The submission is not wholly correct.
There was in fact an amendment of the plaint pursuant to the enactment of the Madhya Bharat Abolition of Zamindari Act and additional issues were framed on the amended pleadings.
, The parties and the courts were thus not ignorant of the existence of the said Act on the statute book.
Turning to the Act in question, it was brought on the statute book in 1951, as the preamble shows, in order "to provide for the public purposes of the improvement of agriculture and financial condition of agriculturists by abolition and acquisition, of the rights of proprietors in villages, muhala, chaks or blocks settled on zamindari system which is only a. system of,, keeping an intermediary between the State and the tenants injurious to the betterment of agriculture as well as the agriculturists in Madhya Bharat and for other matters connected therewith," "Proprietor" as defined in section 2(a) means, "as respects a village, muhal or land settled on zamindari system, a person owning whether in trust or for his own benefit such village, muhal or land and includes (1) a Malguzar as defined in sub clause (12) of section 2 of Qanoon Mal, Gwalior State, Samvat 1983; and (2) as respects a chak or block a chakdar or blockdar whose lease granted to him by the Government under any Act, Rule or Circular relating to chaks and blocks, includes also, amongst its other conditions, a condition that he shall acquire the proprietary rights in respect of that chak or block when the conditions of the lease are fulfilled; (3) the heir and successors in interest of a proprietor; Section 2(c) defines "Khud kasht" to mean "land cultivated by the Zamindar himself or through employees or hired laborers and includes sir land." Sections 3 and 4 which occur in Chapter II dealing "vesting of proprietary rights in the State" provides as under : "3.
Vesting of proprietary rights in the State.
(1) Save as otherwise provided in this Act and subject to the provisions of section 8, on and from a date to be specified by a notification by the Government in this behalf (hereinafter referred 22 to as the date of vesting all proprietary rights in a village, muhal land, chak or block in Madhya Bharat vesting in a proprietor of such village, Muhal, land, chak or block as the case may be, or in a person having interest in such proprietary right through the proprietor shall pass from such proprietor or such other person, to and vest in the State free of all encumbrances.
(2) After issue of a notification under sub section (1)no right shall be acquired in or over the land to which the said notification relates except by succession or under a decree or order of a Court or under a grant or contract in writing made or entered into by or on behalf of the Government; and no fresh clearings for cultivation or for any other purpose shall be made in such land except in accordance with such rules as may be made by the Government in this behalf.
(3) The Government may by notification published in the Gazette vary the date specified under sub section (1) at any time before such date.
Consequences of the vesting of an estate in the State.
(1) Save as otherwise provided in this Act when the notification under section 3 in respect of any area has been published in the gazette, then, notwithstanding anything contained in any contract, grant or document or in any other law for the time being in force, the consequences as hereinafter set forth shall from the beginning of the date specified in such notification (hereinafter referred to as the date of vesting) ensue, namely : (a) all rights, title and interest of the proprietor in such area, including land (cultivable, barren or Bir), forest, trees, fisheries, wells (other than private wells) tanks, ponds, water channels ferries, path ways, village sites, hats and bazars and mela grounds and in all sub soil including rights, if any, in mines and minerals, whether being worked or not shall cease and be vested in the State free from all encumbrances; 23 (b) all grants and confirmation of title of or to land in the property so vesting or of or to any right or privilege in respect of such property or land revenue in respect thereof shall, whether liable to resumption or not, determine; (c) all rents and cesses in respect of any holding in the property so vesting for any period after the date of vesting which, but for such vesting would have been payable to the proprietor, shall vest in the State and be payable to the Government and any payment made in contravention of this clause shall not be a valid discharge of the person liable to pay the same; Explanation =The word "Holding" shall for the purpose of this clause be deemed to include also land given, on behalf of the proprietor, to any person on rent for any purpose other than cultivation , (d) all arrears of revenue, cesses or other dues in respect of any property so vesting and due by the proprietor for any period prior to the date of vesting shall continue to be recoverable from such proprietor and may ' without prejudice to any other mode of recovery, be realised by deducting the amount from the compensation money payable to such proprietor under Chapter V; (e) The, interest of the proprietor so acquired shall not be liable to attachment or sale in execution of any decree, or other process of any court, civil or revenue, and any attachment existing at the date of vesting or any order for attachment passed before such date shall, subject to the provisions of section 73 of the , cease to be in force.
(f) every mortgage with possession existing on the property so vesting_or part thereof on the date immediately preceding the date of vesting shall, to the extent of the amount secured on such property or part thereof be deemed without prejudice to the rights of the State under section 3, to have been substituted by a simple mortgage.
24 (2) Notwithstanding anything contained in subsection (1) the proprietor shall continue to.
remain.
in possession of his khud kasht land, so recorded in the annual village papers before the date of vesting.
(3) Nothing contained in sub section ( 1 ) shall operate as bar to the recovery by the outgoing proprietor of any sum which becomes due to him before the date of vesting in virtue of his proprietary rights.
" A plain reading of these sections would show that all rights, title and interests of the proprietors in the area notified were to cease and were instead to vest in the State free from all encumbrances with effect from the date of notification and after such vesting in the State every mortgage with possession existing on the property so vested or part thereof on the date immediately preceding the date of vesting, to the extent of the amount secured on such property or part thereof, is to be deemed, without prejudice to the right of the State under section 3 to have been substituted by a simple mortgage.
The proprietor, however, notwithstanding other consequences of the vesting in a State, is entitled to continue to remain in possession of his khud kasht land which is so recorded in the annual village papers before the date of vesting.
Now it was clearly open to the plaintiffs to show that the land in question was khud kasht and, therefore, in accordance with section 4 they were entitled to remain in possession thereof.
On behalf of the appellants ' also our attention was invited to the decision of this Court in the case of Haji Sk. Subhan(1) and specific reliance was placed on observations at page 139 of the report which suggests that a person continuing in possession on the basis of entries in the village papers, which had to be presumed to be correct, was not affected by the Act.
Reference was also made to the observation at page 142 of the report where right to possess was upheld in favour of the party who had obtained A declaration of being an owner in possession.
On behalf of the respondents reliance was placed on Rana Sheo Ambar Singh vs Allahabad Bank Ltd., Allahabad (2 , but that decision does not deal with the Madhya Bharat Act which concerns.
That is with the U.P. Zamin dari Abolition and Land Reforms Act 1 of 1951, the scheme of which is not shown to be similar to that of the Madhya Bharat Act so far as it concerns us in the present case.
That decision is, therefore, of little assistance in construing the Madhya Bharat Act.
Another decision on which the respondents ' learned Advocate has placed reliance is Raja Sailendra Narayan Bhaj Deo vs Kumar Jagat Kishore Prasad Narayan Singh(s) which again (1) [1962] Supp.
I S.C.R. 123.
(2) ; (3) [1962] Supp.
2 S.C.R. 119.
25 deals with the Bihar Lands Reforms Act and not with the Madhya Bharat Act.
The scheme of the Bihar Act being also dissimilar from that of the Madhya Bharat Act, this decision too cannot be of much help.
The last decision relied on by Shri Mishra is Suraj Ahir vs Prithinath Singh and others(1) which is concerned with the Bihar Lands Reforms Act XXX of 1950 as amended by Act XVI of 1959.
This decision is equally unhelpful.
In our opinion the High Court was in error in allowing the appeal before it and in dismissing the plaintiff appellants ' suit for possession on the authority of this Court 's decision in the case of Haji Sk.
Subhan(2).
In the reported case the word "document" as occurring in section 4(1) of the M.P. Abolition of Proprietary Rights (M.P. Act 1 of 1951) was construed to include a decree of the Court and it was held that the principle that the executing Court cannot question the decree and has to execute it, had no operation on the facts of that case, because the objection was not based on the invalidity of the decree but on the effect of the aforesaid Act on the rights of the decree holder proprietor, to retain possession.
The facts of that case were, therefore, different and so was the problem requiring solution.
The precise question requiring decision by the Court in the present case was lost sight of and not properly adverted to.
We are required in the present case to consider the effect of section 4(1) (f) of the M.P. Act XIll of 1951 on the rights of the plaintiff appellants to redeem the mortgage and secure possession of the mortgaged land.
It may be pointed out that both the contesting parties the appellants and the respondents before us claim for themselves actual possession of the land in dispute as Khud kashi and also assert that the relevant entries in the annual village papers before the date of vesting showed them in such possession.
On this basis they both claim right to retain possession even against the State.
These rival controversial claims pressed by both the parties was the central question involving proper appraisal of material on the record and this basic dispute had to be first adverted to and judicially determined and thereafter the Court had to consider the applicability of the relevant provisions of the M.P. Act XIII of 1951 to the facts found.
As the question of vesting of title in the State was also of vital importance it was, in our opinion, fit and proper for the Courts below to have issued notice, to the State as well, thereby enabling it to be impleaded as a party if it so desired.
The approach of the High Court is erroneous and its decision highly unsatisfactory.
The controlling questionseems to have been missed.
We, therefore, allow the appeal and remit the case back to the High Court for a fresh decision of the (1) ; Sup.
Cl.170 3 (2) [1962] Supp. 1 S.C.P. 12?.
26 appeal after notice to the State and after hearing it, in case it desires to be heard.
It would also be open to the High Court, if it considers just and proper, to implead the State and if necessary to permit it to adduce evidence before the High Court or to remit the case to the trial Court for that purpose.
In the circumstances of the case, parties would bear their own costs in this Court.
Y.P. Appeal allowed.
| IN-Abs | The appellant filed a suit for redemption of a mortgage.
The lower courts decreed the suit.
The High Court held that in view of the provisions of the Madha Bharat Zamindari Abolition Act XIII of 1951 the appellants were entitled to redeem the mortgage but disentitled to get possession of the mortgaged land since under the Act the proprietary rights including the right to possession vested in the State.
In appeal to this Court it was urged that High Court did not afford the appellants an opportunity to show that the land in question was Khud kasht and, therefore in according with section 4 they were entitled to remain in possession thereof.
HELD : The precise question requiring decision by the High Court in the present case was lost sight of and not properly adverted to.
Under the Act the proprietor, notwithstanding any other consequences of the vesting in the State, is entitled to continue to retain possession of his Khud kasht land which is so recorded in the annual village papers before the date of vesting. ' In the present case both the contesting parties claim for themselves actual possession of the land in dispute as Khud kasht and also assert that the relevant entries in the annual village papers before the date of vesting showed them in such possession.
On this basis they both claim right to retain possession even against the State.
These rival controversial claims pressed by both the parties was the central question involving proper appraisal of the material on the record and this basic dispute had to be first adverted to and judicially determined and thereafter the Court had to consider the applicability of the relevant provisions of Act XIII of 1951 to the facts found.
As the question of vesting of title in the State was also of vital importance it was fit and proper for the Courts below to have issued notice to the State as well thereby enabling it to be impleaded as a party, if it so desired.
[25D 26B] Haji Sk.
Subban vs Madho Rao, [1962] Supp. 1 S.C.R. 123, distinguished.
[The case was remitted to the High Court for a fresh decision].
|
Appeal No. 21 of 1966.
Appeal from the judgment and order dated January 22, 1962 of the Patna High Court in Misc.
Judicial Case No. 757 of 1961.
D. Goburdhun, for the appellant.
M. K. Ramamurthi, for the respondents.
B. Sen and section P. Nayar, for intervener No. 1.
L. M. Singhvi and section P. Nayar, for intervener No. 2.
The Judgment of J. M. SHELAT, C. A. VAIDIALINGAM, K. section HEGDE and A. N. RAY, JJ.
was delivered by HEGDE, J., SHAH, J. delivered a dissenting Opinion.
Shah, J. The High Court of Patna has declared the second part of sub section
(6) of section 144 of the Code of Criminal Procedure ultra vires.
Sub Section (6) reads "No order under this section shall remain in force for more than two months from the making thereof; unless, in cases of danger to human life, health or safety, or a likelihood of a riot or an affray, the State Government, by notification in the Official Gazette, otherwise directs.
" In the view of the High Court, an order made by the State Government extending the duration of an order under section 144 imposes an unreasonable restriction on the fundamental freedom of the citizens, because the order of the State Government is not subject to judicial scrutiny and the Code provides no machinery for applying for an order of rescission or alteration of the order.
Section 144 is enacted to provide for making temporary orders in urgent cases of nuisance or apprehended danger, where imme 184 diate prevention or speedy remedy is desirable.
It provides that when a Magistrate competent in that behalf is of the opinion that there is sufficient ground for proceeding under the section, and immediate prevention or speedy remedy is desirable, the Magistrate may make an order in writing against any person or the public generally when frequenting or visiting a particular place, if he considers that his direction is likely to prevent or tends to prevent obstruction, annoyance or injury, or risk of obstruction, annoyance or injury, to any person lawfully employed, or danger to human life, health or safety, or a disturbance of the public tranquility, or a riot, or an affray.
The order must state the material facts of the case and it must be served in the manner provided by section 134 and may direct a person to abstain from a certain act or to make certain order with certain property in his possession or under his management.
In cases of emergency or in cases where the circumstances do not admit of service in due time of a notice upon the person against whom the order is directed, it may be passed ex parte.
The order remains in force for not more than two months, unless the State Government, in cases of danger to human life, health or safety, or a likelihood of a riot or an affray otherwise directs.
The order may be rescinded or altered by a Magistrate on his own motion or on the application of any person aggrieved if the order is passed by himself or by any Magistrate subordinate to him or by his predecessor in office.
In deciding the application made to him the Magistrate must give an opportunity of appearing before him either in person or by pleader and showing cause against the order. ' and if the Magistrate rejects the application wholly or in part, he shall record in writing his reasons for so doing.
This Court in Babulal Parate vs State of Maharashtra and Ors.(1) held that section 144 is intended to secure the public weal by preventing disorders, obstructions and annoyances.
The powers conferred by it are exercisable by a Magistrate who acts judicially and the restraints permitted by it are of a temporary nature 'and may be imposed only in an emergency.
The Court further held that the restrictions which the section authorises are not beyond the limits prescribed by cls.
(2) and (3) of article 19 of the Con stitution, for the prevention of such activities as are contemplated by the section is in public interest and therefore no, less in the interest of public order.
The Court observed that the wide power under the section may be exercised only in an emergency and for preventing obstruction, annoyance, or injury etc.
as specified therein and those factors necessarily condition the exercise of the power and, therefore, the power is not unlimited or untrammelled, and that the section cannot be struck down simply on the ground (1) [1961]3 S.C.R. 423. 185 that the Magistrate might possibly abuse his power.
Challenge to the validity of section 144 in its entirety was negatived in Babulal Parate 's case(1).
The Court however did not consider the validity of the power vested in the State executive to extend the duration of the order beyond two months, apparently because no argument was advanced at the Bar in that behalf.
Power conferred upon a Magistrate to make an order under section 144(1) is subject to the jurisdiction of the High Court under sections 435 & 439 of the Code of Criminal Procedure.
Again an order under sub section
(4) refusing to rescind or alter any order under the section, may be rectified by the High Court.
The Magistrate may pass an order in the conditions prescribed in sub section
(1) and not otherwise.
The order does not remain in force for a period longer than two months, unless the State Government, in cases of danger to human life, health or safety, or a likelihood of a riot or an affray, directs otherwise.
The power to "otherwise direct" involves authority to extend the duration of the Magisterial order for the ,duration of the danger or emergency.
Sub section (6) however does not authorise the State to make the order of the Magistrate permanent.
The State must in "otherwise" directing take into consideration, whether it is a case of danger to human life, health or safety, or of a likelihood of a riot or an affray in respect of which an order has been made by the Magistrate, and whether it is necessary to extend the period beyond two months and then to direct that the order shall remain in force for a period longer than two months, but not after apprehension of danger or emergency ceases.
It was submitted that in the absence on any statutory restriction on the exercise of the power, the State may abuse the power and continue it in force either permanently or for a period longer than the apprehension of danger or emergency justifies.
But the validity of a statute conferring power is not open to challenge on the plea that the power may possibly be abused by the authority in which it is vested.
, The order, duration of which is extended by declaration of the State,, is and continues to remain the order of the Magistrate.
The source of the authority of the order is derived not from the State Government, but from the Magistrate.
The direction of the State Government only extends its duration.
The Code, it is true, provides no machinery for subjecting the direction by the State Gov ernment to a judicial scrutiny.
The direction under sub section
(6) does not depend upon the subjective satisfaction of the Government.
On appropriate grounds the direction may be challenged in a petition under article 226 of the Constitution.
Again sub section
(4) of section 144 clearly authorises a Magistrate either on his own motion or on the application of any person aggrieved, to rescind (1) ; 6Sup.
CI/70 13 186 or alter any order made under the section.
The order is passed by the Magistrate, and, the source of its authority lies in the exercise of the judicial function of the Magistrate even after its duration is extended by the State Government.
Therefore under sub section
(4) notwithstanding that the State Government has made a direction extending the duration of the order beyond two months, the Magistrate would, in my judgment, be competent, on a judicial consideration of the materials placed before him, to rescind or alter the order.
It was submitted that a Magistrate exercising power under sub sections
(1) & (4) of section 144 of the Code of Criminal Procedure is an authority subordinate to the State Government, and he cannot rescind or alter an order made by the State Government.
That argument proceeds upon a misconception of the true nature of the division of powers under our Constitution.
Since the ultimate liability for maintaining law and order lies upon the State, the Legislature has provided that the order, if it is to remain in operation for a period exceeding two months, should have the imprimatur of the State Government.
But on that account the Magistrate does got become an authority subordinate to the State Government.
The State Government is the head of the executive and exercises no authority over the judicial functions of the Magistrates.
A Magistrate is independent of the State Government and he is entitled, notwithstanding the declaration made by the State Government, if the circumstances justify, to rescind or alter the order.
Under the scheme of division of the executive and judicial functions, it is true that power to make an order under section 144 is generally vested in Executive Magistrates who are in some matters responsible to the executive authorities.
But even under the scheme of separation of judicial and executive powers the function of the Magistrates exercising power under section 144 remains judicial.
To assume in deciding a constitutional issue, that in the prevailing administrative set up, an Executive Magistrate invested with power under section 144 of the Code of Criminal Procedure may not, on extrajudicial considerations, rescind a direction of the State Government is to overlook the distinction between abuse of power and noninvolvement of power.
If in a given case, the order is matte on extra judicial considerations it is, it is liable to be set aside by recourse to appropriate remedy.
The power to amend or alter the order after its duration is extended by the State Government cannot in my judgment be denied to the Magistrate merely because he is an Executive Magistrate.
In adjudging the reasonableness of the restrictions imposed by the exercise of power on the fundamental rights of the citizens, absence of a provision for judicial review and of machinery forobtaining an order recalling or amending the order made in exercise of that power have to be given due weight : Virendra vs The 187 State of Punjab and Anr.
(1) But as already pointed out the State Government has to make an order not on any subjective satisfaction.
The order is liable to rescission or alteration under sub section
Validity of an order made by a Magistrate is open to challenge on appropriate ground even after it is extended by the direction of the State Government in a proceeding before the High Court, for the jurisdiction of the High Courts to examine the validity of the order of the Magistrate is not affected by the extension of the duration of the order by the direction of the executive.
Again under sub section
(4) of section 144 a proceeding for withdrawal or modification of the order may be initiated even after the State has by direction extended its duration.
I am unable to hold that the order of the Magistrate gets merged into the direction of the State Government when its duration is extended.
In terms, sub section
(6) provides that the order made by a Magistrate shall not remain in force for more than two months from the making thereof, unless in the classes of cases specified the State Government otherwise directs.
Therefore, even after the period is extended by the direction of the State Government the order continues to remain the order of the Magistrate.
The declaration made by the State Government only removes the temporaly limit on its operation prescribed by sub section
In State of Madras vs V. G. Row(2), Patanjali Sastri, C.J., observed that in considering the reasonableness of laws imposing restrictions on fundamental rights, the test of reasonableness, wherever prescribed, should be applied to each individual statute impugned and no abstract standard or general pattern of reasonableness can be laid down as applicable to all cases.
Exercise of power under section 144 is intended to ensure the maintenance of law and order, and for that purpose the section authorises the Magistrate, exercising judicial power of the State, on being satisfied on sufficient grounds, and where it is necessary that immediate prevention or speedy remedy is desirable, to make an appropriate order.
Normally an order made by a Magistrate under sub section
(1) of section 144 remains in force so long as it serves its purpose, but not longer than two months.
In case the danger or emergency or apprehension thereof is deep rooted, the State Government is competent by direction to extend the duration of the order.
The duty of maintaining law and order ordinarily lies on the executive, but since the making of an order under section 144 involves serious infringement of the rights of the citizens, exercise of, the power is conditioned by a judicial evaluation of the circumstances which necessitate it.
Whether the order remains operative for its normal duration, or is extended by direction of the execu (1) ; (2) ; 188 tive, the Magisterial verdict lends sustenance to it.
Apprehension that the executive may abuse the power to extend the duration will not, in my judgment, justify the Court in holding that the extension shifts the source of authority of the order, or vitiates the Magisterial evaluation.
I cannot accept the abstract standard that every statute in the execution of which fundamental rights of citizens may be infringed will be adjudged unreasonable, if within its framework the statute does not provide machinery for judicial scrutiny or for rescission of the action taken.
Nor can I accept the plea that absence of machinery in the Code for approaching the High Court for redress against the direction of the State, and absence of express provision for moving the State for rescission or alteration of the duration constitute a test of unreasonableness.
Reasonableness of a statutory provision cannot be determined by the application of a set formula: it must be determined on a review of the procedural and substantive provisions of the statute keeping in mind the nature of the right intended to be infringed, underlying purpose of the restriction contemplated to be imposed, gravity of the evil intended to be remedied thereby, object intended to be achieved by the imposition of restriction, and other relevant circumstances.
In my view, the appeal must be allowed and the order passed by the High Court set aside.
Hegde, J.
In a proceeding under article 226 of the Constitution initiated by the respondents the High Court of Patna struck down the second part of sub section
(6) of section 144, Criminal Procedure Code as being violative of sub cls.
(b), (c) and (d) of cl.
(1) of article 19 of the Constitution.
The State of Bihar after obtaining a certificate from the High Court under article 132(1) of the Constitution has brought this appeal.
The respondents are not represented in this Court.
This Court by its order dated April 7, 1969 appointed Mr. Ramamurthi, a senior Advocate of this Court as an amicus curiae to assist the Court at the hearing of the appeal.
The Union of India has intervened and it was represented before us by Mr. B. Sen.
As the question involved in this case directly concerns a legislation by the central legislature, notice to Attorney General was also given and the Attorney General was represented by Dr. Singhvi.
The only question that arises for decision in this appeal is whether the second part of sub section
(6) of section 144, Criminal Procedure Code namely the words "unless, in cases of danger to human life, health or safety, or a likelihood of a riot or any affray, the (State Government) by notification in the Official Gazette, otherwise directs" are liable to be struck down as being violative of any of the clauses in article 19 (1 ) of the Constitution.
189 The facts leading to the present proceedings are as follows It appears that there was dispute between two sections of workers in the Tata Workers Union, Jamshedpur.
In that connection Shri K. N. Mishra, City Magistrate, Jamshedpur passed an order against respondent Verma under sub section
(1) of section 144, Criminal Procedure Code on May 21,1961.
He followed up that order by another order against respondents, K. K. Mishra, Sadhu Singh, P. C. Joshi and M. N. Govende on June 20, 1961.
Thereafter the State Government of Bihar passed an order under sub s, (6) of s.144, Criminal Procedure Code and notified the same in the Bihar Official Gazette on July 18, 1961.
It is the validity of this notification that is in issue in this case.
That notification reads "NOTIFICATION The 18th July, 1961.
No. 8255 C Whereas the following orders have been made under the provision of section 144, Code of Criminal Procedure, 1898 (V of 1898) by Shri K. N. Mishra, City Magistrate, Jamshedpur 1.
TO Shri R. L. Verma, Jamshedpur.
Whereas it has been made to appear to me that the President, Tata Workers ' Union, Jamshedpur, has informed you regarding the adoption of the resolution of ratification of no confidence motion against you in the General Body meeting of T.W. Union on 17th May 1961, and you received the letter on 18th May, 1961 and still you have not refrained from attending the Office of Tata Workers ' Union, situated.
at K. Road, Jamshedpur, and I am satisfied that your going to the office of Tata Workers ' Union, may lead to a serious breach of the peace, the prevention of which is immediately necessary.
I, K. N. Mishra, City Magistrate, Jamshedpur, specially empowered under section 144, Criminal Procedure Code, therefore, hereby restrain you from going to the office of the Tata Workers, Union, situated at K. Road, Bistupur, Jamshedpur, for a period of 60 (sixty) days, with effect from today.
You are also called upon to show cause by 25th May, 1961,at 6 30 a.m. as to why this order under section 144, Criminal Procedure Code, should not be made absolute against you.
190 Given under my hand and seal of the Court, this the 21st day of May 1961.
K. N. Mishra City Magistrate Jamshedpur 21 5 1961.
To (1) Shri Kamla Kant Mishra, (2) Shri Sadhu Singh (3) Shri P. C. Joshi and (4) Shri M. N. Govende, all of Tata Workers ' Union.
Whereas the officer in charge of Bistupur P.S. has submitted a report that there is serious apprehension of breach of peace in respect of the Tata Workers ' Union Office and the same still continues.
And whereas I am satisfied that a serious apprehension of breach of peace still exists due to rivalry between two rival groups of the Tata Workers ' Union and the same (breach of peace) cannot otherwise be prevented unless these four members of the O.P. are prohibited from entering into the office and compound of the Tata Workers ' Union at 'K ' Road Bistupur, for _a further period of 30 (thirty) days, I. K. N. Mishra, City Magistrate, Jamshedpur, specially empowered under section 144, Criminal Procedure Code do hereby prohibit Shri Kamla Kant Mishra, Shri Sadhu Singh, Shri P. C. Joshi and Shri M. N. Govende from entering into the office and compound of the.
Tata Workers ' Union situated at 'K ' Road, Bistupur, for a further period of 30 (thirty) days with effect from today, the 20th June 1961, and also call upon you to show cause why this order under section 144, Criminal Procedure Code, should not be made absolute against you Cause, if any be on 29th June, 1961, 'at 6 30 a.m.
Given under my hand and the seal of the Court this 20th day of June, 1961.
K. N. Mishra, City Magistrate, Jamshedpur, 20 6 1961.
And whereas the above orders expire on the 19th July, 1961, and whereas the Governor of Bihar is satisfied that the conditions which rendered these orders necessary still exist and that there is apprehension that they may continue to exist for a longer time and that it is necessary that these orders should be "tended for 191 a further period beyond the present date of their expiry in the interest of the safety of the life of the inhabitants of the town of Jamshedpur and in order to avoid the risk of riotor affray.
Now, therefore, in exercise of the powers conferred by sub section (6) of the Section 144 of the said Code, the Governor of Bihar is pleased to direct that the above orders will continue to remain in force for a period of four months, with effect from the date of publication of this notification in the Bihar Gazette, unless previously withdrawn by a notification in the said Gazette.
By Order of the Governor,of Bihar, M. Sinha, Deputy Secretary to Government.
" At this stage we may mention that the validity of the orders made by the City Magistrate, Jamshedpur on May 21, 1961 and June 20, 1961 was not challenged in the present proceedings.
Nor was the validity of any portion of section 144, other than mentioned earlier was assailed.
The validity of parts of section 144 other than that impugned in the present proceedings has been upheld by this Court in Babulal Parate vs State of Maharashtra and Ors.
In order to consider the validity of the impugned part of section 144 Criminal Procedure Code, it is necessary to have before us the entire section.
That section reads thus : "(1) In cases where, in the opinion of a District Magistrate, a Chief Presidency Magistrate, Sub Divisional Magistrate, or of any other Magistrate (not being a magistrate of the third class) specially empowered by the (State Government) or the Chief Presidency Magistrate or the District Magistrate to act under this section (there is sufficient ground for proceeding under this section and) immediate prevention or speedy remedy is desirable, such Magistrate may, by a written order stating the material facts of the case and served in the manner provided by section 134, direct any person to abstain from a certain act or to take certain order with certain property in his possession or under his management, if such Magistrate considers that such direction is likely to prevent, or tends to prevent, obstruction annoyance or injury, or risk of obstruction, annoyance or injury to any person lawfully employed, or danger to human life, health or safety, or a disturbance of the public tranquillity, or a riot, or an affray, (1) ; 192 (2) An order under this section may, in cases of emergency or in cases where the circumstances do not admit of the serving in due time of a notice upon the person against whom the order is directed, be passed, ex parte.
(3) An order under this section may be directed to a particular individual, or to the public generally when frequenting or visiting a particular place.
(4) Any Magistrate may, (either on his own motion or on the application of any person aggrieved) rescind, or alter any order made under this section by himself or any Magistrate subordinate to him, or by his pre decessor in office.
(5) Where such an application is received, the Magistrate shall afford to the applicant an early opportunity of appearing before him either in person or by pleader and showing case against the order; and it the Magistrate rejects the application wholly or in part, he shall record in writing his reasons for so doing.
(6) No order under this section shall remain in force for more than two months from the making thereof, unless, in cases of danger to human life, health or safety, or 'a likelihood of a riot or an affray, the (State Government) by notification in the Official Gazette, otherwise directs.
" It may be noted that orders under sub sections
(1), (2), (3), (4) and (5) of section 144 can only be passed by superior Magistrates.
This Court in Babulal Parate 's case(1) sustained the validity of an order made by a Magistrate under section 144(1) because of the various safeguards provided in the section.
It may be seen that an order made by a Magistrate under section 144(1), Criminal Procedure Code is open to be revised on the basis of any representation made by the aggrieved party and is also revisable by the High Court.
An analysis of the section shows that an order under that provision is subject to the following safeguards : (1) It has to be made by a superior Magistrate; (2) While making the order the Magistrate has to act judicially; (3) The order will be in operation for a short period an order of a temporary nature; (4) An opportunity is given, to the aggrieved party of showing cause against that order; (5) Reasons have to be recorded by the Magistrate for rejecting an application under s, 144(4) and (1) ; 193 (6) The order of the Magistrate being a judicial order, it can be challenged in revision before the High Court under section 435 read with section 439, Criminal Procedure Code.
It was urged by Mr. Ramamurthi that whereas the legislature had provided adequate safeguards in respect of orders made by Magistrates, it has failed to provide for any safeguard in respect of orders made by the State Government under the second part of sub section
(6) of section 144, Criminal Procedure Code; before making an order under that provision, the State Government is not required to make any inquiry; no opportunity is given to the aggrieved party to show cause against the order; the order made by the State Government need not be of a temporary nature and the order of the State Government is neither appealable nor revisable.
Hence according to him the restriction imposed on the fundamental rights guaranteed to the respondents under article 19(1)(b)(c) '(d) viz., to assemble peaceably without arms, to form associations or unions and to move about freely throughout India, is an unreasonable restriction.
The State has not been consistent in its stand.
Before the High Court, in its grounds of appeal filed as well as in the initial stage of the arguments of Mr. Goburdan learned counsel for the State of Bihar and Dr. Singhvi, the stand taken was that the order made by the State Government is on administrative order and as such is not amenable to any judicial review.
But after some discussion and after obviously realising the untenability of their contention, they drastically changed their stand and contended that the only operative orders are those made by the Magistrate, the Government merely extended the duration of those orders; the order of the Government got merged in the orders of the Magistrate; the extended order is open to review under sub section (4) of section 144, Criminal Procedure Code and the same is revisable under section 435 read with section 439, Criminal Procedure Code.
We shall now proceed to consider whether there is any basis for the new line of argument advanced in this Court.
We have earlier seen the scheme of section 144, Criminal Procedure Code.
Its first sub section empowers the appropriate Magistrate to make any order contemplated therein.
The second sub section confers power on the Magistrate to pass the ex parte order under certain circumstances.
The third sub section sets out the person against whom the order made by the 'Magistrate can be directed.
The fourth sub section provides for the review of the order by the Magistrate who made the order or his successor in office or by his superior either suo moto or on the representation made by the aggrieved party.
The fifth sub section lays down the procedure to be adopted by the concerned Magistrate to deal with the repre 194 sentation received.
The first part of the sixth sub section fixes the period during which the order made by a Magistrate would be in operation.
Once the process set but above comes to an end the Magistrate has no further function.
Thereafter it is clear he becomes functus officio in relation to the order made by him.
The power conferred on the Government under the second part of the sixth sub section is an independent power.
Before issuing any direction under that sub section, the Government has to examine afresh whether the danger to human life, health or safety or a likelihood of a riot or an affray continues and if it continues how long the original order made by the Magistrate should 'be kept alive.
It is true that the basic order is the Magistrate 's order but the decision that the circumstances mentioned in sub section
(6) of section 144, Criminal Procedure Code continue to exist and the original order should be continued for a certain period of time or indefinitely is that of the Government.
It is not a case of the Government order getting merged in the Magistrate 's order.
It is rather the converse.
The Magistrate 's order is adopted by the Government as its own order.
Once the Government notifies its direction.
the responsibility for the continuance of the original order is that of the Government.
It may be noted that the direction given by the Government has to be notified in the Official Gazette.
We have earlier seen that the order with which we are concerned in this case was made in the name of the Governor and signed by a Secretary to the Government.
That is the usual procedure adopted in issuing directions under section 144(6).
From all these, it is clear that the direction in question is an executive act of the State Government coming within article 166 of the ConstitutiON.
If the direction given under section 144(6) is intended to merely keep alive a judicial order, the legislature would have entrusted that function to a judicial authority as has been done in the case of an order under section 144(1), Criminal Procedure Code.
Further it is least likely that the legislature would have prescribed that such a direction should be notified in the Official Gazette.
It we bear in mind our legislative practice, it is difficult to accept the contention that the legislature had conferred upon the Magistrate power to review the directions given by the Government.
Section 144(4) says in clearest possible terms that the Magistrate may rescind or alter any order made under that section by himself or any magistrate sub ordinate to him or by a predecessor in office.
It is not possible to bring within the scope of this section the order made by the State Government.
If the legislature intended to bring within the scope of this sub section direction (which really means order) given by the State Government, it would have stated so particularly when it specifically referred to the order made by the Magistrate 's predecessor in office or that made by a subordinate Magistrate.
The scheme of the section.
the language employed therein and our legislative practice militate against the new line of defence adopted 195 on behalf of the State of Bihar, Union of India and the Attorney General in this Court.
From a plain reading of section 144(6), Criminal Procedure Code, it is clear that the power conferred on the State Government is an independent power and it is an executive power.
It is not expected to be exercised judicially.
It is open to be exercised arbitrarily.
The directions given in the exercise of that power need not be of a temporary nature.
The ambit of that power is very large and it is uncontrolled.
Dr. Singhvi at one stage urged that the only check on the exercise of that power by the Government is the searching scrutiny of governmental actions expected from our legislators.
We shall assume as Dr. Singhvi wants us to do that de executive actions of the Government are constantly being watched by the legislators.
But that does not absolve this Court 's responsibility.
To quote the felicitous expressions of one of the illustrious former Chief Justices of this Court (Sri Patanjali Sastri) in State of Madras vs Y. G. Row(1) that as regards the fundamental rights, the Constitution has assigned to this Court the role of a Sentinel on the quivive.
Proceeding further the learned Chief Justice observed in that case that "while this Court naturally attaches great weight to the legislative judgment, it cannot desert its own duty to determine finally the constitutionality of an impugned statute".
It will be neither fair nor just to this Court or to our Constitution or even to our representatives, if this Court deserts its duty on the assumption that the other organs of the State would safeguard the fundamental rights of the citizens.
Dr. Singhvi 's contention ignores the very character of the fundamental rights, the basic principles underlying them and the safeguards carefully erected by our Constitution against the legislative encroachment of the fundamental rights of citizens.
Further it is based on an over simplification of the concept of the rule of the majority in a parliamentary democracy.
It overlooks the fact that these safeguards are primarily intended to protect the rights of the minority.
Dr. Singhvi 's contention also overlooks the fact that the fundamental rights constitute a protective shield to the citizens as against State actions.
Therefore there is no point in saying that the legislators would see that those rights are not impugned.
The real question for decision is whether impugned restriction is a reasonable restriction.
Unless that restriction can be considered as a reasonable restriction, it does not get the protection of Sub articles
(3), (4) and (5) of article 19, which means that restriction is violative of article 19 (1 ) (b) (c) and (d).
(1) ; 196 As observed in Dr. Khare vs State of Delhi(1), and reiterated in V. G. Rao 's case (2 ) that in considering reasonableness of laws imposing restrictions on fundamental rights both substantive and procedural aspects of the law should be examined from the point of view of reasonableness and the test of reasonableness wherever prescribed should be applied to each individual statute impugned and no abstract standard or general pattern of reasonableness can be laid down as applicable to all cases.
It is not possible to for mulate an effective test which would enable the court to pronounce any particular restriction to be reasonable or unreasonable per se.
All the attendant circumstances must be taken into consideration and one cannot dissociate the actual contents of the restrictions from the manner of their imposition or the mode of putting them into practice.
In other words in order to be a reasonable restriction, the same must not be arbitrary or excessive and the procedure and the manner of imposition of the restriction must also be fair and just.
Any restriction which is opposed to the fundamental principles of liberty and justice cannot be considered reasonable.
One of the important tests to find out whether a restriction is reasonable is to see whether the aggrieved party has a right of representation against the restriction imposed or proposed to be imposed.
No person can be deprived of his liberty without being afforded an opportunity to be heard in defence and that opportunity must be adequate, fair and reasonable.
Further the courts have to see whether the restriction is in excess of the requirement or whether it is imposed in an arbitrary manner.
Although the object of a restriction may be beyond reproach and may very well attract the protection of Sub articles
1 to 6 of article 19, if the statute fails to provide sufficient safeguards against its misuse the operative sections will be rendered invalid see The State of Madhya Pradesh vs Baldeo Prasad(3).
A restriction imposed under section 3(1) of the Punjab Special Powers Act, 1956 was struck down by this Court in Virendra vs State of Punjab(4) on the ground that the Act did not provide for any time for the operation of an order made thereunder nor for a representation by the aggrieved party.
Now adverting to the restriction impugned in this case, the power to impose the same is conferred on the executive Government and not to any judicial authority.
There is no provision to make representation by the aggrieved party against the direction given by the Government; no appeal or revision is provided against that direction and the order made need not be of temporary nature.
Hence we agree with the High Court that impugned provision is (1) ; (2) ; (3) ; (4) ; , 197 violative of article 1 9 (1) (b) (c) and (d) and is not saved by article 19(3), (4) or (5).
In the result this appeal fails and the same is dismissed.
ORDER In accordance with the opinion of the majority the appeal is dismissed.
| IN-Abs | Sub section (6) of section 144 of the Code of Criminal Procedure provides that no order under s, 144 shall remain in force for more than two months from the making thereof, unless, in cases of danger to human life, health or safety, or a likelihood of a riot or an affray, the State Government, by notification in the Official Gazette otherwise directs.
The City Magistrate of Jamshedpur passed orders under section 144(1) against the respondents which were later extended by the State Government of Bihar in exercise of its powers under section 144(6).
In a writ petition filed by the respondents the High Court of Patna struck down the second part of sub s.(6) of section 144 as being violative of sub cls.
(b), (c) and (d) of cl.
(1) of article 19 of the Constitution.
The State appealed and contended that the only operative orders were those made by the Magistrate and the Government merely extended those orders.
Further, since the order of the Government got merged in the orders of the Magistrate, the extended order was open to review under sub section
(4) of section 144 and the same was also revisable under section 435 read with section 439 of the Code of Criminal Procedure.
HELD : Per Shelat, Vaidialingam, Hedge and Ray, JJ. (i) The Magistrate 's order is no doubt the basic order.
But after the process in the first five sub sections of section 144 is completed he becomes functus officio.
The decision that the circumstances mentioned in sub section
(6) of section 144 Criminal Procedure Code continue to exist and the original order should be continued is that of the Government.
It is not a case of the Government order getting merged in the Magistrate 's order.
Rather the Magistrate 's order is adopted by the Government as its own order.
[194 A C] The order of the Government is made in the name of the Governor ,and signed by a Secretary to the Government.
It is published in the Official Gazette.
It is thus clearly an executive act of the Government coming within article 166 of the Constitution.
If the direction given under section 144(6) is intended to merely keep alive a judicial order, the legislature would have entrusted that function to a judicial authority as has been done in the case of an order under section 144(1).
[194 E F] Section 144(4) says in clearest possible terms that the Magistrate may rescind or alter any order made under that section by himself or any magistrate subordinate to him or by a predecessor in office.
It is not possible to bring within the scope of this section the order made by the State Government.
for if it was so intended it would have been mentioned in the section.
[194 G] From a plain reading of section 144(6) it is clear that the power conferred on the Government is an independent executive power, not expected to be exercised judicially.
It is open to be exercised arbitrarily.
The direc 182 tions given in the exercise of that power need not be of a temporary nature.
The ambit of that power is very large and is uncontrolled.
[195 B] (ii) The fact that the Legislature is expected to keep a check on governmental actions does not absolve this Court 's responsibility.
The fundamental rights constitute a protective shield to the citizen as against State actions and the Court cannot desert its duty on the assumption that the other organs of the State would safeguard the fundamental right of the citizens.
[195 C D] (iii) In order to be a reasonable restriction within the meaning of article 19 of the constitution the same must not be arbitrary or excessive and the procedure and the manner of its imposition must also be fair and just.
Any restriction which is opposed to the fundamental principles of liberty and justice cannot be considered reasonable.
One of the im portant tests to find out whether a restriction is reasonable is to see whether the aggrieved party has a right of representation against the restriction imposed or proposed to be imposed.
Further the courts have to see whether it is in excess of the requirement or imposed in an arbitrary manner.
Although the object of a restriction may be beyond reproach and may very well attract the protection of sub articles
1 to 6 or article 19, if the State fails to provide sufficient safeguards against its misuse the operative sections will be rendered invalid.
[196 C F] Since section 144(6) gives the power to impose the restrictions contemplated by it to the executive Government and not to a judicial authority and there is no right of representation, appeal or revision given to ,the aggrieved party against an order which may not be of a temporary nature, it must be held that the said impugned provision is violative of article 19 (1) (b) (c) and (d) and is not saved by articles 19(3) (4) or (5).
[196 G] Babulal Parate vs State of Maharashtra and Ors. ; , ,referred to.
State of Madras vs V. G. Rao, ; ; Dr. Khare V. State of Delhi, ; ; State of Madhya Pradesh vs Baldeo Prasad ; and Virendra vs State of Punjab; , , applied.
Per Shah, J. (dissenting).
Sub section
(6) of section 144 does not authorise the ,State Government to make the order of the Magistrate permanent.
It ,cannot direct it to continue after apprehension of danger or emergency ceases.
The validity of a statute conferring power is not open to challenge on the plea that the power may possibly be abused by the authority in which it is vested.
The order duration of which is extended by declaration of the State is and continues to remain that of the Magistrate.
The 'source of the authority of the order is derived not from the State Government, but from the Magistrate.
It cannot be said that the order of the Magistrate gets merged with that of the Government when its duration is extended.
Although no provision is made in the Code for a judicial review of the State Government 's order under section 144(6), the said order does not depend on the subjective satisfaction of the Government and is capable of being challenged in a petition under article 226 of the Constitution ' Further the Magistrate who passed the original order may in considera tion of the materials placed before him under section 144(4) rescind or alter the State Government 's order.
In the exercise of his judicial functions 183 the Magistrate is independent of the Government and not subordinate to it.
The principle applies even in the case of an Executive Magistrate who under the scheme of separation of powers may be responsible to the executive authorities.
The above remedies being available the provision in section 144(6) cannot be held to be unreasonable on the mere ground that there is no express provision in the Code for redress against the, State Government 's order.
Reasonableness of a statutory provision cannot 'be determined by the application of set formulas : it must be determined on a review of the procedural and substantive provisions of the statute keeping in mind the nature of the right intended to be infringed, underlying purpose of the restriction contemplated to be imposed, gravity of the evil intended to be remedied thereby, object intended to be achieved by the imposition of restriction, and other relevant circumstances.
B D] Case law referred to.
|
Civil Appeals Nos. 942 and 943 of 1966.
Appeals by special leave from the judgment and order dated june 18, 1965 of the Kerala High Court in Writ Appeals Nos.
139 and 140 of 1964.
Jagdish Swarup, Solicitor General, T.A. Ramachandran and D. Sharma, for the appellant (in both the appeals).
S.T. Desai, M.C. Chacko, A.K. Verma, J.B. Dadachanji, and O.C. Mathur, for respondent No. 1 (in C.A. No. 942 of 1966).
A.G. Pudissery, for respondents Nos. 2 and 3 (in C.A. No. 942 of 1966).
J.B. Dadachanji, for respondents Nos. 1 and 2 (in C.A. NO. 943 of 1966).
A.G. Pudissery, for respondents Nos. 7 and 8 (in C.A. No. 943 of 1966).
The Judgment of the Court was delivered by Grover, J.
These two appeals by special leave involve a common question relating to the validity of a notification issued by the Government of Kerala in August 1963 empowering certain revenue officials including the Taluka Tahsildar to exercise the powers of a Tax Recovery Officer under the Income Tax Act 1961, hereinafter called the Act.
The notification was expressly stated to be effective from 1st April 1962 a date prior to the date of the notification.
The facts in one of the appeals (C.A. 942/66) may be stated: One Kunchacko of Alleppey allowed the income tax dues from him to fall into arrears.
The Income Tax Officer took steps to recover the arrears through the Tahsildar.
Certain shares standing in the name of the assessee were attached by the Tahsildar.
The first respondent Ponnoose claimed to have obtained a decree for a certain sum against the assessee.
He also got the shares 680 standing in the name of the assessee attached in execution proceedings, Ponnoose filed a petition under article 226 of the Constitution in the High Court of Kerala in which he challenged the action taken by the revenue officials including the Tahsildar for getting the shares, which had been attached, sold for satisfaction of the income tax dues of the assessee.
The learned Single Judge held that the notification empowering the Tahsildar to exercise the powers of a Tax Recovery Officer under the Act with retrospective effect was invalid.
Consequently ' the attachments made by the Tahsildar were quashed.
This view was affirmed by a division bench in appeal.
The Act came into force on first April 1962.
Section 2(44) defined the expression "Tax Recovery Officer" in the following.
terms: "Tax Recovery Officer ' means (i) a Collector; (ii) an additional Collector or any other officer authorised to exercise the powers of a Collector under any law relating to Land revenue for the time being in force in a State; or (iii) any gazetted officer of the Central or a State Government who may be authorised by the Central Government by notification in the Official Gazette, to exercise the powers of a Tax Recovery Officer".
Section 4 of the Finance Act, 1963 substituted a new definition for the original definition of Tax Recovery Officer.
It was provided that the new definition "shall be and shall be deemed always to have been substituted".
The new definition was as follows: "Tax Recovery Officer" means (i) a Collector or an additional Collector; (ii) any such officer empowered to.
effect recovery of arrears of land revenue or other public demand under any law relating to land revenue or other public demand for the time being in force in the State as may be authorised by the State Government, by general or special notification in the Official Gazette, to exercise the powers of a Tax Recovery Officer; (iii) any Gazetted Officer of the Central or a State Government who may be authorised by the Central Government, by general or special noti 681 fication in the Official Gazette, to exercise the powers of a Tax Recovery Officer.
" The impugned notification dated August 14, 1963 which was published in the Kerala Gazette dated August 20, 1963 referred to the powers conferred by sub clause (ii) of clause (44) of section 2 of the Act read with sub rule (2) of rule 7 of the Income tax (Certificate Proceedings) Rules, 1962 and authorised the various revenue officials mentioned therein including the Taluk Tahsildar to exercise the powers of a Tax Recovery Officer under the Act in respect of the arrears etc.
The concluding portion was, "This notification shall be deemed to have come into force on the first day of April 1962".
The Tahsildar had effected attachment of the shares subsequent to first April 1962 but prior to August 14, 1963.
In other words on the date on which he had effected attachment he was not a Tax Recovery Officer but he got the powers of a Tax Recovery Officer by virtue of the notification dated August 14, 1963.
The short question for determination, therefore, was and is whether the State Government could invest the Tahsildar with the powers of a Tax Recovery Officer under the aforesaid provisions of the Act with effect from a date prior to the date of the notification, i.e., retroactively or retrospectively.
Now it is open to a sovereign legislature to enact laws which have retrospective operation.
Even when the Parliament enacts retrospective laws such laws are in the words of Willes J. in Phillips vs Eyre(1) "no doubt prima facie of questionable policy and contrary to the general principle that legislation by which the conduct of mankind is to be regulated ought, when introduced for the first time, to deal with future acts, and ought not to change the character of past transactions carried on upon the faith of the then existing law.
" The courts will not, therefore, ascribe retrospectivity to new laws affecting rights unless by express words or necessary implication it appears that such was the intention of the legislature.
The Parliament can delegate its legislative power within the recognised limits.
Where any rule or regulation is made by any person or authority to whom such powers have been delegated by the legislature it may or may not be possible to make the same so as to give retrospective operation.
It will depend on the language employed in the statutory provision which may in express terms or by necessary implication empower the authority concerned to make a rule or regulation with retrospective effect.
But where no such language is to be found it has been held by the courts that the person or authority exercising subordinate legislative functions cannot make a rule, regulation or bye law which can operate with retrospective effect; (see Subba Rao J. in Dr. lndramani Pyarelal Gupta vs W. R. Nathu & (1) 40 Law J.Rep.(N.S.) Q.B. 28 at p. 37.
682 Others(1) the majority not having expressed any different opinion on the point; Modi Food Products Ltd. vs Commissioner of Sales Tax U.P.(2); India Sugar Refineries Ltd. vs State of Mysore(3) and General section Shivdev Singh & Another vs The State of Punjab & Others(4).
it can hardly be said that the impugned notification promulgates any rule, regulation or bye law all of which have a definite signification.
The exercise of the power under sub clause (ii) of cl.
(44) of section 2 of the Act is more of an executive than a legislative act.
It becomes, therefore, all the more necessary to consider how such an act which has retrospective operation can be valid in the absence of any power conferred by the aforesaid provision to so perform it as to give it retrospective operation.
In Strawboard Manufacturing Co., Ltd. vs Gutta Mill Workers ' Union(5) an industrial dispute had been referred by the Governor to the Labour Commissioner or a person nominated by him with the direction that the award should be submitted not later than April 5, 1950.
The award, however, was made on April 13, 1950.
On April 26, 1950 the Governor issued a notification extending the time up to April 30.
It was held that in the absence of a provision authorising the State Government to extend from time to time the period within which the Tribunal or the adjudicator could pronounce the decision the State Government had no authority to extend the time and the award was, therefore, one made without jurisdiction and a nullity.
This decision is quite apposite and it is difficult to hold in the present case that the Taluka Tehsildar could be authorised by the impugned notification to exercise powers of a Tax Recovery Officer with effect from a date prior to the date of the notification.
It may next be considered whether by saying that the new definition.
of "Tax Recovery Officer" substituted by section 4 of the Finance Act, 1963 "shall be and shall be deemed always to have been substituted" it could be said that by necessary implication or intendment the State Government had been authorised to invest the officers mentioned in the notification with the powers of a Tax Recovery Officer with retrospective effect.
The only effect of the substitution made by the Finance Act was to make the new definition a part of the Act from the date it was enacted.
The legal fiction could not be extended beyond its legitimate field and the aforesaid words occurring in section 4 of the Finance Act 1963 could not be construed to embody conferment of a power for a retrospective authorisation by the State in the absence of any express (1) ; (2) A.I.R. 1956 All. 35.
(2) A.I.R. 1960 Mys, 326 (4) (5) ; 683 provision in section 2(44) of the Act itself.
It may be noticed that in a recent decision of the Constitution Bench of this Court in B. 8.
vadera etc., vs Union of India & Others(1) it has been observed with reference to rules framed under the proviso to article 309 of the Constitution that these rules can be made with retrospective operation.
This view was, however, expressed owing to the language employed in the proviso to article 309 that ' 'any rules so made shall have effect subject to the provisions of any such Act".
As has been pointed out the clear and unambiguous expressions used in the Constitution, must be given their full and unrestricted meaning unless hedged in by any limitations.
Moreover when the language employed in the main part of article 309 is compared with that of the proviso it becomes clear that the power given to the legislature for laying down the conditions is identical with the power given to the President or the Governor, as the case may be, in the matter of regulating the recruitment of Government servants and their conditions of service.
The legislature, however, can regulate the recruitment and conditions of service for all times whereas the President and the Governor can do so only.
till a provision in that behalf is made by or under an Act of the appropriate legislature.
As the legislature can legislate prospectively as well as retrospectively there can be hardly any .justification for saying that the President or the Governor should not be able to make rules in the same manner so as to give them prospective as welt as retrospective operation.
For these reasons the ambit and content of the rule making power under article 309 can furnish no analogy or.
parallel to the present case.
The High Court was consequently fight in coming to the conclusion that the action taken by the Tahsildar in attaching the shares was unsustainable.
The appeals therefore fail and are dismissed with costs.
One hearing fee.
Y.P. Appeals dismissed.
| IN-Abs | By a notification dated August 14, 1963, issued by the State of Kerala the Taluka Tehsildar was authorised to exercise the powers of a Tax Recovery Officer under the Income tax Act, 1961.
The notification was made effective from April 1962.
The shares of the assessee, who was in arrears of his income tax, were.
attached by the Taluka Tehsildar after April 1, 1962 but prior to August 14, 1963.
A petition under article 226 of the Constitution was filed challenging the, action of the Tehsildar.
The High Court held that the notification empowering the Tehsildar to exercise the powers of a Tax Recovery Officer with retrospective effect was invalid and consequently quashed the attachments.
This view was affirmed by the Division Bench in appeal.
Dismissing the appeal by the Revenue, this Court, HELD: The courts will not ascribe retrospectivity to new laws affecting rights unless by express words or necessary implication it appears that such was the intention of the legislature.
The Parliament can delegate its legislative power within the recognised limits.
Where any rule or regulation is made by any person or authority to whom such powers have been delegated by the legislature it may or may not be possible to make the same so as to give retrospective operation.
It will depend on the language employed in the statutory provision which may in express terms or by necessary implication empower the authority concerned to make a rule or regulation with retrospective effect.
But where no such language is to be found it has been held by the courts that the person or authority exercising subordinate legislative functions rule, regulation or bye law .
which can operate with retrospective effect.
[681 F H] It can hardly be said that the impugned notification promulgates any rule, regulation or bye law 'all of which have a definite signification.
The exercise of the power under sub cl.
(ii) of cl.
(44) of section 2 of the Income tax Act, 1961 is more of an executive than a legislative act.
[682 B] Dr. Indramani Pyarelal Gupta vs
W.R. Nathu & Ors. ; , Strawboard Manufacturing Co. Ltd. vs Gutta Mill Workers ; , followed.
Phillips vs Eyre, 40 Law L Rep. (N.S.) Q.B. 28 at p. 37, referred to.
Modi Food Products Ltd. vs Commissioner of Sales tax U.P.A.I.R. [1956] All.
35, India Refineries Ltd. vs State of Mysore, A.I.R. 1960 Mys.
326 and General 8.
Shivdev Singh & Anr.
v, The State of Punjab & Ors. , approved.
679 By saying that new definition of "Tax Recovery Officer" substituted by section 1 of the Finance Act, 1963, "shall be and shall be deemed always to have been substituted" was to make the new definition a part of the income Tax Act from the date it was enacted.
The legal fiction could not be extended beyond its legiitimate field and the aforesaid words occurring in s.4 of the Finance Act, 1963 could not be construed to embody conferment of 'a power for retrospective authorisation by the State re.the absence of any express provision in section 2(44) of the Income Tax Act itself.
[682 G] B.S. Vadera etc.
vs Union of India & Ors. ; , distinguished.
|
Appeal No. 1121 of 1966.
Appeal by special leave from the judgment and order dated August 17, 1965 of the Punjab High Court, in Letters Patent Appeal No. I 10 of 1965.
203 Janardan Sharma and R. N. Sachthey, for the appellant.
The respondent did not appear.
The Judgment of the Court was delivered by Sikri, J.
This appeal by special leave is directed against the judgment of the High Court of Punjab accepting the petition filed by the rate payers of Municipal Committee, Rohtak, respondents before us, and ordering that the State Government shall not proceed with the constitution of the Rohtak Improvement Trust under the notification of August 30, 1961.
The High Court allowed the petition because it held (1) that sub section
(3) of section I of the Punjab Town Improvement Act (Punjab Act IV of 1922) here in after referred to as the Act only envisages the creation 'of a Trust in a Municipal area where a Committee is functioning and so is in a position to hold a special meeting to decide whether or not it considers the creation of a trust desirable, and (2) that once a trust ceases to exist under section 103(l) of the Act in order to recreate the trust, the Act has to be applied again, and as the Municipal Committee had at a special meeting held on November 9, 1962, decided unanimously that the Act should not be applied the Government was bound to give effect to that decision.
The learned counsel for the appellant, Mr. Sachthey, contends that the High Court has placed a wrong interpretation on the two provisions mentioned above and somehow section 4 A of the Act was not noticed by the High Court.
Before we deal with the interpretation of the provisions mentioned above it is necessary to state a few facts.
The Rohtak Municipal Committee was superseded on August 2, 1954.
The Government purported to extend the provisions of the Act to the whole of the area of the Municipality on May 21, 1958.
The notification to this effect reads "In pursuance of the provisions of sub section of Section I of the Punjab Town Improvement Act 1922 (Punjab Act No. IV of 1922), the Governor of Punjab proposes to apply the provisions of the said Act to the whole of the area of the municipalities specified below with effect from 9th June, 1958 1. . 2. . 3.
Rohtak,. " Sub section (3) of section 1 of the Act reads as follows "1.
(3) This section and section 66 shall come into force at once.
The State Government may by notification propose to apply the rest of the Act to the whole or any part of any municipality and to any locality adjacent 204 thereto, on such date as may be specified in such notification; and the Act shall come into operation after the, lapse of three months unless within that period the municipal committee concerned at meeting convened for the purpose of considering the application of the Act resolve by a majority of two thirds that the Act should not be so applied.
" In pursuance of this notification a trust was set up.
But on August 30, 1961, the Government issued a notification in exercise of its powers under sub section
(1) of section 103 of the Act and declared that the Rohtak Improvement Trust shall be dissolved with effect from August 30, 1961 from which the Chairman and the trustees of the aforesaid Trust ceased to function.
Section 103(1) of the Act reads as follows : "103.
(1) When all schemes sanctioned under this Act have been executed or have been so far executed as to render the continued existence of the trust, in the opinion of the State Government, unnecessary, or when in the opinion of the State Government it is expedient that the trust shall cease to exist, the State Government may by notification declare that the trust shall be dissolved from such date as may be specified in this behalf in such notification; and the trust shall be deemed to be dissolved accordingly.
" It appears that on the supersession of the Municipality of Rohtak in 1954 an Administration was appointed under section 238 of the Punjab Municipal Act, 191 1.
This section, inter alia, provides: "238.
(1) . (2) When a committee is so superseeded.
the following consequences shall ensue (a). (b) all powers and duties of the committee may, until the committee is reconstituted, be exercised and performed by such persons as the State Government may appoint in that behalf;" Fresh elections of the Municipal Committee, Rohtak, were held in July 1961, and the Municipal Committee reconstituted on January 10, 1962.
On October 23, 1962, the Government informed the Deputy Commissioner, Rohtak, that it had decided to reconstitute Rohtak Improvement Trust immediately and asked the Deputy Commissioner to recommend a panel of six names of suitable persons for appointment as trustees and the Government also asked him to call upon the Municipal Committee, Rohtak, to elect its representatives as trustees.
205 This was not to the liking of the Municipal Committee and the Municipal Committee unanimously passed a resolution on November 9, 1962, strongly opposing the reconstitution of the Improvement Trust, Rohtak.
The Government by notification dated January 10, 1963, in exercise of powers conferred 'by sub section
(2) of section 4 of the Act appointed one Major section K.Mehta as Chairman, Rohtak Improvement Trust.
The Municipal Committee was again requested to send two names of three members of the Municipal Committee to be appointed as trustees as required by cl.
(b) of sub section
( 1) of section 4 of the Act.
Thereupon 32 rate payers filed the petition under article 226 of the Constitution challenging the reconstitution of the Rohtak Improvement Trust.
Coming to the first point decided by the High Court, it seems to us that section 4 A to the Act was not brought to its notice and if it had been brought to its notice the High Court may well have come to the contrary conclusion.
Section 4 A which, was inserted by Punjab Act VIII of 1936 reads : "4 A.
During the period of supersession of a Municipal Committee under section 238 of the Punjab Municipal Act, 191 1, the three seats allotted to the Municipal Committee on the trust under clause (b) of sub section (1) of section 4 shall be filled by the State Government by appointing any three persons by notification in the Official Gazette.
The term of office of every trustee so appointed shall be three years or until the Trust is dissolved, whichever period is less, provided that if the Municipal Committee is reconstituted three members of the Municipal Committee shall be elected or appointed in accordance with the provisions of section 4, and on their election or appointment the three trustees appointed by the State Government under this section shall cease to be members of the Trust.
" Reading section 1(3) and section 4A of the Act, and section 238 of the Punjab Municipal Act, 191 1, together, it seems to us that the true meaning of the latter portion of sub section (3) of section 1 is that when the Government applies the section and the Municipal Committee has been superseded before that date, it is the Administrator who would exercise the powers given under the latter part of that sub section; in other words, the Administrator would be competent to say to the Government that the Act shall not come into operation.
The words of section 238 of the Punjab Municipal Act are very wide and it is difficult to limit the expression "all powers and duties of the committee" in any manner.
The Municipality exercised powers by resolution passed by majority and the fact that this particular resolution had to be by two third majority does not lead 206 to the conclusion that the power to oppose the application of the Act vesting in the Municipal Committee cannot be exercised by the Administrator under section 238, Punjab Municipal Act.
Section 4A of the Act clearly proceeds on the basis that while the Municipal Committee stands superseded the appointment of trustees which was originally to be made by the Municipal Committee would be made 'by the State Government.
As the High Court did not have section 4 A before it had relied on the anomaly that where a Municipal Committee was suspended the Government could nominate some members of the suspended Committee as members of the Trust or otherwise fill these vacancies, and the High Court felt that it could not believe that it was the intention of the Legislature.
Coming to the second point.
made by the High Court, it seems that the High Court has wrongly,, held that once the Act has been applied it is necessary that it should be applied again when the Municipal Committee is reconstituted.
There is nothing in the words of sub section
(3) of section I to 'warrant this conclusion.
Once the Act has come into operation in accordance with the provisions of sub section
(3) of section 1 there is no provision by which the Act can cease to apply.
The only point that remains is,: when a trust has been dis solved under section 103 of the Act, can it be reconstituted under the Act ? The only provisions under which a trust can be reconstituted under the Act are sections 3 and 4.
Section 3 reads : "3.
The duty of carrying out the provisions of this ' Act in any local area shall, subject to the conditions and limitations hereinafter contained, be vested in a board to be called "The (name of town) Improvement Trust" hereinafter referred to as the 'The Trust"; and every such board shall be a body corporate and have perpetual succession and common seal, and shall by the said name sue and be sued.
" Section 4 reads; "4.
(1) The trust shall consist of seven trustees, namely The other sub sections of section 4 provide how the trustees are to be appointed.
It seems to us that if the trust could originally be created under sections 3 and 4, reading sections 3 and 4 and section 12 of the General Clauses Act, the Government has the power to create a view trust or reconstitute a new trust.
We may mention that section 12 of the Gene 207 ral Clauses (Punjab.) Act, 1898, provides that "where by any Punjab Act any power is conferred then that power may be exercised from time to time as occasion requires.
" In the result the judgment of the High Court is set aside, the appeal allowed and the writ petition dismissed.
There, will be no order as to costs throughout.
Y.P. Appeal allowed.
| IN-Abs | The Rohtak Municipal Committee was superseded in August 1954, and an Administrator was appointed under section 238 of the Punjab Municipal Act, 1911.
In June 1958 the provisions of the Punjab Town Improvement Act, 1922, were extended to the Municipality and the Rohtak Improvement Trust was set up under the Act.
In August 1961, the Government issued a notification under section 103 (1) of the 1922 Act dissolving the Trust.
The Municipal Committee was reconstituted in January 1962 and in October 1962 the Government decided to reconstitute the Trust.
The Municipal Committee thereupon passed a resolution opposing the reconstitution of the Trust.
In January 1963, however, the Government re constituted the Trust and the Municipal Committee was asked to name its representatives to be appointed as trustees.
The rate payers filed a writ petition challenging the reconstitution of the trust and the High Court allowed the petition.
In appeal to this Court, HELD : (1) The attention of the High Court was not drawn to section 4A of the 1922 Act and therefore it erred in holding that the Trust could not be set up in 1958 because, under section 1(3) of the 1922 Act a Trust cannot be created in a Municipal area unless the committee was functioning.
Under section 4A, where the Municipal Committee was superseded the State ,Government could appoint the trustees, and there was no anomaly in the Government nominating the trustees, because, the Administrator who had all the powers and duties of the Committee under section 238 of the 1911 Act was competent to say to the Government that the 1922 Act should not be applied to the Municipality.
[205 C D 206 B] (2) Once the 1922 Act had come into operation under section 1(3), it ,continues to apply and it was not necessary to apply it again when the Municipal Committee was reconstituted in 1962.
[206 D] (3) Under sections 3 and 4 of the 1922 Act and the General Clauses (Punjab) Act, 1898, Government has the power to create a new trust or reconstitute a Trust which was dissolved.
[206 H]
|
Appeal No. 1191 of 1967.
Appeal by special leave from the judgment and order dated May 23, 1962 of the Allahabad High Court in Special Appeal No. 592 of 1961.
C. B. Agarwala and 0.
P. Rana, for the appellants.
The respondent did not appear.
The Judgment of the Court as delivered by Sikri, J.
This appeal by special leave is directed against the judgment of the Allahabad High Court whereby it allowed the 267 writ petition file by the respondent, Kumari Chittra Srivastava, hereinafter referred to as the petitioner, and quashed the impugned order but left it open to the Board of High School and Intermediate Education, hereinafter referred to as the Board, to reconsider the case after giving the petitioner a chance to offer her explanation.
The facts are not in dispute and the only question which arises is whether in the circumstances the petitioner was entitled to an opportunity to represent her case before the Board prior to the passing of the impugned order.
The relevant facts in brief are these.
The petitioner was in 1959 60 session a student of Basant Girls Intermediate College, Varanasi.
She appeared at the Intermediate examination in 1960 but failed.
She then joined the Government Inter College for Girls at Jaunpur.
Her name was sent up for Intermediate examination to be held in 1961 by the Principal.
She appeared in the examination but her result was not declared by the Board.
On May 24, 1961, the Board addressed a letter to the Principal making enquiries regarding the attendance of the petitioner.
According to the regulations framed by the Board no candidate can be presented for the Intermediate examination unless he/she has attended during two academical years 75% of lectures given in each subject in which the candidate is to be examined.
In the case of a failed candidate, like the petitioner, the percentage shall be calculated for one academical year, but Regulation 5(xiii) enables the head of a recognised institution to condone the deficiency in certain cases.
This regulation reads "(xiii) The rule regarding minimum attendance shall be strictly enforced.
The head of the recognised institution may condone a deficiency in attendance of not more than (a) ten days in the case of a candidate for the High School Examination; and (b) ten lectures (including periods of practical work, if any) given in each subject in the case of a candidate for the Intermediate Examination.
All cases in which this privilege is exercised shall be reported to the Director of Education as the Chairman of the Board.
In the cases of failed or detained candidates whose attendance of one year will be taken into account, the shortage to be condoned shall be reduced to half." 268 The Principal received the letter when on vacation outside Jaunpur.
The Principal replied on June 14, 1961, saying that a proper reply to paragraphs 1 and 2 of the letter will be sent after July 8, 1961.
She, however, stated "When Km.
Chitra Srivastava absented herself for a pretty long period on account of her illness, the position :was explained to her, besides informing her guardian also who was even called to the office and acquainted with the circumstances.
At that time, it was possible for her to make good this shortage by her regular attendance.
The teacher in Home Science took leave in February, 1961.
Chitra was short in attendance in other subjects also, but she made good the shortage by her regular attendance.
When, during the days the classes were held, lectures in other subjects were held and the girl attended there, it was, not considered proper to detain her from appearing at the examination on account of her absence from lectures in a subject in which the required lectures were not held.
I got the student admitted to the examination as I was confident that the officers of the Board will agree with my view.
" The substance of the letter was that the shortage in lectures was due to the lecturer taking leave.
The Board was, however, impatient.
It is not clear whether this letter was received by the Board because no reference to it is made in the letter dated July 6, 1961.
The Board wrote: "In continuation of this office letter No. E.I./617, dated 24th May, 1961 and telegram dated 24th May, 1961 1 have the honour to inform that you have not furnished the desired information about the student Km.
Chitra Srivastava, roll No. 50452.
From your previous letter No. 143/E dated 6th May, 1961, ' it is learnt that the admission of the student by you to the examination.
by condoning her absence from seven lectures on the subject of Home Science was contrary to rules.
Hence the student 's Inter Examination of 1961 is cancelled.
Kindly communicate this to the student under intimation to this office." 269 The Principal replied on July 11, 1961, giving details of the lectures attended and requested that the order be cancelled and the severe punishment be not awarded to the petitioner.
On October 6, 1961, the petitioner filed a petition under article 226 of the Constitution challenging the impugned order dated July 6, 1961.
Mathur, J., dismissed it summarily.
On appeal, Srivastava and Katju, JJ., allowed the petition, as mentioned earlier.
They were of the view that the Board, while cancelling the examination, acted in a quasi judicial capacity.
The Board was "by cancelling the examination inflicting a penalty" and if opportunity had been given to the petitioner to present her case she might have persuaded the Board not to cancel the examination.
The learned counsel for the appellant, Mr. C. B. Aggarwal.
contends that the facts are not in dispute and it is further clear that no useful purpose would have been served if the Board had served a show cause notice on the petitioner.
He says that in view of these circumstances it was not necessary for the Board to have issued a show cause notice .
We are unable to accept this contention.
Whether a duty arises in a particular case to issue a show cause notice before inflicting a penalty does not depend on the authority 's satisfaction that the person to be penalised has no defence but on the nature of the order proposed to be passed.
We agree with the High Court that the impugned order imposed a penalty.
The petitioner has appeared in the examination and answered all the question papers.
According to her she had passed.
To deny her the fruits of her labour cannot but to be called a penalty.
We are unable to appreciate the contention that the Board, in "cancelling her examination" was not exercising quasijudicial functions.
The learned counsel urges that this would be, casting a heavy burden on the Board.
Principles of natural justice are to some minds burdensome but this price a small price indeed has to be paid if we desire a society governed by the rule of law.
We should not be taken to have decided that this rule will also apply when a candidate is refused admission to an examination.
We are not concerned with this question and say nothing about it.
The learned counsel invites us to hold that the decision of the Board was on the facts correct and that the Board had no power to condone the shortage of 2 lectures.
But we decline to into these questions.
We are not sitting as a court of appeal and it is for the Board to decide after giving an opportunity to the petitioner and pass such orders as it thinks fit.
Whether it has the power to condone the shortage of lectures is for it, at least in the first instance, to decide.
270 The learned counsel further invites us to say that the possible courses which the petitioner 's counsel had outlined before the High Court will not be legal or justified.
The petitioner 's counsel had pointed out that the Board could have been persuaded to adopt some of the following courses "(1) To accept the explanation of the principal as valid.
(2) To condone the shortage of two lectures which the Principal could not condone.
The question whether the Board had power to condone shortage was raised in the Board of High School and Intermediate Education Uttar Pradesh Allahabad and others versus G. Vishwanath Nayar but was not decided and was left open.
It is urged on behalf of the appellant that the power to admit a candidate to an examination vests in the Board.
The Regulations only provide the extent to which shortage in attendance can be condoned by the heads of institutions.
There is nothing in the Regulations to limit the power of the Board itself to admit a candidate to an examination after condoning shortage which could not be condoned by the head of the institution.
(3) After noting that a technical breach of rules had been committed the Board or the Chairman may have decided not to take any action.
(4) The Board may have framed a new regulation with retrospective effect either permitting the head of the institution to condone a shortage in a case like that of the appellant or permitting the Board itself to make the necessary condonation in such cases.
(5) The Board could have given an authoritative interpretation of the words 'lectures given ' in clause (iii) of regulation 5 of chapter XII and decided whether the words covered such cases where the students were present to attend the lecture but it could not be arranged because of some unavoidable reason.
" But, like the High Court, we are not called upon to pronounce on their legality or appropriateness at this stage.
In the result the appeal fails and is dismissed.
As the petitioner (now respondent) is not represented there will be no order as to costs.
V.P.S. Appeal dismissed.
| IN-Abs | The respondent appeared in the Intermediate examination and passed, but the appellant, instead of declaring her result, addressed a letter on May 24, 1961, to the Principal of the college in which the Respondent was studying, making enquiries regarding the respondent 's attendance.
According to the regulations, a candidate must attend 75% of the lectures given in each subject.
The Principal, by her letter dated June 14, 1961, replied that the respondent was at one time short of attendance, that she made good the 'shortage in all subjects except one, but the shortage in that subject was due to the fact that lectures Were not given in that subject the lecturer having been on leave.
By its letter dated July 6, 1961, the appellant cancelled the respondent 's result and no reference was made to the Principal 's letter in the appellant 's letter.
The respondent thereupon filed a writ petition challenging the appellant 's order cancelling the result, and the High Court allowed the petition.
In appeal to this Court, HELD : The appellant should have given an opportunity to the respondent to present her case and pursuade the appellant not to cancel her result.
[269 C] Whether a duty arises in a particular case to issue a show cause notice before inflicting a penalty does not depend on the authority 's satisfaction that the person to be penalised has no defence but On the nature of the order proposed to be passed.
In the present case, the impugned order imposed a penalty on the respondent as she was denied the fruits of her labour, and when passing it, the appellant was exercising quasi judicial functions.
[269 D F]
|
ivil Appeal Nos.
736 to 739, 91 3 and 1621 of 1968.
Appeal from the judgment and order dated December 2, 1964 of the Calcutta High Court in Income tax Reference Nos.
131 of 1961 etc.
Jagdish Swarup, Solicitor General, T.A. Ramachandran, R.N. Sachthey and B.D. Sharma, for the appellant (in 'all the appeals).
P. Barman Ranjit Ghose and Sukumar Ghose, for the respondents (in all the appeals).
In a proceeding for assessment to Income tax for the year 1949 50 the respondents in these appeals claimed that the dividend distributed by the Ukhra Estate Zamindaries Ltd. was exempt from tax, because the fund out of which the dividend was distributed did not form part of the "accumulated profits" of the Company.
The Income tax Officer rejected the contention and brought the dividend 'to tax in the hands of the respondents.
The Appellate Assistant Commissioner held that Rs. 1,12,500 out of a total amount of Rs. 2,24,000 distributed by the Company, represented capital gains arising to the Company on or after April 1, 1948 and not being dividend within the meaning of section 2(6A)of the Income Tax Act, 1922, the share distributed to the shareholders out of that amount was exempt from income tax.
The order of the Appellate Assistant Commissioner was reversed in appeal by the Tribunal.
In the view of the Tribunal the definition of 'dividend ' in section 2(6A) in force in the year of assessment was not exhaustive, and if the amount distributed was "dividend in ordinary parlance it became chargeable under the general charging section", and that clause 2(6A) "was concerned with deemed dividends, and exclusion of certain capital gains by the proviso had no beating on the issue raised by the revenue" The following question referred by the Tribunal to the High Court of Calcutta .under section 66( 1 ) of the Indian Income tax Act: "Whether on the facts and in the circumstances of the case the amount of Rs. 28,125 was rightly included as dividend in the total income of the assessee for the assessment year 1949 50?" was answered in the negative.
The Commissioner has appealed to this Court.
with certificates granted by the High Court.
"Dividend ' in its ordinary connotation means the sum paid to or received by a share holder proportionate to his share holding in a company out of the total sum distributed.
The relevant part of the definition contained in section 2(6A) of the Income tax Act, 1922, in the year of assessment 1949 50 was as follows: "Dividend" includes (a) any distribution by a company of accumulated profits whether capitalised or not, if such distribution entails the release by the company to its shareholders of all or any part of the assets of the company; Explanation.
The words 'accumulated profits ' wherever they occur in the clause, shall not include 'capital profit '; 667 Provided further that the expression "accumulated profits", wherever it occurs in this clause, shall not include capital gains arising before the I st day of April 1946 or after the 31st day of March, 1948." Dividend distributed by a Company being a share of its profits declared as distributable among the shareholders, ' is not impressed with the character of the profits from which it reaches the hands of the shareholder.
It would be therefore difficult to hold that the mere fact that a distribution has been made out of the capital gains, it has the attributes of capital gains in the hands of the shareholders.
But that does not assist the case of the Revenue, for the Legislature has expressly excluded from the content of dividend ', capital gains arising after March 31, 1948.
The proviso to the Explanation clearly enacted that capital gains arising after March 31, 1948 are not liable to be included within the expression "dividend".
The definition is, it is true, an inclusive definition and a receipt by a shareholder which does not fall within the definition may possibly be regarded as dividend within the meaning of the Act unless the context negatives that view.
But it is difficult on that account to hold that capital gains excluded from the definition of dividend by express enactment still fall within the charge of tax.
According to the definition in section 2(6A) of the Income tax Act only the proportionate share of the member out of the accumulated profits (excluding capital gains arising in the excepted period) distributed by the Company, alone will be deemed the taxable component.
There is now warrant for the view expressed by the Tribunal that the definition of 'dividend ' only includes deemed dividend.
To hold that the capital gains within the excepted period are not part of the accumulated profits for the purpose of the definition under section 2(6A) and a distributive share thereof does not on that account fall within the definition of 'dividend ' and therefore of income chargeable to tax and still to regard them as a part of accumulated profits for the purpose of dividend in the popular connotation and to bring the share to tax in the hands of the shareholders is to nullify an express provision of the statute.
We do not see any reason why such a strained construction should be adopted.
We agree with the High Court that the proportionate share of the capital gains out Of which the dividend was distributed to the shareholders of the Company must be deemed exempt from liability to pay tax under section 12 as dividend income liable to tax.
Counsel for the Revenue sought to argue that share of dividend which is not chargeable to tax by virtue of the exemption clause is still liable to tax as income other than dividend.
But no such contention was raised before the Tribunal or the High Court 668 and no question was raised in that behalf.
We will not be justified in entering upon the question which was not raised or argued before the Tribunal and before the High Court.
The appeals fail and are dismissed with costs.
One hearing fee.
R.K.P.S. Appeals dismissed.
| IN-Abs | In assessment proceedings for the year 1949 50 the, respondents claimed that certain dividend distributed to them by a company was exempt from tax as the fund out of which it was distributed represented capital gains and not "accumulated profit" of the company.
The Income tax Officer rejected the claim, but the Appellate Assistant CommissiOner held that a part of the total amount distributed represented capital gains and not being dividend within the meaning of section 2(6A) of the Income tax Act, 1922, the share distributed to the share holders out of that amount was exempt from income tax.
This order was reversed in appeal by the Tribunal but the High Court, on a reference, held in favour of the assessee.
On appeal to this Court, HELD: Dismissing the appeal: The proviso to the explanation to section 2(6A)(a) clearly enacted that capital gains arising after March 31, 1948 are not liable to be included within the expression "Dividend".
Although the definition of dividend in section 2(6A) is an inclusive definition and a receipt by share holders which does not fall within the definition may, in some circumstances, regarded as dividend within the meaning of the Act, it is difficult on that account to hold that capital gains excluded from the definition of dividend by express enactment still fall within the charge of tax.
According to the definition in section 2(6A) only the proportionate share of the member out of the accumulated profits (excluding capital gains arising in the excepted period) distributed by the company alone will be deemed the taxable component.
[667 D]
|
esent case the seized articles were removed by the accused it was unnecessary to deal any further with this aspect of the case because if any order was passed for return of the bags the order could not be enforced [251 E] & CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No. 182 of 1966.
Appeal by special leave from the judgment and order dated January 31, 1966 of the Patna High Court in Criminal Appeal No. 210 of 1966.
Rameshwar Dial and A. D. Mathur, for the appellants.
Lal Narayan Sinha, Advocate General for.
the State of Bihar and, U. P. Singh, for the respondent.
236 L. M. Singhvi and section P. Nayar, for the Union of India.
Lal Narayan Sinha, Advocate General for the State of Bihar and D. Goburdhun, for the State of Bihar.
The judgment of the Court was delivered by Ray, J.
This is an appeal by special leave from the judgment of the High Court at Patna challenging first the authority of the Excise Inspectors as Officers of Customs, namely, public servants and secondly their power, to arrest Nazir Mian and seize 2 bags of cloves from his possession under sections 173 and 178 respectively of the .
The facts giving rise to this appeal are as follows.
On 13 December, 1961, Inspectors Uma Shankar and Bisuddha Nand Jha and Constable Bishan Singh, all belonging to the Central Excise Department were on checking patrol 'duty on 330 Down Barauni passenger train proceeding from Barharwa to Pakur which are Railway Stations in Santhal Parganas in Bihar.
The appellant Nazir Mian was travelling by Barauni passenger train.
When the train stopped at Pakur the excise staff found Nazir Mian in the latrine of one of the compartments of the train with two bags of cloves weighing about 2 pounds 10 seers.
The door of the latrine was closed.
Inspector Uma Shankar pushed the door when it was opened from inside.
Uma Shankar disclosed his identity and asked if duty had been paid for the cloves.
Nazir Mian answered in the negative.
Inspector Uma Shankar thereupon seized the bags and arrested Nazir Mian.
While this was being done, the train started.
Shortly after the train had started it stopped at a level crossing in consequence of one of the persons of the excise staff pulling the alarm chain.
The excise staff got down,with Nazir Mian.
The two bags of cloves were also brought down.
Certain persons collected on the spot.
Nazir Mian is alleged to have been rescued by other appellants and the bags of cloves were taken away.
In the scuffle that ensued, one of the Inspectors received simple injuries and the other a grievous injury.
The three appellants Nazir Mian, Ram Kirpal Bhagat and Ganga Dayal Shah and two other persons Jhaman Mian and Raghunath Prasad Yadav were all charged under section 147, 149, 333 and 379 of the Indian Penal Code for forming an unlawful assembly in assaulting Inspectors Uma Shankar and B. N. Jha and in rescuing accused Nazir Mian from their lawful custody and in removing two bags of seized cloves from their possession.
The accused persons with the exception of Raghunath Prasad Yadav were further charged under section 332 of the Indian Penal Code for voluntarily causing hurt to Uma Shankar a public 237 servant in the discharge of his public duties.
The accused with the exception of Nazir Mian were charged under section 225 of the Indian Penal Code for intentionally offering resistance to the lawful apprehension of accused Nazir Mian.
Nazir Mian was also charged under section 7 of the for contravention of section 5 of the, said Act and also under section 167 item 81 of the for contravention of 'Section 19 of the said Act and also under section 5 of the Imports and Exports Control Act, 1947 for contravention of section 3(1) of the Imports Control Order, 1955.
At the trial before the Assistant Sessions Judge, Dumka in Santhal Parganas, Raghunath Prasad Yadav was acquitted of all the charges and the appellants Nazir Mian, Ram Kirpal Bhagat and Ganga Dayal Shah along with Jhaman Mian were all convicted under sections 147 and 332 of the Indian Penal Code.
Jhaman Mian, Ram Kirpal Bhagat and Ganga Dayal Shah were also convicted under sections 225 and 333 of the Indian Penal Code.
Ram Kirpal Bhagat and Nazir Mian were also convicted under section 379 of the Indian Penal Code.
The said four accused including the three appellants were sentenced to several terms of imprisonment and the said sentences were ordered to run concurrently.
The Assistant Sessions Judge, Dumka, however, acquitted the appellant Nazir Mian of the charges under the , the and the Imports and Exports Control Act.
The Assistant Sessions Judge, Dumka held that section 6 of the Imports and Exports Control Act, 1947 raised a bar of taking cognizance by any court except upon a complaint in writing made by an officer authorised in that behalf by the Central Government by general or special order and in the absence of any complaint in writing by the officer concerned, the Assistant Sessions Judge, Dumka found that he had no jurisdiction to take cognizance of the offence under this Act.
The Assistant Sessions Judge, Dumka, also held that section 187A of the laid down that ' cognizance as to offence was to be taken upon a complaint in writing made by the Chief Customs Officer or any other officers of customs not lower in rank than an Assistant Collector of Customs authorised in this behalf by the Chief Customs Officer.
The Assistant Sessions Judge, Dumka, found that in the present case there was no such complaint, and, therefore, he did not take cognizance for the contravention of section 19 of the .
The appellants and Jhaman Mian thereafter preferred an appeal to the High Court.
In the High Court the appellant Nazir 238 Mian contended that Inspector Uma Shankar had no power to arrest him and seize the cloves, and, therefore, the Inspector could not be held to have acted in the discharge of his public duties.
In aid of that contention it was submitted first, that the Imports and Exports Control Act, 147, the , the and the Indian Tariff Act, 1934 were not extended to Santhal Parganas and were not, therefore, applicable.
The second contention was that cloves were not dutiable articles.
The third contention was that section 173 of the had no application, because there was no evidence of reasonable suspicion that Nazir Mian was guilty of an offence under the .
It was also contended that Inspector Uma Shankar was not an officer of the Customs.
The High Court came to the conclusion that the and the Imports and Exports Control Act, 1947 applied to the Santhal Parganas with the result that the import of cloves was prohibited; duty was payable on cloves; the Inspectors were officers of Customs within their respective jurisdiction, and, therefore, they could exercise power under section 173 of the and they could seize the goods under section 178 of the .
The High Court further held that under section 178A of the , the burden was on the appellant Nazir Mian to prove that cloves seized were not smuggled goods and that the appellant Nazir Mian failed to do so.
The High Court held that the appellants had been rightly convicted for certain offences but the sentences under section 332 of the Indian Penal Code against Nazir Mian, Ganga Dayal Shall were set aside to correct an error in the judgment of the Assistant Sessions Judge, Dumka, who at one place convicted all the four accused under section 332 of the Indian Penal Code and at another place found only Jhaman Mian and Ram Kirpal Bhagat guilty of the offences under section 332 of the Indian Penal Code.
Counsel on behalf of the appellants contended first, that the did not apply to the place of occurrence, and, therefore, the arrest and the seizure were unlawful.
The second contention was that the did not apply to the place of occurrence, and therefore, the Inspectors were not officers of Customs who could invoke the authority of the to arrest and seize the appellant Nazir Mian.
The third contention was that the seizure of cloves was not authoorised by section 178 of the Sea.
Customs Act, 1878 nor was the arrest authorised under section 173 of the Sea Customs The arrest and the seizure under the were impeached as illegal on the ground that the did not apply to the place of occurrence, namely, Pakur in Santhal Parganas in Bihar.
The fourth contention was that section 178A of the could not apply, because there was no notification to attract the application of the said section.
The first question which falls for decision is whether the applies.
In order to appreciate this contention it is necessary to refer to the statutes by virtue of which the is said to apply to the place of occurrence.
The Bihar Regulation I of 1951 enacted that the Imports and Exports Control Act, 1947 was applicable to Santhal Parganas.
The relevant sections under the Imports and Exports Control Act, 1947 in the present case are the two sub sections in section 3 which are as follows: "3. Powers to prohibit or restrict imports and exports.
(, 'I) The Central Government may, by order published in the Official Gazette, make provisions for prohibiting, restricting or otherwise controlling in all cases or in specified classes of cases, and subject to such exceptions, if any, as may be made by or under the order: (a) the import, export, carriage coastwise or shipment as ships stores of goods of any specified description; (b) the bringing into any port or place in India of goods of any specified description intended to be taken out of India without being removed from the ship or conveyance in which they are being carried.
(2) All goods to which any order under subsection (1)applies shall be deemed to be goods of which the import or export has been prohibited under section 19 of the , and all the provisions of that Act shall have effect accordingly".
The first contention on behalf of the appellants is that sub section (2) of section 3 of the Imports and Exports Control Act, 1947 means that only section 19 of the is applicable and the other section do not apply.
The second contention on behalf of the appellants that the Bihar Regulation I of 1951 is in excess of the power of the Governor contained in the Fifth Schedule to the Constitution will be 'dealt with hereinafter.
Counsel on behalf of the appellants contended that sec 240 tion 3(2) of the Imports and Exports Control Act, 1947 meant that goods to which sub section (1) of section 3 of the Act of 1947 applied were deemed to be goods of which the import or ,export had been prohibited under section 19 of the , and, therefore, only section 19 of that Act was to have effect for that restricted purpose.
In aid of that contention reliance was placed on the decision of this Court in The Collector ,of Customs, Madras vs Nathella Sampathu Chetty & Anr.(1).
The question for consideration in the Madras Customs case was whether section 178A of the applied.
The Collector of Customs there seized gold because he was, prima facie, of the view that it had been smuggled and notice was issued to the respondent to show cause why the gold should not be confiscated.
Import of gold was dealt with by section 8 of the Foreign Exchange Regulation Act, 1947 which provided that the Central Government might by notification order that no person except with the general or special permission of the Reserve Bank and on payment of prescribed fee bring or send into India any gold or silver.
Section 23A of the Foreign Exchange Regulation Act which came into existence in the year 1952 was as follows : "23A.
Without prejudice to the provisions of section 23 or to any other provision contained in this Act the restrictions imposed by sub sections (1) and (2) of section 8, sub section (1) of section 12 and clause (a) of sub section (1) of section 13 shall be deemed to have been imposed under section 19 of the and ail the provisions of that Act shall have effect accordingly, except that section 183 thereof shall have effect as if for the word "shall" therein the word "may" were substituted".
Section 178A of the was introduced into the Act in the year 1955.
It was, therefore, contended that when the Foreign Exchange Regulation Act, 1947 was enacted the provisions of the were not at all attracted, and secondly.
when section 23A was introduced in 1952 as a part of the Foreign Exchange Regulation Act, 1947 it would have the effect of bringing into operation only those sections of the which were part of the in 1952.
Counsel for the appellants relied on the observations at page 834 of the Report in the Madras Customs case(,) that "the effect of section 23 A is to treat the text of the notification by the Central Government under section 8(l) as if it had been (1) ; 241 issued under section 19 of the with the title and the recital of the source of power appropriate to it by the creation of legal fiction".
Counsel for the appellants extracted from these observations the proposition that only section 19 of the would attracted in the present case to make effective the notifications under the Imports Control and Exports Control Act, 1947 and the Imports Control Order, 1955 and no other section of the would be attracted.
The decision of this Court in the Madras Customs case( ')does not support that contention for the obvious reason that section 178A of the was held to be applicable there.
If only section 19 of the were attracted for the purpose of giving sanction to notifications under the Foreign Exchange Regulation Act section 178A of the could not have been held to be applicable in Madras Customs case( ').
Further this Court in the Madras Customs case( ') at page 799 of the Report held first, that on the law as it stood upto 1952 before section 23A of the Foreign Exchange Regulation Act was inserted, importation of gold in contravention of the notification of August, 1948 issued under section 8(l) of the Foreign Exchange Regulation Act would have been an importation contrary to section 19 of the , with the result that any person concerned in the act of importation would have been liable to the penalties specified in the third column of section 167(8) of the and imported gold would have been liable to confiscation under the opening words of that column.
This conclusion indicates.
that a restriction on the import of gold by a notification under the Foreign Exchange Regulation Act would be a prohibition or restriction on importation or exportation of gold under section 19 of the which occurs in Chapter IV of the .
The other conclusion of this Court in the Madras Customs case was that though section 187A of the was introduced in the, year 1955 section 23A of the Foreign Exchange Regulation Act, 1947 which came into exist ence in 1952 would be operative to introduce the subsequent amendments of the in dealing with con travention of the Foreign Exchange Regulation Act in relation to importation or exportation of gold.
In dealing with the contention in the Madras Custom case that section 178A of the did not apply because it was not a part of the when section 23A of the Foreign Exchange Regulation Act was en (1) ; 242 acted in 1952, the decision of the Judicial Committee in The Secretary of State for India in Council vs Hindustan Co operative Insurance Society Ltd.( ') was referred to by this Court for the purpose of showing that in the Hindustan Co operative Insurance Society case the Calcutta Improvement Trust Act, 1911 referred to the provisions of the Land Acquisition Act by enacting that "the provisions of the Land Acquisition Act shall apply as if they were herein re enacted" to mean that the Calcutta Improvement Trust Act 1911 in adopting the provisions of the Land Acquisition Act did not intend to bind themselves .to any future additions which might be made to the Land Acquisition Act.
The other consideration which weighed with the Judicial Comniittee was that the Calcutta Improvement Trust Act did nothing more than incorporate certain provisions from an existing Act, and for convenience of drafting did so by reference to that Act instead of setting out for itself at length the provisions which it was desired to adopt.
This Court said that there was no analogy between the manner in which the provisions of the, Land Acquisition Act had been incorporated in the Calcutta Improvement Trust Act, 1911 and the operation of the as a result of section 23A of the Foreign Exchange Regulation Act.
Section 23A of the Foreign Exchange Regulation Act was construed to mean that the restrictions imposed by section 8(l) of the Foreign Exchange Regulation Act shall be deemed to have been imposed under section 19 of the and all the provisions of the shall have effect accordingly.
At page, 837 of the Report this Court said that a notification issued under section 8(l) 'of the Foreign Exchange Regulation Act was deemed for all purposes to be a notification issued under section 19 of the and the contravention of the notification attracted to it each and every provision of the which was in force at the date of the notification.
The ratio of the decision in the Madras Customs case( ') is that the provisions of the were attracted by relation to the provisions of section 19 of the which deal with restrictions or prohibitions on import 'or export and the notifications under the Foreign Exchange Regulation Act prohibiting import of gold become an integral part of section 19 of the , and, therefore, the contravention of such a notification would bring into effect each and every provision of the .
In the present case, sub section (2) of section 3 of the Imports and Exports Control Act, 1947, enacts that goods to which any (1) 59 4A. 259.
(2) ; 243 order under sub section (1) applies shall be deemed to be goods of which the import or export has been prohibited under section 19 of the and the second limb of subsection (2) of section 3 is that all the provisions of that Act (meaning thereby the ) shall have effect accordingly.
To accede to the contention of counsel for the appellants that only section 19 of the will apply and no other provision of the will be effective or operative will be not only to render the words "and all the provisions of that Act shall have effect only" otiose but also nugatory.
When the statute enacts that all the provisions of that Act shall have effect accordingly, it will be an error to hold in spite of the language of such legislation that the provisions of the shall not have effect.
The effect of bringing into an Act the provisions of an earlier Act is to introduce the incorporated sections of the earlier Act into the subsequent Act as if those provisions have been enacted in it for the first time.
The nature of such a piece of legislation was explained by Lord Esher M. R. in Re Wood 's Estate(1) that "if some clauses of a former Act were brought into the subsequent Act the legal effect was to write those sections into the new Act just as if they had been written in it with the pen".
This Court noticed in the Madras .
Customs case 2 the distinction between a mere reference to or a citation of one statute in another on the one hand and an incorporation on the other, for the purpose of showing as to what would be the effect of the repeal of the former statute on the latter statute.
It is in that context that this Court observed that if section 19 of the would be repealed then there would no longer be any legal foundation for invoking the penal provisions of the to a contravention of a notification under section 8(l) of the Foreign Exchange Regulation Act.
The ratio is that if the contravention of the, notification under the Foreign Exchange Regulation Act is equated with a contravention of the notification under section 19 of the , 1.878, the effacement of section 19 of the , 1 878 from the statute book would naturally remove the substratum of the .
In the present case, the provisions of the are attracted by reason of the provisions contained in section 3 of the Imports and Exports Control Act, 1947 and on the authority of the decision of this Court in the Madras Customs case( ') all that can be said is that if section 19 of the were repealed then the would not be attracted.
Section 19 of the Sea Customs (1) (1881] (2) 119621 3 S.C.R. 786.
has not been repealed and was extant and is now reenacted as section 11 in the Sea and there has been corresponding change in the Imports and Exports Control Act, 1947 by reference to the Sea and section 11 thereof.
The second question which falls for consideration is whether the Bihar Regulation I of 1951 is in excess of the Governor 's powers.
The contentions were: first, that the Regulation I of 1951 could not at all have been made; secondly, that Regulations deal with the subject matter and did not mean power to apply law and thirdly, the power to extend a law passed by another legislature was said to be not a legislative function, but was a conditional legislation.
The legislation, in the present case, is in relation to what is described as Scheduled Areas.
The Scheduled Areas are dealt with by Article 244 of the Constitution and the Fifth Schedule to the Constitution.
Prior to the Constitution, the Excluded Areas were dealt with by sections 91 and 92 of the Government of India Act, 1935.
The excluded and the partially excluded areas were areas so declared by order in Council under section 91.
and under section 92 no act of the Federal Legislature or of the Provincial Legislature was to apply to an excluded or a partially excluded area unless the Governor by public notification so directed.
Sub section (2) of section 92 of the Government of India Act, 1935 conferred power on the Governor to make regulations for the peace and goods government of any area in a Province which was an excluded or a partially excluded area and any regulations so made might repeal or amend any Act of the Federal Legislature or the Provincial Legislature or any existing Indian law which was for the time being applicable to the area in question.
The extent of the legislative power of the Governor under section 92 of the Government of India Act, 1935 in making regulations for the peace and good government of any area conferred on the Governor in the words of ]Lord Halsbury "an utmost discretion of enactment for the attainment of the objects pointed to".
(See Riel vs The Queen) (1).
In that case the words which fell for consideration by the Judicial Committee were "the power of the Parliament of Canada to make provisions for the administration, peace, order and good government of any territory not for the time being included in any province" It was contended that if any legislation differed from the provisions which in England had been made for the administration, peace, order and good government then the same could not be sustained as valid.
That contention was not accepted.
These words were held to embrace the widest power to legislate for the peace and good government for the area in question.
(1) L.R. 10 A.C. 657 at 658.
245 The Fifth Schedule to the Constitution consists of 7 para graphs and consists of Parts, A, B, C and D. Paragraph 6 in.
Part C deals with Scheduled Areas as the President may by order declare and there is no, dispute in the present case that the Santhal Parganas falls within the Scheduled Areas.
Paragraph 5 in the.
Fifth Schedule deals with laws applicable to Scheduled Areas.
Sub paragraph 2 of paragraph 5 enacts that the Governor may, make regulations for the peace and good government of any area in a State which is for the time being a Scheduled Area.
Undersub paragraph 3 of paragraph 5 the Governor may repeal or amend any Act of Parliament or of the Legislature of the State or, any existing law which is for the time being applicable to the area.
in question.
It may be stated that a contention was advanced by counsel for the appellants that section 92 of the Government of India Act, 1935 was still in operation and the Governor could only act under that section.
This contention is utterly devoid of any substance, because section 92 of the Government of India Act, 1935 ceased to exist after repeal of the Government of India Act, 1935 by Article 395 of the Constitution.
It was contended that the power to make regulations did not confer power on the Governor to apply any law.
It was said that under section 92 of the Government of India Act, 1935 the Governor could do so but under the Fifth Schedule of the Constitution the Governor is not competent to apply laws.
This argument is without any merit for the simple reason that the power to make regulations embraces the utmost power to make laws and to apply laws.
Applying law to an area is making regulations which are laws.
Further the power to apply laws is inherent when there is a power to repeal or amend any Act, or any existing law applicable to the area in question.
The power to apply laws is really to bring into legal effect sections of an Act as if the same Act had be en enacted in its entirety.
Application of laws is one of the recognised forms of legislation.
Law can bemade by referring to a statute or by citing a statute or by incorporating a statute or provisions or parts thereof in a piece of legislation as the law which shall apply.
It was said by, counsel for the apppellants that the power to applv laws under the Fifth Schedule was synonymous with conditional legislation.
In the present case, it cannot be said that the Bihar Regulation I of 1951 is either a piece of delegated legislation or a conditional.
legislation.
The Governor had full power to make regulations which are laws and just as Parliament can enact that a piece of legislation will apply to a particular State, similarly, the Governor under paragraph 5 of the Fifth Schedule can apply specified laws to a Scheduled area.
The Bihar Regulation I of 1951 is an instance of a valid piece of legislation 246 emanating from the legislative authority in its plenitude of power and there is no aspect of delegated or conditional legislation.
The question which next arises for consideration is whether the applied on the relevant date of occurrence namely 13 December, J961 to the Santhal Parganas.
The was enacted in the year 1924 and it was declared to apply to the Santhal Parganas.
Prior to the Constitution the Central Acts or Federal Acts or Acts of the Dominion Legislature did not apply to an excluded or a partially excluded area unless they were declared by the Governor to apply to those areas.
After the enactment of the Constitution, Article 244 and the Fifth Schedule deal with excluded or partially excluded areas.
It was contended on behalf of the State that after the enactment of the Constitution the became applicable to excluded or partially excluded areas because first it was an existing law and secondly the restriction under section 92 of the Government of India Act, 1935 which required a specific declaration of the Governor to apply any legislation to the areas in question was no longer operative.
Article 372(l) of the Constitution enacts that the law in force in the territory of India immediately before the commencement of the Constitution is to continue in force until altered or repealed or amended by a competent legislature or other competent authority.
Explanation I to Article 372 is that law in force in the Article shall include a law passed or mad& by the legislature or other competent authority in the territory of India before the commencement of the Constitution not withstanding that it or parts of it may not be then in operation either at all or in particular area or, areas.
The contention on behalf of the respondent that the would apply to the, Santhal Parganas on the ground that it is an existing law is not acceptable.
Article 372 in clause (1) thereof enacts that subject to the other provisions of this Constitution all the laws in force in the territory of India shall continue in force.
The Fifth Schedule to the Constitution relates to excluded or partially excluded areas.
The existing law in relation to the excluded areas is saved by Article 372 and Explanation I thereto in spite of operation of such laws in particular areas.
Similarly, other laws which were applicable to territories other than the excluded or partially excluded areas are saved by Article 372 Explanation 1.
Therefore, laws which were existing law in territories other than excluded or partially excluded areas would not be existing law under Article 372 in relation to excluded or partially excluded areas.
Nor would existing law for the rest of India be existing law to area in question within the meaning of paragraph 5 in the Fifth Schedule to the Constitution.
The Land 247 Customs Act, 1924 cannot therefore be said to apply to Santhal Parganas as an existing law.
The present day sources of law making in the Santhal Par ganas which are included in the Scheduled Areas are Article 244 and the provisions in the Fifth Schedule to the Constitution.
Clause 5 of the Fifth Schedule has two sub clauses.
Under subclause (1) the Governor is empowered notwithstanding anything in the Constitution to direct that any particular Act of Parliament or of the Legislature of the State shall not apply to a Scheduled Area or shall apply to a Scheduled Area subject to such exceptions and modifications as the Governor may specify in the noti fication.
Sub clause (1) of clause 5 of the Fifth Schedule to the Constitution speaks of Acts of Parliament or of the Legislature of the State and therefore Central Acts or Provincial Acts, prior to the Constitution are not contemplated within sub clause (1) of clause 5.
Sub clause (2) of clause 5 of he Fifth Schedule confers power on the Governor to make regulations for the peace and good Government of any area in a State which is a Scheduled Area.
Under sub clause (2) the Governor has power to make laws which will include the power to apply to Scheduled Areas Central laws or Provincial laws enacted prior to the Constitution.
Prior to the Constitution section 92 of the Government of India Act, 1935 conferred power oil the Governor to make regulations for excluded and partially excluded areas which included the Santhal Parganas.
In making such regulation the Governor could repeal or amend any Central law or any Provincial Acts and the regulations were to be submitted to the Governor General for assent.
The Central or the Provincial Acts under sub section (1) of section 92 of the Government of India Act, 1935 however were not applied to excluded and partially excluded areas unless the Governor so directed.
Prior to the Government of India Act, 1935 the Governor General in Council in 1872 promulgated the regulation known as "Santhal Parganas Settlement Regulation" and section 3 of the said Regulation provided the enactments specified in the Schedule thereto which would be in force in the Santhal Par ganas.
Section 3 (2) of the Santhal Parganas Settlement Regulation of 1872 in so far as it seeks to affect future legislation would not have any force after 26th January, 1950.
In this background it appears that the and the were not made applicable to Santhal Parganas either under the Santhal Parganas Settlement Regulation of 1872 or under any notification issued under section 248 92 of the Government of India Act, 1935.
Neither the nor the has been specifically made applicable to the Santhal Parganas by any notification under sub clause (2) of clause 5 of the Fifth Schedule.
The Bihar Scheduled Laws Regulation being Regula tion I of 1951 which was promulgated under sub clause (2) of clause 5 of the Fifth Schedule for the purpose of applying certain laws to Santhal Parganas however made the Imports and Exports (Control) Act, 1947 and the Imports and Exports (Amendment) Act, 1949 applicable to Santhal Parganas.
We have already stated as to how the is made applicable to Santhal Parganas by reason of the provisions contained in the Imports and Exports (Control) Act, 1947.
Though the does not apply to Santhal Parganas we have indicated hereinafter as to how because of the application of section 6 of the , officers of Land Customs appointed under the are treated as Customs Officers having jurisdiction in the Santhal Parganas.
The Central Excise and Salt Act, 1944 was however made applicable to the Santhal Parganas by a notification dated 14 September, 1944 but the application of that Act is not in issue in the present appeal.
One of the questions in the present appeal was whether the Indian Tariff Act, 1934 applied to the Santhal Parganas.
The articles.which were seized in the present appeal, viz., cloves were dutiable articles being item 9(3) in column 3 in the First Schedule to the Indian Tariff Act, 1934.
We have already indicated as to how by reason of operation of section 3 of the Imports and Exports (Control) Act, 1947 cloves became an article the import or export of which was prohibited under section 19 of the .
No notification of application of the Indian Tariff Act, 1934 to the Santhal Parganas was shown to the High Court.
It will appear in volume 7 page 5792 of the Bihar Local Acts (1793 to 1963) published by Bharat Law House, Allahabad in the year 1966 that the Indian Tariff Act, 1894 is found to be one of the Acts mentioned in the Schedule to the Santhal Parganas Settlement Regulation, 1872 and the Indian Tariff Act, 1894 which was repealed by the ' Indian Tariff Act, 1934 was similarly declared to be in force in the Santhal Parganas.
The Inspectors, Uma Shankar and B. N. Jha were Customs Officers engaged in public duty.
They arrested the appellant Nazir Mian under section 173 of the on a reasonable suspicion.
The Inspectors further arrested the appeallant Nazir Mian under section 178 of the .
Section 178 of the empowered the 249 A Customs Officer to seize smuggled goods under the Act.
The questions which have to be decided in the present case are: first, whether the Inspectors Uma Shankar and B. N. Jha were acting in the discharge of public duties, secondly, whether they could arrest the appellants, and thirdly, whether they could seize the cloves.
The oral evidence of Inspector Uma Shankar is that he B was an Inspector of Central Excise and Customs and he worked in the Preventive and Intelligence Section.
He said that he was posted at Barharwa since the month of January, 1961 and his jurisdiction was Pakur, Dumka and Sahibganj.
He also said that his duty was the prevention of smuggling of contraband commodities.
Inspector B. N. Jha in his oral evidence 'said that he was an Inspector of Central Excise and Customs and he worked in the Preventive and Intelligence section and Pakur, Dumka and Sahibganj were within his jurisdiction of work The Imports and Exports Control Act, 1947 in sub section (2) of section 3 enacted that goods to, which sub section (1) applied would be deemed to be goods the import or export of which would be a restriction under section 19 or the sea Customs Act, 1878 and all the provisions of that Act shall have effect accordingly.
The Imports and Exports Control Act, 1947 conferred power on the Central Government to make provisions prohibiting, restricting and controlling import and export.
The Imports Control Order, 1955 was made by virtue of power conferred by section 3 of the Imports and Exports Control Act, 1947.
Schedule I Part IV item 23 of the Imports Control Order, 1955 mentions cloves within the class of goods the import of which is prohibited.
Therefore, cloves come under the prohibition of section 3 of the Imports and Exports Control Act.
1947 read with clause 3 of the Imports Control Order, 1955 and F are goods which are prohibited from being imported.
The Imports Control Order, 1955 mentions that each entry in column 2 of Schedule I to the said Order has the same meaning as specified against the said item in column 3 of the First Schedule to the Indian Tariff Act.
Schedule I to the Imports Control Order, 1955 gives in a tabular form the names of articles as also G the corresponding items to the Indian Tariff Act.
Cloves which are mentioned as item No. 23 of Schedule I of Part IV of the Imports Control Order, 1955 have the same meaning corresponding to item No.
9(3) in column 3 in the First Schedule to the Indian Tariff Act, 1934.
It, therefore, follows that cloves are goods the import of which is prohibited by the Imports and Exports Control Act, 1947 and they are dutiable goods by reason of that meaning of cloves in column 3 item No. 9 (3) of the First, ,Schedule to the Indian Tariff Act, 1934 having been attracted by the Imports Control Order, 1955.
Cloves are, pro 250 hibited goods within the Imports and Exports Control Act, 1947A and are, therefore, deemed to be prohibited under section 19 of the .
The Inspectors who arrested the appellant Nazir Mian and the other accused and seized the articles were Officers of Central Excise 'and Customs.
In the present case, there are two notifications.
The first is a notification No. 69 Cus. dated 28 September, 1951 under section 6 of the which is set out as follows : "In exercise of the powers conferred by section 6 of the (VIII of 18778) and in supersession of the Government of India in the Ministry of Finance (Revenue Division) Notification No. 71, dated the 12th August, 1950,.
the Central Government hereby appoints all the Land Customs Officers who have been appointed or may be appointed from time to time to be such under sub section (1) of section 3 of the (XIX of 1924)D to be Officers of Customs for their respective jurisdiction and to exercise the powers conferred and to perform the duties imposed on such officers by the first named Act".
The second is a notification No. C.B.R. Notification 1 ' L.Cus.
E dated 25th January, 1958 as amended by No. 8 L.Cus.
dated 117th May, 1958 under the which is setout as follows "In exercise of the powers conferred by sub sec tion (1) of section 3 of the Land Customs Act, 1924F (19 of 1924) read with the notification of the Government of India in the late Finance Department (Central Revenue) No. 5944 dated the 13th December, 1924 and in supersession of its notification No. 56 Customs, dated the 24th July, 1951 as subsequently amended, the Central Board of Revenue hereby appoints all , Deputy Collectors, Assistant Collectors,Headquarters Assistant Collectors, Superintendents, Deputy Superintendents, Inspectors, Nakedars, Supervisors, Range Officers, Assistant Range, Officers, Women Searchers, Jemadars, Petty Officers, Amaldas, Sepoys and Peons,.
including all the officers of Central Excise employed for the time being on the Central Excise or Customs Preventive intelligence work and attached to the Headquarters and the Circle; and.
Divisional Officers of the Collectorate of Central Excise, 251 Delhi, Allahabad, Patna, Shillong, Madras, Bombay and Baroda, to be Land Customs Officers within the jurisdiction of the respective Collectors of Land Customs under whom they are working '.
It will appear from the aforementioned notifications first that under section 6 of the Land Customs Officers are appointed Officers of Customs.
It is manifest the provisions of the apply, and, therefore, the Land Customs Officers are appointed Officers of Customs under the .
Secondly, the notification under the is that all the Officers mentioned therein including the Inspectors of the Central Excise employed on the Central Excise or Customs Preventive Intelligence work and attached to the Headquarters are Land Customs Officers.
The combined effect of both the notifications is that the Inspectors of Central Excise in the present case were Land Customs Officers and Officers of Customs as a 'result of the application of the .
Counsel on behalf of the appellants contended that there was no evidence to warrant the Customs Officers to arrest the appellants under section 173 of the because such an arrest could be made only if there was a reasonable suspicion in existence.
The evidence in the present case established the following facts.
First, the appellant Nazir Mian had in possession two bags of cloves and no duty was paid on those cloves.
Secondly, the appellant Nazir Mian kept the cloves.
in two bags and concealed the same in the latrine of the railway compartment.
Thirdly, the cloves were dutiable goods and there was prohibition on the import of those goods.
Fourthly, Pakur was at a distance of only 1 1 and 12 miles from the East Pakistan border.
Fifthly, cloves are not grown in India.
These circumstances indicated a reasonable suspicion and, therefore, the Officers were justified in arresting the appellant Nazir Mian under section 173 of the .
It was contended on behalf of the appellants that though under section 178 of the , the Customs Officers could seize the goods there was no notification under section 178A of the imposing restrictions on import of cloves, and, therefore.
the onus of proof could not be shifted to the appellants under section 178A of the .
The correct legal position is that in the absence of special notification under section 178A specifying goods to which the section applies, the onus of proof under that section cannot be placed on persons whose goods are seized for violation of other provisions of the .
In 252 view of the fact that in the present case the seized articles were removed by the accused it is unnecessary to deal any further with this aspect of the case because if any order were passed for return of the bags the order could not be enforced.
For these reasons, the appeal fails and is dismissed.
The appellants will surrender to the District Magistrate, Santhal Parrganas to serve the sentences.
Appeal dismissed.
| IN-Abs | One Nazir Mian was arrested at Pakur Railway Station in the Santhal Parganas of Bihar by two Inspectors and a constable belonging to the Central Excise Department.
The Inspectors were employed on Central Excise and Customs Prevention intelligence work.
Two bags of clove& on which duty was required to be paid under the Imports Control Order 1955, but had not been paid, were seized from the possession of Nazir mian who had locked himself inside the latrine of a railway compartment in the said station.
The arrest and seizure were effected under sections 173 and 178 of the .
Helped by certain persons, Nazir Mian escaped and the cloves were also taken away.
In the scufflee the said two Inspectors were injured, one grievously.
Alongwith four others Nazir Mian was tried in connection with the incident.
The charges against the accused included the offences of offering resistance to the lawful Apprehension of Nazir Mian and of causing hurt to a public servant in the discharge of his official duties.
Four of the accused including the three appellants were convicted by the trial Court.
The High Court dismissed their appeals.
In appeal by special leave against the judgment of the High Court the appellants contended before this Court that : (1) The did not apply to the place of occurrence and, therefore, the arrest purporting to have been, made under sections 173 and 178 of that Act and the seizure of the cloves were unlawful.
(ii) The did not apply to the place of occurrence and therefore the Inspectors were not officers of Customs who could invoke the authority of the to arrest and seize the appellant Nazir Mian; (iii) The seizure of cloves was not authorised by section 178 of the nor was the arrest authorised under section 173 of he ; (iv) Section 178A of the could not apply because there was no notification to attract the application of the said section.
HELD : (i) The was applicable to the Santhal Parganas by virtue of section 3(2) of the Imports & Exports Control Act, 1947 up.
C.I./70 16 234 which had been made applicable by the Governor to the Santhal Parganas under Bihar Regulation I of 1951.
Sub section (2) of section 3 of the Imports & Exports Control Act, 1947 enacts that goods to which any order under sub section (1) applies shall be deemed to be goods of which the import or export has been prohibited under section 19 of the and the second limb of subsection (2) of section 3 is that all the provisions of that Act (The , (1878) shall have effect accordingly.
To accede to the contention on behalf of the appellants that only section 19 of the will apply and no other provisions of the will be effective or operative will be not only to render the words "and all the provisions of that Act shall have effect" otiose but also nugatory.
When the statute enacts that all the provisions of that Act shall have effect accordingly, it will be an error to hold in spite of the language of such legislation that the provisions of the Sea Customs act shall not have effect.
the effect of bringing into an Act, the provisions of an earlier Act is to introduce the incorporated sections of the earlier Act into the subsequent Act as if these provisions have been enacted in it for the.
first time.
[242 H 250 Di All that can be said on the authority of the Madras Customs case is that if section 19 of the were repealed then the would not be attracted.
Section 19 of the has not been, repealed and was extant and is now re enacted as section 11 in the Sea and there has been corresponding change in the Imports and Exports Control Act, 1947 by reference to the Sea and section 11 thereof.
[243 H] The Collector of Customs, Madras vs Nathella Sampathu Chetty The Secretary of State for India in Council vs Hindustan Co operative Insurance Society Ltd., referred to.
Re : Wood 's Estate, , applied.
Bihar Regulation 1 of 1951.
was not in excess of the Governor 's powers.
The Santhal Parganas are included in the Scheduled.
Areas dealt with in article 244 and the Fifth Schedule to the Constitution.
Paragraph 5 in the Fifth Schedule deals with laws applicable to Scheduled Areas.
Sub paragraph 2 of Paragraph 5 enacts that the Governor may make regulations for the peace and good government of any area in a State which is for the time being a Scheduled Area.
Under sub paragraph 3 of paragraph 5 the Governor may repeal or amend any Act of Parliament or any Act of the legislature of the state or any existing law which is for the time being applicable to the area in question.
The Bihar Regulation I of 1951 is a valid piece of legislation emanating from the legislative authority of the Governor in its plenitude of power.
The contentions s did not include the that the Governor 's power of making regulation power to apply laws and that the Bihar Regulation I of 1951 is either piece of delegated legislation or a conditional legislation, could not be accepted.
[245 B C, H] Riel vs The Queen, L.R. 10 A.C. 657, referred to.
(ii) The was not applicable to the Santha.
Parganas as an 'existing law within the meaning of article 372(1) of the Constitution.
it was also not made applicable to the Santhal Parganas by the Governor by the exercise of power under the Government of India Act or the Constitution.
Nevertheless by virtue of notification No. 6 235 Cus.
dated 28th September, 1951 under section 6 of the and notification No. CBR Notification 1.
L. Cus.
dated 25th January, 1958 (as amended in May, 1958) the two Inspector 's in the present case had authority to arrest the appellant Nazir Mian and to seize the bags of cloves in his possession.
From the said notifications it appeared that under section 6 of the Sea Customs Act, 1818 Land Customs Officers arc appointed Officers of Customs.
Secondly, the notification under the is that all the officers mentioned therein including the Inspectors of Central Excise employed on the Central Excise or Customs Prevention Intelligence Work and attached to the Headquarters are Land Customs Officers.
The combined effect of both the notifications is that the Inspectors of Central Excise in the present case were Land Customs Officers and Officers of Customs as a result of the application of the .
[246 H; 251 B D] (iii) (a) The import of cloves was prohibited under the Imports Control Order 1955 made under section 3 of the Imports & Exports Control Order 1947.
They were also dutiable goods under the Indian Tariff Act, 1934 which was applicable to the Santhal Parganas being one of the Acts mentioned in the Schedule to the Santhal Parganas Settlement Regulation, 1872.
Being prohibited goods under the Imports & Exports Control Act, 1947 cloves are deemed to be prohibited under section 19 of the .
[250 Al (b) The evidence in the present case established the following facts.
First, the appellant Nazir Mian had in possession two bags of cloves and no duty was paid on those cloves.
Secondly the said appellant kept the cloves in two bags and concealed the same in the latrine of the railways compartment.
Thirdly, the cloves were dutiable goods and there was prohibition on the import of those goods.
Fourthly, the place o f occurrence was at a distance of only 11 & 12 miles from the East Pakistan border.
Fifthly, cloves are not grown in India.
These circumstances indicated a reasonable suspicion and, therefore the Officers were justified in arresting the appellant Nazir Mian tinder section 173 of the .
1251 E] (iv) In the absence of special notification under s, 178A of the specifying goods to which the section applies, the onus of proof under that section cannot be placed on persons whose goods are seized for violation of other provisions of the .
|
Civil Appeals Nos. 1782 and 1783 of 1966.
Appeals from the judgment and decree dated October 6, 1964, of the Kerala High Court in Appeal Suit No. 569 of 1963.
O.P. Malhotra and J.B. Dadachanji, for the appellant (in C.A. No. 1782 of 1966) and the respondents (in C.A. No. 1783 of 1966).
M.C. Chagla and A.G. Pudissery,.
for the respondents (in C.A. No. 1782 of 1966) and the appellants (in C.A. No. 1783 of 1966).
The Judgment of the Court was delivered by Hegde, J.
These connected appeals by certificate arise from the decision of the.
High Court of Kerala in Appeal Suit No. 569 of 1963 on its file.
Civil Appeal No. 1782 of 1966 is filed by the plaintiff in the suit and Civil Appeal No. 1783 of 1966 is filed by the second defendant (who shall hereinafter be referred to as the defendant), who is contesting this appeal.
The suit was for specific performance on the basis of an oral agreement alleged to have been entered into on 9.9.1121 (Malayalain Era.) between the plaintiff and the 1st defendant who died very soon after the filing of the suit.
The suit was contested by the second defendant, his widow.
The trial court decreed the suit as prayed for but in appeal the High Court did not accept the agreement pleaded by the plaintiff but still granted a decree directing the defendant to execute a sate deed in favour of the plaintiff in respect of item No. 1 of the plaint schedule properties less one acre of paddy field at its east for a sum of Rs. 11500/ .
923 Originally the plaintiff was the owner of the suit properties.
He sold the same to the 1st defendant on 9.9.1121 (Malayalam Era) under Exh.
According to the plaintiff at the time of the execution of P 1, there was an oral agreement between him and the 1st defendant whereunder the 1st defendant agreed to reconvey the properties sold for the very price it was sold whenever the plaintiff calls up.on him to reconvey them.
The suit from which these appeals arise has been rounded on the basis of the said agreement.
The 1st defendant died even before he could file his written statement in the case.
Before his death he had gifted the suit properties by means of a registered deed in favour of the defendant.
She denied the agreement pleaded in the plaint but on the other hand she stated that just before his death her husband had agreed to sell to plaintiff item No. 1 of the suit property less one acre of paddy field for a sum of Rs. 11500 but due to the illness of her husband the sale in question could not be effected.
She proceeded further and averred as follows in paragraph 10 of her written statement.
"This defendant has been asked by the 1 st defendant before his death that even after his death the properties in item No. 1 (in the plaint schedule which are the subject matter of the contract) as mentioned in paragraph 7, except the nilam on the eastern part thereof, should be assigned to the plaintiff for a consideration of Rs. 11500 and accordingly this defendant is willing to give such property as mentioned above to the plaintiff." After the defendant filed her written statement, the plaintiff did not amend his plaint and pray for any relief on the basis of the agreement pleaded by the defendant nor did he inform the court that he was ready and willing to accept the agreement pleaded by the defendant or that he was willing to perform his part of that agreement.
The suit proceeded on the basis of the agreement pleaded in the plaint.
The 1st question that arises for decision is whether the agreement pleaded in the plaint is true.
The burden of proving that agreement is naturally on the plaintiff.
The agreement in question as mentioned earlier is said to be an oral agreement.
Therefore the plaintiff 's task is all the more difficult.
The sale deed Exh.
P. 1 proceeds on the basis that it evidences an outright sale.
It does not either specifically or by implication lend support to the case put forward by the plaintiff.
On the other hand it records the following condition stipulated by the vendor: "Subject to the stipulation that during my life time the schedule properties shall not be mortgaged or assigned to anyone else without my knowledge and consent, I completely convey 'and surrender to you all my 924 remaining rights and possession, and the properties are given to your possession on receipt of the sale consideration of Rs. 24,500.
" From this clause it is clear that the plaintiff conveyed all his rights, title and interest in the suit properties to the vendee subject to the aforementioned stipulation.
It is not necessary to consider whether the restriction in question is a valid one.
Even if we assume that the same is valid, it does not support the plaintiff 's case.
On the other hand, by implication it negatives his case.
At best the clause referred to above merely confers on the vendor a right to preempt.
Hence by implication it negatives the plaintiff 's case that there was an agreement to reconvey the suit properties.
The plaintiff has not given any satisfactory explanation why the contract relating to reconveyance was not incorporated in the sale deed.
To explain this important omission he has examined P.W.2, who.
claims to be a document writer of considerable experience.
He claims that the document in question was written by one of his assistants.
His evidence is to the effect that the vendor and the vendee wanted to incorporate the agreement as regards re conveyance in Exh.
P.1 itself but he advised them that it could not be done.
This is a strange legal advice.
This evidence is on the.
face of it unbelievable.
There is also no satisfactory explanation why the alleged agreement was not reduced into.
writing.
In support of the alleged agreement reliance was tried to be placed on Exh.
P 2, which is said to be a document signed by the first defendant after the present suit was filed and before his death.
The High Court was unable to accept the genuineness of this document.
It opined that this document must have been got up by the plaintiff with the assistance of P.W. 7, his brother.
From the High Court 's judgment we find that though the document contains hardly few lines, for completing the same as many as three different types o.f ink had been used.
The original document has not been called for and therefore we have to proceed on the basis that the.
observations made by the High Court are correct.
The very recitals in the document show that it is a suspicious document.
For all these reasons we are unable.
to place any reliance on this document.
It may be again emphasized at this stage that this document has come into existence after the institution of the present suit.
The principal witnesses who are examined in support of the oral agreement pleaded in the case are P.Ws.1, 2 and 7.
We have already referred to the evidence of P.W. 2.
He does not appear to us to be a reliable witness.
P.W. 1 is no other than the plaintiff himself.
P.W. 7 is his brother.
P.W. 1 has no children and P.W. 7 is his nearest heir.
Therefore it is quite 925 clear that both P.Ws. 1 and 7 are interested witnesses.
Their evidence cannot carry much weight.
The story put forward by the plaintiff in the plaint is an im probable one.
ItI is true that the plaintiff and the 1st defendant are first cousins.
It is also true that their relationship was very cordial.
But if the 1st defendant could not trust the plaintiff to advance a sum of Rs. 24,000 without security as could be gathered from the plaintiff 's evidence, we fail to see why the 1st defendant should have relied on the oral assurances given by the plaintiff in the matter of reconveying the property.
From the averments made by the defendant in her written statement it does appear that when the 1st defendant was in his death bed being stricken by cancer, there was some talk about reconveying a portion of the suit properties to the plaintiff.
It may also be as held by the trial court that the suit property was worth more than Rs. 24,000 at the time of its sale.
It appears likely that neither side has come forward with the true version.
But before a court can grant a decree for specific performance, the contract pleaded must be a specific one and the same must be established by convincing evidence.
Rarely a decree for specific performance is granted on the basis of an agreement supported solely by oral evidence.
That apart, as mentioned earlier, in this case the oral testimony adduced in support of the agreement pleaded is a highly interested one.
We do not think that the trial court was justified in relying on that testimony for granting the decree prayed for.
The trial court itself observed in the course of its judgment (para 12) that "there is no clear cut evidence for proving the terms of the oral contract which is alleged to have been entered into by the plaintiff and the 1st defendant".
This finding alone should have been sufficient to non suit the plaintiff.
Therefore we agree with the High Court, though for reasons other than those mentioned by it that the plaintiff has failed to prove the agreement pleaded in the plaint.
This takes us to the decree passed by the High Court in respect of plaint item No. 1.
This decree is purported to have been passed on the basis of the admission made by the defendant.
It may be noted that the agreement pleaded by the defendant is wholly different from that pleaded by the plaintiff.
They do not refer to the same transaction.
plaintiff did not at any stage accept the agreement pleaded by the defendant as true.
The agreement pleaded by the plaintiff is said to have been entered into at the time of the execution of Exh.
P 1 whereas the agreement put forward by the defendant is one that is said to have been arrived at just before the filing of the suit.
The two are totally different agreements.
The plaintiff did not plead either in the plaint or at any subsequent stage that he was ready and willing to perform the agreement pleaded in the written statement of defendant.
A 926 suit for specific performance has to conform to the requirements prescribed in Forms 47 and 48 of the 1st Schedule in the Civil Procedure Code.
In a suit for specific performance it is incumbent on the plaintiff not only to set out the agreement on the basis of which he sues in all its details, he must go further and plead that he has applied to the defendant specifically to perform the agreement pleaded by him but the defendant has not done so.
He must further plead that he has been and is still ready and willing to specifically perform his.
part of the agreement.
Neither in the plaint nor at any subsequent stage of the suit the plaintiff has taken thos pleas.
As observed by this Court in Pt.
Prem Raj vs The D.L.F. Housing and Construction (Private) Ltd. and anr.(1) that it is well settled that in a suit for specific performance the plaintiff should allege that he is ready and willing to perform his part of the contract and in the absence of such an allegation the suit is not maintainable.
The High Court purported to rely on the decision of this Court in Srinivas Ram Kumar vs Mahabir Prasad and ors.
(2) in support of the decree passed by it.
We do not think that the ratio of that decision is applicable to the facts of this case.
Therein the plaintiff brought a suit for specific performance of an agreement to sell a house alleging that he had paid Rs. 30,000 towards the price and had been put into possession in part performance of the contract but the defendant pleaded that the amount of Rs. 30,000 was received as a loan and the plaintiff was put into possession only to facilitate the payment of interest.
This Court accepted the plea of the defendant and negatived the claim of the plaintiff and refused to decree the specific performance prayed for by the plaintiff but at the same time this Court thought that on the peculiar facts of that case, it was appropriate to grant a decree in favour of the plaintiff for Rs. 30,000 which admittedly remained unpaid.
As seen earlier before a decree for specific performance can be given the plaintiff has to plead and satisfy the court about his willingness to perform his part of the contract.
Hence in our opinion the decision in Srinivas Ram Kumar 's case (2) does not bear on the facts of the present case.
For the reasons mentioned above we dismiss Civil Appeal No. 1782 of 1966 and allow Civil Appeal No. 1783 of 1966.
In the result the suit from which these appeals arise stands dismissed.
Now coming to the question of costs, on the facts and circumstances of this case we think it is appropriate to direct the parties to bear their own costs throughout.
Our reasons for doing so are these: It is proved that the suit properties were sold to the 1st defendant at a very low price.
There must have been some good (1) ; (2) ; 927 reason for doing so but the parties have not chosen to place the true version before the Court.
It is also proved that the 1st defendant before his death was willing to resell a portion of the suit properties.
He had directed his wife to resell the major portion of item No. 1 of the plaint schedule to the plaintiff for a consideration of Rs. 11,500 though its price at that time is proved to be much more than Rs. 11,500.
As seen earlier, the defendant was willing to sell item No. 1 in the plaint schedule to the plaintiff for Rs. 11,500.
She expressed her readiness to do so in her written statement.
She is evidently not willing to stand by that offer now because of the enormous rise of price of properties in recent times.
Mr. M.C. Chagla, learned Counsel for the defendant told us at the time of the hearing that the property concerned in the defendant 's appeal is now worth over a lac of ' rupees.
That appears to be the reason why the defendant is backing out of the offer made by her in her written statement.
All that one need say is that all is not well with defendant 's ease either.
Civil Appeal 1782/66 dismissed.
Civil Appeal 1783/66 allowed.
| IN-Abs | The plaintiff as original owner of the suit properties sold the same to the 1st defendant who.
was husband of the 2nd defendant.
According to the plaintiff apart 'from the written sale deed there was an oral agreement between him and the 1st defendant whereunder the latter agrees to reconvey the properties sold at the same price whenever the plaintiff called upon him to do so.
The suit was filed for specific performance of the said oral agreement.
The 1st defendant died even before he filed his written statement.
Before his death he had gifted the suit properties to his wife, the 2nd defendant.
In her 'written statement the 2nd defendant denied the agreement pleaded in the point but stated that just before his death her husband had agreed to sell t6 plaintiff item No. 1 of the suit property less one acre of paddy field for a sum of Rs. 11,500 but due to his illness the sale could not be effected.
She reiterated the said offer in her written statement but the plaintiff did not accept it and the suit proceeded on the basis of the agreement pleaded in the plaint.
The trial court decreed the suit as prayed for.
In appeal the High Court did not accept the agreement pleaded by the plaintiff but still granted a decree directing the defendant to execute a sale deed in favour of the plaintiff in respect of item No. 1 of the plaint schedule properties less one acre of paddy field for a sum of Rs. 11,500.
Both the parties appealed to this HELD.
: (i) The burden of proving the oral agreement was on the plaintiff.
The sale deed on the face of it evidenced an outright sale.
The stipulation ha it that the purchaser would not mortgage or assign the properties to anyone else during the vendor 's lifetime went against the plaintiff 's case inasmuch as it only gave the vendor a right to preempt. ] 'here was no satisfactory explanation why such an important thing as the agreement to re convey was made orally and not reduced to writing.
[923 G,924B] It appeared likely in the present case that neither side had come forward with the true version.
But before a court can grant a decree for specific performance, the contract pleaded must be a specific one and the same must be: established by convincing evidence.
Rarely a decree for specific performance is granted on the basis of an agreement supported solely by oral evidence.
[925 D E] On the evidence adduced by him the plaintiff had failed to prove the agreement pleaded in the plaint.
[925 F] (ii) The High Court was wrong in passing the decree in respect of plaint item No. 1 on the basis of the admission of the 2nd defendant in her written statement.
The plaintiff did not at any stage accept the 922 agreement pleaded by the defendant as true.
The agreement pleaded by the plaintiff in his plaint and that pleaded by the defendant in her written statement were two totally different agreements.
The plaintiff did not plead at any stage that he was ready and willing to.
perform the agreement pleaded in the written statement of defendant.
A suit for specific performance has to conform to the requirements prescribed in Forms 47 and 48 of the 1st Schedule in the Civil Procedure Code.
Before a decree for specific performance can be given the plaintiff has to.
plead and satisfy the court about his willingness to perform his part of the contract.
[925 G926 B] Pt.
Prem Raj vs The D.L.F. Housing and Construction (P) Ltd. & Anr., ; , applied.
Srinivas Ram Kumar vs Mahabir Prasad & Ors., ; , distinguished.
(iii) Since the parties had not laid the true version before the court and the defendant had refiled from the offer made by her in her written statement it was a case in which it was appropriate to direct the parties to bear their own costs throughout.
[926 H]
|
on No. 492 of 1954.
Petition under article 32 of the Constitution for the enforcement of Fundamental Rights.
B. Sen, I. N. Shroff and B. P. Singh for the petitioner.
M. C. Setalvad, Attorney General for India, and C. K. Daphtary, Solicitor General for India (G. N. Joshi 770 P.A. Mehta and P. G. Gokhale, with them) for the respondents.
October 21.
The Judgment of the Court was delivered by MEHR CHAND MAHAJAN C.J.
This is a petition under article 32 of the Constitution of India for the enforcement of fundamental rights under articles 31(1) and 19(1)(f) of the Constitution and for the issue of writs in the nature of mandamus and/or certiorari and for suitable directions restraining the respondents from interfering with the petitioner 's properties in violation of his fundamental rights.
The petition arises in these circumstances.
The petitioner, along with his brothers, used to carry on the business of toddy and liquor vendors.
In addition to this, one of the brothers used to run a bus service and dealt in cotton and money lending also.
All the brothers owned extensive properties, both agricultural and non agricultural.
Though prior to the assessment year 1926 27 all the brothers were assessed to income tax as a Hindu undivided family, since then up to the year 1946 they were assessed separately on account of a partition alleged to have been made between them.
In December, 1946, the Income tax Officer commenced proceedings against them under section 34 on the ground that the case of partition set up by them was not correct and as a matter of fact there had been no partition between them and they were carrying on business jointly.
As a result of these proceedings an assessment under section 34 was made on the four brothers jointly, treating them as an association of persons, for the year 1942 43.
Similar assessment proceedings were taken against them in respect of the years 1940 41, 1941 42 and 1943 44.
In December, 1947, the Central Government, under the bona fide belief that the petitioner 's brothers had made huge profits during the war and had evaded tax, made five references to the Income tax Investigation Commission under section 5(1) of the Taxation on Income (Investigation Commission) Act, 1947.
Reference No. 175 concerned all the brothers as an association of persons while the other four references related 771 to the brothers individually.
As a result of the pro ceedings before the Investigation Commission, the Commission made a report to the Central Government on the 26th of September, 1952, estimating the amount of escaped income at Rs. 16,79,203 between the year,% 1940 41 and 1948 49.
In pursuance of this report the Central Government passed an order under section 8(2) of the Taxation on Income (Investigation Commission) Act directing that the assessment proceedings be taken under the Indian Income tax Act and Excess Profits Tax Act, 1940, as well as under the Business Profits Tax Act, 1947, against Messrs Jamkhandi Bros. as an association of persons with a view to assess or reassess the income that had escaped assessment according to the report of the Investigation Commission.
In accordance with these orders the Income tax Officer commenced proceedings against Messrs Jamkhandi Bros. as an association of persons.
On the 30th November, 1953, various assessment orders were passed by the Income tax Officer assessing the petitioner under the Income tax Act and the Excess Profits Tax Act.
Proceedings were then taken against the petitioner for recovery of the tax assessed by the Income tax Officer and in those proceedings the properties of the petitioner in the District of Belgaum were attached for payment of the dues and one of his properties comprising of about 12 plots of land was sold by public auction under the provisions of the Bombay Land Revenue Code.
On the 20th September, 1954, the present application was preferred under the provisions of article 32 of the Constitution.
It has perhaps been made under the impression that the decision of this Court in Suraj Mal Mohta vs A. V. Visvanatha Sastri and Another (1) has application to the facts and circumstances of this case as well and that relief can be obtained against the assessment orders which have become final, by taking proceedings under article 32 of the Constitution.
In the petition it was alleged that the attachment and sale of the petitioner 's properties was illegal and violates the petitioner 's fundamental rights under articles 31(1) and 19(1)(f) of the Constitution.
It was also alleged (1) ; 772 that the proceedings before the Income tax Investigation Commission after the coming into force of the Constitution were illegal as being in contravention of articles 14 and 20(3) of the Constitution and that in view of the decision of this Court in Suraj Mal Mohta vs A. V. Visvanatha Sastri and Another (supra) proceedings under the Taxation on Income (Investigation Commission) Act, 1947 were discriminatory and that the references made by the Central Government under section 5(1) are not based on a proper classification.
It was prayed that this Court may be pleased to issue a writ in the nature of mandamus and/or certiorari or such other directions as may be appropriate to quash the assessment orders made in pursuance of the order of the Central Govern ment under section 8(2) of the Taxation on Income (Investigation Commission) Act, 1947, and to restrain the respondents from attaching and selling or interfering in any manner with the properties of the petitioner.
From the facts stated above it is plain that the proceedings taken under the impugned Act XXX of 1947 concluded so far as the Investigation Commission is concerned in September, 1952, more than two years before this petition was presented in this Court.
The assessment orders under the Income tax Act itself were made a against the petitioner in November, 1953.
In these circumstances we are of the opinion that he is entitled to no relief under the provisions of article 32 of the Constitution.
It was held by this Court in Ramjilal vs Income tax Officer, Mohindergarh (1) that as there is a special provision in article 265 of the Constitution that no tax shall be levied or collected except by authority of law, clause (1) of article 31 must therefore be regarded as concerned with deprivation of property otherwise than by the imposition or collection of tax, and inasmuch as the right conferred by article 265 is not a right conferred by Part III of the Constitution, it could not be enforced under article 32.
In view of this decision it has to be held that the petition under article 32 is not maintainable in the situation that has arisen and that even otherwise in the peculiar circum stances that have arisen it would not be just and proper (1) 773 to direct the issue of any of the writs the issue of which is discretionary with this Court.
When this position was put to Mr. Sen, the learned counsel for the petitioner, he very fairly, and, in our opinion, rightly conceded that it was not possible for him to combat this position.
For the reasons given above this petition is bound to fail and it is accordingly dismissed with costs.
| IN-Abs | Held, that as there is a special provision in article 265 of the Constitution that no tax shall be levied or collected except by authority of law, clause (1) of article 31 must be regarded as concerned with deprivation of property otherwise than by the imposition or collection of tax and as the right conferred by article 265 is not a fundamental right conferred by Part III of the Constitution, it cannot be enforced under article 32.
Ramjilal vs Income tax Officer, Mohindergarh ([1951] S.C.R. 127) followed.
Suraj Mal Mohta and Co. vs A. V. Visvanatha Sastri (A.i.R. referred to.
|
Appeal No. 1361 of 1966.
Appeal by special leave from the judgment and order dated April 5, 1963 of the Madras High Court in Second Appeal No. 1287 of 1960.
Niren De, Attorney General, V. A. Seyid Muhammad, R.N. Sachthey and S.P. Nayar, for the appellant.
Lily Thomas, for the respondent.
The Judgment of the Court was delivered by Shah, J.
A.V. Narasimhalu hereinafter called "the plaintiff" imported 43 reels of newsprint 131/4" width under a bill of Entry dated July 15, 1954.
The width of the newsprint being less than 15" no import duty was payable under the Open General Licence The Assistant Collector of Customs held that the commodity imported fell within item 44 of the Customs Tariff and levied a duty of 33 3/8% ad valorem.
The plaintiff paid the duty under protest, and applied for refund of the duty relying upon a decision of the High Court o.f Madras in writ petition No. 402 of 1954 in which it was decided that newsprint of width less than 15" was exempt from duty.
This application was rejected.
An appeal to the Collector of Customs and a revision application to the Central Board of Revenue were unsuccessful.
The customs authorities rejected the claim on the ground that the claim not having been made within three months of the date of demand was barred under section 40 of the .
The plaintiff then instituted an action in the City Civil Court for a decree for Rs. 2,669 62 against the Union of India.
The Trial Court decreed the claim holding that the claim was not barred.
In appeal the Principal Judge, City Civil Court held that the City Civil Court had no jurisdiction to entertain the suit.
In so holding he relied upon the judgment of the Judicial Committee in Secretary of State for India vs Mask & Co. (1).
In Second Appeal, the High Court of Madras reversed the judgment of the Principal Judge, City Civil Court, and restored the decree passed by the trial court.
The Union of India has appealed to this Court with special leave.
It is unnecessary to consider whether the claim is barred under section 40 of the , for, in our judgment, the Civil Court had no, jurisdiction to.
entertain the suit.
Section 188 of the , insofar as it is relevant, provides: "Any person deeming himself aggrieved by any decision or order passed b.y an officer of Customs under (1) L.R. 67 I.A. 222.
147 this Act may, within three months from the date of such decision or order, appeal therefrom to the Chief Customs Authority, or in such cases as the Central Government directs, to any officer of Customs not inferior in rank to a Customs Collector and empowered in that behalf by name or in virtue of his office by the Central Government.
Every order passed in appeal under this section shall, subject to the power of revision conferred by section 191, be final".
Section 191 provides: "The Central Government may, on the application of any person aggrieved by any decision or order passed under this Act by any officer of Customs or Chief Customs Authority, and from which no appeal lies, reverse or modify such decision or order".
The Act is a complete code dealing with liability to pay customs duty and for obtaining relief against excessive or erroneous levy and other related matters.
The jurisdiction of the Civil Court to entertain a suit on the ground that the duty was improperly or illegally levied is excluded.
It is true that the decision or order passed under section 188 of the in appeal to the appellate authority is expressly declared final.
But on that account it cannot be held that by refusing to appeal against the decision or by refusing to claim relief in the manner provided by section 188 and section 191 of the , a party aggrieved by the order of a Customs Officer may invest the Civil Court with jurisdiction to entertain a suit.
In Mask & Company 's case(1) a firm of merchants imported a quantity of betelnuts into.
British India.
The Assistant Collector of Customs assessed them for the purposes of duty on a tariff as "boiled", rejecting the contention of the importers, that they Were "raw sliced betel nuts" subject to duty ad valorem.
The importers, appealed from the decision of the Assistant Collector to the: Collector of Customs.
The appeal was dismissed, and in revision to the Government of India the Collector 's decision was affirmed.
A suit was then filed by the importers to recover the excess amount collected from them, by levying duty upon a tariff and not ad valorem.
Before the Judicial Committee it was contended that the decision or order passed by the officer of Customs could only be challenged by an appeal under section 188 of the and jurisdiction of the Civil Court was excluded.
(1) L.R. 67 I.A. 222.
148 Alternatively it was contended that the right of appeal conferred by section 188 constituted a procedure which was alternative to procedure in the civil courts, and since the importers in that option had chosen to proceed under section 188, they were bound by that election, and were thus excluded from resort to the civil courts.
The Judicial Committee observed that adjudication as to confiscations, increased rates of duty or penalties made under the power conferred by section 182 were decisions or orders within the meaning of section 188, and that the decision of the Collector under section 188 was final and excluded the jurisdiction of the Civil Court.
The Judicial Committee did not express any opinion on the question whether prior to taking an appeal under section 188 the porters would have been entitled to resort to the civil courts.
But in our judgment it would not be open in all situations where a party who had right to appeal to refuse to resort to the procedure prescribed by the statute and to file a suit.
The express declaration in section 188 of the that the order of the Collector in appeal shall be final does not imply that a suit will lie against the decision or order of the original authority.
In a recent judgment of this Court Dhulabhai etc.
vs State Madhya Pradesh and Anr.(1) this Court set out certain principles relating to the exclusion of the jurisdiction of the Civil Court.
The propositions (1), (2), (5), (6) & (7) are relevant.
It may be observed that it was not the case that the Assistant Collector of Customs had not acted in conformity with the fundamental principles of judicial procedure, nor was it the case that the provisions of the Act were ultra vires or unconstitutional.
The Act in terms, creates a special liability and provides for determination of the right of the State to recover duty and the liability of the importer to pay duty and by the clearest implication it is provided that it shall be determined by the Tribunal so constituted.
The High Court in the judgment under appeal observed: " . the: question in these.
appeals is different, namely, whether the Collector could be said to be acting within his jurisdiction, if he, in direct disregard of the provisions of the Act and the Rules made thereunder, levied a duty upon the goods which were not liable to duty and compelled by duress as it were the importer to pay the same before taking delivery of the goods.
The result of his action was that the respective appellants had to part with certain sums of money which were collected from them under the colour of statutory power.
In such a case, a suit will undoubtedly (1) ; 149 be maintainable in a civil court by showing that the Customs authorities had excessively charged duty; it will really be a common law right to property being interfered with.
It may be that the remedy provided under section 188 of the would be available to the aggrieved importer to challenge the levy on the ground that it was either improperly made or that the duty was collected under a mistake or under duress.
But in all such cases, there will also exist a remedy under the common law in a civil Court, for the simple reason that these categories of cases will amount to a levy beyond the jurisdiction of the authority, or one made under duress, or paid by mistake.
" But an erroneous decision of the Customs Authority cannot be said to be reached without jurisdiction merely because it may be shown in some collateral proceeding to be wrong.
Normally an action of an administrative authority interfering with the right to property may be challanged by resort to a civil court, Yet in the case of a right which depends upon a statute, the jurisdiction of the civil court to grant relief may by express provision or by clear implication of the statute be excluded.
Where a statute re enacts a right or a liability existing at common law, and the statute provides a special form of remedy, exclusion of the jurisdiction of the civil court to grant relief in the absence of an express provision, will not be readily inferred.
Where, however a statute creates a new right or liability and it provides a complete machinery for obtaining redress against erroneous exercise of authority, jurisdiction of the civil court to grant relief is barred, Liability to pay a duty of custom is not a common law liability: it arises by virtue of the : in respect of any grievance arising in consequence of enforcement of that liability machinery has been provided by the Act.
Having regard to the complicated nature of the questions which arise in the determination of liability to pay duty of customs the Legislature has invested the power of determining liability and the manner of enforcement thereof upon a specially authorised hierarchy of tribunals.
An appeal lies against the order of the Assistant Collector of Customs against an order imposing duty as well as an order refusing to refund duty, and the grievance may be carried to the Central Board of Revenue.
In our judgment, the jurisdiction of the civil court is by clear implication of the statute excluded.
We, however, deem it necessary to observe that the civil courts have jurisdiction to examine cases in which the Customs Authority has not complied with the provisions of the statute or the officer of customs has not acted in conformity with the fundamental principles of judicial procedure or the Authority has acted 150 in violation of the fundamental principles of judicial procedure or he has made an order which is not within his competence or the statute which imposes liability is unconstitutional, or where the order is alleged to be mala fide.
A civil suit will lie for obtaining appropriate relief in these cases.
But the exclusion of the jurisdiction of the civil court to entertain a suit does not exclude the jurisdiction of the High Court to issue high prerogative writs against illegal exercise of authority by administrative or quasi judicial tribunals.
The finality which may be declared by the statute qua certain liability either by express exclusion of the jurisdiction of the civil court or by clever implication does not affect the jurisdiction of the High Court to issue high prerogative writs.
The jurisdiction of the civil court to entertain a suit challenging the validity of the imposition of the duty of customs being excluded, the plaintiff 's suit must fail.
But it must be observed that the present is a fair illustration of the administration not making a serious attempt to avoid futile litigation for small claims.
There was a judgment of the High Court of Madras on the identical question which fell to be determined.
If the plaintiff had moved the High Court in exercise of its jurisdiction under Article 226 the Union had practically no defence.
The Union could without loss of face accede to the request of the plaintiff to refund the amount collected.
The learned Attorney General stated that the Union desired to obtain a decision of this Court on the extent of the jurisdiction of the Civil Court to entertain a suit challenging the decision of the Customs Authorities, because in the view of the Law Advisers the High Court had fallen into error in enunciating the principles.
But the High Court recorded the judgment under appeal after the claim was resisted by the Union.
We are glad to record the assurance given by the Attorney General that whatever may be the decision in the appeal, the Union of India will refund the amount of tax unauthorised recovered by the Assistant Collector of Customs.
This was essentially a case in which when notice was served the Central Government should instead of relying upon technicalities have refunded the amount collected.
We trust that the Administrative authorities will act in a manner consistent not with technicalities, but with a broader concept of justice if a feeling is to be nurtured in the minds of the citizens that the Government is by and for the people.
The appeal is allowed.
The suit is ordered to be dismissed.
The order of costs passed by the High Court is however maintained.
There will be no order as to costs in this appeal.
Y.P. Appeal allowed.
| IN-Abs | Section 188 of the , provides for an appeal against any order of an officer of customs and the order passed in the appeal is made final subject to the. revision under section 191 of the Act.
The respondent claimed refund of customs duty paid by him under protest.
The claim was rejected.
An appeal to the Collector of Customs and a revision to the Central Board of Revenue= were unsuccessful.
The respondent instituted an action in the Civil Court for refund of the amount.
The trial court decreed the suit but the first appellate court held that the civil court had No. jurisdiction to entertain the suit.
The High Court, in further appeal, restored the decree of the trial court.
Allowing the appeal, this Court, HELD: The civil court had no jurisdiction to entertain the suit.
[146 G H] Where a statute creates a new right or liability and it provides a complete machinery for obtaining redress against erroneous exercise of authority, jurisdiction of the Civil Court.
to grant relief is barred.
Where however a statute reenacts a right or liability existing at common law, and the statute provides a special form of remedy, exclusion of the jurisdiction of the Civil Court to grant relief in the absence of an express provision will not be readily inferred.
[149 ' D F] Liability to pay duty of customs is not a common law liability; it arises by virtue of the .
In respect of any grievance arising in consequence of enforcement of that liability, machinery has been provided by the Act.
Having regard to the complicated nature of the questions which arise in the determination of liability to.
pay duty of customs, the legislature has invested the power of determining liability and the manner of enforcement thereof upon a specially authorised hierarchy of tribunals.
[149 ' F G] (ii) A civil suit will lie for obtaining appropriate relief in cases where the customs authority has not complied with the provisions of the statute, or the officer of customs has not acted in conformity with the fundamental principles of judicial procedure or the authority has acted in violation of the fundamental principles of judicial procedure or has made an order which is not within his competence or the statute which imposes liability is unconstitutional or the order is alleged to.
be mala fide.
[149 F G] (iii) The exclusion of the jurisdiction of the Civil Court to entertain a suit does not exclude the jurisdiction of the High Court to issue high prerogative writs against illegal exercise of authority by administrative or quasi judicial tribunals.
[150] Dhulabhai etc.
vs State of Madras Pradesh & Anr.
A.I.R. , followed.
Secretary of State for India vs Mask & Co. L.R. 67 I.A. 222, referred to. 146
|
minal Appeal No. 260 of 1968.
Appeal by special leave from the judgment and order dated October 18, 1968 of the Bombay High Court in Criminal Appeal No. 1161 of 1966.
A. section R. Chari, section section Khanduja and Maya Rao, for the appellant.
M. C. Bhandare and section P. Nayar, for respondent No. 1.
V. M. Tarkunde, Janendra Lal and B. R. Agarwala, for respondent No. 2.
The Judgment of the Court was delivered by P. Jaganmohan Reddy, J.
This appeal is by special leave against the order of the High Court of Bombay dated the 18th October 1968 allowing the oral application of the learned advocate for the respondent for the amendment of the charge of terms of the draft submitted by him and directing the Chief Presidency Magistrate to assign the case to some court for holding a new trial in respect of the amended charge.
This order was made in the following circumstances The appellant was one of the partners of a firm Chandulal Kanji & Co. along with his brother Chandulal K. Mehta.
By and under an agreement called the Packing Credit Agreement entered into between the firm and the second respondent, the Union Bank of India, the appellant obtained 75 per cent of the value of groundnut extraction to be purchased by the firm and exported to the United kingdom and other European countries from the Bank on the condition that immediately after the purchase of the goods and its export the shipping documents would be sent to it.
This arrangement required the firm while sending a letter requesting the credit to be given to it, to enclose the contract of sale of groundnut extraction entered into between it and the foreign firm.
On receipt of this letter and the agreement.
the bank would advance 75 per cent of the money required to purchase the groundnut extraction.
After the amount was received, goods had to be purchased from the mills and shipped for export and the shipping documents sent to the Bank within a month from the date of such advance.
It appears that under this arrangement the second respondent Bank had advanced under the Cash Credit Agreement and the Packing Credit Agreement nearly rupees 4 lacs on several dates the first of which was 744 March 27, 1965 which was for the purchase of 200 tons of groundnut extraction and with which we are now concerned.
The Cash Credit Agreement, the Packing Credit Agreement and the letter requesting the advance of Rs. 60,000/ were all signed on the same date.
The advance, as requested, was also made on the 27th March 1965.
Goods were purchased but could not be shipped within a month from the date of the advance because, as stated in the letter of the appellant dated the 27th April, due to change in the schedule of departure of the ships it was not possible to export the goods on the 24th or 25th March as originally planned as such he undertook to ship the goods a week thereafter.
On the same day, the appellant further sent a declaration that the firm had purchased 300 tons from the advance made to it and is holding the stock.
On the 6th May the Bank requested the firm to forward the shipping documents in respect of the seven agreements of which one related to the agreement of 27th March.
When the shipping documents were not sent to it in conformity with the several documents the bank made certain enquiries from its branch in Veraval, a port in Kathiawar and received certain information as to the dates on which the various quantities were exported and the ships in which they were sent.
As the shipping documents were not sent to the second respondent as required under the agreements entered into with it, it again called on the firm on the 24th May to hand over the documents to it in respect of the groundnut exported.
When this request was not complied with, it filed a complaint against the appellant who alone was the active partner of the firm, in the court of the Presidency Magistrate on the 26th May alleging against him misappropriation of moneys and goods contrary to the agreement.
In support of this complaint the manager of the Bank gave evidence and at the stage of framing the charge the Magistrate heard the lawyers for both sides.
He framed only one charge against the accused for misappropriation of the moneys under section 406 I.P.C. advanced by the Bank in respect of which the Magistrate ultimately convicted him on 31st August 1966 and sentenced him to 18 months ' R.I.
Against this conviction the appellant appealed to the High Court and when the case came up for hearing and had been argued for a considerable length, the advocate for the complainant, the second respondent, appears to have made an oral application for amending the charge framed by the Magistrate as per the draft handed over to the learned Judge which was to be added as an alternative charge to the charge already framed.
It was contended that the Magistrate had framed a charge merely in respect of the entrustment of the moneys that were advanced by the Bank to the appellant but even so the evidence had been led on behalf of the complainant at the trial to show that apart from the money with which the appellant was said to have been 745 entrusted with, even the goods that were purchased by the appellant with the moneys so advanced had also been entrusted to him and which he had agreed to hold on account of the Bank.
This prayer was opposed by the learned advocate for the appellant who contended that it was open to the complainant to have urged the Magistrate at the time when the charge was being framed to have an alternate charge similar to the one now required to be added.
In fact it was stated by the learned advocate that the charge was actually framed by the Magistrate after substantial evidence of the complainant had been recorded by him and after the complainant 's advocate in the lower court had discussions on the question of the framing of charge, but in spite of it only one charge was framed against the appellant for breach of trust in respect of moneys said to have been entrusted to the appellant by the Bank.
The charge relating to goods was omitted and not framed.
It was also pointed out that the altering or amending of charge at this stage would really amount to the framing of a totally new charge in regard to altogether a new subject matter, namely, alleged entrustment of goods, which if permitted would prejudice the accused in his defence.
The learned Judge, however, after hearing these arguments thought that a charge which would include entrustment of moneys as well as entrustment of goods ought to have been framed by the Magistrate but having regard to the materials which have already been brought on record by the complainant at the trial he thought that it was desirable in the interest of justice to allow the amendment.
The following directions given by the learned Judge are relevant for the determination of the contention urged before us : "I direct that the charge as framed by the learned Magistrate be altered and amended in terms of the draft amendment submitted and send the case back for a new trial on this amended charge so as to enable the appellant to have full opportunity to meet this case, till which time this appeal is kept pending.
I direct that the papers be sent to the learned Chief Presidency Magistrate forthwith and the learned Chief Presidency Magistrate is further directed to assign the case to some Court for holding the new trial.
I further direct that the new trial should be expeditiously completed and preferably within two months from the receipt of the papers by the Court to which the case would be assigned by the learned Chief Presidency Magistrate.
The other two appeals being Criminal Appeals Nos. 1162 and 1163 of 1966 should also be adjourned as part heard matters and to be put up along with Cri 746 minal Appeal No. 1161 of 1966 after the record and the proceedings of the new trial is received by this Court." Mr. Chari on behalf of the appellant construing the above order as a direction for a new trial without disposing of the appeal contends that it is unwarranted, unfair, inequitable and unsupported 'by any of the provisions of the Code of Criminal Procedure.
The learned advocate further submits that it is grossly prejudicial to the accused, for the prosecution to wait till the end of the trial and then say that the charge should be amended.
It could have easily insisted at the stage of framing the charge itself that an additional charge should be framed and if the prayer was not accepted it could have come in revision.
The, prosecution having let the trial proceed to the end without insisting on any additional charge cannot now before an appellate court ask for its amendment nor should the said amendment be permitted.
Secondly, he submits that the learned Judge did not consider the question whether there was or was not a prima facie case of entrustment of goods.
In fact it is the contention that the cumulative effect of the agreement and the transaction between the appellant and the second respon dent Bank does not disclose entrustment of moneys to sustain the charge for which the appellant was convicted and if there can be no question of any entrustment of moneys there can be no entrustment of goods.
The learned Judge, it is stated, should have adverted his mind to this aspect of the case before he permitted the framing of additional charge and directed the Magistrate to hold a new trial.
In fact the learned advocate urged that before the Magistrate the second respondent 's advocate had specifically stated that the trial should proceed only on one charge relating to entrustment of moneys as a test case and having taken up this position no prayer for the addition of another charge can be made or ought to have been granted.
But Shri Tarkunde appearing on behalf of the second respondent denies that there was any such submission and contends that in fact Tulzapurkar J. did not direct a new trial as suggested by the advocate on behalf of the appellant though the use of the words "new trial" has unhappily given rise to such a contention.
What in fact the learned Judge did was to send the case back to the Magistrate to enable the appellant to have full opportunity to meet the case and return the record to the court to enable it to dispose of the appeal on both the charges.
The learned advocate submits that there is no illegality in the order of the learned Judge because what the appellate court could have done itself it is directing the Magistrate to do, namely, to give an opportunity to the accused to call the prosecution witnesses if he so desires, obtain his statement under section 342 in respect of the additional charge and to allow him to record any evidence on 747 his behalf if he is so desirous.
It appears to us that the contention of Shri Tarkunde is amply justified by the following observations of the learned Judge allowing the application for amendment made by Mr. Patel on behalf of the second respondent: "I have therefore asked Mr. Khambata as to whether the appellant would like to have an opportunity of a new trial where he could meet this case and Mr. Khambata has stated that the proper course for the court, after allowing amendment of the charge in the manner sought by the complainant, would be to order a new trial.
Mr. Patel for the complainant, however, has stated before me that even during such new trial that would be ordered by the court, no fresh evidence would be led on behalf of the complainant and the complainant would be relying upon the self same material that has already been brought on record by the complainant at the trial, which is already concluded.
Mr. Khambata also urged before me that if I were inclined to allow the application of Mr. Patel, I should dispose of the appeal which deals with the alleged entrustment of the monies and either accept the findings or set aside the findings and thereafter order a new trial in regard to the alleged entrustment of the goods.
I feel that it would be desirable and proper to keep this pending till the opportunity that is being given to the appellant accused No. 2 to meet this new case is fully availed of by him and the record of such new trial is received by this court.
I accordingly allow the application of Mr. Patel for amendment of the charge in terms of the draft submitted by him." From the above observations it would be clear that the learned Judge did not intend that the trial should be a new trial in the sense that the Magistrate would record the evidence afresh, see whether there, was a prima facie case for framing a charge and if there was, to frame a charge then permit the complainant to lead evidence, record the statement of the accused under section 342 and adduce evidence on his behalf after which he would pronounce judgment of conviction or acquittal.
If he had so intended and had directed a totally new trial as is alleged, he could not have rejected the contention of Shri Khambata for the appellant that he should dispose of the appeal and order a new trial on the additional charge nor would he have directed that the appeal should be kept pending till the record of the new trial is received back in his court which could only be after giving 748 the accused appellant an opportunity to meet the case on the additional charge.
On this interpretation of the order the question is whether what has been directed by the learned Judge is in conformity with the provisions of the Code of Criminal Procedure.
In our view the Criminal Procedure Code gives ample power to the courts to alter or amend a charge whether by the trial court or by the appellate court provided that the accused has not to face a charge for a new offence or is not prejudiced either by keeping him in the dark about that charge or in not giving a full opportunity of meeting it and putting forward any defence open to him, on the charge finally preferred against him.
The power of the appellate court is set out in section 423 Cr. P. C. and invests, it with very wide powers.
A particular reference may be made to clause (d) of sub section (1) as empowering it even to make any amendment or any consequential or incidental order that may be just or proper.
Apart from this power of the appellate Court to alter or amend a charge, section 535 Cr. P. C. further provides that no finding or sentence pronounced or passed shall be deemed to be invalid merely on the ground that no charge has been framed unless the Court of appeal or revision thinks that the omission to do so has occasioned failure of justice and if in the opinion of any of these courts a failure of justice has been occasioned by an omission to frame a charge, it shall order a charge to be framed and direct that the trial be recommenced from the point immediately after the framing of the charge.
The wide and extensive power which an appellate or revisional court can exercise in this regard has also the support of the Privy Council.
Lord Porter who delivered the opinion of the Judicial Committee in Thakar Sahab vs Emperor(1) had occasion to point out that while the history of the growth of Criminal Law in England its line of development and the technicalities consequent thereon would have made it more difficult and may be impossible to justify a variation of the charge, Indian Law was subject to no such limitation but is governed solely by the Penal Code and Criminal Procedure Code.
In that case the Privy Council was called on to decide whether the alteration of the charge and the conviction from one of abetment of forgery by known person or persons to abetment of forgery by an unknown person or persons vitiated the conviction.
It was held that it did not, because an Appellate Court had wide powers conferred upon it by section 423 and in particular by sub section (1)(a) of that section, which is "always of course subject to the limitation that no course should be taken by reason of which the accused may be prejudiced either because he (1) [1943] P.C.192.
749 is not fully aware of the charge made or is not given full opportunity of meeting it and putting forward any defence open to him on the charge finally preferred.
" In this case Shri Chari contends that : (1 ) what the High Court should have done if it found that interest of justice required it either to have recorded the evidence itself or to have asked the trial court to record it and send it back, but it cannot refuse to give a finding on the charge for which he was convicted and (2) that the prosecution having proceeded with the trial on the charge framed and not having asked for an amendment at that stage cannot ask the appellate court to amend or add to the charge.
It appears to us that both these contentions are based on a misreading of the order of the High Court.
As already pointed out the learned Judge of the High Court did not intend nor did he direct a new trial in the sense that it is contended he had done.
There was in fact no retrial directed, but only an opportunity was given to the accused to safeguard himself against any prejudice by giving him an opportunity to recall any witnesses and adduce any evidence on his behalf.
The appellant has also understood the order not as a retrial is clear from ground (f) of the Special Leave Petition filed before us.
It is therefore not necessary for us to examine the scope and extent of the power or circumstances in which a retrial should be ordered.
The complainant 's Advocate Shri Tarkunde in fact said and even now submits before is that he does not want to lead any evidence and would be satisfied on the same evidence to sustain a conviction on the amended charge, nor does the alternative charge now framed requires him to answer a charge against him of a new offence which would cause prejudice.
The offence 'With which he is now charged alternatively is the same namely under Section 406 but as the entire transaction was one and indivisible he is not only required to answer the charge of misappropriation of money but in the alternative misappropriation of goods which the complainant Bank contends became their 's as soon as the accused purchased them with the moneys it advanced.
In our view no prejudice is caused or is likely to be caused to the accused by the amendment of the charge as directed by the High Court.
It was again contended that the High Court ought to have considered whether there was a prima facie case against the accused to justify the framing of the amended charge particularly when it took the view that the first charge could not be sustained.
We do not think the learned Judge expressed any view as to the maintainability or otherwise of the conviction, but thought there should have also been framed an alternate charge in respect of the goods.
It is true that the court did not give any reasons as 750 to why it thinks there was a prima facie case, but being an appellate court perhaps it was anxious to avoid giving an impression that it has taken any particular view on the evi dence.
The accused raised no ground on this account in the Special Leave Petition, nor do we think on this account we should interfere with the judicial exercise of discretion of the learned Judge in framing the charge and in giving the accused an opportunity to recall any witnesses or adduce fresh evidence on his behalf.
If no objection could be taken to the trial Court in framing the original charge it is difficult to see how an objection can be taken at this stage to the framing of an alternate charge on the same allegation in the complaint.
The appeal is accordingly dismissed.
Y.P. Appeal dismissed.
| IN-Abs | The second respondent Bank filed a complaint against the appellant alleging against him misappropriation of moneys and goods contrary to the Packing Credit Agreement entered into between the appellant 's firm and the Bank.
The Magistrate framed only one charge against the appellant, viz., 'for misappropriation of moneys, under section 406, Penal Code.
Against his conviction the appellant appealed to the High Court and when the case had been argued for a considerable length the learned Judge allowed an oral application for amendment of the charge to include one of misappropriation of goods.
Allowing the application the learned Judge directed that the case be sent back "for a new trial on the amended charge so as to enable the appellant to have full opportunity to meet the case till which time the appeal is kept pending." In appeal to this Court against this order.
HELD : Dismissing the appeal, The Code of Criminal Procedure gives ample power to the courts to alter or amend a charge whether by the trial court or by the appellate Court provided that the accused has not to face a charge for a new offence or is not prejudiced either by keeping him in the dark about that charge or in not giving a full opportunity of meeting it and putting forward any defence open to him, on the charge finally preferred against him.
Especially, cl.
(d) of sub section
(1) of section 423 empowers the appellate court even to make any amendment or any consequential or incidental order that may be just or proper.
Further, section 535 provides that no finding or sentence pronounced or passed shall be deemed to be invalid merely on the ground that no charge has been framed unless the court of appeal or revision thinks that the omission to do so has occasioned failure of justice and if in the opinion of any of these courts a failure of justice has been occasioned by an omission to frame a charge, it shall order a charge to be 'framed and direct that the 'trial be recommended from the point immediately after the 'framing of the charge.
[748 A E] Thakar Sahab vs Emperor, , referred to.
In the present case the learned Judge of the High Court did not intend nor did he direct a new trial; only an opportunity was given to the accused to safeguard himself against any prejudice by giving him a opportunity to recall any witness and adduce any evidence on this behalf.
[749 C] The offence with which the appellant was charged alternatively was the same, namely, under section 406; but as the entire transaction was one and indivisible he was not only required to answer the charge of misappropriation of money but in the alternative misappropriation of goods which the complainant Bank contended became their 's as soon as the accused purchased them with the moneys it advanced.
Therefore no prejudice was 743 caused, nor was likely to be caused to the accused by the amendment of the charge as directed by the High Court.
[749 E F]
|
al from the order dated October 20, 1965 of the Punjab, High Court in Letters Patent Appeal No. 262 of 1965.
V. C. Mahajan and R. N. Sachthey, for the appellant.
Sobhag Mal Jain and B. P. Maheshwari, for the respondent.
The Judgment of the Court was delivered by Shah, J.
Sant Singh Kanwarjit Singh hereinafter called the assessee is registered as a dealer under the Punjab General Salestax Act, 1948.
The assessee filed returns of the turnover of its business for the quarters ending 30th June, 1962 and 30th September, 1962, but without appending thereto the list of sales to registered dealers as required by rule 30 framed under the Act.
The Sales tax Officer proceeded to make "exparte assessments" for the two quarters.
The assessee then moved a petition in the High Court of Punjab for a writ quashing the orders of assessment.
A single 312 Judge following the Judgment of the Punjab High Court in Mansa Ram Sushil Kumar V. The Assessing Authority, Ludhiana,( ') quashed the orders of assessment.
An appeal by the State of Punjab was summarily dismissed by a Division Bench of the High Court.
The scheme of levy and assessment of tax under the Act may be briefly noticed.
Every dealer whose gross turnover during the year proceeding commencement to the Act exceeded the taxable turnover is liable to pay tax on all sales effected after the quarter after the commencement of the Act.
Tax is to be levied on the taxable turnover at such rates as the State Government may direct.
Tax is payable under the Act in the manner provided and at such intervals as may be prescribed.
section [10(l)].
A registered dealer furnishing a return has to pay the amount of tax due according to the return into the Government Treasury.
The assessing authority may without requiring the presence of the registered dealer or production by him of any evidence hold that the returns furnished are correct and complete, and proceed to assess the amount of tax due from the dealer on the basis of these returns; if the assessing authority is not satisfied with the return he may require the registered dealer to remain present in person or by pleader and to produce evidence on which he may rely upon in support of the return.
The Assessing authority may after hearing the evidence as the dealer may produce and such other evidence as the Assessing authority may require, assess the amount of tax due from the dealer.
The scheme is plain.
A registered dealer must file return of the turnover in the manner prescribed and at such intervals as may be prescribed.
The dealer while submitting the return has also to pay tax according to the return.
The Assessing Officer may accept the return or he may call upon the tax payer to explain the.turnover, and support it by evidence.
Under the Act sales tax is a yearly tax, but the provisions relating to assessment contemplate assessments for periods shorter than a complete year, and for that purpose the tax payers are required by the Act to submit periodical returns of their turnover and to pay tax due thereon.
In Mansa Ram Sushil Kumar vs
The Assessing Authority Ludhiana (1), a Division Bench of the Punjab High Court held that the tax imposed under the Punjab General Sales Tax Act may be assessed only at the end of the year and not during the pendency of the year as and when, the return is filed, and in the absence of machinery in the Act for making Assessment for (1) (1964) 16 S.T.C. 857. 313 period shorter than the year of assessment, the order of assesment of tax for a quarter before the expiry of the assessment year is illegal.
In reaching that conclusion the High Court relied upon the judgment of this Court in M/s. Mathura Prasad & Sons vs State of Punjab (1).
But in Mathura Prashad 's case( ') this Court considered whether an exemption granted by the State, Government during the course of the year was applicable to the whole or only a part of the year of assessment.
This Court held(Mr.
Justice Kapur dissenting) that the exemption operated for the entire financial year.
The Court observed that the tax was a yearly tax levied on the taxable turnover of a dealer for the year; it was collected in some cases quarterly, some, cases yearly; and proceeded to hold that whenever the exemption came in, in the year for which the tax was payable, it exempted sales throughout the year unless notification fixed the date of commencement of the tax.
In our judgment the principle, of that case has no, bearing on the question arising in this case.
:The Court in Mathura Prasad 's case( ') merely emphasised that the tax was an annual tax but that did not imply that assessment of tax quarterly was illegal.
Adjustment may possibly have to be made when the .assessment of the final quarter is made, but the taxing authorities are not debarred from determining and assessing the quarterly turnover of tax.
Mansa Ram 's case (2) has since been over ruled by a full Bench of the Punjab High Court in M/s. Om Parkash Rajinder Kumar vs K. K. Opal (3).
The Court in that case held that Sales tax may be assessed under section 1 1 of the Act on the basis of quarterly returns submitted by the dealer pursuant to the notice served on him under sec.
10(3) before the close of the relevant financial year.
In our judgment the High Court was right in holding in Mis.
Om Parkash Rajinder Kumar 's case (3) that the, assessment proceeding under the Punjab General Sale tax may be started even before the expiry of the year where provision is made for submission of periodical returns, and that such assessments are not provisional.
The appeal is allowed and the order passed by the High Court set aside and the petition is dismissed.
There will be no order to cost throughout.
V.P.S. Petition dismissed.
(1) [1962] Supp. 1 S.C.R. 913.
(2) {1964] 15 S.T.C. 857.
(3) I.L.R. (1967) Vol.
& Har, 155.
| IN-Abs | The assessee, a dealer registered under the Punjab General Sales Tax Act, 1948, filed returns of the turnover of its business for the quarters ending 30th June, 1962 and 30th September, 1962 and the Sales Tax Officer assessed the tax for the two quarters.
On the question whether the tax could be assessed only at the end of the year and not during the year, HELD : Under the Act, sales tax is a yearly tax, but that does not imply that assessment of tax quarterly is illegal if provision is made in the Act for quarterly returns and assessment.
Since the provisions relating to returns and assessment, namely, sections 10 and I 1, and rule 20, contemplate submission of quarterly returns, assessment of tax due thereon and payment of the tax by the taxpayers, the tax was validly assessed.
[313 D, F G] Mathura Prashad & Sons vs State of Punjab, [1962] Supp. 1 S.C.R. 913, explained.
Om Prakash Rajinder Kumar vs K. K. Opal, I.L.R. [1967] Vol.
1 Punjab & Haryana 155, approved.
|
n No. 378 of 1969.
Petition under article 32 of the Constitution for a writ in the nature of habeas corpus.
D. P. Singh, for the petitioner.
G. section Chatterjee for Sukumar Basu, for the respondents.
The Judgment of the Court was delivered by Hegde, J.
In this petition under article 32 of the Constitution submitted from jail, the petitioner seeks a writ of habeas .corpus directing his release from detention.
We have already directed the release of the petitioner on 15 12 1969.
Now we proceed to give our reasons in support of that order.
The petitioner was ordered to be detained by the Commis sioner of Police, Calcutta under section 3(2) of the (Act IV of 1950) by his order dated July 15, 361 1969.
It is stated in that order that the petitioner was ordered to be detained with a view to preventing him from acting in any manner prejudicial to the maintenance of "public order".
That order was confirmed by the State Government after the same was approved by the Advisory Board.
From the grounds served on the petitioner, it appears that his detention was ordered because of the three instances mentioned therein.
It is said therein that on 28 2 1968 between 9 50 p.m. and 10 30 p.m. the, petitioner armed with a knife along with some others, also armed, created disturbance on the Northern Avenue in the course of which he attacked the local people with knife as a result of which one Ajit Kumar Biswas sustained stab injuries.
It is further alleged that during that incident, the petitioner and his associates hurled sodawater bottles and brickbats towards the local people endangering their lives and safety and thereby they created.
fear and frightfulness amongst the people of the locality and thus affected public peace ,and tranquillity of the locality.
The second incident mentioned therein is that on 29 10 1968 at about 9 10 p.m. the petitioner being armed with bombs and accompanied by, some other created disturbance on Raja Manindra Road, in the course of which he and his associates hurled bombs, used swords, iron rods ' and lathis against the local people endangering their lives and safety and thereby they created fear and frightfulness in the locality resulting in the disturbance of public peace and tranquillity of that locality.
The last incident mentioned is that on 28 6 1969 at about 11 15 p.m., the petitioner and his associates armed with bombs created disturbance on Raja Manindra Road in the course of which they indiscriminately hurled bombs towards the local ;people endangering their lives and safety and thereby they affected _public peace and tranquillity of that locality.
From the record it does not appear that the petitioner was prosecuted for any of the offences mentioned earlier.
It is not known why he was not prosecuted.
In the ordinary course, if there is truth in the allegations made, he should have been prosecuted and given an opportunity to defend himself.
The allegations made against the petitioner do not amount to anything more, than that he committed certain breaches of law.
The freedom of the individual is of utmost importance in any civilized society.
It is a human right.
Under our Consti tution it is a guaranteed right.
It can be deprived of only by due process of law.
The power to detain is an exceptional power to be used under exceptional circumstances.
It is wrong to 362 consider the same, as the executive appears to have done in the present case, that it is a convenient substitute for the ordinary process of law.
The detention of the petitioner under the circumstances of this case appears to be a gross misuse of the power conferred under the .
The three incidents mentioned in the grounds are stray incidents spread over a period of one year and four months.
These incidents cannot be said to be inter linked.
They could not, have prejudiced the maintenance of 'public order ' nor can they be held to be subversive of 'public order '.
They were at best prejudicial to " 'law and order".
The distinction between the maintenance of 'public order ' and maintenance of "law and order ' was brought out by this Court in Dr. Ram Manohar Lohia v State of Bihar( ').
Therein this Court pointed out that main tenance of "law and order" is a conception much wider than the conception of maintenance 'public order '.
The latter is the prevention of a disorder of grave nature.
, Every act that affects "law and order" need not affect 'public order '.
If it is otherwise every one who disturbs "law and order", however petty the offence committed by him may be, can be detained under the Prevention Detention Act.
This would be a total repudiation of of the rule of law and an affront to our Constitution.
The lega position relating to the point in issue was again recently considered by this Court in Arun Ghosh vs State of West Bengal( '), Therein it was observed that 'public order ' is the even tempo of the life of the community taking the country as a whole or ever a specified locality.
Disturbance of "public order" is to be distinguished from acts directed against individuals which do no disturb the society to the extent of causing a general disturbance of public tranquillity.
It is the degree of disturbance and it, effect upon the life of the community in a locality which determines whether the disturbance amounts only to a breach of "law and order".
We are of the opinion that the grounds stated in support of the detention cannot amount to a disturbance of the, maintenance of 'public order '.
V.P.S. (1) ; (2) [19701 3 S.C.R. 288.
| IN-Abs | The petitioner along with others, committed various offences on three occasions.
On the first occasion he attacked the people of a locality with a knife and by hurling bottles at them.
On the other two occasions he attacked the people of another locality, by hurling bombs at them.
He was detained under section 3(2) of the , with a view to preventing him from acting in any manner prejudicial to the maintenance of public order.
In a petition under article 32 for the issue of a writ of habeas corpus, HELD : The incidents were not interlinked and could not have prejudiced the maintenance of public order.
They were stray incidents spread over a period of one year and four months, directed against individuals, and did not disturb society to the extent of causing a general disturbance of public tranquillity; and hence,.
the petitioner was entitled to be released.
The power to detain is an exceptional power to be used in exceptional circumstances and cannot be used as a convenient substitute for the ordinary process of law.
The acts complained of against the petitioner can at best be considered as prejudicial to "law and order" and not "public order" as required by the law relating to preventive detention.
[361 H; 362 A C, E F] Ram Manohar Lohia vs State of Bihar, ; and Arun Ghosh vs State of West Bengal,.[1970] 3 S.C.R. 288, followed.
|
Appeal No. 524 of 1967.
Appeal from the judgment and order dated July 19, 1966 of the Madhya Pradesh High Court in Misc.
Petition No. 33 of 1965.
P. Ram Reddy and section section Khanduja, for the appellant.
I. N. Shroff, for the respondents.
Shyamala Pappu, C. L. Somesekhar and Vineet Kumar, for the intervener.
The Judgment of the Court was delivered by Hidayatullah C.J.
The appellant, who appeals :by certificate granted by the High Court of Madhya Pradesh, was appointed as Assistant Surgeon on probation, for one year by the Board of Directors, Hindustan Steel Ltd.
,Ranchi with effect from October 22, 1959.
After completing his period of probation he was employed on a contract for 5 years.
exhibit P 3 is the Contract of Service which he entered into with the Company.
Under the terms of the contract there.
was a further period of probation.
During the period of probation the Company could terminate his service without notice and without assigning any reason.
On the completion of the period of probation, either side could terminate the contract by 3 months ' notice without assigning any reason.
The Company could also terminate the employment by 'giving in lieu of notice, three months ' salary.
This term was .applicable till three months immediately before the end of the period of 5 years.
If a notice terminating the service was not ven three months before the close of the end of 5 years the contract was automatically extended till the incumbent became superannuated on reaching the age of 55 years.
The appellant passed the probation period and he was en titled to three months ' notice if his services were to be terminated.
The Company maintains certain set, of Rules governing the employment of its workmen, in addition to the Standing.
Orders of.
Company.
exhibit P 4 represents the procedure for imp sing major penalties and for punishment and appeal.
These are .extracts from the Disciplinary and Appeal Rules.
On September 17, 1964 the appellant.
was on duty in the Medical Out Patients Department.
He examined one Mrs. 365 Holey I who complained of cold, headache and weakness.
It appears that Mrs. Holey complained of some misbehaviour on the part of the appellant and her husband reported the matter to the Chief Medical Officer of the Bhilai Steel Plant where the appellant was then posted.
The Chief Medical Officer asked for the explanation of the appellant on September 21, 1964, but the appellant denied the allegation.
Some enquiry was then held.
The appellant in his appeal submits that he was not given a copy of the written complaint received from Mr. and Mrs. Holey.
On October 5, 1964 some witnesses were examined in the presence of the appellant.
Two days previously the statements of Mr. and Mrs. Holey were also recorded.
The enquiry was being held by the Commercial Manager.
The appellant then sent a notice to Mr. and Mrs. Holey charging them with defamation and actually filed a suit on November 17, 1964 demanding damages.
On December 15, 1964 the General Manager ter minated his services with effect from March 15, 1965, that is to say, after the expiry of three months ' notice under the contract.
It was stated in the order that the services were being terminated in terms of his employment.
The appellant thereupon filed a petition under article 226 of the Constitution in the High Court of Madhya Pradesh claiming inter alia that his services were wrongly terminated without giving him the protection granted by article 311 of the Constitution.
He also complained of breach of the principles of natural justice inasmuch as the enquiry was not proper.
His contention was that although the action was ostensibly taken according to the terms of the contract of employment, he was really punished and he was entitled, therefore, to the protection of article 3 1 1 of the Constitution.
The Company resisted the ground by saying that article 311 was not applicable to the appellant inasmuch as he was employed by a Corporation and neither belonged to the civil service of the Union nor held a civil post under the Union.
The High Court in its judgment ruled that the protection of article 311 of the Constitution was not available in the case because the appellant was not entitled to it.
It appears that this was the only point urged in the High Court.
In the appeal before us attempt was made to enlarge the case by arguing other points, namely, that the enquiry was not properly conducted, that the principles of natural justice were violated and that the appellant had no opportunity of defending himself.
None of these points is touched upon in the High: Court 's judgment and it appears that in the High Court only the constitutional question was raised.
Otherwise, one would expect the High.
Court to have said something about it, or the appellant to have said so in the application for certificate or in 366 the proposed grounds filed with that, application.
We decline to allow these fresh grounds to be urged.
The question that arises in this case is : whether the em ployeesof a Corporation such as the Hindustan Steel Ltd., are entitledto the protection of article 31 1 ? This question can only be answered in favour of the appellant if we hold that the appellant held a civil post under the Union.
It was conceded before us that the appellant could not be said to belong to the civil service of the Union or the State.
article 31 1, on which this contention is based, reads as follows : "31 1.
Dismissal, removal or reduction in rank of persons employed in civil capacities under the Union or a State.
(1) No person who is a member of a civil service of the Union or an all India service or a civil service or a State or holds a civil post under the Union or a State shall be dismissed or removed by an authority subordinate to that by which he was appointed.
(2)No such person as aforesaid shall be dismissed or removed or reduced in rank until he has been given a reasonable opportunity of showing cause against the action proposed to be taken in regard to him; Provided that this clause shall not apply (a)where a person is dismissed or removed or reduced in rank on the ground of conduct which has led to his conviction on a criminal charge; (b)where an authority empowered to dismiss or remove a person or to reduce him in rank is satisfied that some reasons, to be recorded by that authority in writing, it is not reasonably practicable to give to that person an opportunity of showing cause; or (c) where the President or Governor, as the case may be, is satisfied that in the interest of the security of the State it is not expedient to give to that person such an opportunity.
(3)If any question arises whether it is reasonably practicable to give to any person an opportunity of showing cause under clause (2), the decision thereon of the Authority empowered to dismiss or remove such person or to reduce him in rank, as the case may be, shall be final." 367 Clause (2) of the article, which gives the protection opens with the words "no such person as aforesaid" and these words take one back to clause (1) which describes the person or persons to whom the protection is intended to go.
Clause (1) speaks of (i) persons who are members of (a) a Civil Service of the Union, or (b) an All India Service or (c) a Civil Service of a State, or (ii) hold a civil post under the Union or a State.
(a), (b) and (c) refer to the standing services which have been created in the Union and the States and which are permanently maintained in strength.
In addition to the standing services there are certain posts which are outside the permanent services.
The last category in article 311(l) therefore speaks of such posts on the civil side as opposed to the military side.
Incumbents of such posts also receive protection.
In the present case the appellant did not belong to any of the permanent services.
He held a post which was not borne on any of the standing services.
It was, however,, a civil post as opposed to a military post.
So far the appellant 's case is clear but the clause speaks further that such posts must be under the Union or a State.
The question thus is whether the servant employed here can be said to have held the post under the Union or a State ? The appellant contends that since Hindustan Steel Limited is entirely financed by the Government and its management is directly the responsibility of the President, the post is.
virtually under the Government of India.
This argument ignores some fundamental concepts in relation to incorporated companies.
In support of the contention that the post must be regarded as one under the Union the appeliant relies on some obiter observations of a single Judge in M. Verghese vs Union of India and others( 1).
In that case the petitioners were drivers working for the Durgapur Project under Hindustan Steel Limited.
The learned Judge considered the question by analysing the set up of Hindustan Steel Limited.
He found that it was a Government company and a private limited company, although it did not include in its name any notice Jr that it was a private company.
He referred in detail to the various provisions in the Articles of Association as also in the Indian Companies Act which rendered the ordinary company law in applicable in certain respects and conferred unlimited powers.
of management on the President of India and his nominees.
He also found that Hindustan Steel Limited was entirely owned by the Union of India.
From this the learned Judge wished to infer that Hindustan Steel Limited was really a department of" the Government but he did not express this opinion and decided 368 the case on another point.
The appellant contends that the conclusion which the learned single Judge did not draw in the Calcutta case is the conclusion to draw in this appeal.
We must, according to him, hold that there is no difference between Hindustan Steel Limited and a Department of the Government and that the service under Hindustan Steel Limited is a service under the Union.
On the other hand, in State of Bihar vs Union of India and Anr.(1) Hindustan Steel Limited was not held to be a "State" for purposes of article 131.
The question whether Hindustan Steel Limited was subject to the jurisdiction of the High Court under articles 226 and 227 was left open.
In dealing with the above conclusion, reference was made to the incorporation of Hindus tan Steel Limited as an independent company and thus a distinct entity.
In Praga Tools Corporation vs C. V. Imanual and Ors.(2) it was pointed out that a company in which 88 % of ,the capital was subscribed by the Union and the State Governments could not be regarded as equivalent to Government because being registered under the Companies Act it had a separate legal existence and could not be said to be either a Government Corporation or an industry run by or under the authority of the Union Government.
Similar views were also expressed in the High Courts.
In Lachmi and Others vs Military Secretary to the Government of Bihar( '), the expression "civil post under the Union or the State" was held to mean that the civil post must be in the control of the State and that it must be open to the State to 'abolish the post or regulate the conditions of .service.
Although the case concerned a Mali employed in Rai Bhavan, it was held that it was not a post under the State even though the funds of the State were made available for paying, his salary.
In a later case Subodh Ranjan Ghosh vs Sindhri Fertilizers and Chemicals Ltd.( ') the employees of the Sindhri Fertilizers were held not entitled to the protection of article 31 1.
Our brother Ramaswami (then Chief Justice) noticed that the corporation was completely owned by the Union Government; that the Directors were to be appointed by the President of India who could also issue directions.
He nevertheless held that in the eye of law the company was a separate entity and had a separate legal existence.
In our judgment the decision in the Patna case is correct.
It has also the support of a decision re ported in Ram Babu Rathaur vs Divisional Manager, Life Insurance Corporation of India(5) and another in Damodar Valley , 'Corporation vs Provat ROY( ').
Our brother Ramaswami relied (1)Civil Appeals Nos.
512 513 etc.
of 1969 decide on 19.9.1969.
(2) Civil Appeal No. 612 of 1966 decided on February 19, 1969.
(3) (4) A.I.R. 1957 Pat.
(5) (6) LX C.W.N. 1023.
369 in particular upon an English case Tamlin vs Hannaford(1).
In that case it was held in relation to a business that although the minister was really incharge, the corporation was different from.
the Crown and the services of the corporation were not civil services.
Justice P. B. Mukherjee of the Calcutta High Court, to.
whose judgment we referred earlier distinguished the English, case by pointing out certain differences between the Corporation in that case and Hindustan Steel Limited.
He pointed out that (a) in the English Corporation no shareholders were required to, subscribe the capital or to have a. voice in the affair, (b) the capital was raised by borrowing and not by issuance of shares, (c) the loss fell upon the consolidated fund and (d) the corpo ration was non profit making.
In our judgment these differences rather accentuate than diminish the applicability of the principle laid down in the English case to our case.
The existence of shareholders, of capital raised by the issuance of shares, the lack of connection between the finances of the corporation and the consolidated fund of the Union rather make out a greater independent existence than that of the corporation in the English case.
We must, therefore, hold that the corporation which is Hindustan Steel Limited in this case is not a department of the Government nor are the servants of it holding posts under the State.
It has its independent existence and by law relating to Corporations it is distinct even from its members.
In these circumstances, the appellant, who was an employee of Hindustan Steel Limited, does not answer the description of a holder of " a civil post under the Union ' as stated in the article.
The appellant was not entitled to the protection of article 311.
The High,, Court was therefore right in not affording him the protection.
The appeal fails and is dismissed but in the circumstances of the,case we make no order about costs.
G.C. Appeal dismissed. , (1) [1950] 1 K.B.D. 18.
| IN-Abs | The services of the appellant as Assistant Surgeon in the Hindustan Steel Ltd., Ranchi were terminated purportedly in terms of his contract of employment.
In a petition under article 226 he claimed that the termination was wrongful inasmuch as it was really by way of punishment and article 311 of the Constitution had not been complied with.
The company resisted the ground by saying that article 311 was not applicable to the appellant since he was employed by a corporation and neither belonged to the civil service of the Union nor held a civil post under the union.
The High Court dismissed the ' appellant 's petition.
In appeal before this Court by certificate, the appellant contended that since Hindustan Steel was entirely financed by the Government and its management was directly the responsibility of the President, the post was virtually under the Government of India.
HELD : (i) The protection of article 311(2) is available to the categories of persons mentioned in cls. (a)(b) and (c) of article 311(l).
The appellant did not fall in the categories mentioned in cls, (a) and (b).
He did hold a civil post as opposed to a military post but cl.
(c) further required that it must be under the Union or a State.
In view of the existence of shareholders, of capital raised by the issuance of shares, and the lack of connection between the finances of the corporation and the Consolidated Fund of the Union, it must be held that Hindustan Steel Ltd. was not a department of the Government nor were the servants of it holding posts under the State.
It had its independent existence and by the law relating to corporations it was distinct even from its members.
In these circumstances the appellant, as an employee of Hindustan Steel Ltd., did not answer the description of a holder of 'a civil post under the Union ' as stated in article 31 1.
The High Court was therefore right in not affording him the protection of that Article.
[367 D; 369 C E] State of Bihar vs Union of India, C.A. Nos.
512 513/69 dt.
19 9 1969 and Praga Tools 'Corporation vs C. V. Imanual & Ors.
C.A. No. 612 1966 dt.
19 2 1969, applied.
Subodh Raman Ghosh vs Sindhri Fertilizers and Chemicals Ltd. A.I.R. 1957 Pat. 10, approved.
M. Verghese vs Union of India & Ors.
A.I.R. 1963 Cal.
421, Lachmi and Ors.
vs Military Secretar to the Government of Bihar, Ram Babu Rathaur vs Divisional Manager, Life Insurance Corporation of India, , Damodar Valley Corporation V. Provat Roy, ILX C.W.N. 1023 and Tamlin vs Hannaford, [1950] 1 K.B.D. 18, referred to.
364 (ii)The contentions sought to be raised by the appellant regarding the validity of the departmental enquiry against him were not touched upon in the High Court 's judgment nor mentioned in the proposed grounds filed with the application for certificate.
The appellant could not be allowed to urge them for the first time in this Court.
|
l Appeals Nos.
2143 to 2145 of 1968.
315 Appeals from the judgments and orders dated March 18, 1965 of the Calcutta High Court in Income tax References Nos. 154, 155.
and 156 of 1961.
M.C. Chagla, P. C. Bhartari, and 0.
C. Mathur, for the appellant (in C.As.
2143 and 2144 of 1968).
S.Mitra, P. C. Bhartari and 0.
C. Mathur, for the appellant (in C.A. No. 2145 of 1968).
S.T. Desai, section K. Aiyar and B. D. Sharma, for the respondent (in all the appeals).
The Judgment of the Court delivered by Shah, Actng C.J.
These appeals relate to the assessment to tax of M/s. Bengal Enamel Works Ltd. a public limited com pany for the assessment years 1951 52, 1952 53 and 1953 54.
The Company is doing business of manufacturing "enamelled ware.
It had originally employed a "technician ' at a monthly salary of Rs. 5001 .
In June 1941 the technician was relieved, and one Col. Bhattacharya who was a director of the Company was appointed its "Technical Adviser.
" He was to receive as remuneration 15% of the gross annual profits of the Company.
Col. Bhattacharya resigned his office and Dr. Ganguly (son inlaw of Col. Bhattacharya) was appointed to that office.
The Board of Directors resolved on May 18, 1950 to pay to Dr. Ganguly 15% of the gross annual profits (without deducting depreciation) as his remuneration.
In the assessment years 1951 52, 1952 53 and 1953 54 the Company claimed under section 10(2) (xv) of the Income tax Act, 1922, as admissible allowance, in computing its taxable income, Rs. 52,947/ , Rs. 64,356/ and Rs. 79,227/ respectively, paid as remuneration to Dr. Ganguly under the terms of the resolution dated May 48, 1950.
The Income tax Officer, Companies District III, Calcutta, allowed for each of the years remuneration at the rate of Rs. 42,000/ only as a permissible deduction.
The order was confirmed in appeal to the Appellate Assistant Commissioner and by the Tribunal.
The Tribunal referred in respect of each of the three years the following question: "Whether on the facts and in the circumstances of the case, the disallowance of a part of the expenses incurred by the assessee 'for payment of remuneration to its Technical Adviser is permissible under the Provisions of section 10(2) (xv) of the Indian Income tax Act)" 216 The High Court answered the question in the affirmative, and disallowed the claim of the Company.
With certificate of fitness, these appeals are preferred against the order of the High Court.
In computing the taxable income of an assessee, whether an amount claimed as expenditure was laid out or expended wholly and exclusively for the purpose of the, business, profession or vocation of the assessee must be decided on the facts and in the light, of the circumstances of each case : Swadeshi Cotton Mills Co. Ltd. vs Commissioner of Income tax, U.P.(1).
Resolution of the assessee fixing the remuneration to be paid to an employee and production of vouchers for payment together with proof of rendering service do not exclude an enquiry whether the expenditure was laid out wholly and exclusively for the purpose of the assessee 's business.
It is open to the Tax Officers to hold agreement to pay and payment notwithstanding that the expenditure was not laid out wholly and exclusively for the purpose of the business: Swadeshi Cotton Mills Co.Ltd. 's case( ').
But an inference from the facts found that the expenditure was, wholly and exclusively laid out for the purpose of the business is one of law and not of fact, and the High Court in a reference under section 66 of the Income tax Act is competent to decide that the inference raised by the Tribunal is erroneous in law.
In the present case, the facts found are these : Col. Bhattacharya and his son in law Dr. Ganguly were two of the directors of the Company who between them held on January 1, 1950 49% of the total number of shares of the Company and the other directors of the Company held only I % of the shares.
Dr. Ganguly had received no training in the technique of enamelling : he was a medical practitioner earning Rs. 20,000/ per annum by the exercise of his profession.
Apparently no applications were invited for the appointment of a Technical Adviser when Col. Bhattacharya resigned his office.
In the resolution passed by the Directors it was recorded that many "personal enquiries" regarding the post were made, but no candidate was found suitable The Board, it was recorded, considered the applications of section Urbeneck and J. Schulser but the qualifications of these two candidates did not impress the directors: moreover the terms of service offered by J. Schulser were not acceptable to the Board and therefore the only applicant Dr. Ganguly who was working on Probation in the post for some time past and had worked without remuneration up to December 31, 1949 was considered the applications of section urbeneck and J. Schulser though called for by the Incometax Officer were not produced by the Com pany.
At the relevant time "a good technical expert in enamelling" (1) 63 I.T .
R. 57.
317 could be secured for a monthly remuneration of Rs. 1,000/ or Rs. 1,200/ provided that appointment was not for a short period.
In the view of the Income tax Officer, Dr. Ganguly came to be appointed to the post of Technical Adviser of the Company as soon as, his father in law vacated the post and "the generous remuneration offered to him was influenced by factors other than commercial considerations, and considering that Dr. Ganguly was giving up his professional practice in allopathic medicine which yielded him an annual income of Rs. 20,000/ to engage himself as a whole time Adviser attending to the development of the industry a gross remuneration of Rs. 3,500/ per month, beside the .remuneration of Rs. 1,000/ per month that he obtained as Secretary of the Managing Agents of the Company, would be adequate.
" With that view the Applicate Assistant Commissioner and the Income tax Appellate Tribunal have substantially agreed.
The Tribunal observed that they were inclined to conclude that "extra commercial considerations" had influenced the fixation of remuneration of Dr. Ganguly and that partial disallowance of the remuneration "so influenced seems quite fair".
Counsel for the Company urged, relying upon the judgments of this Court in J. K. Woollen Manufacturers vs Commissioner of Income tax, U.P.(1) and Commissioner of Income tax, Bombay vs Walchand & Co. Private Ltd.( ') that in determining the admissibility of an allowance as expenditure laid out and expended wholly and exclusively for thee purpose of the business has to be adjudged from the point of view of the employer and not of the revenue, the Taxing authorities had no power to disallow the remuneration paid to its Technical Adviser, merely because they think that the Company may probably have secured the services of another Adviser for a smaller remuneration.
But these cases, in our judgment, have no bearing here.
The departmental authorities have not attempted to reduce the allowance on the ground that the remuneration paid to Dr. Ganguli was in their view excessive.
Indisputably an employer in fixing the remu neration of his employee is entitled to take into consideration the extent of his business, the nature of duties to be performed, the special aptitude of the employee, the future prospects of the business and other related circumstances and the taxing authorities cannot substitute their own view as to the reasonable remuneration which should have been agreed to be paid to the employee.
But the taxing authority may disallow an expenditure claimed on the ground that the payment is not real or is not incurred by the assessee in the course of his business, or that it is not laid out wholly and exclusively for the purpose of the business (1) ; (2) ; 318 of the assessee.
Thereby the authority does not substitute its own view of how, the assessee 's business affairs should be managed, but proceeds to disallow the expenditure because the condition of its admissibility is absent.
It, has been uniformly found by all the authorities that the remuneration agreed to be paid to Dr. Ganguly was influenced by "extra commercial considerations".
Ganguly and Col. Bhattacharya were able to control the voting before the Board of Directors.
Dr. Ganguly was not trained in the technique of .
enamelled ware," and had no special qualifications for the post.
The remuneration agreed to be paid was much in excess of what was normally payable, and also of what Dr. Ganguly was earning by practising his profession as a doctor of medicine.
The criticism that the Tribunal 's finding was based on no evidence or was based on irrelevant considerations cannot therefore be accepted.
Where an amount paid to an employee pursuant to an agreement is excessive because of "extra commercial considerations," the taxing authority has jurisdiction to disallow a part of the amount as expenditure not incurred wholly and "elusively for the purpose of the business : Swadeshi Cotton Mills Co. Ltd. The appeals fail and are dismissed with costs.
One hearing fee.
V.P.S. Appeals dismissed.
| IN-Abs | The appellant, which was doing the business of manufacturing enamelled ware, appointed a technical adviser and the Board of Directors resolved to pay him 15% of the gross annual profits as his remuneration.
.For the assessment years, 1951 52, 1952 53 and 1953 54, the appellant claimed the amounts paid to the technical adviser as admissible allowances under section 10(2)(xv) of the Income tax Act, 1922.
The Income tax Officer found, that the technical adviser was a doctor of medicine without any special qualification for the post, that he was not trained in the technique of enamelled ware, that he and his father in law, by the number of shares they held, were able to control the voting before the Board of Directors, that good technical experts in enamelling could have been secured for a smaller remuneration, that the remuneration agreed to be paid to the technical adviser was influenced by extra commercial considerations and therefore, disallowed a part of the amount, holding that it was expenditure not incurred wholly and exclusively for the purpose of the business.
The order was confirmed by the Appellant Assistant Commissioner, the Tribunal and the High Court.
In appeal to this Court.
HELD : The question whether an amount claimed as expenditure was laid out or expended wholly and exclusively for the purpose of the business must be decided on the facts and circumstances of each case, and the inference drawn from the facts found is one of law.
Ordinarily, an employer, in fixing the remuneration of his employee, is entitled to take into consideration the extent of his business, the nature of duties to be performed, the special aptitude of the employee, the future prospects of the business and other related circumstances, and the taxing authorities cannot substitute their own view as to the reasonable remuneration which should have, been agreed to be paid to the employee.
But, the taxing authority may disallow an expenditure claimed, on the ground that the payment is not real or is not incured by the assessee in the course of his business or that it is not laid out wholly and exclusively for the pur pose of the business.
In doing so, the authority does not substitute its own view of how the assessee 's business affairs should be managed, but proceeds to disallow the expenditure, because, the condition of its admissibility is absent.
[316 B, D; 317 F H ', 318 A, D] Swadeshi Cotton Mills Co. Ltd. vs C.I.T., U.P. , followed.
|
Appeal No. 1453 of 1966.
Appeal from the judgment and decree dated September.
14, 1965 of the Madras High Court in Second Appeal No. 1394 of 1963.
A. K. Sen, R.M. Mehta and J.B. Dadachanji, for.
the appellant.
R. Gopalakrishnan, for the respondent.
The Judgment of the Court was delivered by Sikri, J.
This appeal by certificate granted by the High Court of Madras is directed against its judgment and decree modifying the decree passed by the District Judge.
The relevant facts for the determination of the points raised before us are as follows: The plaintiff, K '.
M. Viswanatha pillai, appellant before us and hereinafter referred to as the plaintiff, and K.M. Shanmugham Pillai, respondent before us and hereinafter referred to as the defendant, were originally members of a Joint Hindu Family.
On June 29, 1953, the six brothers who constituted the Joint Hindu Family entered into a partition of the properties belonging to the Joint Family, evidenced by a registered document exhibit A 35.
A motor bus MDH 662 fell to the share of the plaintiff.
At the time of partition the permit was not in the name of the defendant and some proceedings for the transfer of the permit to his name were pending.
Accordingly it was provided in the partition deed as follows: "As soon as its route permit and registration etc. are transferred in the name of Shanmugam Pillai, he shall have the same transferred in the name of the 4th individual of us, Viswanatha Pillai." In September 1953, the permit was transferred in the name of the defendant.
In April 1954, the plaintiff purchased two more vehicles, namely, MDO 1106 and MDH 730, but the permits were obtained in the name of the defendant in whose name the vehicles were also actually acquired.
As the defendant was going to Kuala Lumpur on business he executed a general power of attorney, exhibit A 55, in favour of the plaintiff.
In this power of attorney the defendant admitted that the three buses above mentioned belonged to the plaintiff and were plying in his name as requested by the plaintiff.
Two more buses seem to have been acquired since then.
The plaintiff 's case in brief was that the defendant was carrying on business on his behalf as a benamidar.
He accordingly prayed for a declaration that the five buses alongwith the stage 898 carriage permits belonged to him and that he was entitled to run the same in terms of the power of attorney which was irrevocable.
The defendant had joined with the plaintiff earlier in filing a joint application for transfer of permits before the Regional Transport Authority.
The defendant, however, withdrew his consent and the application was rejected.
The plaintiff, accordingly, seeks a mandatory injunction directing the defendant to execute necessary documents required to effectuate the transfer of the permits.
The suit was decreed entirely by the Trial Court, but the District Judge confirmed the decree only with reference to four of the buses.
With reference to Bus No. MDU 4069 the decree was set aside.
The High Court held that "the plaintiff and the defendant practiced a fraud upon the authorities, conjointly, in contravention of the express provision of the .
The benamidar of the vehicles, representing himself to be the owner, falsely obtained the permits in his name, and allowed the true owner, who had no permit, to conduct the actual business; there cannot be a more flagrant violation of the basic requirements of the Act, or of its scheme.
" The High Court, accordingly, felt that they could not possibly grant mandatory injunction compelling 'the defendant to co operate in any further application for transfer, since that would, in effect, give recognition to the fraudulent contrivance and effectuate rights on the very basis of that contrivance.
The High Court also agreed with the District Judge that the plaintiff could not get a declaration as far as bus No. MDU 4069 was concerned.
The learned counsel for the appellant, Mr. A.K. Sen urges 'before us that no provision of the (IV of 1939) hereinafter referred to as the Act has been contravened and that it is not necessary under the Act that a permit should be obtained only by the real owner of the bus.
The relevant statutory provisions may now be noticed, and they 'are as follows: "The Section 2.
(3) "contract carriage" means a motor vehicle which carries a passenger or passengers for hire or reward under a contract expressed or implied for the use of the vehicle as a whole at or for a fixed or agreed rate or sum and from one point to another without stopping to pick up or set down along the line of route passengers not included in the contract; and includes a motor cab 899 notwithstanding that the passengers may pay Separate fares." (19) "owner" means, where the person in possession of a motor vehicle is a minor, the guardian of such minor, and in relation to a motor vehicle which.
is the subject of a hire purchase agreement, the person in possession of the vehicle under that agreement.
" (20) "permit" means the document issued by the commission or a State.
or Regional Transport Authority authorising the use of a transport vehicle as a contract carriage, or stage carriage, or authorising the owner as a private carrier or public carrier to use such vehicle." (22) "private carrier" means an owner of a transport vehicle other than a public carrier who uses that vehicle solely for the carriage of goods which are his property or the carriage of which is necessary for the purposes of his business not being a business of providing transport, or who uses the vehicle for any of the purposes specified in sub section (2) of section 42.
(23) "public carrier" means an owner of a transport vehicle who transports or undertakes to transport goods, or any class of goods, for another person at any time and in any public place for hire or reward, whether in pursuance of the terms of a contract or agreement or otherwise, and includes any person, body, association or company engaged in the business of carrying the goods of persons associated with that person, body, association or company for the purpose of having their goods transported." Section 42(1) on which the High Court has relied reads thus: "42(1) No owner of a transport vehicle shall use or permit the use of the vehicle in any public place, save in accordance with the.
conditions of a permit granted or countersigned by a Regional or State Transport Authority or the Commission authorising the use of the vehicle in that place in the manner in which the vehicle is being used; . " This section does not, in our view, on the language require that the owner himself should obtain the permit; it only requires the owner that the transport vehicle shall not be used except in accordance with the conditions of the permit.
The High Court would add the words "to him" after the words "permit granted", 900 but, in our view, there is no justification for inserting those words.
The definition of the "permit" itself shows that all permits need not be in the name of the ,owner because the latter part of the definition shows that it is only in the case of a private carrier or a public carrier that a permit has to be in the owner 's name.
The same inference follows from the definitions of "private carrier" and "public carrier".
This Court came to the same conclusion in Veerappa Pillai vs Raman & Raman(1).
Some reliance was placed on the amendments made in section 60( 1 ) (c).
The, section as ' amended reads :, "60 (1) The transport authority which granted a permit may cancel the permit or may suspend it for such period as it thinks fit (c) if the holder of the permit ceases to (own)(2) the vehicle or vehicles covered by the permit," .
There has been a conflict of opinion between the different High Courts as to the inference following that amendment.
It seems to us that the High Court of Allahabad in Khalil ul Rahman Khan vs State Transport Appellate Tribunal(3) rightly gives the effect of the amendment.
Srivastava, J., observed: "A reference was, however, made to cl.
(c) of sub section (1) of Section 60 of the Act and on the basis of that clause it was urged that it assumed that the permit holder should be the owner of the vehicle.
That clause provides for one of the contingencies in which a permit can be cancelled.
According to it, it is permissible for the Transport Authority to cancel a permit if the holder of it ceases to own the vehicle covered by the permit.
It is only a permissive clause and the Transport Authority has only been given a discretion to cancel the permit in that contingency.
It may or may not cancel it, even if the holder of the permit ceases to own the vehicle covered by it.
But it is by no means necessary that el.
(c) should be applicable to the case of every permit holder.
There may be permit holders who own the vehicle covered by the permit and there may be permit holders who do not own the vehicle.
This clause appears to apply only to t he former case and not to the latter.
On its basis, therefore, it cannot be held to be a requirement of the (1) ; (2) Substituted by section 54 of the Motor Vehicles (Amendment) Act, 1956 (100 of 1956) for "possess" (w.e.f. 16 2 1957).
A.I.R. 1963 All. 383, 388.
901 Act that in each case the person in whose favour a permit has been issued should necessarily be the owner of the vehicle covered by it.
" We agree with these observations.
The contrary view held in Varadarajulu Naidu vs Thavasi Nadar(x) that section 42(1 ) contemplates that only an owner will have a permit is erroneous.
The decision of the Andhra High Court in Chavali Venkataswami vs Chavali Kotayya(2) that section 60(1)(c) of the Act envisages the grant of a permit to the owner alone must also.
be dissented from.
The learned counsel for the respondent says that at any rate the Act does not contemplate persons applying for permits benami.
In India benami transactions are recognised and not frowned upon.
(see Gut Narayan vs Sheolal Singh)(a).
In C.I.T. Gujarat vs Abdul Rahim & Co. (4) it was held by this Court that the registration of the partnership deed under section 26A of the Indian Income Tax Act, 1922, could not be refused on the ground that K was the benamidar of V. We see nothing in the Act which expressly or by implication bars benami transactions or persons owning buses benami and applying for permits on that basis.
In the result the appeal is allowed, the decree of the High Court set aside and the decree passed by the District Judge restored.
We may mention that Mr. Sen did not press the claim regarding the fifth bus, MDU 4069.
The appellant will have half costs in this Court.
The parties.
will bear their own costs in the High Court.
Appeal allowed.
| IN-Abs | The appellant was the owner of 5 buses.
The Vehicles stood in the name of the respondent, appellant 's benamidar, and the stage carriage permits were also obtained in the respondent 's name.
The appellant, who was running the buses, flied a suit claiming the buses along with their permits.
It was decreed by the trial court, and the lower appellate court confirmed the decree in respect of 4 buses.
The High Court, in further appeal, held that the appellant and the respondent together practised fraud in contravention of as.
41(1) and 60(1)(c) of the in as much as the respondent representing himself to be the owner falsely obtained the permits in his own name, and allowed the true owner, who had no permit to conduct the actual business and dismissed the suit in toto.
In appeal this Court, HELD: There is nothing in the , which expressly or by implication bars benami transactions or persons owning buses benami and applying for permits on that basis.
Section 42(1) does not require that the owner himself should obtain the permit; it only requires the owner to see that the transport vehicles shall not be used except in accordance with the conditions of the permit.
The definition of 'permit ' itself shows that all permits need not be in the name of the owner because the latter part of the definition shows that it is only in the case of a private earner or a public carrier that a permit has to be in the owner 's name.
The same inference follows from the definitions of 'private carrier ' and 'public carrier '.
[899 H] The amended section 60(1)(c) provides for one of the contingencies in which permit can be cancelled.
According to it, it is permissible for the Transport Authority to cancel a permit if the holder of it ceases to own the vehicle covered by the permit.
It is only a permissive clause and the Transport Authority has only been g/yen a discretion to cancel the permit in that contingency.
It may or may not cancel it, even if the holder of the permit ceased to own the vehicles covered by it.
But it is by no means necessary that cl.
(c) should be applicable to the case of every permit holder.
There may be permit holders who own the vehicle covered by the permit and there may be permit holders who do not own the vehicle.
This clause appears to apply only to the former case and not to the latter.
[900] Veerappa Pillai vs Raman & Raman, ; , followed.
Khallil ul Rahman Khan vs State Transport Appellate Tribunal, A.I.R. 1963 All. 383, Gut Narayan vs Sheolaf Singh, and C.I.T. Gujarat vs Abdul Rahim & Co., , approved.
Varadarajulu Naidu vs Thavasi Nadar, (1963) 2 M.LJ. 20 and Chavali Venkataswami vs Chavali Kotayya, (1959) 2 and W.R. 407, disapproved.
|
Appeal No. 1953 of 1969.
320 Appeal by special leave from the, judgment and decree dated ,October 18, 1968 of the Mysore High Court in Regular First Appeal No. 56 of 1963.
M. C. Chagla and R. Gopalakrishnan, for the appellant.
section V. Gupte, R. V. Pillai Sadasiv Rao and P. Keshava Pillai, for respondent No. 1.
The Judgment of the Court was delivered by Hegde, J.
This is a plaintiff 's appeal by special leave.
The plaintiff sued for possession of the suit properties on the basis of his title.
The suit properties originally belonged to the family .of one Veerbaswantji Rao Deshmukh.
He died in 1892 without male issues, leaving behind him his widow Ratnabai and a daughter by name Lakshmibai.
Ratnabai succeeded to the estate, of her husband.
She died in 1924.
On her death Lakshmibai became entitled to the suit properties.
But one Parwatibai,alias Prayag Bai took unlawful possession of the 'suit properties.
Hence Lakshmibai instituted a suit for their possession in the court of Sadar Adalath, Gulbarga, against the said Parwatibai and obtained a decree.
In execution of the said decree Lakshmibai obtained delivery of the lands described in Schedule 11 to the plaint.
Lakshmibai died in 1948.
Sometime thereafter Parwatibai also died.
The defendant claiming to be the sister 's son of Veerbaswanth Rao Deshmukh got himself impleaded as the legal representative of Lakshmibai in the execution proceedings and sought delivery of the lands mentioned in Schedule I of the plaint.
Meanwhile one Vishwanath alleging to be the legal representative of Parwatibai got himself impleaded in the execution proceedings.
Thereafter the defendant and Vishwanath entered into a compromise in pursuance of which Vishwanath delivered possession of the lands included in Schedule I to the defendant.
Sometime thereafter the plaintiff applied to the court to reopen the execution proceedings and implead him as the legal representative of Lakshmibai claiming that he is the adopted son of Lakshmibai.
The executing court dismissed his application holding that his remedy was by way of a sevarate suit.
A revision taken against that order to the High Court was rejected.
Thereafter the plaintiff filed a suit in the court of Subordinate District Judge, Bidar, for a declaration that lie is entitled to be impleaded 'in the execution proceedings mentioned earlier as the revresenta tive of Lakshmibai and to proceed with the execution after setting aside the order made by the executing court.
on the, basis of the compromise entered into between the defendant and Vishwanath.
It may be noted that that was the only relief asked for in the plaint.
The purported cause of action for the suit was the dismissal of the plaintiff 's application for impleading him in 321 the execution proceedings.
That suit should have been dismissed on the ground that it was not maintainable in law.
But strangely enough it was dismissed on the ground that it was hit by section 42 of the Specific Relief Act inasmuch as the plaintiff did not sue for possession of the concerned property.
Thereafter the suit from which this appeal arises was instituted by the plaintiff on the basis of his title.
The trial court dismissed his suit in respect of the lands mentioned in Schedule I of the; plaint on the ground that the relief in question is barred by Order 2, rule 2, Code of Civil Procedure.
It decreed the suit for the possession of the: lands mentioned in Schedule II except items 3 and 9.
It also,, decreed the plaintiff 's claim in respect of the cash amount mentioned in the plaint.
Both the plaintiff and the defendant went up in appeal to the High Court of Mysore as against the decision of the trial court to the extent that decision was against them.
The High Court, affirmed the decision of the trial court.
Before the trial court and the High Court, there was contro versy as regards the truth of adoption pleaded by the plaintiff.
, Both the courts have upheld the plaintiff 's claim that he was adopted by the husband of Lakshniibai.
That question was not reopened before us.
Before the High Court, the learned Counsel for the plaintiff conceded that the plaintiff 's suit in respect of items 3 and 9 of ' Schedule II of the plaint is barred by limitation.
Hence that question stands concluded.
The only question that remains for consideration is whether the High Court and the trial court were right in their conclusions that the plaintiff 's claim in respect of the lands mentioned in Schedule I of the plaint is barred by Order 2, rule 2, Code of ' Civil Procedure.
We are of the opinion that the trial court and the High Court erred in holding that the plaintiff 's suit in respect of the lands, mentioned in plaint Schedule I is barred by Order 2, rule 2, Code of Civil Procedure.
The suit instituted by the plaintiff.
in the court of Subordinate District Judge, Bidar for a declaration that he is ' entitled to be impleaded in the execution proceedings as legal representative of Lakshmibai and to proceed with the execu tion proceedings, was as mentioned earlier, a misconceived one.
It was exercise in futility.
His remedy was to file a suit for the possession of the concerned properties on the basis of his title.
The High Court and the trial court proceeded on the erro neous basis that the former suit was a suit for a declaration of 322 the plaintiff 's title to the lands mentioned in Schedule I of the plaint.
The requirement of Order 2, rule 2, Code of Civil Procedure is that every suit should include the whole of the claim which the plaintiff is entitled to make in in respect of a cause of ,action. 'Cause of action ' means the 'cause of action for which the suit was brought '.
It cannot be Said that the cause of action on which the present suit was brought is the same as that in the previous suit.
Cause of action is a cause of action which gives occasion for and forms the foundation of the suit.
If that cause, ,of action enables a person to ask for a larger and wider relief than that to which he limits his claim, he cannot afterwards seek to recover the balance by independent proceedings see Mohd. Hafiz vs Mohd. Zakaria(1).
As seen earlier the cause of action on the basis of which the, previous suit was brought does not form the foundation of the present suit.
The cause of action mentioned in the earlier suit, assuming the same afforded a basis for a valid claim, did not enable the plaintiff to ask for any relief other than those he prayed for in that suit.
In that suit he could not have claimed the relief which he seeks in this suit.
Hence the trial court and the High Court were not right in holding that the plaintiff 's suit is barred by Order 2, rule 2, Code of Civil Procedure.
In view of our above.conclusion, we have not thought it ,necessary to go into the controversy whether Order 2, rule 2, Code of Civil Procedure is applicable to a suit under section 42 of the Specific Relief Act.
We are unable to accept the contention of the learned Counsel 'for the appellant that we should allow to the appellant mesne profits at least from the date of the suit.
No claim for mesne profits was made in the plaint.
Therefore we cannot go into that ,question in this appeal.
For the mesne profits, if any, due to the plaintiff, he must take separate steps according to law.
In the result this appeal is allowed and the trial court 's decree is modified by including therein the lands mentioned in Schedule I of the plaint.
In other respects the decree of the trial court is sustained.
The appellant will be entitled to his costs both in this 'Court as well as in the High Court.
Y.P. Appeal allowed.
(1) [1922] L.R. 49 I.A. 9.
| IN-Abs | The appellant applied to the executing court to reopen the execution proceedings in respect of certain properties and to implead him as the legal representative of the owner of the properties, claiming that as the adopted son he was entitled to delivery of possession.
The Court dismissed the application holding that his remedy was by way of a separate suit.
Thereupon he filed a suit for a declaration that he was entitled to be impleaded in the execution proceedings as the legal representative and proceed with the execution.
The purported cause of action for suit was the dismissal of the earlier application for impleading in the execution proceedings.
The suit was dismissed on the ground that it was hit by section 42 of the Specific Relief Act inasmuch as it was not one for possession of the concerned property.
Thereafter the appellant filed another suit on the basis of his title.
The trial court dismissed the suit on the ground that the relief in question was barred by Order 2 rule 2 of the Code of Civil Procedure.
The High Court affirmed.
On the question whether the plaintiff 's claim in respect of the properties was barred by Order 2 rule2 Code of Civil Procedure, HELD : The High Court and the trial court proceeded on the erroneous basis that the former suit was a suit for a declaration of the appellant 's title to the properties in question.
The requirements of Order 2 rule 2, Code of Civil Procedure is that every suit should include the whole of the claim which the plaintiff is entitled to make in respect of a "cause of action.
" 'Cause of action ' means the, 'cause of action for which the suit was brought '.
It cannot be said that the cause of action on which the present suit was brought is the same as that in the previous.
Cause of action is a cause of action which gives occasion for and forms the foundation of the suit.
If that cause of action enables a person to ask for a larger and wider relief than that to which he limits his claim, he cannot afterwards seek to recover the balance by independent proceedings.
[321 G, 322 A C] In the instant case the cause of action on the basis of which the previous Suit was brought does not form the foundation of the present suit.
The cause of action mentioned in the earlier suit, assuming the same afforded a basis for a valid claim, did not enable the plaintiff to ask for any relief other than those he prayed for in that suit.
In that suit he could not have claimed the relief which he seeks in this suit.
Hence the trial court and the High Court were not right in holding that the plaintiff 's suit was barred by Order 2, rule 2, Code of Civil Procedure.
[322 C D]
|
Appeal No. 2127 of 1969.
Appeal by special leave from the judgment and order dated January 27, 1969 of the Orissa High Court in O.J.C. No. 280 of 1965.
H.R. Gokhale, Govind Das and G. section Chatterjee, for the appellant.
R.K. Garg, section C. Agarwala, and Sumitra Chakravarty for respondent No. 1.
The Judgment of the Court was delivered by Shelat, J.
Respondent 1 was, in 1955, admitted as a trade apprentice by the appellant company in ' its works, the company 345 agreeing to bear the cost of his training as such apprentice, which it did for a period of 3 years.
On completion of his training, he was appointed in September 1958 as a skilled workman, i.e., as a fitter.
The letter of appointment under which he was engaged contained a clause which required him to execute a bond to serve the company for five years at least.
The object of that clause evidently was to ensure that he served the company at least for five years in consideration of the company having borne the expenses.of his training.
The evidence produced before the Industrial Tribunal shows that the practice of the company, set up at the instance of the Government of India and the Company 's Board of Directors, was to have a confidential inquiry made to verify the antecedents of its employees. 'Such verification not being practicable at the time of the appointment of each employee, it used to be done after a workman was appointed.
The object of such verification was to ascertain whether it was desirable or not in the interests of the company to continue the service of the employee in respect of whom such verification was made.
The inquiry was made through the police.
On receipt of a verification report from the police, the Senior Security Officer of the company would make his recommendation and the company would terminate the service of an employee where it was considered desirable in the company 's interests not to continue such an employee in service after giving 3 months ' notice or salary for that period in lieu thereof.
Throughout the period of his service commencing from Sep tember ' 1958 no action was ever taken against respondent 1 although he had at one time joined a strike in the company '; works and although he was an active member and the secretary of the workmen 's union.
A criminal case in relation to the said strike was filed against him but had been subsequently withdrawn.
Prima facie, the fact that no action was taken against him indicated that the company did not consider his active participation in the union activities objectionable so as to warrant any interference on its part.
In accordance with the practice of the company, however, a verification report about him was called for as was done in the case of other workmen also.
On such a report from the police, the Senior Security Officer recommended that it was not desirable to retain him in the company 's service any longer.
Respondent I at the time was working as a fitter in the blast furnace of the works.
On December 9, 1960 he was served with an order by which his service was terminated and was informed that he would be entitled to 3 months ' pay in lieu of a notice for that period.
346 On the union of which, as aforesaid, he was the secretary, having raised a dispute, alleging that the termination of his service was the result of victimisation and unfair labour practice,, the dispute was referred by the Government of Orissa to the Industrial Tribunal.
After inquairy, the Tribunal rejected the union 's allegation as to victimisation or unfair labour practice on account of any union activities carried on by respondent 1.
Nevertheless, the Tribunal held that it was improper on the part of the company not to have disclosed the said report to respondent 1 and not to have given him an opportunity to contest its contents and vindicate himself.
The Tribunal held that though the said order was in form one of termination of service, it was in fact punitive in nature and considering the action taken against respondent I as disproportionate further held that it was a case of victimisation, that consequently the, order was illegal and unjustified and directed reinstatement with full 'back wages.
The company filed a writ petition in the High Court for quashing the said order.
Before the High Court the company urged (a) that the termination of the service of respondent 1 was in bona fide exercise of the employer 's right to do so, (b) that it did so only because of the said adverse report and (c) that even if it was held that the said order was not legal or justified, the proper relief to be granted to the respondent in the circumstances of.
the case was compensation and not reinstatement, which meant imposition of a workman against whom there was an adverse report and whom the company did not consider it desirable to retain in its service.
The High Court rejected these contentions and held that the Tribunal was right in holding that the termination of service of respondent I was not in bona fide exercise of the power of the employer to terminate an employee 's service, that it was punitive in character and was, therefore, not legal or justified.
The High Court also held that ordinarily the relief against an illegal termina tion of service was reinstatement though in some cases it may be considered inexpedient to do so, in which event a suitable compensation would be the proper relief.
Lastly, it held that the present case was not one of those exceptions to the general rule of reinstatement and the Tribunal having exercised its discretion it could not interfere with the Tribunal 's order.
The company thereupon applied for special leave from this Court.
Though it was granted, it was limited only to the question whether the relief to respondent I should have been reinstatement or compensation.
It is, therefore, not possible for us to go into the question whether the Tribunal and the High Court were right in their conclusion that the termination of the service of respondent I was not in bona fide exercise of the company 's right to order discharge simpliciter or whether the order was punitive in 347 nature and therefore was not legal in the absence of any domestic inquiry having been held.
Besides, this appeal is one against the High Court 's order refusing certiorari under its writ jurisdiction and not a direct appeal under article 136 of the Constitution against the Tribunal 's order.
These considerations will have to be kept in mind while we are considering this appeal.
Counsel for the appellant company argued that even though he could not challenge, in view of the limited special leave granted to the company, the finding that the impugned order was not termination simpliciter in bona fide exercise of the employer 's right to terminate the service of an employee, he was entitled to agitate the question whether or not the High Court, on the facts of this case, should have interfered and ordered compensation in place of reinstatement, particularly because : (a) the concerned employee was posted in the blast furnace, a crucial part of the company 's works, in respect of which the company could not hazard any risk, (b) the Tribunal had given a clear and firm finding against the case that the workman had been victimised on account of his union activities, and (c) the Tribunal and the High Court had both set aside the company 's order only because of their finding that it was punitive in nature and that the punishment was so disproportionate, that it amounted to victimisation.
The proper order, counsel submitted,) was to award compensation instead of imposing the service of an employee whom the company considered risky to retain in its service.
Mr. Garg, on the other hand, argued that the company 's action involved an important principle, in that, an employer cannot be allowed to terminate the services of his employees on police reports which are not disclosed to the workmen or before the Tribunal, and therefore, are not open to the workmen to challenge.
Such a course, he argued, would enable an employer to put an end to the service of a workman not because he is in fact a danger to the establishment but is merely a member of a party or an association whose views and policies such an employer does not like.
In such a case, he submitted, the termination of service would be in violation of the constitutional right of association of an individual and would be clearly unjustified, and therefore, it would not be a case for departure from the ordinary consequence flowing from an illegal order of termination of service.
There can be no doubt that the right of an employer to discharge or dismiss an employee is no longer absolute as it is subjected to severe restrictions.
In cases of both termination of service and dismissal, industrial adjudication is competent to grant relief, in the former case on the ground that the exercise of power was mala fide or colourable and in the latter case if it amounts to victimisation or unfair labour practice or is in violation 348 of the principles of natural justice or is, otherwise not legal or justified. ' In such cases, a tribunal can award by way of relief to the concerned employee either reinstatement or compensation.
In the earlier stages the question whether one or the other of the two reliefs should be granted was held to be a matter of discretion for the tribunal.
(see Western India Automobile Association vs Industrial Tribunal( '), United Commercial Bank Ltd. vs U.P. Bank Employees Union( ').
The view then was that to lay down a general rule of reinstatement being the remedy in such cases would itself fetter the discretion of the tribunal which has to act in the interests of industrial harmony .
and peace and that it might well be that in some cases imposition of the service of a workman on an unwilling employer might not be conducive to such harmony and peace.
Later on, however, the earlier flexibility appears to have been abandoned and it was ruled that although no hard and fast rule could be laid down and the Tribunal would have to consider each case on its own merits and attempt to reconcile the conflicting interests of the employer and the employee, the employee being entitled to security of service and protection Against wrongful dismissal, the normal rule in such cases should be reinstatement.
(sea Punjab National Bank Ltd. vs Workmen( ').
This conclusion was adhered to, in some of the subsequent decisions.
But in the case of Punjab National Bank Ltd.( ') itself, as also in other subsequent cases, the rule was qualified to mean that in unusual or exceptional cases where it is not expedient to grant the normal relief of rein statement, the proper relief would be compensation and that that would meet the ends of justice.
The problem confronting industrial adjudication is to promote its two objectives, the security of employment and protection against wrongful discharge or dismissal on the one hand and industrial peace and harmony on the other, both leading ultimately to the goal of maximum possible production.
As exceptions to the general rule of reinstatement, there have been cases where reinstatement has not been considered as either desirable or expedient.
These were the cases where there ad en strained relations between the employer and the employee, where the post held by the aggrieved employee had been one of trust and confidence or where though dismissal or discharge was unsustainable owing to some infirmity in the impugned order, the employee was found to have been guilty of an activity subversive of prejudicial to the interests of the industry.
These cases are to be found in Assam Oil Co. Ltd. vs Workmen (4 ) Workmen of Charottar Gramodhar Sahakari Mandali Ltd. vs Charottar Gramo (1) [19491 F.C.R. 321, 348.
(2) (19521 (3) (4) ; 349 dhar Sahakari Mandali Ltd.( '), Doomur Dulung Tea Estate vs Workmen (2 ) and Ruby General Insurance.
Co. Ltd. vs P. P. Chopra(3).
These are, however, illustrative cases where an exception was made to the general rule.
No hard and fast rule as to which circumstances would in a given case constitute, an exception to the general rule can possibly be laid down as: the Tribunal in each case, keeping the objectives of industrial adjudication in mind, must in a spirit of fairness and justice confront the question whether the circumstances of the case require that an exception should be made and compensation would meet the ends of justice.
In the present case the facts are fairly clear.
As aforesaid, the concerned workman Was trained for a period of 3 years at the cost of the company.
On completion of his training the company engaged him as a skilled worker.
He worked as such from September 1958 to December 1960.
At the time of the termination of his service, he was working as a fitter in the blast furnace, a vital part of the company 's works, where both efficiency and trust would matter.
Even though he was said to have joined an illegal strike and a criminal case had been filed against him, no steps, even departmentally, were taken against him.
Prima facie, there fore, this was not a case where, the employer could be said to be anxious to wantonly or unreasonably terminate his service.
Even though he was an active member and the secretary of the union, the Tribunal found that the termination of his service was not due to victimisation or any unfair labour practice.
There can also be no dispute that the company ordered the termination of his service only because of the, adverse report of the police against him.
The report was called for 'by the company in accordance with its practice of verifying the workman 's antecedents.
The evidence was that such verification was made in the case of all workmen after they were engaged and that such verifi cation was not made before appointing them as it was not practicable to do so.
The practice was adopted at the instance of the Government and in accordance with the directions to that effect of the Board of Directors.
The letter of the Deputy Inspector General of Police communicating the report made on the investigation by the police was produced but neither the report nor the source of information on which it was based nor the name of the person who conducted the investigation was disclosed either to the workman or the, Tribunal.
The ground urged for such non disclosure was that the report was confidential and if disclosed it would not be possible for the company to have such investigations in future.
The reason appears to be that if the person conduct (1) C.A. 382 of 1966, dec.
on August 14, 1967.
(2) C.A. 516 of 1966 dec.
on October 26, 1967.
(3) C.A. 1735 of 1969,dec.
on September 12, 1969.
350 ing such investigation were produced for cross examination by the workman or if his report were to be disclosed, the name or names of the informants would come out with the result that no informant in future would readily come forward to give information about other workmen.
Even in criminal cases an investigating officer is not compelled to disclose the name of his informant.
But the Tribunal appears to have been impressed by the company 's refusal to disclose the report although it was clearly a confidential report.
The Tribunal thought that such a report might have been made by a person who was not a responsible police officer or that it might be based on mere rumour or hearsay evidence and might not be of a very convincing nature.
The High Court went one step further and observed that it might be "as contended by opposite party No. I that the report is based entirely on the trade union activities of the opposite party in which case the discharge would itself be improper." This observation was not warranted in view of the Tribunal 's clear finding that this was not a case of victimisation or unfair labour practice on account of the union activities of the workman.
The High Court further was of the view that "even if the Management terminated the services of Sri A. K. Ray, simply on the ground that it received an adverse report against him, the order of such termination of services in the circumstances cannot be treated as legal or justified.
" It also observed that "it was not admitted by the opposite party that there was any adverse police report against him.
" But the management had examined P. B. Kanungo, the Senior Personnel Officer, who had categorically testified that the management had received such an adverse report and on the basis of that report the company 's Security Officer had recommended the termination of service of the workman,.
There was no cross examination on this part of his evidence.
The High Court, therefore, was not entitled to proceed on the basis as if the fact of such adverse report was any longer in doubt.
Indeed, the grievance was 'not relating to the factum of such report, but its non disclosure and the Tribunal in consequence not being able to weigh its veracity.
The fact of the Management having received the police report which was adverse was no more in dispute; nor the fact that the company 's Security Officer on the strength of that report had recommended that it was not desirable to retain the workman in service.
The termination of his service was by no means singular in any way, for, the evid ence was that verification of antecedents of all workmen used to be similarly made and whenever the report was adverse an order of discharge used to be made.
Since the special leave granted to the company is limited only to the question of the kind of, relief that the Tribunal ought to have given, we arenot in a position to go into the question whether the termination of service was legal or justified.
We have, therefore, 351 to proceed on the footing that the Tribunal 's conclusion that it was not legal was right.
The question, however, still is whether the Tribunal was, in the circumstances of the case, justified in directing reinstatement.
It is true that some of the decisions of this Court have laid down that where the discharge or dismissal of a workman is not legal or justified, the relief which would ordinarily follow would be reinstatement.
The Tribunal however, has the discretion to award compensation instead of reinstatement if the circumstances of a particular case are unusual or exceptional so as to make reinstatement inexpedient or improper.
The Tribunal has, therefore, to exercise its discretion Judicially and in accordance with well recognised principles in that regard and has to examine carefully the circumstances of each case and decide whether such a case is one of those exceptions to the general rule.
If the Tribunal were to exercise its discretion in disregard of such circumstances or the principles laid down by this Court it would be a case either of no exercise of discretion or of one riot legally exercised.
In either case the High Court in exercise of its writ jurisdiction can interfere and cannot be content by simply saying that since the Tribunal has exercised its discretion it will not examine the circumstances of the case to ascertain whether or not such exercise was properly and in accordance with the well settled principles made.
If the High Court were to do so, it would be 'a refusal on its part to exercise jurisdiction.
In the present case, there could be no dispute that the company, in accordance with its practice, called for a verification report about the concerned workman.
The report was made by the police after investigation and on that being adverse, the company 's security officer recommended to the company that it was not in the interests of the company to retain the workman 's services.
There can be no doubt that the company terminated the service of the workman only because it felt that it was not desirable for reasons of security, to continue the workman in its service.
This is clear from the fact that it was otherwise not interested in terminating the workman 's service and had in fact insisted that the workman should bind himself to serve it at least for five years.
The termination of service was not on account,of victimisation or unfair labour practice as was clearly found by the Tribunal.
It is, therefore abundantly clear that the company passed the impugned order of termination of service ' on account of the said adverse report, the recommendation of its own security officer and on being satisfied that it would not be in the company 's interests to continue him in its service.
The Tribunal no doubt felt that it was not established whether the investigation and the report following it were properly done 352 and made, that the company ought to have disclosed it to the workman and given him an opportunity to vindicate himself and that the non disclosure of the report made the termination illegal and unjustified.
That may or may not be right.
But what was relevant, at the stage when the Tribunal came to decide what relief the workman was entitled to,, was the question whether the management genuinely apprehended as a result of.
the report that it would be risky to retain the workman in the company 's service.
They may have gone wrong in the manner of terminating the workman 's service as held by the Tribunal.
But, if the management truly believed that it was not possible to retain the workman in the company 's service on grounds of security and consequently could not place confidence in him any longer, that present case would be one of those exceptional cases where the general rule as to reinstatement could not properly be applied.
Thus of courie does not mean that in every case where the employer says that he has lost confidence in the workman, and therefore, has terminated his service that reinstatement cannot be granted and the Tribunal has to award compensation.
On the other hand, it on an examination of all the circumstances of the case, the Tribunal comes to the conclusion that the apprehensions of the employer were genuine and the employer truly felt that it was hazardous or prejudicial to the interests of the industry to retain the workman in his service on grounds of security, the case would be properly one where compensation would meet the ends of justice.
On a consideration of all the circumstances, the present case, in our view, was one such case.
The Tribunal exercised its discretion mechanically without weighing the circumstances of the case.
That was no exercise of discretion at all.
There is ample authority to the effect that if a statutory tribunal exercises its discretion on the basis of irrelevant considerations or without regard to relevant considerations, certiorari may properly issue to quash its order.
[See S.A. de Smith, Judicial Review of Administrative Action, (2nd ed.) 324 325].
One such relevant consideration, the disregard of which would render its order amenable to interference, would be the well settled principles laid down in decisions binding on the tribunal to whom the discretion is entrusted.
The refusal by the High Court to interfere was equally mechanical and amounted to refusal to exercise, its jurisdiction.
Its order, therefore, becomes liable to interference.
There is, therefore, no difficulty in holding that the order of reinstatement passed by the Tribunal was liable to be quashed and that the High Court erred in refusing to interfere with it merely .
on the ground that it could not do so as it was a case where the Tribunal had exercised its discretion.
The question next is ', having held that the order of reinstatement was not a proper order, in that, 353 it was not in consonance with the decided cases, do we simply quash the order of the Tribunal and that of the High Court and leave the concerned workman to pursue his further remedy ? The other alternative would be to remand the case to the, Tribunal to pass a suitable order.
In either case, in view of this judgment, no other order except that of compensation can be obtained by him.
If the case is remanded and the Tribunal on such remand passes an order of compensation and fixes the amount, such a course would mean further proceedings and a I possible appeal.
That would mean prolonging the dispute, which would hardly be fair to or conducive to the interests of the parties.
In these circumstances we decided that it would be more proper that we ourselves should determine the amount of compensation which would meet the ends of justice.
Having come to that conclusion, we heard counsel for both the parties.
After doing so and taking into consideration all the facts and circumstances of the present case we have come to the conclusion in the light also of the decisions of this Court such as Assam Oil Co. vs Its Workmen( '), Utkal Machinery Ltd. vs Workmen( ') and the recent case of Ruby General Insurance Co. Ltd. vs P. P. Chopra(3) that compensation ', for a period of two years at the rate of Rs. 160/ per month, that being the last salary drawn by the concerned workman, would meet, the ends of justice.
We accordingly allow the appeal, quash the order of the Tribunal and the High Court and instead direct the appellant company to pay to the 1st respondent Rs. 3840 as and by way of compensation.
There will be no order of costs.
R.K.P.S. Appeal allowed.
(1) ; (2) ; (3) C.A. 1735 of 1969 decided on September 12, 1969.
| IN-Abs | The first respondent was appointed in 1958 as a skilled workman by the appellant Company.
He had executed a bond to serve the Company for five years in consideration of the Company having borne.the expenses of his training.
In accordance with the practice of the Company a verification report about him was called for as was done in the case of other workmen also.
On a report from the Police the Security Officer recommended that it was not desirable to retain the respondent in the company 's service any longer.
The respondent at the time was working as a fitter in the blast furnace of the works.
In December 1960 he was served with an order by which his service was terminated.
The Industrial Tribunal, on a reference of the dispute, rejected the Union 's allegation as to victimisation or unfair labour practice.
Nevertheless it held that it was improper on the part of the Company not to have disclosed the report to the respondent, that the order of termination was in fact punitive in nature and considering the action taken as disproportionate the order was illegal and unjustified.
The Tribunal therefore directed reinstatement with full back wages.
On a petition for a Writ of Certiorari the High Court upheld the Tribunal 's order.
It also held that the case was not one of those exceptions to the general rule of reinstatement and the Tribunal having exercised its discretion it could not interfere with the Tribunal 's order.
The appeal to this Court was limited only to the question whether the relief to the first respondent should have been reinstatement or compensation.
HELD : (1) In the circumstances of the case the Tribunal was not justified in directing reinstatement and the High Court erred in refusing to interfere with the order of the Tribunal merely on the ground that it could not do so as it was a case where the Tribunal had exercised its Discretion.
The Tribunal has the discretion to award compensation instead of reinstatement if the circumstances of a Particular case are unusual or exceptional so as to make reinstatement inexpedient or improper.
The Tribunal has to exercise its discretion judicially and in accordance with the well recognised principles in that regard and has to examine carefully the circumstances of each case and decide whether such a case is one of those exceptions to the general rule.
If the Tribunal were to exercise down by this Court it would be a case either of no exercise of discretion or of one not legally exercised.
In either case the High Court in exercise of its jurisdiction can interfere and cannot be content by simply saying, that since the Tribunal has exercised its discretion, it will not examine the circumstances of the case to ascertain whether or not such exercise 344 was properly and in accordance with settled principles made.
If the High Court were to do so, it would be a refusal on its part to exercise jurisdiction.
[351 B E] In the present case the termination of service was not on account of victimisation or unfair labour practice.
It is clear that the Company terminated the service of the workman only because it felt that it was not desirable for reason of security to continue the workman in its service.
Therefore what was relevant at the stage when the Tribunal came to decide what relief the workman was entitled to was the question whether the management genuinely apprehended as a result of the report that it would be risky to retain the workman in the company 's service.
If, on an examination, of the circumstances of the case the Tribunal came to the conclusion that the apprehensions of the employer were genuine and the employer truly felt that it was hazardous or prejudicial to the interests of the industry to retain the workman in his service on grounds of security the case would be properly one where , compensation would meet the ends of justice.
The present case is one such.
The Tribunal exercised its discretion mechanically without weighing, the circumstances of the case and the refusal by the High Court to interfere was equally mechanical and amounted to refusal to exercise jurisdiction.
A GI Western India ' Automobile Association vs Industrial Tribunal , 348; United Commercial Bank Ltd. vs U.P. Bank Employees Union, [19521 ; Punjab National Bank Ltd. vs Workmen, ; Assam Oil Co. Ltd. vs Workmen, ; ; Working of Charottar Gramodhar Sahakari Mandali Ltd. vs Charottar Gramodhar Sahakari Mandali Ltd., C.A. 382 of 1966, dec.
on August 14, 1967; Deomur Dulung Tea Estate vs Workmen, C.A. 516 of 1966, dec. on October 26, 1967; and Ruby General Insurance Co. Ltd. vs P.P. Chopra, C.A. 1735 of 1969, dec. on September 12, 1969, referred to.
(ii)In the circumstances of the case it would be proper for this Court to determine the amount of compensation.
Compensation for a period of two years at the rate of Rs. 160 per month, that being the last salary drawn by the concerned workman would meet the ends of justice.
[353 DI Assam Oil Co. Ltd. vs Workmen, [19601 3 S.C.R. 457 and Utkal Machinery Ltd. vs Workmen, ; , referred to.
|
Appeal No. 1914 of 1968.
Appeal by special leave from the judgment and order dated March 12, 1968 of the Allahabad High Court in Special Appeal No. 301 of 1966.
C.K. Daphtary, R. N. Banerjee, P. N. Tiwari and 0.
C. Mathur, for the appellant.
S.C. Agarwala, R. K. Garg and section Chakravarty, for respon dents Nos. 1 and 3.
The Judgment of the Court was delivered by Shelat, J.
On May 9, 1956 the appellant company appointed respondent 3 as a foreman on probation for a period of six months.
On expiry of that period the probationary period was extended from time to time and ultimately respondent 3 was transferred to the labour office of the company.
On May 29, 1957, while respondent 3 was still serving his probationary period, the company terminated his service.
The matter was thereupon taken up by respondent 1 before the Regional Conciliation Officer, Bareilly who registered the case as Case No. 83B/57.
For the reasons hereinafter stated, no conciliation could be arrived at and the State Government declined to make a reference for adjudication under the U.P. (hereinafter called the Act).
On the said refusal, respondent 3 filed a writ petition in the High Court for a mandamus.
The High Court dismissed the petition on the ground that the decision of the State Government to refer or not to refer a dispute for adjudication was a matter of its discretion.
By about the end of 1962 the respondent union made further representation to the State Government and by its order dated August 28, 1963 the Government made a reference of the dispute regarding the said termination of the service of respondent 3 to the Labour Court for adjudication.
By its order dated March 22, 1965 the Labour Court rejected the reference on the ground that there was no industrial dispute, and therefore, the reference was not maintainable.
Respondents I to 3 thereupon 'filed a writ petition in the High Court which was allowed by a learned Single Judge.
An appeal against the said order filed by 373 the appellant company was dismissed.
This appeal, by special leave, is directed against the order of the High Court dismissing the appellant company 's writ petition.
Counsel for the appellant company, in support of the appeal, raised the following points : (1) Was it possible for the respondent union to validly espouse the cause of respondent 3 when he was not a member at the date when his service was terminated Even if it was, was there in fact an espousal so as to convert his individual dispute into an industrial dispute ? (2) Do the words "at any time" in section 4(k) of the Act have any limitations, or can the Government refer a dispute, for adjudication after the lapse of about six years, as in this case, after the accrual of the cause of the dispute ? (3) In what circumstances can the Government refer such a dispute for adjudication after it has once refused to do so ? The definition of 'industrial dispute ' in section 2(l).of the Act is in the same language as that in section 2(k) of the .
The expression 'industrial dispute ', therefore, must bear the same meaning as it is assigned to that expression in the Central Act.
It is now well settled by a long series of decisions that notwithstanding the wide language of the definition in section 2(k) of the Central Act, the dispute contemplated there is not an individual dispute but one involving a substantial number of work men.
However, a dispute, though originally an individual dispute, may become.
an industrial dispute if it were to be espoused and made a common cause by workmen as a body or by a considerable section of them.
Section 4(k) of the Act, therefore, must be held to empower the Government to make a reference of such a dispute only for adjudication.
It provides that where the State Government is of opinion that any industrial dispute exists or is apprehended, it may, at any time, by order in writing, refer the dispute for adjudication to a labour court or to a tribunal depending upon whether the matter.
of the industrial dispute falls under one or the other Schedule to the Act.
The first question that falls for determination is whether where a dispute is originally an individual dispute but becomes an industrial one as a result of its being espoused by a union or,a substantial number of workmen, the concerned workman should have been a member of such union at the time when the cause of such dispute arises.
It appears that at one time there was a conflict of judicial opinion on this question.
Some of the High Courts took the view that in order that an individual dispute may be converted into an industrial dispute on, as aforesaid, its being espoused by a substantial number of workmen, the concerned workman must be a member of the union at the time of the accrual of the cause of the dispute.
Thus, in Padarthy, Ratnam & Co. vs Industrial Sup.
CI(NP)70 9 374 Tribunal(1) the High Court of Andhra Pradesh held that a dispute simpliciter between an employer and a workman might develop into an industrial dispute if the cause is espoused by a union of which he is a member, and that the membership of the union which would give it the jurisdiction to espouse his cause must be anterior to the date of the dismissal and not subsequent to it.
A similar view was also taken by the High Courts of Kerala and Punjab.
(see Shamsuddin vs State of Kerala( ') and Khadi Grainodyog Bhawan Workers ' Union vs E. Krishnamurthy, Industrial Tribunal( ').
In a later decision, however, the High Court of Punjab appears to have taken a contrary view.
In Muller & Phipps (India) (P) Ltd. vs Their Employees ' Union( ') the dispute related to the retrenchment of a workman and the failure of the employer to re employ him in spite of its having re employed two other employees out of their turn as against the turn of the con cerned workman.
The High Court rejected the employer 's con tention that the espousal of the union was not valid as it was made after the retrenched workman had ceased on his being retrenched to be a member of the union on the ground that if that contention were to be upheld it would mean that no union can ever espouse the cause of a retrenched workman.
In Workmen vs Jamadoba Colliery of Tata Iron and Steel Co. Ltd.( '), the union which espoused the causE of the workman came into existence after his dismissal.
The workman naturally became its member after his dismissal.
The High Court disagreed with the Tribunal, which had rejected the reference, 'and held that even if, oN the date of the dismissal of a workman, the dispute was an individual dispute,, it may under some circumstances become an industrial dispute on the date of the reference and that the validity of the reference has to be judged on the facts, as they stand on the date of the reference and not at the date of the dismissal.
Therefore, even if there was no union at the date of the workman 's dismissal to espouse his cause, if such a union comes into existence before the reference and the dismissed workman becomes its member and the union thereupon espouses his cause that would be sufficient.
It also held that there was no principle in support of the view that the union must be in existence at the time of the dismissal.
After the decision by this Court in Workmen vs Management of Dimakuchi Tea Estate(") there can be no doubt that though the words "any person" in the definition of an industrial dispute in section 2 (k) of the Central Act are very wide and would on a mere literal interpretation include a dispute relating to any person, considering the scheme and the objects of the Act all disputes are not industrial disputes and that a dispute becomes an industrial dis (1) [19581 (2) (3) A.I.R. 1966 Pun.
(4) (5) (6) [19581 S.C.R. 1156.
375 pute where the person in respect of whom it is raised is one in whose employment, non employment, terms of employment or.
conditions of labour the parties to the dispute have a direct or substantial interest.
The question, therefore, which would arise in cases where the existence of the industrial dispute is challenged, is whether there was between the parties to the reference, i.e, the employer and his workmen, an industrial dispute.
The parties to the industrial dispute are obviously the parties to the reference, and therefore the dispute must be an industrial dispute between such parties.
It follows, therefore, that though a dispute may initially be an individual dispute, the workmen may make that dispute as their own, that is to say, espouse it on the ground that they have a community of interest and are directly and substantially interested in the employment, non employment, or conditions of work of the concerned workman.
This premise pre supposes that though at the date when the cause of the dispute arises that dispute is an individual dispute, such a dispute can become an industrial dispute if it is spoused by the workmen or a substantial section of them after the cause of the dispute, e.g., dismissal, has taken place.
It may be that at the date of such dismissal there is no union or that the workmen are not sufficiently organised to take up the cause of the concerned workman and no espousal for that or any other reason takes place at the time when such cause occurs.
But that cannot mean that because there was no such union in existence on that date, the dispute cannot become an industrial one if it is taken up later on by the union or by a substantial section of the workmen.
If it is insisted that the concerned workman must be a member of the union at the date of his dismissal, the result would be that if at that period of time there is no union in that particular industry and it comes into existence later on then the dismissal of such a workman can never be an industrial dispute although the other workmen have a community of interest in the matter of his dismissal, and the cause for which or the manner in which his dismissal is brought about directly and substantially affects the other workmen.
The only condition for an individual dispute turning into an industrial dispute, as, laid down in the case of Dimakuchi Tea Estate(), is the necessity of a community of interest and not whether the concerned workman was or was not a member of the union at the time of his dismissal.
The parties to the reference being the employer and his employees, the test must necessarily be whether the dispute referred to adjudication is one in which the workmen or a substantial section of them have a direct and substantial interest even though such a dispute relates to a single workman.
It must follow that the existence of such an interest, evidenced by the espousal by them of the cause, must be at the date when the reference is made and not necessarily at the date when the cause occurs, otherwise, as aforesaid, in some (1) ; 376 cases a dispute which was originally an individual one cannot become an industrial dispute.
Further, the community of interest does not depend on whether the concerned workman was a member or not at the date when the cause occurred, for, without his being a member the dispute may be such that other workmen by having a common interest therein would be justified in taking up the dispute as their own and espousing it.
Any controversy on the question as to whether it is necessary for a concerned workman to be a member of the union which has espoused his cause at the time when that cause arose has been finally set.
at rest by the decision in Bombay Union of Journalists vs The "Hindu", Bombay( ') where this Court laid down that the test whether an individual dispute got converted into an industrial dispute depended on whether at the date of the reference the dispute was taken up and supported by the union of workmen of the ,employer against whom the dispute was raised by an individual workman or by an appreciable number of such workmen.
(see also Workmen vs M/s Dharampal Premchand (2 ) and Workmen of Indian Express (P) Ltd. vs The Management (I).
The argument, therefore, that the reference in this case was not competent on the .ground that the concerned workman was not a member of the union at the date when the cause giving rise to the dispute arose, and that therefore, the union could not have espoused the dispute to convert it into an industrial dispute is not correct and cannot be upheld,.
The next question is whether the expression "at any time" in section 4(k) means what its literal meaning connotes, or whether in the context in which it is used it has any limitations.
Counsel for the company argued that the concerned workman was admittedly not a member of the respondent union in the beginning of 1959 when the State Government refused to make the reference, that he became a member of the respondent union in July 1962, that it was thereafter that the respondent union revived the said dispute which had ceased to be alive after the Government 's said refusal and that it was at the instance of the Union that the Government later on ,changed its mind and in August 1963 agreed to make the reference.
The contention was that the Government having once declined to refer the dispute, could not change its mind after a lapse of nearly six years after the dispute arose and that though the expression "at any time" does not apparently signify any limit, it must be construed to mean that once the Government had refused to make the reference after considering the matter and the employer thereupon had been led to believe that the dispute was not to be agitated in a tribunal and had consequently made his own arrangement, the Government cannot, on a further agitation by the (1) ; (2) (3) [1991] 1 S.C. Cases 228.
377 union, take a somersault and decide to refer it for adjudication.
It was argued that if it were so, it would mean that a workman, who after termination of his service, has already obtained another employment, can still go to the union, become its member and ask the union to agitate the dispute by espousing it.
Such an action, if permitted, would cause dislocation in the industry as when the employer has in the meantime made his own arrangement by appointing a substitute in place of the dismissed workman on finding that the latter had already found other employment.
The legislature, the argument proceeded, could not, therefore, have used the words "at any time" to mean after any, length of time.
From the words used in section 4(k) of the Act there can be no doubt that the legislature has left the question of making or refusing to make a reference for adjudication to, the discretion of the Government.
But the discretion is neither unfettered nor arbitrary for the section clearly provides that there must exist an industrial dispute as defined by the Act or such a dispute must be apprehended when the Government decides to refer it for adjudication.
No reference thus can be made unless at the time when the Gov ernment decides to make it an industrial dispute between the employer and his employees either exists or is apprehended.
Therefore, the expression "at any time".
though seemingly without any limits, is governed by the context in which it appears.
Ordinarily, the question of making a reference would arise after conciliation proceedings have been gone through and the conciliation officer has made a failure report.
But the Government need not wait until such a procedure has been completed.
In an urgent case, it can "at any time", i.e., even when such proceedings have not begun.
or are still pending, decide to refer the dispute for adjudication.
The expression "at any time" thus takes in such cases as where the Government decides to make a reference without waiting for conciliation proceedings to begin or to be completed.
As already stated, the expression "at any time" in the context in which it is used postulates that a reference can only be made if an industrial dispute exists or is apprehended.
No reference is contemplated by the section when the dispute is hot an industrial dispute, or even if it is so, it no longer exists or is not apprehended, for,instance, where it is already adjudicated or in respect of which there is an agreement or a settlement between the parties or where the industry in question is no longer in existence.
In the State of Madras vs C. P. Sarathy(1) this Court held on construction of section 1 0 ( 1 ) of the Central Act that the, function of the appropriate Government thereunder is an administrative function.
It was so held presumably because the Government cannot go into the merits of the dispute, its function being only to refer such a dispute for adjudication so that the industrial relations bet (1) [19531 S.C.R. 334, at 346.
378 ween the employer and his employees may not continue to remain disturbed and the dispute may be resolved through a judicial process as speedily as possible.
In the light of the nature of the function of the Government and the object for which the power is conferred on it, it would be difficult to hold that once the Government has refused to refer, it cannot change its mind on a reconsideration of the matter either because new facts have come to light or be cause it had misunderstood the existing facts or for any other relevant consideration and decide to make the reference.
But where it reconsiders its earlier decision it can make the reference, only if the dispute is an industrial one and either exists at that stage or is apprehended and the reference it makes must be with regard to that and no other industrial dispute.
Sindhu Resettlement Corporation, Ltd. vs Industrial Tribunal( ').
Such a view has been taken by the High Courts of Andhra Pradesh, Madras, Allahabad, Rajasthan, Punjab and Madhya Pradesh.
(see Gurumurthi (G.) V. Ramulu (K.)( ') Vasudeva Rao vs State of Mysore( ') Rawalpindi Victory Transport Co. (P) Ltd. vs State of Punjab( '), Champion Cycle Industries vs State of U.P. (5), Goodyear (India) Ltd., Jaipur vs Industrial Tribunal (6) and Rewa Coal Fields Ltd. vs Industrial Tribunal, Jabalpur ( 7 ) .
The reason given in these decisions is that the function of the Government either under section 10(l) of the Central Act or a similar provision in a State Act being administrative, principles such as res judicata applicable to judicial Acts do not apply and such a principle cannot be imported for consideration when the Government first refuses to refer and later changes its mind.
In fact, when the Government refuses to make a reference it does not exercise its power; on the other hand it refuses to exercise its power and it is only when it decides to refer that it exercises its power.
Consequently, the power to refer cannot be said to have been exhausted when it has declined to make a reference at an earlier stage.
There is thus a considerable body of judicial opinion according to which so long as an industrial dispute exists or is apprehended and the Government is of the opinion that is so, the fact that it had earlier refused to exercise its power does not preclude it from exercising it at a later stage.
In this view, the mere fact that there has been a lapse of time or that a party to the dispute was, by the earlier refusal, led to believe that there would be no reference and acts upon such belief, does not affect the jurisdiction of the Government to make the reference.
It appears that there was a controversy before the High Court whether there was at all any espousal of the dispute by the respon (1) [19681 , 839.
(2) (3) (4) [19641 (5) (6) (7) A.I.R. [19691 M.P. 174.
379 dent union, and if there was, at what stage.
The High Court, therefore, got produced before it the record before the conciliation officer.
Strictly speaking, in a proceeding for certiorari under article 226, the record which would be produced before the High Court would be that of the Tribunal whose order is under challenge.
But if the High Court got produced in the interests of justice the file of the conciliation officer which alone could show whether there was espousal by the union or not, no one could reasonably object to the High Court calling for that record for the purpose of ascertaining whether the stand of the union that it had taken up the cause of respondent 3 was correct or not.
As the High Court has said, that file showed that on July 2, 1957 one Har Sahai Singh, the then President of the union, had complained to the Regional Conciliation Officer against the termination of service of respondent 3 and following that complaint, respondent 3 had filed a written statement dated September 4, 1957 which was counter signed by the said Har Sahai Singh in his capacity as the President and presumably, therefore, on behalf of the union.
The record also indicated that on that very day, i.e., September 4, 1957, the Conciliation Officer recorded an order that the conciliation proceedings could not be proceeded with as "no authorised agent" of the union appeared before him.
Presumably, the Conciliation Officer in course of time must have made his failure report.
From these facts the following conclusions must emerge : (1) that the Conciliation Officer had taken cognisance of the dispute, (2) that he took that dispute as having been espoused by the union through its president, (3) that thereupon he fixed September 4, 1957 as the date for holding the conciliation proceedings and informed the parties to attend before him, and (4) that as "no authorised agent" on behalf of the union appeared before him, he recorded that the conciliation proceedings could not go on.
These facts clearly go to show that the then president of the union had not made the said complaint in his personal capacity but as the president representing the union.
This is borne out to a certain extent by a subsequent resolution of the executive body of the union dated February 28, 1.963 which recites that the executive committee of the union will continue to take up the cause of respondent 3 as it had been so far doing.
But Mr. Daphtary emphasised that even this resolution did not mean that the union had taken up the cause of respondent 3 as its own since the resolution uses the word 'pairavi ' and not espousing or sponsoring the workman 's cause.
Pairavi, according to him, means acting as the agent of a party to a proceeding and not being a party to the proceeding which would be the position had the union taken up the Complaint as its own.
In our view we need not look at the said .resolution in so narrow a manner, for, the facts taken as a whole indicate that the union had in fact taken up the cause of the workman.
The President evidently could not have countersigned the 380 written statement of the concerned workman and the Conciliation Officer could not have given a notice to the union to appear before him and could not have recorded that he did not proceed with the conciliation proceedings as no authorised agent of the union appeared before him unless every one understood that the union had taken up the cause of the workman.
The notice dated August 2, 1957 issued by the Conciliation Officer after the union President had lodged his said complaint is on record and shows that it was issued to the management and the union calling upon both of them to appoint their respective representatives on the conciliation board as required by the Government Order dated July 14, 1954.
It also shows that the Officer treated the dispute as having been espoused by the union as the notice recites the dispute as an industrial dispute.
The subsequent facts would seem to indicate that the Govern ment declined to make the reference presumably because of the report of the Conciliation Officer that in spite of the said notice no authorised agent of the union had appeared before him and therefore no conciliation had been possible.
As already stated, a writ petition to compel the Government to make the reference proved unsuccessful.
It may be that the respondent union may have decided to press for the reference after the concerned workman became its member.
That fact, however, is irrelevant for the purposes of the jurisdiction of the Government under section 4(k).
One fact, however, is clear that the respondent union carried on correspondence with the Labour Ministry and also passed the said resolution dated February 28, 1963.
The correspondence which was carried on from about November 1962 shows that the union pressed the Government to make the reference and the Government ultimately made the reference in August 1963.
That correspondence further shows that the Government at one stage pointed out that the union had in 1957 failed to appear before the Conciliation Officer although it had espoused the dispute and that that fact had influenced the Government 's refusal then to refer the dispute for adjudication.
The union pointed out (1) that at the time when the said complaint was lodged in 1957 before the Conciliation Officer the union 's 'president was one Varma, (2) that in the meantime elections for the union 's office bearers took place when the said Har Sahai Choudhury and one Girish Chandra Bharati were elected president and working president respectively ' (3) that the above mentioned individuals appeared before the conciliation officer, but the said Varma did not, as he had failed in the elections, (4) that dispute arose about the said elections and the Registrar of the Trade Union , refused to recognise the new office bearers, and ( I) that the conciliation officer also refused to recognise the said Har Sahai Choudhary and Bharati a,; the duly elected president and working president, and therefore, although both of 381 them attended the meeting fixed by that officer, the latter recorded that no authorised agent of the union had appeared before him and no conciliation, therefore, could be arrived at.
It thus appears from the correspondence that following the espousal of the said dispute by the union, two of the office bearers of the union did appear before the conciliation officer but were not recognised as the authorised agents of the union on account of the said disputes about the elections.
If the Government, therefore, had refused then to make the reference on the ground that though the union had espoused the workman 's cause it had not cared to appear at the conciliation proceedings, the Government 's decision refusing to make the reference was clearly on misapprehension.
If the Government subsequently found that its earlier decision was based on such a misapprehension and on facts brought to its notice it reconsiders the matter and decides to make the reference it is difficult to say that it exercised the discretion conferred on it by section 4 (k) in any inappropriate manner.
But that does not mean that if section 4(k) is construed to mean that the Government can reconsider its earlier decision.
such a construction would result in unions inducing workmen to join them as members or to shift their membership from one to the other rival union on promises by such union to revive disputes which are already dead or forgotten and then press the Government to make a reference in relation to them .
There is no reason to think that the Government would not consider the matter properly or allow itself to be stampeded into making references in cases of old or stale disputes or reviving such disputes on the pressure of unions.
It is true that where a Government reconsiders its previous decision and decides to make the reference, such a decision might cause inconvenience to the employer because the employer in the meantime might have acted on the belief that there would be no proceedings by way of adjudication of the dispute between him and his workmen.
Such a consideration would, we should think.
be taken into account by the Government whenever, in exercise of its discretion, it decides to reopen its previous decision as also the time which has lapsed between its earlier decision and the date when it decides to reconsider it.
These are matters which the Government would have to take into account while deciding whether it should reopen its former decision in the interest of justice and industrial peace but have nothing to do with its juris diction under section 4(k) of the Act.
Whether the intervening period may be short or long would necessarily depend upon the facts and circumstances of each case, and therefore, in construing the expression "at any time" in section 4(k) it would be impossible to lay down any limits to it.
In the present case though nearly four years had gone by since the earlier decision not to make the reference, if the Government 382 was satisfied that its earlier decision had been arrived at on a mis apprehension of facts, and therefore, required its reconsideration, neither its decision to do so nor its determination to make the reference can be challenged on the ground of want of power.
The fact that the dispute between the concerned workman and the management had become an industrial dispute by its having been espoused by the union since 1957 cannot be disputed.
The fact that the workman was then not a member of the union does not preclude or negative the existence of the community of interest nor can it disable the, other workmen through their union from making that dispute their own.
The fact that the Government refused then to exercise its power cannot mean that the dispute had ended or was in any manner resolved.
In the absence of any material it Is not possible to say that with the refusal of the Government then and the dismissal of the writ petition by the High Court in March 1959 the dispute, which was already an industrial dispute, had ceased to subsist or that on respondent 3 joining the union in July 1962 the union revived a dispute which was already dead and not in existence.
His becoming a member in July 1962 was as immaterial to the power of the Government under section 4(k) as the fact of his not being a member at the time when his cause was espoused in 1957 by the union and the dispute becoming thereupon an industrial dispute.
The question of his membership, therefore, haS to be kept apart from the right of the other workmen to espouse his cause and the power of the Government under section 4(k).
It may be that his becoming a member in 1962 may have been the cause of the union 's subsequent efforts to persuade the Government to reconsider its decision and make a reference on proper facts being placed before it and its earlier misapprehensions re moved.
But that again has nothing to do with the jurisdiction of the Government under section 4(k) of the Act.
In our view, the appellant company fails on both the points and its appeal against the High Court 's decision becomes unsustainable.
Accordingly, we dismiss the appeal with costs.
V.P.S. Appeal dismissed.
| IN-Abs | The appellant terminated the service of a workman in 1957.
At that time he was not a member of the respondent union.
The respondent however, espoused the cause of the workman and took up the matter before the Conciliation Officer.
Two of the union 's office bearers appeared before the Conciliation Officer but the Conciliation Officer did not recognise them as authorised agents of the union, because, there were some disputes regarding their election.
He therefore recorded that the conciliation proceedings could not be proceeded with on the ground that no authorised agent of the union appeared before him at the proceedings.
The State Government assumed, that though the union had espoused the workman 's cause, it had not cared to appear at the conciliation proceedings at all, and refused to refer the industrial dispute for adjudication.
In 1962, the workman became a member of the respondent union and the union again took up the matter with the Government.
After some correspondence, in which it was pointed out that in fact two officers of the union did appear at the conciliation proceedings, the State Government, in 1963, referred the dispute for adjudication.
On the question of the validity of reference, HELD : (1) Under section 4(k) of the U.P. , if the State Government is of opinion that an industrial dispute exists or is apprehended, it may, at any time, refer the dispute for adjudication.
The expression 'of any time ', does not confer an unfettered or arbitrary discretion on the Government.
At whatever time the Govern ment decides to refer a dispute for adjudication, there must, at that time, exist an industrial dispute or such a dispute must be apprehended.
[373 F; 377 F G] (2)Though a dispute may initially be an individual dispute, the other workmen may espouse it on the ground that they have a community of interest and that they are directly and substantially interested in the employment, non employment or conditions of employment of the concerned workman.
Therefore, when the existence of the industrial dispute is challenged, the test is whether the dispute referred to adjudication is one in which the workmen or a substantial section of them have a direct and substantial interest.
The espousal by the other workmen may be at the time when the cause of the dispute occurs or later, because, the workmen may not, at the time when the dispute occurs, be sufficiently organised to espouse his cause or there may not have been a union at that time.
Since no reference is contemplated by section 4(k) when the dispute is not an 371 industrial dispute, or, even if it is so, it no longer exists or is not apprehended, the existence of the community of interest, evidenced by the espousal converting an individual dispute into an industrial dispute, must be at the date when the reference is made and not necessarily at the date when the cause occurs.
Further, the community of interest does not depend on whether theconcerned workman was a member or not of the union at the date whenthe cause occurred.
The question of the work man 's membership has tobe kept apart from the right of the other Work men to espouse his cause and the power of the Government under section 4(k).
In the present case, the reference was competent because the fact that the workman was not a member of the union on the date when the cause of the dispute arose did not preclude or negative the existence of.
the community of interest, nor did it disable the other workmen, through their union, from making that dispute their own.
[375 B E, G H; 376 A B, D; 382 A B, D E) Workmen vs Management of Dimakuchi Tea Estate, [1958] S.C.R. 1156, Bombay Union of Journalists vs The Hindu, Bombay,.
; Workmen of Indian Express (P) Ltd. vs The Management, [1969] 1 S.C. Cases 228, and Workmen vs Dharampal Premchand. ; followed.
Muller & Phipps (India) (P) Ltd. vs Their Employees Union and Workmen vs Jamadoba Colliery of Tata, Tata Iron & Steel Co. Ltd. , referred to.
Padarthy Ratnam & Co. vs industrial Tribunal, , Shamsuddin vs State of Kerala, [1961] 1 L.L.J. 77 and Khadi Gramodyog Bhawan Workers ' Union vs E. Krishnamurthy, A.I.R. 1966 Punjab 173, overruled.
(3)The Government 's function is to refer a dispute for adjudication so thatindustrial relations may not continue to remain disturbed, and not todecide the merits of the dispute.
Therefore, it cannot be held that once the Government has refused to refer a dispute to adjudication, it cannot change its mind on a reconsideration of the matter, either because new facts have come to light or because it had misunderstood the existing facts or for any other relevant consideration, and decide to make the reference.
Where, however, it reconsiders its earlier decision and makes a reference it can do so only if the dispute is an industrial one and either exists at that stage or is apprehended, and the reference must be with regard to only that industrial dispute.
Further, though it does not affect the jurisdiction of the Government to make a reference, before doing so, the Government should take into account the lapse of time and any inconvenience to the employer, and should not allow itself to be stampeded into making References in cases of old or stale disputes or allow the revival of such disputes on the pressure of outside agencies.
[378 A C; 381 B E] In the present case, the Government 's refusal to make a reference at the earlier stage on the ground that the union had not cared to appear at the conciliation proceedings, was based on a misapprehension.
Therefore, if the Government subsequently found that its earlier decision was based on such a misapprehension, and on facts brought to its notice it reconsidered the matter and decided to make the reference since the dispute was 'still subsisting, it could not be said that the exercise of the discretion was improper, merely because, four years had elapsed since its earlier decision not to make the reference.
[381 F H; 382 B D] 372 State of Madras vs C. P. Sarathy, , 346 and Sindhu Resettlement Corporation Ltd. vs Industrial Tribunal, , 839, followed.
Gurumurthi vs Ramulu, , Vasudeva Rao vs State of Mysore , Rawalpindi Victory Transport Co. (P) Ltd. vs State of Punjab, [1964] 1 L.L.J. 644, Champion Cycle Industries vs State of U.P. , Goodyear (India) Ltd., Jaipur vs Industrial Tribunal, and Rewa Coal Fields Ltd. vs Industrial Tribunal, A.I.R. 1969 M.P. 174, approved.
|
Appeals Nos. 138 and 139 of 1954.
Appeals under articles 132 and 133 of the Constitution of India from the Judgment and Order, dated the 16th February, 1953, of the Court of Judicial Commissioner, Ajmer, in Civil Miscellaneous Petitions Nos. 260 and 263 of 1952.
N.C. Chatterjee (B. D. Sharma and Naunit Lal, with him) for appellants Nos. 1 and 2 in C. A. No. 138 of 1954 (Edward Mills and Krishna Mills).
Achhru Ram (B. D. Sharma and Naunit Lal, with him) for appellant No. 3 in C. A. No. 138 of 1954 (Mahalaxmi Mills).
H.N. Seervai, J. B. Dadachanji and Rajinder Narain for the appellant in C. A. No. 139 of 1954.
C. K. Daphtary, Solicitor General of India (M. M. Kaul and P. G. Gokhale, with him) for respondent No. 2 (Union of India).
October 14.
The Judgment of the Court was delivered by MUKHERJEA J.
These two appeals are directed against a common judgment, dated the 16th of February, 1953, passed by the Judicial Commissioner of Ajmer, on two analogous petitions under article 226 of the Constitution, in one of which the appellants in Appeal No. 138 of 1954 were the petitioners, while the other was filed by the appellant in Appeal No. 139 of 1954.
The petitioners in both the cases prayed for a declaration that the notification, dated the 7th of October, 1952, issued by the State Government of 738 Ajmer, fixing the minimum rates of wages in respect of employment in the textile industry within that State, under the provisions of the (Act XI of 1948), was illegal and ultra vires and for issue of writs in the nature of mandamus directing the respondents not to enforce the same against the petitioners.
To appreciate the points that have been canvassed before us, it will be convenient to narrate briefly the material facts in chronological order.
On the 15th of March, 1948, the Central Legislature of India passed an Act called The , the object of which, as stated in the preamble, is to provide for fixing minimum rates of wages in certain employments.
The schedule attached to the Act specifies, under two parts, the employments in respect of which the minimum wages of the employees can be fixed; and section 27 authorises the "appropriate Government", after giving three months ' notice of its intention to do so, to add to either part of the schedule, any other employment, in respect of which it is of the opinion that minimum rates of wages should be fixed under the Act.
The expression "appropriate Government" as defined in section 2(b) means, in relation to a scheduled employment, other than one carried by or under the authority of the Central Government, the State Government ' Under section 3 the "appropriate Government" is to fix minimum wages payable to employees employed in any employment specified in the schedule at the commencement of the Act or added to it subseq uently in accordance with the provisions of section 27.
Sub section (1) (a) of this section provides inter alia that the "appropriate Government" may refrain from fixing the minimum rates of wages in respect of any scheduled employment in which there are in the whole State less than 1,000 employees engaged in such employment.
Section 5 lays down the procedure for fixing minimum wages.
The appropriate Government can appoint a committee to hold enquiries to advise it in the matter of fixing minimum wages; in the alternative it can, by notification in the official public gazette, publish its proposals for the information of persons likely to be affected thereby.
After 739 considering the advice of the committee or the representations on the proposals as the case may be, the 'appropriate Government ' shall fix the minimum rates of wages in respect to any scheduled employment, by notification in the official gazette, and such rates would come into force on the expiry of three months from the date of issue unless the notification directs otherwise.
Section 9 provides inter alia that an advisory committee constituted under section 5 shall consist of persons nominated by the appropriate Government.
There shall be in the committee an equal number of representatives of the employers and the employed in any scheduled employment and there shall be independent persons as well, not exceeding one third of the total number, one of whom shall be appointed Chairman.
Section 30 confers on the appropriate Government the power to make rules for carrying out the purposes of the Act.
It may be mentioned at the outset that Part I of the schedule to the Act mentioned only 12 items of employment at the time when the Act was passed and employment in the textile industry was not included in Chem.
On the 16th of March, 1949, the Central Government issued a notification, in exercise of its powers under section 94(3) of the Government of India Act, 1935, directing that the functions of the "appropriate Government" tinder the , would, in respect of every Chief Commissioner 's Province, be exercised by the Chief Commissioner.
On the 17th March, 1950, the Chief Commissioner of Ajmer, purport ing to act as the "appropriate Government" of the State, published a notification in terms of section 27 of the Act giving three months ' notice of his intention to include employment in the textile mills as an additional item in Part I of the schedule.
On the 10th of October, 1950, the final notification was issued stating that the Chief Commissioner had directed "that the employment in textile industry" should be added in Part I of the schedule.
On the 23rd November, 1950, another notification was published under the signature of the Secretary to 740 the Chief Commissioner containing the rules purporting to have been framed by the Chief Commissioner in exercise of his powers under section 30 of the Act.
Out of these, only rules 3, 8 and 9 are material for our present purpose.
Rule 3 provides that the term of office of the members of an advisory committee shall be such, as in the opinion of the State Government, is necessary for completing the enquiry into the scheduled employment concerned and the State Government may, at the time of the constitution of the committees, fix a term and may, from time to time, extend it as circumstances may require.
Rule 8 provides for filling up the vacancies occurring or likely to occur in the member ship of the committee by resignation of any of its members.
Rule 9 lays down that if a member of the committee fails to attend three consecutive meetings he would cease to be a member thereof.
The rule further states that such member could, if he so desires, apply, within a certain time for restoration of his membership and restoration could be made if the majority of the members are satisfied that there were adequate reasons for his failure to attend the meetings.
On the 17th January, 1952, a committee was appointed to hold enquiries and advise the Chief Commissioner in regard to the fixation of minimum wages relating to the textile industry within the State.
Ten members were nominated consisting of four represeiitatives of the employers, four of the employees and two independent members, one of whom Shri Annigeri was to act as an expert member of the committee and the other, Dr. Bagchi, as its Chairman.
The term of office of the members was fixed at six months from the date of the notification ending on the 16th of July, 1952.
The first meeting of the committee was held on the 29th February, 1952.
The expert member was present at that meeting and it was resolved that the minimum wages must not merely provide for the bare subsistence of life but should be adequate for the maintenance of the efficiency of the worker.
The second meeting was held on the 29th March, 1952, and the third on the 14th of June, 1952.
The expert member was not present at any other meeting except the first and on the 27th of 741 May, 1952, he wrote a letter to the Chief Commissioner stating that he was proceeding to Europe on the 3rdd June, 1952, for a period of three months.
He expressed ' his willingness to assist the Chairman in the preparation of the report after he came back from Europe by the first week of September, next, provided the term of the committee was extended.
If however that was not possible, he requested that his letter might be treated as a letter of resignation from the membership of the Committee.
No action appears to have been taken on receipt of the letter.
The fourth and the fifth meetings of the committee were held respectively on the 8th and the 15th of July, 1952.
On the 20th August, 1952, the the Chairman of the Committee informed the Chief Commissioner that Shri Annigeri had ceased to be a member of the committee by reason of his failing to attend three consecutive meetings.
He had also desired that his letter to the Chief Commissioner dated the 27th May, 1952, should be treated as a letter of resignation.
In the circumstances the Chief Commissioner was requested to fill up this vacancy in the membership.
On the very next day, that is to say, on the 21st August, 1952, a notification was issued by which the Chief Commissioner ordered the extension of the term of the committee up to the 20th of September, 1952, and on the 28th of August, following, another notification was made appointing Shri Annigeri as a member of the committee.
The term of the committee was extended by a further notification till the 5th of October, 1952.
In the meantime a meeting of the committee was held on the 10th September, 1952, in which Shri Annigeri was not present.
The only resolution passed was, that all relevant papers might besent to Shri Annigeri as desired by him.
It appears that some time after the 14th of September, 1952, the Chairman himself took the papers to Nagpur where Shri Annigeri was staying and a draft final report was prepared by the Chairman in consultation with the expert member and both of them signed the report at Nagpur.
The report was placed before the other members on the 4th October, 1952, and on the 7th of October, following, a notification was issued fixing 95 742 minimum rates of wages for the employees in the textile industry in the State of Ajmer, under the signature of the Secretary to the Chief Commissioner and stating that these rates should be deemed to be in force from the 1st of September, 1952.
Feeling aggrieved by this notification the three appellants in Appeal No. 138 of 1954 presented an application under article 226 of the Constitution before the Judicial Commissioner of Ajmer on the 31st October, 1952, praying for a writ in the nature of mandamus ordering the State of Ajmer not to enforce the same.
A similar application was filed by the Bijay Cotton Mills, the appellant in the other appeal, on the 6th of November, 1952.
Both the petitions were heard together and a common judgment was passed by the Judicial Commissioner on the 16th of February, 1953.
The applications were dismissed except that the Chief Commissioner was held to have exceeded his legal authority in giving retrospective effect to the notification of the 7th of October, 1952, and the State of Ajmer, was restrained from enforcing the notification from any date earlier than the 8th of January, 1953.
It is against this judgment that these two appeals have come up to this Court on the strength of certificates granted by the Judicial Commissioner, Ajmer.
Mr. Chatterjee, appearing for the appellants in Appeal No. 138, has put forward a three fold argument on behalf of his clients.
He has contended in the first place that without a delegation of authority by the President under article 239 of the Constitution, the Chief Commissioner of Ajmer was not competent to function as the "appropriate Government" for purposes of the .
All the steps therefore that were taken by the Chief Commissioner under the provisions of the Act including the issuing of the final notification on the 7th of October, 1952, were illegal and ultra vires.
The second contention raised is that the provision of section 27 of the Act is illegal and ultra vires inasmuch as it amounts to an illegal and unconstitutional delegation of legislative powers by the Legislature in favour of the "appropriate Government" as defined in the 743 Act.
The third and the last contention is, that the Chief Commissioner had no authority to extend retrospectively the term of the Advisory Committee after it expired on the 16th of July, 1952.
Mr. Seervai, who appeared in support of the other appeal, adopted all these arguments on behalf of his client.
He however raised some additional points impeaching the constitutional validity of the itself on the ground that its provisions conflicted with the fundamental rights of the appellants and its employees guaranteed under article 19(1) (g) of the Constitution.
These points were argued elaborately by the learned counsel in connection with the two petitions filed on behalf of the Bijay Cotton Mills Ltd., and a number of employees under them under article 32 of the Constitution and we will take them up for consideration when dealing with these petitions.
We will now proceed to consider the three points mentioned above which have been raised in support of the appeals.
So far as the first ground is concerned the argument of Mr. Chatterjee in substance is that the expression "appropriate Government" has been defined in section 2(b) (ii) of the to mean, in relation to any scheduled employment, not carried on by or under the authority of the Central Government, the State Government. "State Government" has been defined in section 3(60) of the General Clauses Act as meaning, in regard to anything done or to be done after the commencement of the Constitution in a Part C State, the Central Government.
Prior to the commencement of the Constitution, under section 94(3) of the Government of India Act, 1935, a chief commissioner 's Province could be administered by the GovernorGeneral acting to such extent, as he thought fit, through a Chief Commissioner to be appointed by him in his discretion; and under section 3(8) of the General Clauses Act, as it stood before the 26th of January, 1950, the expression "Central Government" included, in the case of a Chief Commissioner 's Province, the Chief Commissioner acting within the scope of authority given to him under section 94(3) of the Government of 744 India Act, 1935.
Article 239 of the Constitution which corresponds to section 94(3) of the Government of India Act, though it is much wider in scope, provides that a State specified in Part C of the First Schedule shall be administered by the President acting, to such extent as he thinks fit, through a Chief Commissioner or a Lieutenant Governor to be appointed by him or through the Government of a neighbouring State.
Agreed to this constitutional provision section 3(8 ) (b) (ii) Of the General Clauses Act, as amended by the Adaptation Laws Order, 1950, lays down that the expression "Central Government" shall include inter alia the Chief Commissioner of a Part C State acting within the scope of the authority given to him under article 239 of the Constitution.
Ajmer was admittedly a Chief Commis sioner 's Province under section 94(1) of the Government of India Act, 1935.
It has become a Part C State after the coming into force of the Constitution.
As has been stated already, the Central Government issued a notification on the 16th of March, 1949, under section 94(3) of the Government of India Act, directing that the function of the "appropriate Government" under the would, in respect of any Chief Commissioner 's Province, be exercised by the Chief Commissioner.
There was no such delegation of authority however under article 239 of the Constitution after the Constitution came into force.
Mr. Chatterjee contends that in the absence of such delegation under article 239 the Chief Commissioner of Ajmer cannot be regarded as "Central Government" as defined in section 3(8) (b) (ii) of the General Clauses Act as it stands at present and consequently he could not be held to be the "appropriate Government" within the meaning of section 2(b) (ii) of the .
The Government of India Act, it is said, stands repealed by article 395 of the Constitution.
An order issued under section 94(3) of the Government of India Act cannot possibly be operative after the inauguration of the Constitution, nor could it be regarded as an order made under article 239 of the Constitution.
The contention does not appear to us to be sound.
A complete reply to this argument is furnished, in our 745 opinion, by the provisions of clauses (1) and (2) of article 372 of the Constitution.
Article 372 runs as follows: "372.
(1) Notwithstanding the repeal by this Constitution of the enactments referred to in article 395 but subject to the other provisions of this Constitution, all the law in force in the territory of India immediately before the commencement of this Constitution shall continue in force therein until altered or repealed or amended by a competent Legislature or other competent authority.
(2) For the purpose of bringing the provisions of any law in force in the territory of India into accord with the provisions of this Constitution, the President may by order make such adaptations and modifications of such law, whether by way of repeal or amendment, as may be necessary or expedient, and provide that the law shall, as from such date as may be specified in the order, have effect subject to the adaptations and modifications so made, and any such adaptation or modification shall not be questioned in any court of law." Thus clause (1) of the article provides for continuance, in force, of the existing laws notwithstanding the repeal by the Constitution of the enactments mentioned in article 395 and clause (2) provides for their adaptation with a view to bring them into accord with the provisions of the Constitution.
The Government of India Act, 1935, undoubtedly stands repealed by article 395 of the Constitution, but laws made thereunder which were in existence immediately before the commencement of the Constitution would continue under article 372(1) and could be adapted :under the second clause of that article.
Mr. Chatterjee argues that article 372 has no application to the present case inasmuch as the order made by the Central Government under section 94(3) of the Government of India Act could not be regarded as "a law in force" within the meaning of article 372.
A distinction is sought to be made by the learned counsel between an "existing law" as defined in article 366(10) and a "law in force" and it is argued that though an "order" can come within the definition 746 of "existing law", it cannot be included within the expression "law in force" as used in article 372.
It is argued next that even if the word "law" is wide enough to include an order, that order must be a legislative and not a mere executive order promulgated by an administrative authority, and in support of this contention the learned counsel has relied on a number of cases decided by the Privy Council and the different High Courts in India.
The first point does not impress us much and we do not think that there is any material difference between " an existing law" and "a law in force".
Quite apart from article 366(10) of the Constitution, the expression "Indian law" has itself been defined in section 3(29) of the General Clauses Act as meaning any Act, ordinance, regulation, rule, order, or bye law which before the commencement of the Constitution had the force of law in any province of India or part thereof.
In out opinion, the words "law in force" as used in article 372 are wide enough to include not merely a legislative enactment but also any regulation or order which has the force of law.
We agree with Mr. Chatterjee that an order must be a legislative and not an executive order before it can come within the definition of law.
We do not agree with him however to ' at the order made by the Governor General in the present case under section 943) of the Government of India Act is a mere executive order.
Part IV of the Government of India Act, 1935, which begins with section 94, deals with Chief Commissioners ' Provinces and sub section (3) lays down how a Chief Commissioner 's Province shall be administered.
It provides that it shall be administered by the Governor General acting through a Chief Commissioner to such extent as he thinks fit.
An order made by the Governor General under section 94(3) investing the Chief Commissioner with the authority to administer a province is really in the nature of a legis lative provision which defines the rights and powers of the Chief Commissioner in respect to that province.
In our opinion such order comes within the purview of article 372 of the Constitution and being "a law in force" immediately before the commencement of the 747 Constitution would continue to be in force under clause (1) of the article.
Agreeably to this view it must also be held that such order is capable of adaptation to bring it in accord with the Constitutional provisions under clause (2) of article 372 and this is precisely what has been done by the Adaptation of Laws Order, 1950.
Paragraph 26 of the Order runs as follows: "Where any rule, order or other instrument was in force under any provision of the Government of India Act, 1935, or under any Act amending or supplementing that act, immediately before the appointed day, and such provision is re enacted with or without modifications in the Constitution, the said rule, order or instrument shall, so far as applicable, remain in force with the necessary modifications as from the appointed day as if it were a rule, order or instrument of the appropriate kind duly made by the appropriate authority under the said provision of the Constitution, and may be varied or revoked accordingly.
" Thus the order made under section 94(3) of the Government of India Act should be reckoned now as an order made under article 239 of the Constitution and we are unable to agree with Mr. Chatterjee that it was beyond the competence of the President under clause (2) of article 372 to make the adaptation order mentioned above.
The first contention of Mr. Chatterjee therefore fails.
Coming now to the second point.
Mr. Chatterjee points out that the preamble to the as well as its title indicate clearly that the intention of the Legislature was to provide for fixing minimum wages in certain employments only and that the Legislature did not intend that all employments should be brought within the purview of the Act.
The schedule attached to the Act gives a list of the employments and it is in respect to the scheduled employments that the minimum wages are to be fixed.
Under section 27 of the Act however ' power has been given to the "appropriate Government" to add to either part of the schedule any employment in respect to which it is of opinion that minimum wages shall be fixed by giving notification in a particular manner, and 748 thereupon the schedule shall, in its application to the State, be deemed to be amended accordingly.
It is argued that the Act nowhere formulates a legislative policy according to which an employment shall be chosen for being included in the schedule.
There are no principles prescribed and no standard laid down which could furnish an intelligent guidance to the administrative authority in making the selection.
The matter is left entirely to the discretion of the "appropriate Government" which can amend the schedule in any way it likes and such delegation of power virtually amounts to a surrender by the Legislature of its essential legislative function and cannot be held valid.
There is undoubtedly an element of delegation implied in the provision of section 27 of the Act, for the Legislature in a sense, authorises another body, specified by it, to do something which it might do itself But such delegation, if it can be so called at all, does not in the circumstances of the present case appear to us to be unwarranted and unconstitutional.
It was said by O 'Connor J. of the High Court of Australia in the case of Baxter vs Ah Way (1): "The aim of all legislatures is to project their minds as far as possible into the future, and to provide in terms as general as possible for all contingencies likely to arise in the application of the law.
But it is not possible to provide specifically for all cases and, therefore, legislation from the very earliest times, and particularly in modern times, has taken the form of conditional legislation, leaving it to some specified authority to determine the circumstances in which the law shall be applied, or to what its operation shall be extended, or the particular class of persons or goods to which it shall be applied.
" The facts of this Australian case, in material features, bear a striking resemblance to those of the present one.
The question raised in that case related to the validity of certain provisions of the Customs Act of 1901.
The Act prohibited the importation of certain goods which were specifically mentioned and then gave power to the Governor General in Council to include, by (1) ; at 637.
749 proclamation, other goods also within the prohibited list.
The validity of the provision was challenged on the ground of its being an improper delegation of legislative powers.
This contention was repelled and it was held that this was not a case of delegation of legislative power but of conditional legislation Of the type which was held valid by the Privy Council in the case of Reg vs Burah (1).
It can indeed be pointed out that in Burah 's case what was left to the Lieutenant Governor was the power to apply the provisions of an Act to certain territories at his option and these territories to which the Act could be extended were also specified in the Act.
The Legislature could be said therefore to have applied its mind to the question of the application of the law to particular places and it was left to the executive only to determine when the laws would be made operative in those places.
According to the High Court of Australia the same principle would apply even when the executive is given power to determine to what other persons or goods the law shall be extended besides those specifically mentioned therein.
Whether a provision like this strictly comes within the description of what is called "conditional legislation" is not very material.
The question is, whether it exceeds the limits of permissible delegation.
As was said by O 'Connor J. himself in the above case, when a Legislature is given plenary power to legislate on a particular subject there must also be an implied power to make laws incidental to the exercise of such power.
It is a fundamental principle of constitutional law that everything necessary to the exercise of a power is included in the grant of the power.
A Legislature cannot certainly strip itself of its essential functions and vest the same on an extraneous authority.
The primary duty of law making has to be discharged by the Legislature itself but delegation may be resorted to as a subsidiary or an ancillary measure.
Mr. Chatterjee contends that the essential legislative function is to lay down a policy and to make it a binding rule of conduct.
This legislative policy, he says, is not discernible anywhere in the (1) 3 App.
96 750 provisions of this Act and consequently there is no standard or criterion to guide the administrative authority in the exercise of the subsidiary legislative powers.
We do not think that this is the correct view to take.
The legislative policy is apparent on the face of the present enactment.
What it aims at is the statutory fixation of minimum wages with a view to obviate the chance of exploitation of labour.
The Legislature undoubtedly intended to apply this Act not to all industries but to those industries only where by reason of unorganized labour or want of proper arrangements for effective regulation of wages or for other causes the wages of labourers in a particular industry were very low.
It is with an eye to these facts that the list of trades has been drawn up in the schedule attached to the Act but the list is not an exhaustive one and it is the policy of the Legislature not to lay down at once and for all time to which industries the Act should be applied.
Conditions of labour vary under different circumstances and from State to State and the expediency of including a particular trade or industry within the schedule depends upon a variety of facts which are by no means uniform and which can best be ascertained by the person who is placed in charge of the administration of a particular State.
It is to carry out effectively the purpose of this enactment that power has been given to the "appropriate Government" to decide, with reference to local conditions, whether it is desirable that minimum wages should be fixed in regard to a particular trade or industry which is not already included in the list.
We do not think that in enacting section 27 the Legislature has in anyway stripped itself of its essential powers or assigned to the administrative authority anything but an accessory or subordinate power which was deemed necessary to carry out the purpose and the policy of the Act.
The second contention of Mr. Chatterjee cannot therefore succeed.
The third and the last point raised by Mr. Chatterjee is directed against the notification of the Chief Com missioner by which he extended the term of the Advisory Committee till the 20th of September, 1952.
It is argued that the term of the committee, as originally 751 fixed, expired on the 16th of July, 1952, and on and from the 17th of July all the members of the committee became functus officio.
The Commissioner therefore was not competent to give a fresh lease of life to the committee which was already dead.
We do not think that there is much substance in this contention.
Rule 3 of the rules framed under section 30 of the Act expressly lays down that the State Government may fix the term of the committee when it is constituted and may from time to time extend it as circumstances require.
The State Government had therefore a right to extend the term of the committee in such way as it liked.
The only question is whether it could do so after the period originally fixed had come to an end.
Mr. Chatterjee relied, in this connection,.
upon certain cases which held that the Court could not grant extension of time in an arbitration proceeding after the award was filed and an award made after the prescribed period is a nullity.
In our opinion this analogy is not at all helpful to the appellants in the present case.
It is not disputed that the committee did not function at all and did no work after the 16th of July, 1952, and before the 21st of August next when its term was extended.
No report was submitted during this period and there was no extension of time granted after the submission of the report.
Assuming that the order of the 21st August, 1952, could not revive a committee which was already dead, it could certainly be held that a new committee was constituted on that date and even then the report submitted by it would be a perfectly good report.
Quite apart from this, it is to be noted that a committee appointed under section 5 of the Act is only an advisory body and that the Government is not bound to accept any of its recommendations.
Consequently, procedural irregularities of this character could not vitiate the final report which fixed the minimum wages.
In our opinion, neither of the contentions raised in support of these appeals can succeed and both the appeals therefore should fail and stand dismissed with costs.
Appeals dismissed.
| IN-Abs | The words 'law in force ' as used in article 372 of the Consti tution are wide enough to include not merely a legislative enactment but also any regulation or order which has the force of law.
An order made by the Governor General under section 94(3) of the Government of India Act, 1935, investing the Chief Commissioner with the authority to administer a province is really in the nature of a legislative provision which defines the rights and powers of the Chief Commissioner in respect of that province.
Such an order comes within the purview of article 372 of the Constitution and being a 'law in force ' immediately before the commencement of the Constitution would continue to be inforce under clause (1) of the article.
Such an order is capa ble of adaptation to bring it in accord with the constitutional provisions and this is precisely what has been done by the Adaptation of Laws Order, 1950.
Therefore an order made under section 94(3) of the Government of India Act, 1935, should be reckoned now as an order made under article 239 of the Constitution and it was within the competence of the President under clause (2) of article 372 to make the adaptation order.
Under section 27 of the , power has been given to the "appropriate Government" to add to either part of the schedule any employment in respect of which it is of opinion that minimum wages shall be fixed by giving notification in a particular manner, and thereupon the scheme shall, in its application to the State, be deemed to be amended accordingly.
There is an element of delegation implied in the provisions of section 27 of the Act, for the Legislature, in a sense, authorises another body specified by it, to do something which it might do itself.
But such delegation, if it can be so called at all, is not unwarranted and unconstitutional and it does not exceed the limits of permissible delegation.
The legislative policy is apparent on the face of the present enactment.
What it aims at is the statutory fixation of minimum wages with a view to obviate the chances of exploitation of labour.
It is to carry out effectively the purposes of the enactment that power has been given to the appropriate Government to decide with reference to local conditions whether it is desirable that minimum wages should be fixed in regard to a particular trade or industry which is not already included in the list.
Therefore in enacting section 27 the legislature has not stripped itself of its essential powers or assigned to the administrative authority anything but an accessory or subordinate power which was deemed necessary to carry out the purpose and the policy of the Act.
Rule 3 of the rules framed under section 30 of the Act empowers the State Government to fix the term of the committee appointed under section 5 of the Act and to extend it from time to time as circumstances require.
The period originally fixed had expired and its term was extended subsequently.
It did not function and submitted no 737 report during the period.
Assuming that the subsequent order could not revive a committee which was already dead, a new committee could be held to have been constituted and the report, submitted by it would be a perfectly good report.
Apart from this, a committee is only an advisory body and procedural irregularities of this character could not vitiate the final report which fixed the minimum wages.
Baxter vs Ah Way ; and Reg.
vs Burah (3 App.
Cas. 889) referred to.
|
ons for special leave to Appeal (Civil) Nos.
2430, 2431, 2436 to 2438, 2442 2443.
2445, 2446, 2472 and 2480 of 1969 and 3 of 1970.
From the orders dated December 8, 1969 of the Madras High Court in Civil Misc.
Petitions Nos.
15375 of 1969 etc.
in Writ Appeals Nos.
519 of 1969 etc.
K. K. Venugopal and R. Gopalakrishnan, for the petitioner (in S.L.P. Nos.
2430, 2431 and 2438 of 1969).
section Mohan Kumaramangalam, M. K. Ramamurthi, G. Ramaswamy, Shyamala Pappu and Vineet Kumar, for the petitioners (in S.L.P. No. 2436 of 1969).
M. K. Ramamurthi, G. Ramaswamy, Shyamala Pappu and Vineet Kumar, for the petitioner (in S.L.P. No. 2437 of 1969).
A. section Nambiar, for the petitioner (in S.L.Ps.
2442, 2443 and 2472 of 1969).
496 M. C. Setalvad, V. Subramanian and K. Jayaram, for the petitioner (in S.L.P. Nos. 2445, 2446 and 2480 of 1969 and 3 of 1970).
Madan Mohan for respondent No. 1 (in S.L.P. Nos.
2430, 2431, 2436, 2437, 2438, 2442, 2443 and 2472 of 1969).
O. C. Mathur, for respondent No. 1 (in S.L.P. No. 2445 of 1969).
R. Gopalakrishnan, for respondent No. 1 (in S.L.P. No. 2480 of 1969).
K. Thirumalai, A. T. M. Sampath and E. C. Agrawala, for respondent No. 1 (in S.L.P. No. 3 of 1970).
The Order of the Court was delivered by Hidayatullah, C.J. These are petitions for special leave against the orders of the Division Bench of the High Court of Madras by which the High Court has ordered that the permits granted by the Regional Transport Authority will operate and not those which the State Transport Appellate Tribunal in appeal granted.
The facts may be stated, taking as a sample, Special Leave Petition No. 2430 of 1969.
The original grantee of the permit by the Regional Transport Authority may be described as 'A '.
The date of the grant was November 20, 1966.
On appeal by the respondent who may be described as 'B ', the State Transport Appellate Tribunal cancelled the grant made to A by the Regional Transport Authority.
This was on July 18, 1967.
A writ petition was thereupon filed by A and it was allowed by the learned single Judge on November 4, 1969 and the order of the State Transport Appellate Tribunal was quashed.
When the matter went before the Letters Patent Bench, it was observed that in view of the fact that only the grantee of the Regional Transport Authority had a valid permit, it was not possible to grant any permit to B who was recognised by the State Transport Appellate Tribunal.
They followed an earlier ruling of the court and restricted the grant pending disposal of the Letters Patent appeal to the grantee of the Regional Transport Authority who alone was permitted to operate on the route.
It appears that only one operator could be allowed on this route, because of a section 47(3) determination.
In these petitions for special leave which are ex facie against the orders made in interlocutory proceedings, the attempt is to get the permits restored to B.
It is claimed that this involves a question of jurisdiction and that question is whether the High Court could recognise A the grantee of the Regional Transport Authority when his permit had been cancelled by the State Transport Appellate 497 Tribunal.
We think that these are matters into which this Court cannot be invited to go under article 136 of the Constitution, because the appeal itself is pending before the High Court and what the High Court has done is to give effect to the order of the learned single Judge.
In other words, the Letters Patent Bench has not attempted to pass any special order of its own staying the operation of the decision of the learned single Judge.
We think it would be wrong for us to interfere at this stage.
It may be that the question may come up in some other form before us when the appeals from the Letters Patent decision are brought before this Court.
If and when this happens, we may find it convenient to express our opinion on the question of jurisdiction of the High Court to go into such matters in appeal or in original writ petitions.
Beyond this, we do not wish to express any opinion, one way or the other, at this stage.
We accordingly order the dismissal of these special leave petitions, reserving to the petitioners the right to raise such questions as may legitimately be raised when they choose to file appeals against the decision of the Letters Patent Bench.
Stay granted by this Court is vacated.
V.P.S. Special Leave Petitions dismissed.
| IN-Abs | The Regional Transport Authority granted to the respondent a permit to operate a bus on a route.
The grant was set aside by the State Transport Appellate Tribunal on appeal filed by another applicant.
The order of the S.T.A. was quashed by a Single Judge of the High Court in a writ petition filed by the grantee from the R.T.A.
When the matter went before the Letters Patent Bench it was observed that since only the grantee from the R.T.A. had a valid permit it was not possible to grant any permit to the appellant before the S.T.A. pending the disposal of the Letters Patent Appeal as only one operator could be allowed on the route.
In the petition for special leave to appeal to this Court under article 136 against the interlocutory order, on the question of the jurisdiction of the High Court to recognise the grantee from the R.T.A. when his permit was cancelled by the S.T.A., HELD: This Court would not go into the matter at this stage because the appeal itself was pending before the High Court and all that the Bench had done was to give effect to the order of the Single Judge pending disposal of the appeal.
[497 A B]
|
minal Appeal No 159 of 1967.
491 Appeal by special leave from the judgment and order dated April 28, 1967 of the Allahabad High Court in Criminal Appeal No. 2195 of 1964.
Anil Kumar Gupta, R. A. Gupta and Uma Datta, for the appellant.
O. P. Rana, for the respondent.
The Judgment of the Court was delivered by Hidayatullah, C.J.
The appellants are five in number who were prosecuted originally with.
11 others under diverse sections of the Indian Penal Code which included sections 147 and 148 of the Indian Penal Code and sections 333 and 353 read with section 149 of the Indian Penal Code.
of the original 16 accused in the case, 11 were acquitted in the Court cf Session.
The High Court, on appeal, confirmed their convictions with some modifications and reduced the sentences passed on them.
As a result of the High Court 's judgment, one of the appellants Gopi stands convicted under section 326 of the Indian Penal Code with a sentence of six months ' rigorous imprisonment and under section 148 of the Indian Penal Code with a like sentence, the two sentences of imprisonment to run concurrently.
Others are convicted only under s.147 of the Indian Penal Code and have been sentenced to imprisonment already undergone by them which we are told was in the neighbourhood of two weeks.
They now appeal by special leave against their conviction and sentences.
The facts of the case are as follows.
In November 1963 a she buffalo belonging to one Rajbir of village Chhainsa, police station Chhainsa in the district of Gurgaon (then a part of Punjab and now a part of Haryana) was stolen.
Rajbir 's suspicion was that the appellants Gopi and Munshi had stolen the buffalo and that they were keeping it in village Gunpara, police station Dankaur in Bulandshahr district in Uttar Pradesh.
There are certain allegations that Gopi and Munshi demanded a sum of Rs. 200 for the return of the buffalo, that the amount was paid but the buffalo was not returned.
We are not concerned with the truth of this statement.
A report of theft of buffalo was lodged at police station Chhainsa on November 26, 1963.
The report was sent to Sub Inspector Kesar Singh (P.W. 1) who was then at another village and he proceeded in the company of three constables and some other villagers to Gunpara.
From the village he took with him two other persons Rajey and Chander.
The police party was armed with rifles.
a revolver and lathis.
They reached the house of Gopi and Munshi at about 11 30 p.m. and found them sleeping in front of their house.
Gopi and Munshi were woken up by the police and were informed that the police party had come to search 492 for the buffalo.
The prosecution case is that Gopi and Munshi thereupon raised a hue and cry that the police party had arrived and on that the appellants and some other persons violently attacked the police party causing simple injuries to Kesar Singh, Mohan Singh and Sri Ram of the police force and grievous injury to Jodhra Ram.
The injury to Jodhra Ram was caused with a farsa on the head and had fractured his skull.
Later, the police party, when it was withdrawing, was again waylaid and the allegation is that Kesar Singh was wrongfully confined at Naurangpur.
He was then rescued 'by Mulaim Singh, a constable of police station Dankaur and Kesar Singh then went to Gunpa a where he made a report to the police station officer Dankaur who had by that time returned.
It may be mentioned that on behalf of the appellants a report was also lodged at police station Dankaur at 4 a.m. on the night of the occurrence, complaining that a dacoity was attempted to be committed at the house of Gopi and Munshi by some persons who were dressed in police uniform.
Investigation then followed and the appellants with 11 others who have since been acquitted were prosecuted.
The High Court considered whether the action of Kesar Singh in conducting the search outside the limits of his police station house was bona fide or under colour of office.
It gave a finding that it was ,not bona fide because Kesar Singh could have easily asked the police station house officer of Dankaur to conduct the search under section 166(1) of the Code of Criminal Procedure.
His explanation that the police at Dankaur were mixed up with the appellants ' party was considered a lame excuse.
However, the High Court felt that the action of the appellants was criminal because they knew that it was a police party.
In this appeal, the appellants had earlier undertaken to this Court that they would argue a pure point of law and that the record therefore need not be printed.
As a result, there is no evidence before us.
All that we have is the copy of the judgment of the High Court and the special leave petition with the grounds on which this appeal is to be argued.
The only question of law argued on behalf of the appellants is that the search was illegal and therefore the appellants had every right to resist it and further that they resisted the search party in the exercise of the right of private defence, thinking that the raiding party were decoits dressed in police uniforms.
As to the knowledge of the appellants about the identity of the raiding party, we have had the evidence of the witnesses read to us.
It is quite clear from that evidence that the sub inspector Kesar Singh had communicated to Gopi and Munshi that this was a raid by a police party who were out to search the premises for 493 the missing buffalo.
Therefore, the statement of the appellants that they took the raiding party to be dacoits is not true and we do not, therefore, believe it.
The argument, however, was raised that under section 165, the powers of search of station house officer are limited to the limits of his police station and he cannot make a search within the jurisdiction of another police station house officer.
Reliance was placed upon the provisions of section 165 to establish this.
There is no doubt that that is the normal and ordinary provision of the Code but then there is section 166 also to be read.
Under sub section 1 of that section a police officer may invoke the assistance of a police station house officer of another jurisdiction and ask him to conduct the search.
It is submitted that this is what the, sub inspector Kesar Singh ought to have done.
The powers of the police station house officer, however, are not confined to this only because sub section
3 of the same section gives the right and authority to the police station house officer to conduct search in the jurisdiction of another police station house officer if he has reason to believe that delay would be occasioned by requiring the officer in charge of the other police station to cause the search to be made and as a result evidence of the commission of the offence would be concealed or destroyed.
This is what the sub inspector Kesar Singh seems to have done.
His explanation was that the police of Dankaur were mixed up with the accused who had stolen the buffalo and therefore he took it upon himself to conduct the search and recover the buffalo.
The explanation in our opinion is believable because no police officer would ordinarily go into another jurisdiction unless there, are compelling reasons to do so.
A buffalo had been stolen a few weeks before and nothing had been done to recover it.
In these circumstances the sub inspector Kesar Singh might well have believed that unless he took some instant action, the buffalo would never be found.
Therefore his action was with due care and attention and cannot be said to be mala fide.
It was argued however that the sub section is limited to avoidance of delay and there was no case made out here that there was likelihood of delay it the police station house officer of Dankaur had been invited to conduct the search.
In our opinion in the case of stolen cattle, time is of the essence, because once the animal is removed and mixed up with others, it is very difficult to spot it in the big herds common in these places.
Therefore if the police officer had reason to believe that the police officers at Dankaur would take their own time because they were mixed up with the accused party, he had full jurisdiction in taking recourse to sub section
(3) of section 166 and to carry out the search himself.
It was contended before us that he ought to have recorded his reasons in writing as required by section 165 and also by section no question appears to have been put to the sub inspector to elicit from him whether the reasons were recorded or not.
Regard being had to the regularity of official acts, we are entitled to presume that the sub inspector must have taken the precaution to record his reasons.
In any event, we cannot hold this against the prosecution, because there is no material on which we can proceed.
We are therefore satisfied that the search in this case was bona fide and was conducted legally by Kesar Singh in another jurisdiction, because be had reason to believe that evidence, namely, the buffalo was likely to be lost if he did not take prompt action.
The accused were informed by him that it was the police party which had come and they had no reason to attack the police party either as dacoits or in self defence in any other form.
The offence of the appellants is therefore amply brought home to them.
We see no reason to interfere.
The appeal fails and will be dismissed.
G.C. Appeal dismissed.
| IN-Abs | On the basis of a First Information Report regarding loss of a buffalo lodged at police station, Chhainsa, the Sub Inspector of that police station sought to search the house of the appellants situated in the jurisdiction of police station, Dankaur.
The appellants and several others resisted the search and caused injuries to the police party, for which they were prosecuted under various sections of the Indian Penal Code.
The appellants along with certain others were convicted by the trial court and their appeals were disallowed by the High Court.
By special leave they appealed to this Court, contending : (i) that the officer of a police station cannot carry out a search in the jurisdiction of another police station without the permission of the Station House Officer of that station; in the present case the reason given by the Sub Inspector for not taking such permission, namely, that the local police was in league with the appellants did not satisfy the terms of section 166(3) of the Code of Criminal Procedure; (ii) that the search was also illegal for the reason that the Sub Inspector before attempting the search did not record his reasons as required by sections 165 & 166 of the Code; (iii) that being illegal the search was not bona fide. (iv) that the appellants were entitled to the right of private defence since they thought that the raiding party were decoits dressed as policemen.
HELD : (i) In the case of stolen cattle, time is of the essence, because once the animal is removed and mixed up with others, it is very difficult to spot it in the big herds common in these places.
Therefore if the police officer had reason to believe that the police officers at Dankaur would take their own time because they were mixed up with the accused party, he had full jurisdiction in taking recourse to sub section
(3) of section 166 and to carry out the search himself.
[493 G H] (ii) No questions were put to the Sub Inspector to elicit from him whether the reasons for the search were recorded or not.
Regard being had to the regularity of official acts it must be presumed that the Sub Inspector must have taken the precaution to ',record his reasons.
[494A] (iii) In the circumstances of the case the search was legal and bonafide.
[494 B] (iv) The accused were informed by the Sub Inspector that it was the police party which had come and they had no 'reason to attack the police party either as dacoits or in self defence in any other form.
[494 C]
|
Appeal No. 458 of 1969.
Appeal from the judgment and order dated July 1, 1968 of the Gujarat, High Court in Special Civil Application No. 1499 of 1966.
517 M. C. Chagla, section K. Dholakia, Vineet Kumar and J. R. Nana vati, for the appellants.
section T. Desai, B. D. Sharma and section P. Nayar, foe respondent No. 1.
section section Shukla, for respondents Nos. 2 to 148.
The Judgment of the Court was delivered by Shah, J.
Certain officers in the ministerial branch of the Secretariat Service of the State of Gujarat moved a petition in the High Court of Gujarat for an order directing the State Government to treat its order dated August 19, 1966 as "illegal, void and of no effect" and to forbear from enforcing its order treating the persons whose names were specified in the annexure to the order as servants of the "Secretariat cadre".
The High Court of Gujarat granted the petition and declared the order dated August 19, 1966, invalid.
With certificate granted by the High Court this appeal has been filed.
Prior to November 1, 1956, the appellants were holding permanent posts in the ministerial service of the Secretariats of the Part B State of Saurashtra and the State of Kutch.
By virtue of section 8 of the States Reorganization Act 37 of 1956 the new State of Bombay, which included the territories of the States of Saurashtra and Kutch, was formed.
Section 115 of the made provisions relating to services other than All India Services.
By sub section
(1) of section 115 it was enacted, inter alia, that every person who immediately before the appointed day was serving in connection, with the affairs of any of the existing States specified therein shall, as from that day, be deemed to have been allotted to serve in connection with the affairs of the successor State to that existing State.
By the proviso to sub section
(7) it was provided that conditions of service applicable immediately before the appointed day to the case of any person allotted to another State shall not be varied to his disadvantage except with the previous approval of the Central Government.
Section 116 provided for the continuance of officers in the same posts.
By section 117 power was conferred upon the Central Government to give directions to Any State Government that may appear to be necessary for the purpose of giving effect to the provisions of sections 114,115 and 116 of the Act.
Under the , the appellants were allotted to serve in connection with the affairs of the new State of Bombay.
In exercise of the powers under article 309 of the Constitution, the Government of Bombay sanctioned certain rules called "The Allocated Government Servants ' (Absorption, Seniority, Pay & Allowances) Rules, 1957".
Those rules governed the servants who were allotted to the State of Bombay on reorganisa 518 tion.
A large majority of the members of the ministerial branch of the Secretariat of the States of Saurashtra and Kutch were, it appears, unwilling to be posted in the Secretariat of the new State of Bombay.
They were accordingly posted in the districts of the former States of Saurashtra and Kutch.
Under Act 11 of 1960 called "The Bombay Reorganisation Act" the States of Gujarat and Maharashtra were carved out of the territory of the new State of Bombay.
Under section 81 provisions relating to services other than All India Services were made and by section 82 provisions as to the continuance of officers in the same posts was made.
By section 83 power was given to the Central Government to give directions to the States.
Those provisions were substan tially the same as the provisions of sections 115, 116 and 117 of the .
The appellants were allotted to serve in connection with the affairs of the State of Gujarat under section 81 of the Bombay Reorganisation Act.
The newly constituted State of Gujarat finding a dearth of experienced officers in the Secretariat transferred the appellants at ,diverse times between the years 1961, 1962 and 1963 to the Secretariat of the State of Gujarat and 'assigned them duties in connection with the Secretariat Service.
Orders were issued from time to time fixing their scales of pay and seniority.
Apparently the Public Service Commission raised some objections about an attempted integration between the officers who were originally serving in the Secretariat Service, and those who were posted from the districts.
Ultimately on August 19, 1966, the State Government issued the order to the following effect : "The question of regularising the appointment to various posts in the Secretariat Department on and after 1st May 1960 of the drafted persons was under the consideration of Government for some time.
Government is now pleased to direct, in consultation with the Gujarat Public Service Commission, that the persons shown in the accompanying statement should be treated to have been regularly appointed in the posts shown against their names in column 4 of the statement with effect from the date shown in column 5 in the Departments mentioned in column 3 of the statement.
As regards fixation of their pay and seniority orders have already been issued in Government Resolution General Administration Department No. SCT 1161 F, dated 25th April, 1961 and Government Reso lution General Administration Department No. SCT1162 KH, dated 14th March 1964.
The Departments are requested to fix their pay and seniority accordingly.
" 519 Appended to the order was a list of 90 persons designating the departments in which they were posted, posts to which appointed and the dates from which they were appointed.
The officers of the Secretariat who before the date of the order constituted the ministerial service then filed the petition out of which this appeal arises challenging the validity of the order of the Government.
The petition was ,founded on three grounds : (1) that the order violated r. 138 of the Recruitment Rules framed by the Government of Bombay in 1957; (2) that the order violated the proviso to cl.
(6) of section 81 in that it altered the conditions of service of the applicants; and (3) that it violated the provisions of the Allocated Government Servants ' (Absorption, Seniority, Pay & Allowances) Rules, 1957.
Counsel for the applicants conceded before the High Court that the transfer of the former Saurashtra and Kutch States Secretariat personnel to the Gujarat Secretariat per se was not open to objection.
The High Court did not consider whether the Saurashtra and Kutch States secretariat personnel had "any rights flowing on account of absorption and integration of service under the or the Allocated Government Servants ' Rules,, 1957.
" But the High Court held that since the impugned order purported to amalgamate the former Saurashtra and Kutch States personnel with the Gujarat Secretariat Service contrary to the terms of r. 138 of the Recruitment Rules, and the Government had no authority to vary the method of recruitment provided by the statutory r. 138 of the Recruitment Rules which was mandatory, the orders of transfer to the Secretariat which was not made in the process of integration could not operate as absorption under the Allocated Government Servants ' (Absorption, Seniority, Pay & Allowances) Rules, 1957.
The High Court also observed that when the ministerial service employees of the former Saurashtra and Kutch States Secretariats were absorbed in the districts, integration of the services was complete and any transfer thereafter to the Secretariat could not and did not amount to absorption in equivalent posts.
It is necessary first to examine the scheme of sections 115 & 116 of the .
Section 115 was intended to provide for the conditions of service of employees who immediately before November 1, 1956 were serving in connection with the affairs of a State and were allotted to serve in connection with the affairs of another State.
Power to fix the conditions of service was reserved exclusively to the Central Government.
For that purpose the Central Government was authorised to establish one or more Advisory Committees to 'advise the Government on the division and integration of the services in the new States and for ensuring fair and equitable treatment to all persons affected by the 520 provisions of section 115 and for proper consideration of any representation made by those persons.
By the proviso to sub section
(7) section 115 a guarantee was given to every allotted public servant that his conditions of service shall not be varied to his disadvantage except with the previous approval of the Central Government.
Section 116 provided for the continuance of officers in equivalent posts.
This Court in N. Raghavendra Rao vs Deputy Commissioner, South Kanara, Mangalore(1) held that the effect of sub section
(7) of section 115 is to preserve the power of the State to make rules under article 309 of the Constitution, but the proviso imposes a limitation on the exercise of that power; the limitation is that the State cannot vary the conditions of service applicable immediately before November 1, 1956, to the disadvantage of persons mentioned in sub sections
(1) & (2) of section 115.
In the view of the Court the broad purpose underlying the proviso to section 115 (7) of the Act was to ensure that the conditions of service shall not be changed except with the prior approval of the Central Government, that is, before embarking on varying the conditions of service, the State Governments should obtain the concurrence of the Central Government.
In Union of India & Anr.
vs P. K. Roy & Ors.
(2) this Court held that it is the duty of the Central Government to integrate the services, but the State may be asked to prepare a provisional gradation list provided.
the Central Government maintains its control over it.
It is clear that the conditions of service applicable immediately before the appointed day in the case of any person who is allotted to another State cannot be varied to his disadvantage except with the previous approval of the Central Government.
This protection could not be removed by the rules made by the State subsequent to November 1, 1956, unless the previous approval of the Central Government was obtained thereto.
It is true that the ministerial service personnel in the States of Saurashtra and Kutch, after they were allotted to the State of Bombay were posted and assigned duties in various districts in Saurashtra and Kutch.
But in the absence of evidence to show that the previous approval of the Central Government was obtained, their right to be absorbed in equivalent posts in the new State of Bombay and later in the State of Gujarat was not thereby affected.
It appears that there has riot been any equivalence established between the posts in the Secretariats.
of the States of Saurashtra and Kutch and the posts in the new State of Bombay and: later in the State of Gujarat to which the members of the ministerial service of the Secretariats of former Saurashtra and Kutch States were allotted.
The mere fact that they were posted (1) ; (2) ; 521 and continued to render service in the Districts will not, in our judgment, affect the right of the personnel to be absorbed in the equivalent posts in the Secretariat and on terms not disadvanta geous to those they were already entitled except with the previous, approval of the Central Government.
It was conceded, and rightly, that the State has the authority to transfer, subject to the Constitution and the rules made under article 309 any public servant to render service which by his training and aptitude he was competent to do.
Transfer of the personnel from the States of Saurashtra and Kutch to the Secretariat in the State of Gujarat and assignment of duties performable by the ministerial staff in the Secretariat cannot be challenged, and that because they were posted between 1956 and 1960 in the Districts they will not be deprived of their statutory right under section 115(7) proviso.
Posting in the districts was and must remain purely provisional, until final integration is made by the Central Government.
It is common ground that no such final integration had been made by the Central Government.
Two grounds appealed to the High Court in deciding the case against the appellants : (1) that the appellants were transferred to the Secretariat of the State of Gujarat, but they were not absorbed in the ministerial service of the Secretariat of the State of Gujarat.
In the view of the High Court there was merely "regularisation" of the appointment of those persons for the purpose of performing service in the Secretariat; and (2) that the order dated August 19,.
1966 was contrary to the Recruitment Rules, 1957.
If it be granted that the State was competent 'to transfer and did transfer the appellants to perform service in connection with the affairs of the State in the Secretariat, it is difficult to hold that when the State "regularised" the service of the appellants in the Secretariat with the consent of the Public Service Commission there was no absorption under the Absorption Rules.
It is true that the expression "absorption" has not been used in the order, but that will not justify an inference that there was no intention to absorb the former Saurashtra and Kutch States personnel in the Secretariat.
In the absence of determination of equivalent posts under the orders of the Central Government, the State of Gujarat was competent, as a matter of provisional arrangement to absorb the former Saurashtra and Kutch States personnel in the ministerial establishment of the Gujarat State Secretariat.
In terms the order says that the persons named therein "should be treated to have been regularly appointed in the posts shown against their names in column 4 of the statement" appended to the order.
That, in our judgment, amounted to absorption.
522 Original r. 138 of the Bombay Civil Services Classification and Recruitment Rules, 1939, was deleted and the following rule was substituted on May 22, 1957.
The relevant part of the rule reads "138.
The ministerial staff in the Secretariat and attached offices is divided into two Divisions.
(a) Upper; and (b) Lower.
(i) Superintendents : Appointments shall be made by promotion from among Senior Assistants.
(ii) Senior Assistants : Appointments shall be made by promotion from among Junior Assistants.
(iii) Junior Assistants : Appointments shall be made either : (a) by nomination on the results of a competitive examination held by the Bombay Public Service Commission, or (b) by promotion from among members of the Lower Division.
Provided that ,not more than one out of every four vacancies in the posts of Junior Assistants shall ordinarily be filled by promotion.
(2) To be eligible for appointment by nomination a candidate must (i) hold a degree in Arts, law, science, Agriculture or commerce of a recognised University or possess an equivalent qualification; (ii) have attained the age of 18 years; and (iii) not have attained the age of 30 years in the case of members of the Lower Division appointed on the recommendation of the commission and who have graduated while in service and in any other case 24 years on the first day of the month immediately following month in which the posts are advertised by the Commission.
B. Lower Division (b) Clerks, clerk typists, typists : Appointments shall be made by nomination on the results of a competitive examination held by the Commission.
523 Provided that suitable members of Class IV services who while in that service, have passed the Secondary School Certificate Examination or an examination recognised by Government as equivalent to that examination, shall be eligible for appointment to the posts of clerks by promotion.
(2) To be eligible for appointment by nomination, a candidate must . (i) have passed the secondary school certificate exa mination or an examination recognised by Government as equivalent to that examination; (ii) have attained the age of 18 years; and (iii) not have attained the age of 23 years on the first day of the month immediately following the month in which the posts are advertised by the Commission.
A candidate for the post of clerk typist or typist must, also be able to type neatly and accurately at a minimum speed of 40 words per minute.
The High Court held that recruitment to the ministerial staff in the Secretariat could only be by nomination or by promotion from among members of the Lower Division, nomination being on the result of a competitive examination held by the Public Service Commission and promotion being from the subordinate staff.
In view of this rule, according to the High Court, it was not open to the State Government to adopt any other method of recruitment of the members of the ministerial staff.
Counsel for the appellants contended that r. 138 only dealt with the existing servants and did not prevent any additional members from being amalgamated in the ministerial staff in the Secretariat.
He also contended that the recruitment did not amount to admission of an officer for the first time in the service.
It is unnecessary for the purpose of this appeal to consider these arguments.
Assum ing that r. 138 requires the State to follow a certain method for recruitment to the ministerial service, that rule made under article 309 of the Constitution cannot take away the statutory right vested in the personnel of the former Saurashtra and Kutch States which they acquired under the , to hold posts in the 'new State which were equivalent and on terms which were not, unless the previous approval of the Central Government was 524 obtained, disadvantageous.
Since the arrangement which is made by the Government of the State of Gujarat must be regarded as provisional and to enure so long as the Central Government does not make a final decision, it is not open to the officers of the Secretariat to challenge the authority of the Government of Gujarat either to transfer officers from the Districts and to post and assign them duties in the Secretariat or to fix their pay and seniority among the officers in the Secretariat performing ministerial duties.
The appeal must therefore be allowed and the order passed by the High Court must be set aside.
The petition filed by the respondents Nos. 2 to 148 will stand dismissed.
There will be no order as to costs throughout.
G.C. Appeal allowed.
| IN-Abs | Prior to November 1, 1956 the appellants were holding permanent posts in the ministerial service of the Secretariats of the Part B State of Saurashtra and the Part C State of Kutch.
By virtue of section 8 of the States Reorganisation Act 37 of 1956 the new State of Bombay which included the territories of the States of Saurashtra and Kutch was formed.
Under section 115(1) of the Act the appellants were allotted to serve in connection with the affairs of the new State of Bombay.
BY the proviso to, section 115(7) it was provided that 'conditions of service applicable immediately before the appointed day to the case of any person allotted to another State shall not be varied to his disadvantage except with the previous approval of the Central Government '.
Section 116 provided for the continuance of officers in equivalent posts.
By section 117 power was conferred upon the Central Government to give directions to State Governments for the purposes of sections 114, 115 and 116.
The Act authorised the Central Government to establish one or more Advisory Committees to advise the Government on the division and integration of the services in the new States and for ensuring fair and equitable treatment to all persons affected by the provisions of section 115 and for proper consideration of any representation made by those persons.
A large majority of the members of the ministerial branch of the Secretariats of the State of Saurashtra and Kutch were unwilling to be posted in the Secretariat of the new State of Bombay.
A large majority out of them including the appellants were accordingly posted in the districts of the former States of Saurashtra and Kutch.
Under the Bombay Reorganisation Act 11 of 1960 the States of Gujarat and Maharashtra were carved out of the territory of the new State of Bombay.
Sections 81, 82 and 83 of the 1960 Act were substantially the same as Ss. 115, 116 and 117 of the 1956 Act.
The services of the appellants were under section 81 of the Act allotted to the newly constituted State of Gujarat.
The State of Gujarat transferred the appellants from the districts to the Secretariat.
After consulting the Public Service Commission it issued on August 19, 1966 an order "regularising" the services of the appellants and fixing their pay and seniority.
The officers of the Secretariat who before the, passing of the said order constituted the ministerial service filed a petition in the High Court challenging its validity.
The High Court allowed the petition mainly on two grounds, namely : (i) that the appellants were not absorbed in the ministerial services of the Secretariat within the meaning 516 of the Bombay Allocated Servants ' (Absorption, Seniority, Pay and Allowances) Rules, 1957; (ii) that r. 138 of the Bombay Civil Services Classification and Recruitment Rules, 1939 as amended in 1957 allowed recruitment to the Ministerial Staff of the Secretariat by nomination after an examination or by promotion from the Lower Division and it was not open to the Government to adopt any other method.
The High Court 's ,,decision was challenged in appeal before this Court.
The Court noted that no equivalence had been established between the ,posts in the Secretariats of the States of Saurashtra and Kutch and the posts in the new State of Bombay or later in Gujarat and that there had been no integration of the services by the Central Government.
It was conceded before the Court that the State had the authority to transfer, subject to the Constitution and the rules made under article 309, any public servant to render service which by his training and aptitude he was competent to do.
HELD : (i) The fact that the expression 'absorption ' had not been used in the impugned order would not justify the inference that there was no intention to absorb the former Saurashtra and Kutch State personnel in the Secretariat.
[521 F] In the absence of determination of equivalent posts under the orders of the Central Government, the State of Gujarat was competent, as a matter of provisional arrangement to absorb the former Saurashtra and Kutch States personnel in the ministerial establishment of the Gujarat State Secre tariat.
In terms the order said that the persons named therein "should be treated to have been regularly appointed in the posts shown against their names in column 4 of the statement" appended to the order.
That clearly amounted to absorption.
[521 G H] (ii) The High Court was wrong in holding that the impugned order was bad because it contravened r. 138 of the Recruitment Rules.
Assuming that r. 138 requires the State to follow a certain method for recruitment to the ministerial service, that rule made under article 309 of the Constitution cannot take away the statutory right vested in the personnel of the former Saurashtra and Kutch States which they acquired under section 115(7) of the to hold posts in the new State which we re equivalent and on terms which were not, unless previous approval of the Central Government was obtained, disadvantageous.
Since the arrangement which was made by the Gujarat Government must be regarded as provisional and to ensure so long as the Central Government did not make a final decision, it was not open to the officers of "the Secretariat to challenge the authority of the Government of Gujarat either to transfer officers from the Districts and to post and assign them duties in the Secretariat or to fix their pay and seniority among the officer of the Secretariat performing ministerial duties. ' [523 G 524 B] N. Raghavendra Rao vs Deputy Commissioner, South Kanara, Mangalore, ; and Union of India & Anr.
vs P. K. Roy & Ors.
; , applied.
|
iminal Appeal No. 75 of 1967.
Appeal by special leave from the judgment and order dated April 8, 1966 of the Andhra Pradesh High Court in Criminal Appeal No. 636 of 1963.
Nur ud din Ahmed, A. V. Rangam, A. Vedavalli and D. Gopala Rao, for the appellants.
P. Ram Reddy and A. V. V. Nair, for the respondents.
425 The Judgment of the Court was delivered by Dua, J.
In this appeal by special leave directed against.
the order of the Andhra Pradesh High Court, the only question canvassed on behalf of the appellants before us relates to the plea of private defence raised by them at the trial.
The appellants who are ten in number were tried on as many is 22 charges by the Court of Additional Sessions Judge, Masulipatam and acquitted of all the charges.
On appeal by the State against their acquittal there was a difference of opinion between the two Judges of the High Court constituting the Division Bench hearing the appeal.
Whereas Sharfuddin Ahmed, J., upheld the order of acquittal on the basis of the plea of private defence, Mohd. Mirza, J., was of the opinion that the prosecution case was proved by overwhelming evidence.
The case was in consequence laid before Basi Reddy, J., as provided by section 429, Cr.
That learned Judge accepted the prosecution case and convicted the appellants on some of the charges.
He expressed his final conclusion thus : "I shall now indicate the charges upon which the accused should be convicted and the sentences that should be imposed: On charge No. 21 would convict accused 1, 3 and 5 to 9 under section 147, I.P.C. and on charge No. 3 accussed 2, 4 and 10 and sentence each of accused 1, 2,3, 4 and 5 to pay a fine of Rs. 5001/ in default each to suffer six months ' rigorous imprisonment.
I would sentence each of accused 6 to 9 (who are farm servants) to pay a fine of Rs. 100/ in default to suffer two months ' rigorous imprisonment.
I would sentence accused 10 to suffer rigorous imprisonment for two years.
On each of charges nos.
4, 5 and 6 which pertain to the three counts of murder, I would convict and sentence accused 10 to suffer imprisonment for life under section 302, I.P.C. 3.
On charge No. II, I would convict and sentence accused No. 10 to suffer two years ' rigorous imprisonment under section 326, I.P.C. for having caused grievous hurt to P.W. 6 by shooting at him with the gun.
On charge No. 221 would convict accused 10 under section 19(a) of the Indian Arms Act and sentence him to suffer one year 's rigorous imprisonment.
I would direct all the sentences of imprisonment passed on accused 10 to run concurrently.
I would uphold the order of acquittal on other charges.
426 The net result will be that accused 10 will have to undergo imprisonment for life; accused 1 to 5 will each have to pay a fine of Rs. 500; and accused 6 to 9 will each have to pay a fine of Rs. 100/ ".
The final.
order of the High Court on appeal followed the opinion expressed by Basi Reddy, J. The charges on which the appellants were convicted are there ". . . .
Secondly : that you accused nos.
1, 3 and 5 to 9 along with accused nos.
2, 4 and 10 at about 10 a.m. on 10 9 61 at the same place and in the course of the same transaction as set out in charge No. 1 above, formed your the common object of such assembly viz : beating and the occupiers of Gabbilalakunta, committed an offence of assembly, viz. : beating and killing the members of the lakunta, committed an offence of rioting and that at that weapons to wit, 'spears ' and the 10th accused was armed and within my cognizance; Thirdly : that you accused nos.
2, 4 and 10 along with accused nos.
1, 3 and 5 to 9 at the same time and place in the course of the same transaction as set out in charge No. 2 above, were members of an unlawful assembly and did in prosecution of the common object of such assembly, viz :beating and killing the members of the party that came in support of the occupiers of Gabbilalakunta, committed an offence of rioting and that at that time, the accused nos.
2 and 4 were armed with deadly weapons to wit, 'spears ' and the 10th accused was armed with a D.B.B1 Gun and thereby committed an offence punishable under section 148 of the Indian Penal Code and within my cognizance; Fourthly : that you accused No. JO at the same time and place and in the course of the same transaction as set out in charge No. 2 above, did commit murder by intentionally or knowingly causing the death of Anne Ramarao, son of Seetha Ramarao of Atkur by shooting him with a D. B. B1 gun and thereby committed an offence punishable under section 302 of the Indian Penal Code and within my cognizance; Fifthly : that you accused No. 10 at the same time and place and in the course of the same transaction as set out in charge No. 2 above, did commit murder by intentionally or knowingly causing the death of Bodapati China Anjaiah s/o Danaiah of Mustabada by shooting 427 him with a D.B.B I gun and thereby committed an offence punishable under section 302 of the Indian Penal Code and within my cognizance; Sixthly : that you accused No. 10 at the same time and place and in the course of the same transaction as set out in charge No. 2 above, did commit murder by intentionally or knowingly causing the death of Boddapati Lakshmaiah s/o Kotaiah of Medaripalem, hamlet of Verudupavuluru by shooting him with a D.B.B1 gun and thereby committed an offence punishable under section 302 of the Indian Penal Code and within my cognizance; Eleventhly : that you accused No. 10 at the same time and place and in the course of the same transaction as set out in charge No. 2 above, voluntarily caused grievous hurt to Kolli Nagabhushanam, son of Venkaiah of Davajigudem by means of a D.B.B1 gun an instrument for shooting and thereby committed an offence punishable under section 326 of the Indian Penal Code and within my cognizance and that the said act having been done in pursuance of the common object of the unlawful assembly consisting of you all the accused herein, all of you are guilty of the offence under section 326 of the Indian Penal Code read with section 149, Indian Penal Code and within my cognizance, or alternatively under section 326 read with section 34, Indian Penal Code and within my cognizance; Twentysecondly : that you accused No. 10 at about the same time and place and in the course of the same transaction as set out in charge No. 2 above, were armed with a D.B.B1 gun without licence under the Indian Arms Act and thereby committed an offence punishable under section 19(e) of the Indian Arms Act and within my cognizance.
" In this Court, as already observed, the appellants ' learned Advocate confined his submission only to the question of right of private defence.
According to the prosecution case, there is a low lying area covering.
about 11 acres known as Gabbilalakunta (hereafter to be referred as the Kunta) about one mile away from Surampalli village but within its limits.
This Kunta serving as a tank is fed by rain water.
The village of Surampalli was a Mokhasa village in the erstwhile zamindari of Mirzapuram.
Under 428 the provisions of the Madras Estates (Abolition and Conversion into Ryotwari) Act, 1948, the zamindari of Mirzapuram was taken over by the Government in 1950.
As a result thereof the entire estate including Surampalli village and the Kunta became vested in the Government free from all encumbrances.
This Kunta thus belonged to the Government.
Some poor landless persons like P.Ws 13 and 14, Shaik Madarsaheb and Kandavalli Anandam, began cultivating a part of this Kunta and started raising wet and dry crops.
This started in the year 1953.
Their occupation being unauthorised the Revenue Authorities collected penalty list from the occupants.
Accuse4d nos.
1 to 4, Gottipulla Venkatasiva Subbarayanam, Gottipulla Bapaiah, Gottipulla Seshaiah and Gottipulla Subba Rao, who are the ,former Mokhasadars have their lands measuring about 80 acres to the south of the Kunta. 'There is a big tank called Erracharuvu located about three or four furlongs to the north of the Kunta.
There are some channels through which water flows from this tank to various fields and one such channel serves to irrigate the field of the accused nos.
1 to 4.
According to the prosecution the lands of these accused persons should be irrigated by means of the channel running along the western side of the Kunta.
According to the accused persons, however their fields should receive water from the Kunta through sluices in its southern bund.
In 1958 the Settlement Authorities registered the Kunta as a source of irrigation for an ayacut of 34 acres.
Prior to that, sometime in August 1957, the occupiers of the Kunta had instituted a suit for injunction restraining accused nos.
1 to 4 from interfering with the possession of the occupiers and also claiming damages on the allegation that the defendants had spoiled their crops and an interim injunction was actually granted on August 21, 1957.
Accused nos.
1 to 4 also filed an application seeking to in junct the occupiers from opening the sluices (out lets) or making breaches in the bund of the Kunta during the pendency of the suit.
On this application also the court, by an order dated August 29, 1957, granted a temporary injunction in the following terms "Pending disposal of this petition, the respondents are restrained fro in opening the sluices or outlets or cutting any breaches to the bund of the tank situated in section No. 44 if there is any bund. " On February 3, 1960 the Court confirmed both the orders of injunction mentioned above.
The land in the Kunta was not cultivated in the years 1958 to 1960 because, of failure of rains.
In June, 1961 cultivation was resumed by P.W. 13 and P.W. 14, along with four other persons, raising paddy crop in a part of the Kunta.
Another part of the Kunta was prepared for raising 429 jonna crop.
The suit mentioned above was still pending when on September 4, 1961 it was adjourned to some other date.
It rained heavily that night and the,, rain water collected in the Kunta.
On the following morning when P.W. 13 and P.W. 14, along with some other occupiers passed by the side of the Kunta they saw a new bund raised on its western side so as to prevent the rain water collected therein from flowing westwards.
This resulted in submerging the crop grown on the eastern portion of the Kunta.
The new bund was about 3 high, 2 1/2 wide and 25 yards in length.
There being no one present at the bund P.Ws 13 and 14 and their companions made a breach therein to let the water flow westwards.
In the evening when they came back to the Kunta they found that the breach in the bund had been repaired and the bund restored to its original position.
There were also two improvised huts set up to the south of the bund and all the ten accused were present keeping a watch.
The occupiers pleaded with the accused persons to remove the bund pointing out that otherwise their crops would be damaged but the accused persons did not listen to their entreaties and threatened to beat them if they dared to interfere with the bund.
The occupiers thereupon went back to their village.
On the following day, September 6, 1961, P.W. 12, Yelamanchili Malikharjuna Rao, a medical practitioner at Surampalli and a leading member of the Communist Party was approached by the occupiers to assist them in representing to the authorities against the high handed action of the Mokhasadars.
A report was prepared by P.W. 12 which was addressed to the Sub Inspector of Police.
The Sub Inspector promised to send his constables to the spot and on this assurance the occupiers went back to their village.
On September 7, 1961 under the direction of the Police Sub Inspector two police constables went to the Kunta with the object of getting the bund removed and if possible to bind over the parties.
The Kunta was full of water and the paddy crop was submerged.
Six of the occupiers were also present at the spot.
The police Constables informed the persons present keeping a watch on the bund, which included accused No. 1 Gottipulla Venkatasiva Subbarayanam, accused No. 2 Gottipulla Bapaiah and accused No. 10, Charugulla Vijayaramarao, that the Sub Inspector had directed the western bund to be removed so that water may flow westwards.
Accused nos.
1, 2 and 10 asked for Government orders to that effect and declined to allow the bund to be removed in the absence of such an order.
The police constables asked the parties present to meet the Sub Inspector on the following day.
Neither party, however, went to the police station as required.
The Tahsildar also appears to have been approached to get the bund removed but he declined to do so on the ground that it was not his business and that it was for the Revenue Divisional Officer to look into the matter.
On September 9, 1961 the Sub Inspector sent a head constable along with 430 the constable who had gone there on September 7, to enquire into the complaint made to the police earlier.
According to the report prepared by the head constable accused No. 10 was firm and emphatic that the bund could not be removed in the absence of a Government order to that effect.
Bonds were, therefore, secured from accused nos.
2 and 3 and also from the occupiers for appearance before the Sub Inspector on the following morning.
It appears that these steps by the police produced no tangible result.
The occupiers realising that their crops were being irreparably damaged made frantic efforts to get the bund removed and with that object they approached some ryots of the surrounding villages to intervene on their behalf and to persuade the Mokhasadars to remove the bund.
After the police party had left Surampalli on the evening of September 9, P.Ws. 13 and 14 and some other occupiers proceeded to Gannavaram and approached some persons belonging to the Communist Party and apprised them of their plight.
The occupiers were assured of their support on the following morning.
On the morning of September 10, P.W. II, Katragadda Pedavenkatarayudu accompanied by P.W. 6, Koli Nagabhushanam, and Anne Rama Rao (deceased No. 1) went to Mustabada on their way to Surampalli.
At Mustabada they contacted Chinna Anjayya (deceased No. 2) and P.W. 15, Pendyala Venkateswara Rao, and from there they all proceeded to Surampalli.
At the Panchayat Board Office at Surampalli they collected P.W. 1, Madhukuluri Satyanarayana, P.W. 4, Kolampatta Venkata Sub bayyachari, P.W. 5, Jasti Ramarao, P.W. 7, Garimella Subbarao, P.W. 8, Garimella Venkataiah, P.W. 9, Mukkala Veeraiah and deceased No. 3, B. Lakshmayya and also the six occupiers of the Kunta and two or three other persons.
P.W. 12, Y. Mallikarjuna Rao also arrived there.
A message was sent through P.W. 13 to bring accused nos.
1 to 4 to the Panchayat Board office but they were reported to be at the Kunta.
Then all the persons gathered at the Panchayat Board office numbering about 20 proceeded to the Kunta at about 10 a.m. on September 10.
Accused nos.
1 to 9 were found near the huts whereas accused No. 10 with a gun was standing about 25 yards to the southeast of the huts.
Accused nos.
2 and 4 had spears whereas accused nos.
3 and 5 to 9 had sticks with them.
P.Ws. 1, 4, deceased No. 1, P.W. II and others are stated to have requested accused nos.
1 to 4 to remove the bund and save the growing crop belonging to the poor men.
The accused declined to do so.
Thereupon the six occupiers went towards the bund about 25 yards to the north of the huts and started themselves removing a portion.
Accused nos.
1 to 9 thereupon rushed at them to beat them.
At that stage P.W. 5, Jasti Ramarao, P.W. 7, Garimella Subba Rao and some others who had come to mediate intervened but they were beaten by the accused.
The, prosecution witnesses in turn snatched the sticks from some of the accused persons and retaliated causing injuries to some of them.
431 At this point of time accused No. 10 who was standing near the huts shouted that the party of the occupiers would not go back unless shot at and asked his companions to come back.
Accused nos.
1 to 9 started retreating towards the huts.
Deceased No. 1 and P.W. I who was about 10 yards southeast of the huts at that time went towards accused No. 10 challenging him to shoot if he dared and saying that they were prepared to be shot for a just cause.
Accused No. 10 then stepped forward and fired at deceased No. 1 from a distance of about 10 yards.
Crying out "Abba" deceased No. 1 fell down and died on the spot.
A pellet grazed the nose of P.W. I who was a couple of yards behind deceased No. 1 and he too fell down.
According to the prosecution version accused No. 2 hit P.W. I at the back as a result of which P.W. I also fell down unconscious.
, Accused No. 10 is stated to have fired another shot towards the west as a result of which P.W. 6 was injured.
Accused No. 10 then re loaded his gun and fired a shot towards the west and this hit deceased No. 2 who also fell down dead.
The fourth shot was fired by accused No. 10 in the northwestern direction which hit deceased No. 3 who was about 25 yards away from the huts and he too fell down dead.
P.Ws. 2, 3, 8, 9 and 10 also received pellet injuries in the course of this firing.
This, broadly speaking, is the prosecution case.
According to the defence version sought to be supported by ,four defence witnesses the gun used during the occurrence was brought by accused No. 1 who holds the necessary licence for this fire arm and it was he who used it in exercise of the right of private defence after accused nos.
2 to 4 had received injuries at the hand of about 200 or 300 communist & who had come to the place of occurrence from the house of P.W. 12.
They were armed with sticks and spears and were also carrying their flag.
They were raising party slogans and shouting that Gottipulla people should be killed.
They tried forcibly to remove the bund and on being obstructed by accused nos.
2 to 4 and their servants working at their farm the occupiers and the communists gave a severe beating to the latter.
Accused No. 1 came to the spot with his gun and fired at the aggressors in exercise of the right of private defence.
Accused no.10, according to this version, was not present at the spot.
In his statement under section 342, Cr.
P.C. this accused pleaded alibi by stating that he was at Sivapuram, Kadapa district on the fateful day having gone there weeks before and that he knew nothing about this occurrence; according to him he stayed in Sivapuram for about one month and himself surrendered in the Magistrate 's court on hearing that he was named as an accus ed in this case.
The trial court did not accept his plea of alibi nor did the High Court accept it and we do not find any cogent ground for disagreeing with this conclusion.
432 Now, the facts in the background of which, the question of Tight of private defence is to be considered are that the Kunta was the property of the Government and it was registered as a source of irrigation in the year 1958 or 1959.
The occupiers were thus cultivating the Kunta in an unauthorised manner.
Both sides had also secured injunction orders from the civil court against their opponents and the orders secured by the accused restrained the opposite party (plaintiffs in the suit) from cutting any breaches in the bund.
The accused no doubt seemed to have put up the present bund after the occupiers had grown their crops but it is clear that for a couple of years previously there was insufficient rain and there was also no cultivation in the Kunta.
The present bund was apparently raised on September 4, because it was on the morning of September 5, that the existence of the bund is stated to have been noticed by the occupiers.
Thereafter the occupiers approached the police authorities for assistance in getting the bund removed but unfortunately the matter was not dealt with by the authorities in an effective manner as they ought to have.
Having failed in their attempt to have the bund removed, the occupiers with their communist helpers seem to have gone to the spot on the day of the occurrence to help themselves.
Up to this stage there does not seem to be any controversy.
The only difference between the rival versions relates to the question, whether or not the party of the occupiers was armed and their number.
The prosecution witnesses would have us believe that they (the occupiers) along with some of their friends and supporters had gone to the Kunta unarmed to peacefully persuade the accused persons to remove the bund and that the accused persons beat them tip with sticks and spears.
The occupiers, acting merely in self defence, snatched the sticks and spears from some of the accused persons and gave them a beating whereupon accused No. 10 used his gun indiscriminately firing at the party of the occupiers.
The accused, on the other hand, claimed that the party of the occupiers, helped by prominent communists which far outnumbered the accused persons were armed with sticks and spears and they forcibly tried to remove the bund and when the accused objected they were beaten up.
Apprehending danger to their lives, the gun was used on behalf of the party of the accused persons.
It was thus in exercise of the right of private defence that this gun was used.
It may at this stage be pointed out that the accused persons had also reported the matter to the police but on the plea that the police was siding with the occupiers and favouring them the accused persons filed a complaint in the court of a Magistrate against 35 persons and both the cases were tried simultaneously.
As each side is blaming the other of being the aggressor and the witnesses for the prosecution deposing to the occurrence as eye witnesses are clearly interested in the occupiers the nature and 433 extent of the injuries suffered by the men of the two factions would serve as more reliable material for arriving at the truth.
It is in this connection noteworthy that even according to the prosecution witnesses the party of the occupiers consisted of not less than 20, persons.
We may now turn to the wound certificates of the accused persons.
Gottipulla Venkata Siva Subbarayanam, aged 60 years, accused No. 1, had 10 injuries on his person mainly on the head, base of the neck and the shoulders and dying declaration was considered necessary by the Civil Assistant Surgeon.
Gotti pulla Bapaiah, aged about 50 years, accused No. 2 had the following injuries on his person : 1.
A contusion 12" in length x 1/2" with raised edges placed diagonally across the upper 1 /3 of left half of the back, the lower and towards the spine and the upper end towards the shoulder.
Brownish red in colour; 2.
A contusion brownish red in colour 1" in diameter situated on the right shoulder; 3.
Whole of the right shoulder joint swollen and brownish red in colour.
Movements at right shoulder joint restricted; 4.
A contusion bluish in colour 3" in diameter on the outer aspect of upper 2 1/2 of the right arm; 5.
A contusion 6"X1/2" with raised edges situated diagonally across the right side back, the outer end towards the axilla and the upper end towards the neck.
Brownish in colour; 6.
Whole of the right hand swollen and tender brownish red in colour; 7.
A lacerated injury 2" x 1/2" scalp deep situated on the left parietal, eminence 4" above Pinna of left ear.
Clotted blood seen in the wound and is placed transversely; 8.
An incised wound transversly placed on the right half of centre of occiput at the back of head 1 1/2" x 1/4" scalp deep.
Clotted blood found in the wound.
X ray report disclosed M.C. dislocation of right acromio clavicular joint.
Gottipulla Seshayya, aged 50 years, accused No. 3, had two injuries on his person one of which was incised wound scalp deep situated diagonally on the front half of right parietal bone.
Dying declaration was not considered necessary and he was discharged from the hospital on the 16th September, 1961 after six days.
434 Gottipulla Subba Rao, aged 48 years, accused No. 4 had a brownish red contusion with raised edges and small abrasion over it situated transversely on the right forearm, 1/3 of which was swollen and tender.
There was a fracture of the bone below.
He also remained in the hospital from September 10, to September 16.
Korlagunta Narayana Rao, aged 35 years, accused No. 5 had four injuries on his person including a lacerated injury 2" x 1/2 " scalp deep on the front of the right parietal bone, 1/2" to the right of mid line of skull and another similar injury 1" x 1/2" scalp deep on a contusion 3" in diameter, brownish red in colour at the back of junction of both parietal bones in between parietal eminences.
Shaik Madarsaheb, aged 25 years, accused No. 6, had five injuries on his person including a contusion.
He too remained in the hospital for six days upto September 16, 1961.
Thota Seetharamayya, aged 40 years, accused No. 7 had a simple injury on his right hand ring ginger.
Accused No. 8, Thota Subba Rao, aged 22 years had only a contusion on right buttocks.
These injuries quite clearly suggest that the party of occupiers did not consist of a few unarmed persons who had no design to forcibly remove the bund.
It is the prosecution case that the accused were determined not to allow the bund to be removed without an order from the Government authorities and that they were prepared to use force to protect the bund.
The accused were also armed with the gun belonging to accused No. I and this was fully known to the occupiers.
In this background it is not possible to accept the story that the prosecution witnesses had one to the Kunta unarmed and it was only when they were beaten by the accused persons that they in self defence snatched the sticks and spears from some of the accused persons and beat up the others With 'those sticks and spears.
Some of the injuries found on the persons of the prosecution witnesses were of course caused by blunt weapons but most of the injuries were, according to the medical evidence caused by gun shots.
According to the trial court both parties asserted their respective claims, the occupiers to the use of the land in the Kunta for cultivation and the accused to the use of the Kunta as a source of supply of rain water for irrigating their land and these conflicting rights could not co exist.
When the prosecution witnesses attempted forcibly to remove the bund the trouble flared up.
The two factions had a1so, affiliations with two different political parties 435 the occupiers had full support of the Communist Party and accused No. 10 was a member of the Mandal Congress.
The court also did not believe the prosecution version that prosecution witnesses had gone to the Kunta to peacefully persuade the accused persons to remove the bund.
It held the occupation of the Kunta by the occupiers to be unauthorised after its registration as an irrigation tanks.
It further held that the bund as it existed on September 5, 1961had been raised by the accused persons but there were sluices and vents in the southern bund.
The court also found that water from Errache uvu used to flow into the bund of the Kunta from where it passed on to the fields of the accused nos.
1 to 4 with the result that the accused persons were justified in raising the bund and if there was any contravention of the civil court 's injunction the occupiers should have approached that court for appropriate relief.
It was on this line of reasoning that the action of the accused in protecting the bund was upheld.
On a consideration of the prosecution evidence the trial court observed that notwithstanding the denial of his presence at the spot by accused No. 10 it was open to him to say that on the prosecution evidence itself he must be held to have acted in exercise of the right of private defence and so observing that court expressed its conclusion thus : "The facts and circumstances elicited in the prosecution evidence referred to above clearly establish that the accused 1 to 9 were maintaining a right at that time, that the bund was being removed by men on the other side and the men on the other side also inflicted simple and grievous injuries on the accused 1 to 9.
In such a situation it was open either to any of the accused 1 to 9 or even to the 10th accused to do something to avert further beating.
The beating to the extent to which it took place resulted in grievous injuries to some of the accused.
Under these circumstances it has to be held that the facts disclose a situation in which the 10th accused can well claim to have acted in the exercise of the right of private defence.
Charges 4 to 6, 10 to 13, 15 to 17 against the 10th accused, therefore, fail.
Consequently, the charges 7, 8 and 9 against the remaining accused also fail.
" In regard to the other charges, after discussing the evidence, in the case and other material on the record and criticising the failure on the part of the police authorities to take effective and timely measures in advance to prevent the occurrence in question the trial court came to the conclusion that in regard to the actual beating suffered by the members of both parties the evidence was so conflicting and their respective versions so distorted that 436 no definite finding could safely be arrived at.
All that emerged from the material in the court 's view was that the accused wanted to retain the bund which the prosecution party wanted to remove and the fight ensued.
On this view the accused were acquitted.
On appeal Basi Reddy J., who disposed it of in the High Court under section 429, Cr.
P.C. felt that the case put forward by the prosecution was substantially true and the case set up by the defence palpably false.
According to the learned Judge neither the accused had a right to put up the bund nor had the occupiers a right to encroach on the bed of the Kunta.
The injunction order in favour of the accused was only based on the existence of a bund at the time of the order and thus did not entitle the accused to raise a new bund whereas the injunction order in favour of the occupiers restrained the accused persons from interfering with the enjoyment of the Kunta by the occupiers.
The accused who had raised the bund and who being fully armed were determined to guard and preserve it by use of force were held by the learned Judge to constitute an unlawful assembly.
Accused nos.
2, 4 and 10 were held to be armed with deadly weapons and therefore guilty of section 148, I.P.C. and the other accused were held guilty under section 147, I.P.C. The right of private defence was also negatived by the learned Judge.
It was observed that this right had not been pleaded by accused No. 10 and on the prosecution evidence the accused had first attacked the mediators on their inter vention to prevent the occupiers being beaten up and it was thereafter that P.Ws. 5 and 7 and others beat the accused persons in retaliation.
The High Court did not consider it material whether the prosecution witnesses and others had brought with them sticks or had snatched the same from the accused persons and sustenance of injuries by accused nos.
1 to 8 in this connection was held not to give rise to any right of private defence.
Holding the use of the gun by accused No. 10 to be his individual act independent of the object of the assembly he alone was held guilty of the offence of murder.
In our opinion the High Court has misconceived the law in regard to the right of private defence and the appeal has, therefore, to be allowed.
The right of private defence of person and property is recognised in all free, civilised, democratic societies within certain reasonable limits.
Those limits are dictated by two considerations : (1) that the same right is claimed by all other members of the society and (2) that it is the State which generally undertakes the responsibility for the maintenance of law and order.
The citizens, as a general rule, are neither expected to run away for safety when faced with grave and imminent danger to their person or property as a result of unlawful aggression, nor are they expected, by use of force, to right the wrongs done to 437 them or to punish the wrongdoer for commission of offences.
The right of private defence serves a social purpose and as observed by this Court more than once there is nothing more degrading to the human spirit than to run away in face of peril; (Munshi Ram vs Delhi Administration(1) and Kishna vs State of Rajasthan(2).
But this right is basically preventive and not punitive.
It is in this background that the provisions of sections 96 to 106, I.P.C. which deal with the right of private defence have to be construed.
According to section 96 nothing is an offence which is done in the exercise of the right of private defence and under section 97 subject to the restrictions contained in section 99 every person has a right to, defend : (1) his own body and the body of any other person against any offence affecting the human body and (2) the property whether movable or immovable of himself or of any other person against any act which is an offence failing under the definition of theft, robbery, mischief or criminal trespass or which is an attempt to commit these offences.
The right of private defence, according to section 99, does not extend to an act which does, not reasonably cause the apprehension of death or of a grievous hurt if done or attempted to be done by a public servant acting in good faith etc., and there is also no right of private defencein cases in which there is time to have recourse to the protection of the public authorities.
Nor does it extend to the inflicting of more harm than is necessary to inflict for the purpose of defence.
Section 100 lays down the circumstances in which the right of private defence of the body extends to the voluntary causing of death or of any other harm to the assailants.
They are: (1) if the assault which occasions the exercise of the right reasonably causes the apprehension that death or grievous hurt would otherwise be the consequence thereof and (2) if such assault is inspired by an intention to commit rape or to gratify unnatural lust or to kidnap or abduct or to wrongfully confine a person under circumstances which may reasonably cause apprehension that the victim would be unable to have recourse to public authorities for his release.
In case of less serious offences this right extends to causing any harm other than death.
The right of private defence to the body commences as soon as reasonable apprehension of danger to the body arises from an attempt or threat to commit the offence though the offence may not have been committed and it continues as long as the apprehension of danger to the body continues.
The right of private defence of property under section 103 extends, subject to section 99, to the voluntary causing of death or of any other harm to the wrongdoer if the offence which occasions the exercise of the right is robbery, house breaking by night, mischief by fire on any building etc.
, or if such offence is, theft, mis (1) Crl.
A. No. 124 of 1965 decided on 27.11.1967.
(2) Crl.
A. No. 23 of 1960 decided on 30.10.1962.
L7Sup.
CI(NP)/70 13 438 chief or house trespass in such circumstances as may reasonably cause apprehension that death, or grievous hurt will be the consequence, if the right of private defence is not exercised.
This right commences when.
reasonable apprehension of danger to the property commences and its duration, as prescribed in section 105, in case of defence against criminal trespass or mischief, continues as long as the offender continues in the commission of such offence.
Section 106 extends the right of private defence against deadly assault even when there is risk of harm to innocent persons.
In the case in hand it is undoubtedly true that the accused persons are found to have raised the bund after the rainfall of September 4, 1961.
But it is indisputable that the occupiers had ample opportunity of approaching the public authorities concerned if they felt that their right had been encroached upon.
it is noteworthy that the accused persons had accomplished the raising ,of the bund long before the occupiers noticed it.
A civil suit had already been instituted by them as far back as 1957 in respect of their right to cultivate the Kunta.
In that suit a permanent in.
junction had been sought against the defendants and their agents etc., restraining them from interfering with the plaintiffs possession and enjoyment of the disputed land.
Damages amounting to Rs. 300/ were also claimed in that suit for loss suffered by the plaintiffs as a result of trespass alleged to have been committed by the defendants on the said land.
This suit was pending at the time of the occurrence in question and as observed earlier in February, 1960 both sides had secured injunctions in this suit.
The police authorities had also been approached by the occupiers with a complaint against the recent raising of the bund by the accused persons a couple of days prior to the present occurrence.
If the Sub Inspector concerned was guilty of grave dereliction of duty (as in our opinion he clearly was) the higher authorities could easily have been approached by the occupiers and their supporters.
Even the civil court could have been moved with a complaint that the accused persons were interfering with the occupiers ' possession and enjoyment of the Kunta.
But instead of having recourse to these steps the occupiers and their supporters decided to go to the spot in large numbers fully determined to remove the bund by use of force.
When this attempt was foiled by the accused persons with show of force the party of the prosecution witnesses mercilessly beat up some of the accused persons who were advanced in age.
This conduct on the part of the occupiers and their supporters was, in our opinion, sufficient, on the facts and circumstances of this case, to give rise to a reasonable apprehension in the mind of accused No. 10 that the victims of this assault would have been killed had he not exercised the right of private defence.
The use of the gun by accused No. 10 against the members of the opposite faction would thus seem to be justified.
It may be 439 recalled that accused No. 1 aged about 60 years, who is the father in law of accused No. 10 had received as many as 10 injuries mostly on vital parts of the body and accused No. 2 about 50, years old had also been subjected to severe beating.
In a situation like this it is not possible for an average person whose mental excitement can be better imagined than described, to weigh the position in golden scales and it was, in our opinion, wellnigh impossible for the person placed in the position of accused No. 10 to take a calm and objective view expected in the detached atmosphere of a court, and calculate with arithmetical precision as to how much force would effectively serve the purpose of selfdefence and when to stop.
It appears that the persons against whom the gun was used were the real aggressors from whom accused No. 10, agitated in mind as he must be at that time, apprehended grave danger to the lives of the other accused persons and ultimately to himself.
We are, therefore, satisfied that accused No. 10 was fully justified in using his gun in exercise of the right of private defence against the party of the prosecution wit nesses who had come to the spot in support of the occupiers to use force in removing the bund and who actually did use it and mercilessly beat up the accused persons and that accused No. 10 did not exceed this right.
The fact that the plea of self defence was not raised by accused No. 10 and that he had on the contrary pleaded alibi does not in our view, preclude the Court from giving to him the benefit of the right of private defence, if, on proper appraisal of the evidence and other relevant material on the record, the Court concludes that the circumstances in which he found himself at the relevant time gave him the right to use his gun in exercise of this right.
When there is evidence proving that a person accused of killing or injuring another acted in the exercise of the right of private defence the Court would not be justified.
in ignoring that evidence and convicting the accused merely because the latter has set up a defence of alibi and set forth a plea different from the right of private defence.
The analogy of estoppel or of the technical rules of civil pleadings is, in cases like the present, inappropriate and the Courts are expected to administer the law of private defence in a practical way with reasonable liberality so as to effectuate its underlying object, bearing in mind that the essential basic character of this right is preventive and not retributive.
The approach of the High Court in this matter seems to us to be erroneous.
We accordingly allow the appeal and acquit the appellants.
V.P.S. Appeal allowed.
| IN-Abs | With respect to a kunta, which was government property, certain persons who had occupied a part of the land in the kunta and the accused, were asserting their respective claims, the former to the use of the land in the kunta for cultivation and latter, to the use of the kunta as a source of irrigation.
The occupiers and accused belonged to opposite political factions.
A suit was filed by the occupiers and the civil court passed two orders of injunction, one restraining the accused from interfering with the occupiers ' possession, and the other, restraining the occupiers from opening sluices in the bund of the kunta.
While the suit was pending the occupies raised corps on their land and the accused raised a new bund.
Since their crops were being damaged as a result of the raising of the new bund, the occupiers approached the police 'authorities and tahsildar for the removal of the bund, but they did not give any effective help.
The accused were not willing to allow the removal of the bund without any Government order.
Thereupon, the occupiers and their supporters, numbering not less than twenty went to the spot to remove the bund by force, but the accused were present at the spot determined not to allow the bund to be removed.
In the fight that ensued, the first accused, aged about 60 years, received ten injuries on the vital parts of his body and the Civil Assistant Surgeon who attended on him thought it was neces sary to take a dying declaration from him.
The second accused who was about 50 years old, was also subjected to severe beating.
Some of the other accused also received injuries.
The tenth accused, who had a gun in his hand, and who was the son in law of the first accused, shot at the actual aggressors and killed three of them and injured another.
The party of the occupiers asserted that they went to the scene of occurrence unarmed and with the intention of peacefully persuading the accused to remove the bund and that when beaten by the: accused they snatched the sticks and spears from them and retaliated.
The tenth accused put forth a plea of alibi.
The other accused asserted that the party of the occupiers were the aggressors and that they acted in self defence.
Holding that it was not material to consider whether the occupiers 'and their supporters had brought with them sticks or snatched them from the accused, that the accused had attacked first, and that the injuries to the accused did not give rise to any right of private defence, the High Court convicted some of the accused for the offence under sections 147 I.P.C., to, the offence under section 148 I.P.C., and the tenth accused for the offences of murder and grievous hurt with a dangerous weapon.
In appeal to this Court, HELD : (1 ) When they went to the scene, the occupiers knew that determined not to allow the removal of the bund without an order from determined not to allow the removal of the bund without an order 'from the Government authorities.
In the circumstances the occupiers and their 424 supporters must have gone to the kunta fully armed, and it was not possible to accept their version.
[434 E G] (2) The occupiers moved in the matter only after the new bund was raised by the accused.
They had ample opportunity of approaching public authorities to have the bund removed.
When the occupiers and their supporters found that the police were guilty of a grave dereliction of their duty, they could have approached the higher authorities or the civil court in which the suit was pending.
Instead of having recourse to those steps they decided to go to the scene in large numbers fully determined to remove the bund by force.
When that attempt was foiled by the accused with show of force, the members of occupiers ' party mercilessly beat up some of the accused persons who were advanced in age.
In such a situation it was not possible for an average person placed in the position of the tenth accused, to take a calm and objective view and calculate with arithmetical precision as to how much force would effectively serve the purpose of self defence and when to stop.
He only used the gun against the real aggressors from whom he apprehended grave danger to the lives of the other accused persons and to himself.
Therefore, he was fully justified in using his gun in the exercise of the right of private defence against the party of the occupiers.
[438 C D, E H; 439 A E] Except as against acts of public servants acting in good faith and when there is time to have recourse to the protection of public authorities, under section 97 I.P.C., every person has a right to defend : (1) his own body and the body of any other person against any offence affecting the human body, and (2) the property of himself or of any other person against theft, robbery, mischief, of criminal trespass.
Such a right is basically preventive and not punitive, and, nothing is an offence which is done in the exercise of the right.
Under section 100 one of the circumstances in which the right of private defence of the body extends to the voluntary causing of death of the assailant, is, if the assault, which occasions the exercise of the right, reasonably causes the apprehension that death or grievous hurt would otherwise be the consequences thereof.
[437 B D, E F] (3) When there is evidence proving that a person accused of killing or injuring another acted in the exercise of the right of private defence, the court would not be justified in ignoring that evidence and convicting the accused merely because he had set up a defence of alibi and set forth a plea different from the right of private defence.
Courts are expected to administer the law of private defence in a practical way with reasonable liberality so as to effectuate its underlying object.
Therefore, the Court was not precluded from giving the tenth accused the benefit of the right of private defence.
[439 F H]
|
Appeals Nos. 397, 400 to 402, 404 to 417, 422 to 4.41, 451, 1158 to 1161, 1176, 1178 to 1181, 1204, 1207 and 1407 of 1969.
Appeals from the judgments and orders dated January 6, 1969 of the Madras High Court in Writ petitions Nos. 846 of 1968 etc.
K. K. Venugopal, K. R. Nambiar and A. section Nambiar, for the appellants (in C.As.
Nos, 397, 400 to 402, 422,, 423, 441 and 451 of 1969).
M. C. Chagla, V. Subramaniam, V. T. Gopalan, Radharani, C. section Prakasa Rao and K. Jayaram, for the appellant I s (in.
404 to 417, 1179, 1180 of 1407 of 1969).
M. K. Ramamurthi, Shyamala Pappu and Vineet Kumar, for the appellant (in C.A. No. 1176 of 1969).
R. V. section Mani, for the appellants (in C.As.
424 to 428, 1158 to 1161 and 1207 of 1969).
A. K. Sen, C. A. Prakasa Rao and R. Gopalakrishnan, for the appellants (in C.As.
429, 431 to 438, 440, 441, 1178 and 1181 of 1969).
C. section Prakasa Rao, A. R. Ramanathan and R. Gopalakrishnan, for the appellant (in C.A. No. 430 of 1969).
507 C. section Prakasa Rao, R. Gopalakrishnan and Sudhir Khanna, for the appellant (in C.A. No. 439 of 1969).
C. section Prakasa Rao, K. K. Venugopal and R. Gopalakrishnan, for the appellant (in C.A. No. 1204 of 1969).
Niren De, Attorney General for India and A. V. Rangam, for the respondents (in C .
A. No. 397 of 1969).
section V. Gupte and A. V. Rangam, for the respondents (in C.A. No. 400 of 1969).
A. V. Rangam, for the respondents (in C.A. Nos. 401, 402, 404 to 417, 422 to 441, 451, 1158 to 1161, 1176, 1178 to 1181, 1204, 1207 and 1407 of 1969).
The Judgment of the Court was delivered by Hegde, J.
These 52 appellants are private stage carriage operators in the State of Tamil Nadu.
They have been operating in various routes in that State.
Some of those routes are proposed to be rationalised.
A draft scheme of nationalisation has been prepared and published under section 68 (C) of the Motor Vehicles Act (Central Act IV of 1939) (to be hereinafter referred to as 'the Act ').
The validity of the draft scheme was challenged by the appellants before the High Court of Madras under article 226 of the Constitution.
Incidentally the validity of some of the provisions of the amending Act XVIII of 1968 (Madras Act) also came to be challenged in those petitions.
A division bench of the Madras High Court consisting of Anantanarayanan C.J. and Natesan J. have dismissed those petitions.
As against the decision of the High Court these appeals have been brought on the strength of the certificates issued by the High Court.
In these appeals we are primarily concerned with the validity of the draft scheme under challenge.
The ground on which it is challenged is that the opinion requisite Under section 68 (C) of the Act was not formed by the State Government but by the Secretary to the government in the Industries, Labour and Housing Department, acting in pursuance of the powers conferred on him under rule 23(A) of the Madras Government Business Rules (to be, here inafter referred to as 'the Rules ').
The contention of the appellants is that the said rule is ultra vires the provisions of the Consti tution.
There is no dispute that if the rule in question is valid, the challenge directed against the &aft scheme must fail.
The High Court has opined that that rule is a valid rule.
It is the correctness of that conclusion that is primarily in issue in these, appeals.
508 Section 68(C) prescribes : "Where any State transport undertaking is of opinion that for the purpose of providing an efficient, adequate, economical and properly coordinated road transport service, it is necessary in the public interest that road transport services in general or any particular class of such service in relation to any area or route or portion .thereof should be run and operated by the State transport undertaking, whether to the exclusion, complete or partial of other persons or otherwise, the State transport undertaking may prepare a scheme giving particulars of the nature of the services proposed to be rendered, the area or route proposed to be covered and such other particulars respecting thereto as may be prescribed, and shall cause every such scheme to be published in the Official Gazette and also in such other manner as the State Government may direct." This section requires that the State transport undertaking must form the opinion contemplated therein.
In the State of Tamil Nadu, the State transport undertaking is a department of the State government.
Therefore the necessary opinion should have been formed by the State government.
It was urged on behalf of the appellants that under our constitutional set up, the requisite opinion could have been formed either by the Council of Ministers or the Minister to whom the business in question had been allocated under the 'Rules '.
The same could not have been formed by the 'Secretary who is merely an official and that too by the Secretary who is not the head of the department to which the functions under the Act had been assigned.
The contentions advanced on behalf of the appellants proceed thus : The executive power of the State vests in the Governor (article 154).
In the exercise of that power he has to be aided and advised by the Council of Ministers with the Chief Minister at the head (article 163(1)) but the Governor can make rules for more convenient transaction of the business of the government of the State and for the allocation among Ministers of the said business in so far as it is not business with respect to which the Governor is by or under the Constitution required to act in his discretion, (article 166(3)).
A Minister can only deal with the business that has been allocated to him by the Governor under 'the Rules '.
He is not competent to deal with any other business.
Motor Vehicles Act has been allocated to the Home Department.
Mr. Karunanidhi, the Transport Minister was not in charge of the Home Department.
Therefore his department could not have dealt with functions arising under the Act.
Further the Governor could not have allocated any business to a Secretary.
Hence in making rule 23(A), the Governor exceeded the powers conferred on him under article 166(3).
509 On the other hand, it was urged on behalf of the State of Tamil Nadu that originally the functions under the Motor Vehicles Act had been allocated to the Home Department but when Mr. Annadurai formed the D.M.K. government in Tamil Nadu in 1967, the Home Department as such was not allocated to any Minister.
The various subjects included in that department were split up and distributed amongst the various Ministers.
Transport was allocated to Mr. Karunanidhi.
Motor Vehicles Act as such was not allocated to any Minister.
The department of Transport included functions under the Motor Vehicles Act as well.
Ever since the D.M.K. ministry was formed, the functions under the Motor Vehicles Act were dealt with by the Transport ministry.
At the instance of the Transport Minister, Mr. Karunanidhi, Governor framed rule 23(A) for the more convenient discharge of the business.
On behalf of the government, it was further urged that article 166(3) has two, parts namely (1) rules for the more convenient transaction of the business of the government of the State and (2) rules relating to allocation of business of the State among the Ministers.
It was said that after allocating the business of the government among 'various Ministers, it was open to the Governor on the advice of the ministry to make rules for the convenient discharge of the business allocated.
Rule 23(A) is one such rule made under article 166(3).
Hence its validity is not open to question.
The impugned rule 23(A) was introduced for the first time by G.O.Ms.
No. 2715 Public dated 22 12 67.
Under sub cl.
(1) of that rule, it is provided that powers and functions which State transport undertaking may exercise under section 68(C) of the Act shall be exercised and discharged on behalf of the State government by the Secretary to the Government of Madras in the Industries.
Labour and Housing Department.
The rule further provides that cases relating to such powers and functions of the State transport undertaking under section 68(C) need not be submitted to the Minister in charge.
Under sub cl.
(2) of that rule, the powers and functions of the State government under section 68(D) of the Act and the rules relating thereto are directed to be exercised and discharged by the Secretary to the government in the Home Department.
Rule 4 of 'the Rules ' deals with allocation and disposal of business.
It provides.
that the business of the Government shall be transacted in the department specified in the 1st Sch.
and classified and distributed between those departments as laid down therein.
Rule 5 says that Governor shall, on the advice of the Chief Minister allot the business of the government among the Ministers, assigning one or more departments to the charge of a Minister but the proviso to that rule says that nothing in that rule shall prevent the assigning of one department to the charge of more than one Minister.
510 Rule 6 prescribes that each department of the secretariat shall be under a Secretary who shall be the official head of the department.
Under rule 7, the Council of Ministers constituted under Art 163(1) is held collectively responsible for all the executive orders issued in the name of the Governor in accordance with rules, whether such orders are authorised, by an individual Minister on a matter pertaining to his portfolio or as a result of the discussion at the meeting of the Council of Ministers.
Rule 9 provides that without prejudice to the provisions of rule 7, the Minister in charge of a department shall be primarily responsible for the disposal of the business pertaining to his department.
Section III of the "Rules" containing rules 21 to 30 deal with the departmental disposal of business.
Rule 21 says that except as otherwise provided by any other rule cases shall ordinarily be disposed of by or under the authority of the Minister in charge who may by means of standing orders give such directions as he may think fit for the disposal of cases in the department; copies of such standing orders shall be sent to the Governor and the Chief Minister.
Rule 22 provides that each Minister shall by means of standing orders arrange with the secretary of the department what matters or class of matters are to be brought to his personal notice; copies of such standing orders has to be sent to the Governor and the Chief Minister.
Rule 23 prescribes that except as otherwise provided in the rules, all cases shall be submitted to the Minister in charge by the secretary of the department to which they belong.
Then comes rule 23(A) to which reference has already been made.
The first question that has to be decided is whether the functions under the Motor Vehicles Act had been assigned to Mr. Karunanidhi, the Minister for Transport.
It is true that when the various departments were reorganized in 1961, Motor Vehicles Act as well as Transport were included in the Home Department.
But when the D.M.K. ministry came to power after the 1967 general elections, the Home Department as such was not allocated to any Minister.
The various subjects included in that department were distributed amongst several Ministers.
Transport was allocated to the Transport Minister.
Motor Vehicles Act as such was not allocated to any Minister.
The allocation of business among the various Ministers appears to have been made under broad heads.
In 1961 while allocating subjects to the various departments there was a detailed and exhaustive enumeration of the subjects.
But that method was not adopted in 1967 while distributing the business of the government among the various Ministers.
The functions under the Act undoubtedly relate to Transport department.
It cannot be assumed that functions under the Act had not been assigned to any Minister.
It is proved that those functions were being discharged by the Minister for Transport. 'Hence we agree with the High Court that those functions had been 511 allocated to the Transport Minister and that the State transport undertaking was being run by the Transport ministry.
Mr. Karunanidhi has in his affidavit filed before the High Court sworn to the fact that rule 23(A) was framed at his instance.
Admittedly he could have assigned the functions under section 68(C) of the Act to the Transport Secretary by making a standing order under rule 22.
If he could have done that, we fail to see why he could not advise the Governor through the Chief Minister to make rule 23 (A).
It was urged on behalf of the appellants that the parliament has conferred powers under section 68(C) of the Act to a designated authority.
That power can be exercised only by that authority and by no one, else.
The authority concerned in the present case is the State government.
The government could not have delegated its statutory functions to any one else.
The government means the Governor aided and advised by his Ministers.
Therefore the required opinion should have been formed by the Minister to whom the business had been allocated by 'the Rules '.
It was further urged that if the functions of the Government can be discharged by any one else, then the doctrine of ministerial responsibility which is the very essence of the cabinet form of government disappears; such a situation is impermissible under our Constitution.
We think that the above submissions advanced on behalf of the appellants are without force and are based on a misconception of the principles underlying our Constitution.
Under our Constitution, the Governor is essentially a constitutional head; the administration of State is run by the Council of Ministers.
But in the very nature of things, it is impossible for the Council of Ministers to deal with each and every matter that comes before the Government.
In order to obviate that difficulty the Constitution has authorised the Governor under sub article
(3) of article 166 to make rules.
for the more convenient transaction of business of the government of the State and for the allocation amongst its Ministers, the business of the government.
All matters excepting those in which Governor is required to act in his discretion have to be allocated to one or the other of the Ministers on the advice of the Chief Minister.
Apart from allocating business among the Ministers, the Governor can also make rules on the advice of his Council of Ministers for more convenient transaction of business.
He can, not only allocate the various subjects amongst the Ministers but may go further and designate a particular official to discharge any particular function.
But this again he can do only on the advice of the Council of Ministers.
512 The cabinet is responsible, to the legislature for every act ion taken in any of the ministries.
That is the essence of joint responsibility.
That does not mean that each and every decision must be taken by the cabinet.
The political responsibility of the Council of Ministers does not and cannot predicate the personal responsibility of the Ministers to discharge all or any of the governmental functions.
Similarly an individual Minister is responsible to the legislature for every action taken or omitted to be taken in his ministry.
This again is a political responsibility and not personal responsibility.
Even the most hard working minister cannot attend to every business in his department.
If he attempts to do it, he is bound to make a mess of his department.
In every well planned administration, most of the decisions are taken by the civil servants who are likely to be experts and not subject to political pressure.
The Minister is not expected to burden himself with the day to day administration.
His primary function is to.
lay down the policies and programmes of his ministry while the Council of Ministers settle the major policies and programmes of the 'government.
When a civil servant takes a decision, he does not do it as a delegate of his Minister.
He does it on behalf of the government.
It is always open to a Minister to call for any file in his ministry and pass orders.
He may also issue directions to the officers in his ministry regarding the disposal of government business generally or as regards any specific case.
Subject to that over all power, the officers designated by the 'Rules ' or the standing orders, can take decisions on behalf of the government.
These officers are the limbs of the government and not its delegates.
In Emperor vs Sibnath Banerji and ors.
(1) construing section 5 9 (3) of the Government of India Act, 1935, a provision similar to article 166(3), the Judicial Committee held that it was within the competence of the Governor to empower a civil servant to transact any particular business of the government by making appropriate rules.
In that case their Lordships further observed_ that the Ministers like civil servants are subordinates to the Governor.
In Kalyan Singh vs State of U.P.(2) : this Court repelling the contention that the opinion formed by an official of the government does not fulfil the requirements of section 68 (C) observed : "The opinion must necessarily be formed by somebody to whom, under the rules of business, the conduct of the business is entrusted and that opinion, in law, will be the opinion of the State Government.
It is stated in the counter affidavit that all the concerned officials in the Department of Transport considered the draft scheme and the said scheme was finally approved by the Secretary of the Transport Department before the (1) L. R. 72 T. A. p. 241.
(2) [1962] Sup.
(2) section C. R. p .76.
513 notification was issued.
It is not denied that the Secre tary of the said Department has power under the rules of business to act for the State Government in that behalf.
We, therefore, hold that in the present case the opinion was formed by the State transport undertaking within the meaning of section 68 (C) of the Act, and that, there was nothing illegal in the manner of initiation of the said Scheme".
In Ishwarlal Girdharlal Joshi etc.
vs State of Gujarat and anr.
( 3 ) this Court rejected_the contention that the opinion formed by the Deputy Secretary under section 17(1) of the Land Acquisition Act cannot be considered as the opinion of the State government.
After referring to the rules of business regulating the government business, this Court observed at p. 282 "In our case the Secretaries concerned were given the jurisdiction to take action on behalf of Government and satisfy themselves about the need for acquisition under section 6, the urgency of the matter and the existence of waste and arable lands for the application of sub sections
(1) and (4) of section 17.
In view of the Rules of business and the Instructions their determination became the determination of Government and no exception could be taken." In Capital Multi purpose Co operative Society vs State of Madhya Pradesh and Ors.
(1), this Court dealing with the scope of section 68 (D) of the Act observed that the State Government obviously is not a natural person and therefore some natural person has to give hearing on behalf of the State Government and hence the hearing given by the special secretary pursuant to the power conferred on him by the business rules framed under article 166(3) is a valid hearing.
As mentioned earlier in the very nature of things, neither the Council of Ministers nor an individual Minister can attend to the numerous matters that come up before the Government.
Those matters have to be attended to and decisions taken by various officials at various levels.
When those officials discharge the functions allotted to them, they are doing so as limbs of the government and not as persons to whom the power of the government had been delegated.
In Halsbury Laws of England Vol.
I 3rd Edn.
at p. 170, it is observed : "Where functions entrusted to a Minister are performed by an official employed in the Minister 's department (1) [1968] 2, section C R. p. 266.
(2) C. A. 2201 of 1966 decided on 30.3.1967.
L8Sup CI/70 3 514 there is in law no delegation because constitutionally the act or decision of the official is that of the Minister.
" Similar view has been expressed in "Principles of Administrative Law" by Griffith and Street.
That is also the view taken by Sir Ivor Jennings in his "Cabinet Government".
For the reasons mentioned above, we are of opinion that the functions under the Motor Vehicles Act had been allocated by the Governor to the Transport Minister under "the Rules" and the Secretary of that ministry had been validly authorised under rule 23 A to take action under section 68 (C) of the Act.
The validity of some of the provisions of Madras Act 18 of 1968 which amended the Act was canvassed before us,.
It is not necessary to go into those questions for deciding the validity of the impugned scheme.
Those questions can be more appropriately gone into and decided if 'and when action is taken on the strength of those provisions.
Hence we leave open those questions.
In the result these appeals fail and they are dismissed with costs hearing fee one set.
R.K.P.S. Appeals dismissed.
| IN-Abs | A draft scheme for the nationalisation of certain transport routes was prepared and published by the respondent State Government under Section 68(C) of the Motor Vehicles Act 4 of 1939.
The validity of the scheme was challenged by the appellants, who were private stage carriage operators, in a petition under Article 226 of the Constitution but the peti tion was dismissed by the High Court.
In appeal to this Court the validity of the scheme was mainly challenged on the ground that the opinion requisite under Section 68(C) was not formed by the State Government but by the Secretary to the Government acting pursuant to powers conferred on him under Rule 23 A of the Madras Government Business Rule.
It was further contended that the said rule was ultra vires, the provisions of the Constitution; Parliament has conferred powers under Section, 68 C to a designated authority and that power can be exercised only by the authority specified and no one else.
The authority concerned in the present case was the State Government and it could not have delegated is statutory 'functions to any one else.
By Government was meant the Governor aided and advised by his Ministers.
The requisite opinion should therefore have been formed by the Minister to whom the business had been allocated under the Rules.
HELD : The functions under the Motor Vehicles Act had been allocated by the Governor to the Transport Minister under the Rules and the Secretary of that Ministry had been validly authorised under Rule 23 A to take action under section 68(C) of the Act.
In the very nature of things, neither the Council of Ministers nor an individual Minister can attend to the numerous matters that come up before the Government.
Those matters have to be attended to and decisions taken by various officials at various levels.
When those officials discharge the functions allotted to them, they are doing so as limbs of the Government and not as persons to whom the power of the Government had been delegated.
[513 G] Under our Constitution, the Governor is essentially a constitutional head; the administration of the State is run by the Council of Ministers.
in order to obviate the difficulty that would arise if the Council of Ministers had to deal with every matter, the Constitution has authorised the Governor under sub article (3) of the Article 166 to make rules for the more convenient transaction of the business of the Government of the State and for the allocation amongst its Ministers of the business of Government.
All matters excepting those in which the Governor is required to act in his discretion have to be allocated to one or the other of the Ministers on 506 the advice of the Chief Minister.
Apart from allocating business among the Ministers, the Governor can also make rules on the advice of his Council of Ministers for more convenient transaction of business.
He can not only allocate the various subjects amongst the Ministers but may go further and on the advice of his Ministers, designate a particular official to discharge any particular function.
[511 F] The cabinet is responsible to the Legislature for every action taken in any of the Ministries.
This is the essence of joint responsibility.
That does not mean that each and every decision must be taken by the cabinet.
The political responsibility of the Council of Ministers does not and cannot predicate the personal responsibility of the Ministers to discharge all or any of the functions of the Government.
Similarly an individual Minister is responsible to, the Legislature, for every action taken or omitted to be taken in his ministry.
This again is a political responsibility and not personal responsibility.
In every well planned administration, most of the decisions are taken by the civil servants who are likely to be experts and not subject to political pressure.
The Minister is not expected to burden himself with the day to day administration.
His primary function is to lay down the policies and programmes of his ministry while the Council of Ministers settle the major policies and programmes of the, Government.
[512 A] Emperor vs Sibnath Banerjee & Ors.
L.R. 72 I.A. p. 241; Kalyan Singh vs State of U.P. [1962] Supp. 2 S.C.R. 76; Ishwarlal Girdharlal Joshi vs State of Gujarat and anr.
, , Capital Multipurpose Cooperative Society vs State of Madhya Pradesh and Ors.
Civil Appeal No. 2201/1966 decided on 30 3 1967; referred to.
|
Appeal No. 2315 of 1966.
Appeal from the judgment and order, dated August 25, 1965 of the Madras High Court in Tax Case No. 216 of 1962 (Reference No. 121 of 1962).
Sukumar Mitra and R. N. Sachthey, for the appellant.
T. A. Ramachandran, for the respondent.
The Judgment of the Court was delivered by Shah, J.
Arunachallam Chettiar whom will hereinafter be called "A Senior" had three wives Valami Achi, Lakshmi Achi and Nachiar Achi.
By Valami Achi he had a son who was also called Arunachallam We will call him "A. Junior".
A Junior married Umayal Achi.
A Senior, A. Junior and the wives of the two members formed a joint Hindu family, possessing a large estate in Ceylon.
A. Junior died on July, 9, 1934.
A Senior died on February 1 23, 1.938, leaving heirs running his two wives Lakshmi Achi and Nachiar Achi and his son 's widow Umayal Achi.
The Revenue authorities in Ceylon levied Rs. 221.743 as estate duty in respect of the estate of A. Junior and Rs. 6,33,601.76 in respect of the estate of A. Senior.
The levy was challenged by the three widows and the dispute was carried to the Judicial Committee of the Privy Council.
The Board set aside the entire levy.
In 1957 the Government of Ceylon deposited in Court the duty which was levied together with Rs. 7,97,072 as interest due from the date on which the estate duty was collected.
After the death of A. Senior, there were disputes between the three widows Lakshman Achi, Nachiar Achi and Uniayal Achi, and each widow adopted a son to her deceased husband.
A suit for, partition of the joint family property was then filed in the Civil Court at Deokotai.
Under a settlement reached on February 17, 1949 between the three widows and the adopted son of A. Junior (whom we will hereinafter call the assessee) was held entitled, to 5/24th share in the estate.
This appeal relates to the liability to income tax on the share of the assessee in the amount of interest paid on the estate duty which was refunded by the Ceylon Government after the Judicial, Committee set aside the order levying the estate duty.
The Income Tax officer, karaikudi brought to tax the, 'assessees share of the amount interest received from the Ceylon Government on the estate duty.
The Income tax Officer rejected the, contention of the assessee that the receipt was of a capital nature,: and that in any case it was a casual receipt and on that account 309 exempt from tax under section 4(3) (vii) of the Income tax Act, 1922The order was confirmed by the Appellate Assistant Commissioner.
The Income tax Appellate Tribunal, however, reversed the order holding that the amount of interest received by the assessee was of a capital nature and was on that account not liable to tax.
The Tribunal referred the following question to the High Court of Madras under section 66(1) of the Income tax Act, 1922 "Whether the sum of Rs. 1,20,830 or Any part thereof is assessable to tax ?" The High Court was of the opinion that the assessee 's share in the interest attributable to the period ending February 17, 1947 was not taxable, but the 'share attributable to the period between that date and the date of payment by the Ceylon Government was taxable.
Against that decision, with certificate granted by the High Court the Commissioner of Income tax has appealed to this Court.
The assessee has not appealed against the opinion insofar as it was held that the receipt to the extent to which it related to a period subsequent to February 17, 1947 is taxable.
In the view of.
the High Court the amounts paid as estate duty must be deemed in law to have come from the joint family, estate and on severance of the joint family status,in February, 1947, each adopted son received his share in the estate then existing as capital.
Counsel for the Revenue countended that the High Court erred in holding that the assessee 's share in the amount of interest received from the Ceylon Government Was of the nature of capital.
Counsel submitted that the character of the receipt which was revenue when received by the joint family, could not be altered when it was divided between the members of the family.
Counsel also contended that this Court has held that the share in the amount of interest on estate duty received by the son adopted by Nachiar Achi was liable to be taxed as income: RM.
Ramanathan Chettiar vs Commissioner of Income tax Madras( ') .
But that case has no relevance here.
for the only argument advanced before the Tribunal and the High Court in that case was.
that the receipt was of a casual,and non recurring nature and was on that account exempt from tax under section 4(3) (vii) of the Income tax Act.
This Court negatived the contention.
The Court declined to consider the argument advanced at the Bar that the share allotted to the adopted son of Nachiar Achi being a share in the estate of A. Senior was of the nature of capital, because the question did not arise out of the order made by the Income tax Appellate Tribunal and was not made the subject matter of 'lie reference.
In RM.
Ramanathan (1) L7Sup.
CI.(NP)70 5 310 Chettiar 's case(1) the question argued before the High Court in this case was not raised before the income tax Appellate Tribunal and was not decided.
After the death of A. Senior the property was held by the three widows as members of the Hindu Undevided family.
Under the Hindu Law it is not predicted of a Hindu Joint family that there must be a male member in existence.
Even after the death of the sole male member, so long as the property which was originally of the Joint Hindu family remains in the hands of the widows of the members of the family and is not divided among them, the joint family continues.
Payment of the estate duty was doubtless made out of the joint family fund and the interest which accrued due, also acquired the character of joint family property when received.
The joint family status came to an end only on February 17, 1947.
On the severance of the joint status the assessee became entitled to a share in the family estate.
The amount of interest on the estate duty accrued as income to the joint family but it was income of the joint family and not of the individual members.
But when a share out of the estate which included the interest on estate duty was received by the assessee it had not the character of income.
Once the.
income was received by the joint family, the amount lost its character of income: it became merged in the joint family assets and became the capital 'Of the family.
The share received by the assessee was therefore a share in the capital of the family.
The share in the joint family property which included interest on the estate duty which accrued prior to February 17, 1947 was rightly held by the High Court to be not of the nature of revenue and accordingly not taxable.
We express no opinion on the correctness of the finding of the High Court that the interest accrued due after February 17, 1947, must be regarded as income to the extent of the share of each of the members of the family.
The appeal fails and is dismissed with costs.
R.K.P.S. Appeal dismissed.
| IN-Abs | The revenue authorities in Ceylon levied estate duty in respect of the estate of A and his son in the hands of their three widows.
The Judicial Committee of the Privy Council set aside the levy and in 1957 the Government of Ceylon deposited in Court the duty which was levied, with interest.
On February 17, 1947, the joint family estate was parti tioned among the three widows and their adopted sons.
The Income tax Officer brought to tax one of the adopted son 's share of the interest received from the Ceylon Government on the estate duty.
The Tribunal reversed the assessment order holding that the amount of interest received by the assessee was of a capital nature and was on that account not liable ' to tax.
on a reference the High Court was of the opinion that the assessee 's share in the interest attributable to the period ending February 17, 1947 was not taxable but the share attributable to the period between that date and the date of payment by the Ceylon Government was taxable.
In the view of the High Court the amounts paid as estate duty had to be deemed in law to have come from the joint family estate and on severance of the joint family status in February 1947 each adopted son received his share in the estate then existing as capital.
The Commissioner appealed to this Court.
It was contended that the character of the receipt which was revenue when received by the joint family could not be altered when it was divided between the members of the joint family.
Dismissing the appeal, HELD : On the severance of the joint status the assessee became entitled to a 'share in the family estate.
The amount of interest on the state duty accrued as income to the joint family but it was income of the joint family and not of the individual members.
But when a share out of the estate which included the interest on estate duty was received by the assessee it had not the character of income.
Once the income was received by the joint family, the amount lost its character of income : it became merged in the joint family estate and became the capital of the amity.
The share received by the assessee was therefore a share in the capital of the family.
Therefore, the share in the joint family property which included interest on the estate duty which accrued prior to February 17, 1947 was rightly held by the High Court to be not of the nature of revenue and accordingly not taxable.
[310 C E] RM.
Ramananthan Chettiar vs Commissioner of Incometax Madras, , distinguished.
[The Court did not express any opinion on the correctness of the finding of the High Court that the interest accrued due after February 17, 1947 must be regarded as income to the extent of the share of each of the members of the family.]
|
ivil Appeal No. 1552 of 1966.
735 Appeal by special leave from the judgment and order dated June 8, 1966 of the Mysore High Court in C.R.P. No. 1118 of 1964.
M. C. Chagla and R. Gopalakrishnan, for the appellant.
M. R. Ramamurthi, section section Javali and M. Veerappa, for the respondent.
The Judgment of the Court was delivered by Vaidailyngam J.
this appeal, by special leave, is against the judgment of the Mysore High Court, dated June 8, 1966 in Civil Revision Petition No. 1118 of 1964.
The respondent land lord filed an application, dated July 6, 1962 under section 21 (1) (j) of the Mysore Rent Control Act, 1961 (Mysore Act XXII of 1961) (hereinafter called the Act) before the Rent Controller for eviction of the tenants (the appellants herein) on the ground that the premises were reasonably and bonafide required by him for the immediate purpose of demolishing and erecting of a new building.
According to the respondent the premises were old and were (not suitable for continued occupation.
The respondent had also stated in his application that he had obtained the necessary licence for erecting a new building after demolition of the existing building and that he had made all preparations for demolition and erection of new buildings on the site.
The appellant tenant contested the claim of the landlord on several grounds.
He pleaded that the premises were not old and that it was quite suitable for occupation and it does not require any re construction or remodelling.
The allegations that the building was old and required to be reconstructed were not bona fide and had been made by the landlord only as a pretext for evicting the tenant.
The tenant further pleaded that the requirement of the landlord was neither reasonable nor bona fide.
In any event, the tenant claimed that he should be entitled to be paid the value of the improvements that had been effected by him.
The Rent Controller, by his order dated January 22, 1964 accepted the claim of the respondent and ordered eviction of the appellant granting the tenant one month 's time for delivering vacant possession.
Though the Consulting Engineer who gave evidence as P.W. 2 on behalf of the respondent had stated that the building was over 60 years old but nevertheless it could go co for about 15 years more, the Rent Controller actually found that the building was more than 50 years old and that it was an old fashioned one.
He further found that when the landlord desired to pull it down and put up a modern building thereon, it could not under the circumstances, be said that his claim was not bona fide or reasonable 736 and that the intention of the landlord in pulling down the building and erecting a new one to get a better return was certainly understandable.
The Rent Controller further found that the landlord had proved that he had sufficient means to construct the building and that he had also obtained the necessary sanction from the Municipality concerned for reconstruction of the building.
In view of all these circumstances, the Rent Controller found that the requirement of the landlord was quite reasonable and bona fide.
Regarding the claim of the tenant for payment of improvements before eviction is ordered, the Rent Controller found that such a claim, even if established, could not stand in the way of the landlord getting possession of the premises.
Ultimately the application filed by the landlord was allowed.
The findings recorded by the Rent Controller were confirmed by the learned District Judge, by his judgment dated October 19, 1964 in A.S. No. 43 of 1964 taken before him by the tenant.
The revision filed by the appellant before the High Court was rejected by order dated June 8, 1966.
Mr. Chagla, learned counsel appearing for the appellant, contended that the interpretation placed by all the Courts on section 21 (j) of the Act was erroneous.
According to the learned counsel, unless the landlord was able to establish that the condition of the building was such that it required immediate demolition and re construction, no eviction of the tenant could be ordered under section 21 (1) (j) of the Act.
On the findings of the Courts, based upon the evidence of the Engineer, that though the building was old it could continue to exist for another 15 years, it should have been held that the conditions mentioned in section 21 (I) (j) were not attracted to justify an order of eviction of the tenant.
Mr. Ramamurthi, learned counsel for the respondent, pointed out that in order to attract section 21 (I) (j) it was not necessary that the landlord should establish that the condition of the building was such that it required to be demolished immediately.
On the other hand, the sub section made it clear that the requirement contemplated was that of the landlord and once his requirement had been held by all the Courts to be reasonable and bona fide, the order passed for eviction of the tenant was fully justified.
Having due regard to the scheme of the Act, we are satisfied that the interpretation placed upon section 21(1)(j) by the High Court is correct.
Section 21 (1), while placing a general embargo against a landlord from evicting a tenant, recognises, in its.
proviso the circumstances under which a landlord could seek recovery of 737 possession of a premises.
The ground upon which the landlord asked for eviction, in the present case, was based on section 21 (1) (j).
The material provision is as follows : "21.
(1) Notwithstanding anything to the contrary contained in any other law or contract no order or decree for the recovery of possession of any premises shall be made by any court or other authority in favour of the landlord against the tenant: Provided that the court may on an application made to it, make an order for the recovery of possession of a premises on one or more of the following grounds only, namely: . . . . . (j) that the premises are reasonably and bona fide required by the landlord for the immediate purpose of demolishing them and such demolition is to be made for the purpose of erecting a new building in place of the premises sought to be demolished; . . . . . .
According to Mr. Chagla, the words 'reasonably and bona fide required ', occurring in this clause, must be interpreted to have reference to the condition of the building, the demolition of which is sought to be made and those words have no reference to any intention entertained by the landlord.
The mere fact that a landlord may bona fide and reasonably entertain an idea of demolishing the building and reconstructing the same with a view to putting the property to a more profitable use after construction, will not satisfy the requirements of the said clause.
That is, according to the learned counsel, the condition of the building must be such that it is immediately necessary to demolish it, in which case alone eviction under cl.
(j) could be ordered.
We are not inclined to accept this construction sought to be placed by the appellant on the clause in question.
The proviso to section 21 (1) enumerates the various circumstances under which a landlord may seek to recover possession of the property from his tenant.
The requirement contemplated under clause (j) of the proviso to sub section
( 1 ) is that of the landlord and it does not have any reference to the condition of the building as such.
What is necessary under that clause is that the landlord must satisfy the Court that he reasonably and bona fide requires the premises for the immediate purpose of demolishing it and the demolition is for the purpose of erecting a new building in the place of the old one.
No doubt, as to whether the landlord 's requirement is reason 738 able and bona fide has to be judged by the surrounding circumstances, which will include his means for reconstruction of the.
building, and other steps taken by him in that regard.
In considering the reasonable and bona fide requirement of the landlord under this clause, the desire of the landlord to put the property to a more profitable use after demolition and reconstruction is also a factor that may be taken into account in favour of the landlord.
In our opinion, it is not necessary that the landlord should go further and establish under this clause that the condition of the building is such that it requires immediate demolition.
That the condition of the property may be such which requires immediate demolition is emphasized in cl.
(k) of the proviso.
When such a specific provision has been made in cl.
(k), the condition of the building cannot come into the picture nor could it have been dealt with again in cl.
So the requirement under cl.
(j) is that of the landlord and cannot have any reference to the building.
This Court, in Neta Ram vs Jiwan Lal (1) in interpreting no doubt a slightly differently worded provision in section 13(3)(a)(iii) of the Patiala and East Punjab States Union Urban Rent Restriction Ordinance, 2006 B.K. (8 of 2006 BK) held that one of the circumstances which could be taken into account in considering the requirements of the landlord with reference to the existing building is 'the possibility of its being put to a more profitable use after construction '.
In the case 'before us all the Courts have concurrently held that the requirement of the landlord is reasonable and bona fide and that he had obtained the necessary sanction from the municipality concerned and that the landlord had also the means for reconstruction of the building.
If the landlord does not commence demolition of the premises within the period specified in the order of the Court, the tenant is given a right under section 26(1) to issue a notice to the landlord of his intention to occupy the pre mises from which he had been evicted and also to apply to the Court for relief if the landlord does not comply with his request.
Again under section 27, the tenant has got a right to occupy the new building on its completion provided he satisfies the requirements contained in that section.
Under section 2 8 (I), the landlord is bound to intimate the tenant from whom he had received a notice under section 27 the date on which the erection of the new building will be completed from which date the tenant will be entitled to occupy the same.
Mr. Chagla has referred us to a decision of the Madras High Court in Mehsin Bhai vs Hate & Company (2).
The section which came up for consideration before the Madras High Court was section 14(3) of the Madras Buildings (Lease and Rent Control) Act, 1960 (Act XVIII of 1960) which was as follows: (1) [1962] Supp. 2 S.C.R. 623.
(2) 739 14(1)(b) that the building is bona fide required by the landlord for the immediate purpose of demolishing it and such demolition is to be made for the purpose of erecting a new building on the site of the building sought to be demolished, pass an order directing the tenant to deliver possession of the building to the landlord before a specified date.
" That clause is substantially similar to section 21(1)(j) of the Act.
In the Madras case it is seen that the building from which the tenant was sought to be evicted was in good condition and there was no danger of its failing for another 20 years though the building was old.
Under those circumstances when the landlord applied under section 14(1) (h) of the Madras Act for eviction on the ground that he wished to demolish the building for the purpose of erecting a new building thereon, the High Court affirmed the decision of the Subordinate Court declining relief to the landlord, Though the learned Judge states that landlords May bona fide require such buildings, particularly old buildings in their own interest for demolition and reconstruction, he holds that it is equally possible that the mere fact that a building is old may be taken advantage of by a landlord to put forth such pretext, his real object being ulterior and not bona fide ,for the purpose of reconstruction.
We have no hesitation in agreeing with the learned Judge 's observation that the landlord must prove the reasonableness and bona fide nature of his requirement.
But, if the learned Judge intended to Iay down a proposition of law that under section 14 ( I ) (b) of the Madras Act, similar to section 21 ( 1) (j) of the Act a landlord cannot recover possession of the property for the purpose of re construction so as to put the property to a more profitable use, we are of the view that the decision of the Madras High Court must be considered to be erroneous.
There is absolutely no justification for putting such a narrow interpretation on the clause in question.
Mr. Chagla further urged that before his client is evicted his, claim for compensation should have been considered by the Rent Controller.
It is enough to say that, as pointed out by the High Court, that claim does not arise for consideration in these proceedings.
We may also state that a further contention regarding them validity of the notice to quit issued by the landlord which was taken before the High Court and held against the appellant, has not been canvassed before us.
In the result, the appeal fails and is dismissed with costs.
The petitioner/appellant undertaken to vacate the premises within a month from today.
Y.P. Appeal dismissed.
| IN-Abs | Under section 21 (1) (j) of the Mysore Rent Control Act, 1961 the court may on an application order the recovery of possession of any premises in favour of the landlord, if "the premises are reasonably and bona fide required by the landlord for the immediate purpose of demolishing them and such demolition is to be made for the purpose of enacting a new building in place of the premises sought to be demolished,".
The respondent landlord applied under section 21(1)(j) for eviction of the tenants appellants, claiming that the premises were reasonably and bona fide required by him for the immediate purpose of demolishing and erecting of a new building, that the premises were old and were not suitable for continued occupation.
The respondent claimed to have obtained the necessary licence and to have made all preparations for demolishing the existing., building and erecting new building.
The appellants tenants contested the claim.
The Rent Controller accepted the respondent landlord 's claim and ordered eviction, which in appeal, and further revision to the High Court was upheld.
In appeal to this Court for the appellant tenant, it was contended that unless the landlord was able to establish that the condition of the building was such that it required immediate demolition and reconstruction, no eviction of the tenant could be ordered under section 21 (1) (j).
Rejecting this contention and dismissing the appeal, HELD : The requirement contemplated under clause (j) of the proviso to sub section
(1) is that of the landlord and it does not have any reference to the condition of the building as such.
What is necessary under that clause is that the landlord must satisfy the Court that he reasonably and bona fide requires the premises for the immediate purpose of demolishing it and such demolition is for the purpose of erecting a new building in the place of the old one.
No doubt, whether the landlord 's requirement is reasonable and bona fide has to be judged in the light of the surrounding circumstances, which will include his means for reconstruction of the building, and other steps taken by him in that regard.
[737 G, H] In considering the reasonable and bona fide requirements of the landlord under this clause, the desire of the landlord to put the property to a more profitable use after demolition and reconstruction is also a factor that may be taken into account in favour of the landlord.
It is not necessary that the landlord should go further and establish under this clause that the condition of the building is such that it requires immediate demolition.
[738 D] Neta Ram vs Jiwan Lal, [1962] Supp.
2 S.C.R. 623, referred to.
Mehsin Bhai vs Hale & Company, (1964) II M.L.J. 147, contra observation disapproved.
|
il Appeal No. 1178 of 1966.
Appeal by special leave from the judgment and order dated June 15, 16, 1965 of the Bombay High Court in Special Civil Application No. 2061 of 1963.
V. A. Seyid Muhammad and section P. Nayar, for the appellant.
N. N. Keswani for the respondents.
This appeal by special leave is directed against the decision of a Division Bench of the Bombay High Court allowing 441 a petition under articles 226 and 227 of the Constitution by Arjandas Dayaram Vachhani challenging the order of the Deputy Chief Settlement Commissioner (with delegated powers of Chief Settlement Commissioner) under the (44 of 1954), hereafter referred to as the Act disallowing the writ petitioner 's revision from the order of the Settlement Officer (with delegated powers of Settlement Commissioner) which had affirmed on appeal the order of the Assistant Settlement Officer.
The writ petitioner 's case was held to fall within r. 19(3) of the Displaced Persons (C & R) Rules, hereafter called the Rules, made by the Central Government under section 40 of the Act.
The question which falls for decision is a very short one and it relates to the meaning and effect of r. 19(3).
The facts are not in dispute.
Kishanchand Dayaram Vachhani and his four sons Arjandas Dayaram Vachhani, Dayaram A. Vachhani, Ramchand Dayaram Vachhani and Kanayalal Dayaram Vachhani constituted a joint Hindu family when, as a result of partition of the country in 1947, they migrated from Sind (now in Pakistan) to India.
After their migration Kishanchand Dayaram Vachhani, the father, made an application for vertification of claim in respect of the properties left by the joint Hindu family in Sind.
This claim was duly verified.
It is unnecessary to make a detailed reference to the history of the case.
Suffice it to say that on October 28, 1961 'Shri Purshottam Sarup, Deputy Chief Settlement Commissioner (with delegated powers of Chief Settlement Commissioner) (Rehabilitation Department) allowed the appeal preferred by Arjandas Dayaram Vachhani from the order of Shri H. K. Chaudhary, Regional Settlement Commissioner, Bombay, dated May 14, 1961 and after setting aside the impugned order, directed that the property.
in question be treated as joint family property in which the parties would be entitled to apportionment as members of joint Hindu family in accordance with the Rules.
Pursuant to this direction Shri K. section Bedi, Assistant Settlement Officer, Bombay, on June 12, 1963 directed that the case be re processed.
Shri Arjandas Dayaram Vachhani appealed from this order to the Settlement Officer (with delegated powers of the Regional Settlement Commissioner) but without success.
That officer recorded a fairly exhaustive order dated October 21, 1963 in which the entire history of the case was noticed.
A revision was taken to the Deputy Chief Settlement Commissioner, Shri Purshottam Sarup (with delegated powers of Chief Settlement Commissioner).
That officer also went into the controversy at some length and by his order ' dated February 13, 1964 disallowed Shri Arjandas Dayaram Vachhani 's claim both under r. 20 and r. 19(2).
of the Rules.
It was pointed out that in his (Shri Purshottam Sarup 's) earlier order it had 442 been clearly stated that the parties constituted a joint Hindu family and were entitled to apportionment.
The father and the sons could not be treated as separate and that their claim as tenants in common or as co sharers was contrary to his earlier decision which had remained unchallenged.
In view of sub r.
(3) of r. 19, r. 19(2) was held inapplicable.
On an application under articles 226 and 227 of the Constitu tion the High Court disagreed with the view of the Chief Settlement Commissioner and held r. 19(3) to be inapplicable when the joint Hindu family consists only of father and his sons.
On this view the order of the departmental authorities was set aside.
The short question which now falls for our determination in this appeal is whether the sons of Kishanchand Dayaram Vachhani are entitled to claim the benefit of r. 19(2) which has been granted by the High Court on their writ petition in disagreement with the view of the departmental authorities which excluded the claim of the sons under r. 19(3).
Rule 19 may here be re ad "Special provision for payment of compensation to joint families : (1) Where a claim relates to properties left by the members of an undivided Hindu family in West Pakistan (hereafter referred to as the joint family) compensation shall be computed in the manner hereinafter provided in this rule.
(2) Where on the 26th September, 1955 hereinafter referred to 'as the relevant date the joint family consisted of (a) two or three members entitled to claim partition, the compensation payable to such family shall be computed by dividing the verified claim into two equal shares and calculating the compensation separately on each such share, (b) four or more members entitled to claim partition, the compensation payable to such family shall be computed by dividing the verified claim into three equal shares and calculating 'the compensation separately on each such share.
(3) For the purpose of calculating the number of the members of a joint family under sub rule (2), a person who on the relevant date: (a) was less than 18 years of age, 443 (b) was a lineal descendant in the main line of another ' living member of joint Hindu family entitled to claim partition shall be excluded : Provided that where a member of a joint family has died during the period commencing on the 14th August, 1947 and ending on the relevant date leaving behind on the relevant date all or any of the following heirs namely: (a) a widow or widows, (b) a son or sons (whatever the age of such son or sons) but no lineal ascendant in the main line, then all such heirs shall, notwithstanding anything contained in this rule, be reckoned as one member of the joint Hindu family.
Explanation : For the purpose of this rule, the question whether a family is joint or separate shall be determined with reference to the status of the family on the 14th day of August, 1947 and every member of a joint family shall be deemed to be joint notwithstanding the fact that he had separated from the family after that date.
" According to the High Court the other living member of the joint Hindu family whose lineal descendants are to be excluded under sub r. (3) (b) must be a person other than their own father.
This view, in our opinion, is ' contrary to the plain words used in this sub rule.
The High Court expressed its opinion in these words "It is clear that this condition is intended to apply to a case where a joint family consists of more than two persons where each one of them is entitled to claim partition and the members sought to be excluded are lineal descendants of one of such members.
It is only in such cases that it could be said that they were lineal descendants of a member who was ' entitled to claim partition against another.
In the present case the father and each of the sons is entitled to claim partition against each other.
If the lineal descendants are to be excluded even in a case like the present it only means that all the descendants of the father must be excluded even though there is no other member against whom the father can seek to enforce partition.
Having regard to the words used the only interpretation which can be placed on clause (b) of sub rule (3) of r. 19, is the one adopted by us.
" 444 The error into which the High Court seems to have fallen is that it has assumed that a person against whom partition can be claimed by the father ' of the lienal descendants constituting the joint Hindu family must be some member of that family other than his lienal descendants and that it excludes his right to claim partition when the only other members of the joint family are his own lineal descendants.
Far this assumption there does not seem to us to be any.
justification either in the language or in the scheme of the Act and the rules or in any other provision of law applicable to the parties before us and governing the present controversy.
According to the general provisions of Hindu law the father in a joint Hindu family has the power to partition the joint family property and indeed in the present case the High Court has accepted the legal position that the father and each of his sons are entitled to claim partition against each other.
It is only on the language of r. 19(3) and as the judgment under appeal suggests, on that Court 's disinclination to accept as proper, the exclusion of the sons when the, joint family consists only of the father and his sons that the High Court construed r. 19(3) in the, manner stated above.
We are unable to find any warrant for this view.
The plain reading of r. 19(3) is against it.
The language is not susceptible of the meaning that there should be in existence some member of the joint family other than the sons, against whom the father should be entitled to claim partition.
The words of the sub rule being plain and unambiguous they have, in our view, to be construed in their natural and ordinary sense.
No cogent reason has been suggested for departing from the rule of literal construction in this case.
The consequence flowing from.
this construction is quite intelligible and seems to us to be rational and logical.
The special provision embodied in r. 19 for paying compensation to joint Hindu families is, in our view, intended to treat a joint Hindu family consisting only of a father and his sons as one, unit for the purpose of payment of compensation for the joint family property left in Pakistan.
Such a joint family is not intended to be broken up by the statutory scheme of the Act and the Rules.
Sub rule (3) (b) of r. 19 was, in our opinion correctly construed by the Chief Settlement Commissioner and the High Court was wrong in disagreeing with it and in allowing the writ petition.
The appeal accordingly succeeds and is allowed with costs.
V.P.S. Appeal allowed.
| IN-Abs | Rule 19(2) of the Displaced Persons (Compensation and Rehabilitation) Rules provides for the method of compensation to joint families which have migrated to India as a result of the partition of the country in 1947.
Rule 19(3)(b) provides that for the purpose of calculating the number of members of a joint family.
Under r. 19(2), a person who was a lineal descendant in the main line of another living member of the family entitled to claim partition shall be excluded.
A joint family consisting of a father and his sons had migrated to India from Sind.
The father made an application for the verification of claim in respect of the properties left by the family in Sind and the claim was verified.
One of the sons claimed that the father and sons should be treated as tenants in common.
The authorities under the Act held that the parties constituted a joint Hindu family 'and that in view of the r. 19 (3) (b), r. 19(2) was not applicable.
The High Court quashed the order holding that the living member of the family whose lineal descendants are to be excluded under r, 19(3) (b), must be a person other than their father, on the assumption that a person against whom partition can be claimed by the father must be some member of the family other than his lineal descendants.
In appeal to this Court, HELD : The special provision embodied in the rule is intended to treat a joint Hindu family consisting only of a father and his sons as one unit for the purpose of payment of compensation for the joint family property left in Pakistan.
The rule is rational and logical and its_language is not susceptible of the meaning given to it by the High Court, because under Hindu law a father and each of his sons are entitled to claim partition against each other.
[444 A B, C F]
|
ivil Appeal No. 1201 of 1966.
Appeal by special leave from the judgment and order dated June 24, 1965 of the Bombay High Court in Appeal No. 79 of 1963.
F. section Nariman, K. D. Mehta and 1.
N. Shroff, for the appellants.
M. C. Chagla and A. K. Verma, for the respondents.
The Judgment of the Court was delivered by Shah, J.
Dadiba Hormusji Boatwalla was one of the eight partners of Messrs Meghji Thobhan & Company a firm of Muccadams and cotton brokers.
Boatwalla died on February 20, 1957.
By virtue of cl. 8 of the deed of partnership the business of the firm was continued by the surviving partners.
Khorshed and Nariman widow and son respectively of Boatwalla obtained letters of administration to the estate of Boatwalla and commenced an action in the High Court of Bombay for an account of the partnership between Boatwalla and the surviving partners and for an order paying to the plaintiffs the amount determined to be due to Boatwalla at the time of his death.
The suit was resisted by the surviving partners who will hereinafter be called ` the defendants '.
Tarkunde, J., passed a preliminary decree declaring that qua Boatwalla the partnership stood 'dissolved on February 20, 1957, but not in respect of the surviving partners, and directed that an account be taken of the partnership upto February 20, 1957.
Against that decree the defendants appealed under cl. 15 of the Letters Patent.
In appeal the High 'Court modified the decree.
The learned Judges held that the plaintiffs were not entitled to an account in the profits and losses of the firm after the death of Boatwalla, nor to exercise an option under section 37 of the Partnership Act, but that the plaintiffs were entitled only to interest at six per cent.
per annum on the amount found due as Boatwalla 's share in the assets of the partnership including .the goodwill.
They further declared that the interest of Boatwalla in the firm ceased on February 20, 1957, and deleted the direction with regard to the dissolution of the firm as between Boatwalla and the defendants.
With special leave, this appeal has been filed by the defendants.
The defendants contend that the plaintiffs as legal representatives of Boatwalla were not entitled to a share in the value of the goodwill of the firm because the goodwill of a firm may be taken into account only when there is a dissolution of the firm and in any event because Boatwalla had agreed that his interest in the goodwill shall cease on his death and the business shall 691 be continued by the surviving partners.
The defendants do not challenge the decree of the High Court awarding to the plaintiffs Boatwalla 's share in the assets of the firm other than goodwill icy contend that in the goodwill of the firm the plaintiffs had to share.
By section 14 of the Partnership Act, 1932, it is enacted that "Subject to contract between the partners, the property of the firm includes all property and rights and interest in property originally brought into the stock of the firm or acquired, by purchase or otherwise, by or for the firm or for the purposes and in the course of the business of the firm, and includes also the goodwill of the business.
" Goodwill of the firm is expressly declared to be the property of he firm.
Counsel for the defendants relied upon section 55 of the Partnership Act which makes a provision with regard to sale of goodwill after dissolution.
It is provided by sub section
(1) of section 55 that : "In settling the accounts of a firm after dissolution, the goodwill shall, subject to contract between the partners, be included in the assets, and it may be sold either separately or along with other property of the firm.
But it is not enacted thereby that goodwill may be taken into account only when there is a general dissolution of the firm, and not when the representatives of a partner claim his share in the firm, which by express stipulation is to continue notwithstanding the death of a partner.
Nor do sections 39, 42 and 46 which were relied upon by counsel for the 'defendants support that contention.
Under section 39 the dissolution of partnership between all the partners of a firm is called the "dissolution of the firm"; and by section 42 a firm is said to be dissolved subject to the contract between the partners on the happening of certain contingencies.
Section 46 provides that on the dissolution of a firm every partner or his representative is entitled as against all the other partners or their representatives, to have the property of the firm applied in payment of the debts and liabilities of the firm, and to have the surplus distributed among the partners or their representatives according to their rights.
These provisions deal with the concept and consequences of dissolution of the firm : they do not either abrogate the terms of the contract between the partners relating to the consequences to ensue in the event of the death of a partner when the firm is not to stand dissolved by 692 such death, nor to the right which the partner has in the, assets an( property of the firm.
The Partnership Act does not operate to extinguish the right in the assets of the firm of a partner who dies when the partnership agreement provides that on death the partnership is to continue.
In the absence of a term in the deed Of partnership to that effect, it cannot be inferred that a term that the partnership shall continue notwithstanding the, death of a partner will operate to extinguish his proprietary right in the assets of the firm.
Clause 8 of the deed of partnership reads as follows "This partnership shall not be dissolved or determined by the death of any of _the parties hereto but the same shall be continued as between the surviving part:ners on the same terms and conditions but with such shares as shall then be determined.
" Mr. Nariman says that goodwill is nothing but the right to the name, the place of business and the reputation of the firm, and when all these components of the right by express agreement between the partners devolve upon the surviving partners '.
it follows that. the share of the deceased partner in the goodwill of the firm devolves upon the surviving partners and not upon his legal representatives.
The goodwill of a business is however an intangible asset being the whole advantage of the reputation and connections formed with the customers together with the circumstances which make the connection durable.
It is that component of the total value of the undertaking which is attributable to the ability of the concern to earn profits over a course of years because of its reputation, location and other features.
An agreement between the partners that the name, the place of business and the reputation of the firm are to be utilised by the surviving partners will not necessarily warrant an inference that it was intended that the heirs of the deceased partner will not be entitled 'to a s hare in the goodwill.
Our attention was invited to Hunter vs Dowling( '); Smith vs Nelson(2); and Bachubai and L. 'A. Watkins vs Shamji Jadowji(3).The first two cases proceed upon the interpretation Of certain clauses in partnership Agreements It was inferred in those cases from the terms of the agreement that the right in the goodwill of a partner in a firm dying or retiring shall not survive to ' his legal representatives.
Bachubai and L. A. Watkin 's case(") arose out of a case in which in the partnership agreement it was provided that (1) (2) 96 Law Times Reports.
(3) 1.
L. R. 9 Bom .
536. 694 the firm shall be the agents of a company: carrying on business as a manufacturer of cotton textiles so long as the firm carries on business in Bombay, or until the firm should resign.
The firm were appointed the agents of the Corn any and continued to act as agents.
One of the, partners died, and a representative of the partner filed a suit,.
claiming a certain share in the assets of the firm including the goodwill.
It was observed by Sargent, c.
J,in rejecting the claim of the plaintiff to a share in the goodwill of the business as an asset of the firm, that "Assuming_ (which may well be doubted) that the term "goodwill" is applicable to a business of this nature, it is plain that it is attached to the name of the firm which, by the partnership agreement itself is to be used by the surviving partners, or partner for their own benefit.
Such an arrangement between the partners must take away all value from the goodwill; even if it be not, as Mr. Justice Lindley in his Treatise on Par tnership, p. 887, (3rd ed.), considers it to be inconsistent.
with its being an asset at all" The, learned Chief Justice expressed a doubt presumably relying upon old.
English decisions that the goodwill of a firm may not be an asset at all.
These observations do not set out any rule, of interpretation of a deed 'of partnership.
But the question is now settled by statutory enactment.
Under the Partnership Act, 1932, it is expressly declared that the goodwill of a business is ' an asset.
Whether the goodwill has any substantial value may be determined on the facts of each case.
We are unable to agree with Mr. Nariman that in interpreting a deed of partnership, business whereof it is stipulated shall be continued by the surviving partners after the death of a partner, the Court will not award to the legal representatives of the deceased partner a share in the goodwill in the absence of an express stipulation to the contrary.
The goodwill of a firm is an asset.
In interpreting the deed of partnership, the Court will insist upon some indication that the right to a share in the assets is, by virtue of the agreement that the surviving partners are entitled to carry on the business on the death of the partner, to be extinguished.
In the absence of a provision expressly made or clearly implied, the normal rule.
that the share of a partner in the assets devolves upon his legal representatives will apply to the goodwill as well as to other assets.
The appeal therefore fails and is dismissed with costs.
Appeal dismissed.
| IN-Abs | D who was one of eight partners in a firm, died on February 20, 1957.
By virtue of a provision in the partnership deed, the business of the firm was continued by the surviving partners.
The respondents, being the widow and son of D commenced an action for an account of the partnership between D and the surviving partners, praying for an order for the payment of the amount determined to be due to D at the time of his death.
A single judge of the High Court passed a preliminary decree directing that an account be taken of the partnership as on February 20, 1957.
A Division Bench, in appeal, modified the decree holding that the respondents were entitled only to interest at 6 % p.a. on.
the amount of D 's share in the assets of the partnership, including good will.
In appeal to this Court it was contended on behalf of the appellants that the respondents as legal representatives of D were not entitled to a share in the value of the good will of the firm because good will may be taken into account only when there is a dissolution and not otherwise; and.
furthermore, because D had agreed that his interest in the good will would cease after his death and the business shall be continued by the _surviving, partners.
HELD : Dismissing the appeal, It could not be held that in interpreting a deed of partnership, business.
whereof, it is stipulated shall be continued by the surviving I partners after the death of a partner, the Court will not award to the legal representatives of the deceased partner a share in the goodwill in the absence of an express stipulation to the contrary.
The good will of a firm is an.
asset of the firm.
In interpreting the deed of partnership, the Court will insist upon, some indication that the right to a share in the assets is, by virtue of the agreement that the surviving partners are entitled to carry on the business on the death of the partner, to be extinguished.
In the absence of a provision expressly made or clearly implied, the normal rule that the share of a partner in the assets devolves upon his legal representatives will apply to the good will as well as to other assets.
[693 F H] There is no indication in section 55 of the Partnership Act that goodwill may be taken into account only when there is a general dissolution of the firm,.
and not when the reprensentatives of a partner claim his share in the firm, which by express stipulations is to continue not with standing the death of a partner.
Nor do sections 39, 42 and 46 of the Act support such a contention.[691 F] Hunter vs Dowling, [18951 ; Smith vs Nelson 96 Law Times Reports 313; Bachubai and L. A. Watkins vs Shamji Jadowji, I.L.R. ; referred to.
Cl/70 14. 690
|
No. XLII of 1950.
Appeal from the judgment of the Calcutta High Court (Harries C.J. and Chakravarthi J.) in Appeal from Original Order No. 78 of 1948.
N.C. Chatterjee (B. Sen, with him), for the appellants.
A.N. Grover, for the respondents.
November 30.
The judgment of Fazl Ali and Patanja li Sastri JJ. was delivered by FAZL ALI J.
This is an appeal from a judgment of a Bench of the High Court of Judicature at Calcutta in West Bengal, reversing the decision of a single Judge of that Court, who had refused to set aside an award given by the arbitration tribunal of the Bengal Chamber of Commerce on a submission made by the respondents.
The facts of the case are as follows.
On the 25th January, 1946, the appellants entered into a contract with the respondents for the sale of 5,000 mounds of jute, which was evidenced by a "sold note" (Exhibit A), which is in the form of a letter addressed to the respond ents, commencing with these words: "We have this day sold by your order and for your account to the undersigned, etc.
" The word "undersigned" admittedly refers to the appellants, and, at the end of the contract, below their signature, the word "brokers" is written.
On the same day, a "bought note" (Exhibit B) was addressed by the appellants to the Bengal Jute Mill Company, with the following statement: "We have this day bought by your order and.
for your account from the undersigned, 794 etc.
" In this note also, the word "undersigned" refers to the appellants and underneath their signature, the word "brokers" appears, as in the "sold note" There are various provisions in the sold note, relating to delivery of jute, non delivery of documents, nonacceptance of documents, claims, etc., but the most material provisions are to be found in paragraphs 10 and 11.
paragraph 10 provides that the sellers may in certain cases be granted an extension of time for delivering the jute for a period not exceeding thirty days from the due date free of all penalties, and if the contract is not implemented within the extended peri od, the buyers would be entitled to several options, one of them being to cancel the contract and charge the sellers the difference between the contract rate and the market rate on the day on which the option is declared.
In the same para graph, there is another provision to the following effect: "Sellers shall notify Buyers that goods will or will not be shipped within such extended period referred to in (a) and in the case of sellers intimating that they will be unable to ship within the extended time Buyers shall exercise their option within 5 working days of receiving notice and notify Sellers.
In the absence of any such notice from Sellers it shall be deemed that the goods have not been shipped and Buyers shall exercise their option within 5 working days after expiration of extended date and notify Sellers.
" The 11th paragraph provides among other things that "all matters, questions, disputes, differences and/or claims arising out of and/or concerning and/or in connection and/or in consequence of or relating to this Contract whether or not obligations of either or both parties under this contract be subsisting at the time of such disputes and whether or not this contract has been terminated or purport ed to be terminated or completed shall be referred to the arbitration of the Bengal Chamber of Commerce under the rules of its Tribunal of Arbitration for the time being in force and according to such rules the arbitration shall be conducted.
" 795 It is common ground that the respondents delivered 2,256 maunds of jute under the contract, but the balance of 2,744 maunds could not be delivered within the stipulated period, and, by mutual agreement, time was extended up to the 30th June, 1946.
On the 2nd July, 1946, the respondents addressed a letter to the appellants stating that the balance of jute could not be despatched owing to lack of wagons, and "exten sion" was requested for a period of one month.
In reply to this letter, which was received by the appellants on or about the 3rd July, 1946, time was extended till the 31st July, 1946.
On the same day on which the reply was received by the respondents, i.e., on the 9th July, 1946, they ad dressed a letter to the appellants pointing out that the extension of time had not been intimated within the 5th working day as provided in the contract and therefore the contract was automatically cancelled.
After this letter, some further correspondence followed between the two par ties, and finally a bill of difference amounting to Rs. 4,116 was submitted by the appellants to the respondents, who, in their turn, denied their liability to pay the sum.
The appellants thereupon claimed arbitration under clause 11 of the sold note and submitted the dispute between them and the respondents to the Bengal Chamber of Commerce.
On the 6th February, 1947, the Tribunal of Arbitration made an award to the effect that the due date of contract had been extended by mutual agreement up to the 31st July, 1946, and accordingly the respondents should pay to the appellants a sum of Rs. 4,116 together with interest at the rate of 4% per annum from the 10th August, 1946, until the date of the award.
A sum of Rs. 210 was also held to be payable by the respondents on account of costs.
Nearly a year later, on the 19th February, 1949, a petition was presented by the re spondents under the Indian , to the High Court at Calcutta, in its ordinary original civil jurisdiction, praying inter alia that the award may be adjudged to be without jurisdiction and void and not binding on the respondents, and that it may be set aside.
The main point raised by the 796 respondents in the petition was that it was not open to the appellants to invoke the arbitration clause, as the Bengal Jute Mill Company and not the appellants were the real party to the contract and the appellants had acted as mere bro kers.
The appellants asserted in reply that the allegation made by the respondents in regard to there being no privity between them and the appellants was wrong, and in paragraph 16 of their affidavit they stated as follows : "With regard to paragraph 7 of the petition I crave reference to the said contract for its true construction and effect.
I say as I have already stated that according to the custom or usage or practice of the trade the respondent is entitled to charge brokerage and also to enforce the terms of the said contract.
" The case was heard by Sinha J., who dismissed the peti tion on the ground that the contract was directly between the respondents and the appellants.
The learned Judge also observed that if the right of the appellants to enforce the contract depended upon the existence of custom it would have been necessary to take evidence and the arbitrators would have had jurisdiction to decide the question of the exist ence of custom.
The respondents being dissatisfied with the judgment of Sinha J., preferred an appeal, which was heard and disposed of by a Division Bench of the High Court consisting of the learned Chief Justice and Chakravarthi J.
The learned Judges held that having regard to the fact that the appellants ' own contention was that they had entered into the contract as brokers and were entitled to enforce its terms by reason of the usage or custom of the trade, it was not open to Sinha J. to treat them as principals, and the award was liable to be set aside on the ground that the arbitration tribunal had no jurisdiction to make an award at the instance of a per son who was not a principal party to the contract.
The appellants thereafter having obtained a certificate from the High Court under section 109 (c) of the Code of Civil Proce dure, preferred this appeal.
797 It seems to us that this appeal can be disposed of on a short ground.
We have carefully read the affidavit filed on behalf of the appellants in the trial court, and we are unable to hold that their case was that they were not par ties to the contract or that they had asked the court to proceed on the sole ground that they were entitled to en force the contract by virtue of the custom or usage of the trade.
In our opinion, the position which was taken up by them may be summed up as follows : (1) They did not accept the allegations made by the respond ents that they were not parties to any arbitration agreement with the respondents.
(2) They asked the Court to construe the contract and its effect and asserted that they were entitled to enforce it.
(3) They also stated that they were entitled to enforce the contract according to the custom or usage of the trade.
The principal dispute raised in this case was whether the extension of time for delivery was granted within the time limited in the contract.
That dispute is certainly covered by the arbitration clause.
The further dispute that the brokers (appellants) were not parties to the contract in their own right as principals but entered into the contract only on behalf of the Bengal Jute Mill Company does not appear to have been raised until the matter went to the arbitrators.
Assuming that at that stage it was open to the respondents to raise such an objection, after the other dispute which clearly fell within the arbitration clause was referred to the arbitrators, this further dispute is also one which turns upon the true interpretation of the con tract, so that the respondents must have recourse to the contract to establish their claim that the appellants were not bound as principals while the latter say that they were: If that is the position, such a dispute, the determination of which turns on the true construction of the contract, would also seem to be a dispute, under or arising out of or concerning the contract.
In a 798 passage quoted in Heyman vs Darwins Ltd.(1), Lord Dunedin propounds the test thus: " If a party has to have recourse to the contract, that dispute is a dispute under the con tract ".
Here, the respondents must have recourse to the contract to establish their case and therefore it is a dispute falling within the arbitration clause.
The error into which the learned Judges of the appellate Bench of the High Court appear to have fallen was their regarding the dispute raised by the respondent in respect of the position of the appellants under the contract as having the same consequence as a dispute as to the contract ever having been entered into.
If, therefore, we come to the conclusion that both the disputes raised by the respondents fail within the scope of the arbitration clause, then there is an end of the matter, for the arbitrators would have jurisdiction to adjudicate on the disputes, and we are not concerned with any error of law or fact committed by them or any omission on their part to consider any of the matters.
In this view, it would not be for us to determine the true construction of the contract and find out whether the respondents ' contention is correct or not.
Once the dispute is found to be within the scope of the arbitration clause, it is no part of the province of the court to enter into the merits of the dispute.
In the result, we allow this appeal, set aside the judgment of the appellate Bench of the High Court and re store the order of Sinha J.
The appellants will be entitled to their costs throughout.
MAHAJAN J. I agree with my brother Fazl Ali that this appeal be allowed with costs.
Appeal allowed.
| IN-Abs | The appellants, a firm of brokers, entered into a contrct for the sale and purchase of a quantity of jute under a "sold note" addressed to the respondents which they signed as "A & Co., brokers" and a "bought note" of the same date and for the same quantity of jute addressed to a third person in which also they signed as "A & C0.
, brokers ".
The" sold note" contained the usual arbitration clause under which all matters, questions, disputes, differences and/or claims, arising out of and/or concerning, and/or in connec tion and/or in consequence of, or relating to, the contract . . shall be referred to the arbitration of the Bengal Chamber of Commerce.
" A dispute having arisen with regard to a matter which admittedly arose out of the contract evidenced by the sold note, the appellants referred the dispute for arbitration.
The respondents raised before the arbitrators the further contention that as the appel lants were only brokers they were not entitled to refer the matter to arbitration.
The arbitrators made an award in favour of the appellants.
The respondents made an applica tion to the.
High Court under the Indian Arbitration Act for setting aside the award: Held that, assuming that it was open to the respondents to raise this objection at that stage, inasmuch as this further dispute 793 was also one which turned on the true interpretation of the contract and the respondents must have recourse to the contract to establish their claim, this was also a dispute arising out of or concerning the contract and as such fell within the arbitration clause, and the award could not be set aside under the Indian , on the ground that it was beyond jurisdiction and void.
Heyman vs Darwins Ltd. ([1942.] A.C. 356) referred to.
|
minal Appeals Nos. 4, 23 and 28 of 1954.
Appeal by Special Leave granted by the Supreme Court by its Order dated the 2nd April, 1953, from the Order dated the 12th January, 1953, of the High Court of Judicature at Bombay in Criminal Appeal No. 22 of 1953, arising out of the Judgment and Order dated the 6th October, 1952, of the Court of Sessions Judge, Greater Bombay, in Case No. 20 of 1952.
A. K. Basu (J. B. Dadachanji and Naunit Lal, with him) for the appellant in Criminal Appeal No. 4 of 1954.
T. Godiwala and B. P. Maheswhari for the appellant in Criminal Appeal No. 23 of 1954.
Jai Gopal Sethi (B. P. Maheshwari and T. Godiwala, with him) for the appellant in Criminal Appeal No. 28.
M. C. Setalvad, Attorney General for India (Porus A. Mehta and P. G. Gokhale, with him) for the respondent.
1954.October 22.
The Judgment of Bhagwati and Venkatarama Ayyar JJ.
was delivered by Bhagwati J. Jagannadhadas J. delivered a separate Judgment.
907 BHAGWATI J. Anokhelal Ranjit Singh, original accused I and appellant in Criminal Appeal No. 28 of 1954, Harnarain Nanakchand, original accused 2 and appellant in Criminal Appeal No. 23 of 1954 and Ramkishan Mithanlal Sharma, original accused 4 and appellant in Criminal Appeal No. 4 of 1954, along with one Rubidas Radhelal, original accused 3 since deceased and one Bankelal Devisingh still absconding were charged under section 397 read with section 395 of the Indian Penal Code with having committed dacoity and used deadly weapons at the time of committing the same and were also charged under section 396 of the Indian Penal Code with having committed the murder of Lawrence Quadros at the same time and place and in the course of the same transaction while committing the said dacoity.
The trial was held before the Sessions Joe for Greater Bombay with the aid of a special jury.
The jury returned unanimous verdicts of guilty against each of the accused and the learned Sessions Judge convicted them and sentenced each of them to transportation for life.
An appeal filed by them to the High Court of Judicature at Bombay was summarily dismissed.
Special leave was granted to them to appeal to this Court and these three special leave appeals have now come on for hearing and final disposal before us.
The prosecution alleged that the Lloyds Bank Ltd. had a branch situated at Hornby Road and had three entrances, the main one on Hornby Road and two others on Outram Road and Bastion Road.
It was customary for the Bank to send cash from time to time to the Reserve Bank whenever the Head Cashier thought that there was a surplus.
On a day previous to the day when cash was to be sent, the Head Cashier would give the currency notes to the Assistant Cashiers.
As a token of having checked up the notes each of the Assistant: Cashiers would put their signatures on the top and the bottom notes in a bundle containing 100 notes of Rs. 100 each, and would affix thereon the rubber stamp of the Bank.
These notes then would be tied up in what are known as "thappis" each "thappi" consisting of 10 bundles of 100 notes each.
On the day that the cash was to be sent an escort party would go to the 908 Reserve Bank with the cash consisting of two Assistant Cashiers, one European Officer and a peon.
The Assistant Cashiers would then put the cash into a leather bag which bag would be attached by an iron chain to the person of the peon.
The Lloyds Bank it appears had received a large deposit from the Bank of Iran a few days prior to the day in question and it was decided that an amount of Rs. 12 lakhs should be sent to the Reserve Bank of India on the 20th April, 1951.
In the morning of the 20th April, the escort party consisted of Brightling, Sarkari and Doctor and the peon Rama Madura and taxi No. BMT 1829 was summoned to carry the party to the Reserve Bank.
The escort party emerged from the rear door of the Bank and went up to the taxi.
Bala Gopal Kadam, a watchman, was on duty on Bastion Road.
When the escort party came out, the taxi 's bonnet was in the direction of the Empire Cinema and the driver Lawrence Quardros was at the driver 's seat.
Brightling got into the taxi first and took his seat on the rear seat and was followed by Rama Madura.
Sarkari went round in front and took his seat next to the taxi driver.
Rama Madura after entering the taxi placed the bag on the taxi 's floor and was about to take his seat.
Doctor was standing with his left hand on the rear door of the taxi on the Bank side waiting for Rama Madura to take his seat.
It was at this juncture that accused 1, 2 and 4, Rubidas and Bankelal attacked the taxi and the escort party.
One of these persons first wrenched open the door to the taxi driver 's seat, leaned inside and fired twice with a revolver.
One of these shots caused an injury to Lawrence Quadros near the collar bone, which almost instantaneously caused his death and his body came out with the head first.
The man who so shot after leaning into the taxi went round the front of the taxi and took his seat next to the driver 's seat.
There was another man behind this one when the driver was shot, and he pulled out Lawrence Quadros from the taxi and took his seat at the steering wheel.
That man was Rubidas one time a motor driver in the employ of the Pan American Airways at Delhi.
Accused I also Armed with a revolver stood on the road side of the 909 taxi and fired twice at the taxi from that side and accused 2 and 4 were, either at the back or on the Bank side and were also armed with revolvers.
Sarkari first thought that these shots were tyre bursts and naturally got out of his seat to inspect the tyres but hearing further shots he realised that an attempt was being made to loot the cash.
He got frightened and went in the direction of Outram Road.
Brightling got out of the taxi, first went a little towards the back of the taxi and then seeing that the taxi was surrounded, zigzagged and went towards the junction of Outram and Bastion Roads where he tried unsuccessfully to stop a passing car.
Accused 1 who was firing at the taxi came near it, opened the back door of the taxi on the road side with his shoulder and got into the taxi.
Accused 2 came towards the rear door of the taxi on the Bank side and fired at Doctor injuring him on the dorsum of his left palm.
Kadam at about this time raised his baton, realising that Doctor was in danger whereupon accused 2 shouted "Khabardar, chhod do chale jao, bhago" or words to that effect and shot at him injuring him in his right eye.
That injury resulted in the total loss of his right eye.
Both the accused 2 and 4 were armed with revolvers.
A driver by name Sarvarkhan, was sitting on the foot path near the taxi and seeing :the body of Lawrence Quadros falling out of the taxi 'he tried to go up to him but the accused 4 prevented him from doing so shouting at him "khabardar" and threatened him with his revolver.
" During the course of the attack someone of these men shot at Rama Madura.
Rama Madura became unconscious and accused 2 and another dragged him out from the taxi.
The taxi was then started whereupon Brightling, who was still.
on Bastion Road, after making signals to the Cash Department to show as to what was taking place picked up a motor cycle parked near the corner of the Parsi Lying in Hospital and threw it in the way of the taxi but Rubidas, who was driving that taxi, managed to drive it away.
The taxi however had to be first driven at a slow speed and one Major Casey, who was standing at the corner of the foot path saw the whole of the incident and also those inside the taxi when it was 910 driven past him.
The prosecution alleged that accused 1, 2 and 4, Rubidas and Bankelal surrounded and ,attacked the taxi and its inmates and after snatching away the bag tied to Rama Madura 's belt with the cash containing Rs. 12 lakhs drove away in that taxi.
Brightling and some other employees of the Bank after some time secured a car which was parked nearby and went round in search of the taxi but to no purpose.
Brightling then reported the matter to the Esplanade Police Station but before that the telephone operator of the Bank, Mrs. Paterson who with Miss Vida Palmer, a clerk, had seen the incident from the window on the mezzanine floor had telephoned to the police and several police officers arrived at the Bank soon after.
Lawrence Quadros was already dead and his body was sent to the 'morgue.
Doctor, Kadam and Rama Madura, who had all been injured, were sent to St. George 's Hospital.
The taxi which was driven away by Rubidas with the accused and Bankelal seated therein was found abandoned at about 1 30 P.m., on that very day by the police not far from the Kashmir Hotel.
The police made various efforts to trace accused 4 and Bankelal but were unable to find them and they therefore charge sheeted accused 1, 2 and Rubidas (who was original accused 3) and they were all committed to stand their trial in the Sessions Court.
After those proceedings were over the accused 4 was arrested on the 25th December, at Bareli Station, and he too was charge sheeted and was committed to Sessions.
Rubidas, the original accused 3, died on the 3rd August, 1952, with the result that accused 1, 2 and 4 stood their trial on the charges under section, 395, 397 and 396 of the Indian Penal Code.
The defence of the accused 1, 2 and 4 was that they had nothing to do with the incident in question which took place in the morning of the 20th April, 1951.
Though conceding that they had been in Bombay, accused 1 and 4 contended that accused I had left Bombay on the night of the 18th April, and accused 4 had left Bombay either on the 16th or 17th April, for Allahabad, that they were not in Bombay 'on the day in question but were in Allahabad where they had filed 911 two affidavits before one Tondon, the first class Magistrate at Allahabad.
Accused 2 also conceded that he had stayed in Astoria Hotel with the accused 4 but, he had left that hotel on the 18th April, and had gone to stay in Kashmir Hotel on that day and had stayed there until the night of the 20th April, when he left Bombay for Delhi.
His case was that he had come to Bombay to make purchases for his wedding and his business and that he had nothing to do with the incident in question.
Before the learned Sessions Judge the prosecution led the evidence of various witnesses.
That evidence may be grouped into three heads.
One part of the evidence related to the movements and the activities of the accused before the 20th April, 1951, the other part of the evidence related to the actual participation of the accused in the occurrence which took place at Bastion Road on the morning of the 20th April, between 10 30 and 10 45 A.M., and the last part of the evidence related to the subsequent events including the arrest and the identification of the accused, the recoveries of the tin box containing the revolvers and the live cartridges, the steel trunk containing six 'thappis ' and five bundles of 100 rupee notes and disbursements of cash by the accused towards the end of April, or the beginning of May. The accused were represented by counsel and searching and vigorous cross examination was addressed to all the prosecution witnesses.
The trial took considerable time.
The counsel addressed the special jury at considerable length and the learned Sessions Judge summed up the whole case to the special jury in a charge which took well nigh three days.
It was a very exhaustive and a fair charge and in several respects was favorable to the accused.
The learned Judge summed up the evidence which had been led by the prosecution, pointed out the defects as also the contradictions in.
the evidence of the several witnesses, administered the necessary warning in regard to the evidence of the identification parades, considered the cases of each of the accused separately and marshaled the evidence which had been led by the prosecution against each of them and fairly put to the jury the 912 questions which they had to determine before they could arrive at their verdict.
The jury took time to consider their verdict and returned as stated above unanimous verdicts of guilty against all the accused in respect of both the charges.
This being a trial by jury the appellants in order to succeed would have to establish that there were serious misdirections or non directions in the learned Judge 's charge to the jury such as would vitiate the verdict.
The main contentions which were urged before us by the learned counsel for the appellants were (1)That evidence inadmissible under section 162 of the Criminal Procedure Code and under section 27 of the Indian Evidence Act had been admitted and that therefore there was an error of law which amounted to a misdirection to the jury; and (2)That there were misdirections in the learned Judge 's charge to the jury which had the effect of misleading the jury or were in any event such as to render the charge unfair and prejudicial to the accused, thus causing a failure of justice.
The admission of inadmissible evidence was attacked on two counts: (1)That the evidence in regard to the test identification parades held at the instance of the police and under their active supervision was hit by section 162 of the Criminal Procedure Code; and (2)That the statement of the police officer that it was 'tat the instance of" or "in consequence of certain statement by" the accused that certain discoveries were made was hit by section 27 of the Indian Evidence Act.
The investigation in this case was started on the 20th April, 1951, and the Bombay City Police were then governed in the matter of investigation by the provisions of the City of Bombay Police Act (Bombay Act IV of 1902).
Section 63 of that Act provided : "(1) No statement made by any person to a police officer in the course of an investigation under this Act shall, if taken down in writing, be signed by the person making it nor shall such writing be used as evidence.
913 There was a proviso to that section which enabled such statements to be used by the accused to impeach the credit of such witness in the manner provided by the .
It may be noted that under section 1(2) (a) of the Criminal Procedure Code the Code did not apply to the police in the towns of Calcutta and Bombay and therefore section 162 of the Criminal Procedure Code was not applicable to the investigations made by the Bombay City Police.
On the 11th June, 1951, the State Legislature passed the Bombay Police Act (Bombay Act XXII of 1951).
Section 167(3) of that Act repealed section 1(2) (a) of the Criminal Procedure Code so far as the police in the town of Bombay were concerned with the result that when this Act came into operation with effect from the 1st August, 1951, the Bombay City Police were also governed by the provisions of Criminal Procedure Code thus bringing into operation the provisions of section 162 thereof in the investigations conducted by the Bombay City Police.
Section 162(1) of the Criminal Procedure Code provides: "No statement made by any person to a police officer in the course of an investigation under this Chapter shall, if reduced into writing, be signed by the person making it; nor shall any such statement or any record thereof, whether in a police diary or otherwise, or any part of such statement or record, be used for any purpose (save as hereinafter provided) at any inquiry or trial in respect of 'any offence under investigation at the time when such statement was made.
" There is a proviso to this sub section which enables the accused to use such statements to contradict such witnesses in the manner provided by section 145 of the .
The investigations conducted by the Bombay City Police were after the 1st August, 1951, assimilated to the investigations conducted by the police under the Criminal Procedure Code and oral statements made by persons to police officers in the course of the investigation also came within the ban of ' section 162 and could not be used for any purpose save that specified in the proviso to section 162(1).
914 The provisions of section 162 applied to investigations conducted by the Bombay City Police from and after the 1st August, 1951.
They applied to investigations "under this chapter", i.e., investigations conducted under the Criminal Procedure Code, and therefore prima focie did not apply to the investigations conducted by the Bombay City Police prior to the 1st August, 1951, in which case section 63 of the City of Bombay Police Act IV of 1902 was applicable.
It was however contended on behalf of the appellants that this section was a procedural one, that nobody had a vested right in any course of procedure, that alterations in procedure were to be retrospective unless there was some good reason against it or unless that construction be textually 'inadmissible [vide Banwars ' Gope vs Emperor(1) and Delhi Cloth Mills vs Incometax Commissioner, Delhi(1)], that the ban under section 162 was operative when evidence in regard to the test identification parades was led before the learned Sessions Judge and that therefore all evidence in regard to these test identification parades whether they had been held before or after the 1 st August, 195 1, was inadmissible.
It was contended on the other hand by the learned Attorney General for the respondents that section 167(2) of the Bombay Police Act XXII of 1951 saved by clause (b) thereof any right, privilege, obligation or liability already acquired, accrued or incurred before such date and by clause (d) thereof any investigation, legal proceeding or remedy in respect of such right, privilege, obligation, liability, penalty, forfeiture or punishment and that therefore the investigation which had been made by the police under the provisions of the City of Bombay Police Act IV of 1902 was saved and did not come within the ban of section 162 of the Criminal Procedure Code.
Both these contentions are untenable.
Section 167(2)could only apply to those rights, privileges, obligations or ' liabilities already acquired, accrued or incurred under the City of Bombay Police Act IV of 1902 before the date of its repeal.
An investigation conducted by the police under the provisions of that Act would not (1) A.I.R. 1943 Pat.
(2) 915 create or impose any right, privilege, obligation or liability which could be saved by the provisions of section 167 (2) of the Bombay Police Act XXII of 1951.
The investigation which bad been conducted up to the 1st August, 1951, would be governed by the provisions of City of Bombay Police Act IV of 1902 and unless there was something in the Bombay Police Act XXII of 1951 which referred to those investigations, all.
the incidents of those investigations would be governed by the provisions of the repealed, Act and the question as to the admissibility in evidence of the results of such investigations would also have to be considered 'With reference to the provisions of that Act.
Section 162 of the Criminal Procedure Code in terms applied to the investigations conducted "under this Chapter", i.e., Chapter XIV which relates to information to the police and their powers to investigate, whereas section 63 of the City of Bombay Police Act IV of 1902 specifically referred to the investigations conducted "under this Act", i.e., the City of Bombay Police Act IV of 1902.
Section 162 of the Criminal Procedure Code therefore applied by reason of the context and the terms of that very section to investigations which had been conducted by the Bombay City Police after the 1st August, 195 1, and would not have a retrospective operation, because the investigations conducted up to the 1st August, 1951, by the Bombay City Police would certainly not be investigations conducted "under this Chapter", i.e., Chapter XIV of the Criminal Procedure Code.
There is no substance therefore in either of these contentions and the question as to admissibility in evidence of the statements made in the course of investigation under the City of Bombay Police Act IV of 1902 would have to be considered in the light of the provisions of section 63 of that Act and not section 162 of the Criminal Procedure Code.
It may be noted that the test identification parades in regard to the accused I and 2 were all held prior to the 1st August, 1951, and no question could therefore arise as to the provisions of section 162 of the Criminal Procedure Code being applicable to the evidence in 916 I regard to those parades.
The test identification parades in regard to accused 4 however were held after the 1st August, 1951, between the 16th January and the 22nd January, 1952, and it remains to be considered how far the evidence in regard to those parades was admissible in evidence having regard to the provisions of section 162 of the Criminal Procedure Code.
There has been a conflict of opinion between various High Courts in regard to the admissibility of evidence in regard to these test identification parades.
The Calcutta High Court and the Allahabad High Court have taken the view that identification of a person amounts to a statement within section 162 and that therefore the fact of such identification is not admissible in evidence.
*The High Court of Madras and the Judicial Commissioner 's Court at Nagpur have taken the contrary view.
In Khabiruddin vs Emperor(1) the question arose as to the admissibility of identification of stolen property during investigation in the presence of police officers and it was held that section 162 embraced all kinds of statements made to a police officer in the course of an investigation, that the evidence of the fact of identification is nothing but evidence of the statements which constitute the identification in a compendious and concise form and that therefore any identification of stolen property in the presence of a police officer during investigation was a statement made to a police officer during investigation and was therefore within the scope of section 162.
Pointing out by finger or nod of assent in answer to a question was held as much a verbal statement as a statement by word of mouth and no distinction was made between the mental act of the identifier on the one hand and the communication of that identification by him to another on the other.
Even the fact of identification by the identifier himself apart from the communication thereof to another was considered to be within the ban of section 162.
This decision was commented upon in Surendra Dinda vs Emperor(2).
There also the question arose as to the admissibility of the evidence of the sub inspector (1) A.I.R. 1943 Cal.
(2) A.I.R. 1949 Cal.
917 of police that the witnesses told him that the articles produced by him were identified by them as their property and the statements by the witnesses themselves A. that they had identified the articles to the sub inspector.
It was held that the word "identified" had a ' double meaning.
It meant the fact of actual recognition as well as the communication, of that fact to a third person.
There was distinction between on the one hand the actual fact of identification which is a mental act on the part of the person identifying, seeing an object or person and recognizing that the object or person seen was identical with some particular object or person and on the other hand the communication to a third person of this mental act.
The communication was of course a statement, but the identification by the identifier could not possibly be a statement.
The Court however proceeded to observe that no distinction could be legitimately made between an actual verbal statement and some action on the part of the identifier disclosing the fact of his identification.
Both were hit by section.
The communication of his own mental act of recognition and identification to the police was what was hit but evidence in the Court subsequently by the actual identifier himself was not inadmissible under section 162.
The Court further observed that it was not the actual act or process of seeing or recognising the accused in the presence of the officer which was affected by the provisions of the section, it was the communication of that fact to the police officer of which proof could not be given.
It therefore held that the accused was entitled to ' object to the evidence of the sub inspector, that the witnesses "identified" the articles to him or the evidence of the witnesses when they said they "identified" the articles in the presence of the sub inspector in so far as, the latter expression was taken to mean and include not only that they recognised the articles as theirs but conveyed the fact of that recognition to the sub inspector.
The Allahabad High Court in Daryao Singh vs
State(1) followed this decision of the Calcutta High Court in terms without adding any comments of its own.
(1) A.I.R. 1952 All.
117 918 These decisions of the Calcutta and the Allahabad High Courts seek to make a distinction between the mental act of identification and the communication of that fact to another person.
The mental act of identification is not hit by section 162 but the communication thereof to another person either by an oral statement or even by signs or gestures including the pointing out by finger or nod of assent in, answer to a question put to the identifier in that behalf would come within the ban of section 162.
Anything which amounts to a communication of the fact of such identification by the identifier to another person is banned and no evidence in respect thereof can be given in a Court of law under section 162.
The High Court of Madras on the other hand in In re Kshatri Ram Singh (1) took the view that any evidence about the statements made by witnesses at the identification parades held by the police in the course of investigation was excluded by section 162, but the fact that witnesses had identified persons at parades held by the police might be proved.
In coming to this conclusion the High Court followed an earlier decision of a Division Bench reported in Guruswami Thevan vs Emperor (2).
In that case an objection had been taken to the admission of a note of an identification parade held by the police Sub inspector.
It was contended that the document embodied a record of statements made by identifying witnesses to the sub inspector and as such was inadmissible under section 162.
Mr. Justice Wadsworth who delivered the judgment of the Court observed that the question was not without difficulty, for in the nature of things it was probable that when a witness identifies a person in a parade he does make some statement or other as to the purpose for which he identifies him and anything said by a witness at an identification parade held by the investigating officer might well be considered to come within the purview of section 162.
On the other hand the mere act of a witness in picking out one individual from a parade was a revelant circumstance concerning which evidence is admissible and if the investigating officer made a note of that circumstance which he himself had observed, there was no (1) A.I.R. 1941 Mad.
675 (2) 919 apparent reason why that note should, not be used in evidence.
If in the course of that note he appends an inadmissible record of the statement of the identifying witnesses presumably any such portion of the note ' would have to be excluded from evidence.
He applied that criterion to the document in question and the bare note of the personnel of the parade, the names of the witnesses, the way in which the parade was arranged and the numbers of the persons in the parade identified by each witness were held unobjectionable. 'What was excluded was the statement in regard to the identification of witnesses of the persons as having been concerned in the murder cases which were the subjectmatter of investigation.
A distinction was thus made between the physical fact of identification and the statement made by the identifier as regards the persons identified having been concerned in the offence.
The Judicial Commissioner 's Court at Nagpur in Ramadhin Brahmin vs Emperor (1) expressed a similar Opinion that evidence of police officers who give evidence with regard to the identification parades which were held and who depose to certain of the accused having been identified by prosecution witnesses in an identification parade was not inadmissible under section 162 as their evidence does not relate to any statement made to the police but is a simple exposition of a fact or circumstances witnessed by themselves.
Here also a distinction appears to have been made between the physical fact of identification sought to be proved by the evidence of the police officers and the statements made by the identifier to the police.
In order to resolve this conflict of opinion one has to examine the purpose of test identification parades.
These parades are held by the police in the course of their investigation for the purpose of enabling witnesses to identify the properties which are the subject matter of the offence or to identify the persons who are concerned in the offence.
They are not held merely for the purpose of identifying property or persons irrespective of their connection with the offence.
Whether the police (1) A.I.R. 1929 Nag.
920 officers interrogate the identifying witnesses or the Panch witnesses who are procured by the police do so, the identifying witnesses are explained the purpose of holding these parades and are asked to identify the properties which are the subject matter of the offence or the persons who are concerned in the offence.
If this background is kept in view it is clear that the process of identification by the identifying witnesses involves the statement by the identifying witnesses that the particular properties identified were the subject matter of the offence or the persons identified were concerned in the offence.
This statement may be express or implied.
The identifier may point out by his finger or touch the property or the person.
identified, may either nod his head or give his assent in answer to a question addressed to him in that behalf or may make signs or gestures which are tantamount to saying that the particular property identified was the subject matter of the offence or the person identified was concerned in the offence.
All these statements express or implied including the signs and gestures would amount to a communication of the fact of identification by the identifier to another person.
The distinction therefore which has been made by the Calcutta and the Allahabad High Courts between the mental act of identification and the communication thereof by the identifier to another person is quite logical and such communications are tantamount to statements made by the identifiers to a police officer in the course of investigation and come within the ban of section 162.
The physical fact of identification has thus no separate existence apart from the statement involved in the very process of identification and in so far as a police officer seeks to prove the fact of such identification such evidence of his would attract the operation of section 162 and would be inadmissible in evidence, the only exception being the evidence sought to be given by the identifier him self in regard to his mental act of identification which he would be entitled to give by way of corroboration of his identification of the accused at the trial.
We therefore approve of the view taken by the Calcutta and Allahabad High Courts in preference to the view taken 921 by the Madras High Court and the Judicial Commissioner 's Court at Nagpur.
The learned Attorney General however sought to make a distinction between the statements made to the police officers and the statements made to the Panch witnesses called by the police officers when conducting the test identification parades.
He urged that a statement made to the police officers would be within the ban of section 162.
But if in spite of the test identification parades having been arranged, by the police Panch witnesses were called by the police and they explained to the identifying witnesses the purpose of the parades and the identification was made by the witnesses before them though in the presence of the police officers, the Panch witnesses could certainly depose to the fact of identification as also the statement made by the identifying witnesses to them without attracting the operation of section 162.
He further urged that in such a case the identification would amount to a statement to the Panch witnesses even though the police officers were present at the time and it would be a question of fact whether the statement was made to the Panch witnesses or to the police officers which question would have to be determined having regard to the circumstances of each case.
[Vide Abdul Kader vs Emperor(1) and Rao Shiv Bahadur Singh vs State of Vindhya Pradesh(2)].
He contended that the test identification parades were held in the present case in the presence of the Panch witnesses who were called by the police for witnessing the same, that the Panh witnesses explained to each identifying witness the purpose of holding the parade, that the identification took place in the presence of the Panch witnesses who noted down the result of the identification, that Panchnamas were prepared by the police after the identification was held and were signed by the Panch witnesses and that therefore the, identification of the accused by the identifying witnesses amounted to statements made by the identifiers to the Panch witnesses and not to the police and evidence in that behalf given by the Panch witnesses was therefore admissible in evidence.
(1) A.I.R. 1946 Cal.
(2) 922 This argument would have availed the learned Attorney General if after arranging the test identification parade the police had completely obliterated themselves and the Panch witnesses were left solely in charge of the parade.
The police officers would certainly arrange the parade, would call the persons who were going to be mixed up with the accused in the course of the parade and would also call the Panch witnesses who were to conduct the parade.
But once the Panch witnesses were called for the purpose the whole of the process of identification should be under the exclusive direction and supervision of the Panch witnesses.
If the Panch witnesses thereafter explained, the purpose of the parade to the identifying witnesses and the process of identification was carried out under their exclusive direction and supervision, the statements involved in the process of identification would be statements made by the identifiers to the Panch witnesses and would be outside the purview of section 162.
In the case of the, identification parades in the present case however the police officers were present all throughout the process of identification and the Panch witnesses appear only to have been brought in there for the purpose of proving that the requirements of law in the matter of holding the identification parades were fully satisfied.
Not only were the police officers present when the identifying witnesses were brought into the room one after the other and identified the accused, they also prepared 'the Panchnama, read out and explained the contents thereof to the Panch witnesses, and also attested the signatures of the Panch witnesses which were appended by them at the foot of the Panchnama.
The whole of the identification parades were thus directed and supervised by the police officers and the Panch witnesses took a minor part in the same and were there only for the purpose of guaranteeing that the requirements of the law in regard to the holding of the identification parades were satisfied.
We feel very great reluctance in holding under these, circumstances that the statements, if a any, involved in the process of identification were statements made by the indentifiers to the Panch witnesses and not to the police officers as 923 otherwise it will be easy for the police officers to circumvent the provisions of section 162 by formally asking the Panch witnesses to be present and contending that the statements, if any, made by the identifiers ' were to the Panch witnesses and not to themselves.
We are therefore of the opinion that the test identification parades in regard to the accused 4 which were held between the 16th January, and the 22nd January, 1952, attracted the operation of section 162 and the evidence of identification at those parades was inadmissible against accused 4.
The question as to the admission of evidence inadmissible under section 27 of the really lies within a narrow compass.
The contention in this behalf was based on the evidence of the Investigating Officer, Hujur Ahmed Khan, that on the 16th May, 1951, the accused I made a certain statement in consequence of which he took accused I and 2 to Itawa and leaving the accused 2 there the party proceeded to Bhagwasi with the accused I and his further evidence that the accused 1 there pointed out Baliram who at the instance of accused 1 dug out from a mud house a tin box containing three revolvers and two tins containing live cartridges.
Exception was taken to the expressions "in consequence of a certain statement made by accused 1" and "at the instance of accused 1" which it was argued came within the ban of section 27.
Section 27 of the runs as under : "Provided that, when any fact is deposed to as discovered in consequence of information received from a person accused of any offence, in the custody of a police officer, so much of such information, whether it amounts to a confession or not, as relates distinctly to the fact thereby discovered may be proved.
" Section 27 is an exception to the rules enacted in sections 25 and 26 of the Act which provide that no confession made to a police officer shall be proved as against a person accused of an offence and that no confession made by any person whilst he is in the custody of a police officer, unless it be made in the immediate presence of a Magistrate, shall be proved as 924 against such person.
Where however any fact is discovered in consequence of information received from a person accused of any offence, in the custody of a police officer, that part of the information as relates distinctly to the fact thereby discovered can be proved whether it amounts to a confession or not.
The expression "whether it amounts to a confession or not" has been used in order to emphasise the position that even though it may amount to a confession that much information as relates distinctly to the fact thereby discovered can be proved against the accused.
The section seems to be based on the view that if a fact is actually discovered in consequence of information given some guarantee is afforded thereby that the information was true and accordingly can be safely allowed to be given in evidence.
But clearly the extent of the information admissible must depend on the exact nature of the fact.
discovered to which such information is required to relate.
[Kottaya vs Emperor(1)].
On a bare reading of the terms of the section it appears that what is allowed to be proved is the information or such part thereof as relates distinctly to the fact thereby discovered.
The information would consist of a statement made by the accused to the police officer and the police officer is obviously precluded from proving the information or part thereof unless it comes within the four corners of the section.
If the police officer wants to prove the information or a part thereof, the Court would have to consider whether it relates distinctly to the fact thereby discovered and allow the proof thereof only if that condition was satisfied.
If however the police officer does not want to prove the information or any part thereof, section 27 does not come into operation at all.
What was stated by the Investigation Officer, Hujur Ahmed Khan, in the present case was that certain information was supplied to him by the accused 1 in consequence of which he took certain steps.
He did not seek to prove that information or any part thereof in the evidence which he gave before the Court.
Even when he said that Baliram dug out the tin box from the mud floor of a house at (1) A.I.R. 1947 P.C. 67.
925 the instance of the accused I he did not seek to prove what that information was.
The operation of section 27 was therefore not attracted and _prima facie there was nothing to prevent that evidence being admitted against the accused 1.
Reliance was however placed on an unreported judgment of Chagla C.J. and Gajendragadkar J. delivered on the 11 th January, 1950.
in Criminal Appeals No. 454 of 1949 and No. 464 oil, 1949 with revisional application No. 952 of 1949 in the case of Rex vs Gokulchand Dwarkadas Morarka No. 1.
An exception was there taken to the statement of the police officer that in consequence of certain statements made by the accused I and 2 in that case he discovered the missing pages of the Bombay Samachar of the 23rd April, 1948, and it was contended that statement was inadmissible in evidence.
The question that really arose for the consideration of the Court there was whether the joint statement attributed to the accused I and 2 in that case was admissible without specifying what statement was made by a particular accessed which led to the discovery of the relevant fact and it was rightly held that a joint statement by more than one accused was not contemplated by section 27 and the evidence of Mistry, the police officer, in that behalf should therefore have been excluded.
An argument was however addressed by the learned Advocate General who appeared for the State there that Mistry had not attempted to prove what statement the accused had made and all that he said was that in consequence of statements made by them a discovery was made.
The learned Judges dealt with that argument as under: "In our opinion, this is a roundabout and objectionable way of attempting to prove the statements made by the accused without actually proving them.
When the police officer speaks of "in consequence of a statement made by an accused a discovery was made", he involves the accused in the discovery.
Whether he gives evidence as to the actual words used by the accused or not, the connection between the statement made by the accused and the discovery of the relevant fact is clearly hinted at.
In our opinion, 118 926 therefore, evidence cannot be given of any statement made by accused which results in the discovery of a fact unless it satisfies the conditions laid down under section 27 and this would be so even if the actual statement is not attempted to be proved by the prosecution.
Even if the statement is not proved, the statement must be such as can be proved under section 27." The learned Judges then proceeded to consider the following observations of Rankin C.J. in Durlav Namasudra vs Emperor(1) : "There seems to me to be nothing in section 24 or 25 to prevent evidence being given: 'In consequence of something said by the accused I went to such and such a place and the re found the body of the deceased. ' In cases under section 27 the witness may go further and give the relevant part of the confession." The learned Judges expressed their inability to agree with this view of the law observing that Ran kin C.J. was really dealing academically with the various sections of the and he was not called upon to decide this point.
With the utmost respect the learned Judges of the Bombay High Court committed the same error which they thought Rankin C.J. had committed, because immediately thereafter they observed: "We would also like to add that, in the circumstances of this case, this discussion is somewhat academic, because even if we accept the contention of the Advocate General and hold that the statement of the investigating officer is admissible, it cannot, possibly help the prosecution case very much.
" What they were considering was the case of a joint statement made by the accused 1 and 2 in that case and these observations made by them expressing their inability to agree with Rankin C.J. 's view of the law were clearly obiter.
The evidence of the police officer would no doubt go to show that the accused knew of the existence of the fact discovered in consequence of information given by (1) Cal.
1040,1045.
927 him.
But that would not necessarily show his direct connection with the offence.
It would merely be a link in the chain of evidence which taken along with other pieces of evidence might go to establish his connection therewith.
This circumstance would therefore be quite innocuous and evidence could certainly be given of that circumstance without attracting the operation of section 27.
If it were necessary to do so we would prefer to accept the view of Rankin C.J. to the one expressed by the learned Judges of the Bombay High Court.
This question as regards the inadmissibility of evidence under section 27 of the must therefore be answered against accused 1.
Turning now to the misdirections and non directions such as to vitiate the verdict of the jury, the main misdirection which was pointed out by the learned counsel for all the accused before us was in regard to the question whether four or five persons were concerned in the commission of the offence.
Particular exception was taken to paragraph 59 of the learned Judge 's charge to the jury: "Brightling, Baburao Raje, Miss Vida Palmer, Mrs. Paterson and witness Sarkari, if you were to accept his evidence here on this part of the case, were all definite that there were five or more men surrounding the taxi and concerned in the attack while Holmes said that there were at least four, if not more, which means that he was not certain about the number.
If you were to find from the statement of Casey that he saw some men trying to pile into the taxi from the rear door.
of the taxi on the Bank side, that would suggest that there were at least five men concerned even according to Casey.
Consider this question carefully and then if you find after scrutiny of this evidence that there were at least five men conjointly concerned then only section 395 would apply.
That briefly was the evidence so far as the question as to the number of men is concerned.
" Our attention was drawn to the evidence of these several witnesses and it was pointed out that far from 928 their being definite that there were five or more men concerned in the commission of the offence there was evidence to show that only two persons were occupying the front seats and two persons were occupying the rear seats in the taxi which brought the number of persons to four and not five as contended by the prosecution.
Exception was also taken to the manner in which the expression "piling into the taxi from the rear door of the taxi on the Bank side" was sought to be interpreted by the learned Judge, thus belittling the significance of the evidence of Major Casey that when the taxi went past him he saw two persons in the front seats and two persons in the rear seats of the taxi.
It was further pointed out that according to the evidence of Miss Vida Palmer and Mrs. Paterson there were only five or six persons there in all.
Their evidence did not definitely say that these five persons were the persons concerned in the commission of the offence and that some of them might as well have been passersby or Baburao Raje or Sarvarkhan, who happened to be present there at the scene of the occurrence and were certainly not concerned in the commission of the offence.
It was also pointed out that Holmes, the sub manager of the Bank, who witnessed the occurrence from behind the double glasses of the windows was not in a position to know how many persons actually took part in the affair and was also not in a position to see how many persons had got into the taxi.
We have carefully considered these criticisms of the evidence of the several witnesses but are unable to come to the conclusion that there was any misdirection on the part of the learned Judge in his summing up to the jury.
The evidence of each of these witnesses was discussed by the learned Judge and the main defects and con tradictions in their evidence were clearly pointed out by him to the jury.
The actual words used by him in the paragraph in question were that the several witnesses were all definite that there were five or more men surrounding the taxi and concerned in the attack and on the evidence as a whole we do not see any exception to the correctness of that statement.
The explanation which was given, of the expression 929 "piling into the taxi from the rear door of the taxi on the Bank side" was also unobjectionable.
The words " piling into the taxi" could certainly be appropriate when describing the getting into the taxi of "some other persons" and.
that expression certainly was capable of being understood to mean that more than one person was trying to get into the taxi from its rear door on the Bank side.
All these points were clearly put by the learned Judge to the jury and we are of the opinion that there was no misdirection at all in that part of the learned Judge 's summing up to the jury.
It was strictly within the province of the jury on the evidence as it was summed up by the learned Judge to them on this aspect of the question to come to the conclusion whether four or five persons were concerned in the commission of the offence and they brought in a unanimous verdict of guilty under section 395 of the Indian Penal Code.
The other misdirections which were sought to be pointed out by the learned counsel for the accused I and 2 were minor misdirections, if any, and need not detain us, as we are clearly of the opinion that even though those misdirections were there they were not such as to vitiate the verdict of the jury.
We must however advert to the serious misdirection which it was contended was apparent on the face of the learned Judge 's charge to the jury and which was the result of the learned Judge 's not bringing into prominence the various points which could be urged in favour of the accused.
It was contended that the learned Judge merely reiterated in various places the story of the prosecution and did not point out the weaknesses or the defects in that story, that he did not advert to the various criticisms which were leveled against the story of the prosecution by the counsel for the defence, that he did not point out to the jury the improbabilities of the prosecution story or the incredibility of the prosecution witnesses in regard to the salient features of the prosecution case, that he did not draw the pointed attention of the jury to the infirmities attaching to the prosecution evidence in regard to the test identification parades and that the learned Judge 's summing up to 930 the jury was on the whole unfair and prejudicial to the accused.
Section 297 of the Criminal Procedure Code lays down that in cases tried by jury, when the case for the defence and the prosecutor 's reply (if any) are concluded, the Court shall proceed to charge the jury, summing up the evidence for the prosecution and defence, and laying down the law by which the jury are to be guided.
The Judge lays down the law and directs the jury on questions of law.
So far as the facts are concerned however they are within the exclusive province of the jury.
But even there the Judge has to sum up the evidence for the prosecution and defence.
Summing up does not mean that the Judge should give merely a summary of the evidence.
He must marshall the evidence so as to bring out the lights and the shades, the probabilities and the improbabilities so as to give proper assistance to the jury who are required to decide which view of the facts is true.
Vide Ilu vs Emperor(1).
The Judge should give the jurv the help and guidance which they are entitled to expect from the Judge and which it is his duty to give.
The charge should not consist of a long rambling repetition of the evidence, without any attempt to marshall the facts under appropriate heads, or to assist the jury to sift and weigh the evidence so that they will be in a position to understand which are the really important parts of ' the evidence and which are of secondary importance.
It is necessary in every criminal case for the Judge carefully, properly and efficiently to charge the jury and he should not go into unnecessary details with regard to such aspects of the case which are really of very little importance.
Vide Nabi Khan vs Emperor(2) It has been observed by the Privy Council however in Arnold vs King Emperor(6), that " A charge to a jury must be read as a whole.
there are salient propositions of law in it, these will, of course, be the subject of separate analysis.
But in a protracted narrative of fact the determination of which is ultimately left to the jury, it must needs be that the (1) A.I.R. 1934 Cal.
(2) A.I.R. '1936 Cal.
(3) Cal.
931 view of the Judge may not coincide with the view of others who look upon the whole proceedings in black type.
It would, however, not be in accordance with usual or good practice to treat such cases as cases of misdirection, if, upon the general view taken, the case has been fairly left within the jury 's province.
But in any case in the region of fact their Lordships of the Judicial Committee would not interfere unless something gross amounting to a complete misdescription of the whole bearing of the evidence has occurred. '? Bearing these principles in mind we have got to scrutinise how far these criticisms levelled against the learned Judge 's charge to the jury are of any avail.
We have been taken into the evidence of the several witnesses in great detail by the learned counsel for the accused but we are unable to come to the conclusion that there is any serious misdirection such as to vitiate the verdict of the jury or that there has been a failure of justice.
The learned Judge 's charge to the jury has been scrupulously fair and he has in several places brought out the points which militate against the story of the prosecution and support the defence version.
He has been at pains to point out the various defects and contradictions in the evidence of the prosecution witnesses and has fairly put it to the jury to consider whether in view of the same they would accept the testimony of the several witnesses.
He has marshalled the evidence against each of the accused separately and has also pointed out in their proper places the criticisms which have been levelled against the evidence of the prosecution witnesses in regard to each of the accused, Apart from the general observations which he made in regard to the scrutiny of the evidence of the test identification parades he has also in appropriate places reiterated the warning in regard to that evidence and has put the jury wise to the whole position in regard to such evidence.
On reading the charge as a whole we are of the opinion that there is nothing in the learned, Judge 's charge to the jury which would, to use the words of their Lordships of the Privy Council, " amount to a complete misdescription of the whole bearing of the evidence" or that "there is any failure of justice, 932 We are unable to agree with the submission made by the learned counsel for the accused before us that the charge was grossly unfair or contained any serious misdirection or non direction such as to vitiate the verdict of the jury.
The result therefore is that so far as the verdict of the jury against accused I and 2 is concerned the same was not vitiated either by the admission of inadmissible evidence or by any misdirection or non direction.
The convictions of these accused and the sentences passed upon them by the learned Sessions Judge will therefore be confirmed.
As regards accused 4 however there has been an error of law in admitting evidence of the test identification parades in regard to him which we have held was inadmissible under section 162 of the Criminal Procedure Code.
The admission of such inadmissible evidence would amount to a misdirection in the learned Judge 's charge to the jury in regard to that accused and it is necessary therefore to consider what would be the effect of the admission of such inadmissible evidence so far as that accused is concerned.
Learned counsel for the accused relied upon the observations in Kabiruddin vs Emperor(1), that it was impossible to ascertain what was the effect of this evidence on the minds of the jury and that it was also impossible to say that this inadmissible evidence did not have considerable effect on the jury and their verdict.
He therefore urged that the verdict should be set aside and the case remanded for retrial.
A later decision of the Calcutta High Court reported in Surendra Dinda vs Emperor(1), however, took the view that every breach of section 162 would not vitiate a trial.
Reception of evidence inadmissible under section 162 was not necessarily fatal and in an appeal the Court had to see whether the reception influenced the mind of the jury so seriously as to lead them to a conclusion which might have been different but for its reception.
It must always be a question whether prejudice had been caused in such cases, and, if not, whether the materials (1) A.I.R. 1943 Cal.
644, 646, (2) A.I. R. 933 left were sufficient within the meaning of section 167 of the .
The position in this behalf has got to be considered with reference to the provisions of section 537 of the Criminal Procedure Code and section 167 of the .
Section 537 of the Criminal Procedure Code provides: " Subject to the provisions hereinbefore contained, no finding, sentence or order passed by a Court of competent jurisdiction shall be reversed or altered under Chapter XXVII or on appeal or revision on account. . (d) of any misdirection in any charge to a jury, unless such. . . misdirection has in fact . occasioned a failure of justice.
" Section 167 of the provides: "The improper admission or rejection of evidence shall not be ground of itself for a new trial or reversal of any decision in any case, if it shall appear to the Court before which such objection is raised, that independently of the evidence objected to and admitted, there, was sufficient evidence to justify the decision, or that, if the rejected evidence had been received, it ought not to have varied the decision.
" The latest pronouncement on this question was the decision of the Privy Council in Abdul Rahim vs KingEmperor(1), where it was laid down that where inadmissible evidence had been admitted in a criminal case tried with a jury, the High Court on appeal may, in view of section 167 of the after excluding such inadmissible evidence, maintain 'a conviction, provided that the admissible evidence remaining was, in the opinion of the Court, sufficient clearly to establish the guilt of the accused.
It was observed that Misdirection is not in itself a sufficient ground to justify interference with the verdict.
The High Court must under the provisions of section 423, subsection 2 and section 537 of the Criminal Procedure Code proceed respectively to consider whether the (1) (1946) L.R. 73 I.A. 77.
119 934 verdict is erroneous owing to the misdirection or whether the misdirection has in fact occasioned a failure of justice.
If the Court so finds, then its duty is to interfere.
In deciding whether there has been in fact a failure of justice in consequence of a misdirection the High Court is entitled to take the whole case into consideration and determine for itself whether there has been a failure of justice in the sense that a guilty man has been acquitted or an innocent one convicted.
" This decision was followed by our Court in Mushtaq Husain vs State of Bombay(1) and the Court held that where a jury has been misdirected and has based its verdict on assumptions and conjectures, the Supreme Court may order a retrial or remit the case to the High Court with a direction that it should consider the merits of the case in the light of the decision of the Supreme Court and say whether there has been a failure of justice as a result of the misdirections, or it may examine the merits of the case and decide for itself whether there has been a failure of justice in the case and that in deciding whether there has been in fact a failure of justice in consequence of a misdirection the Court would be entitled to take the whole case into consideration.
This Court discussed the statute law in India which in certain circumstances permitted an appeal against a jury verdict and authorised the appellate Court to substitute its own verdict on its own consideration of the evidence and came to the conclusion that unless it was established in a case that there had been a serious misdirection by the Judge in charging the jury which had occasioned a failure of justice and had misled the jury in giving its verdict, the verdict of the jury could not be set aside.
What has therefore got to be done in cases where inadmissible evidence has been admitted and has been incorporated in the learned Judge 's charge to the jury is to exclude the inadmissible evidence from the record and consider whether the balance of evidence remaining thereafter is sufficient to maintain the conviction.
A question was raised in this connection by the learned Attorney General whether having regard to (1) ; 935 the observations of their Lordships of the Privy Council in Abdul Rahim vs King Emperor (supra) and of this Court in Mushtaq Husain vs State of Bombay (supra) the Court was justified in considering the balance of evidence for itself and substituting its own verdict for the verdict of the jury.
He relied upon the observations of the Privy Council approving the decision in Mathews vs Emperor(1) to the effect that the appellate Court was entitled to examine the evidence to see whether it justified the verdict pronounced or whether there had in fact been a failure of justice and also upon the observations of Mr. Justice Mahajan, as he then was, to the effect that on the materials on record no reasonable body of men could have arrived at the verdict.
There is no doubt that these observations occur in the judgments above referred to.
But if these judgments are read as a whole they go to show that it is for the Court of Appeal to take the whole case into consideration and determine for itself whether the verdict pronounced by the jury was justified or whether there had been in fact a failure of justice.
The merits of the case, had to be examined by the Court.
of Appeal and the Court had to decide for itself whether the conviction could be maintained.
As a matter of fact this very question was mooted before the Privy Council in Abdul Rahim vs KingEmperor(2 ) as under: "The controversy which, as the reported cases show, has long existed in the High Courts of India has centered round the question whether the appellate court, in deciding whether there is sufficient ground for interfering with the verdict of a jury, particularly where there has been a misdirection by the judge, has the right and duty to go into the merits of the case for itself and on its own consideration of the evidence to make up its mind whether the verdict was justified or not.
On the one hand, it has been said that the accused is entitled to have his guilt or innocence decided by the verdict of a jury and that the appellate court has no right to substitute its own judgment in place of a verdict by a jury.
On the other hand, it (1) A.I.R. 1940 Lah. 87.
(2) (1946) L.R. 73 I.A. 77, 93.
936 is argued that it is impossible for the court to perform the duty laid on it by the Code without applying its own mind to the soundness of the verdict.
" Section 537 of the Criminal Procedure Code was then referred to as also the two distinct lines of cases supporting these ,divergent points of view.
The, Privy Council then came to the conclusion that the ratio of cases beginning with Elahee Buksh(1) and ending with Mathews vs Emperor(1) was correct and held that the Court was entitled to examine the evidence for itself and see whether it justified the verdict pronounced or whether there had in fact been a failure of justice.
The Court of Appeal is thus entitled to substitute its own verdict for the verdict of the jury if on examining the record for itself it comes to the conclusion that the verdict of the jury was erroneous or that there has been a failure of justice in the sense that a guilty man has been acquitted or an innocent man has been convicted.
It is therefore necessary to consider whether the balance of evidence on the record after excluding the evidence of test identification parades in regard to accused 4 is sufficient to maintain his conviction.
We have been taken through the evidence which wag led on behalf of the prosecution seeking to prove that accused 4 was concerned in the commission of the offence.
Baburao Raje was no doubt characterised as an unreliable witness.
But even apart from his evidence there was evidence of Sarvarkhan which was sufficient to establish the participation of accused 4 in the offence.
His presence at the scene of the occurrence and his participation in the offence was clearly deposed to by Sarvarkhan and we see no reason in spite of the criticisms levelled against his evidence by learned counsel to discard his testimony in that behalf.
There is also sufficient evidence of his previous conduct, his association with the accused I and 2, his activities in Bombay after he arrived there from Delhi in the beginning of April, 1951, in regard to the renting of rooms and garage from Tayabali Vaid and attempting to acquire the Vauxhall and the Chevrolet cars from ' Haribhau and Ramdas respectively, his (1) (2) A.I.R. 1940 Lah.
87. 937 conversations with Lalchand and in particular (1) the conversation outside the Sandhurst Road Branch of the Central Bank of India Ltd., and (2) the conversation at Apollo Bunder near the Sea Wall where he, accused 1 and Lalchand had gone after having the hair cut at the Taj Mahal Hotel and survey of the site of the Lloyds Bank by him along with the other accused as deposed to by Chinoy and Ramesh Chandra Mehta which make it highly probable that he must have been present at the scene of the occurrence and must have participated in the commission of the offence as deposed to by Sarvarkhan.
His subsequent conduct also in leaving Bombay by the Calcutta Mail bound for Allahabad on the night of the 20th April, 1951, and the expression of relief at his finding accused 1 at the last moment entering his compartment, proved as it is by the evidence of Gogte contrary to his own assertion and the assertion of accused 1 that they had left Delhi for Kanpur on the 18th April, 1951, and had sworn an affidavit there before the Magistrate, Mr. Tandon, also support the same conclusion.
All this evidence in our ' opinion is sufficient to establish the case of the prosecution against him and we are satisfied that even excluding the evidence of the test identification parades in regard to him the balance of evidence remaining on record is enough to maintain his conviction.
The result therefore is that the appeals of all the accused fail and must stand dismissed.
JAGANNADHADAS J. I agree that the appeals should be dismissed.
But I consider it necessary to make a few observations as regards the questions debated before us in these cases with reference to section 162 of the Criminal Procedure Code and section 27 of the .
I agree that the objection under section 162 of the Criminal Procedure Code to the admissibility of evidence relating to identification parades does not apply to those held prior to the 1st August, 1951.
The only identification parade, therefore, objection to the admis.
sibility of which requires consideration is that which relates to the fourth accused held in January, 1952.
938 The evidence in this behalf has been given by (1) the Police Inspector, P.W. 80, Huzur Ahmed Mahomedali Khan, (2) the Panch witness, P.W. 113, Damodar Dayaram, and (3) the two eye witnesses, P.Ws. 13 and 15, Baburao Parshram Raje and Sarwarkhan.
An attempt has been made to argue before us that while the evidence of the police officer may be inadmissible, the evidence of the Panch witness as well as of the identifying witnesses themselves, relating to the fact of the prior identification, as an item of corroborative evidence is admissible.
I agree that, on the evidence given in this case, there is no scope for such differentiation and that the entire evidence relating to the prior identification parades concerning the 4th accused is, in Substance, evidence only of the prior statements of the identifying witnesses to, the police officer and is hence inadmissible.
But I wish to guard myself against being understood as having assented to the suggestion that in law a, differentiation can be made in such cases between the three classes of evidence, viz., (1) of the police officer, (2) of the Panch witness, and (3) of the identifying witness himself, in so far as they speak to a prior identification at a parade held by the police officer.
I am inclined to think that such differentiation is unsound and inadmissible.
The legal permissibility thereof is a matter of importance because, though the evidence of prior identification is only corroborative evidence, still such corroboration is of considerable value in cases of this kind.
Next as regards the objection to the admissibility of evidence raised with reference to section 27 of the , the main items of evidence are (1) the recovery on the 16th May, 1951, of a tin box containing three revolvers and two tins containing live cartridges, and (2) the find on the 19th May, 1951, of a steel trunk containing Government currency notes of the value of Rs. 6,47,400 on the production thereof by Kamalabai, the wife of the first accused, at a village Bhagwasi which is her native place.
So far as the first is concerned it is not of much consequence because the expert evidence did not show that any of the three bullets which were found at the scene of offence were 939 in fact fired from the three revolvers above recovered and this has been sufficiently indicated in the charge to the jury.
It is the second item that is of importance.
This arises from the fact that some of the currency notes had identification marks showing that they were part of the bundle of notes which formed the object of the offence.
The evidence in this behalf is that of the Police Inspector, P.W. 80, which is as follows: "We started from Delhi at about 6 'A.M., and reached Bagwasi at about 2 or 3 P.m., on the 19th of May.
The 1st accused took us to a certain house where he pointed out witness Kamala (wife of the first accused).
At the instance of the 1st accused witness Kamala brought from somewhere outside that house a steel box. . .
When it was opened I found therein six big bundles and five smaller bundles of hundred rupee G. C. Notes.
" The portion in this evidence which is objected to is that this production was "at the instance of the first accused" seeking thereby to establish the direct connection of the first accused with the find of this very large sum of money which bears indications that it was out of that lost to the Bank by the offence.
It may be that when a police officer speaks to a recovery being "on the information of" or "at the instance of" an accused, section 27 of the is not in terms attracted.
But what is objected to on behalf of the appellants is that when a police officer speaks to a recovery of this kind as having been "at the instance of an accused" or "in consequence of information given by an accused" he is being allowed to place on record not merely the fact of his having received some information but also the implication thereof, viz., that the information is of a character which directly con nects the accused with the objects recovered.
It is urged that the prosecution cannot be permitted to rely on such evidence without placing the admissible portion of the information on the record.
I am inclined to think that there is considerable force in this objection.
The information given by ;in accused in such a situation may be such which, if scrutinised, shows only his 940 remote connection and not direct connection.
In such a situation evidence of the bare fact of information having been given may be inadmissible and such evidence may cause serious prejudice.
I am not, therefore, prepared to say that the view expressed by Chief Justice Chagla in the unreported judgment(1), placed before us is erroneous.
I would reserve my opinion in this behalf for fuller consideration.
In the present case, however, even if the evidence of the police officer that the recovery was at the instance of or in consequence of information furnished by the first accused is ruled out, there is still the fact spoken to by him that the trunk containing the currency notes was produced by Kamalabai, wife of the first accused, at her native place.
This item of evidence is clearly admissible against the first, accused as indicating his connection.
Therefore no prejudice can be said to have been caused.
It is also to be noticed that no objection under sect ion 27 of the appears to have been taken at the trial nor is there any indication of it in the grounds of appeal to the High Court.
In view of our opinion that the evidence of identification parades relating to.
the fourth accused was inadmissible, we were 'taken through the rest of the evidence as against this accused.
I agree, on a consideration of that evidence, that this is not a case in which interference with the verdict even as against the fourth accused is called for.
Appeals dismissed.
(i) judgment of the Bombay High Court in Criminal Appeals Nos. 454 and 464 Of 1949 in the case of Rex vs Gobutchand Dwarkadas Morarka No. I, delivered on the 11th January, 1950.
| IN-Abs | Investigation in this case was started on the 20th April, 1951, under the City of Bombay Police Act (Bombay Act IV of 1902), the provisions of the , Code of Criminal Procedure being then inapplicable to Bombay City Police by virtue of section I (2)(a) of the Code.
In 1951, the Bombay Police Act (Bombay Act XXII of 1951) was passed by 'which both the Bombay Act IV of 1902 and the provision in section 1(2)(a) of the Code of Criminal Procedure in so far as it made the Code inapplicable to Bombay City Police. were repealed.
This Act came into force on 1st August, 1951, and after that date the provisions of the Code of Criminal Procedure became applicable to investigations by the Bombay City Police.
Under section 63 of the City of Bombay Police Act (Bombay Act IV of 1902), no statement made by a person to a Police Officer during investigation, reduced to writing, may be need in evidence, while under section 162 of the Code of Criminal Procedure the ban applies also to oral statements made to a Police Officer during investigation, not reduced to writing.
Held, that section 162 of the Code of Criminal Procedure by its very context and terms, applied to investigations conducted under Chapter XIV of the Code, and could not operate retrospectively and apply to investigations conducted prior to 1st August, 1951, by the Bombay City Police, as they were not investigations conducted under Chapter XIV of the Code.
The test identification parades in regard to accused I and 2 having been held prior to the 1st August, 1951, section 162 of the Code did not apply to the evidence 904 received in regard to these parades, but the section applied to the evidence relating to the test identification parades in regard to accused 4 as these were held after 1st August, 1951.
Banwari Gope vs Emperor (A.I.R. 1943 Patna 18) and Delhi Cloth Mills vs Income tax Commissioner, Delhi (A.I.R. , referred to.
The purpose of identification parades being to enable witnesses to identify the properties involved or the persons concerned in the offence under investigation, the very process of identification involves a statement by the identifying witness that the particular property or person identified was concerned in the offence.
This statement may be express or implied.
Such a statement, whether express or implied, including signs and gestures, would amount to a communication of the fact of identification by the identifier to another person, and where the identifications are held in the presence of the Police, such communications are tantamount to statements made by the identifiers to a Police Officer in the course of investigation and come within the ban of section 162 of the Code.
The physical fact of identification has no separate existence apart from the statement involved in the very process of identification, and in so far as a Police Officer seeks to prove the fact of such identification, such evidence would be inadmissible under section 162 of the Code, the only exception being the evidence sought to be given by the identifier himself in regard to his mental act of identification which he would be entitled to give by way of corroboration of his identifi cation of the accused at the trial.
Where the Police Officers arrange the parade, produce the parsons who are to be mixed up with the accused, and withdraw, leaving the actual parade solely and exclusively in charge of Panch witnesses, and the process of identification is carried out under the exclusive direction and supervision of the Panch witnesses, the statements involved in the process of identification would be state ments made by the identifiers to the Panch witnesses and would be outside the purview of section 162 of the Code.
Khabiruddin vs Emperor (A.I.R. ; Surendra Dinda vs Emperor (A.I.R. ; and Daryoo Singh vs State (A.I.R. 1952 All. 59), approved.
In re Kshatri Ram Singh (A.I.R. 1941 Mad. 675); Guruswami Thevan vs Emperor and Bamdhin Brahmin vs Emperor (A.I.R. , disapproved.
Rao Shiv Bahadur Singh vs State of Vindhya Pradesh ([1954] S.C.R. 1098) and Abdul Kader vs Emperor (A.I.R. 1946 Cal.
452), referred to.
Per JAGANNADHADASJ.
Differentiation between the evidence of a Police Officer and that of Panch witnesses and identifying witnesses relating to the fact of prior identification in a parade held by a Police Officer on the ground of the latter being corroborative evidence, is unsound and inadmissible, and the evidence of the 905 Panch witnesses and identifying witnesses relating to the fact of prior identification would be inadmissible even as corroborative evidence.
Section 27 of the Indian Evidence Act is based on the view that if a fact is actually discovered in consequence of information given, some guarantee is afforded thereby that the information was true and accordingly can be safely allowed to be given in evidence.
But clearly the extent of the information admissible must depend on the exact nature of the fact discovered to which such information is required to relate.
Kottaya vs Emperor (A.I.R. 1947 P.O. 67), referred to.
Where evidence was given by a Police Officer that "in conse quence of a certain statement made by the accused" and "at the instance of the accused", a tin box was dug out of a mud house, and the nature of the statement made or information given by the accused was not sought to be proved, section 27 was not attracted and prima facie there was nothing to prevent the evidence being admitted against the accused concerned.
Durlav Namasudra vs Emperor ([1931] I.L.R. , referred to.
Per JAGANNADHADAS J.
There is considerable force in the objection that when a Police Officer speaks to a discovery being made "at the instance of the accused" or "in consequence of information given by the accused", the prosecution cannot be permitted to rely on such evidence without placing the admissible portion of the information on record.
The information given by the accused in such a situation may be such as, on scrutiny, might show only his remote connection and not direct connection with the objects recovered.
In such a situation, evidence of the bare fact of information having been given may cause serious prejudice.
Summing up to the Jury does not mean merely giving a summary of the evidence.
The Judge should marshall the evidence so as to bring out the lights and the shades, the probabilities and improbabilities, so as to give proper assistance to the Jury who are to decide which view of the facts is true.
The charge should not consist of along rambling repetition of the evidence, without any attempt to marshall the facts under appropriate heads, or to assist the Jury to sift and weigh the evidence so that they may be in A. position to understand which are the really important parts of the evidence and which are of secondary importance.
Ilu vs Emperor (A.I.R. and Nabi Khan vs King Emperor (A.I.R. , referred to.
Held, that as regards accused 4 there had been an error of law in admitting evidence of the test identification parades relating to him.
The admission of such inadmissible evidence would amount to a misdirection; but misdirection by itself would not be a ground for reversal under a. 537 of the Code unless such misdirection had in fact occasioned a failure of justice, nor is reception 906 of evidence inadmissible under section 162 of the 'Code necessarily fatal.
The Appellate Court has to see whether the reception of inadmissible evidence influenced the mind of the Jury so seriously as to lead them to a conclusion which might have been different but for its reception.
What the Appellate Court should do is to exclude the inadmissible evidence from the record and consider whether the balance of evidence is sufficient to maintain the conviction.
The Court of Appeal should take the whole case into consideration and determine for itself whether the verdict of the Jury was justified or whether there had in fact been a failure of justice.
The Court of Appeal is entitled to substitute its own verdict for the verdict of the Jury if on examining the record for itself it comes to the conclusion that the verdict of the Jury was erroneous or that there had been a failure of justice in the sense that a guilty man has been acquitted or an innocent man his been convicted.
Abdul Rahim vs King Emperor ((1946) L.R. 73 I.A. 77, Mushtaq Hussain vs State of Bombay ([19531 S.C.R. 809), Ilu vs Emperor (A.I.R. 1934 Cal, 847); Nabi Khan vs Emperor (A.I.R. ; Khabiruddin vs Emperor (A.I.R. 1943 Cal. 644) ; Surendra Dinda vs Emperor (A.I.R. and Mathews vs Emperor (A.I.R. 1940 Lahore 87), referred to.
|
Appeals Nos. 1061 and 1627 to 1629 of 1966.
Appeals by special leave from the judgment and order dated March 9, 10, 1965 of the Bombay High Court in Revision Applications Nos.
1428, 1427, 1430 and 1676 of 1961.
M. C. Chagla, J. L. Hathi, K. L. Hathi and K. N. Bhat for the appellants (in all the appeals).
R. P. Bhat, Janendra Lal, R. A. Gagrat and B. R. Agarwala, for the respondent (in all the appeals).
The Judgment of the Court was delivered 'by Shah, J.
Under an indenture dated August 2, 1950, Dossibai respondent in this appeal granted a lease of 555 sq. yards in village Pahadi, Taluka Borivli to Mathura Prasad appellant herein for constructing buildings for residential or,business purposes.
The appellant constructed buildings on the land.
He then submitted an application in the Court of the Civil Judge, Junior Division, Borivli, District Thana, that the standard rent of the land be determined under section 11 of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947.
The Civil Judge rejected the application holding that the provisions of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, did not apply to open land let for constructing buildings for residence, education, business, trade or storage.
This order was confirmed on September 28, 1955, by a single Judge of the Bombay High Court in a group of revision applications : Mrs. Dossibai N. B. Jeejeebhoy vs Hingoo Manohar Missar : Nos. 233 to 242 of 1955.
But in Vinayak Gopal Limaye vs Laxman Kashinath Athavale(1) the High Court of Bombay held that the question whether section 6(1) of the Act applies to any particular lease must be determined on its terms and a building lease in respect of an open plot is not ex (1) I.L.R. 832 cluded from section 6(1) of the Act solely because open land may be used for residence or educational purposes only after a structure is built thereon.
Relying upon this judgment, the appellant filed a fresh petition in the Court of the Small Causes, Bombay, for an order determining the standard rent of the premises.
The application was filed in the Court of Small Causes because the area in which the land was situated had since been included within the limits of the Greater Bombay area.
The Trial Judge rejected the application holding that the question whether to an open piece of land let for the purpose of constructing buildings for residence.
education, business or trade section 6 (1) of the Act applied was res judicata since it had been finally decided by the High Court between the same parties in respect of the same land in the earlier proceeding for fixation of standard rent.
The order was confirmed by a Bench of the Court,of Small Causes and by the High Court of Bombay.
With special leave, the appellant has appealed to this Court.
The view expressed by the High Court of Bombay in Mrs. Dossibai N. B. Jeejeebhoy vs Hingoo Manohar Missar (Civil) Revision Application No. 233 of 1955 (decided on September 28, 1955) was overruled by this Court in Mrs. Dossibai N. B. Jeejeebhoy vs Khemchand Gorumal & Others(1).
In the latter case the Court affirmed the view expressed by the Bombay High Court in Vinayak Gopal Limaye 's case (2).
But all the Courts have held that the earlier decision of the High Court of Bombay between the same parties and relating to the same land is res judicata.
Section II of the Code of Civil Procedure which enacts the general rule of res judicata, insofar as it is relevant, provides : "No Court shall try any suit or issue in which the matter directly and substantially in issue has been directly and substantially in issue in a former suit between the same parties, or between parties under whom they or any of them claim litigating under the same title, in a Court competent to try such subsequent suit or the suit in which such issue has been subsequently raised, and has been heard and finally decided by such Court." The Civil judge, Junior Division, Borivli, was competent to try the application for determination of standard rent, and he held that s 6(1) of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, did not apply to open land let for construction of residential and business premises.
The rule of res judicata applies if "the matter directly and substantially in issue" in a suit or proceeding was directly and sub (1) I.L.R. (2) 833 stantially in issue in the previous suit between the same parties and had been heard and finally decided by a competent Court.
The Civil Judge, Junior Division, Borivli, decided the application between the parties to the present proceeding for determination of standard rent in respect of the same piece of land let for construction of buildings for residential or business purposes.
The High Court has held that a decision of a competent Court may operate as res judicata in respect of not only an issue of fact, but mixed issues of law and fact, and even abstract questions of law.
It was also assumed by the High Court that a decision relating to the jurisdiction of the Court to entertain or not to entertain a proceeding is binding and conclusive between these parties in respect of the same question in a later proceeding.
But the doctrine of res judicata belongs to the domain of procedure : it cannot be exalted to the status of a legislative direction between the parties so as to determine the question relating to the interpretation of enactment affecting the jurisdiction of a Court finally between them, even though no question of fact or mixed question of law and fact and relating to the right in dispute between the parties has been determined thereby.
A decision of a competent Court on a matter in issue may be res judicata in another proceeding between the same parties : the "matter in issue" may be an issue of fact, an issue of law, or one of mixed law and fact.
An issue of fact or an issue of mixed law and fact decided by a competent court is finally determined between the parties and cannot be re opened between them in another proceeding.
The previous decision on a matter in issue alone is res judicata : the reasons for the decision are not res judicata.
A matter in issue between the parties is the right claimed by one party and denied by the other, and the claim of right from its very nature depends upon proof of facts and application of the relevant law thereto.
A pure question of law unrelated to facts which give rise to a right, cannot be deemed to be a matter in issue.
When it is said that a previous decision is res judicata, it is meant that the right claimed has been adjudicated upon and cannot again be placed in contest between the same parties.
A previous decision of a competent Court on facts which are the foundation of the right and the relevant law applicable to the determination of the , transaction which is the foundation of the right and the relevant law applicable to the determination of the transactions which is the soured of the right is res judicata.
A previous decision on a matter in issue is a composite decision: the decision of law can not be dissociated from the decision on facts on which the right is founded.
A decision on an issue of law will be as res judicata in a subsequent proceeding between the same parties, if the cause of action of the subsequent Proceeding be the same as in the previous proceeding, but not when the cause of action is different, nor 834 when the law has since the earlier decision been altered by a competent authority, nor when the decision relates to the jurisdiction of the Court to try the earlier proceeding, nor when the earlier decision declares valid a transaction which is prohibited by law.
The authorities on the question whether a decision on a question of, law operates as res judicata disclose widely differing views.
In some cases it was decided that a decision on a question of law can never be res judicata in a subsequent proceeding between the same parties : Parthasardhi Ayyangar vs Chinnakrishna Ayyangar(1); Chamanlal vs Bapubhai (2) ; and Kanta Devi vs Kalawati(3).
On the other hand Aikman, J., in Chandi Prasad vs Maharaja Mahendra Mahendra Singh(1) held that a decision on a question of law is always res judicata.
But as observed by Rankin, C.J., in Tarini Charan Bhattacharjee vs Kedar Nath Haldar(5) : "Questions of law are of all kinds and cannot be dealt with as though they were all the same.
Questions of procedure, questions affecting jurisdiction, questions of limitation, may all be questions of law.
In such questions the rights of parties are not the only matter for consideration.
" We may analyse the illustrative cases retating to questions of law, decisions on which may be deemed res judicata in subsequent proceeding.
In Bindeshwari Charan Singh vs Bageshwari Charan Singh(1) the Judicial Committee held that a decision of a court in a previous suit between the same parties that section 12A of the Chota Nagpur Encumbered Estates Act 6 of 1876 which renders void a transaction to which it applies was inapplicable, was Yes judicata.
In that case the owner of an impartable estate, after his estate was released from management, executed a maintenance grant in favour of his minor son B, but without the sanction of the Commissioner as required by section 12A of the, Act.
B on attaining majority sued his father and brothers for a maintenance grant at the rate of Rs. 4,000 per annum.
The claim was decreed, and the plaintiff was awarded a decree for a grant of Rs. 4,000 inclusive of the previous grant of 1909, and the Court held that the grant of 1909 was valid in law.
The father implemented the decree and made an additional maintenance grant upto the value of the decreed sum.
In an action by the sons of B 's brothers challenging the two grants on the plea that the grants were illegal and not binding upon them, the Judicial Committee held that the plea was barred as res judicata in respect of both the grants in respect of the first because there was an express decision on the validity of the first grant in the earlier suit, and in respect of the second the (1) I.L.R. (3) A.I.R. [1946] Lah. 419.
(5) I.L.R. (2) I L.R, (4) I.L.R. 23 All.
(6) L.R. 63 I.A. 53.
83 5 decision in the first suit was res judicata as to the validity of the second grant which was made in fulfillment of the obligation under the Court 's decision.
The Judicial Committee held that in respect of the first grant, the decision that section 12A did not apply to the grant, was res judicata, and in respect of the second grant the construction between the same parties of section 12A was res judicata.
Validity of the second grant was never adjudicated upon in any previous suit; the second grant was held valid because between the parties it was decided that to the grant of maintenance of an impartible zamindari section 12A of the Chota Nagpur Encumbered Estates Act had no application.
This part of the judgment of the Judicial Committee is open to doubt.
Where the law is altered since the earlier decision, the earlier decision will not operate as res judicata between the same, parties : Tarini Charan Bhattacharjee 's case(1).
It is obvious that the matter in issue in a subsequent proceeding is not the same as in the previous proceeding, because the law interpreted is different.
In a case relating to levy of tax a decision valuing property or determining liability to tax in a different taxable period or event is binding only in that period or event, and is not binding in the subsequent years, and therefore the rule of, res judicata has no application; see Broken Hill Proprietary Company Ltd. vs Municipal Council of Broken Hill(2) A question of jurisdiction of the Court, or of procedure, or a pure question of law unrelated to the right of the parties to a previous suit, is not res judicata in the subsequent suit.
Rankin, observed in Tarini Charan Bhattacharjee 's case(1) : "The object of the doctrine of res judicata is not to fasten upon parties special principles of law as applicable to them inter se, but to ascertain their rights and the facts upon which these rights directly and substantially depend; and to prevent this ascertainment from becoming nugatory by precluding the parties from reopening or recontesting that which has 'been finally decided.
" A question relating to the jurisdiction of a Court cannot be deemed to have been finally determined by an erroneous decision of the Court.
If by an erroneous interpretation of the statute the Court holds that it has no jurisdiction, the question would not, in our judgment, operate as res judicata.
Similarly by an erroneous decision if the Court assumes jurisdiction which it does.
not possess under the statute, the question cannot operate as res judicata bet (1) I.L.R. (2) 83 6 ween the same parties, whether the cause of action in the subsequent litigation is the same or otherwise.
It is true that in determining the application of the rule of res judicata the Court is not concerned with the correctness or otherwise of the earlier judgment.
The matter in issue, if it is one purely of fact, decided in the earlier proceeding by a competent court must in a subsequent litigation between the same parties be regarded as finally decided and cannot be, reopened.
A mixed question of law and fact determined in the earlier proceeding between the same parties may not, for the same reason, be questioned a subsequent proceeding between the same parties.
But, where the decision is on a question law, i.e. the interpretation of a statute, it will be res judicata in a subsequent proceeding between the same parties where the cause of action is the same for the expression "the matter in issue" in section 11 Code of Civil Procedure means the right litigated between the parties, i.e. the facts on which the right is claimed or denied and the law applicable to the determination of that issue.
Where, however, the question is one purely of law and it relates to the jurisdiction of the Court or a decision of the Court sanctioning something which is illegal, by resort to the rule of res judicata a party affected by the decision will not be precluded from challenging the validity of that order under the rule of res judicata,for a rule of procedure cannot supersede the law of the land.
In the present case the decision of the Civil Judge, Junior Division, Borivli, that he had no jurisdiction to entertain the application for determination of standard rent, is, in view of the judgment of this Court, plainly erroneous : see Mrs. Dossibai N. B. Jeejeebhoy vs Khemchand Gorumal & Others(1) If the decision in the previous proceeding be.
regarded as conclusive it will assume the status of a special rule of law applicable to the parties relating to the jurisdiction 'of the Court in derogation of the rule declared by the Legislature.
The appeals are allowed, and the orders passed by the High Court and the Court of Small Causes are set aside and the proceedings are remanded to the Court of First Instance to deal with and dispose them of in accordance with law.
There will be no order as to costs throughout.
Y.P. Appeals allowed.
| IN-Abs | The appellant obtained lease of an open land for construction of buildings.
After the constructions, the appellant applied for determination of standard rent under the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947.
The application was rejected holding that the provi sions of the Act did not apply to open land let for construction.
This view was confirmed by the High Court.
Sometime thereafter in another case the High Court held that the question whether the provisions of the Act applied to any particular lease must be determined on its terms and a building lease in respect of an open plot was not excluded from the provisions of the Act solely because open land may be used from residence or educational purposes only after a structure is built thereon.
Relying upon this judgment, the appellant filed a fresh application for determining the standard rent.
The Trial Judge rejected the application holding that question of the applicability of the Act was res judicata since it had been finally decided by the High Court between the same parties in respect of the same land in the earlier proceeding for fixation of standard rent.
The order was confirmed by first appellate court and on further appeal by the High Court.
HELD:The judgment did not operate as res judicata.
A question relating.
to the jurisdiction of a Court cannot be deemed to have been finally determined by an erroneous decision of the Court.
If by an erroneous interpretation of the statute the court holds that it has no jurisdiction, the decision will not, operate as res judicata.
Similarly by an erroneous decision if the Court assumes jurisdiction which it does not possess under the statute, the decision will not operate as res judicata between the same parties, whether the cause of action in the subsequent litigation is the same or otherwise.
in determining the application of the rule of res judicata the court is not concerned with the correctness or otherwise of the earlier judgment.
The matter in issue, if it is one purely of fact, decided in the earlier proceeding by a competent court must in a subsequent litigation between the same parties be regarded as finally decided and cannot be reopened.
A mixed question of law and fact determined in the earlier proceeding between the same parties may not, for the same reason, be questioned in a subsequent proceeding between the same parties where the cause of action is the same, for the expression "the matter in issue" in section 11, Code of Civil Procedure means the right litigated between the parties, i.e., the facts on which the right is claimed or denied and the law applicable to the determination of that issue.
Where, however, the question is one purely of law and it relates to the jurisdiction of the Court or a decision of the Court sanctioning something which is illegal, by resort to the rule of res judicata a party affected by the decision will not be precluded_ from challenging the validity of that order because of the rule of res judicata, for a rule of procedure cannot supersede the law of the land.
83 1 if the decision in the previous proceeding be regarded as conclusive it will assume the status of a special rule of law applicable to the parties relating to the jurisdiction of_the Court, in derogation of the rule declared by the Legislature.
[835G 836 F] Parthasardhi Ayyangar vs Chinnakrishna Ayyangar, I.L.R. , Chamanlal vs Bapubhai, I.L.R. , Kanta Devi vs Kalawati, A.I.R. 1946 Lah.
419,, Tarini Charan Bhattacharjee vs Kedar Nath Haldar, I.L.R. , and Broken Hill Proprietary Company Ltd. vs Municipal Council of Broken Hill, , approved.
Chandi Prasad vs Maharaja Mahendra Mahendra Singh, I.L.R. 23 All.
,5, disapproved.
Bindeshwari Charan Singh vs Bageshwari, Charan Singh, L.R. 63 I.A. 53, doubted.
|
Appeals Nos.
1991 1992, 2010 and 2011 of 1968.
Appeals from the judgment and order dated October 9, 1967 of the Gujarat High Court in Wealth Tax Reference No. 3 of 1964.
B. Sen, section K. Aiyar and B. D. Sharma, for the appellant (in C. A. Nos. 1991 and 1992 of 1968) and the respondent (in C. As.
2010 and 2011 of 1968).
8 20 N. A. Palkhivala and I. N. Shroff, for the respondent (in C. As.
Nos. 1991 and 1992 of 1968) and the appellant (in C.As.
2010 and 2011 of 1968).
The Judgment of the Court was delivered by Hegde, J.
These appeals by certificate under section 29 of the Wealth Tax Act, 1957 (to be hereinafter referred to as the Act) arise from a reference under section 27(1) of the Act to the High Court of Gujarat.
Therein four questions were referred to the High Court for its opinion.
,These four questions really gave rise to two questions of law viz. (1) whether under the three trust deeds referred to therein the assessee got annuities falling within the scope of section 2(e) (iv) ? and (2) whether the value of the jewels owned by the assessee was exempt under section 5(1)(viii) in computing the net wealth of the assessee ? The assessee is an individual and the assessment years with which we are concerned in these appeals are 1957 58 and 195859, the corresponding valuation dates being December 31, 1956 and December 31, 1957.
By a deed of settlement dated September 7, 1945 the father of the assessee settled certain shares of the Indian Companies of the estimated value of Rs. 5,50,325/ upon trust for the benefit of his two sons and his daughter, the assessee.
By another deed of settlement dated October 12, 1945 he settled certain other shares upon trust for the benefit of the assessee and her two brothers.
All the terms of the two trust deeds relevant for our present purpose are identical.
By a deed of settlement dated September 30, 1945, the mother in law of the assessee settled upon trust a sum of Rs. 3,88,931/ and shares of some Indian Companies of the aggregate market value of Rs. 11,81,670/ .
The assessee is one of the beneficiaries named in that deed.
The assessee also possessed jewellery of the value of Rs. 80,000/ .
As regards the payments to be made to the assessee under the afore mentioned three trust deeds, the contention of the assessee is that under each of those deeds, she has only a right to an 'annuity ' and the terms and conditions relating thereto preclude the commutation of any portion thereof into a lumpsum grant and hence in view of section 2(e)(iv), the value of those annuities cannot be included in the computation of her net wealth.
As regards the jewellery her case is that they are articles of her personal use and therefore their value cannot be taken into consideration in ascertaining her net wealth.
She contends that the value of those jewellery is exempt under section 5(1)(viii).
The Wealth Tax Officer rejected both those contentions and assessed her after including in her net wealth the value of the benefits receivable by her under 821 the trust deeds in question as well as the value of the jewellery minus Rs. 25,000/ , deduction given under section 5(1)(xv) as it stood at the relevant time.
Against that order the assessee went up in appeal to the Assistant Appellate Commissioner.
That officer agreed with the conclusions reached by the Wealth Tax Officer and he accordingly dismissed the appeal of the assessee.
Thereafter the assessee appealed to the Tribunal.
The Tribunal held that the payments to be made to the assessee under the trust deed executed by her mother in law is an 'annuity ' entitled to exemption under section 2(e) (iv).
As regards the payments to be made to the assessee under her father 's, settlement deeds, it opined that as the assessee was entitled to withdraw from the trust fund at her own discretion after she attained majority and after she gave birth to one child, one half of the corpus, to that extent commutation was possible.
Therefore to the extent of one half of the value of the annual payments to be made to her under those deeds, the assessee was not entitled to exemption under section 2(e)(iv) but she was entitled to exemption as regards the other half.
The Tribunal rejected the assessee 's claim for exemption under section 5(1)(viii) i.e. in respect of the value of the jewellery.
One a reference under section 27(1), the High Court of Gujarat held that the payments to be made to the assessee under the three settlement deeds do not come within section 2(e)(iv) but the value of the jewellery is exempt under section 5(1)(viii).
Both the assessee as well as the Revenue have appealed against that decision.
We shall first take up the contention of the assess6e that the payments to be made to her under the trust deeds are annuities which by the terms and conditions relating thereto preclude the commutation of any portion thereof into a lumpsum grant and hence are within the scope of section 2(e)(iv).
If those payments fall within the scope of that provision, they cannot be considered as the assets of the assessee and therefore their value cannot be reckoned in determining her net wealth under section 2(m).
Under section 3, the charging section, only the net wealth of an assessee can be brought to tax.
Hence we have to examine the terms of the settlement deeds to find out whether the benefits conferred on the assessee by any or all of those deeds can be considered as annuity.
As stated earlier the two settlement deeds executed by the father of the assessee are expressed more or less in identical language.
It was conceded at the bar that whatever construction we may place on one, would be equally applicable to the other.
Therefore we shall take up the deed executed on September 7, 1945 by the father of the assessee.
Under cl. 3 of that deed it is provided that the trustees, after deducting from the income of the 822 shares in question, all costs and expenses incurred in or about the administration of the trust, should at the end of every calendar year pay the whole residue to the assesses and her two brothers in equal shares.
But after the death of the assessee her heirs are not entitled to any share in that income.
Therein provision is made by the settler for disposition of the corpus of the trust.
But it is provided that notwithstanding anything contained to the contrary in the deed of Trust after assessee attained majority and after the birth of her first child when and so often as might be required by the assessee, the trustees are required to pay a portion of the corpus of the trust fund not exceeding in the whole one half thereof to the assessee and this payment of the corpus was to be absolutely freed and discharged from the trust and provisions of the trust deed.
The other provisions of the trust deed are not relevant for our present purpose.
Under the trust deed executed by the assessee 's mother in law on December 30, 1945, the husband of the assessee and her two brothers in law were constituted as the Trustees.
Under cl.
(a) of that deed, the trustees were required to pay the income of the trust fund after deducting the expenses to the assessee during her life time.
The rest of the clauses in that trust deed relate to disposition of the corpus to different beneficiaries after the life time of the assessee.
It is clear from the terms of the three trust deeds referred to earlier that the assessee had a life interest in each of those funds.
Further under the trust deeds executed by her father, she was also entitled to a portion of the corpus under certain circumstances.
The question for decision is whether the benefits obtained by the assessee under those deeds can be held to come within section 2 (e)(iv).
The expression "annuity" is not defined in the Act.
In Halsbury 's Laws of England, 3rd Edn. Vol.32 at p. 534 (paragraph 899), the meaning of the word "annuity" is explained thus "An annuity is a certain sum of money payable yearly either as a personal obligation of the grantor or out of property not consisting exclusively of land." In Jarman on Wills at p. 11 13 "annuity" is defined thus "An annuity is a right to receive de anno in annum a certain sum; that may be given for life, or for a series of years; it may be given during any particular period, or in perpetuity; and there is also this singularity about annuities, that, although payable out of the personal assets, they are capable of being given for the purpose of devolution, as real estate; they may be given to a man and his heirs, and may go to the heir as real estate.
" 823 In Williams on Executors and Administrators "annuity" is described as a yearly payment of a certain fixed sum of money granted for life or for years charging the person of the grantor only.
In Bignold vs Giles,(1), Kindersley V. C. described "annuity" in these words: "An annuity is a right to receive de anno in annuma certain sum; that may be given for life, or for a series of years; it may be given during any particular period, or in perpetuity; and there is also this singularity about annuities, that although payable out of the personal assets, they are capable of being given for the purpose of devolution, as real estate; they may be given to a man and his heirs, and may go to the heir as real estate so an annuity may be given to a man and the heirs of his body; that does not, it is true constitute an estate tail, but that is by reason of the Statute De Donis, which contains only the word 'tenements ', and an annuity, though a hereditament, is not a tenement; and an annuity so given is a base fee.
" Proceeding further the learned judge observed: "But this appears to me at least clear; that if the gift of what is called an annuity is so made, that, on the face of the will itself, the testator shows his intention to give a certain portion of the dividends of a fund, that is a very different thing; and most of the cases proceed on that footing.
The ground is, that the Court construes the intention of the testator to be, not merely to give an annuity, but to give an aliquot portion of the income arising from a certain capital fund." Illustrations of annuity given in section 173 of the Indian Succession Act also show that it is a right to receive a specified sum and not an aliquot share in the income arising from any fund or property.
Ordinarily an annuity is a money payment of a fixed sum annually made and is a charge personally on the grantor.
On an analysis of the relevant clauses in three trust deeds, it is clear the assessee was given thereunder a share of the income arising from the funds settled on trust.
Under those deeds she is not entitled to any fixed sum of money Therefore it is not possible to hold that the payments that she is entitled to receive under those deeds are annuities.
She has undoubtedly a life interest in those funds.
In Ahmed G. H. Ariff vs Commissioner of Wealth Tax, Calcutta (2) , a Division Bench of the Calcutta High Court held that the right of a person to receive under a wakf an aliquot (1) Drew 345; (Revised Reports 113 p. 390).
(2) 824 share of the net income of the wakf property is an 'asset ' within the meaning of the Wealth Tax Act, 1957 and the capital value of such a right is assessable to wealth tax.
Therein the Court repelled the contention that the right in question was an 'annuity '.
This decision was approved by this Court in Ahmed G. H. Ariff & Ors.
vs Commr.
of Wealth Tax, Calcutta(1) and the same is binding on us.
A similar view was taken by another Bench of the Calcutta High Court in Commissioner of Wealth Tax vs Mrs. Dorothy Martin(1).
In that case under the will of the assessee 's father the assessee was entitled to receive for 'her life the annual interest accruing upon her share in the residuary trust fund.
The Wealth Tax Officer included the entire value of the said share in the assessable wealth of the assessee and subjected the same to tax under section 16(3) of the Wealth Tax Act, 1957.
That order was confirmed by the Assistant Appellate Commissioner but the Tribunal in appeal excluded the same in the computation of the net wealth of the assessee.
On a reference made to the High Court, it was held that on a construction of the various clauses in the will, the assessee was entitled to an aliquot share in the general income of the residuary trust fund and not a fixed sum payable periodically as "annuity" and, therefore, the value of her share was an asset to be included in computing his net wealth.
These decisions in our view correctly lay down the legal position.
In this view it is not necessary to consider whether the income receivable by the assessee under those deeds either wholly or in part is capable of being commuted into a lumpsum grant.
For the reasons mentioned above we agree with the High Court that payments to be made to the assessee under the three trust deeds cannot be considered as annuities and hence she is not entitled to the benefit of section 2(e)(iv).
This takes us to the question whether the High Court was right in its view that the value of the assessee 's jewellery should not be taken into consideration in determining her net wealth.
The Tribunal has taken the view and the High Court has agreed with that view that the jewellery in question are articles intended for the personal use of the assessee.
As mentioned earlier those jewels were valued at Rs. 80,000/ ; out of that amount Wealth tax Officer deducted Rs. 25,000/ under section 5(1)(xv).
The assessee claims that in view of section 5(1)(viii), the value of those jewels cannot be included in the computation of her net wealth.
Section 5(1)(viii) reads: "5.
(1) Wealth tax shall not be payable by the assessee in respect of the following assets, and such assets shall not be included in the net wealth of the assessee (1) ; (2) 825 (viii) furniture, household utensils, wearing apparel, provisions and other articles intended for the personal, or household use of the assessee.
" There is no dispute that the Jewels in question were intended for the personal use of the assessee; but it is said on behalf of the revenue that section 5(1)(viii) does not apply to jewels as those articles are specifically provided for under section 5(1)(xv).
On the other hand it is urged on behalf of the asessee that section 5(1)(xv) deals with jewellery which are not intended for personal use of the assessee such as heirloom or other jewellery which are retained as valuable assets or intended for the use of persons other than the assessee whereas section 5(1)(viii) takes in only such jewellery as are intended for personal use of the assessee.
We think the contention advanced on behalf of the assessee is the correct one.
It is well known that the jewellery is widely used as articles of personal use by the ladies in this country specially by those belonging to the richer classes.
That being so jewellery intended for the, personal use of the assesses comes within the scope of section 5(1)(viii).
But the jewellery mentioned in section 5 (1) (xv) need not be articles intended for personal use of the assessee.
That provision deals with jewellery in general.
The two provisions deal with different classes of jewellery.
That is made further clear by section 5(1)(xiii) which says that Wealth Tax shall not be payable by assessee in respect of any drawings, paintings, photographs, prints and other heirloom not falling within cl.
(xii) and not intended for sale but not including jewellery.
If the contention that the jewellery is exclusively dealt with by section 5(1)(xv) is correct then there was no occasion for the legislature to refer to jewellery in section 5(1)(xiii).
From an analysis of the various provisions in section 5, it appears to us that therein there are four provisions dealing With jewellery viz. (1) jewellery intended for personal use of the assess.
5(1) (viii); (2) jewellery that is heirlooms.
5(1)(xiii); (3) jewellery in the, possession of any ruler section 5(1)(xiv) and (4) jewellery in generate section 5(1)(xv).
Under section 5(1)(xv) as it stood at the relevant time every assessee was entitled deduct a sum of Rs. 25,000/ from out of the value of the jewellery in her possession whether the same was intended for her personal use or not but under section 5(1) (viii) the value of all the jewellery intended for the personal use of the assessee stands excluded in the computation of the net wealth of an assessee.
For the reasons mentioned above we think the High Court was right in answering the question relating to the value of the jewellery in favour of the assessee.
In the result these appeals fail and they are dismissed no costs.
V.P.S. Appeals dismissed.
| IN-Abs | The assessee was an individual.
She was entitled for her life, to an aliquot share of the income arising from the funds settled on trust by three trust deeds and 'received payments of such share.
She also possessed jewellery, intended for her personal use, of the value of Rs. 80,000.
On the questions : (1) whether the payments to the assessee were annuities falling within the scope of section 2(e)(iv) of the Wealth Tax Act, 1957, whose value could not be included in the computation of her net wealth; and (2) whether the value of the jewels was exempt under section 5(1) (viii).
HELD : (1) Under the trust deeds, the assessee was not entitled to any fixed sum of money.
Therefore, the payments to the assessee under the trust deeds could not be considered as annuities and hence, she was not entitled to the benefit of section 2(e)(iv).
[824 E F] Ahmed G H. Ariff vs Commissioner of Wealth Tax, Calcutta, ; followed Commissioner of Wealth Tax vs Mrs. Dorothy Martin, (1968) 60 I.T.P 586, approved.
(2) Under section 5 there are four provisions dealing with jewellery, namely, (a) jewellery intended for ' the personal use of the assessees.
5(1)(viii), (b) jewellery which forms an heir loom section
5(1)(xiii),(c) jewellery in the possession of any ruler section 5(1)(xiv); and (d) jewellery in general.
5(1)(xv).
Under section 5(1)(xv), as it stood in 1958 59, every assessee was entitled to deduct a sum of Rs. 25,000 from out of the value of the jewellery whether the same was intended for personal use or not; but under section 5 (1) (viii) the value of all the jewellery intended for the personal use of the assessee stands excluded in the compu tation of the net wealth of an assessee.
Therefore, the jewellery in the present case is exempt under section 5(1)(viii).
[825 D, E G]
|
Appeal No. 1370 of 1966.
Appeal from the Judgment and decree dated February 16, 1966 of the Rajasthan High Court in D. B. Civil Regular First Appeal No. 86 of 1958.
R. K. Garg, section C. Agarwal, D. P. Singh, V. J. Francis and section Chakravarty, for the appellants D. V. Patel, Janendra Lal, and B. R. Agarwala, for the respondents.
The judgment of the Court was delivered by Bhargava, J.
This appeal arises out of a suit for Partition of properties in the family of one Lalaji Ramchandra who Was the ,common ancestor of the parties to the suit.
He had two sons, Govindraoji 'and Motilal alias Krishnaraoji.
The plaintiffs/ appellants and the non contesting proforma respondents are the descendants of Motilal, while the contesting respondents are the descendants of Govindraoji, the principal one being Chandrakant Rao who was defendant No. 1 in the suit.
The appellants sought Partition of all the family properties, including eight villages known ,as "the sarola Jagir" which were situated in the erstwhile State of 'Kota.
The trial Court dismissed the suit in its entirety, holding 83 9 that none of the properties in suit was ancestral property.
On appeal by the present appellants, the High Court of Rajasthan upheld the dismissal of the suit insofar as the appellants had claimed a share in the eight villages forming the Sarola Jagir, while the suit in respect of the other properties was decreed and a preliminary decree passed in respect of those properties.
The appellants have come up to this Court in this appeal, by certificate granted ,by the High Court, against the order of the High Court refusing to grant partition of the eight villages of the Sarola Jagir.
In order to appreciate the point raised in this appeal the history of this Jagir in this family may be recited briefly.
Lalaji Ramchandra and his eldest son Govindraoji were awarded this Jagir by means of a Parwana dated 8th April, 1838 issued by His Highness Maharao Ramsingh, Ruler of Kotah.
It appears that the Maharao had contracted debts with the family of Lalaji Ramchandra even in the time of his ancestors and, at the relevant time, the amount of debt exceeded Rs. 9 lakhs.
This debt was guaranteed by the British Government.
In lieu of this debt, this Jagir, which was already being enjoyed by Lalaji Ramchandra with certain limitations, was given jointly to him and his son Govindraoji, stating that it was being conferred in perpetuity and was always to remain from sons to grandsons and was to be free from all taxes which were being exacted up to that time, such as Barar and Sewai.
At the same time, Govind Rao executed a deed of release by which he accepted the adjustment of the amount due from the Maharao against this grant of jagir.
These documents thus show that this Jagir was originally granted by Maharao Ramsingh, Ruler of Kotah, jointly in the names of Lalaji Ram Chandra and his son, Govindraoji in lieu of the debt which the Maharao owed to them.
Subsequently, this property was treated as property of the joint family of Lalaji Ramchandra Motilal the second son of Lalaji Ramchandra, was born after this grant and his name was also mutated against the Jagir villages.
On the death of Govindraoji, the name of his adopted son, Ganpat, Raoji, was brought in, while Motilal, the uncle, managed the property on behalf of the family.
Motilal executed a will in respect of his properties, including these villages, specifically stating that half of this property belonged to Ganpatraoji, while half would belong to his adopted son, Purshottam Raoji.
After the death of Motilal, Ganpatraoji became the manager of the property and Purshottam Raoji 's name was also entered against this property.
On the death of Ganpat Raoji, the name of his eldest son Chandrakant Rao was mutated while Purshottam Raoji in the capacity of the eldest member of the family, started managing the property.
The property thus remained in the family, being treated as joint family property and, even during the years between 1852 and 1868 when efforts were made by the Maharao of Kotah to dispossess this 8 40 family, the British Government had intervened to ensure that the property remained with this family, insisting that the Maharao could only resume the Jagir on repayment of the loan in respect of which discharge had been obtained when this Jagir was conferred.
The property was thus continued to be treated as joint family property until the death of Purshottam Raoji when a question arose as to the mutation of names of his descendants in his place.
Chandrakant Rao desired that his name alone should be shown as the holder of this Jagir and, on 22nd October, 1937, gave a statement before the Revenue Commissioner claiming that the eldest son in the eldest branch had the right over the jagir according to the custom and usage in Rajputana and, consequently, mutation in the records should be in his name alone.
A report was sent by the Revenue Commissioner and the matter was dealt with by the Maharao of Kotah himself in Mehakma Khas.
The order of the Maharao on that report was passed on 22nd January, 1938.
By this Order, a direction was made that this Jagir, like all other Jagirs, should be given the status of an impartible estate and it should be given proper shape by being liable to render 'Chakri, and 'Subhchintki to the Ruler.
It was further ordered that the Jagir will be governed by the rule of primogeniture, so that Chandrakant Rao alone would be held to be the Jagirdar.
As a result, all these eight villages of the Sarola Jagir came to be shown as the property of Chandrakant Rao alone.
The claim of the plaintiff in this suit was that the Jagir having been joint Hindu family property, the rights of the plaintiffs, who are the successors in interest of Purshottam Raoji, cannot be defeated by the order of the Maharao dated 22nd January, 1938 ,and, consequently, the appellants together with the proforma respondents who are also descendants of Purshottam Raoji are entitled to 1/2 share, whereas the other 1/2 share only can be claimed by the contesting defendants, including Chandrakant Rao, who are descendants of Ganpatraoji.
Both the trial Court and the High Court have held that, after the order of the Maharao of Kota dated 22nd January, 1938, this Jagir came to be, governed by the rule of primogeniture, with the result that Chandrakant Rao alone was the owner of this property, while all other members of the family could only claim maintenance out of this property.
Consequently, the claim of the appellants for a share in these villages on partition was negatived.
It is the correctness of this decision that has been challenged, before us.
Since, in this case, no effort was made on behalf of the respondents to contest the correctness of the finding given by the High Court that all these villages were joint family property and were treated as such right up to the year 1937 when Purshottam Raoji died, we need not enter into the details of the evidence on the basis 841 of which this finding has been recorded.
The question that falls for decision is whether the Maharao of Kota by his order dated 22nd January, 1938, could validly change the nature of the property.
make it impartible and governed by the rule of primogeniture when the property was already joint family property.
In deciding this question, the crucial point is that the Maharao of Kota was an independent and sovereign Ruler whose orders in his State were law.
He had absolute power to make any orders, and the Order dated 22nd January, 1938 has, therefore to be given the force of law which, when it was passed, could not be challenged as invalid.
Counsel for the appellants, however, urged that all orders passed by an independent and sovereign Ruler do not have the force of law.
It is only those orders which purport to lay down a law for the State which cannot be challenged and which would remain in force even after the merger of the Kota State in India and after, the enforcement of the Constitution under article 372 of the Constitution.
His submission was that, when passing the Order dated 22nd January, 1938, the Ruler was only exercising executive powers of directing mutation of names and was not exercising any legislative powers.
The nature of the Order passed by him, however, shows that this submission cannot be accepted.
No doubt, that Order was made on a report which was put up before the Maharaoji for deciding who should be held to be the owner of the Jagir when Purshottam Raoji died.
The Order shows that the Maharao took notice of the fact that the Sanad had been granted in the name of Lalaji Ramchandra and his eldest son Govind Rao on executing a deed of release in respect of the debt, but it added that, when the unpaid debt was changed in the form of a Jagir and no special condition was laid down regarding it and the name of only the eldest son was written in the 'Sanad ' though another brother was present there, it has to be held that the Jagir was intended to be given on the same rules on which the other Jagirs were granted The Order then proceeds to take notice of the fact that, though the mutation should have been in the name of Chandrakant after the death of Ganpat Rao, a practice had developed of entering more than one person as the holders of this Jagir.
It appears that, in order to give effect to the original intention that this Jagir should be governed by the same rules as all other Jagirs, the Maharao proceeded to lay down that this ' Jagir should also be impartible and should be held by the eldest member of the family in the eldest branch.
The Ruler considered it desirable to make this Order, because it was envisaged that, it the entire Jagir, was distributed amongst all the members of the family, then even the name of Thikana ' would disappear.
It was considered desirable that this Jagir should be governed according to the custom of the States in Rajputana including Kota State under which the eldest son of the senior branch alone was entitled to hold the property.
Thereafter, the Maharao proceeded to lay down that this Jagir should be L 10 Sup C I (NP)70 9 84 2 equated with other Jagirs by making a direction that the holders of this Jagir should also render 'Chakri ' and should continue to do 'Subhchintki '.
Having made this direction, the Ruler then held that.
since this 'Thikana ' was being given proper shape, its custom and status must be similar to that of all other Jagirdars in the State.
These directions given by the Ruler clearly show that, though the proceedings came to him on the basis of a report for directions as to the mutation entry to be made on the death of Purshottam Rao, he proceeded to lay down the principles Which were to govern this Jagir thereafter.
The Ruler decided that this Jagir should be placed on equality with all other Jagirs in the State and should be governed by the same laws.
The Order thus made was clearly an exercise of legislative power by which the Ruler was competent to lay down that, though this Jagir had in the past been joint family property, it was to be thereafter impartible property governed by the rule of primogeniture and Chandra Kant Rao as the eldest member of the senior branch was to be the sole Jagirdar.
This was, therefore, a case where the Maharao exercised his powers of laying down the law with respect to this one single Jagir.
It cannot be said that the Order passed by him was a mere executive order and did not result in exercise of his powers of making the law.
In this connection, counsel for the appellants relied on the principle laid down by this Court in Rajkumar Narsingh Pratap Singh Deo vs State of Orissa and Another(1) to canvass his submission that the Maharao, in this case, was not exercising legislative powers when he passed the Order dated 22nd January, 1938.
In that case, the effect of a Sanad granted by the Ruler of Dhenkanal State had to be considered and 'the question arose whether the Sanad could be treated as existing law within the meaning of article 372 of the Constitution.
The Court, after taking notice of previous decisions, drew a distinction between orders made by a Ruler having the force of law and orders which may be of executive nature, and held "The true legal position is that whenever a dispute arises as to whether an order passed by an absolute monarch represents 'a legislative act and continues to remain operative by virtue of cl.
4(b) of the Order, 'all relevant factors must be considered before the question is answered; the nature of the order, the scope and effect of its provisions, its general setting and context, the method adopted by the Ruler in promulgating legislative as distinguished from executive orders, these and other allied matters will have to be examined before the character of the order is judicially determined." (1) ; 843 On an application of these principles in that case, it was held that the Sanad in question could not be held to be a legislative act.
In our opinion, even if these principles are applied to the case,before us, it has to be held that the Order of the Maharao dated 22nd January, 1938 amounted to exercise of legislative power.
As we have already indicated earlier, the very mature of the Order, which changes the law applicable to the Jagir, indicates that it was a legislative act and not a mere executive order.
The Maharao did not purport to lay down that the Jagir was already governed by the rule of primogeniture; what he did was to apply the rule of primogeniture to this Jagir for future.
Such an order could only be made in exercise of his prerogative of laying down the law for the State.
The mere fact that it was laid down for one single Jagir and was not a general law applicable to others in the State is immaterial, because it does not appear that there were any other similar Jagirs which also required alteration of the law applicable to them.
There is also nothing to show that during the period of his rule, the Maharao had adopted any special procedure for promulgating the laws in his State.
The manner in which the Order was passed indicates that, in this State, the Maharao considered himself competent to lay down the law at any time he liked.
Reliance was also placed on the decision of this Court in State of Gujarat vs Vora Fiddali Badruddin Mithibarwala(1), but that case, in our opinion, has no application at all.
In that case,, the question arose whether an agreement entered into by a Ruler had the force of law.
In the case before us, there is no such question of any agreement.
In dealing with that question, the Court relied on the following extract from a decision of the Court in an earlier case of The Bengal Nagpur Cotton Mills Ltd. vs The Board of Revenue, Madhya Pradesh and Others(2) : "It is plain that an 'agreement of the Ruler expressed in the shape of a contract cannot be regarded as a law.
A law must follow the customary forms of law making and must be expressed as a binding rule of conduct.
There is generally an established method for the enactment of laws, and the laws, when enacted, have also a distinct form.
It is not every indication, of the will of the Ruler, however expressed, which amounts to a law.
: An indication of the will meant to bind as a rule of,,., conduct and enacted with some formality either traditional or specially devised for the occasion, results.
in a law but not an agreement to which there are two parties, one of which is the Ruler.
" Emphasis was laid by counsel on the views expressed in this passage that a law, must follow the customary forms of law making.and ' (1) ; (2) A.T.R. 1964 S.C. 8.88 844 must be expressed as a binding rule of conduct.
In the present case, there is nothing to show that, in the State of Kota, there was any other customary form of law making.
The Order of 22nd January, 1938 clearly expresses the direction of the Ruler that the Jagir must be governed by the same customary law as other Jagirs as a binding direction which was to govern the future conduct of the holders of this Jagir.
The principle relied on, therefore, does not show that this Order of 22nd January, 1938 did not amount to a legislative act on the part of the Maharao.
Reference was also made to the decision of this Court in Major Ranjit Singh Rao Phalke vs Smt.
Raja Bai Sahiba (dead) by her legal representatives & Vice Versa(1) where the Court said : "It is now settled law that every order of the Maharaja cannot be regarded as law, particularly those which were in violation of his own laws." and again repeated: "The position today is that every order of the Ruler cannot be regarded as law but only such orders as contain some general rule of conduct and which follow a recognised procedure of law making." In that case, the particular order of the Ruler which was questioned had been made in contravention of one of the existing laws of the State and it was held that such an order could not be treated as law.
In the case before us, the position is quite different.
There was no law of the Kota State which could be held to be contrary to the Order dated 22nd January, 1938.
In fact, the general law govern ing all Jagirs in the State was the customary law under which the Jagirs were owned by the eldest member of.
the senior branch, and all that this Order did was to apply the same law to this Jagir also.
It is true that no special procedure of law making was adopted by the Maharao when making this Order; but that circumstance cannot change the nature of the Order specially when there is nothing to indicate that there was any recognised procedure of law making in the Kota State at that time.
In these circumstances, we hold that the High Court was quite correct in arriving at the decision that these eight villages ', at the time when the suit for partition was instituted, were impartible property governed by the law of primogeniture and Chandrakant Rao respondent alone had to be treated as the owner of these villages.
It, however, appears that, during the pendency of the suit, Jagirs were resumed in Rajasthan including this Jagir which stood in the name of Chandrakant Rao and cash compensation was paid in respect of it.
It was urged by counsel for the appellants that, (1) Civil Appeals Nos. 982 and 983 of 1964 decided on 18th July, 1967.
845 even if the Jagir was impartible and governed by the rule of primogeniture, the right, which earlier Vested in the members of the family when it was joint family property, would be exercisable when the Jagir was converted into cash and lost its status of impartible estate.
It was, therefore, claimed that, after the Jagirs had been converted into cash under the Rajasthan Land Reforms and Resumption of Jagirs Act No. VI of 1952, the appellants should have been granted a share in the compensation received by Chandrakant Rao on the basis that this property was earlier joint Hindu family property.
In the altemative, it was also urged that, even if this claim of the plaintiffs/appellants is not accepted, they would at least be entitled to claim a part of the compensation in lieu of their right of maintenance.
These two aspects do not seem to have been considered by the trial Court and even the High Court in one sentence disposed of this matter by saying that, since the appellants were only entitled to maintenance, they could not claim any share in the compensation money paid under the Rajasthan Act VI of 1952.
In dealing with this aspect, we are handicapped by the circumstance that the suit was instituted before this Act VI of 1952 was.
passed, so that there was no specific pleading in this behalf by the plaintiffs appellants.
The trial Court, therefore, ignored this aspect altogether, and even the High Court did not take into account the effect of Act VI of 1952 in the, two aspects which have been mentioned by us above.
Since, however, this is an appeal against a preliminary decree in the suits and the suit is still to continue in the trial Court, we think it appropriate to direct that these questions should be properly raised in the trial Court by amendment of the pleadings in the plaint, if necessary, and should be considered and decided by that Court.
It will be for that court to give a fresh decision whether, the appellants are entitled to claim a share in the compensation money received in lieu of these eight villages under Rajasthan Act VI of 1952.
The result is that this appeal is dismissed, subject to the modification that the case will go back to the trial Court for deciding the question whether the plaintiffs/appellants can claim a share in the compensation money or not, as indicated above.
Costs of this appeal shall abide the decision on this claim of the plaintiffs appellants to a share in the compensation money.
R.K.P.s.
Appeal dismissed.
| IN-Abs | L had two sons G and M. L. and his elder son G were granted a Jagir by the then Ruler of Kotah jointly in their names, in lieu of a debt which the Ruler owed to them.
This property was treated as property of the joint family of L.
The name of M, the second son born after the grant, was also mutated against the Jagir villages.
The names of the descendants of G and M were from time to time similarly mutated against the Jagir and this Jagir as well as other property of the joint family was managed for some time by the eldest member belonging to either branch of the family.
The respondent C was a descendant of G and claimed in 1937 before the Revenue Commissioner that as the eldest son in the eldest branch he alone had the right over the Jagir according to the custom and usage in Rajputana and, consequently, mutation in the records should be in his name alone.
On a report by the Revenue Commissioner, the Ruler passed an order on 22nd January, 1938, directing that the Jagir, like all other Jagirs in the State should be given the status of an impartible estate and should be liable to render 'Chakri ' and 'Subchintki ' to the Ruler.
It was further ordered that the Jagir would be governed by the rule of primogeniture, so that C alone would be held to be jagirdar.
The appellants, who were the descendants of M, sought partition of all the family properties including the villages in the Jagir.
Although the Trial Court dismissed the suit, on appeal, the High Court granted a decree in respect of other properties but upheld the dismissal of the suit in so far as the appellants had claimed a share in the Jagir.
The appellants claimed that the jagir having been joint Hindu property, their rights as successors in interest of M could not be defeated by the order of Ruler dated 22nd January, 1938, and consequently, the appellants were entitled to their proper share in the Jagir.
It was contended that all orders passed by an independent and sovereign Ruler do not have the force of law.
It is only those orders which purport to lay down a law for the State which cannot be challenged and which would remain in force even after the merger of the Kotah State in India and, after the enforcement of the Constitution, under article 372 of the Constitution.
It was submitted that, when passing the Order dated 22nd January, 1938, the Ruler was only exercising executive powers of directing mutation of names and was not exercising any legislative powers.
HELD: Dismissing the appeal.
(i) The High Court was right in holding that the villages in the Jagir, at the time when the suit for partition was ' instituted, were impartible 838 property governed by the law of primogeniture and C alone could be treated as the owner of these villages.
(ii)The very nature of the Order, which changed the law applicable to the Jagir, indicated that it was a legislative act and not a mere executive order.
The Ruler did not purport to lay down that the Jagir was already governed by the 'rule of primogeniture; what he did was to apply the rule of primogeniture to this Jagir for future.
Such an order could only be made in exercise of his prerogative of laying down the law for the State.
The mere fact that it was laid down for one single Jagir and was not a general law applicable to others in the State was immaterial, because it does not appear that there were any other similar Jagirs which also required alteration of the law applicable to them.
L843 B D] (iii)Although no special procedure of law making was adopted by the Ruler when making this Order, that circumstance could not change the nature of the Order specially when there was nothing to indicate that there was any recognised procedure of law making in the Kotah State at that ,time.
[844 F G] Rajkumar Narsingh Pratap Singh Deo vs State of Orissa and Another ; ; referred to.
State of Gujarat, vs Vora Fiddali Badruddin Mithibarwala ; and Major Ranjit Singh Rao Phalke vs Smt.
Raja Bai Sahiba (dead) by her legal representatives and Vice Versa Civil Appeal Nos.
982 :and 983 of 1964 decided on 18th July, 1967 ; distinguished.
|
l Appeal Nos.
2130 and 2131 of 1969.
Appeals by special leave from the judgment and order dated June 16, 19, 1969 of the Bombay High Court in Special Civil Application No. 41 of 1969 and S.C.A. No. 1774 of 1969.
C. K. Daphtary, Suresh A. Shroff, P. C. Bhartari and O. C. Mathur, for the appellants (in both the appeals).
H. R. Gokhale, N. H. Gurshani and N. N. Keswani, for res pondent No. 1 (in both the appeals).
B. D. Sharma and section P. Nayar, for respondent No. 2 (in both the appeals).
856 The Judgment of the Court was delivered by Civil Appeal No. 2130 of 1967 Shah, J.
The High Court of Bombay dismissed in limine a petition filed by the Century Spinning Manufacturing Co. Ltd. hereinafter called 'the Company 'for the issue of a writ restraining the respondent Municipality from enforcing the provisions of the Maharashtra Municipalities Act 40 of 1965 relating to the levy, assessment, collection recovery of octroi and in particular section 105 and Ss. 136 to 144 thereof, and from enforcing the Maharashtra Municipalities (Octroi) Rules, 1967, and from acting upon resolutions passed by the Municipal Council dated September 9, 1968 and ' September 13, 1968, and from levying, assessing, collecting, recovering or taking any other step under the Act, rules or the resolu tions and for an order restraining the Municipality of Ulhasnagar from levying, assessing, collecting any octroi on the goods imported by the Company within the limits of the Municipal Council for a period of 7 years from the date of its first imposition.
With special leave, the Company has appealed 'against, the order rejecting the petition.
The Company was incorporated under the Indian Companies Act, 1913.
It set up its factory in 1956, within the limits of village Shahad, Taluka Kalyan on a site purchased from the State of Bombay, and within an area known as the 'Industrial Area '.
No octroi duty was then payable in respect of goods imported by the Company into the Industrial Area for use in the manufacture of its products.
On October 30, 1959, the Government of Bombay issued a notification announcing its intention to constitute a Municipality for certain villages, including the Industrial Area.
The Company and other manufacturers who had set up their plants and factories objected to the proposed constitution of the Municipal Area.
On September 20, 1960, the State of Maharashtra (successor to the State of Bombay) published a notification constituting with effect from April 1, 1960 the Municipality including the area in which the Industrial Area was included.
Representations were then made by the Company and other manufacturers for excluding the Industrial Area from the Ulhasnagar Municipal District Area.
On April 27, 1962 the Government of Maharashtra (the new State of Maharashtra having been constituted under the Bombay Reorganization Act, 1960) proclaimed that the Industrial Area be excluded from the Municipal jurisdiction.
The District Municipality then made a representation to the Government of Maharashtra that the proclamation dated April 27, 1962, be withdrawn by the Government.
The Municipality agreed to exempt the existing factories viz., the Company and other manufacturers whose factories were then existing in the Industrial Area from payment of octroi for a period of seven years from the date of levy of octroi and for exempting new industrial units from payment of octroi for 8 5 7 a similar period from the date of establishment.
The Government of Maharashtra acceded to the request of the Municipality to retain the Industrial Area within the local limits of the Municipality.
On August 24, 1963, the District Municipality passed a resolution to implement the agreement.
It was resolved that the Municipality "agrees to give a concession to the existing factories by exempting them from the payment of octroi for a period of 7 years from the date of levy of octroi tax and by exempting new factories from the payment of the octroi tax for a period of 7 years from the date of their establishment as recommended by the Government of Maharashtra".
On October 31, 1963, the Government of Maharashtra issued a notification withdrawing the proclamation dated April 27, 1962, and the Industrial Area became part of the Ulhasnagar Municipal District.
Relying upon the assurance and undertaking given by the Municipality the Company claims that it had expanded its activities and commenced manufacturing new products by, setting up additional plant which it would not have done "but for the concessions given, assurances and representations made and agreement arrived at on May 21, 1963".
On September 10, 1965, the Legislature of the State of Maha rashtra enacted the Maharashtra Municipalities Act which repealed the Bombay District Municipal Act 3 of 1901.
the notification declaring the area of the former District Municipality of Ulhasnagar into the Ulhasnagar Municipality became effective as from June 15, 1966.
The Ulhasnagar Municipality took over as successor to the Ulhasnagar District Municipality, the assets and the affairs of that body.
On September 9, 1968 the Ulhasnagar Municipality resolved "to levy minimum rates of octroi duty as shown in columns 4 and 6 on all items shown in Sch. 1 to the Rules", and by resolution dated September 13, 1968, the Municipality 'adopted with effect from January 1, 1969, the rates for the imposition of octroi duty on the goods imported for use, sale and consumption within the Municipal Council limits.
At a special meeting held on December 24, 1968, the Munici pal Council considered the letters written by the Government of Maharashtra dated November 22, 1968 and December 10, 1968, drawing the attention of the Municipality to the circumstances in which the Industrial Area was included and retained in the local limits of the Ulhasnagar District Municipality and continued to reman within the local limits of the Municipality, and "advised the Municipality to pass a resolution confirming such exemption and honour the commitments of its predecessor." The Municipality ignored the advice and resolved that the Government of Maharashtra be informed that the Municipality would consider afresh on Sup.
CI(NP)70 10 858 merits any representation of a tax payer for exemption from payment of octroi, and if any such representation was made by the factories situate in the Industrial Area, the Council would consider the same and take such action as it would deem fit.
Thereafter the Municipality sought to levy octroi duty and to recover from the Company octroi duty amounting to approximately Rs. 15 lakhs per annum.
The Company moved a petition before the High Court of Bombay under article 226 of the Constitution for the writs set out earlier seeking to restrain the Ulhasnagar Municipality from enforcing the octroi Rules.
The High Court may, in exercise of its discretion, decline to ,exercise its extra ordinary jurisdiction under article 226 of the Constitution.
But the discretion is judicial : if the petition makes a claim which is frivolous, vexatious, or prima facie unjust, or may not appropriately be tried in a petition invoking extra ordinary jurisdiction, the Court may decline to entertain the petition.
But a party claiming to be aggrieved by the action of a public body or authority on the plea that the action is unlawful, high handed, arbitrary or unjust, is entitled to a hearing of its petition on the merits.
Apparently the petition filed by the Company did not raise any complicated questions of fact for determination, and the claim could not be characterised as frivolous, vexatious or unjust.
The High Court has given no reasons for dismissing the petition in limine, and on a consideration of the averments in the petition and the materials placed before the Court we are satisfied that the Company was ,entitled to have its grievance against the action of the Municipality, which was prima facie unjust, tried.
The Company pleaded that the, Ulhasnagar Municipality had" entered into a solemn arrangement" not to levy octroi duty for aperiod of seven years from the date of its imposition.
The evidence relating to the undertaking was contained in public records.
The Government of Maharashtra advised the Municipality that it was acting in violation of the terms of that undertaking.
By its resolution the Municipality declined to abide by the undertaking of itspredecessor.
There is undoubtedly a clear distinction between a represen`tation of an existing fact and a representation that something will be done in future.
The former may, if it amounts to a representation as to some fact alleged at the time to be actually in existence, raise an estoppel, if another person alters his position relying upon that representation.
A representation that something will be done in the future may result in a contract, if another person to whom it is 859 addressed acts upon it.
A representation that something will be done in future is not a representation that it is true when made.
But between a representation of a fact which is untrue and a representation express or implied to do something in future, there is no clear antithesis.
A representation that sotmething will be done in future may involve an existing intention to act in future in the manner represented.
If the representation is acted upon by another person it may, unless the statute governing the person mak ing the representation provides otherwise, result in an agreement enforceable at law; if the statute requires that the agreement shall be in a certain form, no contract may result from the representation and acting thereupon but the law is not powerless to raise in appropriate cases an equity against him to compel performance of the obligation arising out of his representation.
Public bodies are as much bound as private individuals to carry out representations of facts and promises made by them, relying on which other persons have altered their position to their prejudice.
The obligation arising against an individual out of his representation amounting to a promise may be enforced ex contractu by a person who acts upon the promise : when the law requires that a contract enforceable at law against a public body shall be in certain form or be executed in the manner prescribed by statute, the obligation may be if the contract be not in that form be enforced against it in appropriate cases in equity. 'In Union of India & Ors.
vs Mls.
IndoAfghan Agencies Ltd.(1) this Court held that the Government is not exempt from the equity arising out of the acts done by citizens to their prejudice, relying upon the representations as to its future conduct made by the Government.
This Court held that the following observations made by Denning, J., in Robertson vs Minister of Pensions(1) applied in India "The Crown cannot escape by saying that estoppe ls do not bind the Crown for that doctrin e has long been explode d.
Nor can the Crown escape by praying in aid the doctrin e of executi ve necessi ty, that is, the doctrin e that the Crown cannot bind itself so as to fetter its future executi ve action.
, We are in this case not concerned to deal with the question whether Denning, L.J., was right in extending the rule to a different class of cases as in Falmouth Boat Construction Co. Ltd. vs Howell(1) where he observed at p. 542 : "Whenever Government officers in their dealings with a subject take on themselves to assume authority in a (1) ; (2) (3) 8 6 0 matter with which the subject is concerned, he is entitled to rely on their having the authority which they assume.
He does not know, and cannot be expected to ]mow, the limits of their authority, and he ought not to suffer if they exceed it.
" It may be sufficient to observe that in appeal from that judgment (Howell vs Falmouth Boat Construction do.
Ltd.) Lord Simonds observed after referring to the observations of Denning, L.J. "The illegality of an act is the same whether the action has been misled by an assumption of authority on the part of a government officer however high or low in the hierarchy. . .
The question is whether the character of an act done in force of a statutory prohibition is affected by the fact that it had been induced by a misleading assumption of authority.
In my opinion the answer is clearly : No." If our nascent democracy is to thrive different standards of conduct for the people and the public bodies cannot ordinarily be permitted.
A public body is, in our judgment, not exempt from liability to carry out its obligation arising out of representations made by it relying upon which a citizen has altered his position to his prejudice.
Mr. Gokhale appearing on behalf of the Municipality urged that the petition filed by the Company apparently raised questions of fact which in the view of the High Court could not appropriately be tried in the exercise of the extra ordinary jurisdiction under article 226.
But the High Court has not said so, and on a review of the averments made in the petition this argument cannot be sustained.
Merely because a question of fact is raised, the High Court will got be justified in requiring the party to seek relief by the somewhat lengthfiy, dilatory and expensive process by a civil suit against 'a public body.
The questions of fact raised by the petition in this case are elementary.
The order passed by the High Court is set aside and the case is remanded to the High Court with a direction that it be readmitted to the file and be dealt with and disposed of according to law.
The High Court will issue rule to the Municipality and the State and dispose of the petition.
We recommend that the case may be taken up for early hearing.
We had during the pendency of the appeal in this Court made an order restraining the levy of octroi duty.
We extend the operation of the order for a fortnight from this date to enable the 861 Company to move the High Court for an appropriate interim order pending hearing and disposal of the writ petition.
There will be no order as to costs in this Court.
Costs in the High Court will be costs in the cause.
Since we have granted special, leave against the order dismissing the petition, we do not deem it necessary to consider whether the order rejecting the application for certificate was erroneous.
Civil Appeal No. 2131 of 1969 is therefore dismissed.
| IN-Abs | The appellants companies set up their factories within an "Industrial Area", No octroi duty was payable in respect of goods imported by the appellants into the Industrial Area for use in the manufacture of its products.
The State of Maharashtra constituted a Municipality for certain villages including the Industrial Area.
On representations made by the appellants and other manufacturers, the State proclaimed the exclusion of the Industrial Area from the Municipal Jurisdiction.
The Municipality made representations to the State requesting that the proclamation, be withdrawn, agreeing to exempt the factories in the Industrial Area from payment of octroi for seven years from the date of the levy.
The State acceeded to the request of the Municipality.
The appellants claimed to expand their activities relying upon the Municipality 's assurance and undertaking.
The Maharashtra Municipalities Act was enacted and the respondent Municipality took over the administration of the former municipality as its successor.
Thereafter, the respondent Municipality sought to levy octroi duty on the appellant amounting to about Rs. 15 lakhs per annum.
The appellants filed a petition under article 226 of the Constitution to restrain the respondent Municipality from enforcing the levy of the Octroi.
The High Court dismissed the petition in limine.
In appeal by special leave, HELD : The case must be remanded to the High Court for being readmitted to its file and dealt with and disposed of according to law.
The High Court may, in exercise of its discretion, decline to exercise its extra ordinary jurisdiction under article 226 of the Constitution.
But the discretion is judicial; if the petitioner makes a claim which is frivolous, vexatious, or prima facie unjust or which may not appropriately be true in a petition invoking extraordinary jurisdiction, the Court may decline to entertain the petition.
But a party claiming to be aggrieved by the action of a public body or authority on the plea that the action is unlawful, highhanded, arbitrary or unjust is entitled to a hearing of its petition on the merits.
Apparently the petition filed by the Company did not raise any complicated questions of fact for determination, and the claim could not be characterised as frivolous, vexatious or unjust.
The High Court has given no reason for dismissing the petition in limine, and on a consideration of the averments in the petition and the materials placed before the Court the appellants were entitled to have its grievance against the action of the Municipality, which was prima facie unjust, tried.
Merely because a question of fact is raised, the High Court will not be justified in requiring the party to seek relief by the somewhat lengthy, dilatory and expensive process by a civil suit against a public body.
The questions of fact raised by the petition in this case are elementary.
[858 C F] Public bodies are as much bound as private individuals to carry out representations or facts and promises made by them, relying on which 855 other persons have altered their position to their prejudice.
The obligation arising against an individual out of his representation amounting to a promise may be enforced ex contractu by a person who acts upon the promises when the law requires that a contract enforceable at law against a public body shall be in certain form or be executed in the manner prescribed by statute and if the contract be not in that form the obligation may still be enforced against the body in appropriate cases, in equity.
[859 D] If our nascent democracy is to thrive different standards "of conduct ,for the people and the public bodies cannot ordinarily be permitted.
A public body is not exempt from liability to carry out its obligation arising out of representations made by it relying upon which a citizen has altered his position to his prejudice.
[860 D] There is undoubtedly a clear distinction between a representation of an existing fact and a representation that something will be done in future.
The former may, if it amounts to a representation as to some fact alleged at the time to be actually in existence, raise an estoppel if another person alters his position relying upon that representation A representation that something will be done in future may result in a contract, if another person to whom it is addressed acts upon it.
A representation that something will be done in future is not a representation that it is true when made.
But between a representation of a fact which is untrue and a representation express or implied to do something in future there is no clear anti thesis.
A representation that something will be done in future may involve an existing intention to act in future in the manner represented.
If the representation is acted upon by another person it may, unless the statute governing the person making the representation provides otherwise, result in an agreement enforceable at law; if the statute requires that the agreement shall be in a certain form, no contract may result from the representation and acting thereupon but the law is not powerless to raise in appropriate cases an equity against him to compel performance of the obligation arising out of his representation.
[858 H 859 C] Union of India & Ors.
vs M/s. Indo Afghan Agencies Ltd., ; Robertson vs Minister of Pensions, ; Falmouth Board Construction Co. Ltd. vs Howell, , referred to.
|
iminal Appeal No. 40 of 1968.
Appeal by special leave from the judgment and order dated January 23, 1968 of the Patna High Court in Criminal Revision No. 91 of 1968.
D. P. Singh, D. N. Mishra and Govind Das, for the appel lant.
R. C. Prasad, for the respondent.
The Judgment of the Court was delivered by Hidayatullah, C. J.
On May 28, 1966, Bhola Prasad Mandal, Supply Inspector Pathargama with other officers searched a godown belonging to Nagarmal Tekriwal (appellant) and found stored therein 45 quintals of rice, 90 quintals of paddy, 5 50 quintals of grains, 3 quintals of wheat, one quintal Arhar and 207 quintals of Khesari together with weighing scale and weights and measures.
As Nagarmal did not possess a licence under the Bihar Foodgrains Dealer 's Licensing Order, 1966, he was prosecuted under section 7 of the Essential Commodities Act for violation of cl. 3 of the order.
He was convicted by the Munsif Magistrate, First Class and sentenced to undergo rigorous imprisonment for six months.
The foodgrains found in his possession were also ordered to be forfeited to the State.
He appealed unsuccessfully to the Sessions Judge, Santhal Parganas, Dumka and his revision in the High Court was summarily dismissed.
He now appeals by special leave granted by this Court.
The defence of the appellant was that he was an agriculturist and that the foodgrains were grown by him on the lands he had taken on lease from various parties.
In support of his defence, he produced both documentary and Oral evidence.
The documentary evidence consisted of certain lease deeds executed by 'him and his brother in favour of the lessors.
Oral evidence showed that he and, his brother were in possession of 80 90 bighas of land on which Paddy and other foodgrains found in his pos session, were grown, 901 The case proceeded against him on the basis of the presump tion under para 3 of the Order.
It may be read here "Licensing of wholesale and retail dealers (1) No person shall carry on business as a whole sale dealer or retail dealer except under and in accordance with the terms and conditions of a licence issued in this behalf by licensing authority.
(2) For the purpose of this clause, any person other than a bona fide consumer or an agriculturist, who stores any foodgrains in any quantity shall, unless the contrary is proved, be deemed to store the foodgrains for the purpose of sale.
" It was held that as he had stored foodgrains above the permitted quantities for a wholesale dealer, he would be regarded as a wholesale dealer within the order.
The defence, before us again is that he is an agriculturist and is not liable to the penalty under the law, because the presumption in his case cannot be drawn.
It is also submitted that his case that he was an agriculturist stands completely proved in this case.
The learned Magistrate rejected the documentary evidence on the ground that the lease deeds were not registered and were not admissible in evidence under section 49 of the Registration Act.
The learned Sessions Judge did not accept this ground; at least he did not say anything about it.
He held that such documents could be brought into existence at any time and were thus not reliable.
Both the Magistrate and the Sessions Judge did not accept the evidence of the witnesses on the ground that they were interested in the appellant.
Mr. B. P. Singh, in arguing the case has drawn our attention to a ruling of this Court in Manipur Administration vs M. Nila Chandra Singh(1) and contended that the appellant cannot be regarded as doing business as a dealer unless a series of transactions by him of sale were proved against him.
The ruling does say that the words "carrying on the business" in the context of the Act postulate a course of conduct and continuity of transactions.
Therulingmaynof be applicable in certain circumstances, as for example where even a single transaction can be demonstrated to be in the course of business.
Carrying on of business may be found in one instance or more, depending upon the circumstances of the case.
(1) ; 90 2 However, in the present matter we need not worry about the ,carrying on of business, because in our opinion, the appellant has successfully proved that he is an agriculturist and the presumption under paragraph 3(2) of the order cannot be drawn against him.
That paragraph expressly excludes bona fide consumers and agriculturists from the presumption to be drawn from proof of storage only.
It is obvious that sub paragraph speaks of storage for sale as a dealer although the words "as a dealer" are not there, because storage has reference to 'business as a dealer and that is the essence of the Order.
The fiction in the second sub paragraph must be carried to its logical conclusion.
In the present case, the appellant produced a number of lease deeds in which leases of various parcels of land are shows to have been granted to him.
He also produced receipts of payment of lease money and he cited witnesses who deposed on oath that he and his brother cultivated 80 90 bighas of land.
No doubt, the lease deeds are not registered, but for the purpose of a criminal prosecution, we have to see whether they are genuine or not and Whether an inference of innocence can be based upon them.
In our judgment they serve the collateral purpose of showing that the lands about which the witnesses spoke orally were held by him for purposes of cultivation.
If that be so, then, he is an agriculturist and it is easy to see that the evidence which was 'brought for ward of witnesses deposing orally was not concocted to set up a false defence.
Indeed no adequate reasons were given for rejecting the testimony of witnesses.
The learned Magistrate rejected the testimony of one witness on the ground that he is the next door neighbour and has a "soft corner for him".
We do not know why the evidence of the next door neighbour should be rejected; it can only be rejected if there is something intrinsically wrong with that evidence.
The total circumstances in the case show that the appellant was in fact carrying on agricultural ,operations.
He executed a number of lease deeds, produced receipts and proved by oral evidence that he was an agriculturist.
In his case, therefore, the presumption under para 3(2) could ,not be drawn.
If that presumption is not drawn, then the case against him stands unproved because of the exemption which agriculturists enjoy.
On the whole, we are satisfied that his conviction was im properly reached.
We allow the appeal and set aside his conviction.
His bail bonds are cancelled.
The order of forfeiture of foodgrains is also set aside.
We are informed that the foodgrains were sold.
If any money has been recovered by sale of the foodgrains, it shall be handed over to the appellant.
Appeal allowed.
| IN-Abs | On search of the appellant 's premises foodgrains above quantities permitted under the Bihar Foodgrain Dealer 's Licensing Order 1966 were found.
He was prosecuted under section 7 of the Essential Commodities Act for violation of cl. 3 of the Order.
The appellant produced oral and documentary evidence to show that he was an agriculturist and therefore the presumption tinder cl.
3(2) of the order that he had stored the foodgrains for sale could not be drawn against him.
The documentary evidence aforesaid consisted of lease deeds executed by the appellant and his brother in favour of lessees.
The oral evidence showed that he, and his brother were in possession of 80 90 bighas of land on which the foodgrains found in his possession were grown.
The documentary evidence was rejected by the trial magistrate on the ground that the lease deeds not being registered were not admissible in evidence under section 49 of the Registration Act.
The Sessions Judge in appeal did not 'rely on the lease deeds for the reason that such documents could be brought into existence at any time.
Both the trial magistrate and the Sessions Judge rejected the oral evidence as unreliable because it was given by persons who were next door neighbours and as such interested in the appellant.
The appellant 's revision petition before the High Court was summarily rejected.
By special leave he appealed to this Court.
HELD : (i) Cl.
3(2) of the Order expressly excludes bona fide consumers and agriculturists from the presumption to be drawn from proof of storage only.
It is obvious that the sub clause speaks of storage for sale as a dealer although the words 'as a deal& ' are not there because storage has reference to business as a dealer and that is the essence of the order.
The fiction in the second sub clause must be carried to its, logical conclusion.
[902 B] ii) No doubt the lease deeds were not registered but in a criminal case it had to he seen whether they were genuine or not and whether, an inference of innocence could be based ' on them They served the collateral purpose of showing that the lands about which the witnesses spoke orally were held by him for purposes of cultivation.
[902 D] (iii) There is no reason why the evidence of a next door neighbour should be rejected unless there is something intrinsically wrong with it.
[902 E F] (iv)The total circumstances in the case showed that the appellant was in fact carrying on agricultural operations.
He executed a number of lease deeds, produced receipts and proved by or a evidence that he 900 was an agriculturist.
In his case therefore the presumption under cl.
3(2) could not be drawn.
If that presumption was not drawn, the case against him stood unproved because of the exemption which agriculturists enjoy.
[902 F G] The appeal must accordingly be allowed.
Manipur Adminisration vs M. Nila Chandra Singh, [1964] 5 S.C.R.574.
referred to and explained.
|
ivil Appeal No. 2348 Of 1966.
Appeal from the judgment and decree dated September 6, 1962, of the Punjab High Court in Regular First Appeal No. 53 of 1956.
V. C. Mahajan, for the appellant.
N. section Bindra and B. Datta, for the respondent.
The Judgment of the Court was delivered by Mitter, J.
By this appeal the State of Punjab challenges the judgment and order of the Punjab High Court upholding the decree of the Subordinate Judge, Gurgaon declaring that the dismissal of the respondent from service was illegal and inoperative.
The respondent, a Sub Inspector of Police was called upon to answer a charge framed on October 12, 1949 setting forth extracts from his confidential character roll showing his inefficiency and lack of probity while in service from 1941 to 1948 and to submit his answer to the prima facie charge of inefficiency as envisaged in paragraph 16.25(2) of the Punjab Police Rules.
The respondent had joined the police service and had served as a Sub Inspector in various places which are now in Pakistan before he was posted to Gurgaon in the year 1948.
It appears that the view taken of his conduct and reputation by his superior officers, over the years was not consistent.
In some years he got what is known as a 'B ' certificate and in others an 'A ' certificate.
According to rule 13.17 of the Punjab Police Rules, Superintendents of Police had to prepare personally and submit annually to the Deputy Inspector General of Police confidential reports in the form prescribed on the working of all Assistant Sub Inspectors and Sub Inspectors serving under them.
The reports were to be of two kinds 'A ' and 'B ' and to be marked as such.
An 'A ' report was for recommending that incremental promotions should not be withheld while a 'B ' report was to contain a recommendation for reasons to be fully stated, that incremental promotions should be withheld.
The rule further shows that the purport of all 'B ' reports was to be formally communicated to the officer 696 concerned and his written acknowledgment to, be taken.
It also prescribed that the submission of two successive 'B ' reports regarding an officer would result, automatically in the institution of departmental proceedings against him with a view to stoppage of increment.
The punishments which could be awarded departmentally are set out in rule 16.1 and under.
rule 16.2(1) dismissal is to, be awarded only for the gravest acts of misconduct or as the cumulative effect of continued misconduct proving incorrigibility and complete unfitness for police service.
Rule ) 6.24 sets out the procedure to be followed in departmental enquiries.
The sum and substance of rule 16.24 is that in case the police officer did not admit the misconduct "the officer conducting the enquiry shall proceed to record such evidence, oral and documentary, in proof of the accusation as is available and necessary,to support the charge.
Whenever possible, witnesses shall be examined direct, and in the presence of the accused, who shall be given opportunity to take notes of their statements and cross examine them.
The officer conducting the enquiry is empowered, however,, to bring on to the.
record the statement of any witness whose presence cannot, in the opinion of such officer, be procured without undue delay and expense or inconvenience, if he considers such statement necessary, and provided that it has been recorded and attested by a police officer superior in rank to the accused officer or by a magistrate, and is signed by the person making Further the accused officer was required to state the defence witnesses whom he wished to call together with a summary of the facts as to which they would testify.
The enquiring officer was empowered to refuse to hear any witnesses whose evidence he considered would be irrelevant or unnecessary in regard to the specific charge framed.
Under rule 16.25(1) a police officer called upon to answer a charge of misconduct must be given every opportunity of proving his innocence.
Under sub rule (2) of this rule, charges need not be framed in relation only to a specific incident or act of misconduct and when reports received.
against an officer or a preliminary enquiry show that his general behaviour has been such as to be unfitting his position or that he has failed to reach or maintain a reasonable standard of efficiency he may and should be charged accordingly, and a finding of guilty on such a 697 charge would be valid ground for the infliction of any authorised departmental punishment which might be considered suitable in the circumstances of the case.
The confidential reports extracts, whereof were contained in the charge sheet make it clear that the respondent was being accused of laziness and ineffectiveness and as having a doubtful reputation as to his honesty.
Excepting for the year 1948 wherein a specific instance of corruption was charged against him the other reports only contained generally adverse remarks.
For instance the remarks against him for the year 1941 were to the effect that he was "lazy and ineffective and that he had been warned for dishonesty, laziness and lack of control." In the year 1942 When he was posted at Dera Gazi Khan his annual confidential report showed that although there were no definite complaints he had not shown any outstanding ability or energy.
The Superintendent of Police was not certain about hi& honesty but had no special complaints against him.
The respondent was not allowed to cross the efficiency bar in that year in view of his past reports.
It is the common case of the parties that the respondent was allowed to cross the efficiency bar in 1944.
in 1945 he was transferred to Montgomary And dot a 'B ' report and his honesty was characterised as doubtful.
He got another warning in that year.
In 1946 the Superintendent of Police remarked that he was a failure as a Station House Officer and was slow to carry out orders and had no grip on his staff.
I The Deputy Inspector General of Police, Multan Range, summed up his 16 years ' service with the note "From all accounts he is one of the worst Sub Inspectors in the Range and the department will be well rid of him, if action under r. 16.25(2) can be successfully taken against him.
Action under r. 16.25 cannot succeed at present but his past record is such that any further complaint should warrant his dis missal.
" In the confidential reports of the year 1946, the Superintendent of Police, Muzaffargarh, stated that he was not honest and was very poor on parade.
The Deputy Inspector General, Multan Range gave him a third warning.
The Superintendent of Police, Muzaffargarb, however remarked that although his previous record was unsatisfactory he appeared to be trying to mend himself.
In the year 1948 he got a 'C ' report and the Superintendent of Police described him as "thoroughly corrupt" The S.P. further remarked that "This officer fell to unheard of depths of moral degradation in corrupt practices while posted to City 698 Rewari inasmuch as he changed the opium recovered by him earlier with Rasaunt for Rs. 1,000/ bribe and then made over the opium for sale in the black market.
He was known to have mixed up with bad characters, gamblers and Rishawatdalals.
" According to the charge sheet the attested copies of these reports were to be used as evidence against him.
In regard to the year 1948 and the charge above mentioned it is enough to say ;hat an enquiry was held against him and he was held entitled to an honourable acquittal.
The respondent pleaded not guilty to the charge and filed a list of 63 witnesses whom he sought to examine in his defence.
He also gave a summary of the facts about which each of the witnesses was to depose.
The enquiry officer allowed him to examine 21 witnesses in defence.
No witness was examined on behalf of the department.
On 25th May 1950 Bishambar Das, Superintendent of Police made a report that the charge had been fully brought home to the respondent and it was suggested that he should be dismissed.
The Deputy Inspector General asked him to show cause why he should not be dismissed from service.
After receipt of a written representation made by the respondent and recording his statement the Deputy Inspector General passed an order dismissing the respondent from service.
The respondent then filed his suit in the court of the Subordinate Judge, Gurgaon, wherein his main complaint was that the enquiring officer did not record any evidence in support of the charge nor were the persons making the reports examined direct and in his presence with opportunity to him to crossexamine the persons who had made those reports : he also averred that good reports earned by him during his long period of service had not been taken into account.
He also pleaded that he had been allowed to cross the efficiency bar in December 1944 and had been given a selection grade in 1,945.
It was urged before us that the crossing of the efficiency bar must be regarded as giving him a clean bill up to that date and in view of this the reports of 1941 and 1942 should not have been taken into consideration against him.
As regards the reports for the years 1945 and 1946 the respondent 's complaint was that the Superintendent of Police.
Montgomary, was for certain communal reasons biased against him.
As regards the reports for the period May 27, 1946 to 30th June 1946 and the rest of the year the same had been made by Shamsheer Singh and Sadat Ali, Superintendents of Police of 699 Muzaffargarh.
Shamsheer Singh had given him no adverse remark and had left the column of honesty in the report "blank".
Sadat Ali who was biased against the respondent got the word "no" typed opposite the column of honesty.
The report for the year 1948 was based mainly on the opium case and as he had been cleared of the charge in respect of that case, there was no foundation for the report for that year.
Further the order of dismissal was in violation of r. 16.2 as this punishment was to be awarded for the gravest acts of misconduct or as the cumulative effect of continued misconduct proving incorrigibility and complete unfitness for police service which facts did not exist in his case.
A further complaint was made that the enquiry officer did not care to summon A. L. Chopra, the Rehabilitation Inspector and Captain Chuni Lal, Ex military man although they had been allowed to be examined previously.
The deposition of Ram Chander, Assistant Surgeon, a defence witness was not typed out and made a part of the record although his deposition was noted by the stenotypist in the note book.
The order of dismissal was passed by the Deputy Inspector General without considering this evidence.
Besides the above, the evidence of well placed officers like Deputy Commissioners, Superintendents of Police, Sub Divisional Magistrates and others who had testified to the respondent 's efficiency, honesty and reliability were totally ignored.
The Subordinate Judge held that the charge framed against the respondent was vague and indefinite and the enquiry was.
unfair and inadequate because some of the authors of the reports adverse to the respondent, though avail able, were not produced to enable the respondent to cross examine them, that oral and, documentary evidence sought by the respondent was withheld and as such no reasonable opportunity of defence was afforded to him.
in the result he held that the requirements of article 311 of the Constitution had been violated and the order of dismissal was inoperative.
The High Court did not agree that the charge was vague but focussed its attention mainly on the question as to whether there had been a substantial compliance with the requirements of article 311 and whether the enquiry conformed to the principles of fairplay and natural justice.
Considering the Service Rules already mentioned the High Court observed that there was no dispute that reports till 1940 were generally favourable to the plaintiff.
In our view reports earlier than 1942 should not have been considered at all inasmuch as he was allowed to cross the efficiency bar in that year.
It is unthinkable that if the authorities took any serious view of the charge of dishonesty and inefficiency contained in the confidential reports of 1941 and 1942 they could 700 have overlooked the same and recommended the case of the officer as one fit for crossing the efficiency bar in 1944.
It will be noted that there was no specific complaint in either of the two years and at best there was only room for suspicion regarding, his behaviour.
It further appears from the judgment of the High Court based mainly on the lengthy finding of the, Superintendent of Police, Bishambar Das dated 25th May 1950 that from 1942 to April 1945 the respondent got 'A ' class reports,though his superior officers were not certain as regards his honesty.
His integrity was, considered to be doubtful in the succeeding reports up to 31st December 1946.
As regards the first half of 1947 the Superintendent of Police had noted that he was not in a position to make any remark about his honesty as he had not seen the respondent s work at any police station.
The Deputy Commissioner however remarked that his work was quite satisfactory, and he was honest.
For the remaining part of 1947 he received an 'A ' report from the District Superintendent of Police who also stated that the respondent seemed to be honest and competent.
There can be no doubt that the 1948 report was a very damaging one and if the allegations contained therein had any substratum of truth, the respondent could be dismissed from service on the strength .of the charges based on ' those allegations alone.
But, as already noted, the respondent was cleared of this charge.
The High Court opined that the enquiry officer, Bishambar Das, should not have neglected to summon five officers ' who made reports about the respondent and were available for examination at the enquiry.
They were Chunilal Malhotra, Choudhry Roshan Lal, Deputy Commissioner, Shri Ismail.
Shri, Holiday and Shri Sant Prakash Singh.
According to the High Court the defence of the respondent in the enquiry being that the reports against him were based upon no sufficient data and/or were made partly because of the poisoning of the mind of the District Superintendent of Police by the Deputy Superintendent of Police on communal considerations the only way the respondent could have substantiated his defence version would be by putting questions to the reporting officers if made available during the enquiry.
One of the above officers Shamsher Singh was actually examined as 'the respondent 's witness in the suit and his evidence showed that he had left the column for honesty in the report for 1946 blank as he had not seen the respondent at his work.
This evidence went to show that if he had been examined by the enquiry officer a portion of the report taken in consideration against the respondent would have been found to be without substance.
Another officer.
Chunilal Malhotra though not examined before the enquiry 701 officer was called in defence in the suit.
All that he could say., was that he had received complaints against the respondent but he did not remember whether they were oral or in writing.
The High Court justifiably commented that there was no sufficient reason for the enquiry officer refusing to summon Chunilal Malhotra.
On an overall consideration of the facts the High Court took the view that "The approach of the enquiry officer was such that whatever be the testimony of other witnesses, it could not undo the effect of the reports made by the superior officers about the plaintiff.
" In other words the enquiry officer shut his mind to the testimony, afforded by a large number of witnesses including a Deputy commissioner, Under Secretary, two Superintendents of Police, a few Magistrates and some Deputy Superintendents of Police who had given evidence about the respondent 's reputation and work.
Further the High Court took the view that the remarks of the Deputy inspector General of Police against the respondent in the year 1948 that he was not worth being retained in service had influenced the entire approach of the enquiry officer who was a subordinate to the Deputy Inspector General of Police.
The. Deputy Superintendent of Police Lekhraj examined at the hearing of the suit by the respondent and to whom another enquiry against the respondent had been entrusted earlier by Bishambar has the inquiry officer, told the court that when he (Lekhraj) exonerated the respondent in the other enquiry, Bishambar Das had sent for him and told him that the higher authorities wanted to take serious action to the extent of dismissal of the respondent.
In our view the High Court arrived at the correct conclusion and on the facts of this case it is impossible to hold that the respondent had been given reasonable opportunity of conducting his defence before the enquiry officer.
From what we have stated it is clear that if the enquiry officer had summoned at least those witnesses who Were available and who could have thrown some light on the reports made against the respondent the report might well have been different.
We cannot also lose sight of the fact that charge based on the reports for the years 1941 and 1942 should not have been levelled against the respondent.
Learned counsel for the appellant relied on two decisions of the Orissa High Court in support of his contention that it was not necessary to examine the authors of the confidential reports against I the respondent.
in sadananda Mohapatra vs State( ') the court considered the question as to whether reasonable Opportunity had (1) A.I.R. 1967 Orissa 49. 702 in fact been given to the petitioner before the punishing authority ,had made use of the adverse remarks in the confidential character roll.
According to the High Court the petitioner in his examination to the second show cause notice had referred to the good services that he had rendered to the department.
The High Court ,observed that the fact that the petitioner had done good work led the punishing authority to impose a lesser punishment and thus the confidential roll had helped the petitioner.
It also appears from the judgment that the punishing authority in that case had ,during the personal hearing discussed the confidential character with the petitioner and accordingly the High Court was of opinion that even though the adverse remarks in the petitioner 's confidential character roll were not included in the second show cause notice inasmuch as the same had been discussed at the personal hearing it could not be said that no reasonable opportunity had 'been given to the petitioner, In our view the facts in this case are entirely different.
The respondent before us wanted an opportunity by examining the witnesses mentioned by him to explain away the circumstances .which had led to the making of the adverse remarks and he was ,given no such chance.
The second authority relied on for the appellant was State of Orissa vs Sailabehari(1).
In this case the entry in the diary of a Deputy Collector went to show that the Special Assistant Agent, 'i.e., the respondent, had no reputation for honesty.
The diary mentioned the source of information on which the remarks were based and although none of the informants figured as witnesses in the departmental enquiry the touring officer was examined as a witness and his tour diary proved at the inquiry and the respondent had been given an opportunity to cross examine him. 'On those facts the High Court of Orissa after discussing this position, took the view that although insufficient for the establishment of a criminal charge the position was different in the case of departmental enquiries where punishment could be based merely on general reputation for corrupt conduct.
In our view there was no flaw in the enquiry which the Orissa High Court was called upon to examine in that case and the above dictum of the High Court was not really called for.
Learned counsel also wanted to rely on a decision of this Court in State of Jammu and Kashmir vs Bakshi Ghulam Mohammed (2) where the Court was dealing with the proceedings ,of a Commission of Inquiry under the Commission of Inquiry Act.
(1) A.I.R. 1963 Orissa 73.
(2) [1966] Supp.
S.C.R. 401.
703 Section 10 of that Act gave the delinquent a right to be heard but only a restricted right of cross examination, i.e., it was confined only to the witnesses called to depose against the person demanding the right.
It was further observed that as "the Act did not contemplate a right of hearing to include a right to cross examine" "it will be natural to think that the statute did not intend that in other cases a party appearing before he Commission should have any further right of cross examination".
On the facts before it the Court came to the conclusion that no case had been made by Bakshi Ghulam Mohammad that rules of natural justice required that he should have a right to cross examine all the persons who had sworn affidavits supporting the allegations made against him.
In our opinion the above observation regarding the limit of the right to cross examine dissociated from the context in which it was made cannot help the appellant.
Although the case is governed by article 311 as it stood prior to its amendment in 1963 the respondent could not be deprived of an effective right to make representation against the action of dismissal.
In our opinion, refusal of the right to examine witnesses who had made general remarks against his character and were available for examination at the inquiry amounted to denial of a reasonable opportunity of showing cause against the action.
In the result we hold that the High Court came to the correct conclusion and the appeal should be dismissed with costs.
G.C. Appeal dismissed.
| IN-Abs | The respondent was a Sub Inspector of Police and had served as such in various places which are now in Pakistan before being posted to Gurgaon in 1948.
His confidential 'service reports upto 1940 were satisfactory.
In 1941 and 1942 he got bad reports.
However he was allowed to cross the efficiency bar in 1944.
The reports relating to 1945 and 1946 were again adverse.
In 1948 the report charged him with having taken bribe in a particular case, but the charge was on enquiry found to be false.
On October 12, 1949 he was served with a charge sheet setting forth extracts from his confidential character roll imputing inefficiency and lack of probity while in service from 1941 to 1948.
He was asked to answer to the prima facie charge of inefficiency as envisaged in paragraph 16.25(2) of the Punjab Police Rules.
A departmental enquiry was held and the enquiry officer in 1950 recommended his dismissal.
After a further show cause notice the respondent was dismissed from service.
He thereupon filed a suit in which he challenged his dismissal as wrongful on the grounds inter alia that (i) Reports relating to the years 1941 & 1942 should not have been taken into consideration against him; (ii) that the enquiry officer did not allow him to examine in defence the officers who had written adverse reports against him and other witnesses who could have thrown light on these reports.
The trial court decreed the suit and the High Court also held in the appellant 's favour mainly on the ground that article 311 of the Constitution had not been complied with.
In appeal to this Court by the State of Punjab.
HELD : (i) Reports earlier than 1944 should not have been considered at all inasmuch as the respondent was allowed to cross the efficiency bar in that year.
It was unthinkable that if the authorities took any serious view of the charge of dishonesty and inefficiency contained in the confidential reports for 1941 and 1942 they could have overlooked the same and recommended the case of the officer as one fit for crossing the efficiency bar in 1944.
Moreover there was no specific complaint in either of the two years and at best there was only room for suspicion re garding his behaviour.
[699 H] (ii) On the facts of this case it was impossible to hold that the respondent had been given reasonable opportunity of conducting his defence before the enquiry officer.
It was clear that if the enquiry officer had summoned at least those witnesses who were available and who could have thrown some light on the reports made against the, respondent the report might will have been different.
Refusal of the right to examine witnesses who had made general rem arks against the respondent 's character and were available for examination at the enquiry amounted to denial of a reasonable opportunity of showing cause against the action proposed.
Although the case was governed by article 311 as it stood prior to its 695 amendment in 1963 the respondent could not be deprived of an effective right to make representation against the action of dismissal.
[701 F G; 703 C D] In this view the appeal by the State of Punjab must fail.
Sadananda Mohapatra vs State, A.I.R. 1967 Orissa 49 and State of Jammu & Kashmir vs Bakshi Ghulam Mohammed, [1966] Supp.
S.C.R. 401, distinguished.
State of Orissa vs Sailabehari, A.l.
R. 1963 Orissa 73, referred to.
|
iminal Appeal No.256 of 1969.
Appeal by special leave from the judgment and order dated January 15, 1969 of the Allahabad High Court in Criminal Misc.
Case No. 1770 of 1968.
R. K. Garg, section C. Agarwal, D. P. Singh, V. J. Francis and section Chakravarty, for the appellant.
O. P. Rana, for respondent No. 2.
The report stated that one Bipen Kumar Tiwari had been attacked by certain goondas who also stabbed him with a knife and further caused injuries ot Vijay Shankar Nigam also.
One of the principal accused named in that report was section N. Sharma, Additional District Magistrate (Judicial), Gorakhpur, who is the appellant in this appeal.
The allegation against him was that it was at his instigation that the goondas had attacked Bipen Kumar Tiwari and attempted to murder him.
The offences made out by the report lodged by Vijay Shankar Nigam were cognizable and the Police, after registering the case, started investigation.
On the 13th April, 1968, the appellant moved an application before the Judicial Magistrate having jurisdiction to take cognizance of the offence, alleging that a false report bad been lodged against him at the connivance and instance of the local police.
It was urged that it would, therefore, be desirable in the interest of justice that provisions of section 159 of the Code of Criminal Procedure be 948 invoked and the preliminary enquiry may be conducted by the Court itself and necessary directions may be issued to the Police to stop the investigation.
The Magistrate, after hearing both parties, passed an order directing the police to stop investigation and decided to hold the enquiry himself.
Thereupon, on 2nd May, 1968, an application was moved in the High Court of Allahabad under section 561A, Cr.
P.C., to quash the order passed by the Magistrate on 13th April, 1968, on the ground that he had no jurisdiction to pass such an order under section 159, Cr.
This application was allowed by the High Court by its judgment dated 15th January, 1969, so that the High Court quashed the order of the Judicial Magistrate and held that the police of Gorakhpur was at liberty to conclude the investigation and submit its report to the Magistrate after which the case could proceed in accordance with law.
The appellant has challenged this order of the High Court in this appeal brought up by special, leave.
Section 156(1) of the Code of Criminal Procedure empowers an officer in charge of a police station to investigate any cognizable case without the order of a Magistrate.
Sub section (2) of section 156 lays down that no proceeding of a police officer in any such case shall at any stage be called in question on the ground that the case was one which such officer was not empowered under this section to investigate, while sub section
(3) gives power to any Magistrate empowered under section 190 of the Code to order such an investigation in any case as mentioned in sub section
Section 157 requires that, whenever such information in received by an officer in charge of a police station that he has reason to suspect the commission of an offence which he is empowered to investigate under section 156, he must forthwith send a report of it to the Magistrate empowered to take cognizance of such an offence upon a police report and, at the same time, he must either proceed in person, or depute.
one of his subordinate officers to proceed, to the spot to investigate the facts and circumstances of the case, and, if necessary, to take measures for discovery and arrest of the offender.
This provision is qualified by a proviso which is in two parts.
The first clause of the proviso enables an officer in charge of a police station not to proceed to make an investigation on the spot or to depute a subordinate officer for that purpose if the information received is given against a person by name and the case is not of a serious nature.
The second clause.
of the proviso permits the officer in charge of a police station not to investigate the case if it appears to him that there is no sufficient ground for entering on an investigation.
The report to be sent to the Magistrate under sub section
(1) of section 157 requires that in each of the cases where the officer in charge of the police station decides to act under the two clauses of the proviso, he must state in his report 949 his reasons for not fully complying with the requirements of subsection (1) and, in addition, in cases where he decided not to investigate on the ground mentioned in the second clause of the proviso, he is required to notify to the informant the fact that he will not investigate the case or cause it to be investigated.
These provisions are followed by section 159 which is as follows "159.
Such Magistrate, on receiving such report, may direct an investigation or, if he thinks fit, at once proceed, or depute any Magistrate subordinate to him to proceed, to hold a preliminary inquiry into, or otherwise to dispose of, the case in manner provided in this Code.
" The High Court has held that, under section 159, the only power, which the Magistrate can exercise on receiving a report from the officer in charge of a police station, is to make an order in those cases which are covered by the proviso to sub section
(1) of section 157, viz., cases in which the officer in charge of the police station does not proceed to investigate the case.
The High Court has furl, :her held that this section 159 does not empower a Magistrate to stop investigation by the police in exercise of the power conferred on it by section 156.
It is the correctness of this decision which has been challenged by the appellant, and the ground taken is that section 159 should be interpreted as being wide enough to permit the Magistrate to proceed, or depute any Magistrate subordinate to him to proceed, to hold a preliminary enquiry into, or otherwise to dispose of, the case in the manner provided in this Code, even if the report from the police, submitted under section 157, states that the police is proceeding with the investigation of the offence.
It was urged by counsel for the appellant that the narrower interpretation of section 159 accepted by the High Court will leave persons at the mercy of the police who can harass any one by having a false report lodged and starting investigation on the basis of such a report without any control by the judiciary.
He has particularly emphasised the case of the appellant who was himself a Judicial Officer working as Additional District Magistrate and who moved the Magistrate on the ground that the police had engineered the case against him.
We, however, feel constrained to hold that the language used in section 159 does not permit the wider interpretation put forward by counsel for the appellant This section first mentions the power of the Magistrate to direct an investigation on receiving the report under section 157, and then states the alternative that, if he thinks fit, he may at once proceed, or depute any Magistrate subordinate to him to proceed, to hold a preliminary enquiry into, or otherwise to dispose of, the case.
On the face of it, the first alternative of directing an investigation cannot arise in a case where the report itself shows that investigation by the police is going on in 950 accordance with section 156.
It is to be noticed that the second alternative does not give the Magistrate an unqualified power to proceed himself or depute any Magistrate to hold the preliminary enquiry.
That power is preceded by the condition that he may do so, "if he thinks fit".
The use of this expression makes it clear that section 159 is primarily meant to give to the Magistrate the power of directing an investigation in cases where the police decide not to investigate the case under the proviso to section 157(1), and it is in those cases that, if he thinks fit, he can choose the second alternative.
If the expression "if he thinks fit" had not been used, it might have been argued that this section was intended to give in wide terms the power to the Magistrate to adopt any of the two courses of either directing an investigation, or of proceeding himself or deputing any Magistrate subordinate to him to proceed to hold a preliminary enquiry as the circumstances of the case may require.
Without the use of the expression "if he thinks fit", the second alternative could have been held to be independent of the first; but the use of this expression, in our opinion, makes it plain that the power conferred by the second clause of this section is only an alternative to the power given by the first clause and can, therefore, be exercised only in those cases in which the first clause is applicable.
It may also be further noticed that, even in sub section
(3) of section 156, the only power given to the Magistrate, who can take cognizance of an offence under section 190, is to order an investigation; there is no mention of any power to stop an investigation by the police.
The scheme of these,sections, thus, clearly is that the power of the police to investigate any cognizable offence is uncontrolled by the Magistrate, and it is only in cases where the police decide not to investigate the case that the Magistrate can intervene and either direct an investigation, or, in the alternative, himself proceed or depute a Magistrate subordinate to him to proceed to enquire into the case.
The power of the police to investigate has been made independent of any control by the Magistrate.
The High Court of Lahore in The Crown vs Mohammad Sadiq Niaz(1), and the High Court of Patna in Pancham Singh vs The State(1) interpreted section 159 to the same effect as held by us above.
The reasons given were different.
Both the Courts based their decisions primarily on the view expressed by the Privy (3) Council in King Emperor vs Khwaja Nazir Ahmad .
That case, however, was not quite to the point that has come up for decision before us.
The Privy Council was concerned with the question whether the High Court had power under section 561A of the (1) A.I.R. 1949 Lah. 204.
(3) 71 I.A. 203.
(2) A.I. R. 1967 Patna 418.
95 1 Code of Criminal Procedure to quash proceedings being taken by the police in pursuance of first information reports made to the police.
However, the Privy Council made some remarks which have been relied upon by the High Courts and are to the following effect : "In India, as has been shown, there is a statutory right on the part of the police to investigate the circumstances of an alleged cognizable crime without requiring any authority from the judicial authorities, and it would as their Lordships think, be an unfortunate result if it should be held possible to interfere with those statutory rights by an exercise of the inherent jurisdiction of the court.
The functions of the judiciary and the police are complementary, not overlapping, and the combination of individual liberty with a due observance of law and order is only to be obtained by leaving each to exercise its own function, always, of course, subject to the right of the court to intervene in an appropriate case when moved under section 491 of the Criminal Procedure Code to give directions in the nature of habeas corpus." This interpretation, to some extent, supports the view that the scheme of the Criminal Procedure Code is that the power of the police to investigate a cognizable offence is not to be interfered with by the judiciary.
Their Lordships of the Privy Council were, of course, concerned only with the powers of the High Court under .sect ion 561A, Cr.
P.C., while we have to interpret section 159 of the Code which defines the powers of, a Magistrate which he can exercise on receiving a report from the police of the cognizable offence under section 157 of the Code.
In our opinion, section 159 was really intended to give a limited power to the Magistrate to ensure that the police investigate all cognizable offences and do not refuse to do so by abusing the right granted for certain limited cases of not proceeding with the investigation of the offence.
Counsel appearing on behalf of the appellant urged that such an interpretation is likely to be very prejudicial particularly to Officers of the judiciary who have to deal with cases brought up by the police and frequently give decisions which the police dislike.
In such cases, the police may engineer a false, report of a cognizable offence against the Judicial Officer and may then harass him by carrying on a prolonged investigation of the offence made out by the report.
It appears to us that, though the Code of Criminal Procedure gives to the police unfettered power to investigate all case 's where they suspect that a cognizable offence has been committed, in appropriate cases an aggrieved person can always seek a remedy by invoking the power of the High Court under article 9 5 2 226 of the Constitution under which, if the High Court could be convinced that the power of investigation has been exercised by a police officer mala fide, the High Court can always issue a writ of mandamus restraining the police officer from misusing his legal powers.
The fact that the Code does not contain any other provision giving power to a Magistrate to stop investigation by the police cannot be a ground for holding that such a power must be read in section 159 of the Code.
In theresult, the decision of the High Court in this case must be upheld,so that the appeal fails and is dismissed.
Y.P. Appeal dismissed.
| IN-Abs | A first information report was lodged in respect of a crime and the appellant, who was the Additional District Magistrate (Judicial) was named therein as principal accused.
The offences mentioned were cognizable and the Police after registering the case, started investigation.
The appellant applied to the Judicial Magistrate for invocation of the provisions of section 159 Cr.
P.C., and for conducting preliminary enquiry by the Court itself and for issuance of necessary directions to the Police to stop investigation alleging that a false report had been lodged at the instance of the local police.
The Magistrate directed the police to stop investigation and decided to hold the enquiry himself.
Thereupon an application was moved in the High Court under section 561 A Cr.
P.C. for quashing the order of the Magistrate as he had no jurisdiction to pass such an order under section 159 Cr.
The High Court accepted the application and set aside the Magistrate 's order.
Dismissing the appeal, this Court, HELD : Section 159 Cr.
P.C. does not empower a Magistrate to stop investigation by the police.
This section first mentions the power of the Magistrate to direct an investigation on receiving the report under section 157, and then states the alternative that, if he thinks fit, he may it once proceed, of depute any Magistrate subordinate to him to proceed, to hold a preliminary enquiry into, or otherwiseto dispose of, the case.
On the face of it, the first alternative of directing an investigation cannotarise in a case where the report itself shows that investigation by the police is going on in accordance with section 156.
It is to be noticed that the second alternative does not give the Magistrate an unqualified power to proceed himself or depute any Magistrate to hold the preliminary enquiry.
That power is preceded by the condition that he may do so, "if he thinks fit" The use of this expression makes it clear that section 159 is primarily meant to give to the Magistrate the power of directing an investigation in cases where the police decides not to investigate the case under the proviso to section 157(1), and it is in those cases that.
if he thinks fit, he can choose the second alternative.
Without the use of the expression "if he thinks fit" the second alternative could have been held to be independent of the first; but the use of this expression makes it plain that the power conferred by the_ second clause of this section is only ,in alternative to the Power given by the first clause and Fan, therefore.
he exercised only in those, cases in which the first clause is applicable.
Even in sub s.(3) of section 156, the only power given to the Magistrate, who can take cognisance of an offence under section 190, is to order an investigation, there is no mention of any power to stop an investigation by the police.
The scheme of these sections, thus, clearly is that the Dower of the Police to investigate any cognizable offence is uncontrolled by the Magistrate, and it is only in cases where the police 947 decide not, to investigate the case that the Magistrate can intervene and either direct an investigation, or, in the alternative, himself proceed or depute a Magistrate subordinate to him to proceed to enquire into the case.
[949 G 950 F] The Crown vs Mohammad Sadia Naiz, A.I.R. 1949, Lah.
204, Pancham Singh vs The State, A.I.R. 1967 Pat. 416 and King Emperor vs Khwaja Nazir Ahmad, 71 I.A. 203, referred to.
(2)The Code of Criminal Procedure gives to the police unfettered power to investigate all cases where they suspect a cognizable offence has been committed.
If the police engineer a false report of a cognizable offence against any person he can in appropriate cases always invoke the Power of the High Court under Act.
Therefore, the fact that the Code does not provide for.a power to a Magistrate to stop investigation by the Police cannot be a ground for holding that such a power must be read into section 159 of the Code.
[951 H]
|
iminal Appeal No.166 of 1967.
2 Appeal by special leave from the judgment and order dated November 28, 1966 of the Mysore High Court in Criminal Peti tion No. 610 of 1966.
V. K. Sanghi and M. section Narasimhan, for the appellant.
section section Javali and M. Veerappa, for respondents Nos. 1 and 2.
R. Gopalakrishnan, for respondent No. 3.
section P. Nayar, for respondent No. 4.
The Judgment of the Court was delivered by Hidayatullah, C.J.
This is an appeal by special leave against the judgment and order of the High Court of Mysore dated November 28, 1966 in Misc.
Criminal Petition No. 610 of 1966.
By that order the High Court held that the present appellant Bhimappa had no locus standi to invoke section 417(3) of the Code of Criminal Procedure and to ask for special leave to file an appeal against the acquittal of the respondent.
The appellant questions the correctness of the order.
Bhimappa (appellant) had a house at Athni, Taluka Belgaum District.
It stood in the name of his eldest son and his two other sons lived in one part of the house and the other part was let out to the first respondent Laxman who ran a boarding house and also lived there with his wife and children and his mistress Champevva, the second respondent.
No rent was fixed but the sons of Bhimappa used to have their meals with respondents Nos. 1 and 2.
Bhimappa asked his tenant to vacate the house as he wanted to reside in it himself and his son Yamnappa (P.W. 14) wanted space for a godown for 400 bags of groundnut purchased by him.
The first respondent was asked to vacate a portion of the house but was reluctant.
It is not necessary to give the details of what happened further.
Suffice it to say that the house was set on fire to cause loss to Bhimappa.
All efforts to save the house failed and it was burnt down.
Yamanappa then filed a report in the police station.
The police arrested respondents Nos. 1 and 2 and submitted a charge sheet against them in the court of Junior Magistrate, Athni.
Bhimappa was dissatisfied that the police had not prosecuted Mallappa, respondent No. 3 also and he filed a complaint against him in the same court.
The magistrate inquired into the two cases together and finding a prima facie case established committed the first two respondents and the third respondent separately to the Court of Sessions.
The three respondents asked that the two cases be consolidated and a combined charge be framed in the case.
3 The two sessions cases were numbered as Sessions Trials Nos. 79 80 of 1965.
They were tried together and the Sessions Judge, Belgaum by his judgment, July ' 13, 1966 held the respondents not guilty and acquitted them.
The appellant then applied to the High Court of Mysore under section 417(3) of the Code of Criminal Procedure for special leave to appeal against the acquittal of the three respondents.
With the petition he filed a memorandum of appeal.
The High Court held ' on November 28, 1966 as follows : "The petitioner has no locus standi to prefer an appeal when the State had prosecuted the respondent in the Sessions Court.
This petition is dismissed.
Sd/ H. Hombe Gowda, Chief Justice, Sd/ M. Santhosh," Bhimappa filed also a revision application, which was dismissed on December 5, 1966 by C. Honniah J. Bhimappa 's request for a certificate was also rejected.
He now appeals to this Court.
His contention is that he had a right to move the High Court unders.
417(3) of the Code of Criminal Procedure for special leave as the order of 'acquittal was passed in a case instituted upon his complaint.
The High Court could not, therefore, hold that he, had no standing to move the High Court under section 417(3) of the Code of Criminal Procedure.
Sub section 3 of section 417 as an amendment was introduced by Act XXVI of 1955.
Previously the right of appeal against acquittal belonged only to the State Government.
By the amendment this right is also conferred on a complainant if the order of ' acquittal is passed in any, case instituted upon complaint.
The sub section may be read here "3.
If such an order of acquittal is passed in any case instituted upon complaint and the High Court, on an application made to it by the complainant in this behalf, grants special leave to appeal from, the order of acquittal, the complainant may present such an appeal to the High Court.
" Under sub section 4 the application has to be made within 60 days from the date of the order of acquittal while under sub section 5 it the application under sub section 3 for the grant of special leave to appeal from the order of acquittal is refused, no appeal from that order of acquittal shall lie at the instance of the State Government.
4 The short question in this case is whether the sessions case .Started on the complaint of Bhimappa entitles him to move the High Court for special leave (a) against all the three respondents ,or (b) at least against respondent No. 3.
The answer to this question depends upon whether we can say that there was a case instituted upon a complaint by Bhimappa in which an acquittal was recorded, for these are the words of the sub section and also the condition precedent to the right.
The word 'case ' is not defined by the Code but its meaning is well under stood in legal circles.
In criminal jurisdiction means ordinarily a proceeding for the prosecution of a person alleged to 'have committed In offence.
In other contexts the word may represent other kinds of proceedings but in the context of the sub section it must mean a proceeding which at the end results either in discharge, conviction, or acquittal of an accused person.
What is meant by 'instituted ' may next be explained.
There are three different ways in which cognizance is taken by Magistrates of offences.
This is stated in section 190 of the Code.
They are "(a) upon receiving a complaint of the facts which constitute an offence; (b) upon a report in writing of such facts made by any police officer; and (c) upon information received from any person other than a police officer, or upon his own knowledge or suspicion, that such offence has been committed.
" The third sub section, therefore, obviously refers to a case in which cognizance is taken upon a complaint of facts constituting an offence.
The word 'complaint ' has been defined in section 4(1)(h) ,and means an allegation made orally or in writing to a Magistrate, with a view to his taking action, under the Code, that some person, whether known or unknown, has committed an offence, but it does not include the report of a police officer.
The word 'complaint ' has a wide meaning since it includes even an oral allegation.
It may, therefore, be assumed that no form is prescribed which the complaint must take.
It may only be said that there must be an allegation which prima facie discloses the commission of an offence with the necessary facts for the Magistrate to take action.
Section 190(1)(a) makes it necessary that the alleged facts must disclose the commission of an offence.
The Code then proceeds to provide different procedures for different cases arising under section 190 and also in relation to the 5 seriousness of the offence.
Chapter XVI deals with proceedings instituted upon a complaint, Chapter XVIII with inquiries into cases triable by the Court of Session or the High Court, Chapter XX with the trial of Summons cases by Magistrates, Chapter XXI with the trial of Warrant cases by Magistrates, Chapter XXII with summary trials and Chapter XXIII with trial before High Courts and Courts of Sessions.
The offence here was mischief by fire with intent to destroy a house etc.
punishable under section 436 I.P.C.
This offence is triable7 exclusively by the Court of Session.
Section 207 of the Code of Criminal Procedure provides : "Procedure in inquiries preparatory to commitment In every inquiry before a Magistrate where the case is triable exclusively by a Court of Session or High Court, or in the opinion of the Magistrate, ought to be tried by such Court, the, Magistrate shall (a) in any proceeding instituted on a police report, follow the procedure specified in section 207A; and (b) in any other proceeding, follow the procedure specified in the other provisions of this Chapter." Under section 206 the Magistrate is required to commit an accused to the Court of Session for trial.
In cases triable by the Magistrate himself he has to follow the procedure for trial of cases according to the other procedures mentioned earlier by us.
As this was a case for the application of sections other than section 207 A it fell under section 208.
That section provides for cases of complaint and the is complainant has to be heard when the accused appears or brought before the Magistrate who has to take such evidence as may be produced in support of the prosecution or in behalf of the accused, or as may be called by the Magistrate.
Then under section 209 the accused may be discharged unless the Magistrate con siders it necessary that the person should be tried before himself or some other Magistrate in which case he shall proceed accordingly.
If he considers that there are reasons to commit the accused, he shall frame a charge, explain it to the accused, obtain from the accused a list of his defence witnesses.
The Magistrate may in his discretion examine any of these witnesses and then commit the accused to stand his trial before the Court of Session or if satisfied that there are no grounds for committing the accused.
, he may cancel the charge and discharge the accused.
It will be noticed that in a case involving an offence triable exclusively by the Court of Session the procedure under sections 206 220 6 has to be followed if the complaint is filed initially.
There are other sections in the Chapter and other Supplementary provisions Which are not relevant to the discussion and, therefore, reference .to them is omitted here.
The position regarding other cases triable by the Magistrate himself or by another magistrate are laid down in Chapter XVI.
There the magistrate shall examine the complainant and the witnesses present, if any.
The Magistrate may even send the case to the police for investigation under section 156(3) if he is empowered to act under section 190.
This procedure of course does not arise in cases in which the trial is of an offence triable by the Court of Session.
As we are not concerned with the problems arising under Chapter XVI we refrain from expressing an opinion on the various aspects of the problem arising under that Chapter.
For that reason we do not refer to cases which were mainly concerned with trials before Magistrate.
In the present case the police had put up a chargesheet against two respondents only.
Bhimappa filed a complaint in which he charged these two respondents and respondent No. 3 with the same offence of mischief by fire but with the aid of section 34 I.P.C. As he had charged the three respondents with having entered into :a Criminal Conspiracy a charge under section 120 B I.P.C. was also framed while committing the accused to the Court of Session.
Mallappa was also charged under section 436 read with section 109 I.P.C. for abetment of the offence by the other accused.
The two cases in the Magistrate 's Court were registered under their own numbers but were tried together and were committed separately.
In the Court of Session they were also registered separately and bore numbers Sessions Cases Nos.
79 and 80 of 1965.
Both the cases ,ended in acquittal.
Bhimappa applied for special leave in both cases to file an 'appeal under section 417(3).
His right to ask for special leave was not accepted in the High Court.
Now there can be no manner of doubt that one of the cases was instituted on the report of a police officer and the other on the complaint of the complainant.
There can be no question of merger because the identity of the two cases is maintained right up to the end of the Sessions trial.
The case of Bhimappa proceeded on its own number and although evidence was led in both the cases together, the acquittal was recorded in each of the two cases.
The police did not present a charge sheet against Mallappa and the trial of Mallappa can be said to be in the other case and not in the case filed by the police.
In this view of the matter it is quite plain that Bhimappa was entitled to move the High 7 Court for special leave in his own case.
The order saying that he had no standing cannot, therefore, be sustained.
Bhimappa had also applied for revision and his application was rejected.
He applied for special leave against that order but leave was refused by this Court.
It was argued that that must conclude the matter.
We do not agree.
Bhimappa 's statutory right to move the High Court could not be lost by reason of the revision.
The result of the revision, therefore, had no bearing upon the matter.
Bhimappa was thus entitled to have a hearing of his petition for special leave under section 417 (3) of the Code.
Whether he could ask for leave against Malappa alone.or against the other two because the charge under section 120 B I.P.C. was framed against all the three respondents on his complaint is a point which we do not decide because it will be for the High Court to consider the matter when his petition is considered and only if it is allowed.
We accordingly set, aside the order of the High Court and remit the case for consideration of the petition under section 417(3) filed by Bhimappa.
R.K.P.S. Appeal allowed.
| IN-Abs | The appellant 's house was set on fire and burnt down.
As a result of a report filed by his son the police arrested Respondents 1 and 2 and submitted a charge sheet against them.
The appellant was dissatisfied that the police had not prosecuted Respondent No. 3 also and he filed a complaint against him, in the same Court.
The Magistrate inquired into the two cases together and committed separately the first two respondents and the third respondent separately to the Court of Sessions.
After the Sessions Judge had held all the three respondents not guilty and acquitted them, the appellant applied under section 417(3) Cr.
P.C., for special leave to appeal against the acquittal of the three respondents; but this petition was dismissed by the High Court on the ground that the petitioner had no locus standi to prefer an appeal when the State had pro secuted the respondents in the Sessions Court.
A revision application filed by the appellant was also rejected.
On appeal to this Court, HELD : The appellant was entitled to have a hearing of his petition for special leave under section 417(3) and the case must therefore be remitted to the High Court for this purpose.
The answer to the question whether the appellant had a right to move the High Court for special leave under section 417(3) depended upon whether there was a case instituted by him upon a complaint in which an acquittal was recorded, for this is the requirement of the special section and also the condition precedent to the right.
[4 B].
On the facts, there could be no doubt that one of the cases was instituted on the report of a police officer and the other on the complaint of the complainant.
There could be no question of merger because the identity of the two cases was maintained right upto the end of the Sessions Trial.
The case of the appellant proceeded on its own number and although evidence was led in both cases together, the acquittal was recorded separately in each of the two cases.
The appellant was therefore entitled to move the High Court for special leave in his own case.
[6 G] The fact that the appellant had also applied for revision which was rejected and had applied for special leave against that order which was refused by this Court, did not mean that that must conclude the matter.
The appellant 's statutory right to move the High Court could not be lost by reason of the revision and the result of the revision, had no bearing upon the matter.
|
iminal Appeal No.100 of 1967.
Appeal from the judgment and order dated March 13,1967 of the Gujarat High Court in Criminal Appeal No. 566 of 1965.
J. L. Hathi, K. L. Hathi and K. N. Bhat, for the appellant.
section K. Dholakia, Badri Das Sharma and section P. Nayar, for the respondent.
The Judgment of the Court was delivered by Ray, J.
This is an appeal from the judgment of the High Court of Gujarat.
The appellants were charged with offences under sections 302 and 323 read with section 34 of the Indian Penal Code.
Accused Nos. 1 and 2 were charged for the individual offences under sections 302 and 323 of the Indian Penal Code for intentionally causing death of Amarji and for causing simple hurt to Vaghji Mansangji.
The deceased Amarji was the brother in .
law (sister 's husband) of Vaghji Mansangji.
Two important eyewitnesses were Pabaji Dajibha and Pachanji Kesarji.
Amarji 33 was Pabaji 's mother 's sister 's son.
Pachanji is the first cousin of Vaghji Mansangji.
Accused No. 3 Mulubha is the maternal uncle (mother 's bro ther) of accused No. 2 Ranubha Naranji and accused No. 1 Hethubha alias Jitubha is the son of another maternal uncle of accused No. 2.
Accused No. 2 was residing at Bhalot.
Vaghji also resided there.
About two months prior to the date of the occurrence on 26 January, 1965 at 8 p.m. there was a quarrel between the children of the house of accused No. 2 Ranubha and the children of the house of Vaghji.
There was exchange of words between the members of the two families.
Accused No. 2 Ranubha and his father Naranji assaulted the wife of Vaghji.
Vaghji then filed a complaint.
Ultimately, the complaint was compounded on the intervention of accused No. 3 Mulubha.
The prosecution case is that because of the behaviour of accused No. 2 Ranubha towards the wife of Vaghji, Ranubha had to leave his own village of Bhalot and had to go to reside with his maternal uncles at Bhuvad.
The further prosecution case is that the relations of Ranubha thereafter went to village Bhalot for fetching the goods of Ranubha and at that time they had threatened Vaghji and others that Ranubha had to leave the village and Vaghji and others would not be able to continue to, reside in the village.
On 26 January, 1965 Amarji, Pabaji Vaghji and Pachanji took their carts of fuel wood for selling it in the village Khedoi which is about 7 miles from Bhalot.
They left Bhalot at about 10 a.m. and reached Khedoi at about 1 p.m.
The cart loads of fuel wood were sold in Khadoi by about 5 p.m.
They made some purchases and then left Khedoi at about 7 p.m.
While returning home Amarjis cart was in the front and Pabaji, Pachanji and Vaghji followed him in.
that order.
There was not much distance between each cart.
When the carts had gone about 2 miles from Khedoi and they were about to enter village Mathda, the three accused persons were noticed waiting on the roads.
All of them caught hold of Amarji and attacked him who was in the first cart.
In the meantime, accused No. 3, Mulubha, caught hold of the hand of Pabaji and prevented him from going near Amarji.
Mulubha was armed with an axe.
Accused Nos. 1 and 2 dealt knife blows to Amarji.
The prosecution suggested that the accused persons realised their mistake that instead of Vaghji they had attacked Amarji, and so both the accused Nos. 1 and 2 left Amarji and went to the cart of Vaghji and gave blows with sticks to Vaghji.
On seeing the attack on vaghji Pabaji intervened and asked the accused to desist from attacking Vaghji any 34 longer as they had already killed Amarji.
Thereupon the accused stopped attacking Vaghji.
By this time Amarji had come staggering to the spot where Pabaji was standing.
Then Amarji was placed in one of the carts and Vaghji was made to sit in that cart.
Pachanji drove his cart first and the two carts without any drivers which had been formerly driven by Vaghji and Amarji, were kept in the middle and Pabaji with the two injured men in his cart was driving his cart last.
The carts were taken to village Khedoi.
It is the prosecution case that the three accused persons followed these carts up to a certain distance and then accused Nos '.
1 and 2 left while accused No. 3 disappeared near Khari Vadi.
Pabaji took the carts to Moti khedoi and saw police head constable Banesing who had come to Khedoi for patrolling work.
Banesing was attached to the police outpost at Bhuvad.
Banesing directed these persons to take Amarji to the Khedoi hospital.
By that time Amarji had died.
Banesing left Khedoi with Pabaji for Anjar police station which is about 8 miles from Khedoi.
They reached, Anjar at about 11 p.m. and Pabaji 's F.I.R. was recorded before police sub inspector Khambholja.
The police sub inspector then preceded to, Khedoi hospital.
Amarji was declared to be dead.
The police sub inspector recorded the statements of Vaghji and Pachanji and :then took steps in the investigation of the case.
At the trial all the three ' accused denied having committed the offence.
, The Sessions Judge acquitted all the three persons under section 302 read with section 34.
He however convicted all the accused for the offence punishable under section 304 Part II read,with section 34 and sentenced them to suffer rigorous imprisonment for five years.
Accused Nos. 1 and 2 were convicted for the offence under section 323 and accused No. 3 was convicted for the offence under section 323 read with section 34 of the Indian Penal Code.
Accused Nos. 1 and 2 were sentenced to suffer rigorous imprisonment for three months while accused No. 3 was sentenced to suffer rigorous imprisonment for two months.
All the sentences were to run concurrent All the accused filed appeals against their convictions.
Before the Division ' Bench in the High Court of Gujarat Divan, J. held that accused No. 1 alone was responsible for the fatal injury on Amarji and he was found guilty for the offence under section 302 while accused Nos. 2 and 3 were found, guilty for the offence under section 324 read with section 34.
Shelat, J. was of the view that all the accused must acquitted because he ' was not satisfied with the evidence and proof of the identity of the accused.
The case was then placed under Section 429 of Criminal ' Procedure Code before Mehta, J. who held that accused No. 1 35 must be Convicted for the offence under section 302 while accused Nos. 2 and 3 must be convicted for the offence under section 302 read with section 34 and all of them should be sentenced to suffer rigorous imprisonment for life.
The conviction of accused Nos. 1 and 2 under section 323 and of accused No. 3 under section 323 read with section 34 was upheld.
The conviction of all the accused under section 304 Part 11 was altered by convicting accused No. 1 under section 302 and accused Nos. 2 and 3 under section 302 read with section 34 of the Indian Penal Code.
Counsel for the appellants contended first that the third learned Judge under section 429 of the Criminal Procedure Code could only deal with the differences between the two learned Judges and not with the whole case.
The same contention had been advanced before Mehta, J. in the High Court who rightly held that under section 429 of the Criminal Procedure Code the whole case was to be dealt with by him.
This Court in Babu and Ors.
vs State of Uttar Peadesh (1) held that it was for tic third learned Judge to decide on what points the arguments would be heard and therefore he was free to resolve the differences as he thought fit.
Mehta, J. here dealt with the whole case.
Section 429 of the, Criminal Procedure Code states "that when the Judges comprising the Court of Appeal are equally divided in opinion, the case with their opinion thereon, shall be laid before another Judge of the same Court and such Judge, after such hearing, if any, as he thinks fit shall deliver his opinion, and the judgment or order shall follow such opinion".
Two things are noticeable; first, that the, case shall be laid before another Judge, and, secondly, the judgment and order will follow the opinion of the third learned Judge.
It is, therefore, manifest that the third learned Judge can or will deal with the whole case.
The second and the main contention of counsel for the ap pellants was that there was no common intention to kill Amarji.
The finding of fact is, ,that the attack the three accused was a concerted one under prearranged plan.
Amarji Was attacked by mistake :but whosoever inflicted, injury in the region of the collar bone of Amarji must be held guilty of murder.
under section 302.
Amarji was further found to have been attacked by accused Nos. 1 and 2 and accused No. 3 who was armed with an axe caught hold of the hand of Pabaji.
The injury on Amarji was an incised wound 1 3/4" *3/4" over the left side of the neck neck just above the left collar bone.
The direction of the wound was was towards right and downwards.
The other injury was incised (1) ; 36 wound 1" * 1/2" * 1/2" over the chest (right side) near the middle line between the 6th and 7 ribs.
The evidence establishes these features; first, that all the accused were related; secondly, they were residing at Bhuvad at the relevant time; thirdly, all the three accused made sudden appearance on the scene of the occurrence; fourthly, they started assault as soon as the carts arrived at the scene of the offence; fifthly, the way in which Amarji was attacked by accused Nos. 1 and 2 and stab wounds were infficted on him and the manner in which accused No. 3 held up Pabaji would show that the three accused were lying in wait under some pre arranged plan to attack these persons when they were returning to Bhalot.
It therefore follows that the attack took place in pursuance of the pre arranged plan and the rapidity with which the attacks Were made also shows the pre concerted plan.
The attack by accused Nos. 1 and 2 on Amarji and the holding up, of Pabaji by accused No. 3 all prove ,common intention, participation and united criminal behaviour of all and therefore accused No. 3 would be equally responsible with ,accused Nos. 1 and 2 who had attacked Amarji.
This Court in the case of Shankarlal Kachrabhai and Ors.
vs State of Gujarat(1) said that a mistake by one of the accused as to killing X in place of Y would not displace the common intention if the evidence showed the concerted action in furtherance of pre arranged plan.
The dominant feature of section 34 is the ,element of participation in actions.
This participation need not in all cases be by physical presence.
Common intention implies acting in concert.
There is a pre arranged plan which is proved either from conduct or from circumstances of from incriminating facts.
The principle of joint liability in the doing of a criminal act is embodied in section 34 of the Indian Penal Code.
The existence of common intention is to be the basis of liability.
That is why the prior concert and the pre arranged plan is the foundation of common intention to establish liability and guilt.
Applying these principles to the evidence in the present case it appears that there was pre arranged plan of the accused to commit offences.
All the accused were lying in wait to attack the party of Amarji, Vaghji, Pabaji and Pachanji.
Amarji was in the forefront.
The accused attacked him.
Vaghji was also attacked and prevented from going to the relief of Amarji.
The plea that Amarji was mistaken for Vaghji would not take away the common intention established by pre arranged plan and participation of all the accused in furtherance of common intention.
The act might be ,done by one of the several persons in furtherance of the common intention of them all, without each one of them having intended (1) ; 37 to do the particular act in exactly the same way as an act might be done by one member of an unlawful assembly in prosecution of the common intention which the other members of the unlawful assembly did not each intend to be done.
In view of the evidence that Amarji was killed in furtherance of the common intention of all the accused the appellants are guilty of murder. 'In Shankarlal 's case(1) this Court said that if the common intention was to kill A and if one of the accused killed B to wreck his private vengeance, it could not be possibly in furtherance of the common intention for which others can be liable.
But if on the other hand he killed B bona fide believing that he was A and the common intention was to kill A the killing of B was in furtherance of the common intention.
All the three accused in the present case were lying in wait and assaulted the driver of the first cart and stabbed him in pursuance of their prearranged plan Therefore, all the three accused including the appellant must share the liability of murder under section 302 read with section 34 of the Indian Penal Code.
Further, in view of the finding that the the concerted plan was to cause injuries to the intended victim with dangerous weapons with which the assailants were lying in wait, the liability of the appellant is established.
The conclusion of Mehta, J. is correct.
The appeal, there fore, fails and is dismissed.
The accused must surrender to the bail and serve out the sentences.
| IN-Abs | The three appellants were charged with offences under sections 302 and 323 read with section 34, of the Penal Code and appellants 1 and 2 were charged with the individual offences under sections 302 and 323 for intentionally causing the death of A, mistaking him for V and for causing simple hurt to V. The Sessions Judge acquitted all the three accused under section 302 read with section 34 but convicted them under section 304 Part 11 read with section 34 and sentenced them to suffer rigorous imprisonment for five years.
Appellants 1 and 2 were also convicted for the offence under section 323 and appellant 3 was convicted for the offence under section 323 read with section 34.
All three were sentenced for these convictions to rigorous imprisonment for terms.
to run concurrently.
On appeal to a Division Bench of the High Court one learned Judge held, that the first appellant alone was responsible for the fatal injury on A and found him guilty under section .302, while the second and third appellants were found guilty under section 324 read with section 34.
The second learned Judge was of the view that all the accused must be acquitted as he was not satisfied with, the evidence and proof of. the identity.
of the accused.
The case was then placed before , a, third learned Judge under section 429 Cr.
P.C. who held that the first appellant must 'be convicted under section 302 while the second and third appellants must be convicted, under section 302 read with section 34 and all of them must be sentenced to suffer rigorous prisonment for life.
The conviction of the first and second appellants under section 323 and of the third appellant under section 323 read with section 34 was upheld.
In appeal to this Court it was contended (i) that the third learned Judge under section 429 Cr. P.C. could only,.deal with the differences between the two learned Judges and not with the whole case; and (ii) that there was no comnmittee intend on within the meaning of supp I.P.C. on the part of the three appellants to kill A as he was attacked by, mistake.
HELD : Dismissing the appeal.
(i) Section on of the Criminal Procedure Code.states "that when the judges comprising the Court of Appeal are equally divided in opinion the case with their opinion thereon shall be laid before another Judge of the same Court and such Judge, after hearing,if any, as he thinks fit, shall deliver his opinion, and the judgment or order shall follow such before another Judge, and, secondly, the Judgment and order will follow the, opinion of the third learned Judge.
It is, therefore, manifest that the third learned Judge can or will deal with the whole case.
[35 D F] 32 Babu and Ors.
vs State of Uttar Pradesh, [1965] 2 S.C.R. 771; referred to.
(ii) The plea that A was mistaken for V would not take away the common intention established by a pre arranged plan and participation of all the accused in furtherance of common intention.
The act might be done by one of the several persons in furtherance of the common intention of them all without each one of them having intended to do the particular act in exactly the same way as an act might be done by one member of an unlawful assembly in prosecution of the common intention which the other members of the unlawful assembly did not each intend to be don. .
[36 H] On the facts, it was clear that the attack took place in pursuance of a pre arranged plan.
, The attack by appellants 1 and 2 on A and the evidence showing that appellant 3 held back P during the attack all proved common intention, participation and united criminal behaviour of all; appellant 3 was therefore equally responsible and guilty with appellants 1 and 2 who had attacked A. Shankarlal Kachrabbhai and Ors.
vs State of Gujarat, ; ; referred to.
The dominant feature of section 34 is the element of participation in actions.
This participation need not in all cases be by physical presence.
Common intention implies acting in concert.
There is a pre arranged plan which is proved either from conduct or from circumstances or from incriminating facts.
The principle of joint liability in the doing of a criminal act is embodied in section 34 of the Indian Penal Code.
The existence of common intention is to be the basis of liability.
That is why the prior concert and the pre arranged plan is the foundation of common intention to establish liability and guilt.
[36 E]
|
ew Petition No. 29 of 1969.
Application for review of this Court 's Judgment dated July 17, 1969 in Civil Appeal No. 1878 of 1967 arising out of the judgmentand order dated July 18, 1966 of the Bombay High Court, Nagpur Bench in Special Civil Application No. 722 of 1965.
N. section Bindra and section P. Nayar,for the petitioner/appellants.
A. G. Ratnaparkhi, for the respondent.
47 The, Judgment of the Court was delivered by Shah, J. Appeal No. 1878 of 1967 was ordered to be dismissed by this Court on July 17, 1969.
The Court held that the sale of standing trees is not sale of goods chargeable to sales tax under the Bombay Sales Tax Act, 1959.
A petition for review of Judgment has been filed by the State contending that after the judgment of the High Court and before the appeal was heard, the Bombay Sales Tax Act, 1959 was amended by the Maharashtra Act 15 of 1967 with retrospective operation, and by the amendment standing timber was included 'in the definition of timber, but counsel for the State failed to invite the attention of the Court to that Act.
Since the judgment of this Court it is claimed suffers from an error apparent on the face of the record, we have granted review of judgment.
The expression "goods" was defined in section 2(13) of the Bombay Sales Tax Act, 1959.
By Maharashtra Act 15 of 1967 by section 2 the definition of "goods" was altered by providing that "In section 2 of the Bombay Sales Tax Act, 1959 .
in clause (13), after the words 'and commodities ' the following shall be, and shall be deemed always to have been, added, namely: 'and all standing timber which is agreed to be severed before sale or under the contract of sale '.
" The definition was retrospective in operation and the expression " goods" included at all relevant times standing timber agreed to be severed before sale or under the contract of sale.
The expression "sale of goods" in Entry 54 List 11 of Sch.
VII of the Constitution has the same connotation as it has in the .
This Court in The State of Madras vs Gannon Dunkerley & Co. (Madras) Ltd.(1) observed that the expression "sale of goods" was, at the time when the Government Of India Act, 1935, was enacted, a term of well recognised legal import in the general law relating to sale of goods and in the legislative practice relating to that topic and must be interpreted in Entry 48 in List 11 in Sch.
VII of the Act as having the same meaning as in the : see also Pandit Banarsi Das Bhanot vs The State of Madhya Pradesh (2).
The expression " sale of goods" in Entry 54 in List II of Sch.
VII of the Consti tution has also the same meaning as that expression had in Entry 48 in List II of the Government of India Act, 1935.
The State Legislature may not therefore extend the import of the expression (1) ; (2) ; 48 " sale of goods" so as to impose, liability for tax on transactions which are not sales of goods within the meaning of the .
By article 366(12) of the Constitution the expression "goods" is defined as inclusive of "all materials, commodities and articles".
That is, however an inclusive definition and does not throw much light on the meaning of the expression "goods".
But the definition of "goods" in the , as meaning "every kind of moveable property other than actionable claims and money; and includes stock and shares, growing crops, grass, and things attached to or forming part of the land which are agreed to be severed before sale or under the contract of sale".
Standing timber may ordinarily not be regarded as "goods", but by the, in clusive definition given in section 2(7) of the things which are attached to the land may be the subject matter of contract of sale provided that under the terms of the contract they are to be severed before sale or under the contract of sale.
In the present case it was expressly provided that the timber agreed to be sold shall be severed under the contract of sale.
The timber was therefore "goods" within the meaning of section 2(7) of the and the expression "sale of goods" in the Constitution in Entry 54 List 11 having the same meaning as that expression has in the , sale of timber agreed to be severed under the terms of the contract may be regarded as sale of goods.
The appeal is allowed and the petition filed by the respondent must be dismissed.
Since the State succeeds in this appeal, relying upon a statute which was passed after the judgment of the High Court, there will be no order as to costs throughout.
V.P.S. Appeal allowed.
| IN-Abs | The contract of sale entered into by the respondent expressly provided that the timber agreed to be sold shall be severed.
The High Court held that the sale of standing trees was not a sale of goods chargeable to sales tax under the Bombay Sales Tax Act, 1959.
and the decision was confirmed by this Court on appeal.
But after the judgment of the High Court and before the appeal was heard in this Court, the expression "goods" in the Act was amended by Maharashtra Act 15 of 1967 with retrospective operation, so that, it included at all relevant times, standing timber agreed to be severed before sale or under the contract of sale.
In a petition for review to this Court, HELD : Since the judgment of this Court suffers from an error apparent on the face of the record, the judgment should be reviewed and the appeal allowed.
[47C] A State Legislature may not extend the import of the expression sale of goods" so as to impose liability for tax on transactions which are not sales of goods within the meaning of the Sale of Goods Act.
But, by the inclusive definition in section 2(7) of the Sale of Goods Act, things which are attached to the land may be the subject matter of contract of sale provided that under the terms of the contract they are to be severed before sale of under the contract of sale.
The timber in the present case was therefore "goods" within the meaning of section 2(7) of the Sale of Goods Act.
Since the expression " sale of goods" in Entry 54, List II, of the Constitution has the same meaning as that expression has in the Sale of Goods Act, the amendment is valid.
[47 H; 48 A E] The State of Madras vs Gannon Dunkerley, ; and Pandit Banarsi Das Bhanot vs The State of Madhya Pradesh, ; , referred to.
|
Appeal No. 145 of 1953.
Appeal by Special Leave from the Judgment and Order dated the 8th day of September, 1950, of the High Court of Judicature for the State of Punjab at Simla in Civil Reference No. 3 of 1949.
Achhru Ram (R. section Narula and Naunit Lal, with him) for the appellants.
M. C. Setalvad, Attorney General for India, (G. N. Joshi and P. G. Gokhale, with him) for the respondent.
October 25.
The Judgment of the Court was delivered by DAS J.
This appeal by special leave arises out of a consolidated reference made on the 19th April, 1949, under section 66(1) of the Indian Income tax Act read with section 21 of the Excess Profits Tax Act by the Income tax Appellate Tribunal, Madras Bench.
The reference arose out of four several proceedings for assessment to excess profits tax of the appellant, the chargeable accounting periods being periods ending with 31st March of each of the years 1942, 1943, 1944 and 1945.
The relevant facts appearing from the consolidated statement of the case are as follows: Narain Swadeshi Weaving Mills, the appellant before us (hereinafter referred to as the assessee firm), is a firm constituted in 1935 upon terms and conditions set forth in a deed of partnership dated the 6th November, 1935.
The partners were Narain Singh and two of his sons, Ram Singh and Gurdayal Singh, their respective shares in the partnership being 6 annas, 5 annas and 5 annas.
The business of the firm which was carried on 954 at Chheharta, Amritsar, in the Punjab, was the manufacture of ribbons and laces and for this purpose it owned buildings, plant, machinery , etc.
On the 7th April, 1940, a public limited liability company was incorporated under the name of Hindus,tan Embroidery Mills Ltd. The objects for which the company was established were to purchase, acquire and take over from the assessee firm the buildings and leasehold rights, plant, machinery, etc., on terms and conditions mentioned in a draft agreement and the other objects set forth in the Memorandum of Association of the said company.
Out of the total subscribed capital represented by 41,000 shares 23,000 shares were allotted to the assessee firm.
Of these 23,000 shares so allotted 20,000 shares were not paid for in cash but the remaining 3,000 shares were paid for in cash.
The directors of the company were Narain Singh and his three sons Ram Singh, Gurdayal Singh and Dr. Surmukh Singh and one N. D. Nanda, a brother in law of Gurdayal Singh.
Dr. Surmukh Singh was at all material times residing in South Africa.
These 4 directors between themselves hold 33,340 shares including the said 23,000 shares.
The company was, accordingly, a director controlled company.
The funds available to the company were not sufficient to enable it to take over all the assets of the assessee firm.
The company, therefore, purchased only the buildings and the leasehold rights therein but took over the plant, machinery, etc.
on lease at an annual rent of Rs. 40,000.
On the 28th July, 1940, the company executed a managing agency agreement in favour of Uppal & Co., a firm constituted on the same day with Ram Singh and Gurdayal Singh, two of the sons of Narain Singh, as partners with equal shares.
Under the managing agency agreement dated the 28th July, 1940, Uppal & Co., was to be paid 10% of the net profits of the company besides salary and other allowances mentioned therein.
On the 25th January, 1941, the company appointed as its selling agent Ram Singh & Co., a firm which 955 came into existence on the same day with Ram Singh, Gurdayal Singh and Dr. Surmukh Singh, the three sons of Narain Singh, as partners, each having an one third share.
The terms of this partnership were recorded in writing on the 17th March, 1941.
Ram Singh & Co., was to get a commission of 3% on the net sales and 6% on the gross income of the company.
In the two new firms so constituted Narain Singh had no share and eventually with a view to make up for his loss the shares of the partners in the assessee firm were modified by an agreement made by them on the 21st April, 1941.
Under this agreement Narain Singh was to get a 12 annas share and the two sons Ram Singh and Gurdayal Singh 2 annas share each.
All the three firms mentioned above, namely, the assessee firm, Uppal & Co., and Ram Singh & Co., were registered as firms under section 26A of the Indian Income tax Act.
On the facts summarised above, the Excess Profits Tax Officer came to the conclusion that the main purpose of the formation of the company and the two firms of Uppal & Co., and Ram Singh & Co., was the avoidance of liability to excess profits tax.
Accordingly, on the 16th November, 1944, the Excess Profits Tax Officer issued notices under section 10A of the Excess Profits Tax Act to the company and the three firms.
Eventually, however, the proceedings against the company were dropped and the Excess Profits Tax Officer considered the case of the three firms only.
He held that the three firms were really one and he, therefore, amalgamated the income of all three and proceeded to assess the assessee firm to excess profits tax on that basis for the four several chargeable accounting periods mentioned above.
Under sub section (3) of section 10 A the assessee company preferred four several appeals to the Appellate Tribunal.
In their order the, Appellate Tribunal considered the four following issues: (1)Whether the income of the firms styled as "Uppal & Co.," and "Ram Singh & Co.," could be amalgamated with the income of the assessee firm 956 under the provisions of section 10 A of the Excess Profits Tax Act ? (2) Whether the share of income of Dr. Surmukh Singh, a partner in the selling agency of Ram Singh & ,Co., could be included under section 10 A in the excess profits tax assessment of the assessee firm ? (3) Whether the lease money obtained by the assessee firm could be legally treated as business profits liable to excess profits tax ? (4) Whether proper opportunity under section 10 A had been given to the assessee firm?" Before the Appellate Tribunal, as before the Excess Profits Tax Officer, the assessee firm objected to the application of the provisions of section 10 A of the Excess Profits Tax Act.
The contention was.
that as the assessee firm did not, during the relevant chargeable accounting periods, carry on any business within the meaning of section 2(5) of the Excess Profits Tax Act, section 10 A had no application and, therefore, the profits of Uppal & Co., and Ram Singh & Co., could not be amalgamated with its own income.
In other words, the argument was that there must be an existing business of an assesses during the relevant period before section 10 A could be applied in respect of transactions concerning that business.
The Appellate Tribunal took the view that instead of using the plant, machinery, etc., for its own manufacture the assessee firm turned that revenue yielding asset into another use by lettinh it out on an annual rent of Rs. 40,000 and that this was certainly an adventure in the nature of trade as contemplated by section 2(5) of the Excess Profits Tax Act read with rule 4 of Schedule I thereto.
Accordingly, it decided issue No. 3 against the assessee firm holding that the assessee firm carried on business in the letting out of the plant, machinery, etc., on hire and the lease money obtained thereby could be legally treated as business profits liable to excess profits tax.
On issue No. I the Appellate Tribunal agreed with the Excess Profits Tax Officer that it was evident beyond doubt that a definite scheme was adopted creating separate charges in order to avoid excess profits tax 957 by the three firms, namely, the assessee firm, Uppal & Co., and Ram Singh & Co., taken together.
Thefirst step in the scheme was the formation of the company.
The second step was the appointment of Uppal & Co., as managing agents instead of appointing the assessee Tfirm itself.
The third step was the creation of the firm Ram Singh & Co., for taking up the selling agency of the company and the final step was to adjust the shares of the partners of the assessee firm so as to equalise, as far as possible, the share of Narain Singh with the shares which his sons got in the several firms.
The Appellate Tribunal held that all the various steps noted above need not necessarily have been fictitious or artificial but they were certainly transactions so as to attract the operation of section 10 A.
The Appellate Tribunal decided issues Nos. 2 and 4 against the assessee.
All the four appeals were accordingly dis missed by the Appellate Tribunal.
The assessee firm thereupon preferred four several applications under section 66(1) of the Income tax Act read with section 21 of the Excess Profits Tax Act praying that the following questions arising out of the order of the Appellate Tribunal be referred to the High Court : (1) Whether, under the facts and circumstances of the case, the application of section 10 A with a view to amalgamating the income of the firms "Uppal & Co." and "Ram Singh & Co.", with the income of the appellant firms was correct and valid in law ? (2) Whether, in view of the facts admitted on record, the share of income of Dr. Surmukh Singh, a partner in the selling agency and not a partner in the appellant firm, could be legally included along with the share of income of section Ram Singh and section Gurdial Singh and is this inclusion at all within the purview of section 10 A ? (3) Whether, in view of the facts, circumstances and observations on record, the lease money obtained by the appellant firm could be legally treated as business profits or profits from an adventure in trade liable to excess profits tax ? 122 958 (4) Whether the type of a notice served on the appellant, under the facts and the circumstances of the case, legally amounts to a proper opportunity under section 10 A of the Excess Profits Tax Act, and if not ,what is the legal effect of such opportunity being not afforded ? (5) Whether the proceedings under section 1O A were not null and void ab initio, for want of necessary previous sanction from the Inspecting Assistant Commissioner of Excess Profits Tax, the fact of such previous sanction having been obtained being neither mentioned in the order nor proved before the Appellate Tribunal at the time of hearing although expressly required by the Court.
The Appellate Tribunal declined to refer questions (4) and (5) sought to be raised by the assessee firm and no grievance has been made before us on that score.
The Appellate Tribunal referred the earlier three questions after reframing the same so as to read as follows : (1) Whether there is any evidence before the Tribunal to support the conclusion that the main purpose of the transactions was the avoidance of excess profits tax ? (2) Whether on the facts admitted or proved the share of income of Dr. Surmukh Singh in the firm of Ram Singh & Co., can be legally included along with the share of income of Ram Singh and Gurdayal Singh ? (3) Whether on the facts and circumstances of the case the leasing of machinery, etc., by the assessee firm to the company was a business within the meaning of section 2(5) of the Excess Profits Tax Act ? The learned counsel appearing for the assessee firm submitted before the High Court that the third of the referred questions should be discussed and decided first, but the High Court took the view that the decision of the first question was a necessary preliminary to the consideration of the third question.
Taking up, then, the first question first the High Court referred to the ,several facts found by the Appellate Tribunal and 959 described as steps and regarding them as circumstantial evidence came to the conclusion that it could not be said that there was no evidence upon which the Tribunal was justified in coming to the conclusion that the formation of the firms, Uppal & Co., and Ram Singh & Co., was mainly for the purpose of avoidance or reduction of liability to excess profits tax.
In the result, the High Court held that the three firms, the assessee firm, Uppal & Co., and Ram Singh & Co., were in fact one and the same and on that basis proceeded next to take up the third question.
After referring to section 2(5) and certain judicial decisions, the High Court concluded as follows: " The argument of Mr. Pathak when applied to the present case would have force were it a fact that the sole concern of the assessee firm was the receipt of hire of machinery from a company or firm, in which the assessee firm had Do interest.
But this is not the state of affairs.
On the finding under the first question referred, the assessee firm, the firm of managing agents and the firm of selling agents are really one and the same firm.
This firm and its partners held the majority of shares in the company.
The agreement for payment of Rs. 40,000 as rent of machinery is an agreement between the assessee firm and the company which the assessee firm controls.
The business of the assessee firm was, and in effect still is, the manufacture of ribbons and laces, and the receipt of Rs. 40,000 is a profit from that business diverted into the pockets of the assessee firm.
" The High Court accordingly answered the third question in the affirmative and against the assessee firm.
The necessary certificate of fitness for appeal to this Court having been refused by the High Court, the assessee firm obtained special leave of this Court to prefer the present appeal.
The learned counsel appearing for the assessee firm has submitted before us and we think rightly that the approach of the High Court was erroneous in that they took up the discussion of question No. I first.
That question, as framed, proceeded on the assumption 960 that section 1O A applied to the case and only raised the question as to whether there was any evidence to support the finding of the Appellate Tribunal arrived at as a result of the enquiry under that section, namely, that the main purpose of the transaction was the avoidance of excess profits tax.
The long title and the preamble of the Excess Profits Tax Act refer to the imposition of tax on excess profits arising out of certain businesses.
Section 4, which is the charging section and section 5 which lays down the application of the Act to certain business, clearly postulate the existence of a business carried on by the assessee on the profits of which the excess profits tax can be imposed.
Therefore, if there is such a business during the relevant period, then and then alone can arise the question of the applicability of section 10 A.
If there is no such business as is contemplated by the Act, then the Act does not apply and section 10 A cannot come into operation at all.
Before the Excess Profits Tax Officer can embark upon an enquiry as to whether a transaction was effected for the avoidance or reduction of liability to excess profits tax and to make such adjustments as he considers appropriate_ there must be proof that the assessee was, during the chargeable accounting period, carrying on any business of the kind referred to in section 5 of the Act.
Logically, therefore, the Appellate Tribunal as well as the High Court should have taken up question No. 3 first, for on a decision of that question would depend the applicability of section 1O A and if that question were answered in favour of the assessee firm the further question of law as raised in question No. I would not, in such event, arise.
The approach of the High Court was, therefore, logically misconceived on the facts of this case.
What then are the facts found by the Appellate Tribunal apart from its findings under section 10 A ? The findings are that after the formation of the company the assessee firm was left with no business at all.
The company purchased the leasehold rights in the lands and buildings where the plant, machinery, etc., were installed.
The firm as such ceased to manufacture any ribbons and laces.
It was left with the plant, 961 machinery, etc., which it did not require and which ceased to be a commercial asset in its hands, for it had no longer any manufacturing business at all.
Further, the assessee firm had put it out of its power to use the plant, machinery, etc.
, for it had no right in the lands and buildings where the plant, machinery, etc., had been installed.
In these circumstances, the assessee firm let out the plant, machinery, etc., to the company.
It was thenceforth the company which was carrying on the business of manufacturing ribbons and laces and for that purpose hired the plant, machinery, etc., from the assesee firm.
Prima facie it was the company which appointed the managing agents and the selling agents.
Ex facie and apart from the alleged result of any enquiry under section 10 or section 1O A of the Excess Profits Tax Act those were not transactions of the assessee firm.
The assessee firm was, therefore, left only with some property which at one time was a commercial asset but had ceased to be so.
The assessee firm thereupon let out that property on rent.
The question is whether such letting out in such circumstances amounted to carrying on of a business.
"Business" as defined in section 2(5) of the Excess Profits Tax Act includes amongst others, any trade, commerce or manufacture or any adventure in the nature of trade, commerce or manufacture.
The first part of this definition of "a business" in the Excess Profits Tax Act is the same as the definition of a business in section 2(4) of the Indian Income tax Act.
Whether a particular activity amount to any trade, commerce or manufacture or any adventure in the nature of trade, commerce or manufacture is always a difficult question to answer.
On the one hand it has been pointed out by the Judicial Committee in Commissioner of Income tax vs Shaw Wallace & Co.(1), that the words used in that definition are no doubt wide but underlying each of them is the fundamental idea of the continuous exercise of an activity.
The word "business" connotes some real, substantial and systematic or organised course of activity or conduct with a set purpose.
On the other hand, a single and (1) Cal.
962 isolated transaction has been held to be conceivably capable of falling within the definition of business as 'being an adventure in the nature of trade provided the transaction bears clear indicia of trade.
The question therefore, whether a particular source of income is business or not must be decided according to our am ordinary notions as to what a business is.
The case of Commissioner of Excess Profits Tax, Bombay City vs
Shri Lakshmi Silk Mills Ltd.(1), decided by this Court is clearly distinguishable.
There, the respondent company which was formed for the purpose of manufacturing silk cloth installed a plant for dying silk yarn as a part of its business.
During the relevant chargeable accounting period, owing to difficulty in obtaining silk yarn on account of the war, it could not make any use of this plant and it remained idle for some time.
In August, 1943, the plant was let out to another company on a monthly rent.
The question arose whether the income received by, the respondent company in the chargeable accounting period by way of rent was income from business and assessable to excess profits tax.
It should be noted that in that case the respondent company was continuing its business of manufacturing silk cloth.
Only a part of its business, namely, that of dying silk yarn had to be temporarily stopped owing to the difficulty in obtaining silk yarn on account of the war.
In such a situation, this Court held that part of the assets did not cease to be commercial assets of that business since it was temporarily put to different use or let out to another and accordingly the income from the assets would be profits of the business irrespective of the manner in which that asset was exploited by the company.
This Court clearly indicated that no general principle could be laid down which would be applicable to all cases and that each case must be decided on its own circumstances according to ordinary common sense principles.
In the case before us the assessee firm 's business had entirely closed.
It no longer 'manufactured any ribbons and laces.
It had accordingly no further trading or commercial activity.
It could not in fact use the plant, machinery, etc., (1) ; 963 after the land and the buildings where they were installed had been sold to the company.
In these circumstances the assessee firm let out the plant, machinery, etc., on an annual rent of Rs. 40,000.
These facts are very similar to those found in Inland.
Revenue , Commissioners vs Broadway Car Co., Ltd.(1).
There the war conditions bad reduced the company 's business to very small proportions.
In that situation it was observed that in that case the company dealt with part of its property which bad become redundant and was sublet purely to produce incomes transaction quite apart from the ordinary business activities of the company.
The ratio decides in that case which was noticed in the judgment of this Court appears to us to apply to the facts found in the present case apart from the findings Under section 10 A. Applying also the common sense principle to the fact so found it is impossible to hold that the letting out of the plant, machinery, etc., was at all a business operation when its normal business activity had come to a close.
It is interesting to note that sub sections (3) and (4) of section 12 of the Indian Income tax Act recognise that letting out of plant, machinery, etc., may be a source of income falling under the head "other sources" within that section and not necessarily under the head "business" dealt with in section 10 of that Act.
In the facts and circumstances of this case, therefore, the letting out of the plant, machinery, etc.
,cannot be held to fall within the body of the definition of "business" under section 2(5) of the Excess Profits Tax Act.
In this view of the matter it is not necessary for us to express an opinion as to the meaning or implication of the proviso to that definition or rule 4(4) of Schedule I to the Act.
In our opinion, in the facts and circumstances of this case, question No. 3 should have been answered in the negative.
The question of law raised in the third question being answered in favour of the assessee firm, the question of the applicability of section 1O A of the Excess Profits Tax Act could not arise, for the assessee firm having, during the relevant period, no business to which that (1) 964 Act applied section 1O A could not be invoked by the revenue and, therefore, the question whether there was "evidence to support the finding of the Tribunal under that section could not arise.
On the contrary, the further question of law which would really arise out of the order of the Appellate Tribunal consequent upon the aforesaid answer to question No. 3 would be whether under the facts and circumstances of the case the application of section 1O A with a view to amalgamating the income of the firms Uppal & Co., and Ram Singh & Co., with the income of the assessee firm was correct and valid in law and that was precisely the first question which the assessee firm sought to raise by its application.
In our view the High Court should not only have answered question No. 3 in the negative but should also have raised, as a corollary to that answer to question No. 3, the further question of law on the lines indicated in question No. I of the assessee 's petition.
In other words, the High Court should have, after answering question No. 3 in the negative reframed the referred question No. I by restoring question No. 1 as suggested by the assessee firm in its petition and should have answered the question so restored in the negative and in favour of the assessee.
For the reasons stated above, we allow this appeal, reframe question No. I by restoring the first question suggested by the assessee firm, namely " Whether under the facts and circumstances of the case the application of section 1O A with a view to amalgamating the income of the firms Uppal & Co., and Ram Singh & Co., with the income of the appellant firm was correct and valid in law?" and we answer the question so reframed in the negative.
Question No. 2 must be answered in the negative and in favour of the assessee by way of necessary corollary.
We also answer question No. 3 in the negative.
The appellant will be entitled to the costs of this appeal and we order accordingly.
| IN-Abs | As condition precedent to the applicability of section 10 A of the Excess Profits Tax Act, 1940, it must be proved that during the chargeable accounting period the assessee was carrying on the kind of business to which the Act applies by virtue of section 5 of the Act.
Section 2(5) of the Act states what is included in the word "business".
It is not possible to lay down a general definition which would cover all cases of business.
Business involves the fundamental idea of a continuous activity.
It connotes some real, substantial and systematic or organised course of activity with a set purpose.
Single isolated transaction may also bear the clear indicia of trade or an adventure in the nature of trade which is included in the word "buisiness" mentioned in section 2(5) of the Act.
Hence whether a particular source of income is business or not must be decided on the facts and circumstances of each case according to our ordinary conception of business.
Since 1935 the assessee firm carried on the business of manufacturing ribbons and laces and for this purpose owned buildings, leasehold rights, plant, machinery etc.
On April 7, 1940, a public limited liability company was incorporated with the object of acquiring and taking over the buildings, leasehold rights, plant, machinery etc.
, from the assessee firm.
The company purchased leasehold rights in the lands and buildings where plant, machinery etc. were installed.
The assesses firm as such ceased to manufacture ribbons and laces and was left with plant and machinery etc.
which it did not require and which ceased to be commercial asset in the hands of the firm.
The land and the buildings having been sold the assessee firm put it out of its power to use the plant, machinery etc.
In these circumstances the company took and the assessee firm granted a lease of the plant, machinery etc., at an annual rent of Rs. 40,000.
Held, that this lease of the plant, machinery etc., given by the assesses firm could not be "business" within the meaning of section 2(5) of the Excess Profits Tax Act, 1940.
953 Commissioner of Excess Profits Tax, Bombay City vs Shri Lakshmi Silk Mills Ltd. ([1952] S.C.R. 1), distinguished.
Inland Revenue Commissioner vs Broadway Car Co., Ltd. ([1946] 2 A.E.R. 609), relied upon.
Commissioner of Income tax vs Shaw Wallace & Co., ([1932] I.L.R. , referred to.
|
Appeal No. 707 of 1966.
Appeal by special leave from the judgment and order dated January 20, 1965 of the Allahabad High Court, Lucknow Bench in First Appeal No. 67 of 1948.
V. section Desai and K. P. Gupta, for the appellant.
A. K. Sen, E. C. Agarwala, section R. Agarwala and P. C. Agarwala, for respondent Nos. 1 to 6.
The Judgment of the Court was delivered by Hegde, J.
In this appeal by special leave though number of contentions were taken we have not thought it necessary to go into all of them as in our judgment High Court 's conclusion that Shyam Behari Lal (1st defendant) had been validly adopted by Gopal Das ,is well founded.
The suit from which this appeal arises is for possession of the suit properties on the basis of title.
The 1st plaintiff Debi Prasad claims title to the properties as the nearest heir to Gopal Das, his maternal uncle who died in 1934.
The 2nd plaintiff is an alienee from the 1st plaintiff.
In order to properly understand the controversy in the present case, it is necessary to have before us the family pedigree.
The admitted pedigree is as shown below 103 LAJJA RAM Kooramal (died in 1874) Kedar Nath Hiralal (died Laddoomal Ramass (died in 1897) during his (died father 's life issueless time) in 1871) (1St wife (2nd wife) died in Dwaramal 1874) alias Shyam Behari Dwarkadas Mantoo Mal Lal (died in (died in (adopted by 1885) 1897) at Gopal Das) age 25 or 27.
No. 1 (other children, died during minority).
Changumal Smt.
Misro Smt.
Kaushilla died in 1923 (died in 1917) (dead) Smt.
Raj Rani Shanker Sahai Manohar Das (died childless (died in (alive) 1944 or 1945) 1929) Smt.
Radhey Rani Smt.
Drupati Mukut Behari Lal (Deft.
No. 2) Govind Prasad Ram Kumar Ram Swarup Mahesh Bebari Ram Prasad (Deft. No. 3) (Deft. No. 4) (Four other children died 1940 41) Gopal Das Smt.
Kundan Smt.
Shyamo Masani Din (died on (died in (died in (died issueless) 18 2 34) 1914) 1923 or 1904) Smt.
Bhagwan Baghumal Kedar Nath Del (died in 1932) (died in 1925) (died on 19 10 1934) Debi Prasad Plff.
No. 1 Minor son Minor Minor daughter (all died before 1890) 104 The common ancestor of the family was Lajja Ram who died in 1874.
We are now concerned with the branch of Kedar Nath, the father of Gopal Das who died on February 18, 1934.
His widow Bhagwan Dei died on October 19, 1934.
The contention of Debi Prasad is that Gopal Das had separated from his family; he died intestate and, therefore, being the nearest heir of Gopal Das, he is entitled to the properties left by Gopal Das.
The plaintiffs claim was resisted by the 1st defendant Shyam Behari Lai, who claimed to be the adopted son of Gopal Das.
According to Shyam Behari Lai, he had been adopted by Gopal Das in about the year 1892 when he was only an infant.
He also resisted the suit on the ground that Gopal Das was an undivided member of his family and therefore the 1st plaintiff in any event cannot claim any right to the suit properties.
His further contention was that the 1st plaintiff was estopped from contending that he was not the adopted son of Gopal Das.
Shyam Behari Lai died luring the pendency of the appeal before the High Court and his legal representatives are contesting this appeal Debi Prasad also died during the pendency of this appeal.
The trial court substantially accepted the claim made in the plaint but in appeal the High Court reversed the decree of the trial court and dismissed the suit.
The principal question that we have to decide in this case is whether the adoption pleaded by Shyam Behari Lai is true and valid.
According to Shyam Behari Lai, Gopal Das took him in adoption on February 8, 1892, on the very day he was born.
He says that very soon after his birth, his natural parents handed him over to Gopal Das and his wife who took him over as their adopted son and thereafter performed the necessary ceremonies according to the custom of their community.
He also pleaded that in the community of Gopal Das, there is a custom of taking a child.
in adoption on the very day of its birth.
The plaintiffs have denied both the factum of adoption as well as the custom pleaded.
We may at the very outset mention that Shyam Behari Lai had not been able to establish the custom pleaded by him.
Nor was he able to adduce any satisfactory evidence about the actual adoption but he has produced considerable documentary evidence to show that (Gopal Das) was treating him for over a quarter of century as his son.
There is also plenty of reliable evidence to show that close relations of Gopal Das including Debi Prasad treated Shyam Behari Lai as the son of Gopal Das both during the life time of Gopal Das and also thereafter till about the time the suit from which this appeal arises was instituted.
As mentioned earlier Gopal Das as well as his wife died in 1934 and the suit from which this appeal arises was filed in 1946.
105 While considering the question of proof of the adoption pleaded, we must bear in mind the fact that the same is alleged to have taken place in 1892 nearly 54 years before the present suit was instituted.
Therefore, naturally, it was extremely difficult for Shyam Behari Lai to adduce any oral evidence in proof of that adoption.
All the persons who could have known about the adoption are likely to have died.
Shyam Behari Lai himself could not speak to that adoption.
His evidence is at best hearsay.
It is true, as observed by this Court in Addagada Raghayamma and anr.
vs Addagada Chenchamma and anr.
(1) that it is settled that (a person.
who seeks to displace the natural succession to property by alleging an adoption must discharge the burden that lies upon him by proof of the factum of adoption and its validity).
Again as held by this Court in Lakshman Singh Kothari vs Smt.
Rup Kanwar(2) that in order that an adoption may be valid under the Hindu law, there must be a formal ceremony of giving and taking.
This is true of the regenerate castes as well as of the Sudras.
Although no particular form is prescribed for the ceremony, the law requires that the natural parent should hand over the adoptive boy and the adoptive parent must receive him, the nature of the ceremony varying according to the circumstances.
In the course of the judgment Subba Rao J. (as he then was) who spoke for the, Court quoted with approval the following observations of Gopalchandra Sarkar in his book on Hindu Law, 8th Edn.; "The ceremonies of giving and taking are abso lutely necessary 'in all cases.
These ceremonies must be accompanied by the actual delivery of the child; symbolical or constructive delivery by the mere parol expression of intention on the part of the giver and the taker without the presence of the boy is not sufficient.
Nor are deeds of gift and acceptance executed and registered in anticipation of the intended adoption nor acknowledgment, sufficient by themselves to constitute legal adoption, in the absence of actual gift and acceptance accompanied by actual delivery; a formal ceremony being essential for that purpose.
" That is also the view expressed in Mayne 's Hindu Law wherein it is observed that the giving and receiving are absolutely necessary to the validity of an adoption; they are the operative part of the ceremony, being that part of it which transfers the boy from one family to another; but the Hindu law does not require that there shall be any particular form so far as giving and acceptance are concerned; for a valid, adoption all that the law requires is that the natural father shall be asked by the adoptive (1) ; L11SupCI 8 (2) ; 106 parent to give his son in adoption, and that the boy shall be handed over and taken for this purpose.
There is no doubt that the burden of proving satisfactorily that he was given by his natural father and received by Gopal Das as his adoptive son is on Shyam Behari Lal.
But as observed by the Judicial Committee of the Privy Council in Rajendrao Nath Holder vs Jogendro Nath Benerjee and ors.(1); that although the person who pleads that he had been adopted is bound to prove his title as adopted son, as a fact yet from the long period during which he had been received as an adopted son, every allowance for the absence of evidence to prove such fact was to be favourably entertained, and that the case was analogous to that in which the legitimacy of a person in possession had been acquiesced in for a considerable time, and afterwards impeached by a party, who had a right to question the legitimacy, where the defendant, in order to defend his status, is allowed to invoke against the claimant every presumption which arises from long recognition of his legitimacy by members of his family; that in the case of a Hindoo, long recognition as an adopted son, raised even a stronger presumption in favour of the validity of.
his adop tion, arising from the possibility of the loss of his rights in his own family by being adopted in another family.
In Rup Narain and anr.
vs Mst.
Gopal Devi and ors.
(1), the Judicial Committee observed, that in the absence of direct evidence much value has to be attached to the fact that the alleged adopted son had without controversy succeeded to his adoptive father 's estate and enjoyed till his death and that documents during his life and after his death were framed upon the basis of the adoption.
A Division Bench of the Orissa High Court in Balinki Padhano and anr.
vs Gopalkrishntt Padhano and ors(3); held that in the case of an ancient adoption evidence showing that the boy was treated for a long time as the adopted son at a time when there was no controversy is sufficient to prove the adoption although evidence of actual giving and taking is not forthcoming.
We are in agreement with the views expressed in the decisions referred to above.
In the case of all ancient transactions, it is but natural that positive oral evidence will be lacking.
Passage of time gradually wipes out such evidence.
Human affairs often have to be judged on the basis of probabilities.
Rendering of justice will become impossible if a particular mode of proof is insisted upon under all circumstances.
In judging whether an adoption pleaded has been satisfactorily proved or not, we have to bear in mind the lapse of time between the date of the alleged adoption and the date on which the concerned party is required to adduce proof.
In the (1) 14 Moore 's Indian Appeals p.67. (2) 36 I.A. p. 103.
(3) A.I.R. 1964 Orissa p. 117.
107 case of an adoption said to have taken place years before the same is questioned, the most important evidence is likely to be that the alleged adoptive, father held out the person claiming to have been adopted as his son; the latter treated the former as his father and their relations and friends treated them as father and son.
There is no predetermined way of proving any fact.
A fact is said to have been proved where after considering the matters before it, the court either believes it to exist or considers its existence so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that it exists.
Hence if after taking an overall view of the evidence adduced in the case, we are satisfied that the adoption pleaded is true, we must necessarily proceed on the basis, in the absence of any evidence to the contrary, that it is a valid adoption as well.
As mentioned earlier Shyam Behari Lal has not been able to substantiate the custom pleaded by him; nor has he adduced any direct evidence relating to the factum of adoption.
His case entirely rests upon the decumentary evidence that he has produced to show that he had been consistently and continuously treated as the son of Gopal Das, by Gopal Das himself, during his life time and by all his friends and relations including Debi Prasad.
Before dealing with the evidence mentioned earlier, it is necessary to mention that the High Court has relied in proof of the adoption pleaded, on the evidence of D.W. 10 Rikhab Das and D.W. 15 Chhotey Lal.
Both of them were the close relations of the wife of Gopal Das.
They are disinterested witnesses.
Their evidence is to the effect that sometime after the birth of Shyam Behari Lal, the wife of Gopal Das took him to her paternal home where Paon Pheri ceremony was performed.
There is satisfactory evidence to show that this ceremony is customarily performed in the parental home of a lady who has given birth to her first child.
We see no reason to disbelieve the testimony of these witnesses.
Their evidence clearly indicates the fact that Shyam Behari Lal must have been taken in adoption by Gopal Das.
We may also at this stage refer to another important circumstance appearing in the case.
As mentioned earlier, both Gopal Das and his wife died in the year 1934.
The suit from which this appeal arises was instituted only in 1946, just a few months before the period of limitation for instituting the same expired.
Debi Prasad has not given any satisfactory explanation for this inordinate delay in instituting the suit.
This circumstance tends to show that the suit is likely to be speculative one.
Now coming to the documentary,evidence referred to earlier, it is proved that Shyam Behari Lal was admitted to school in 1907.
A 658, is the application made for admission on December 12, 1907.
That application was signed by Gopal Das, 108 It recites that Shyam Behari Lal is the son of Gopal Das.
This admission of Gopal Das is an extremely important piece of evidence.
No reason is given why Gopal Das should have made a false statement in that application.
The explanation that someone must have filled in the form and Gopal Das must have signed the same in ignorance is not worthy of credence.
A 261, is the certified copy of the deposition of Gopal Das in Regular Suit No. 104 of 1917 in the court of the Subordinate Judge, Faizabad.
That deposition was given on May 9, 1918.
Therein Gopal Das admitted in more than one place that Shyam Behari Lal was his son.
We next come to Exh.
A 364, a copy of the nomination paper filed by Shyam Behari Lal for election to the municipal council.
Gopal Das was one of the persons who proposed his name.
Therein again Shyam Behari Lal was described as the son of Gopal Das.
Gopal Das was an income tax assessee.
He was assessed as the Karta of his Hindu Undivided Family.
A 299 is the assessment order for the year 1921 22; Exh.
A 300 is the assessment order for the year 1922 23; Exh.
A 3 01 is the assessment order for the year 1923 24; Exh.
A 302 is the assessment order for the year 1924 25; Exh.
A 303 is the assessment order for the year 1925 26; Exh.
A 304 is the assessment order for the year 1926 27; Exh.
A 305 is the assessment order for the year 192728; Exh.
A 306 is the assessment order for the year 1928 29; Exh.
A 307 is the assessment order for the year 1929 30; Exh.
A 309 is the assessment order for the year 1931 32 and Exh.
A313 is the assessment order for the year 1935 36.
While computing the income of the H.U.F. the professional income of Shyarn Behari Lal as a lawyer was taken into consideration.
Those assessment orders proceed on the basis that Gopal Das and Shyam Behari Lal constituted a joint Hindu family.
It may be noted that most of those assessment orders were made during the life time of Gopal Das and evidently on the basis of the returns submitted by him.
If Shyam Behari Lai had not been the son of Gopal Das, he could not have been treated as a member of the 'coparcenary of which Gopal Das was the Karta, nor his professional income would have been added to the income of the joint family of Gopal Das.
These assessment orders have considerable evidentiary value.
It may be noted that these documents came into existence at a time when there was no dispute.
Next we come to the admissions made by the plaintiff him self.
A 233 is the certified copy of the deposition of the plaintiff given in Regular Suit No. 55 of 1935 in the court of Additional Subordinate Judge, Faizabad.
This deposition he 109 gave on May 20, 1935, nearly a year after Gopal Das died.
Is that deposition he stated : "I am partner of the firm of Gopal Dass Chhangamal.
Plaintiff No. 2 is the proprieter of the said firm", If Debi Prasad was the rightful heir to the estate of Gopal Das, he could not have admitted in the year 1935 that Shyam Behari Lal was the proprietor of the firm Gopal Dass Chhangamal.
Debi Prasad 's explanation that on the date he gave that deposition, he was unaware of the fact that he was the heir of Gopal Das, cannot be believed.
In Exh.
A 226, the decree in the aforesaid suit, Shyam Behari Lal was described .as the son of Gopal Das.
A 274 is another certified copy of the deposition given by Debi Prasad.
This was, given on July 19, 1923 in a suit where Gopal Das was the plaintiff.
Therein he stated in cross "The plaintiff No. 1 has got a son named B. Shyam Behari Lal Vakil .
Our business is also ancestral business.
His son Shyam Behari and his grand son Mukut Behari are members of a joint Hindu family.
" He further stated therein "Lala Gopal Das, his son (referring to Shyam Behari Lal) and grand son are the sole owners of the firm styled Kuramal Kedar Nath".
A 236 is the certified copy of the plaint filed by Shyam Behari Lal and Debi Prasad jointly in Suit No. 353 of 1935 in the court of Civil Judge, Faizabad.
In paragraph 1 of the plaint, it is stated : "The proprietor of the said shop was Gopal Das, father of the plaintiff No. 1 till his life time and after his death to which about a year, nine months and half have passed, the plaintiff No. 1, as survivor became and is the proprietor of the said property.
" This is an extremely important admission.
This admission was made after the death of Gopal Das.
Therein Debi Prasad not only admitted that Shyam Behari Lal was the son of Gopal Das, he further admitted that he became the proprietor of the concern by survivorship.
This could have only happened if Shyam Behari Lal had been adopted by Gopal Das.
A 352 and 356 are two applications made for registration of a firm under the .
The first, application was made on March 26, 1936.
It was returned 'with some objection and the second application was made on May 4, 1936.
Both these applications bear the signature of Debi Pradsad as Well 110 as Shyam Behari Lal.
In those applications, it was stated that Shyam Behari Lal had succeeded as a partner of the firm whose registration was sought in the place of his father Gopal Das who had died.
A 358 is an application for transfer of shares made to the Banaras Cotton & Silk Mills Ltd. by Debi Prasad.
Thereunder he sought to transfer his 100 shares to Shyam Behari Lal whom he described in his application as the son of Gopal Das.
Similar avertments were made in Exh.
A 359.
A 262, 656, 657 and A 276 are the statements made by the relations of Shyam Behari Lal and Debi Prasad wherein Shyam Behari Lal was described as the, son of Gopal Das.
A large number of documents have been produced to show that friends, relations and even strangers were treating Shyam Behari Lal as the son of Gopal Das.
The documents produced before the court conclusively prove that right from 1907 till 1946, Shyam Behari Lal wag treated as the son of Gopal Das.
This continuous and consistent course of conduct on the part of Debi Prasad, Gopal Das and others affords a satisfactory proof of the fact that Shyam Behari Lal must have been the adopted son of Gopal Das.
No other reasonable inference can be drawn from the material on record.
Mr. Desai appearing on behalf of the appellants contended that we should not accept the adoption pleaded firstly because, it was unlikely that Gopal Das would have taken a child in adoption as far back as 1892 when he was only 32 years of age; secondly the story that an one day old child was taken in adoption when the family must have been in pollution must be rejected as being repugnant to Hindu notions and lastly in a decree of 1910, Shyam Behari Lal was described as the son of Ram Das, his natural father.
We are unable to accept these contentions.
It is in evidence that Gopal Das had lost three children even before 1890.
Evidently he had lost all hopes of getting a natural son.
Further it is not necessary to speculate in the face of the documentary evidence referred to earlier why Gopal Das should have taken a son in adoption when there was every possibility for him to get a natural son.
Coming to the question of adoption on the very day Shyam Behari Lal was born, that plea rests on hearsay information.
There is no positive evidence before us as to when exactly Shyam Behari Lal was adopted.
From the evidence of D.Ws.
10 and 15, it is clear that he must have been adopted very soon after his birth.
That is the best that can be said on the basis of the evidence.
That a art custom differs from place to place and from community to community.
It is true that in a decree made in 1910, Shyam Behari Lal was described as the son of Ram Das.
But in the very next year in another decree, he was 111 described as the son of Gopal Das.
We do not think that the evidence afforded by that solitary document showing Shyam Behari Lal as the son of Ram Das can outweigh the other evi dence which is both satisfactory as well as voluminous.
On an appreciation of the entire evidence on record, we are in agreement with the High Court 's conclusion that Shyam Behari Lal was the adopted son of Gopal Das and there is nothing to show that the said adoption was invalid for any reason.
In view of this conclusion, it is unnecessary to consider the other contentions raised in the appeal.
In the result this appeal fails and the same is dismissed with costs.
Y.P. Appeal dismissed.
| IN-Abs | The appellant filed a suit in 1946 claiming to be the nearest heir to his maternal uncle G, who died in 1934.
S defendant No. 1 (the predecessor of the respondents) resisted the suit on the ground that he had been adopted by G on the very day he was born in 1892.
Close relations of the wife of G deposed that after the birth of S, the wife of G took him to her paternal home where Paon Pheri ceremony was performed, as was customary in that family.
The application for admission to the school recited that S was the son of G, and it was signed by G. G deposed before courts that S was his son.
S filed a nomination paper, proposed by G mentioning that his father was G.
In income tax assessment which proceeded on the basis that G and S formed a H.U.F. of which G was the karta, the professional income of S was added.
Then there were admissions of the appellant in Courts after the death of G that S was the proprietor of the firm of G.
In other application for transfers, the appellant described S as son of G.
But there was a decree of a Court in 1990 where S was described as son of his natural father.
The trial court decreed the suit, but the High Court reversed that decree.
The High Court held on the evidence that S was validly adopted by G, though S had not been able to establish the custom pleaded by him, nor was he able to adduce any satisfactory evidence about the actual adoption but he has produced considerable documentary evidence to show that G was treating him for over a quarter of century as his son; then there was also plenty of reliable evidence to show that close relations including the, appellant treated S as the son of G both during the life time of G and also, thereafter till about the time the suit was instituted.
HELD : A person who seeks to displace the natural succession to property by alleging an adoption must discharge the burden that lies upon him by proof of the factum of adoption and its validity.
In order that an adoption may be valid under the Hindu law, there must be a formal ceremony of giving and taking.
This is true of the regenerate castes as well as of the Sudras.
Although no particular form is prescribed for the ceremony, the law required that the natural parent should hand over the adoptive boy and the adoptive parent must receive him, the nature of the ceremony varying according to the circumstances.
[105 A D] Although the person who pleads that he had been adopted is bound to prove his title as adopted son, as a fact yet from the long period during which he had been received as an adopted son, every 'allowance for the absence of evidence to prove such fact was to be favourably entertained.
The case was analogous to that in which the legitimacy of a person in possession had been acquiesced in for a considerable time, and afterwards impeached by a party, who had a right to question the legitimacy, where the defendant, in order to defend his status, is allowed to invoke against the claimant every presumption which arises from long recognition of his 102 legitimacy by members of his family.
In the case of a Hindu long recognition as an adopted son, raised even a stronger presumption in favour of the validity of his adoption, arising from the possibility of the loss of his rights in his own family by being adopted in another family.
In the absence of direct evidence much value has to be attached to the fact that the alleged adopted son had without controversy succeeded to his adoptive 'father 's estate and enjoyed till his death and that documents during his life and after his death were framed upon the basis of the adoption.
[106 B F] On the evidence, S was the adopted son of G and there was nothing to show that the said adoption was invalid for any reason.
While considering the question of the proof of adoption pleaded, the 'fact that the suit was filed nearly 54 years after the alleged adoption had taken place must be borne in mind.
Therefore, naturally it was extremely difficult far the adopted son to adduce any oral evidence in proof of that adoption.
Addagada Raghavamma and anr.
vs Addagada Chenchamma and anr.
2 S.C.R. 933; Lakshman Singh Kothari vs Smt.
Rup Kanwar ; ; applied.
Rajendrao Nath Holder vs Jogendro Nath Banerjee and ors.
14, Moore 's Indian Appeals p. 67, approved.
|
Appeal No. 354 of 1967.
Appeal from the judgment and decree dated August 25, 1965 of the Madras High Court in Appeal No. 177 of 1961.
section V. Gupte, R. Thiagarajan, Janendra Lal and B. R. Agar wala, for the appellant.
N. H. Hingorani and K. Hingorani, for the respondent.
The Judgment of the Court was delivered by Shah, J.
Perumal Nadar married Annapazham (daughter of Kailasa Nadar an Indian Christian) on November 29, 1950, at Kannimadam in the State of Travancore Cochin according to Hindu rites.
Annapazham gave birth to two children the first on September 14, 1951 and the other on March 5, 1958.
The elder child died shortly after its birth.
The younger named Ponnuswami acting through his mother Annapazham as his guardian filed an action in the Court of the Subordinate Judge, Tirunelveli, for separate possession of a half share in the properties of the joint family held by his father Perumal.
The suit was defended by 51 Perumal contending that he had not married Annapazham as claimed by her; that if it be proved that marriage ceremony had been performed, it was invalid, and in any event Ponnuswami was an illegitimate child and could not claim a share in his estate.
The Trial Court rejected the defence, and decreed the suit.
Perumal appealed to the High Court of Madras, but without success.
With certificate under article 133(1)(c) of the Constitution, this appeal is preferred.
Three contentions are urged in support of this appeal : (1) that Annapazham was an Indian Christian and a marriage between a Hindu and an Indian Christian is regarded by the Courts in India as void; (2) that the marriage was invalid because it was prohibited by the Madras Act 6 of 1949; (3) that Annapazham and Perumal were living apart for a long time before the birth of Ponnuswami and on that account Ponnuswami could not be regarded as a legitimate child of Perumal.
Annapazham was born of Christian parents and she followed the Christian faith.
She married Perumal when she was about 19 years of age.
It is not now in dispute that on November 19, 1950 she went through the ceremony of marriage and lived with Perumal as his wife for several years thereafter.
The children born to Annapazham in September 1951 and March 1958 were entered in the Register of Births as Hindus.
On the occasion of the marriage, printed invitations were sent to the relatives of Perumal and of Annapazham and an agreement was executed by Perumal and Annapazham reciting that: "Individual No. 1 (Perumal) among us has married Individual No. 2 (Annapazham) as settled by our parents and also with our full consent.
As our relatives are of the opinion that our marriage should be registered, this agreement has been registered in accordance therewith.
We have executed this agreement by consenting that both of us shall lead a family life as husband and wife from this day onwards, that we shall not part each other both in prosperity and adversity and that we shall have mutual rights in respect of the properties belonging to us, under the Hindu Mitakshara Law.
" The marriage ceremony was performed according to Hindu rites and customs : a bridal platform was constructed and Perumal tied the sacred than which it is customary for a Hindu husband to tie in acknowledgement of the marriage.
The High Court on a consideration of the evidence recorded the following finding: "Oral evidence was adduced to prove that the marriage was celebrated according to Hindu rites and Sams 52 karas.
Invitations were issued at the time of the marriage and usual customary tying of thali was observed.
After the marriage she ceased to attend the Church, abandoned the Christian faith and followed the Hindu customs and manner prevailing among the Hindu Nadar community of Travancore." Perumal who had previously been married to one Seethalakshmi agreed to and did go through the marriage ceremony.
It is in evidence that marriage between Hindu males belonging to the Nadar community and Christian females are common and the wife after the marriage is accepted as a member of the Hindu Nadar community.
Mr. Gupte on behalf of Perumal contends that a valid marri age mistake place between two Hindus only and not between a Hindu and a non Hindu and in the absence of any evidence to show that Annapazham was converted to Hinduism before she married Perumal, the marriage, even if performed according to the Hindu rites and ceremonies, is not valid in law.
Counsel also contended that the evidence that Annapazham lived after the marriage is a Hindu will not validate the marriage.
It is not necessary to decide in this case whether marriage between a Hindu male and an Indian Christian female may be regarded as valid for, in our judgment, the finding of the Courts below that Annapazham was converted to Hinduism before her marriage with Perumal is amply supported by evidence.
A person may be a Hindu by birth or by conversion.
A mere theoretical allegiance to the Hindu faith by a person born in another faith does not convert him into a Hindu, nor is a bare declaration that he is a Hindu sufficient to convert him to Hinduism.
But a bona fide intention to be converted to the Hindu faith, accompanied by conduct unequivocally expressing that intention may be sufficient evidence of conversion.
No formal ceremony of purification or expiation is necessary to effectuate conversion.
In Muthusami Mudaliar vs Masilamani alias Subramania Mu liar(1) the validity of a marriage according to Hindu rites between a Hindu and a Christian woman fell to be determined.
It was held that the marriage contracted according to Hindu rites by a Hindu with a Christian woman, who before marriage is converted to Hinduism, is valid, though the marriage was not in strict accordance with the Hindu system of law.
Such a marriage is still common among and recognised as valid by the custom of the caste to which the man belongs.
In Goona Durgaprasada Rao and Another vs Goona Sudarasa naswami and others(1), Mockett, J., observed that no gesture or (1) I.L.R. (2) I.L.R. 53 declaration may change a man 's religion, but when on the facts it appears that a man did change his religion and was accepted by his co religionists as having changed his religion and lived and died in that religion, absence of some formality cannot negative what is an actual fact.
Krishnaswami Ayyangar, J., observed that a Hindu who had converted himself to the Christian faith returned to Hinduism and contracted a second marriage during the life time of his first wife and remained and died a Hindu having been accepted as such by the community and co religionists without demur.
Absence of evidence of rituals relating to conversion cannot justify the Court in treating him as having remained a Christian.
The evidence clearly establishes that the parents of Anna pazham arranged the marriage.
The marriage was performed according to Hindu rites and ceremonies in the presence of relatives who were invited to attend : customary ceremonies peculiar to a marriage between Hindus were performed : no objection was raised to the marriage and after the marriage Annapazham was accepted by the local Hindu Nadar community as belonging to the Hindu faith, and the plaintiff was also treated as a Hindu.
On the evidence there can be no doubt that Annapazham bona fide intended to contract marriage with Perumal.
Absence of specific expiatory or purificatory ceremonies will not, in our judgment, be sufficient to hold that she was not converted to Hinduism before the marriage ceremony was performed.
The fact that Perumal chose to go through the marriage ceremony according to Hindu rites with Annapazham in the presence of a large number of persons clearly indicates that be accepted that Annapazham was converted to Hinduism before the marriage ceremony was performed.
The second contention has little substance.
The Madras Hindu (Bigamy Prevention and Divorce) Act 6 of 1949 provided by sections 3 & 4(1) : section 3 "This Act applies to Hindus domiciled in the State of Madras.
Explanation.
This Act shall also apply if either of the parties to the marriage was a Hindu domiciled in the State of Madras." section 4(1) "Notwithstanding any rule of law, custom or usage to the contrary, any marriage solemnized after the commencement of this Act between a man and a woman either of whom has a spouse living at the time of such solemnization shall be void, whether the marriage is solemnized within or outside the State of Madras : Provided. . . . . . " 54 Mr. Gupte contended that Perumal was domiciled in the village of Kannamkulam, Taluka Nanguneri, District Tirunelveli in the State of Madras and on that account governed by Madras Act 6 of 1949, and since Perumal had been previously married to Seethalakshmi who was alive, his marriage with Annapazham was invalid.
The Courts below have held that Perumal had married Seethalakshmi before he married Annapazham, and that Seethalakshmi was alive at the date of Perumal 's marriage with Annapazham.
But no contention was raised in the written statement filed by Perumal that he was domiciled in the State of Madras.
The marriage with Annapazham took place in Kannimadam which is admittedly within the territory of the State of Travancore Cochin and after the marriage Perumal and Annapazham lived at Kannimadam.
M. Thangiah Nadar P.W. 2, and Kailasa Nadar P.W. 4 have deposed that the families of Annapazham and Perumal were the subjects of the Travancore Maharaja and that evidence was not challenged.
Perumal and Annapazham were married according to the ceremonies which make a valid marriage: they had lived as husband and wife and if it was the case of Perumal that the marriage was, by reason of the prohibition contained in Madras Act 6 of 1949, invalid, it was for him to set up and to establish that plea by evidence.
It is true that an attempt was made after plaintiff closed her case to suggest to witnesses examined that he Perumal was a resident of Kannamkulam and that he occasionally visited Kannimadam where he had a house.
But no argument was raised that Perumal was domiciled in the State of Madras.
In the absence of any such contention, the Trial Court held that Perumal was not domiciled in the State of Madras.
It cannot be held in the absence of a specific plea and issue raised to that end that Perumal was domiciled in the State of Madras and was on that account governed by the provisions of the Madras Hindu (Bigamy Prevention and Divorce) Act 6 of 1949.
We agree with the High Court that it is not proved that Perumal was domiciled in the State of Madras at the date of his marriage with Annapazham.
Nor can we accept the contention that the plaintiff Ponnu swami is an illegitimate child.
If it be accepted that there was a valid marriage between Perumal and Annapazham and during the subsistence of the marriage the plaintiff was born, a conclusive established that at the time when the plaintiff was conceived, Peru presumption arises that he was the son of Perumal, unless it be mal had no access to Annapazham.
There is evidence on the record that there were in 1957 some disputes between Annapazham and Perumal.
Annapazham had lodged a complaint before the Magistrate 's court that Perumal had contracted marriage with one Bhagavathi.
That complaint was dismissed and the order was 55 confirmed by the High Court of Madras.
Because of this com plaint, the relations between the parties were strained and they were living apart.
But it is still common ground that Perumal and Annapazham were living in the same village, and unless Perumal was able to establish absence of access, the presumption raised by section 112 of the Indian Evidence Act will not be displaced.
In Chilukuri Venkateswarlu vs Chilukuri Venkatanarayana(1) in a suit filed by a Hindu son against his father for partition it was contended that the plaintiff was not the legitimate child of the defendant.
The defendant relied upon certain documents by which he had agreed to pay maintenance to the plaintiffs mother, and upon a deed gifting a house to her and assertions made in a previous suit that he had no intercourse with her after he married a second wife.
The Court in that case observed, following the judgment of the Privy Council in Karapaya vs Mayandi(1) that .,non access could be established not merely by positive or direct evidence; it can be proved undoubtedly like any other physical fact by evidence, either direct or circumstantial, which is relevant to the issue under the provisions of the Indian Evidence Act, though as the presumption of legitimacy is highly favoured by law it is necessary that proof of non access must be clear and satisfactory", and since on the basis of that proof there was evidence on the record that the plaintiffs mother lived in the house gifted to her by her husband and there was no impossibility of cohabitation between the parties, there was no acceptable evidence of non access.
In Ammathayee vs Kumaresain (3) this Court held that the conclusive presumption under section 112 of the Indian Evidence Act can.
only be displaced if it is shown that the parties to the marriage had no access at any time when the child could have been begotten, There is a concurrent finding of the Trial Court and the High Court that there is no evidence to establish that Perumal living in the same village as Annapazham had no access to Annapazham during the time when the plaintiff could have been begotten.
The appeal fails and is dismissed with costs.
G.C. Appeal dismissed.
(1) (2) I.L.R. 12 Rang.
| IN-Abs | One Perumal Nadar, a Hindu, married Annapazham, daughter of an Indian Christian, on November 29, 1950 at Kannimadam in the State of Travancore Cochin according to Hindu rites.
Of the two children born of the marriage one died.
The younger child, a son born in 1958, acting through his mother, the afoResaid Annapazham, as his guardian, filed an action in the Court of the Subordinate Judge, Tirunelveli, for separate possession of a half share in the properties of the joint family held by his father Perumal.
The 'suit was defended by Perumal.
The trial court decreed the suit and the High Court confirmed the decree.
In appeal to this Court by certificate Perumal, the appellant, contended : (i) that Annapazham was an Indian Christian and a marriage between a Hindu and an Indian Christian must be regarded as void; (ii) that the marriage was invalid because the appellant was already married .before he married Annapazham and bigamous marriages were prohibited by Madras Act 6 of 1949; (iii) that the appellant and Annapazham were living apart for a long time before the birth of the plaintiff and on that account the plaintiff could not be regarded as a legitimate child of the appellant.
HELD : (i) The question whether marriage between a Hindu male and a Christian female is valid or not did not arise for consideration in the present case because the finding of the Courts below that Annapazham was converted to Hinduism before her marriage with Perumal was amply supported by evidence.
[52 D E] A person may be a Hindu by birth or conversion.
A mere theoretical allegiance to the Hindu faith by a person born in another faith does not convert him into a Hindu, nor is a bare declaration that he is a Hindu sufficient to convert him to Hinduism.
But a bona,fide intention to be converted to the Hindu faith, accompanied by conduct unequivocally expressing that intention may be sufficient evidence of conversion.
No formal ceremony of purification or expiration is necessary to effectuate conversion.
[52 E F] Muthusami Mudaliar vs Musilamani alias Subramania Mudaliar I.L.R. and Goona Durgaprasada Rao vs Goona Sudarasanaswami, I.L.R. , referred to.
The evidence in the present case established that the parents of Annapazham arranged the marriage.
The marriage was performed 50 according to Hindu rites and ceremonies in the presence of relatives who were invited to attend : customary ceremonies peculiar to a marriage between Hindus were performed : no objection was raised to the marriage and after the marriage Annapazham was accepted by the local Hindu Nadar community as belonging to the Hindu faith; and the plaintiff was also treated as a Hindu.
On the evidence there could be no doubt that Annapazham bona fide intended to contract marriage with Perumal.
Absence of specific expiatory or purificatory ceremonies would not be sufficient to hold that she was not converted to Hinduism before the marriage ceremony was performed.
The fact that the appellant chose to go through the marriage ceremony according to Hindu rites with Annapazham in the presence of a large number of persons clearly indicated that he accepted that Annapazham was converted to Hinduism before the marriage ceremony was performed.
[53 C E] (ii) On the facts and pleadings the High Court was right in holding that it was not proved that the appellant was domiciled in the State of Madras at the date of his marriage with Annapazham.
He could not therefore rely upon the provisions of the Madras Hindu (Bigamy Prevention and Divorce) Act 6 of 1949.
[54 F] (iii) There was a concurrent finding by the courts below that there was no evidence to establish that the appellant living in the same village as Annapazham had no access to her during the time when the plaintiff could have been begotten.
Therefore, in view of section 112 of the Indian Evidence Act it could not be held that the plaintiff was an illegitimate child.
[55 A B] Chilukuri Venkateswarlu vs Chilukuri Venkatanarayana, , Karapaya vs Mayandi, I.L.R. 12 Rang.
243 (P.C) and Ammathayee vs Kumaresain, , applied.
|
Appeal No. 1641 of 1966.
Appeal from the judgment and decree dated March 10, 11, 1965 of the Bombay High Court in Appeal No. 26 of 1958 from Original Decree.
L10Sup Cl (NP)/70 14 922 L. M. Singhvi and B. D. Sharma, for the appellant.
H. R. Gokhale, Y. section Chitale, Janendra Lal and B. R. Agarwala, for respondent No. 1.
The Judgment of the Court was delivered by Bhargava, J.
The Union of India, as the owner of the Central Railway, instituted a suit for refund of Rs. 2,76,967/ collected as tax from the Railway Administration by the respondent Municipality during the period from 1931 till the institution of the suit in November, 1954.
The facts leading up to the suit are that the G.I.P. Railway, which was a Private Company, had land situated within the limits of the respondent Municipality.
On this land, stood the railway station, their Water Reservoir at Bhusi, bungalows of Officers, and certain other buildings.
There were also vacant lands and some lands on which railway lines were laid out.
In this area, which belonged to the G.I.P. Railway, the Railway Company itself built roads, supplied water from its Bhusi Reservoir, arranged for the lighting, and provided other services.
In fact, up to the year 1916, the Railway used to supply water even to the Municipality from its Bhusi Reservoir on payment.
The Municipality was governed, at that time, by the Bombay District Municipal Act No. 3 of 1901 (hereinafter referred to as "the Act of 1901") under which a tax on lands and buildings situated within the municipal limits used to be charged @ 4 per cent of the annual rental value, but no tax was levied on the buildings and lands of the G.I.P. Railway in view of section 135 of the Indian Railways Act No. 9 of 1890.
In the year 1914, the Government of India issued a notification under section 135 of the Railways Act declaring that the Administration of the G.I.P. Railway shall be liable to pay, in aid of the funds of the local authorities set out in the Schedule, the taxes specified against each of those authorities.
Against the 'lame of Lonavla Municipality, which is the respondent in this case, the tax mentioned was house tax.
Thus, the exemption granted to the Railway Administration was taken away by this notification in respect of house tax and house tax became payable by the G.I.P. Railway to the respondent.
In 1916, the respondent constructed its own water reservoir and became independent of the Railway for water supply, but no water rate was charged from the Railway even thereafter, though water charges for actual quantities of water supplied in three of the bungalows was charged from the occupants of the bungalows.
The rest of the Railway Colony continued to be supplied with water from the Railway Reservoir at Bhusi.
On 4th May 1916, the respondent promulgated new rules for taxation and, instead of charging separate house tax and water rate it decided to charge a consolidated tax assessed as a rate on 923, buildings and lands in accordance with clause (c) of the proviso to section 59(1) of the Act of 1901.
Thereafter, it appears that the respondent demanded this consolidated tax from the Railway in respect of the Railway lands and buildings.
The Railway felt that, since, under the notification of 1914, house tax only was payable by the Railway Administration, there was no justification for the respondent to charge consolidated tax from it and, consequently, protested against this payment.
Thereafter, on 26th July, 1917, the Government of India issued a fresh notification tinder section 135 of the Railways Act, whereby the Railway Administration was rendered liable to pay what was described as "tax on lands and buildings".
On the issue of this notification, the respondent started charging the G.I.P. Railway this consolidated tax and this continued until some time in the year 1927 by which time the G.I.P. Railway was taken over by the Government and became a Government undertaking.
In the Rules promulgated on 4th May, 1916, the consolidated tax described as a general rate on buildings and lands was not chargeable on government property.
Relying on this provision in the Rules, an objection was raised that the charge of the tax was illegal when the Railway had become government property.
Subsequently, the respondent Municipality amended its Rules and promulgated fresh Rules on the 6th October, 1931.
By this time, the respondent Municipality had been constituted into a Borough under the Bombay Municipal Boroughs Act No. 18 of 1925 (hereinafter referred to as "the Act of 1925").
These new Rules were thus promulgated under this Act of 1925.
Under these Rules, the exemption in respect of government property to the charge of the general rate on buildings and lands, which was contained in the Rules of 1916 was deleted and all lands and buildings within the Municipal Borough became chargeable irrespective of their being owned by the Government.
A separate clause was incorporated giving certain exemptions, but, since they do not affect the case before us, they need not be mentioned.
In pursuance of these Rules of 1931, the respondent started collecting the consolidated tax assessed as a rate on buildings and lands of the Railway from it.
In the year 1940, the Railway Administration preferred an appeal under section 110 of the Act of 1925 against one of the demand notices issued in respect of this tax on the 6th October, 1940.
This appeal came up before the Sub Divisional Magistrate Western Division, Poona, who held that the levy of this consolidated tax was ultra vires and set aside the demand notice.
On a revision by the respondent under section 111 of the Act of 1925, the District and Sessions Judge set aside the order of the Sub Divisional Magistrate, holding that the imposition of the tax was valid.
Against this decision, the Railway Administration filed a revision 924 before the High Court of Bombay under section 115 of the Code of Civil Procedure.
The High Court, on 12th February, 1945, refused to exercise its special powers under section 115, C.P.C., with the further remark that the proper remedy to be sought was by means of a suit.
Under these circumstances, the Union of India, which had come to be the owner of this Railway under the name of the Central Railway, filed the suit on 27th November, 1954 for refund of the entire amount which was collected by the respondent from the Railway in pursuance of the Rules of 193 1.
The trial court held that the levy of this tax was void inasmuch as, under the notification issued on the 26th July, 1917, only the rate on lands and buildings was payable by the Railway Administration.
The suit for the refund filed by the Union of India was, on this ground, decreed.
On appeal, the ' High Court disagreed with the trial court and held that even the consolidated tax was payable in view of the notification of 26th July, 1917, so that the tax had been rightly collected.
The High Court, thereupon, set aside the decree of the trial court and dismissed the suit.
It is against this decree that the Union of India has come up in this appeal by certificate under Article 133 of the Constitution.
In order to appreciate the submissions made by counsel for parties in this appeal, it is necessary to set out the relevant provisions of section 59 of the Act of 1901 and of section 73 of the Act of 1925 which are as follows : "Section 59 of the Act of 1901.
(1) Subject to any general or special orders which the State Government may make in this behalf, any Municipality many impose, for the purposes of this Act, any of the following taxes, that is to say, (i)a rate on buildings or lands or both, situate within the municipal district; (vii) a general sanitary cess for the construction or maintenance, or both construction and maintenance, of public latrines, and for the removal and disposal of refuse; (viii) a general water rate or a special water rate or both for water supplied by the Municipality, which may be imposed in the form of a rate assessed on buildings 925 and lands, or in any other form, including that of charges for such supply, fixed in such mode or modes, as shall be best adapted to the varying circumstances of any class of cases or of any individual case; (ix) a lighting tax; . .
Provided further that . .
(c) the Municipality in lieu of imposing separately any two or more of the taxes described in clauses (i), (vii), (viii) and (ix) may impose a consolidated tax assessed as a rate on buildings or lands, or both situate within the municipal District.
" "Section 73 of the Act of 1925 73. (1) Subject to any general or special orders which the State Government may make in this behalf and to the provisions of sections 75 and 76, a municipality may impose for the purposes of this Act any of the following taxes, namely: (i) a rate on buildings or lands or both situate within the municipal borough; . .
(viii)a general sanitary cess for the construction and maintenance of public latrines, and for the removal and disposal of refuse; . .
(x) a general water rate or a special water rate or both for water supplied by the municipality, which may be imposed in the form of a 'rate assessed on buildings and lands or in any other form, including that of charges for such supply, fixed in such mode or modes as shall be best adapted to the varying circumstances of any class of cases or of any individual case; (xi) a lighting tax; . .
926 Provided further that . .
(c) the municipality in lieu of imposing separately any two or more of the taxes described in clauses (i), (viii), (x) and (xi) may impose a consolidated tax assessed as a rate on buildings or lands or both situated within the municipal borough.
" In the year 1914, the respondent Municipality had only levied a rate on buildings an& lands under clause (i) of section 5 9(1) of the Act of 1901.
There was no question of imposing a general or special water rate as the respondent had no water works of its own and was taking water supply from the G.I.P. Railway.
It was in these circumstances that the notification was issued by the Central Government dated the 13th May, 1914 making the Railway Administration liable to pay house tax to the Municipality of Lonavla.
The notification was obviously intended to make the Railway liable to pay the tax which had been imposed as a rate on buildings and lands under section 59(1)(i) of the Act of 1901 by the respondent.
Subsequently,, in the year 1916, the respondent Municipality not only arranged for water supply and imposed a general water rate, it proceeded to make rules for imposition of a consolidated tax assessed as a rate on buildings and lands under clause (c) of the second proviso to section 59(1) in lieu of the existing tax imposed as a rate on buildings and lands under clause (i) as well as the water rate, imposed under clause (viii) of section 59(1).
Thereafter, the Central Government issued the notification dated 26th July, 1917 under section 135(1) of the Railways Act making the G.I.P. Railway liable to tax on buildings and lands imposed by the Lonavla Municipality.
It is to be noted that, in this notification, the Government used the word "tax" and not the word " rate".
The tax imposed under section 59(1) was described as "a rate on buildings and lands".
If the intention of the Government had been that the G.I.P. Railway should be liable to that tax only, it could have used the word "rate" instead of the word "tax ' in the notification.
In fact, if the, notification had been left untouched, the liability of the G.I.P. Railway would have continued to be in respect of the rate on buildings or lands because of the earlier notification of 1914, under which the Railway had been made liable to House tax.
The notification of 26th July, 1917 made the Railway liable to tax on buildings and lands obviously because the Government intended that the Railway should be liable to the consolidated tax under clause (c) of the second proviso to section 59(1).
Clause (c) permits the imposition of a consolidated tax assessed as a rate on buildings or lands, or both.
The moment a tax is assessed as a rate on buildings or lands, it naturally becomes a tax 9 2 7 on building and lands.
The fact that it was a consolidated tax was immaterial.
It was this consolidated tax which was intended to be made payable by the G.I.P. Railway when the Central Government used the expression "tax on buildings and lands" in place of the earlier words "House Tax" and chose not to refer to the liability being in respect of a rate on buildings and lands.
It is true that all taxes are not rates but all rates are taxes.
A rate on buildings and lands is 'a tax on buildings, so also any other tax ' assessed as a rate on buildings and lands becomes a tax on buildings and lands.
We are unable to accept the submission made by counsel for the appellant that the expression "tax on buildings and lands" used in the notification of 26th July, 1917 could only refer to a rate on buildings and lands under clause (i) of section 59(1) and would not cover the con solidated tax referred to in clause (c) of the second proviso.
It is true, as urged by him, that the tax under clause (c) of the second proviso is not identical with, and is different in nature from, the rate on buildings and lands imposed under clause (i), but that circumstance does not imply that it is not a tax on buildings and lands.
The mere use of the word "consolidated" cannot make any difference to this interpretation.
It is also significant that clause (c) of the second proviso does not purport to lay down that the consolidated tax will be the sum total of the taxes described in clauses (i), (vii), (viii) and (ix).
The consolidated tax envisaged by that clause is in lieu of separate imposition of any two or more of the taxes described in clauses (i), (vii), (viii) and (ix) which means that the power to impose.
this consolidated tax has been given for the purpose of substituting it for the multiple taxes which could be imposed under those clauses.
This consolidated tax cannot, therefore, be held to be of the same nature as the taxes in all those clauses.
The intention appears to be that, though the Municipality was empowered to impose four different kinds of taxes, it was permitted under clause (c) of the second proviso to simplify matters by having a single tax on buildings and lands in lieu of those multiple taxes.
Such a single tax had to be assessed as a rate on buildings and lands.
This being the nature, it obviously becomes a tax on buildings and lands, so that the notification of 26th July, 1917 clearly makes the Railway liable to payment of this tax.
The position under the Act of 1925 is exactly the same where also the language of clause (c) to the second proviso is identical with that contained in the Act of 1901, so that the liability imposed on the Railway by the notification of the Government dated 26th July, 1917 under s.135(1) of the rail ways Act continued even under the Act of 1925.
It is also significant to note that the Rules, which we 're framed by the Municipality under the Act of 1901 and by the Municipal .Borough later under the Act of 1925 which were promulgated on 928 the 4th May, 1916 and the 6th October, 1931 respectively, described the tax as a general rate on buildings and lands in rule 1.
It is true that, in the heading of the Rules, the expression used was that "the Rules were for the levy of a consolidated rate on buildings and lands", but, in the main provision, the tax was described only as "a general rate on buildings And lands".
A general rate on buildings and lands is obviously a tax on buildings and lands and would, therefore, be covered by the notification of the Central Government dated 26th July, 1917.
Apart from this interpration which we have arrived at on the basis of the language used in the two Acts, the Rules, and the notification of the Central Government, there are two circumstances which indicate that this must be the correct construction of the notification issued by the Central Government.
The first circumstance is that, when this notification was issued, the only tax which was being imposed by the Lonavla Municipality which the Central Government could have intended should become payable by the, G.I.P. Railway was the consolidated tax under clause (c) of the second proviso.
There was no other tax which could have been covered by this notification.
In fact, the notification would be meaningless if we were to hold that this consolidated tax is not covered by the expression "tax on buildings and lands".
This notification was issued while the earlier notification of 1914 was ,already in existence and, if the intention was to cover only the rate mentioned in clause (i) of section 59(1), there was no need to issue this fresh notification as the liability of the Railway to pay that tax already existed under that notification of 1914.
The second circumstance that we can take notice of is the historical background in which this notification of 26th July, 1917 was issued.
It appears that, after the Rules for imposition of this consolidated tax came into force in 1916, the Municipality demanded payment of this consolidated tax from the G.I.P. Railway.
Thereupon, the Agent of the G.I.P. Railway Company wrote a letter to the Secretary, Railway Board, Simla, on the 1st December, 1916, stating that the Company did not agree that it should pay the new consolidated tax as it comprised a house tax and a water rate.
The Company had its own arrangements for the supply of water and it was obviously unfair that it should be called upon tO pay any tax which includes a water rate, when no municipal water was being consumed by the Railway at Lonavla.
The Secretary, Railway Board, forwarded this letter to the Secretary to the Government of Bombay, General Department, with a letter dated 12th December, 1916, enquiring whether the Agent 's information was correct and, if so, whether the Bombay Government had any remarks to offer on the, Agent 's 92 9 contentions.
On 11th May, 1917, the Secretary to the Government of Bombay replied to the Secretary, Railway Board, pointing.
out that, originally, the Municipality, proposed to levy a general water rate on all houses, in addition to the existing house tax, but, on representations from property owners of Lonavla and Khandalla, it had decided to.
impose a consolidated rate on buildings and lands in lieu of the house tax and the proposed general water rate.
Consequently, they were, levying, in lieu of house tax, a consolidated rate, which included a general water rate, on a sliding scale, on all properties situated within the municipal limits.
The water rate imposed was not intended to cover expenses on any service rendered in the nature of a general tax as opposed to a service tax.
In equity, the Railway Company 's property in Lonavla had no better right to exemption than the properties of private individuals who, although they did not take private pipe connections, were paying the general water rate.
In these circumstances, a request was made to the Secretary, Railway Board, to move the Government of India to declare the Administration of the G.I.P. Railway liable to pay to the Lonavla Municipality the consolidated tax on buildings and lands in lieu of the, housetax in respect of the railway properties situated within the municipal limits.
It was suggested that the Schedule annexed to the notification dated 13th May, 1914 may be amended accordingly.
It was in pursuance of this move by the Bombay Government that the notification of 26th July, 1917 was issued by the Central Government.
That the notification of 26th July, 1917 was issued in pursuance of this correspondence is clarified by the Memorandum dated 17th August, 1917, with which a copy of the new notification was forwarded by the Government of India, Railway Department (Railway Board) to the Secretary to the Government of Bombay.
These circumstances, in which the notification of 16th July, 1917 was issued, make it plain that the Government of India, when they used the expression ' 'tax on buildings and lands" in the notification, intended to make the G.I.P. Railway liable to the consolidated tax which had been imposed by the Municipality under the Rules of 1916.
The decision of the Bombay High Court in Borough Munici .
pality, Ahmedabad vs Ahmedabad Manufacturing and Calico Printing Co. Ltd. (1) on interpretation of, section 73 and 1 1 0 of the Act, of 1925 also supports the view that we have taken above.
The, question that arose in that case was whether the right of an appeal ' envisaged by using the expression "in the case of a rate on buildings or lands or both" in section 110 could be availed of in respect of, a general water rate imposed under clause (x) of section 73(1) which described that tax as a general water rate imposed in the form of a. (1) , 930 rate assessed on buildings and lands.
It was held that there was no distinction between a rate on buildings or lands and a tax in the form of a rate assessed on buildings or lands.
In the case before us, ,on that analogy, a consolidated tax assessed as a rate on buildings and lands cannot be distinguished from a tax on buildings and lands.
Reference may also be made to a decision of the Allahabad High Court in Raza Buland Sugar Co., Ltd. Rampur vs Municipal Board, Rampur(1) where it was held that a water rate is a tax on buildings and lands and is not, in fact, a service tax chargeable in respect of water supplied.
Counsel for the appellant referred to a decision of the Madras High Court in Municipal Council, Cuddappah vs M & section M. Ry.
Co. Ltd.(1); but that case is of no assistance as it turned on the special language which had been used in the Act and the notification which came up for consideration in that case.
In fact, the expression that had to be interpreted was "property tax" and not "tax on buildings and lands".
We agree with learned counsel for the appellant that much assistance cannot be derived from the decision of this Court in Patel Gordhandas Hargovindas vs Municipal Commissioner, Ahmedabad ( 3 ) which was relied upon by the High Court.
However, as we have held ,above, on the proper interpretation of the language used in the two Acts, the Rules, and the notification, and taking into account the circumstances under which the notification of 1917 was issued, the only conclusion that can be arrived at is that the Railway was made liable to this consolidated tax, so that the decision of the High Court is perfectly correct.
The appeal fails and is dismissed with costs.
R.K.P.S. Appeal dismissed.
(1) A.I.R. 1962 Alld.
(2) A.I.R. 1929 Mad. 746.
| IN-Abs | The respondent Municipality, which at the time was governed by the Bombay District Municipal Act 3 of 1901 levied a tax on lands and buildings situated within its municipal limits at 4 per cent of the annual rental value.
However, no such tax was levied on the buildings and lands of the G.I.P. Railway situated within its limits in view of section 135 of the Indian Railways Act, 9 of 1890.
In 1914,the Government of India issued a notification under section 135 persuant to which the G.I.P. Railway administration was required to pay house tax to the respondent.
Upto 1916 the respondent municipality used to draw water from the Railway 's reservoir but constructed its own reservoir during that year.
Both prior to and after this date, no water rate was charged by the respondent municipality from the railway.
On 4th May, 1916 the respondent promulgated new rules for taxation and instead of charging separate house tax under section 59(1)(i) or a general water rate under section 59(1) (viii) of the Act of 1901, it decided to charge a consolidated tax assessed as a rate on buildings and lands in accordance with clause (c) of the proviso to section 59(i).
Although the respondent demanded this consolidated tax from the railway in respect of its lands and buildings, the railway resisted payment contending that under the notification of 1914, house tax only was payable by it.
On 26th July, 1917, the Government of India issued a fresh notification under section 135 of the Railways Act whereby the railway administration was rendered liable to pay what was described as "tax on lands and buildings".
Thereafter the respondent charged the railway the consolidated tax until some time in 1927 when the G.I.P. railway was taken over by the Government.
In the rules promulgated on 4th May, 1916, the consolidated tax was not chargeable on Government property.
Relying on this provision, an objection was raised that the charge of tax was illegal when the railway had become Government property.
The respondent Municipality amended its rules and promulgated fresh rules on 6th October, 1931 under the provisions of the Bombay Municipal Boroughs Act 18 of 1925 under which enactment the respondent municipality had by that time been constituted into a Borough.
Under these rules the exemption in respect of Government property was deleted.
In pursuance of these amended rules the respondent started collecting from the railway the consolidated tax assessed as a rate on its buildings and lands which was by then being levied under the provisions of s.73 of the Act of 1925 that were similar to those of s.59 of the Act of 1901.
In 1940 the railway administration preferred an appeal under section 110 of the Act of 1925 against one of the demand notices.
Although the 921 First Court set aside the demand notice, an appeal was eventually dismissed by the High Court with the remark that the proper remedy to be sought was by means of a suit.
The Union of India which had become the owner of the railway, field a suit in November 1954 for refund of the entire amount which was collected by the respondent from the railway in pursuance of the rules of 1931.
The, Trial Court granted a decree holding that the levy of this tax was void inasmuch as, under the notification issued on the 26th July, 1917, only the rate on lands and buildings was payable by the Railway Administration.
On appeal, the High Court disagreed with the trial court and set aside the decree.
, Oil appeal to this Court by a certificate under article 133 of the Constitution.
HELD : Dismissing the appeal, On the proper interpretation of the language used in two Acts, the Rules, the notification, and taking into account the circumstances under which the notification of 1917 was issued, the only conclusion that could be arrived at was that the Railway was made liable to the consolidated tax.
It is true that all taxes are not rates; but all rates are taxes.
A rate on buildings and lands is a tax on buildings; so also any other tax assessed as a rate on buildings and lands becomes a tax on buildings and lands.
It was not possible to accept the submission of the appellant that the expression "tax on buildings and lands" used in the notification of 26th July, 1917 could only refer to a rate on buildings and lands under clause (i) of section 59(1) and would not cover the consolidated tax referred to in clause (c) of the second proviso.
Although the tax under clause (c) of the second proviso is not identical with and is different in nature from,the rate on buildings and lands imposed under clause (i), that circumstance does not imply that it is not a tax on buildings and lands.
The mere use of the word "consolidated" cannot make any difference to this interpretation.
The intention appears to be that, though the Municipality was empowered to impose four different kinds of taxes, it was permitted under clause (c) of the second proviso to simplify matters by having a single tax on buildings and lands in lieu of those multiple .axes.
Such single tax had to be assessed as a rate on buildings and lands.
This being the nature, it obviously becomes a tax on buildings and lands, so that the notification of 26th July, 1917 clearly makes the Railway liable to payment of this tax.
The position under the Act of 1925 is exactly the same where also the language of clause (c) to the second proviso is identical with that contained in the Act of 1901, so that the liability imposed on the Railway by the notification of the Government dated 26th July, 1917 under section 135(1) of the Railways Act continued even under the Act of 1925.
[927 B H] Borough Municipality, Ahmedabad vs Ahmedabad Manufacturing and Calico Printing Co. Ltd., ; Raza Buland Sugar Co. Ltd. Rampur vs Municipal Board, Rampur, A.I.R. 1962 Alld.
83, Municipal Council, Cuddappah vs M.,& S.M. Ry.
Co. Ltd., A.IR and Patel Gordhandas Hargovindas vs Municipal Commissioner, Ahmedabad, ; ; referred to.
|
iminal Appeal No.207 of 1969.
Appeal by special leave from the judgment and order dated September 11, 1969 of the Delhi High Court in Criminal Misc.
(Main) No. 53 of 1969.
V. A. Seyid Muhammad and section P. Nayar, for the appellant.
R. Jethamalani, Harjinder Singh, Kumar Mehta, H. K. Puri and Rameshwar Nath, for respondent No. 1.
Immediately after his arrest, he made a confession before a Magistrate.
Since then, he has been in custody part of the time under section 3 (2) (g) of the , part of the time as a convict in various offences for which he was convicted, and part of the time as an under trial prisoner.
The first regular case filed against him was under section 5 of the in which he was convicted on 29th January, 1965 and sentenced to undergo six month 's rigorous imprisonment after he had pleaded guilty.
While he was undergoing that sentence, a second case was filed against him for an offence under section 135 of the in which he was convicted and sentenced to nine months ' rigorous imprisonment and a fine of Rs. 2,000 again after he had pleaded guilty.
This conviction was recorded on 29th May, 1965.
After he had undergone this sentence, he was again put in detention under section 3 (2) (g) of the .
This detention was challenged by him by filing two writ petitions in the High Court of Punjab, and in this, Court, but both the writ petitions were dismissed.
Then, on 17th January, 1967, a case was filed in the Court of Miss K. Sen Gupta, S.D.M., New Delhi, for a substantive offence under section 135 of the , for an offence under section 120 B of the Indian Penal Code read with section 135 of the Customs ' Act and section 23 (1 ) (a) of the Foreign Exchange Regulations Act, and an offence under section 23 (1 ) (a) of the Foreign Exchange Regulations Act read with sections 109 and 114 of the Indian Penal Code.
The respondent again pleaded guilty, was convicted on 31st January, 1969, and was sentenced to undergo rigorous imprisonment for six months and to pay a fine of Rs. 2,000.
In this case, 17 other persons were prosecuted as his co accused.
114 During the pendency of this case,, another case was filed in the Court of Shri N. C. Jain, S.D.M., New Delhi, on 18th March, 1968 against the respondent and 45 other persons charging them with offences under section 120, I.P.C., read with section 135 of the , section 167(81) of the and section 23 (1 A) of the Foreign Exchange Regulations Act, as well as substantive offences under section 135 of the , section 167(81) of the , and section 23(1 A) of the Foreign Exchange Regulations Act.
Having already been convicted for some of the offences, particularly the offence of conspiracy in the earlier case, on the 31st January, 1969, the respondent moved a writ petition in the High Court on 4th April,, 1969, for quashing these last proceedings on the ground that, having been convicted for a conspiracy earlier, he could not be retried for the same conspiracy, so that this trial was invalid.
In the alternative, the respondent prayed that, in case the proceedings are not quashed, the proceedings against him be separated from other co accused, his plea of guilty be recorded, and he be convicted in? accordance with law.
Two other alternative prayers were that, in case the first two prayers were not accepted, the trial Court may be directed to record the plea of guilty of the respondent and convict him in accordance with law even in the joint trial, and, in the alternative, the trial Court be ordered to take up the proceedings day to day and a time limit may be fixed by which the complainant should furnish the evidence against the respondent before the Court.
The High Court, by its order dated 11th September, 1969, accepted the plea of the respondent, held that this second trial for the offence of conspiracy was barred as a result of the earlier trial in which the respondent had been convicted on 31st January, 1969, and, consequently, quashed the proceedings in respect of this offence.
The Court also quashed the proceedings in respect of specific offences under section 135 of the and section 23(1 A) of the Foreign Exchange Regulations Act insofar as they related to smuggling of 52 kilograms of gold into India on or about 8th May, 1964 on the ground that the respondent had already been convicted and sentenced in respect of these offences.
The High Court, however, added a sentence that, if the respondent is accused of any other specific acts of smuggling , there will be no bar against the continuation of prosecution proceedings in respect of them.
It is this order which has been challenged before us in this 'appeal by special leave.
In this case, it was very unfortunate that, when the writ petition was heard by the High Court, the very first confession made by the respondent, which was to a great extent the basis of the various prosecutions, was not placed before the High Court and was not brought to its notice.
Obviously, there was carelessness on the part of the prosecution in not bringing it to the notice of 115 the High Court.
At the same time, the respondent, who had challenged the prosecution, also owed a duty to bring that confession to the notice of the High Court as the burden lay on him to show that the prosecution going on against him was illegal and liable to be quashed; and he had moved the High Court to exercise its extra ordinary writ jurisdiction to obtain this relief.
In his writ petition, the respondent had offered to produce the copy of the confession for perusal of the Court, but the Court lost sight of this offer and proceeded to pass the order without examining the confession.
The importance of this omission lies in the fact that a reading of the confession itself makes it manifest that there were two different and separate conspiracies, one which was, headed by a person known as Abid Hussain, and the other by another person known as Allau din.
The respondent, in the confession, made statements which indicated that these two conspiracies were distinct and separate ones, though a few of the persons involved in the two conspiracies were common.
In fact, the confession showed that, at one stage, he was given in structions by the head of one of the conspiracies to see that his part in that conspiracy did not come to the knowledge of the head of the other conspiracy.
It is true that, at the initial stage, the customs authorities, even after, the confession, proceeded on the view that, very likely, there was one single conspiracy and that the respondent had incorrectly tried to show that there were two separate conspiracies in which he was involved.
That appears to be the reason why, at the early stages, in the various documents put forward before the courts, the authorities used language indicating that there was one single conspiracy in respect of which the respondent was being held in custody and was going to, be prosecuted.
It appears that it was much later, after detailed investigation, that the authorities became satisfied that there were two separate conspiracies and, consequently, came forward with a second prosecution of the respondent in respect of the conspiracy which was not the subject matter of the first complaint on the basis of which the respondent was convicted on 31st January, 1969.
That the authorities were under the impression that there was only one single conspiracy at the earlier stages is apparent from the facts stated in the complaint dated 5th April, 1965 in respect of the substantive offence under section 135 of the , and even later, in an affidavit filed on 5th January, 1966 by the Under Secretary to Government in reply to the habeas corpus petition filed by the respondent in the High Court, the allegations made out as if there was one single conspiracy which was engineered by a syndicate headed by Abid Hussain.
Even at the time of the prosecution for the first conspiracy on 17th January, 1967, the facts given in the complaint created the impression that there was one single conspiracy and that Allau din was one of the conspirators in that conspiracy and was not the head of that 116 separate conspiracy for which the respondent and 17 others were prosecuted.
These circumstances were partly explained in a later affidavit of H. K. Kochhar, Assistant Collector of Customs, sworn on 12th May, 1969, and filed in the High Court in reply to the petition under article 226 of the Constitution on which the High Court passed the present impugned order.
The High Court preferred to attach greater weight to the affidavit of the Under Secretary to Government and did not choose to act at all on the affidavit of H. K. Kochhar, considering that the former affidavit was by a senior officer on behalf of the Government, while the,, latter affidavit had been sworn by an Assistant Collector of Customs only.
In adopting this course, the High Court lost, sight of the.
circumstance that the affidavit of the Under Secretary was filed in January, 1966 when the investigation of the various facts was at a fairly early stage, while Kochhar 's affidavit was filed in May, 1969, by which time fuller investigation had been made by the authorities and they had discovered that their first impression that there was one single conspiracy was incorrect.
The position has been further clarified before us in the affidavit of the Collector of Customs, R. Prasad, filed in reply to the petition for revocation of special leave to appeal on the basis of which this appeal has 'been heard by us.
These facts made it clear that the High Court misdirected itself in accepting the plea of the respondent and in quashing the proceedings.
In fact, Mr. Jethmalani, counsel for 'the respondent, did not make any serious effort to justify the order of the High Court after we had gone through the confession of the respondent, so that it is obvious that the order of the High ,,Court quashing the proceedings was not justified.
Mr. Jethmalani, however, urged that, even though the order of the High Court may not be justified, the circumstances of this case do not require that this Court should exercise its special powers under article 136 of the Constitution to order a trial of the respondent and reopen the proceedings.
He drew our attention to two decisions of this Court K.V.Krishnamurthy Iyer and others vs The State of Madras(1), and The State of Bihar vs Hiralal Kejriwal and another(2) in which this Court declined to ,order a re trial in exercise, of its powers under article 136 of the ,Constitution even though the orders in which the trials had terminated were held to be incorrect and set aside.
In both the .,cases, the principle laid down was that public interest or th interest of justice did not require that there should be a fresh trial.
Reliance was also placed on the views expressed by 'Bombay High Court in Chudaman Narayan Patil vs State of Maharashtra(3).
On the basis of the views expressed in those (1) A.I.R. 1954 S.C. 406.
(2) [1960] 1 S.C.R. 726.
(3) A.I.R. 1969 Bom.
117 cases, he urged that, in this case, the respondent had been in. custody for a period of about six years since his arrest and was being harassed by prosecutions launched one after the other, while.
being kept in custody under section 3 (2) (g) of the .
during the period when he could not be detained either as a convict or as an under trial prisoner.
He also emphasised the frank confession of his part in the conspiracies and that, every time.
frank confession of his part in the conspiracies and that, everytime a case was brought up against him, he stuck to that confession.
and pleaded guilty in court.
He was also given the impression, when the earlier case of conspiracy was started on 17th January., 1967, that after the trial of that case, his woes will be over and.
he will not have to face any further trials.
We have considered these aspects, but we do not think that.
this is a fit case where we should uphold the order of the HighCourt quashing the proceedings which were validly started and which related to an entirely distinct and separate offence of cons piracy apart from the one for which the respondent has already been convicted.
The offences for which he is now being tried.
are of such a nature that they may have far reaching implications, and we do not think that it will be in the public interest that the trial should be given up merely because there has been delay in, sending up the case.
The case related to a conspiracy and we can very well appreciate that investigation of an offence of cons piracy is necessarily prolonged and requires considerable work by the investigating authorities, so that certain amount of delay is bound to take place in putting the case before the court.
In the present case, the matters appear to have been complicated by the fact that, at the earlier stages, the authorities were under the impression that there was one single conspiracy.
We are unable to find any material to suggest that the prosecution have deliberately prolonged the investigation or delayed bringing the case before the court.
We may also add that we are not impressed by the argument advanced by Mr. Jethmalani that the respondent could have been charged for this conspiracy even in the earlier case in which he was convicted on 3 1 st January, 1969 under the provisions of section 236 of the Code of Criminal Procedure, because the two conspiracies, according to the prosecution, are two entirely separate and distinct ones and are not based on allegations of identical acts having been committed by the offenders.
In this case, therefore, it appears to be appropriate that the respondent should be tried for the conspiracy on the basis of which proceedings are being taken which have been quashed by the High Court.
We, however, consider that, in view of the long delay and in view of the circumstance that the respondent has been pleading 118 guilty, his second alternative request in the writ petition is justified.
Merely because he is a co accused with 45 others there is no justification that he should be subjected to a prolonged trial, specially because we have been assured by the counsel for the respondent that the respondent is still sticking to his confession and will, very likely, plead guilty as soon as a charge is framed against him.
In the circumstances, while allowing the, appeal and setting aside the order of the High Court, we direct that the trial of the respondent shall be separated from all other 45 co accused and will be proceeded with separately.
Dr. Seyid Muhammad, counsel for the appellant, opposed this separation of the trial of .the respondent on the ground that, if there is a joint trial, the confession of the respondent can be taken into account by the court trying the case against his co accused which will not be permissible if the respondent is separately tried. '.
That is no ground for unnecessarily delaying the trial of the, respondent specially when, if the prosecution desire, they can either apply to the Court to make the respondent an approver or can even produce the respondent as a witness in the case against others after his ,conviction.
In fact, if any of these two alternative courses is adopted.
it will be fairer to the other co accused who will then have an opportunity of cross examining the respondent before his statement is taken in evidence against them.
On our enquiry, Dr. Seyid Muhammad stated that it will be 'possible for the prosecution to produce sufficient evidence to make out a prima facie case on the basis of which a charge can be framed by the court, if a period of two months is allowed to the prosecution to produce evidence in the trial.
On behalf of the respondent, a request was made that we.
should fix a timelimit for completion of the whole trial in view of the long delay.
We, however, consider that it is sufficient to make a direction that the Magistrate will allow a period of not more than two months to the prosecution to produce evidence to make out a prima facie case against the respondent, calculated from the date on which .the copy of our order is received by the trial Court.
On the expiry of the period of two months, the Court will proceed either to frame a charge or to discharge the respondent in accordance with his judgment whether the evidence produced does or does not make out a prima facie case to justify framing of a charge.
It is to this extent only that we are laying down a time schedule for the trial Court which we consider necessary to avoid possible harassment of the respondent.
| IN-Abs | The respondent was a Pakistani national and was arrested on 8th May 1964, and immediately after his arrest he made a confession before a Magistrate.
The confession disclosed that he was involved in two different and separate conspiracies with various co accused.
But the customs authorities assumed that there was only one conspiracy and that the respondent had incorrectly shown two separate conspiracies.
Three cases were filed against him charging him with offences under the , and , and the offence of conspiracy and other offences under various enactments.
He was convicted on his plea of guilty and sentenced to various terms of imprisonment.
He was also detained under the .
After fuller investigation, the respondent was again put up for trial for the second conspiracy and for offences under other Acts.
The respondent moved the High Court for quashing the proceedings on the ground that he having been convicted for a conspiracy could not be retried for the same offence again.
He also pleaded various alternatives in the event of the Court not quashing the proceedings, and one of the pleas was that proceedings against him should be separated from other co accused and his plea of guilty be accepted.
The High Court quashed the proceedings.
In appeal to this Court, HELD : (1) Since the second trial was for a different and distinct conspiracy, the High Court 's order was not justified.
[117 D] (2) Since the offences for which the respondent was being tried were likely to have far reaching implications, it was not in the public interest that the trial should be given up merely because, he had already served various terms of imprisonment, or there has been delay in putting him up for trial for the second conspiracy, especially when there was no material to suggest that the prosecution deliberately prolonged the investigation or delayed bringing up the case before Court.
Further, the trial for the second conspiracy could not have been combined with the earlier one, because, the two are separate and distinct.
[117 D E] (3) In the circumstances however, his alternative plea of separating his case from the other co accused should be accepted and the prosecution allowed a period of not more than two months for producing the evidence so that the court could on a consideration of the evidence, either frame a charge or discharge the respondent.
The contention of the prosecution that he should be tried along with the others to enable the court to take his confession into consideration against the co accused is, not a ground 113 for joint trial especially when the respondent could be called as a witness against the other co accused.
1118 B)
|
minal Appeal.
No.97 of 1968.
Appeal by special leave from the judgment and order dated April 24, 1967 of the Bombay High Court in Criminal Appeal No. 317 of 1967.
R. M. Hazarnavis, K. L. Hathi and P. C. Kapoor, for the appellant.
M. section K. Sastri and section P. Nayar, for the respondent, The Judgment of the Court was delivered by Hidayatullah C.J.
This is an appeal by Narayan Nathu Naik who was tried by the Sessions Judge, Thana for the murder of one Rattan on the night following 18th March, 1966 at about midnight.
He was convicted by the Sessions Judge under section 302. 134 of the Indian Penal code and sentenced to imprisonment for .life.
His appeal to the High Court was summarily dismissed .although the High Court recorded a brief note of the arguments which were raised before it and the replies to those arguments repelling them.
It is contended in this case that the appellant was entitled to at least one appeal and that his first appeal should have been properly considered in the High Court and the judgment of the High Court,, which according to the .learned counsel, reads like a dialogue between the court and counsel, is no judgment at all.
It appears that special leave was probably granted in this case, because of the unsatisfactory manner in which reasons were recorded.
The High Court need .not have recorded reasons if it was satisfied that the case was ,one for dismissal but if it thought that it had to go into the . evidence and to discus it, the proper course would have been to set the case down for a proper hearing and to give a con sidered judgment in the case.
We have considered this case on the evidence brought against the appellant and we are satisfied that the appeal must fail.
We give our reasons briefly.
There is some evidence that the appellant Narayan Nathu Naik and the deceased Rattan had some quarrel over property.
This, it is contended, was somewhat old and not very serious and that nothing untoward had happened, for the appellant to .have suddenly embarked upon the murder of rattan.
We need not consider the question of motive in this case if we are ,satisfied that the evidence that Narayan Nathu Naik was the assailant of Rattan, is acceptable.
The Medical evidence showed that Rattan died of a single injury which was a stab wound through the heart.
The left ventricle was cut and the heart was drained of all blood.
The pericardium had also a tear but on its upper reach and the evidence of the doctor who performed the autopsy shows that the pericardium was full of blood.
The clothes of the deceased were also profusely stained but no blood was found inside the house where the deceased was first sleeping, but some blood was found at the Ota where the dead body was found but the source of the blood could not be identified.
From this the learned counsel raised the contention that the scene of offence was probably not what the prosecution case described and his contention is wound up with the rest of the story given by the eye witnesses particularly the wife who named the appellant as one of the assailants.
Therefore we must turn to that story.
On the day in question, the deceased Rattan had gone to make some purchases.
At night he had not returned when the family took their meals and lay down to sleep.
In the house at that time were Rattan 's mother, Rattan 's wife and Rattan 's 135 'brother.
There were three students who had .,come to this house and were staying to appear at the S.S.L.C. examination.
The family distributed themselves as follows.
Inside the house Rattan 's wife lay down on the ground on a bed with her infant child.
The bed for Rattan was made on a swing nearby.
A lantern was burning and the door of the house was open.
Rattan returned at about 10 P.M. in the night.
As food had been taken by the rest of the family, a portion was set apart for Rattan.
According to his wife, Vimalabai, he took his meals without waking her up and after he had washed his hands, he threw some water on her face which woke her up.
He then lay down on the swing to sleep.
Vimalabai says that she also lay down to sleep and presumably she must have slept, because she says that she was woken up in the middle of the night by shouts from her husband.
Vimalabai 's evidence is that when she woke up, she found that her husband was in the grip of the appellant Narayan Nathu Naik at the door near the ota.
Rattan 's brother Kamlakar who had also been awakened by the shouts of the deceased also arrived there, but the appellant had stabbed Rattan.
Kamlakar caught hold of the appellant from behind around his waist, but when Rattan fell on the ground the appellant broke loose and ran away.
On their shouting and wailing, Jairam the uncle of Rattan (P.W.1.) and two other brothers of Rattan came on the scene.
They were living at a distance of about 1 1/2 furlongs from the house of Rattan.
Rattan is said to have spoken to his mother before he died that it was Narayan Nathu Naik who had attacked him.
The evidence is that it was Narayan Nathu Naik and this is brone out by the statements of Kamlakar (P.W.3), Manibai (P.W.4) and Vimlabai (P.W.5).
The two students who were also witnesses in the case made a state ment before the police involving Narayan Nathu Naik, but they later changed in the court and were declared hostile and cross examined.
We shall refer hereafter to their testimony in so far as they have admitted facts in support of the prosecution case.
The story therefore is of an attack in the middle of the .night upon Rattan by the appellant at the door of his hut.
The incident is said to have been witnessed by three persons whom we have mentioned and who are close relations of the deceased.
The argument is that the evidence of these witnesses should not be accepted because of their interest in Rattan and also because of certain contradictions in their testimony.
Apart from the fact that the High Court and the Court of Session have accepted their testimony and this Court does not go into evidence for the third time, we have read the evidence 136 of these witnesses and we have thoroughly checked it and we are satisfied that what has been stated by these witnesses is the true version of what happened on that fateful night.
The story is a simple one, of an attack in the middle of the night by an ,assailant who was not only grappled with but was seen and identified in the light.
The witnesses who have resiled have also stated that die occurrence took place at the door of the cottage.
They have also stated that there was sufficient light for them to see although they changed that they did not see the assailant nor heard what the victim stated to his mother about the appellant having assaulted him.
This version comes from the witnesses who no doubt are interested, but they are not interested enough to let the real assailant escape and charge someone else.
Report of this case was made almost immediately and in fact the police arrived within a couple of hours and the state ments were recorded the very next morning.
There was no time available to concoct a false case with such details against the appellant.
It was argued that the first information report was not pro perly recorded in the prescribed form but was writen down on a piece of paper and it was copied into the register for first information reports.
At first it was suggested that the first information report in the printed form was not produced in the case, but we find that it was so produced and that the Sub Inspector stated that he had copied it from a plain paper.
In our experience, we have seen several first information reports recorded on plain pieces of paper and then transcribed into the first information report register.
In fact if a written report is brought, it is verbatim copied into the first information report register.
There is no doubt that this was the first version of the incident given out by P.W. 1 Jairam when he went to the police station house to report about the occurrence.
There was no time to bring a false case against the appellant and to let the real assailant escape.
On the whole, we are satisfied that the evidence of the eye witnesses is believable.
The witnesses who resiled were the two students who were present at the house for the purpose of appearing at an examination.
They have answered a number of questions which clearly corroborate the evidence of the other witnesses.
For example, P.W. 7 Chintaman Gangaram Kulkarni stated that the light of some lamp was coming outside the door of the house and that when Kamlakar caught hold of the assailant Rattan fell down on the ground near the door of the Ota.
He also stated that Rattan 's mother went inside the house, brought water, tried to give water to Rattan, but he did not drink.
He also stated 137 that after hearing the cries,, Rattan 's uncles, his sister and her husband came there.
He admitted that Kamlakar told his uncle what had happened, he did not hear it.
He admited that it was true also that thereafter one of the uncles of the deceased Rattan.
went to the police station to make a report.
The other witness (P.W. 10) also stated quite clearly that at about 3 or 4 A.M. the police came to the, house and that his statement and those of two companions were recorded by the police at 7 A.M. the next morning.
He also admited that they all woke up when they heard the cry in the middle of the night and that Rattan 's, wife had also awakened and she had stood in the door of the house.
He admitted that the light was burning in the house and the door of the house was open and that the light of the lamp.
had spread over the ota of the house through the open door.
He also admitted that Rattan 's mother brought water from the house and poured in into the mouth of Rattan but he did not drink and all the inmates were crying aloud with the result that Rattan 's uncle Jairam, his two brothers, Rattan 's sister and her husband came there immediately after the crime.
Jairam made enquiries with Kamalakar and Naibai how it had happened and that Kamlakar told something to Jairam but he said that he did not hear it.
All this corroborates the evidence of the, three eye witnesses except as to the identity of the appellant.
We accept the evidence of the eye witnesses.
The medical evidence was used to challenge the scene of offence on the ground that there were no blood marks found, but, in our opinion, the man might bleed internally after receiving, stab wound in the heart.
The witnesses have stated that Rattan was stabbed on the spot where the body was found after the occurrence took place.
Blood was in fact found at the spot but the source of the blood could not be ascertained There is no, reason to think that it was blood of some animal.
On the whole we are satisfied that this case was proved satisfactorily.
The appeal.
therefore, fails and is dismissed.
Y.P. Appeal dismissed '.
| IN-Abs | The first information report in a murder case was written on a piece of paper, and was copied into the register for first information reports.
The Sessions Judge convicted the appellant on the evidence, even though the first information report was not recorded in the prescribed form.
His appeal to the High Court was summarily dismissed although the High Court recorded a brief note of the arguments which were raised before it and the replies to those arguments repelling them.
Dismissing the appeal, this Court HELD : The High Court need not have recorded reasons if it was satisfied that the case was one for dismissal but if it thought that it had to go into the evidence and had to discuss it, the proper course would have been to set the case down for a proper bearing and to give a considered judgment in the case.
The first information report was properly written.
Several first information reports are recorded on plain pieces of paper and then transcribed into the first information report register.
In fact if a written report is brought, it is verbatim copied into the first information report register.
In this case there was no time to bring a false case against the appellant and to let the real assailant escape.
[134 C; 135 E F] On the evidence, the appellant was rightly convicted.
|
Appeal No. 431 of 1967.
Appeal by special leave from the judgment and decree dated September 1, 1966 of the Andhra Pradesh High Court in Second Appeal No. 719 of 1962.
R. Venugopal Reddy and K. Jayaram, for the appellants.
B. Parthasarathy, for the respondent.
The Judgment of the Court was delivered by Hegde, J.
The point in controversy in this appeal by special leave is whether the properties in dispute herein constitute a hereditary archakatwam service inam granted to the plaintiff 's predecessors or whether they are the properties of the appellant temple.
The High Court and the courts below have come to the conclusion that the appellant 's contention that it is the owner of the suit properties is barred by res judicata.
That conclusion is challenged in this appeal.
In the suit under appeal the respondent who is an archaka in the appellant temple prayed for a declaration that the suit properties had been granted to his family as archakatwam service Inam land and that the appellant has no right therein.
He has also asked for an injunction restraining the appellant from interfering with his possession and enjoyment.
The appellant denied the respondent 's claim.
The High Court as well as the appellate court have upheld the respondent 's claim on the ground that the appellant 's claim is barred by res judicata.
130 In 1931 the Madras Religious Endowments Board framed a scheme for the better management of the appellant temple.
At that time the question arose whether the suit properties were the properties of the temple.
The respondent 's family put forward the claim that those properties had been granted to them as archakatwam service inam and consequently those properties were not temple properties.
That contention was accepted by the Board.
It is said that the said decision operates as res judicata against the claim made by the appellant.
On behalf of the appellant it was urged that the proceeding before the Board under section 57(1) of the Madras Religious & Charitable Endowments Act, 1927 (in short the Act) was a summary proceeding, the question as to the title to the suit properties was not directly and substantially in issue in that proceeding and as such the decision in question does not operate as res judicata in the present suit.
Section 57(1) as it stood in 1931 reads thus "When the Board is satisfied that in the interest of the proper administration of the endowments of a temple, a scheme of administration should be settled, the Board may after consulting in the prescribed manner, the trustee, the committee, if any and the persons having interest by order settle a scheme of administration for the endowments of such temple".
Sub section (3) of that section says "Every order of the Board under this scheme shall be published in the prescribed mariner.
The trustee or any person having interest may within six months of the date of such publication institute a suit in the court to modify or set aside such order.
Subject to the result of such suit every order of the Board shall be final and binding on the committee, the trustee and all persons having interest.
" It is not disputed that the decision of the Board holding that the properties in question were archakatwam service inam lands was not challenged by means of a suit under section 57(3).
Therefore the said decision has become final.
We have now to see what is the effect of the finality in question.
According to the appellant as the title to the suit properties was not directly and substantially in issue in the proceeding before the Board and the decision thereon being only incidental, the same cannot operate as res judicata.
In support of the contention that the decision rendered by the Board was only an incidental one, it was urged that the essential purpose of framing of a scheme for the management of temple is 131 to see that the temple 's administration is carried on properly; and" in such a proceeding it is not necessary to determine what all properties the temple owns.
We are unable to accede to this contention.
A scheme framed for the better management of a temple must necessarily show therein the properties of the temple.
Before deciding to frame a scheme the authority framing the scheme must know the nature and extent of the trust funds.
There can be no scheme of management of a temple in vacuum.
As observed by the Judicial Committee in Chotalal Lakhmiram and ors.
vs Manohar Ganesh Tambekar and ors.(1) : "Until the trust funds are ascertained, it seems impossible that any scheme can be settled." Varadachariar J. in (Sri Mahant) Sitaram Dass Bavaji vs Madras Religious Endowment Board, Madras and OrS;(2) observed.
that the power given by section 63 to the Board for framing a scheme for the management of a mutt, a power similar to that conferred on the Board under section 57 for framing scheme for the management of a temple carries with it the power to settle what the properties of the institution are.
A scheme for proper administration of a temple must necessarily provide for the proper administration of its assets.
The persons empowered to manage must know what properties are to be governed by the scheme and what the resources of the temple are.
It is not correct to say that the power conferred on the Board.
under section 57 is a summary power as urged by the learned Counsel for the appellant.
A decision rendered by the Board under that section is final subject to the result of the suit contemplated in the said section.
Section 57 provides for an exhaustive enquiry in the matter of framing scheme, firstly by the Board and then by the Court.
The trial before the court has to be held in the same manner as any other suit that may be instituted under the provisions of the Civil Procedure Code.
In Arikapudi Balakotayya vs Yadlapalli Nagayya(3); a Division Bench of the Madras High, Court held that the order made by the District Court under section 84(2) of the Act operates as res judicata in a subsequent proceeding.
Under section 84(1) the Board is given Dower to decide if any dispute arises as to (a) whether an institution is a math or temple as defined in the Act; (b) whether the trustee is a hereditary trustee a_ defined in the Act or not and (c) whether any property or money endowed is a specific endowment as defined in the Act or not.
(2) of that section provides that any person affected by a decision under sub section
(1) may, within six months apply to the Court to modify or set aside that decision.
Sub s (3) thereof provides for (1) I.L.R. XXIV Bom.
p. 50.
(2) A.I.R. 1937 Mad. 106.
(3) A.I.R. (33) 132 an appeal to the High Court against the order of the District Judge.
Sub section
(4) of that section provides that subject to the result of an application under sub section
(2) or an appeal under sub section
(3), the decision of the Board shall be final.
In Balakotayya 's case( '1) while examining the effect of a decision under section 84(2), it was observed that the doctrine of res judicata is (not confined to a decision in a suit it applies to decisions in other proceedings as well.
But how far a decision which is rendered in other proceedings will bind the parties depends upon other considerations one of which is whether that decision determines substantial rights of parties and the other is whether the parties are given adequate opportunities to establish the rights pleaded by them.
The doctrine of res judicata is not confined to the limits prescribed in section 11, Civil Procedure Code.
The underlying principle of that doctrine is that there should be finality in litigation and that a person should not be vexed twice over in respect of the same matter.
In the proceedings with which we are concerned in this appeal one of the important question the Board had to decide was whether the properties in dispute are archakatwam service inam properties.
The Board 's decision which was adverse to the temple, affected the rights of the temple in a substantial manner.
It was open to the temple to get its right established by means of a suit under section 57(3).
It failed to take that step.
Therefore the decision of the Board has become final and binding on the temple.
In State of Madras vs Kunnakudi Melamatam alias Annathana Matam(2) this Court held that a decision of the Board under section 84(1) which had become final in the absence of any application to the court to set aside that decision under section 84(2), holding that the institution was outside the purview of the Act, bars the board from levying any contribution on the institution under the Act subsequently.
In our judgment the decision of the Board in 1931 that the suit properties are not temple properties operates as res judicata in the present proceeding.
In the result this appeal fails and the same is dismissed with costs.
G.C. Appeal dismissed.
(1) A.I.R. (33) (2) (1962) 2 M.L. J. p. 13.
| IN-Abs | In 1931 the Madras Endowments Board framed a scheme for the better management of the appellant temple.
At that time the question arose whether the suit properties were the properties of the temple.
The respondent 's family put forward the claim that those properties had been granted to them as archakatwam service inam and consequently those properties were not temple properties.
That contention was accepted by the Board.
The Board 's decision was not challenged by the appellant by a suit under section 57(3) of the Act.
The suit under appeal was filed by the respondent praying for a declaration that the suit properties had been granted to his family as archakatwam service inam, and that the appellant had no right therein.
An injunction restraining the appellant from interferring with the respondent 's possession was also prayed for.
The appellant resisted the claim.
The lower courts as well as the High Court upheld the respondent 's claim on the ground that the appellant 's claim was barred by res judicata.
In this Court it was urged on behalf of the appellant that the Board 's decision could not be regarded as res judicata because (i) the proceeding before the Board was a summary proceeding, (ii) the question as to the title of the suit properties was not directly and substantially in issue in that proceeding since the essential purpose of the framing of a scheme for the management of a temple is to see that the administration is carried on properly and not to determine what properties the temple owns.
HELD: (i) It is not correct to say that the power conferred on the Board under section 57 is a summary power.
A decision rendered by the Board under that section is final subject to the result of the suit contemplated in the said section.
Section 57 provides for an exhaustive enquiry in the matter of framing scheme, firstly by the Board and then by the Court.
The trial before the Court has to be held in the same manner as any other suit that may be instituted under the provisions of the Civil Procedure Code.
[131 E F] (ii) (a) The doctrine of res judicata is not confined to a decision in a suit but it applies to decisions in other proceedings as well.
But how far a decision which is rendered in other proceedings will bind the parties depends upon other considerations one of which is whether the decision determines substantial rights of parties and the other is whether the 'parties are given adequate opportunities to establish the rights pleaded by them.
The doctrine of res judicata is not confined to the limits prescribed in section 11 Civil Procedure Code.
The underlying principle of that doctrine is that there should be finality in litigation and that a person should not be vexed twice over in respect of the same matter.
[132 B C] 129 (b) A scheme framed for the better management of a temple must necessarily show therein the properties of the temple.
Before deciding to frame a scheme the authority framing the scheme must know the nature and extent of the trust funds.
There can be no scheme of management of a temple in vacuum.
[131 A B] In the previous proceedings one of the important questions the Board had to decide was whether the properties in dispute were archakatwam service inam properties.
The Board 's decision which was adverse to the temple affected the rights of the temple in a substantial manner.
It was open to the temple to get its right established by means of a suit under section 57(3).
It failed to take that step.
Therefore, the decision of the Board in 1931 that the suit properties were not temple properties operated as res judicata, and the appeal must fail.
[132 D G] Chotalal Lakhmiram & Ors.
vs Manohar Ganesh Tambekar & Ors.
I.L.R. XXIV Bom.
p. 50, (Sri Mahant) Sitaram Dass Bavaji vs Madras Religious Endowment Board, Madras, A.I.R. 1937 Mad. 106, Arikapudi Balakotayya vs Yadlapalli Nagayya, A.I.R. (33) and State of Madras vs Kunnakudi Melamatam alias Annathana Matam, , applied.
|
minal Appeals Nos.
153, 155 and 172 of 1967.
139 Appeals by special leave from the judgment and order dated April 3, 1967 of the Bombay High Court in.
Criminal Appeals Nos. 617, 621, 619 and 620 of 1965.
A. section R. Chari, N. H. Hingorani and K. Hingorani, for appellant No. 1 (in Cr. A. No. 153 of 1967).
N. H. Hingorani and K. Hingorani, for appellant No. 2 (in Cr. A. No. 153 of 1967).
A. section R. Chari, and N. N. Keswani, for appellant (in Cr. A. No. 155 of 1967).
W. section Barlingay and A. G. Ratnaparkhi, for the appellant (in Cr. A. No. 172 of 1967).
M. section K. Sastri and section P. Nayar, for the respondent (in all the appeals).
The Judgment of the Court was delivered by Dua, J.
The four appellants in these three appeals by special leave were tried in the court of the Special judge for Greater Bombay on a charge of conspiracy punishable under section 120 B, I.P.C. Accused No. 1 (Shiv Kumar Lokumal Bhatia) was a godown clerk; accused No. 2 (Hargun Sunderdas Godeja) was the Senior Godown Keeper and accused No. 3 (Hundraj Harchomal Mangtani) was the Godown Superintendent at the General Motors Godown at T Shed, Sewri, Bombay, belonging to the Food Department of the Government of India.
Accused No. 4 (Shankar Maruthi Phadtare) was a driver of Truck No. 2411.
The allegation against them was that all these accused during the month of July, 1963 were parties to criminal conspiracy to commit criminal breach of trust in respect of 1060 bags of red wheat which were released from the ship section section Hudson on July 7, 1963 at Bombay for storing them in the G M.2 Godown at Sewri.
In pursuance of this conspiracy, it was alleged, they had dishonestly and fraudulently misappropriated or converted to their own use 80 bags of red wheat out of 1060 bags released from the ship.
Accused Nos. 1, 2 and 3 were also charged under section 409 read with section 34, I.P.C., section 5(2) read with section 5(1)(d) of the Prevention of Corruption Act.
1947 read with section 34, I.P.C., section 5(2) read with section 5(1) (c) of the Prevention of Corruption Act read with section 34, I.P.C. and section 477 A read with section 34, I.P.C. The learned Special Judge on a consideration of the evidence on the record held that the prosecution has succeeded in proving conspiracy on the part of all the four accused to commit 140 criminal breach of trust in respect of the 80 bags offered wheat Accused Nos. 1, 2 and 3 were also held to have gained pecuniary advantage and further to have altered the records of the T Shed.
Holding the offences to be serious in view of the general shortage of foodgrains in the country the court felt that the case called for deterrent sentences.
Under section 120 B I.P.C. all the accused were sentenced,, to rigorous imprisonment for four years.
Accused Nos. 1, 2 and 3 were in addition held guilty under section 409, I.P.C. read with section 34, I.P.C. and under section 5 (2) read with section 5 (1) (c) of the Prevention of Corruption Act read with section 34, I.P.C., under section 5(2) read with section 5(1)(d) of Prevention of Corruption Act read with section 34, I.P.C. and also under section 477 A read with section 34, I.P.C. and sentenced to rigorous imprisonment for four years on each of these four counts,.
the sentences to be concurrent.
On appeal the High Court confirmed the order of the trial court as against accused No. 4 and dismissed his appeal.
The conviction of accused No. 1 under section 5(2) read with section 5(1) (c) of the Prevention of Corruption Act read with section 34, I.P.C. was set aside.
But his conviction and sentence under section 120 B, I.P.C. and under section 5(2) read with section 5(1)(d) of the Prevention of Corruption Act read with section 34, I.P.C. as also under section 477 A read with section 34, I.P.C. was confirmed.
His conviction under section 409 read with section 34, I.P.C. was altered to one under section 409, I.P.C. but without altering the sentence.
The convictions of accused Nos. 2 and 3 under section 409, I.P.C. read with section 34, I.P.C. as also under section 5 (2) read with section 5 (1 ) (c) of the Prevention of Corruption Act read with section 34, I.P.C. were set aside but their conviction and sentence under section 120 B, I.P.C. and under section 5(2) read with section 5(1)(d) of the Prevention of Corruption Act read with section 34, I.P.C. was confirmed.
In this Court Shri Chari questioned the appellants convic tion on the broad argument, which was indeed the main plank of his challenge against the impugned order, that there was great confusion in the matter of storage of stocks of the foodgrains in the T Shed and there was complete want of regularity and considerable inefficiency in the matter of keeping the records of the arrivals and storage of the stocks with the result that it would be highly unsafe to rely on the evidence relating to the records of the stocks in the T Shed, for holding the appellants guilty of the criminal offences charged.
The learned counsel appearing on behalf of the other appellants, while generally adopting Shri Chari 's arguments, supplemented them by reference to the distinguishing features of the case against their indi vidual clients.
141 The counsel in the course of their arguments emphasised that the prosecution, in order to prove the negative, has the difficult task of affirmatively establishing by unimpeachable evidence that 80 bags which were the subject matter of the charge were in fact not received in the T Shed.
The prosecution must, said the counsel, bring the charge home to every accused person beyond reasonable doubt.
The submission as developed by all the counsel representing the appellants did seem on first impression to be attractive but on a deeper probe we consider it to be unacceptable.
It is no doubt true that the onus on the prosecution is of a negative character and also that the failure on the part of the accused to give evidence on the question as to when, where and to whom.
the controversial 80 bags were delivered at the point of unloading a fact on which the driver of the truck and those whose duty it was to receive the goods at the T Shed could give the best and the most direct information cannot under our law give rise to any presumption against them.
The criminal courts holding trial under the Code of Criminal Procedure have accordingly to bear in mind the provisions of section 342 A of the Code and to take anxious care that in appreciating the evidence on the record and the circumstances of the case, their mind is not influenced by such failure on the part of the accused.
But that does not mean that such negative onus is not capable of being discharged by appropriate circumstantial evidence.
If the circumstantial evidence which is trustworthy and which with unerring certainty establishes facts and circumstances the combination of which, on reasonable hypothesis, does not admit of any safe inference other than that of the guilt of the accused then there can hardly be any escape for him and the Court can confidently record a verdict of guilty beyond reasonable doubt.
The court would, of course, be well advised in case of circumstantial evidence to be watchful and to ensure that conjectures or suspicions do not take the place of legal proof.
The chain of evidence to sustain a conviction must be complete and admit of no reason able conclusion consistent with the innocence of the accused.
In the present case it is fully proved and is indeed ,not disputed on behalf of the accused that truck No. 2411 with the 80 bags of red wheat did leave the dock and did pass the yellow gate which is the check point where a register is kept by the Regional Director of Food.
In this Register entries are made when a truck leaves the yellow gate.
The truck in question left the yellow gate at 1 1.20 a.m. on the second trip as deposed by Parmar, (P.W.8).
And this is not disputed.
According to the accused the 80 bags in question were actually delivered at the appropriate place at the T Shed and the truck chits duly given to the truck driver in token of their receipt and indeed D.W. 1 war, 142 produced by accused No. 4 to prove the actual delivery.
The prosecution case, on the other hand, is that those bags were not, delivered at the T Shed but were misappropriated.
There is no dispute about the procedure of delivery at the T Shed of the goods brought from the dock.
This procedure in regard to the wheat brought on February 7, 1963 may briefly be stated.
The foodgrains consisting of 1060 bags of red wheat had arrived by section section Hudson at the Alexandra docks.
The trucks were loaded with the wheat bags to be taken to the T Shed, Sewri.
Four truck chits were prepared at the docks for each truck out of which two were given to the truck driver concerned.
The driver had to give the truck chits at the godown at the time of the delivery of the bags.
One such chit would be returned to him after endorsing acknowledgment of the receipt of the bags, the other chit being retained at the godown.
The one given to the driver was meant to authorise the receipt of hire charges from the food department.
At the godown, according to the general pro cedure, the driver of the trucks had to give the truck chits to one of the godown clerks there.
A batch of gangmen under a particular Mukaddam had generally to unload the goods from the truck allotted to him and no Mukaddam with his gangmen could unload the goods from a truck which was not allotted to him for the purpose.
The gangmen had, therefore, to unload the goods as instructed by the clerk and the senior godown keeper.
After unloading the bags cooly voucher was to be prepared and the daily diary maintained at the godown written: the kutcha chit was prepared by the godown keeper after the unloading and weighment of the goods.
Only 10% of the bags were as a matter of practice to be actually weighed.
The truck movement chart exhibit 10 shows the order in which the various trucks left the dock for the T Shed on July 7, 1963 as also their contents and the truck chit numbers.
Truck No. 2411 with 80 bags of red wheat figures twice in this document but it is not disputed that trip which concerns us is entered at sl.
No. 9.
Truck chit number of this trip is 69 and the truck left the dock at 11.
15 hours.
The truck at serial No. 8 (immediately preceding the trip in question) in this document is No. 2248 with 80 bags and its chit No. is 68.
This truck left the dock at 11 a.m.
The truck at sl.
No. 10 (immediately next after the one in dispute) is 1477 with 65 bags of red wheat whose truck chit No. is 72.
This truck left the dock at 11.45 hrs.
There were in all 14 trips on July 7, and indeed, this is also established by oral evidence and is not denied on behalf of the accused.
We may now turn to the tally sheet for July 7, The first thing to be noticed in this document is that it only shows the arrival of 13 trucks.
In other words accord 143 ing to this document there were only 13 trips of the trucks though the Truck Movement Order exhibit 10 clearly shows that there were 14 trips and on behalf of the accused also it was asserted that there were 14 trips.
We find in Exhibit 41 that after sl. No. 8 which relates to truck No. 2488 with its chit No. 68 and which arrived at the T Shed at 11.58 a.m there is recorded at serial No. 9 the arrival of truck No. 7866 with chit No. 70 and at sl.
No. 10 the arrival of truck No. 1477 with chit No. 72 and at sl.
No. 11 the arrival of truck No. 8769 with chit No. 71.
These three trucks are shown to have arrived at the unloading point at 1.
15 p.m.
It was explained at the bar that from 12 noon to 1 p.m. no work was done, it being lunch interval.
It has been so stated by P. section Shinde, Assistant Director, Vigilance Branch, as, P.W. 18.
Items at sl.
12 and 13 relate to trucks Nos.
2752 .and 1289 with their respective chit nos.
73 and 74.
It is thus clear that chit No. 69 is missing in this sheet.
Bapu T. Pingle produced as D.W. 1 claims to have been in truck No. 2411 as a wamer with the driver, accused No. 4, on July 7, 1963.
According to him this truck made two trips on that day between the dock and the T Shed and on the second trip the other wamer by name Yashwant had taken the truck chit from the clerk concerned after the same was duly signed.
This witness has deposed about the procedure at the godown which is the same as was suggested on behalf of the prosecution.
The man at the godown used to direct the drivers to the place of unloading the goods and, to quote his own words, "unless an entry was made in this Book (Tally Book) we were not allowed to go ahead at all.
" So, according to his evidence, unless an entry is made in the Tally Book the truck could not proceed to the unloading point to deliver the goods brought from the dock.
Exhibits 10 and 41 in our view affirmatively prove that 80 bags of red wheat carried by truck No. 241 1 on July 7, 1963 on the second trip did not reach the T Shed at all.
This finds support, even from the testimony of D.W. 1.
In view of this documentary evidence with which no fault has been found the evidence regarding irregularities in the record of stock at the T Shed loses all importance.
It may be pointed out that July 7, 1963 was a Sunday and as deposed by Parmeshwar D. Menon (P.W. 1) on that day all gates were not opened.
But this . is not all.
Though in the tally chits time of the arrival of the truck at the unloading point is given in the truck chit in question that time is not shown.
According to the evidence of Roque (P.W. 6) on the reverse of all truck chits Exts.
15 to 26 and Exts.
li A and 11 B entries are made in the handwriting of accused No. 1.
In Exhibits 15 to 26 in addition to the arrival and denarture of the trucks, progressive totals at the back of each of them is also stated, but in exhibit ll B there is no progressive total and in exhibit 11 A there is no signature of accused No. 1 144 though the progressive total is mentioned as 240.
Exhibuit 11 B, it may be pointed out, appertains to the trip by truck No. 2411 on July 7, 1963.
Shri Shinde, (P.W. 18) who was Assistant Director, Vigilance Branch at the relevant time has deposed that according to the weighment register exhibit 69 only 98 bags of S.S. Hudson were weighed and this was 10% of 980 bags.
This document bears the signatures of accused No. 1.
Exhibit 41, carbon copy of the Arrival Tally sheet which was sent to the head office for showing if there was any detention of trucks in the godown ' does not, as already noticed contain any entry in respect of the truck in question.
The reverse of exhibit 41 is not printed in the printed paper book but we have checked up from the original record that witness Shinde is right.
Non inclusion of the entry of the truck in question in exhibit 41, is in our view, very material.
In exhibit 53 the daily Arrival Tally book for July 7, 1963 the entry at sl.
No. 68 shows departure of the truck in question at 12.15 afternoon whereas in exhibit 41 it is ,shown as at 1. 15 p.m. and in exhibit 11 B at 12.15 afternoon.
This, according to P.W. 18, was designed to show that the truck was ,unloaded during the recess period which, according to evidence ,on the record, was not done.
The explanation of accused No. 1 is that on July 7, 1963 he was not feeling well though he attended the office.
He had to get chits from the warners and count the number of bags in the truck and order the labourers to unload them from the trucks.
The suggestion appears to be that due to these multifarious duties and due to his being unwell he had perforce to enter the truck chits in the tally books only when he could get time and meanwhile he had no other alternative but to put the unentered truck chits in his pocket.
According to him, it was on July 10, 1963 when he was giving his clothes to the washerman that he discovered, the solitary chit in question left by mistake in his pocket.
The explanation is far from satisfactory and we are not impressed by it.
It may in this connection be pointed out that July 7, 1963 was a Sunday and the three accused persons were specially called for receiving the grain that had arrived by the two steamers.
The amount of work to be done on that day can thus scarcely be ,considered to be excessive.
And then the fact that only one solitary truck chit relating to the 80 bags in question should happen to have remained in the pocket of accused No. 1 to be discovered only on July 10, 1963 is also not without some significance.
We agree with the High Court in holdings, this explanation to be unconvincing and that the 80 bags in question were in fact not received at the T Shed on July 7, 1963.
In 145 our opinion, the material on the record to which our attention has been invited fully supports the conclusions of the High Court.
We may appropriately repeat what has often been pointed out by this Court that under article 136 of the Constitution this Court does not normally proceed to review the evidence in criminal cases unless the trial is vitiated by some illegality or material irregularity of procedure or the trial is held in violation of rules of natural justice resulting in unfairness to the accused or the judgment or order under appeal has resulted in grave miscarriage of justice.
This Article reserves to this Court a special discretionary power to interfere in suitable cases when for special reasons it considers that interference is called for in the larger interests of justice.
As observed by this Court in Chidda Singh vs The State of Madhya Pradesh(1) this Article cannot be so construed as to confer on a party a right of appeal where none exists under the law.
We, however, undertook in this case to go through the evidence, to which our attention was invited to see whether or not the conclusions of the High Court are insupportable.
We are not persuaded to hold that in this case there is any cogent ground for interference with those conclusions.
These appeals according fail and are dismissed.
V.P.S. Appeals dismissed.
(1) Crl.
125 of 1967 decided on 12th January, 1968.
| IN-Abs | The appellants were charged with the offences of criminal conspiracy and criminal breach of trust in respect of 80 bags of wheat.
They were ,convicted by the High Court for various offences under the Penal Code and the Prevention of Corruption Act.
The evidence disclosed that there were some irregularities in the matter of keeping the records relating to storage of stocks at the storage sheds.
It was therefore contended in .appeal by special leave, to this Court, that the evidence should be reviewed to see if the prosecution had established by unimpeachable evidence that the 80 bags were in fact not received at the storage shed and, that no presumption should be drawn against the appellants for their failure to give evidence as to where and to whom the bags were delivered.
HELD : Non appearance of an accused as a witness in his own defence does not give rise to any presumption against him.
[141 C] HELD, also : Negative onus can also be discharged by circumstantial evidence if it is trustworthy and with unerring certainty establishes facts and circumstances, the combined effect of which leads to the only safe inference of guilt.
The court has, however, to be watchful to ensure that conjectures or suspicions do not take the place of proof.
The chain ,of circumstantial evidence must be complete and admit of no reasonable conclusion consistent with the innocence of the accused.
[141 E F] HELD further : under article 136 this Court does not normally proceed to review the evidence in criminal cases unless the trial is vitiated by some illegality or material irregularity of procedure or the trial is held in violation of rules of natural justice resulting in unfairness to the accused or the judgment or order under appeal has resulted in grave miscarriage of justice.
This Article reserves to this Court a special discretionary power to interfere in suitable cases when for special reasons it considers that interference is called for in the larger interests of justice.
[145 A C] HELD further : This Article cannot be so construed as to confer ,on a party right of appeal where none exists under the law.
[145 C] In the present case there were irregularities in the storage records and the evidence was looked into see if the charge as framed was proved.
[145 C D] [An examination of the entire evidence, oral and documentary, however, showed, that there was enough evidence to support the conviction and that the irregularities were unimportant.] [145 A] Chidda Singh vs State of Madhya Pradesh, Cr. A. No. 125 of 1967 dt. 12 1 1968, referred to.
|
Appeals Nos.
2 1 21 and 2122 of 1969.
Appeals from the judgment and order dated July 18, 1969 of the Andhra Pradesh High Court in W. P. Nos. 464 and 602 of 1965.
D. Narasaraju, A. Subba Rao and K. R. Sharma, for the appel lant (in both the appeals) M. C. Setalvad P. Parameswara Rao, V. Rajagopal Reddy, S, L. Setia and K. C. Dua, for respondent No. 1 (in both the appeals).
V. A. seyid Muhammad and section P. Nayar, for respondent No. 2 (in both the appeals).
156 P. Ram Reddy and A. V. V. Nair, for respondents Nos. 3 and 4 (in C.A. No. 2121 of 1969) and respondent No. 3 (in C.A. No. 2122 of 1969).
The Judgment of HEGDE and GROVER, JJ. was delivered by HEGDE, J. SHAH, J. delivered a dissenting opinion : Shah, J. I agree that Appeal No. 2122 of 1969 must be dismissed.
I also agree that if the states to dispose of the application for grant of a mining lease within the time prescribed by the rules, the failure,results in refusal to grant the lease.
The High Court was in error in holding that in the absence of a provision enacting, that even if the application stands rejected for failure to pass an order within the time prescribed, the State Government has power to issue a licence.
The High Court was again in error in holding that because of the representations made by the State before Bhimasankaran, J., in Writ Petition No. 1237 to 1957 the State Government were estopped from contending that the application was by the first respondent must be deemed to have been refused.
But I am unable to agree that the Central Government was competent in exercise of its power of review, against the order of the State Government made in compliance with the order of Basi Reddy, J. in Writ Petition No. 888 of 1957, to set aside the order so as in effect to overrule the, judgment of the High Court.
The relevant facts may be recalled.
The Central Government made an order on September 25, 1957, in the review application filed by the first respondent holding that his application was premature and that it was for the State Government to dispose of the application within six months of August 31, 1957.
The first respondent then moved Petition No. 888 of 1957 for a mandamus directing the State Government to dispose of his application.
By order dated November 4, 1958, Basi Reddy, J., observed that r. 57(2) as amended by S.R.O. No. 2753 "is intended for the benefit of the applicant, and does not relieve the State from per forming the statutory functions imposed on it under rule 17(1) and 17(2) viz. of granting or refusing the licence".
The State Government then heard the application and granted the mining lease for which the first respondent had applied on September 15, 1953.
Against that order the appellant moved a review petition.
The Central Government by order dated February 15, 1965, allowed the review petition and set aside the grant in favour of the first respondent.
Granting that the High Court erroneously issued a writ of mandamus directing the State Government to perform its func tions it was, in my judgment, not open to the Central Government 157 in effect to exercise appellate authority over the judgment of the High Court.
If the order was erroneous it could be set aside by an appropriate proceeding before a Division Bench of the High Court or before this Court.
But the Central Government had no power to set aside the order on the view that the High Court had reached an erroneous conclusion.
To accede to the contention that the executive has the power, when exercising quasi judicial functions, to sit in appeal over the decision of the High Court is to destroy the scheme of division of powers under our Constitution.
I see no reason for making a distinction be tween the effect of an order made by the High Court and carried out by the State, and an order made by the High Court and confirmed in appeal by this Court and carried out by the State.
In my view article 141 of the Constitution has no bearing on that question.
If this Court decided a question of law or of fact or a mixed question of law and fact arising in an appeal against an order passed by the High Court in a writ petition against the action of the State Government granting or refusing to grant a licence, it would not, in my judgment, be open to the Central Government, hearing a review petition against the order of the State Government in compliance with the order of this Court, to set aside the order so as to upset the order of this Court.
That is so,; not because of article 14 1, but I because neither the Legislature nor the executive is invested with powers to supersede judgments of Courts.
The Legislature may if competent in that behalf change the law but cannot supersede a judgment of the Court.
The executive has no power to change the law, and no power to supersede the judgment of the Court.
It was, however, said that the appellant was not impleaded as a party to Writ Petition No. 888 of 1957, and he could not seek redress in a superior court against the order of Basi Reddy, J.
But it is settled by a long course of authorities that a person who has not been made a party to a proceeding may still appeal with leave of the appellate Court, provided he might have properly been made a party to the proceeding : see Re. "B " an Infant.(1).
In In re.
Securitie Insurance Company(2) Lindley, L.J., observed at p. 413 : "I understand the practice to ' be perfectly well settled that a person who is a party can appeal (of course within the proper time) without any leave, and that a person who without being a party is either bound by the order or is aggrieved by it, or is prejudicially affected by it, cannot appeal without leave.
It does not require.
much to obtain leave.
If a person alleging him (1) C.A. (2) 158 self to be aggrieved by an order can make out even a prima facie case why he should have leave he will get it; but without leave he is not entitled to appeal.
" The rule has been accepted by the High Courts in India : see The Province of Bombay vs Western India Automobile Associa tion;(1) Ponnalagu vs State of Madras;(2) and Pullayya vs Nagbhushanam.
(3) The appellant could undoubtedly have been made a party to a petition before the High Court.
lie could, therefore, challenge the correctness of the order made by Basi Reddy, J. No objection could be raised against the grant of leave to him to appeal ,on the ground that he was not a party to the Writ Petition No. 888 of 1957.
In my judgment, therefore, Appeal No. 2121 of 1967 must also fail.
Hegde, J.
These appeals by certificate arise from the common judgment of the High Court of Judicature at Andhra Pradesh in Writ Petitions Nos.
464 and 602 of 1965.
The appellant herein was the petitioner in Writ Petition No. 602 of 1965 and the 5th respondent in Writ Petition No. 464 of 1965.
In this case, it will be convenient to formulate the issues arising for ' decision after setting out the relevant facts.
Amrutham Kotaiah Naidu, the 1st respondent in these appeals applied for the grant of a mining lease in respect of 915 acres and 18 cents of lands in Appalanarasinmhapuram hamlet of Cheruvumadhavaram in Khammameth Teluqa of Warangal District of the then Hyderbad State, on September 15, 1953.
After production of agreement with the pattedars lease in respect of lands comprising 57 acres 25 Gunthas was granted to him as per the order of the Director of Mines and Geology dated January 9, 1954.
That order is silent as regards the other areas included in his application.
Thereafter the respondent was pressing the State Government to , rant him on lease the remaining areas included in his application.
Meanwhile on November 21, 1955, the appellant applied for the grant of a mining lease of a portion of the area for which the respondent had earlier submitted his application.
The State Government granted on mining lease to various persons some of the areas in respect of which the respondent had asked for a mining lease.
Obviously aggrieved by those grants the respondent moved (1) I.L.R. (2) I.L.R. (3) I.LR.
F.B. 159 the Central Government under rule 57 of the Mineral Concession Rules, 1949 (to be hereinafter referred to as 'rules on December 8, 1955, seeking a directicon to the State Government to grant to him the lease asked for by him by his application of September 15, 1953.
He further requested the Central Government to direct the State Government to stop granting further areas to other appli cants in Appalanarasimhapuram village pending investigation of the matter and pending decision of the Central Goverrunent.
Meanwhile on December 27, 1955, the State Government granted on mining lease 1 acre and 20 cents of land to the appellant from out of the area included in the 1st respondents application.
On July 18, 1956, the Central Government dismissed the review petition made by the 1st respondent on December 8, 1955 with these observations "Sir, I am directed to refer to your application dated the 8th December, 1955, on the subject and to say that after careful consideration of the facts stated therein, the Central Government have come to the conclusion that there is no valid ground for interfering with the decision of the Government of Hyderabad, rejecting your application for grant of mining lease for iron ore in Appanarasimhapuram and Raigudam villages, Khammameth district.
Your application for revision is, therefore, rejected.
Yours faithfully, Sd/ G. C. Jerath, Under Secretary to the Government of India.
" Evidently the Central, Government proceeded on the basis that the order of the State Government dated January 9, 1954 granting 57 acres and 20 cents of land to the 1/st respondent, by implication amounted to a rejection of his claim in respect of the other areas.
Meanwhile on September 15, 1956, some of the rules were amended.
After rule 28(1) anewsub rule 28(1 A)was inserted.
That sub rule reads : "Every application under rule 27 shall be disposed of by the State Government within 9 months from the date of receipt of the application.
" At the same time rule 57 was also amended.
Amended rule 57 reads thus : (1) "Application for review. (1) Where a State Government passes as under. (i) refusing to grant a certificate of approval, prospecting license or mining lease; 160 (ii)refusing to renew a certificate of approval, prospecting license or mining lease; (iii) cancelling a prospecting license or mining lease; (iv) refusing to permit transfer of a prospecting license or any right, title or interest therein under clause (iv) of sub rule (1) of rule 23 or a niping lease or any right, title or interest therein under rule 37, it shall communicate in writing the reasons for such order to the person against whom the order is passed and any person aggrieved by such order may, within two months of the date of receipt of such order, apply to the Central Government for reviewing the same.
(2) Where a State Government has failed to dispose of an application for the grant or renewal of a certificate of approval or prospecting license or a mining lease within the period prescribed therefore in these Rules, such failure shall, for the purpose of these rules, be deemed to be a refusal to grant or renew such certificate, license or lease, as the case may be, and any person aggrieved by such failure may, within two months of the expiry of the period aforesaid apply to the Central Government for reviewing the case.
(3) An application for review under this rule may be admitted after the period of limitation prescribed under this rule, if the applicant satisfies the Central Government that he had sufficient cause for not making the application within the said period.
" A further amendment to that rule 57(2) was made on August 31, 1957.
The concerned notification No. S.R.O. 2753 reads "In exercise of the powers ' conferred by section 5 of the Mines and Minerals (Regulation and Development) Act, 1948, the Central Government hereby makes the following further amendment in the Mineral Concession Rules, 1949, namely Provided that any such application pending with the State Government on the 14th September, 1956, and remaining undisposed of on the 24th August, 1957, shall be disposed of by the State Government within six months from the latter date.
" On April 16, 1957, the 1st respondent filed another review petition before the Central Government.
On September 26, 1957, 161 that petition was dismissed by the Central Government as being premature.
The relevant portion of that order reads "With reference to your application dated 16th April, 1957, on the above subject, I am directed to invite your attention to this Ministry 's notification No., MII 152(26)/57 dated the 21 8 57 (copy enclosed) amending the Mineral Concession Rules, 1949.
It will be noticed therefrom that the application for concessions received by the State Govt.
prior to the 4th September, 1956 and remaining undisposed of on the 31st August 1957 shall be disposed of by them within six months from the latter date.
Your application fo r review is therefore premature at this stage and in case your application for Mining Lease is not disposed of by the State Government within the prescribed period you may apply to the Central Government at the appropriate time." While making this order, evidently the Central Government had overlooked its earlier order dated July 18, 1956.
After the aforementioned order of the Central Government, the 1st respondent moved the High Court of Andhra Pradesh under article 226 of the Constitution in Writ Petition No. 888 of 1957 seeking a writ of mandamus to the State Government of Andhra Pradesh to dispose of his application for lease made on September 15, 1953, expeditiously.
To that petition he made only the State of Andhra Pradesh as the respondent.
Neither the Central Government nor the appellant herein were parties to that petition.
That petition came tip for hearing before Basi Reddy J. on November 4, 1958.
At the hearing the learned Government Pleader who appeared for, the State Government conceded that the application of the petitioner for mining lease on September 15, 1953 had not been disposed of by the State Government in the manner prescribed by rule 17 of the 'Rules ' but he contended that that application must be deemed to have been rejected in view of rule 57(2).
The learned judge rejected that, contention with the following observations: "In my opinion this deeming provision is intended for the benefit of the applicant add does not relieve the State Government from performing the statutory functions imposed on it by rules 17(1) and 17(2) viz., of granting or refusing the licence, and in case of refusal of recording in writing the reasons for the refusal and of refunding the application fee." He accepted the petition and issued the mandamus prayed for. 162 During the pendency of the writ petition No. 888 of 1957, ,the 1st respondent filed another writ petition on December 16, 1957 seeking the very relief that he had sought in his earlier writ ,petition.
That petition was disposed of by Bhimasankaram J. ,on August 20, 1959, with these observations : "It is stated by the learned 3rd Government Pleader that the Government is prepared to dispose of the application of the petitioner on the merits without relying upon rule 57(2) of the Mineral Concession Rules, 1949.
in the circumstances the petitioner does not want to press his petition.
The writ petition is accordingly dismissed.
There will be no order as to costs.
" The State Government by its order dated May 27, 1961, :granted on mining lease to the respondent all the areas for which he had applied an September 15, 1953 less those areas which had been earlier leased out to others.
Aggrieved by the above order, the appellant moved the Central Government under rule 57 on July 7, 1961 for review ing the said order.
Even before that he had moved the Andhra Pradesh High Court under article 226 of the Constitution on June 13, 1961 to issue a writ of mandamus to the State Government .to consider his application for mining lease in preference to that of the 1st respondent as according to him the 1st respondent 's application should be deemed to have been rejected under rule 57(2).
The High Court rejected that application observing that the appropriate course for him was to move the Central Government under rule 57 against the order of the State Government.
Thereafter on 15 2 1965, the Central Government allowed the review petition filed by the appellant and set aside the grant made in favour of the 1st respondent on May 27, 1961.
It came to the conclusion that the applications made by the appellant, the 1st respondent as well as others which were pending before the Andhra Pradesh Government should be deemed to have been rejected on the 1st March 1958, in view of rule 57(2).
Aggrieved by that order the 1st respondent filed Writ Petition No. 464 of 1965 praying that the High Court may be pleased to call for 'the relevant records from the Central Government by issuing a writ of certiorari and quash the order of the Central Government and issue a further writ to the Central Government and to the :State Government to grant the lease asked for by him.
During ,the pendency of that petition the appellant filed Writ Petition 'No. 602 of 1965 seeking a writ of mandamus against the Central 'Government and the State Government to grant him the mining lease for which he had applied.
The High Court has allowed 'the writ petition filed by the 1st respondent and dismissed that of the appellant.
Hence these appeals.
163 So far as Civil Appeal No. 2122 of 1969 is concerned there is no merit in the same.
No ground in support of that appeal was urged before us.
Hence it fails and it is dismissed.
In Writ Petition No. 464 of 1965 from which Civil Appeal ' No. 2121 of 1969 arises, the High Court set aside the order of the Central Government on various grounds and upheld the grant made by the State Government in favour of the 1st res pondent.
We shall now proceed to consider the correctness of the reasons given by the High Court in support of its order.
The High Court was of the opinion that rule 57(2) was enacted only for the benefit of the applicants for lease, license etc.
so that they may have an early opportunity to move the Central Government for appropriate orders.
In the view of the High Court that rule does not take away the, power of the State Government to dispose of the applications made for mining lease etc.
even after the period prescribed expires.
In support of this conclusion, it relied on the decision of the Patna High Court in Dey Gupta and Co. vs State of Bihar and Anr.(1) as well as on the decision of Basi Reddy J. in Writ Petition No. 888 of 1957 to which reference has already been made.
Neither the Patna decision nor the judgment of Basi Reddy J. nor the decision under appeal gives any cogent reason An support of the conclusion that the deemed dismissal under rule '57(2) does not take away the right of the State Government to grant the lease asked for.
The Patina High Court in support of its conclusion observed "No doubt, reading rule 27(1 A) with rule 57(2) of the Rules, it is clear that, if the State Government fails to dispose of an application for the grant of a mining lease within nine months, it must be deemed to have been refused by it.
But this provision is made, in my opinion only for the purpose of filing a review application before the Central Government, so that an applicant desirous to have a mining lease may not have to wait unnecessarily for a long period without any order being passed on his application.
That however, does not mean that after the lapse of nine months from the date of receipt of the application, the State Govt.
ceases to have jurisdiction over the matter so as not to pass any order on any application after the lapse of nine months from the date of its receipt.
The expression "deemed to be a refusal" in rule 57(2) is only for the purpose of a review application to (1) A.I.R. 1961 Pat.
164 be filed before the Central Government, and it is not a part of rule 28(1 A).
In this view of the matter the legality of the order passed by the State Government granting a mining lease to respondent No. 2 cannot be Challenged on the above ground.
" We think that these observations are not correct.
If it is otherwise, even when a review petition is pending before the Central Government under rule 57, the State Government can make an order on the application made and thus compel the parties to file another review petition.
Further, if the Central Government gives one direction ins the review petition and the State Government passes an inconsistent order in the original petition, there is bound to be confusion.
If we read rule 27(1A).
and rule 57(2) together, there is hardly any doubt that after the period prescribed, the State Government is incompetent to deal with the applications pending before it.
According to rule 57(2), where a State Government has failed to dispose of an application.
for the grant of a mining lease within the period prescribed therefor in the rules, such failure shall, for the purpose of the rules be deemed: to be refusal to grant the lease.
The rules referred therein include rule 28 as well.
This deemed refusal, if read with the mandate given to the State Government under rule 28(1 A) requiring it to dispose of the applications within 9 months of the receipt of those applications, there can be hardly any doubt that if the State Government does not dispose of the applications within the time prescribed, it is deemed to have refused those applications, for the purpose of rule 28 as well as rule 57.
The High Court was wrong in thinking that in the absence of a provision providing for deemed rejection in rule 28(1 A), the contravention of that rule does not take away the jurisdiction of the State Government.
That conclusion ignores the words in rule 57(2) that deemed rejection is 'for the purpose of these rules '.
In view of those words in rule 57(2), it was unnecessary for the rule making authority to prescribe in rule 28(1A) the consequences of the failure on the part of the State Gov ernment to implement the mandate of rule 28(1 A).
Hence, in our opinion, the Central Government 's decision that the applications made by the appellant, the 1st respondent and others for mining lease should be deemed to have been refused on March 1, 1958 is correct.
Therefore the High Court was wrong in quashing the order of the Central Government on that ground.
The High Court was also wrong in opining that in view of the representations made by the learned Government Pleader before Bhimasankaran J. on August 25, 1959, in Writ Petition No. 1237 of 1957, the State Government is estopped from con 165 tending that the application made by the 1st respondent on September 15, 1953 must be deemed to have been refused.
There can be no estoppel against a statute.
Rule 28(1 A) and rule 57 (2) are statutory rules.
They bind the Government as much as they bind others.
The requirement of those rules cannot be waived by the State Governments.
Therefore the fact that the learned Government Pleader represented to the Court that the petition filed by the 1st respondent on September 15, 1953 was still pending disposal cannot change the legal position nor could it confer on the State Government any power to act in contravention of those rules.
Yet another ground relied on by the High Court is that in view of the writ issued by Basi Reddy J. in Writ Petition No. 888 of 1957, the State Government was bound to consider the application of the 1st respondent and therefore the decision of the State Government taken in obedience to the order of the High Court could not have been set aside the Central Government.
It is true that as far as the State Government is, concerned the writ issued was binding whether the decision rendered by the court was correct in law or not; but then that decision will not bind either the appellant herein or the Central Government who were not parties to that writ petition.
It is not a judgment in rem.
In obedience to the writ issued by the court, of the State Government did consider the application of the 1st respondent.
It granted him the lease asked for by him.
Therefore the State Government has complied with the direction issued to it by the High Court.
The Central Government had been constituted as the revisional authority under rule 57.
That authority is a quasi judicial body created by statutory rules.
It is bound by law to discharge the duties imposed on it by rule 57.
Therefore it had to obey the mandate of rule 57.
In so doing, it cannot be said that it had infringed the mandamus issued by the High Court in writ petition No. 888 of 1957 to which, as pointed out before, the appellant was not a party and the order made in which could not be 'binding either on the Central Government or the appellant.
For the reasons mentioned above, we allow Civil Appeal No. 2121 of 1969 and set aside the order of the High Court and dismiss the writ petition No. 464 of 1965 but in the circum stances of the case, we make no order as to costs in these appeals.
ORDER In accordance with the opinion of the majority Civil Appeal No. 2121 of 1969 is allowed and Civil Appeal No. 2122 of 1969 is dismissed.
No order as to costs in these appeals.
| IN-Abs | In September, 1953, the first respondent applied for a mining lease for over 900 acres in the then Hyderabad State.
He was granted a lease of about 57 acres in January, 1954 by an order of the State Government which was silent as regards the other areas included in his application.
While the respondent kept pressing ' for a lease of the remaining areas, the State Government began to grant, some of these areas to other persons including the appellant.
Meanwhile,, on December 8, 1955, the respondent moved the Central Government under Rule 57 of the Mineral Concession Rules, 1949, seeking a direction to the State to grant to him the lease of the areas sought by him and to stop granting further areas to other applicants.
This review petition was dismissed on the basis that the order of the State Government granting only 57 acres by implication amounted to a rejection of the respondent 's claim for the balance area.
On September 15, 1956, the Mineral Concession Rules were amended and a new sub rule 28(1) (A) was introduced which provided that every application under Rule 27 shall be disposed of within 9 months from the date of its receipt.
The amended Rule 57 provided that the failure of the State Government to dispose of an application within the prescribed period would be deemed to be a refusal to grant a lease and that the aggrieved person may, within two months, apply to the Central Government for a review.
A further amendment of Rule 57(2) provided that any application pending with the State Government an 14th September, 1956 and remaining undisposed of on the 24th August, 1957, shall be disposed of by the State Government within 6 months from the latter date.
Prior to this amendment the respondent had filed another review petition before the Central Government and on September 26, 1957, that petition was dismissed by the Government as being premature; this was on the basis that the respondent 's original application was pending on 31st August, 1957, and the period of 6 months from that date, as prescribed by the amended Rule 57(2) had not yet expired.
The respondent then moved the High Court by a petition under Article 226.
making the State Government alone party and seeking a writ of mandamus to the Government to dispose of his application of September, 1953, expeditiously.
The High Court allowed this petition and did not accept the contention, on behalf of the State Government that in view of section 57(2) the respondent 's application must be L11Sup CI/11 154 deemed to have been rejected.
it held that section 57(2) was intended to be for the benefit of the applicant and did not relieve the State Government from performing the statutory function imposed on it under rule 17 of granting or refusing the licence.
During the pendency of the first petition, the respondent had also filed a second petition seeking the same relief and this was disposed of in August, 1959 on the basis of a statement by the Government Advocate that the State Government was prepared to dispose of the first respondent 's application on the merits without relying on rule 57(2).
By an order on May 27, 1961, the State Government granted on.
mining lease to the, respondent all the areas for which he had applied in September, 1953 excluding those areas which had been earlier leased to others.
, However.
the Central Government allowed a review petition under Rule 57 filed by the appellant and set aside the order on the ground that the application made by the appellant, the first respondent, as well as others which were pending before the State Government 'should be deemed to have been rejected on 1st March, 1958 in view of rule 57(2).
The 1st respondent then challenged this order by a writ petition in the High Court which was allowed and the order was quashed.
The court held that rule 57(2) was enacted only for the benefit of the applicants and did not take away the power of the State Government to dispose of applications even after expiry of the prescribed period; that in view of the Government Advocate 's concession the State Government Was stopped from contending that the respondent 's application of September, 1953 must be deemed to have 'been refused; and furthermore that in view of the writ of mandamus issued in the first writ petition, the State Government was bound to consider the application of the 1st respondent and the decision of the State Government taken in obedience to the order of the High Court could not have been set aside by the Central Government.
HELD : (Per Hedge and Grover, JJ); The appeal must be allowed (By the Court) (1) Reading rule 28 (1 A) and rule 57 (2) together, there is no doubt that after the period prescribed, the State Government is incompetent to deal with the applications ' pending before it.
The High Court was, therefore, wrong in holding that even if an application stands rejected for failure to pass an order within the time prescribed, the State Government has power to issue a licence.
[164 C] Dey Gupta & Company vs State of Bihar A.I.R. 1961 Pat. 487; referred to.
(2) There can be no estoppel against a statute.
Rule 28(1 A) and rule 57(2) are statutory rules.
They bind the Government as much as they bind others.
The requirement of those rules cannot be waived by the State Governments.
Therefore the fact that the Government Advocate represented to the Court that the 1st respondent 's application was still pending could not change the legal position nor could it confer on the State Government any power to act in contravention of those rules.
[165 A B] (3)Per Hegde and Grover JJ.); As far as the State Government was concerned the writ issued was binding whether the decision rendered by the Court was correct in law or not; but that decision could not bind the appellant or the Central Government who were not parties to that writ petition.
It was not a judgment in rem.
In obedience to the writ issued by the court, the State Government did consider the 155 application of the 1st respondent and granted him the lease asked for by him.
The Central Government had been constituted as the revisional authority under rule 57.
That authority is a quasi judicial body created by statutory rules.
It is bound by law to discharge the duties imposed on it by rule 57.
Therefore it had to obey the mandate of rule 57.
In so doing it cannot be said that it had infringed the mandamus issued by the High Court.
[165 D F] (Per Shah J, dissenting) : The appeal must be dismissed, Granting that the High Court erroneously issued a writ of mandamus directing the State Government to perform its functions it was, not open to the Central Government in effect to exercise appellate authority over the judgment of the High Court.
To accede to the contention that the executive has the power, when exercising quasi judicial functions, to sit in appeal over the decision of the High Court is to destroy the scheme of division of powers under our Constitution.
There was no distinction between the effect of an order made by the High Court and carried out by the State, and an order made by the High Court and confirmed in appeal by this Court and carried out by the State.
Article 141 of the Constitution has no bearing on that question.
If this Court decided a question of law or of fact or a mixed question of law and fact arising in an appeal against an order passed by the High Court in a writ petition against the action of the State Government granting or refusing to grant a licence, it would not be open to the Central Government, hearing a review petition against the order of the State Government in compliance with the order of this Court, to set aside the order so as to upset the order of this Court.
[156 H] It is well settled that a person who has not been made a party to a proceeding may still appeal with leave of the Appellate Court provided he might have properly been made 'a party to the proceeding.
The appellant could undoubtedly have been made a party to the petition before the High Court.
He could, therefore, challenge the correctness of the order and no objection could be raised against the granting of leave to him to appeal on the ground that he was not a party to the writ petition.
C] Re.
"B" an Infant C.A., The Province of Bombay vs Western India Automobile Association I.L.R. ; Ponnalagu vs State of Madras I.L.R. [1953] Mad. 808; Pullayya vs Nagbhushanain I.L.R. F.B.; referred to.
|
Appeal No. 1705 of1969.
Appeal by special leave from the order dated February 21, 1959, of the Central Government Labour Court, Delhi in I.C.A. No. 2 of 1968 and Civil Appeal No. 1781 of 1969.
Appeal by special leave from the order dated February 24, 1969 of the Additional Industrial Tribunal, Delhi in I.D. No. 73 of 1968 and Appeal from the judgment and order dated February 21, 1969 of the Patna High Court in Civil Writ Jurisdiction Case No. 730 of 1968.
Niren De, Attorney General and section P. Nayar, for the appellant (in C. A. No. 1705 of 1969).
M. K. Ramamurthi, E. C. Agarwala, R. P. Agarwala and M. V. Goswami, for the respondent (in C. A. No. 1705 of 1969).
H. R. Gokhale, Jitendra Mahajan, for the appellant (in C.A. No. 1781 of 1969).
M. K. Ramamurthi, J. Ramamurthy and Madan Mohan, for the respondents (in C. A. No. 1781 of 1969).
H. R. Gokhale, M. C. Bhandare, for the intervener.
180 A. K. Sen, Ranen Roy and A. K. Nag, for theappellant (in C. A. No. 1777 of, 1969).
D. Goburdhun, for respondent No. 1 (in C. A. No. 1777 of 1969).
P. N. Tiwari and Shiva Pujan Singh, for respondent No. 3 (in C. A. No. 1777 of 1969).
The Judgment of the Court was delivered by Hidayatullah, C.J.
This judgment will dispose of Civil Appeals Nos. 1705 of 1969, 1781 of 1969 and 1777 of 1969.
The first is an appeal by the Management of Safdarjung Hospital, New Delhi.
The second by the Management of Tuber culosis Hospital, New Delhi and the third by the Kurji Holy Family Hospital, Patna.
The first two are filed by special leave and the third by certificate.
They call in question respectively the order of the Central Government Labour Court, Delhi dated 21st February, 1969 on an application under section 33C(2) of the Industrial Disputes Act, 1949, the order of the Presiding Officer, Additional Industrial Tribunal, Delhi dated 24th February, 1969 and the judgment and order dated 21st February, 1969 of the Patna High Court.
They raise a common question of law whether these several hospitals can be regarded as industries within the meaning of the term in the Industrial Disputes Act.
They also raise different questions on merits which will be considered separately.
The facts of the three cases may be noticed briefly before we begin to examine the common question of law mentioned above.
C.A. Nc. 1705 of 1969.
The Management of Safdarjung Hospital, New Delhi was the respondent in a petition under section 33C(2) of the in a petition by the present respondent Kuldip Singh Sethi, a Lower Division Clerk in the Hospital, for computation of the amount of salary etc.
due to him in the pay scale of store keepers.
Kuldip Singh Sethi was appointed as a Store keeper on October 26, 1956 in the pay scale of Rs. 60 5 75.
This scale was revised to Rs. 110 180 on July 1, 1959 in accordance with the ,recommendations of the Second Pay Commission.
Two or three months later the pay was re fixed and the time scale was Rs. 110 131 with usual allowances.
On July 1, 1962 his basic pay was fixed at Rs. 131.
On November 26, 1962 the Government of India in the Ministry of Health re revised the pay scales of Store keepers to Rs. 130 5 160 8 200 EB 8 280 10 300 with the usual allowances.
The order was to lake effect from the date of issue.
Kuldip Singh Sethi complained by his petition that the Management of the Hospital had failed to give him pay in this scale and claimed Rs. 914 for the period November 26, 1,962 to May 31, 1968.
181 In rely to his petition the Management contended that Kuldip p Singh Sethi was not a workman but a Government servant governed by the Conditions of Service for Government Servants and hence he could not invoke the since the Safdarjung Hospital was not an industry.
The Tribunal following the decision of this Court in State of Bombay vs Hospital Mazdoor Sabha(1) has held that the Hospital is an 'industry ', that Kuldip Singh Sethi is a 'workman ' and hence he is entitled to take recourse to section 3 3C (2) of the .
On merits his claim is found sustainable and he is given an award for Rs. 914.
We need not mention at this stage the grounds on which the merits of his claim are resisted.
The point of law that arises in the case is whether the Safdarjung Hospital can be properly described as an 'industry ' as defined in the .
C.A. No. 1781 of 1969.
In this case there is a dispute between the Management of the Tuberculosis Hospital, New Delhi and its workmen represented by the Aspatal Karamchari Panchayat regarding pay scales, and other facilities demanded by the workmen.
The Management has taken the preliminary objection that the does not apply since the Hospital is not an industry and is not run as such.
The Management.
, therefore, questions the reference to the Tribunal under section 10(1) (d) of the .
A preliminary issue is raised : "Is T.B. Hospital an industry or not?" In support of the case that the Hospital is not an industry, the Management emphasises the functions of the Hospital.
It is pointed out that the Hospital is run by the Tuberculosis Association of India as a research institute where training is given to Medical ,,graduates of the Delhi University for the D.T.C.D. and D.C.H. Courses, and postgraduates and undergraduates of the All India Institute of Medical Sciences are also provided training and nurses from the Delhi College of Nursing, Safdarjung, Lady Hardinge, and Holy Family Hospitals receive training.
The Hospital, it is admitted, has paid and unpaid beds but it is submitted that treatment of tuberculosis is a part of research and training and education, and, therefore, the Hospital has affinity to a University and, not to a Hospital proper.
It is, therefore, contended that this ,Hospital is not an industry.
The Tribunal holds that neither the research carried on, nor the training imparted, nor the existence .of the Tuberculosis Association of India with which the Hospital is affiliated makes any difference and the case falls within the ruling of this Court in the Hospital Mazdoor Sabha(1) case.
The (1) ; 182 Tribunal holds the Tuberculosis Hospital, New Delhi to be an industry.
C.A. No. 1777 of 1969.
The appeal arises from a writ petition filed in the High Court of Patna.
The Kurji Holy Family Hospital took disciplinary action against two of its employees and the matter was taken up by the Kurji Holy Family Hospital Employees Association and the State of Bihar made a reference to the Labour Court, Patna under section 10 of the .
Before the Tribunal, the Management of the Hospital took the objection inter alia that a hospital was neither a trade nor a business, nor an industry as defined in the and as such the provisions of the were not applicable and the reference was incompetent.
The High Court holds this point against the Management, following the Hospital Mazdoor Sabha(1) case.
The later case of this Court reported in Secretary, Madras Gymkhana Club Employees Union vs Management of the Gymkhana Club(2) is held not to have weakened the effect of the decision in the case relied upon.
It is thus that the three cases came before us and were heard together.
Counsel in these cases submit that the ruling in the HospitalMazdoor Sabha(1) case has now been considerably shaken by the pronouncement in the Madras Gymkhana Club (2) case where it was I observed that the Hospital Mazdoor Sabha( ') case was one which might be said to be on the verge and that there were reasons to think that it took an extreme view of an industry.
Relying on this observation, counsel in the three appeals asked for a reconsideration of the Hospital Mazdoor Sabha(1) case although they conceded that it was not yet overruled.
We accordingly heard arguments on the general question whether a hospital can be said to be an industry falling within the and under what circumstances.
We also heard arguments on the merits of the appeals to determine whether the decisions rendered therein could be upheld even if the Hospital Mazdoor Sabha(1) case was held applicable.
We shall follow the same course here.
We shall first consider the general proposition whether a hospital can be considered to fall within the concept of industry in the and whether all hospitals of whatever description can be covered by the concept or only some hospitals under special conditions.
We shall then consider the merits of the individual cases in so far as may be necessary.
The was construed in the past on more than one occasion by this Court.
A fairly comprehensive summary of the various cases with the rationes decidendi of those (1) ; (2) [1968] 1 S.C.R. 742.
183 cases is to be found in the Gymkhana Club(1) case.
, The tests applied to find out whether a particular establishment falls within the definition of 'industry ' or not were not found to be uniform and disclosed a pragmatic approach to the problem.
This Court, ,therefore, in Gymkhana Club(1) case fell back upon the statute for guidance pointing out that they were not concerned with a popular phrase but one which the statute, had with 'great particularity defined itself.
Examining the content of the definitions this Court came to certain conclusions and held in their light that a non proprietary members ' club was not an industry.
The reasoning in the Gymkhana Club(1) case formed the basis of an attack on the former ruling in the, Hospital Mazdoor Sabha(2) case by the Managements of the three Hospitals which are appellants here.
The other side relied.
upon the ruling and the amendment of the by which 'Service in hospitals and dispensaries ' has now been added as item No. 9 in the First Schedule, as one of the industries which may be declared to be public utility services under sub cl .
(vi) of cl.
(n) of section 2 of the Act.
It is claimed that this is a legislative determination of the question whether hospital is an industry or not.
It has, therefore, become necessary to cover some of the ground covered,in the Gymkhana Club(1) case.
To begin with we may once again refer to the relevant definitions contained in the Act for they must necessarily control our discussion.
The , as its title and indeed its whole tenor disclose, was passed to make provision for the investigation and settlement of industrial disputes and for certain other purposes appearing in the Act.
The term 'industrial dispute ' is defined by section 2(k) in the following words " 'industrial dispute ' means any dispute or difference between employers and employers or between employers and workmen, or between workmen and workmen, which is connected with the employment or non employment or the terms of employment or with the conditions of labour, of any person.
" The definition discloses that disputes of particular kinds alone are regarded as industrial disputes.
It may be noticed that this definition does not refer to an industry.
But the dispute, on the grammar of the expression itself, means a dispute in an industry and we must, therefore, turn to the definition of 'industry ' in the Act.
The word is defined in cl.
(j) and reads : " 'industry ' means any business, trade, undertaking, manufacture or calling of employers and includes any (1) [1968] 1 S.C.R. 742.
(2) ; 184 calling, services, employment, handicraft, or industrial occupation or avocation of workman.
" This definition is in two parts.
The first part says that it means any business, trade, undertaking, manufacture or calling of ,employers and then goes on to say that it includes any calling, service, employment handicraft or industrial occupation or avocation of workmen.
In dealing with this definition this Court in the Gymkhana ,Club case(1) attempted to keep the two notions concerning employers and employees apart and gave the opinion that the denotation of the term 'industry ' is to be found in the first part relating to ,employers and the full connotation of the term is intended to include the second part relating to workmen.
It was, therefore, concluded: "If the activity can be described as an industry with reference to the occupation of the employers, the ambit of the industry, under the force of the second part, takes in the different kinds of activity of the employees mentioned in the second part, But the second part standing alone cannot define 'industry. .
By the inclusive part of the definition the labour force employed in an industry is made an integral part of the industry for purposes of industrial disputes although industry is ordinarily something which employers create or undertake." These observations need to be somewhat qualified.
It is to be noticed that this definition modifies somewhat the definition, of "industry ' in section 4 of the Commonwealth Conciliation and Arbitration Act 1909 1970) (Acts Nos. 13 of 1904 and 7 of 1910) of Australia where the definition reads " 'industry ' means business, trade, manufacture, undertaking, calling, service or employment, on land or water, in which persons are employed for pay, hire, advantage or reward, excepting only persons engaged in agricultural, viticultural, horticultural, or dairying pursuits.
" Although the two definitions are worded differently the purport of both is the same.
It is not necessary to view our definition in two parts.
The definition read as a whole denotes a collective enterprise in which employers and employees are associated.
It does not exist either by employers alone or by employees alone.
It exists only when there is a relationship between employers and employees, the former engaged in business, trade, undertaking, manufacture or calling of employers and the latter engaged in any calling, service, (1) [1968] 1 S.C.R. 742.
185 employment, handicraft or industrial occupation or avocation.
There must, therefore, be an enterprise in which the employers follow their avocations as detailed in the definition and employ workmen who follow one of 'the avocations detailed for workmen.
The definition no doubt seeks to define 'industry ' with reference to employers ' occupation but includes the employees, for without the two there can be no industry.
An industry is only to be found when there are employers and employees, the former relying upon the services of the latter to fulfil their own occupations.
But every case of employment is not necessarily productive of an industry.
Domestic employment, administrative services of public officials, service in aid of occupations of professional men, also disclose relationship of employers and employees but they cannot be regarded as in the course of industry.
This follows from the definition of 'workman ' in the Act defined in cl.(s) which reads "workman ' means any person (including an ap prentice) employed in any industry to do any skilled or unskilled manual, supervisory, technical or clerical work for hire or reward, whether the terms of employment be express or implied, and for the purposes of any proceed ing under this Act in relation to an industrial dispute, includes any such person who has been dismissed, discharged or retrenched in connection with, or as a conse quence of, that dispute, or whose dismissal, discharge or retrenchment has led to that dispute, but does not include any such person (i) who is subject to the , or the or the Navy (Discipline) Act, 1934; or (ii) who is employed in the police service, or as an officer or other employee of a prison; or (iii) who is employed mainly in a managerial or administrative capacity; or (iv)who, being employed in a supervisory capacity,draws wages exceeding five hundred rupees per mensem or exercises, either by the nature of the duties attached to the office or by reason of the powers vested in him, functions mainly of a managerial nature.
" The word 'industry ' in this definition must take its colour from the definition and discloses that a workman is to be regarded as one employed in an industry if he is following one of the vocations mentioned in conjunction with his employers engaged in the vocations mentioned in relation to the employers.
Cl/70 13 186 Therefore an industry is to be found when the employers are carrying on any business, trade, undertaking, manufacture or calling of employers.
If they are not, there is no industry as such.
What is meant by these expressions was discussed in a large number of cases which have been considered elaborately in the Gymkhana Club(1) case.
The conclusion in that case may be stated : "Primarily, therefore, industrial disputes occur when the operation undertaken rests upon cooperation between employers and employees with a view to production and distribution of material goods, in other words, wealth, but they may arise also in cases where the co operation is to produce material services.
The normal cases are those in which the production or distribution is of material goods or wealth and they will fall within the expressions trade, business and manufacture.
" The words 'trade ', 'business ', 'manufacture ' and 'calling ' were next explained thus : "The word 'trade ' in this context bears the X X meaning which may be taken from Halsbury 's Laws of England, Third Edn.
38 p. 8 (a) exchange of goods for goods or goods for money; (b) any business carried on with a view to profit, whether manual, or mercantile, as distinguished from the liberal arts or learned professions and from agriculture; and business means an enterprise which is an occupation as distinguished from pleasure.
Manufacture is a kind of productive industry in which the making of articles or material (often on a large scale) is by physical labour or mechanical power.
Calling denotes the following of a profession or trade.
" It may be added here that in National Association of Local Government Officers vs Bolton Corporations(2) at page 183 et seq Lord Wright observes that 'trade ' is a term of the widest scope.
This is true.
We speak of the occupation of men in buying and selling, barter or commerce as trade.
We even speak of work, especially of skilled work as, trade, e.g. the trade of goldsmiths.
But the word as used in the statute must be distinguished from professions although even professions have 'trade unions '.
The word 'trade ' includes persons in a line of business in which persons are employed as workmen.
Business too is a word of wide import.
In one sense it includes all occupations and professions.
But in the collocation of the terms.
and their definitions these terms have a definite economic content of a particular type and on the (1) [1968] 1 S.C.R. 742.
(2) , 183.
187 authorities of this Court have been uniformly accepted as excluding professions and are only concerned with the production, distribution and consumption of wealth and the production and availability of material services.
Industry has thus been accepted to mean only trade and business, manufacture, or undertaking analogous to trade or business for the production of material goods or wealth and material services.
Why professions must be held outside the ambit of industry may be explained.
A profession ordinarily is an occupation requiring intellectual skill, often coupled with manual skill.
Thus a teacher uses purely intellectual skill while a painter uses both.
In any event, they are not engaged in an occupation in which employers and employees co operate in the production or sale of commodities or arrangement for their production or sale or distribution and their services cannot be described as material services.
What is meant by 'material services ' needs some explanation too.
Material services are not services which depend wholly or largely upon the contribution of professional knowledge, skill or dexterity for the production of a result.
Such services being given individually and by individuals are services no doubt but not material services.
Even an establishment where many such operate cannot be said to convert their professional services into material services.
Material services involve an activity carried on through co operation between employers and employees to provide the community with the use of something such as electric power, water, transportation, mail delivery, telephones and the like.
In providing these services there may be employment of trained men and even professional men, but the emphasis is not on what these men do but upon the productivity of a service organised as an industry and commercially valuable.
Thus the services of professional men involving benefit to individuals according to their needs, such as doctors, teachers, lawyers, solicitors etc. are easily distinguishable from an activity such as transport service.
The latter is of a commercial character in which something is brought into existence quite apart from the benefit to particular individuals.
It is the production of this something which is described as the production of material services.
Mr. Ramamurti arguing against the Hospitals drew our atten tion to Citrine 's book 'Trade Union Law ' (3rd edn.
p. 609) where the author observes : "However, whilst the words 'trade ' and 'industry ' are separately capable of a wide interpretation, when they occur in conjunction the tendency of the courts is to give them a narrow one.
" 188 He cites the House of Lords case to which we have referred and criticises the tendency of the court to narrow the meaning of the expressions 'industry ' and 'workman '.
He says that this narrow interpretation unnecessarily excludes from workmen 'teachers employed by local authorities, university employees, nurses and others employed under the National Health Service, the domestic staff of the Houses of Parliament and Civil Servants who are not employed in 'trading ' or 'industrial undertaking '.
He includes all these in the definitions because a person doing the same type of work for a commercial undertaking is within the definition.
According to him any person gainfully employed must be within the definition.
On the strength of this definition Mr. Ramamurthi also contends that not the Hospital Mazdoor Sabha(1) case but the earlier cases off this Court such as University of Delhi and Anr.
vs Ramnath(2) and National Union of Commercial Employees vs M. R. Meher(3) must be reconsidered and overruled.
The reason for these cases, as also the Gymkhana Club(4) case lies in the kind of establishment with which we are concerned.
The Gymkhana Club(4) case of this Court (followed and applied in Cricket Club vs Labour Union(5) has held that non profit making members ' clubs are not employed in trade or industry and their employees are not entitled to engage in trade disputes with the clubs.
This view finds support from Hotel and Catering Industry 'Training Board and Automobile Proprietary Ltd (6).
The Solicitors case cited by Mr. Ramamurti was so decided because there the services rendered by the employees were in aid of professional men and not productive of material goods or wealth or material services.
The other case of University was also decided, as it was, for the same reason.
It, therefore, follows that before an industrial dispute can be raised between employers and their employees or between employers and employers or between employees and employees in relation to the employment or non employment or the terms of employment or with the conditions of labour of any person, there must be first established a relationship of employers and employees associating together, the former following a trade, business, manufacture, undertaking or calling of employers in the production of material goods and material services and the latter following any calling, service, employment, handicraft, or industrial occupation or avocation of workmen in aid of the employers ' enterprise.
It is not necessary that there must be a profit motive but the enterprise must be analogous to trade or business in a commercial sense.
(1) ; (2) ; (3) [1962] Supp.
3 S.C.R. 157.
(4) [1968] 1 S.C.R. 742.
(5) A.I.R. (6) H.L. S.C.; and C.A. 189 We do not find it necessary to refer to the earlier cases of this Court from which these propositions have been deduced because they are all considered in the Gymkhana Club case(1).
We accept the conclusion in that case that : ". . before the work engaged in can be described as an industry, it must bear the definite character of 'trade. ' or 'business ' or 'manufacture ' or 'calling ' or must be capable of being described as an undertaking resulting in material goods or material services.
" We may now consider closely the Hospital Mazdoor Sabha(2) case and the reasons for which it was held that the workmen employed in a hospital were entitled to raise an industrial dispute.
We may say at once that if a hospital, nursing home or dispensary is run as a business in a commercial way there may be found elements of an industry there.
Then the hospital is more than a place where persons can get treated for their ailment.
It becomes a business.
In the Hospital Mazdoor Sabha(2) case, hospitals run by Gov ernment and even by a private association, not on commercial lines but on charitable lines or as part of the functions of Government Department of Health were held included in the definition of industry.
The reason given was that the second part of the definition of industry contained an extension of the first part by including other items of industry.
As we have pointed out the first and the second parts of the definition are not to be read in isolation as if they were different industries but only as aspects of the occupation of employers and employees in an industry.
They are two counterparts in one industry.
The case proceeds on the assumption that there need not be an economic activity since employment of capital and profit motive were considered unessential.
It is an erroneous assumption that an economic activity must be related to capital and profit making alone.
An economic activity can exist without the presence of both.
Having rejected the true test applied in other cases before, the test applied was 'can such activity be carried on by private individuals or group of indivi duals '? Holding that a hospital could be run as a business proposition and for profit, it was held that a hospital run by Government without profit must bear the same character.
With respect, we do not consider this to be the right test.
That test was employed to distinguish between the administrative functions of Government and local authorities and their functions analogous to business but it cannot be used in this context.
When it was emphasised in the same case that the activity must be analogous to business and trade and that it must be productive of goods or their distribution or for producing material services to the community at large (1) [1968] 1 S.C.R. 742.
(2) ; 190 or a part of it, there was no room for the other proposition that privately run hospitals may in certain circumstances be regarded as industries.
The expression 'satisfying material human needs ' was evolved which bore a different meaning.
These observations were apparently based on the observations of, Isaacs and Rich JJ.
in Federated Municipal and Shire Council Employees of Australia vs Melbourne Corporation(1), but they were : "Industrial disputes occur when, in relation to operations in which capital and labour are contributed in cooperation for the satisfaction of human wants and desires, those engaged in co operation dispute as to the basis to be observed, by the parties engaged, respecting either a share of the produce or any other terms and conditions of their co operation.
The question of profit making may be important from an income tax point of view, as in many municipal cases in England; but, from an industrial dispute point of view it cannot matter whether the expenditure is met by fares from passengers or from rates.
" The observations in the Australian case only indicate that in those activities in which government takes to industrial ventures, the notion of profit making and the absence of capital in the true sense of the word are irrelevant.
The passage itself shows that industrial disputes occur in operation in which employers and employees associate to provide what people want and desire in other words where there is production of material goods or material services.
In our judgment the Hospital Mazdoor Sabha (2) case took an extreme view of the matter which was not justified.
It is argued that after the amendment of the Industrial Dis putes Act by which 'service in hospitals and dispensaries ' is included in public utility services, there is no scope for saying that hospitals are not industries.
It is said that Parliament has accepted that the definition is suited to include a hospital.
This contention requires close attention in view of the fact that it was noticed in the Hospital Mazdoor Sabha(2) case although that arose before the amendment.
A public utility service is defined in the Act by merely naming certain services.
It will be noticed that these services are (i) any railway service or any transport service for the 'Carriage of passengers or goods by air; (1) ; (2) ; 191 (ii) any section of any industrial establishment on the working of which the safety of the establishment or the workmen employed therein depends; (iii) any postal, telegraph or telephone service; (iv) any industry which supplies power, light or water to the public; (v) any system of public conservancy or sanitation; After namingthese services the definition adds : (vi) any industry specified in the First Schedule which the appropriate Government may, if satisfied that public emergency or public interest so requires, by notification in the official gazette, declare to be a public uti lity service for the purposes of this Act, for such period as may be specified in the notification.
Provided that the period so specified shall not, in the first instance, exceed six months but may, by a like notification, be exceeded from time to time, by any period not exceeding six months, at any one time if in the opinion of the appropriate Government public emergency or public interest requires such extension.
The intention behind this provision is obviously to cassify certain services as public utility services with special protection for the continuance of those services.
The named services in the definition answer the test of an industry run on commercial lines to produce something which the community can use.
These are brought into existence in a commercial way and are analogous to business in which material goods are produced and distributed for consumption.
When Parliament added the sixth clause under which other services could be brought within the protection afforded by the Act to public utility services, it did not intend that the entire concept of industry in the Act, could be ignored and anything brought in.
Therefore it said that an industry could be declared to be a public utility service.
But what could be so declared had to be an industry in the first place.
We are concerned with the addition of item 9 'service in hospitals and dispensaries.
The heading of, the First Schedule speaks again of industries which may be de clared to be public utility services.
The original entries were five and they read: 1.
Transport (other than railways) for the carriage of passengers or goods, by land, water or air (now air is omitted).
Coal 192 3.
Cotton textiles.
Food stuffs 5.
Iron and steel.
It is obvious that general headings are given here.
Coal is not an industry but certain aspects of dealing with coal is an industry and that is what is intended.
That dealing must be in an industry in which there are employers and employees cooperating in the production of material goods or material services.
Similarly, cotton, textiles or food stuffs or iron and steel, as the entries stand, are not industries.
Therefore the heading of the First Schedule and the words of clause (vi) presuppose the existence of an industry which may be notified as a public utility service, for special protection under the Act.
Therefore when the list was expanded in the First Schedule and certain services were mentioned, the intention could not be otherwise.
The list was extended to 10 items by amendment of the Act by Act 36 of 1956 with effect from March 10, 1957.
The new items are (a) Banking, (b) Cement, (c) Defence Establishments, (d) Service in hospitals and dispensaries, and, (e) Fire Brigade Service.
Later by notifications issued under section 40 of the Act nine more items were added.
Section 40 gives to governments the power to add to the Schedule.
They are (a) Indian Government Mints, (b) India Security Press, (c) Copper Mining, (d) Lead Mining, (e) Zinc Mining, (f) Iron ore mining, (g) Service in any oil field, (h) Any service in, or in connection with, the working of any major port or dock and (i) Service in the Uranium Industry.
It is easy to see that most of them are items in which an industry proper involving trade, business, manufacture or something analogous to business can be found.
It is hardly to be thought that notifications can issue in respect of enterprises which are not industries to start with.
It is only industries which may be declared to be public utility services.
Therefore to apply the notification, the condition precedent of the existence of an industry has to be satisfied.
If there is an industry which falls within the items named in the First Schedule, then alone can it be notified to be classed as a public utility service.
The law does not work the other way round that every activity connected with coal becomes an industry and therefore on notification that activity becomes a public utility service.
The same is true of all items including all the services mentioned.
They must first be demonstrated to be industries and then the notification will apply, to them.
To hold otherwise would largely render useless all the definitions in the Act regarding industry, industrial disputes etc., in relation to the scheduled items.
Parliament has not attempted to declare that notwithstanding the definitions of 193 'industry ', 'industrial disputes, 'workman ' and 'employer ', every hospital is to be regarded as an industry.
All that has been provided is that an 'industry ' may be notified as a public utility service.
That is insufficient to convert non industries under the Act to industries.
We now take up the individual cases.
C.A. No. 1705 of 1969.
It is obvious that Safdarjung Hospital is not embarked on an economic activity which can be said to be analogous to trade or business.
There is no evidence that it is more than a place were persons can get treated.
This is a part of the functions of Government and the Hospital is run as a Department of Government.
It cannot, therefore, be said to be an industry.
In this case the petitioner chose to be a Lower Division Clerk.
The amount of security which he had to furnish in the job of a Store keeper was also refunded to him.
He had applied for the post on May 31, 1962.
On July 14, 1962 he again drew attention to his application.
His application was recommended on August 9, 1962.
It was only after November 26, 1962 when the scale of Store keepers was raised to Rs. 130 300 that he changed his views.
On December 12, 1962 he made a representation but in forwarding it the Medical Superintendent said that the incumbents of the posts of Store keepers could not be given the upgraded scale of Rs. 130 300.
In addition there were certain matters pending against him which precluded his appointment in that scale.
On August 11, 1966 the Director General wrote: "With reference to your letter No. 1 20/62 Estt., dated the 4th Jan, 1966 and subsequent reminder of even number dated the 24th May, 1966 on the subject noted above, I am directed to say that a reference was made to the Government of India in the Ministry of Health and Family Planning, New Delhi who have stated that it was not intended that the revised scale of Rs. 110 131 (previous scale of Rs. 60 75) should be further revised to Rs. 130 300 as all incumbents of the posts carrying the pay scale of Rs. 110 131 were promoted from Class IV and did not possess the requisite qualifications prescribed for posts, carrying pay scale of Rs. 130 300.
In view of the position stated above further action in the matter may kindly be taken in the light of the above remarks and storekeepers concerned informed accordingly.
In view of these facts it is hardly necessary to refer to the reports about the work of Kuldip Singh Sethi and other matters which 194 came in his way of promotion.
Both on the question of law decided by us and on the merits of his case, Kuldip Singh Sethi was not entitled to the pay scale of store keepers and the award of Rs. 914/ in his favour was wrong.
The appeal is allowed.
The order is set aside but there will be no order about costs.
C.A. No. 1781 of 1969.
The Tuberculosis Hospital is not an independent institution.
It is a part of the Tuberculosis Association of India.
The hospital is wholly charitable and is a research institute.
The dominant purpose of the Hospital is research and training, but as research and training cannot be given without beds.
in a hospital, the hospital is run.
Treatment is thus a part of research and training.
In these circumstances, the Tuberculosis Hospital cannot be described as an industry.
The order of the Additional Industrial Tribunal, Delhi on the preliminary point must be reversed.
The reference to the Tribunal under section 10(1)(d) of the was incompetent.
The appeal is allowed but we make no order about costs.
No. 1777 of 1969.
The objects of the Kurji Holy Family Hospital are entirely charitable.
It carries on work of training, research and treatment.
Its income is mostly from donations and distribution of surplus as profit is prohibited.
It is, therefore, clear that it is not an industry as laid down in the Act.
The reference made by the State Government, Bihar was thus incompetent.
The appeal will be allowed.
There will be no order about costs, except in the first case (C.A. 1705 of 1967) in which the earlier order of this Court shall be given effect to.
V.P.S. Appeals allowed.
| IN-Abs | (1) The definition of industry in section 2(j) of the is in two parts.
But it must be read as a whole.
So read it denotes a collective enterprise in which employers and employees are associated.
It does not exist either by employers alone or by employees, alone.
It exists only when there is a relationship between employers and employees, the former engaged in business, trade, undertaking, manufacture or calling of employers and the latter engaged in any calling, service, employment handicraft or industrial occupation or avocation.
But every case of employment is not necessarily productive of an industry.
A workman is to be regarded as one employed in an industry only if he is following one of the vocations mentioned in conjunction with his employers engaged in the vocations mentioned in relation to the employers, namely, any business, trade, undertaking manufacture or calling of employers.
In the collocation of the terms and their definitions these terms have a definite economic content of a particular type and on the authorities of this Court have been uniformly accepted as excluding professions and are only concerned with the production, distribution and consumption of wealth and the production and availability of material services.
Industry has thus been accepted to mean only trade and business, manufacture, or undertaking analogous to trade or business for the production of material goods or wealth and material services.
Material services involve an activity carried on through co operation between employers and employees to provide the community with the use of something such as electric power, water, transportation, mail delivery, telephones and the like.
In providing these services there may be employment of trained men and even professional men, but the emphasis is not on what they do but upon the productivity of a service organised as an industry and commercially valuable, in which, something is brought into existence quite apart from the benefit to particular individuals; and it is the production of this something which is described as the production of material services.
Thus, the services of professional men involving benefit to individuals according to their needs, such as doctors, teachers, lawyers, solicitors, etc. are easily distinguishable from an activity such as transport service.
They are not engaged in an occu pation in which employers and employees cooperate in the production or sale of commodities or arrangement for the production or sale or distribution and their services cannot be described as material services and are outside the ambit of industry.
It, therefore, follows that before an industrial dispute can be raised between employers and employers or between employers and employees or between employees and employees in relation to the employment or non employment or the terms of employment or with the conditions of labour of any person, there must first 178 be established a relationship of employers and employees associating together, the former following a trade, business, manufacture, undertaking or calling of employers in the production of material goods and material services and the attack following any calling, service, employment, handicraft or industrial occupation or avocation of workmen in aid of the employers enterprise.
It is not necessary that there must be profit motive, but the enterprise must be analogous to trade or business in a commercial sense.
[183 H; 184 G H; 185 C, H; 186 H; 187 A B, E G; 188 F H] (2) The decision in State of Bombay vs Hospital Mazdoor Sabha, ; holding that a Government hospital was an industry took an extreme view of the matter and cannot be justified, because : (a) it was erroneously held that the second part of the definition of 'industry ' was an extension of the first part, whereas, they are only the two aspects of the occupation of employers and employees in an industry; (b) it was assumed that economic activity is always related to capital or profit making and since an enterprise could be an industry without capital or profit making it was held that even economic activity was not necessary; and (c) it was held that since a hospital could be run as a business proposition and for profit by private individuals or groups of individuals a hospital run by Government without profit must also bear the same character.
This test was wrongly evolved from the observations in Federated Municipal and Shire Council Employees of Australia vs Melbourne Corporation, ; , which only indicate that in those activities in which Government take to industrial ventures the motive of profit making and absence of capital are irrelevant.
The observations, on the contrary, show that industrial disputes occur only in operations in which employers and employees associate to provide what people want and desire, that is, in the production of material goods or services, and not the 'satisfaction of material human needs '.
If however a hospital, nursing home or dispensary is run as a business, in a commercial way there may be found elements of an industry there.
Then the hospital is more than a place where persons can get treated for their ailments and it becomes a business.
[189 D H; 190 E F] Hospital Case ; over ruled.
(3) Under section 2(n)(vi) any industry specified in the First Schedule to the Act could be notified by the appropriate Government as a public utility service.
But what could be declared had to be an industry in the first place.
The original entries in the Schedule were five and obviously only general headings were given.
For example 'coal ' is not an industry but certain aspects of dealing with coal would be 'industry ' and that is what is intended.
The dealing must be an industry in which.
there arc employers and employees cooperating in the production of material goods for material services.
Similarly, cotton, textiles or food stuffs or iron and steel, as the entries stand, are not industries.
Therefore, the heading of the First Schedule and the words of cl.
(vi) presuppose the existence of an industry which may be notified as a public utility service, for special protection under the Act.
[191 F H] When the list was expanded in the First Schedule and certain services were mentioned, the intention could not have been otherwise.
It could not have been intended by Parliament that the entire concept of 'industry ' in the Act could be ignored and anything could be brought in as industry.
Most of the new entries are items in which an industry proper involving trade, business.
manufacture or something analogous to business can be found% Therefore, to apply the notification.
the condition precedent of the existence of an industry has to be satisfied.
If there is an industry 179 which falls within the item named in the first Schedule, then alone can it be notified to be classed as a public utility service.
To hold otherwise would largely render useless all the definitions in the Act regarding industry, industrial disputes etc., in relation to the scheduled items.
It is hardly to be thought that notifications can issue in respect of enterprises which are not 'industry ' to start with.
Parliament could not have attempted to declare that notwithstanding the definitions of 'industry ', 'industrial dispute ', workman ' and 'employer ' every hospital is to be regarded as an industry, by including 'service in hospitals and dispensaries ' in the First Schedule.
[192 B C, F H] (4) The activities in the cases of Secretary Madras Gytmkhana Club Employees Union vs Management of the Gymkhana Club [1968] 1 S.C.R. 742, University of Delhi vs Ramnath, ; and National Union of Commercial Employees vs M. R. Meher, [1962] Supp. 3 S.C.R. 157 were rightly held not be industries, because, in the first the management was a non profit making members ' club not employed in trade or industry, and the other two were cases in which the services rendered by the employees were in aid of professional men and not productive of material wealth or services.
[188 C F] Hotel and Catering Industry Training Board and Automobile Proprietary Ltd. H.L.; S.C.; and [1968]3 All.
E.R. 399 C.A., referred to.
Therefore, the Safdarjung Hospital which is run as a department of the Government, the Tuberculosis Hospital which is a charitable and research institute.
and the Kurji Holi Family Hospital which is entirely charitable, are not industries within the meaning of the .
[193 C; 194 B E]
|
Appeal No. 1460 of 1966.
Appeal by special leave from the judgment and decree dated April 30, 1965 of the Madhya High Court, Indore Bench in Second Appeal No. 209 of 1962.
G. L. Sanghi, P. C. Bhartari, for the appellants.
Rameshwar Nath, for respondents Nos. 1 to 4.
The Judgment of the Court was delivered by Hegde, J.
The only question, that falls for decision in this appeal by special leave is as to the application of section 151, Civil Procedure Code to a remand order falling within section 105(2) of that Code.
The facts leading upto the point under consideration may now be stated.
The appellant was the Jagirdar of the suit pro perties.
One Bhagirath was his tenant.
The said Bhagirath died in the year 1947 leaving behind no male issues.
His wife had predeceased him.
He had two daughters who were living at the time of his death.
After his death, defendants Nos. 1 to 5 who are his distant relations took possession of the suit properties and I got the revenue records changed in their names.
Thereafter the appellant brought the suit under appeal seeking the following reliefs (1) to declare that he is the owner of the suit properties; (2) to quash the order of the Tehsildar dated November 8, 1949 transferring the khata relating to the suit properties to the names of Defendants 1 to 5; (3) to grant possession of those properties to him and (4) other usual incidental reliefs.
The defendants resisted the plaintiff 's claim.
They contended inter alia that (1) the civil court had no jurisdiction to entertain ,the suit; (2) the plaintiff had lost right over the suit properties in H view of the Jagir Abolition Act, 1951 which came into force on December 4, 1952 during the pendency of the suit and (3) the 1st defendant being the adopted son of Bhagirath is entitled to 209 the possession of the suit properties.
In the suit several issues. were raised.
it is not necessary to refer to them in view of the limited scope of this appeal.
The trial court dismissed the suit upholding the contention of the defendants on two issues viz. (1) that the civil court had no jurisdiction to entertain the suit and (2) that in view of the Abolition of Jagirs and the vesting of the suit properties in the State, the plaintiff can claim no relief.
The first appellate court reversed the findings of the trial court on those issues.
It came to the conclusion that the civil court had jurisdiction to entertain the suit.
It further held that though in view of the abolition of the jagirs, the suit properties had vested in the State, it was for the State to get itself impleaded if it is interested in this litigation and as the State had not chosen to get itself impleaded, it was open to the plaintiff to press the suit.
In view of those conclusions, the appellate court set aside the decree of the trial court and remanded the suit to the trial court for deciding the other issues left undecided.
After the remand, the trial court negatived every one of the contentions taken by the defendants and decreed the suit as prayed for.
In appeal that decree was confirmed.
In second appeal the High Court of Madhya Pradesh agreed with the trial court and the appellate court on the findings given on all issues excepting the issue relating to the effect of abolition of the jagirs on the suit.
On that issue, it came to the conclusion that in view of the abolition of jagirs under the Jagir Abolition Act, the plaintiff had lost his title to the suit properties and therefore he could not get a decree for possession of the suit properties.
It rejected the contention of the plain tiff that that issue is concluded by the decision of the appellate court made before remand as the same had not been appealed against.
It opined that the court had inherent power to consider the correctness of that order.
It accordingly allowed the appeal and dismissed the suit.
The High Court, in our opinion, erred in holding that the correctness of the remand order was open to review by it.
The order in question was made under rule 23, Order 41, Civil Procedure Code.
That order was appealable under Order 43 of that Code.
As the same was not appealed against, its correctness was no more open to examination in view of section 105 (2) of the Code which lays down that where any party aggrieved by an order of remand from which an appeal lies does not appeal therefrom he shall thereafter be precluded from disputing its correctness.
The High Court has misconceived the scope of its inherent powers.
Under the inherent power of courts recognised by section 151, Civil Procedure Code, a court has no power to do that which is prohibited by the Code.
Inherent jurisdiction of the court must be exercised subject to the rule that if the Code does ' contain specific provi 210 sions which would meet the necessities of the case, such provisions should be followed and inherent jurisdiction should not be invoked.
In other words the court cannot make use of the special provisions of section 151 of the Code where a party had his remedy provided ,elsewhere in the Code and he neglected to avail himself of the, same.
Further the power under section 151 of the Code cannot be exercised as an appellate power.
We are also of the opinion that the High Court is not right in holding that in view of the abolition of the Jagirs, the plaintiff had lost all rights in the suit properties.
It is true that in view of the provisions of the Jagir Abolition Act, the suit properties vested in the State.
But it was conceded at the bar that if the plaintiff is proved to have been the owner of the suit properties on the day the Jagir Abolition Act came into force, he is entitled to the com pensation provided in that Act.
Therefore the plaintiff is interested in establishing that on the date Jagir Abolition Act came into force, he was the full owner of the suit properties.
The facts of this case fall within the rule laid down by this Court in Himatrao vs Jaikishandas and Ors.
On the facts of this case the interests of justice would have been better served if the High Court had ordered the impleading of the State of Madhya Pradesh in the appeal before.
it and determined the rights of all the parties finally.
Hence we set aside the decree of the High Court and remand the case to that Court with a direction that the State of Madhya Pradesh should be impleaded and the rights of all the parties decided in accordance with law.
, In the circumstances of the case we make no order as to costs of this appeal.
Y.P. Case remanded.
| IN-Abs | The tenant of the appellant a Jagirdar, died without leaving any male issues.
His distant relations the respondents, took possession of his properties.
Thereupon the appellant brought a suit claiming possession.
of the properties as he was the owner.
The trial court dismissed the suit holding that the civil court has no jurisdiction to entertain the suit, and that in view of the Jagir Abolition Act, 1951 which was enacted during the pendency of the sit and with the vesting of the suit properties in the State, the appellant was not entitled to claim.
The first appellate court reversed these findings and held that though the suit properties had vested in the State, it was for the State to get itself impleaded, and as the State had not got itself impleaded, it was open to the appellant to press the suit.
In view of these conclusions, the appellate court demanded the suit to decide the other undecided issues.
After the remand, the trial court negatived the respondents defendants contention and decreed the suit.
In appeal that decree was affirmed.
In second appeal, the High Court agreed with the courts below on all issues except that relating to the effect of abolition of Jagirs.
It held that under the Jagir Abolition Act, the appellant lost his title to the suit properties.
In its view that issue was not concluded by the decision of the appellate court made before remand as the same had not been appealed against, since the court had inherent power to consider the correctness of that order.
In appeal, this Court: HELD : The case must be remanded for determination of the right of all the parties after impleading the State as a party.
The correctness of the remand order was not open to review by the High Court.
The order in question was made under rule 23, Order 41, Civil Procedure Code.
That order was appealable under Order 43 of that Code.
As the same was not appealed against, its correctness was no more open to examination in view of section 105 (2) of the Code which lays down that where any party aggrieved by an order of remand from which an appeal lies does not appeal therefrom he shall thereafter be precluded from disputing its correctness.
The High Court has misconceived the scope of its inherent powers.
Under the inherent power of courts recognised by section 151, Civil Procedure Code, a court has no power to do that which is prohibited by the Code.
Inherent jurisdiction of court must be exercised subject to the rule that if the Code does contain specific provisions which would meet the necessities of the case, such provisions should be followed and inherent jurisdiction should not be involved.
In other words the court cannot make use of the special provisions of section 151 of the Code where a party bad his remedy provided elsewhere in the Code and be neglected 208 to avail himself of the same.
Further the power under section 151 of the Code cannot be exercised as an appellate power.
The appellant Jagirdar had not lost all rights in the suit properties.
The suit properties vested in the State in view of the Jagir Abolition Act.
But it was conceded at the bar that if the appellant was proved to have been the owner of the suit properties on the day the Jagir Abolition Act came into force, he was entitled to the compensation provided in that Act.
Therefore the appellant was interested in establishing that on the date Jagir Abolition Act came into force, he was the full owner of the suit properties.
[210 C] Himatrao vs Jaikishandas and Ors. ; followed.
|
iminal Appeal No. 61 of 1953.
Appeal under article 134(1)(c) of the Constitution of India from the Judgment and Order dated the 7th August, 1952, of the High Court of Judicature for the State of Punjab at Simla in Criminal Revision No. 78 of 1952 arising out of the case reported by the District Magistrate, Jullundur, with his No. 301 M.D. Reader dated the 9th January, 1952, for revision of the Order dated the 20th July, 1951, of Magistrate 1st Class.
section M. Sikri, Advocate General for the State Of Punjab (Porus A. Mehta and P. G. Gokhale, with him) for the appellant.
N. section Bindra for the respondent.
October 20.
The Judgment of the Court was delivered by MUKHERJEA J.
This appeal, which has come before us, on a certificate granted by the High Court of the State of Punjab at Simla, under article 134 (1)(c) of the Constitution, raises a short point of law.
On the 3rd of March, 1948, an Ordinance (being Ordinance No. VII of 1948) was promulgated by the Governor of East Punjab, under section 88 of the Government of India Act, 1935, making provisions for the registration of land claims of the East Punjab refugees.
On the 17th March, 1948, the respondent, Mohar Singh, who pur ports to be a refugee from West Pakistan, filed a claim in accordance with the provisions of this Ordinance, stating therein, that he had lands measuring 104 kanals situated within the district of Mianwali in West Punjab.
On the 1st of April, 1948, this Ordinance was repealed and Act XII of 1948 (hereinafter called 'the Act ') was passed by the East Punjab Legislature re enacting all the provisions of the repealed Ordinance.
The claim filed by the respondent was investigated in due course and it was found, after enquiry, that the statement made by him was absolutely false and that as a matter of fact there was no land belonging to him in West Pakistan.
Upon this, a prosecution was started against him on the 13th of May, 1950, under section 7 of the 895 Act, which makes it an offence for any person to submit, with regard to his claim under the Act, any information which is false.
The accused was tried by section Jaspal Singh, Magistrate, First Class, Jullandur, before whom he confessed his guilt and pleaded for mercy.
The trying Magistrate by his order dated the 20th of July, 1951, convicted the respondent under section 7 of the Act and sentenced him to imprisonment till the rising of the Court and a fine of Rs. 120, in default of which he was to suffer rigorous imprison ment for one month.
The District Magistrate of Jullundur considered the sentence to be inadequate and referred the case to the High Court at Simla under section 438 of the Criminal Procedure Code with a recommendation that a deterrent sentence might be imposed upon the accused.
The matter first came up before a single Judge of that Court and a preliminary point was raised on behalf of the respondent that it was not within the competence of the trying Magistrate to convict him at all under the provisions of the Act, as the offence was committed against the Ordinance before the Act came into force and the prosecution was started long after the Ordinance had come to an end.
Having regard to the diversity of judicial opinion on the point, the single Judge referred the case for decision by a Division Bench.
The learned Judges constituting the Division Bench accepted the contention raised on behalf of the respondent, and by their judgment, dated the 7th of August, 1952, set aside the conviction of the respondent and the sentence imposed upon him under section 7 of the Act.
It is against this judgment that the present appeal has been taken to this Court by the State of Punjab.
It is not disputed that the respondent did submit, with regard to the claim filed by him under the provisions of the Ordinance, an information which was false and that such act was punishable as an offence under section 7 of the Ordinance.
The Ordinance however was repealed soon after the filing of the claim and was substituted by the Act which incorporated all the provisions of the Ordinance.
The High Court in deciding the case in favour of the respondent proceeded on the 896 ground that as Act XII of 1948 was not in existence at the date when the claim was filed by the respondent, he could not possibly be convicted of an offence under a law which was not in force at the time of the commission of the offence.
The State Government attempted to meet this argument by invoking the provisions of section 6 of the which is in the same terms as section 4 of the Punjab .
Section 6 of the lays down the effect of the repeal of an enactment.
The section runs thus "6.
Where this Act or any Central Act or regulation made after the commencement of this Act, repeals any enactment hitherto made or hereafter to be made, then, unless a different intention appears, the repeal shall not (c)affect any right, privilege, obligation or liability acquired, accrued or incurred under any enactment so repealed ; or (d)affect any penalty, forfeiture or punishment incurred in respect of any offence committed against any enactment so repealed; or (e)affect any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, penalty, forfeiture or punishment as aforesaid.
" On the strength of this provision in the it was contended on behalf of the State that the repeal of the Ordinance could not in any way affect the liability already incurred by the respondent, in respect of an offence, committed against the provisions of the Ordinance and any penalty or punishment consequent thereon.
The learned Judges of the High Court negatived this contention by holding that section 6 of the could be attracted only when an Act or regulation is repealed simpliciter but not when, as in the present case, the repeal is followed by re enactment.
The Repealing Act, it is pointed out, reproduces the provisions of the Ordinance in their entirety, but it 897 nowhere provides that offences committed, when the Ordinance was in force, could be punished after its repeal.
The language of section 11 of the Act, which contains its saving provisions, does not, it is said, indicate that a criminal liability incurred when the Ordinance was in force would continue after it came to an end.
It is the propriety of this view that has been challenged before us in this appeal.
It is not disputed that in the present case the prose caution was started against the respondent under section 7 of the Act and not under the corresponding provision of the Ordinance.
The offence was committed at a time when the Act was not in force and obviously no man could be prosecuted or punished under a law which came into existence subsequent to the commission of the offence.
But this by itself 'Might not raise any serious difficulty, for the Court would have ample authority to alter the conviction of the accused, under the Act, to one under the Ordinance which contained the identical provision, provided he could be prosecuted and punished under the Ordinance after it was repealed, and this is the material point that requires consideration in this case.
Under the law of England, as it stood prior to the Interpretation Act of 1889, the effect of repealing a statute was said to be to obliterate it as completely from the records of Parliament as if it had never been passed, except for the purpose of those actions, which were commenced, prosecuted and concluded while it was an existing law(1).
A repeal therefore without any saving clause would destroy any proceeding whether not yet begun or whether pending at the time of the enactment of the Repealing Act and not already prosecuted to a final judgment so as to create a vested right(1).
To obviate such results a practice came, into existence in England to insert a saving clause in the repealing statute with a view to preserve rights and liabilities already accrued or incurred under the repealed enactment.
Later on, to dispense with the necessity of having to insert a saving clause on each occasion, (1) Vide Craies on Statute Law, 5th edn, page 323.
(2) Vide Crawford on Statutory Construction, page 599 600.
i 898 section 38(2) was inserted in the Interpretation Act of 1889 which provides that a repeal, unless the contrary intention appears, does not affect the previous operation of the repealed enactment or anything duly done or suffered under it and any investigation, legal proceeding or remedy may be instituted, continued or enforced in respect of any right, liability and penalty under the repealed Act as if the Repealing Act had not been passed.
Section 6 of the , as is well known, is on the same lines as section 38(2) of the Interpretation Act of England.
Under section 30 of the , which corresponds to section 27 of the Punjab Act, the provisions of the Act are applicable to Ordinances as well.
Of course, the consequences laid down in section 6 of the Act will apply only when a statute or regulation having the force of a statute is actually repealed.
It has no application when a statute, which is of a temporary nature, automatically expires by efflux of time.
The Ordinance in the present case was undoubtedly a temporary statute but it is admitted that the period during which it was to continue had not expired when the Repealing Act was passed.
The repeal therefore was an effective one which would normally attract the operation of section 6 of the .
The controversy thus narrows down to the short point as to whether the fact of the repeal of the Ordinance being followed by reenactment would make the provision of section 6 of the inapplicable to the present case.
The High Court, in support of the view that it took, placed great reliance upon certain observations of Sulaiman C.J. in Danmal Parshotamdas vs Baburam(1).
The question raised in that case was whether a suit by an unregistered firm against a third party, after coming into force of section 69 of the Partnership Act, would be barred by that section in spite of the saving clause contained in section 74(b) of the Act.
The Chief Justice felt some doubts on the point and was inclined to hold ,that section 74(b) would operate to save the suit although the right sought to be enforced by it had (1) All.
899 accrued prior to the commencement of the Act; but eventually he agreed with his colleague and held that section 69 would bar the suit.
While discussing the provision of section 74(2) of the Partnership Act, in course of his judgment, the learned Chief Justice referred by way of analogy to section 6(e) of the and observed as follows at page 504: It seems that section 6(e) would apply to those cases only where a previous law has been simply repealed and there is no fresh legislation to take its place.
Where an old law has been merely repealed, then the repeal would not affect any previous right acquired nor would it even affect a suit instituted subsequently in respect of a right, previously so acquired.
But where there is a new law which not only repeals the old law, but is substituted in place of the old law, section 6(e) of the is not applicable, and we would have to fall back on the provisions of the new Act itself.
These observations could not undoubtedly rank higher than mere obiter dictum for they were not at all necessary for purposes of the case, though undoubtedly they are entitled to great respect.
In agreement with this dictum of Sulaiman C.J. the High Court of Punjab, in its judgment in the present case, has observed that where there is a simple repeal and the Legislature has either not given its thought to the matter of prosecuting old offenders, or a provision dealing with that question has been inadvertently omitted, section 6 of the will undoubtedly be attracted.
But no such inadvertence can be presumed where there has been a fresh legislation on the subject and if the new Act does not deal with the matter, it may be presumed that the Legislature did not deem it fit to keep alive the liability incurred under the old Act.
In our opinion the approach of the High Court to the question is not quite correct.
Whenever there is a repeal of an enactment, the consequences laid down in section 6 of the will follow unless, as the section itself says, a different intention appears.
In the case of a simple repeal there is scarcely any room for expression of a contrary opinion.
But when the 900 repeal is followed by fresh legislation on the same subject we would undoubtedly have to look to the provisions of the new Act, but only for the purpose of determining whether they indicate a different intention.
The line of enquiry would be, not whether the new Act expressly keeps alive old rights and liabilities but whether it manifests an intention to destroy them.
We cannot therefore subscribe to the broad proposition that section 6 of the is ruled out when there is repeal of an enactment followed by a fresh legislation.
Section 6 would be applicable in such cases also unless the new legislation manifests an intention incompatible with or contrary to the provisions of the section.
Such incompatibility would have to be ascertained from a consideration of all the relevant provisions of the new law and the mere absence of a saving clause is by itself not material.
It is in the light of these principles that we now proceed to examine the facts of the present case.
The offence committed by the respondent consisted in filing a false claim.
The claim was filed in accordance with the provision of section 4 of the Ordinance and under section 7 of the Ordinance, any false information in regard to a claim was a punishable offence.
The High Court is certainly right in holding that section 11 of the Act does not make the claim filed under the Ordinance a claim under the Act so as to attract the operation of section 7.
Section 11 of the Act is in the following terms: " The East Punjab Refugees (Registration of Land Claims) Ordinance No. VII of 1948 is hereby repealed and any rules made, notifications issued, anything done, any action taken in exercise of the powers conferred by or under the said Ordinance shall be deemed to have been made, issued, done or taken in exercise of the powers conferred by, or under this Act as if this Act had come into force on 3rd day of March, 1948.
" We agree with the High Court that the expression "anything done" occurring in the section does not mean or include an act done by a person in contravention of the provisions of the Ordinance.
What the section contemplates and keeps alive are rules, notifications or 901 other official acts done in exercise of the powers conferred by or under the Ordinance and these powers are mentioned in several sections of the Act.
But although the lodging of the claim does not come within the purview of section 11 of the Act, we are of opinion that the proviso to section 4 of the Act clearly shows that a claim filed under the Ordinance would be treated as one filed under the Act with all the consequences attached thereto.
Section 4 of the Act provides for the registration of land claims.
The first subsection lays down how the claim is to be filed.
The proviso attached to it then says that "a refugee who has previously submitted a claim under Ordinance VII of 1948 to any other authority competent to register such claim shall not submit another claim in respect of the same land to the Registering Officer.
" Such claim would be reckoned and registered as a claim under the Act and once it is so treated the incidents and corollaries attached to the filing of a claim, as laid down in the Act, must necessarily follow.
The truth or falsity of the claim has to be investigated in the usual way and if it is found that the, information given by the claimant is false, he can certainly be punished in the manner laid down in sections 7 and 8 of the Act.
If we are to hold that the penal provisions contained in the Act cannot be attracted in case of a claim filed under the Ordinance, the results will be anomalous and even if on the strength of a false claim a refugee has succeeded in getting an allotment in his favour, such allotment could not be cancelled under section 8 of the Act.
We think that the provisions of sections 4,7 and 8 make it apparent that it was not the intention of the Legislature that the rights and liabilities in respect of claims filed under the Ordinance shall be extinguished on the passing of the Act, and this is sufficient for holding that the present case would attract the operation of section 6 of the .
It may be pointed out that section 1 1 of the Act is somewhat clumsily worded and it does not make use of expressions which are generally used in saving clauses appended to repealing statutes; but as has been said above the point for our 902 consideration is whether the Act evinces an intention which is inconsistent with the continuance of rights and liabilities accrued or incurred under the Ordinance and in our opinion this question has, to be answered in the negative.
The Advocate General of Punjab has drawn our attention to certain American authorities which hold that in case of simultaneous repeal and re enactment, the re enactment is to be considered as reaffirmation of the old law and the provisions of the repealed Act which are thus re enacted continue in force uninterruptedly.
It appears that judicial opinion in America on this point is not quite uniform and we do not consider it necessary to express any opinion upon it.
The provisions of section 6 of the will, in our opinion, apply to a case of repeal even if there is simultaneous enactment unless a contrary intention can be gathered from the new enactment.
The result is that the appeal is allowed and the judgment of the High Court set aside.
The Advocate General does not press for enhancement of sentence passed on the respondent.
Consequently it is unnecessary for the High Court to hear the reference made to it by the District Magistrate, Jullundur any further.
The sentence already passed upon the respondent by the trying Magistrate shall stand and if the fine of Rs. 120 has not already been, paid, it shall be paid now.
In default, the respondent shall suffer rigorous imprisonment for one month.
Appeal allowed.
| IN-Abs | The provisions of a. 6(c) (d) and (e) of the (same as section 4 of the Punjab General Clauses Act, 1898) relating to the consequences of the repeal of a law are applicable not only when an Act Regulation is repealed simpliciter but also to a case of repeal and simultaneous enactment re enacting all the provisions of the repealed law.
On the repeal of a law the consequences mentioned in a. 6(c)(d) and (e) of the Act follow unless a different or contrary intention appears from the repealing statute.
For ascertaining the above contrary intention one has to look to the provisions of the new enactment in order to see whether the rights and liabilities under the repealed law have been put an end to by the now enactment.
It is an erroneous and incorrect approach to enquire if the new enactment has by its provisions positively kept alive the rights and liabilities under the repealed law.
The absence of a saving clause in the new enactment preserving the rights and liabilities under the repealed law is neither material nor decisive on the question.
Section 6 of the , has no application to a temporary law which automatically expires by efflux of time but the section would apply if the temporary law is repealed before it so expires.
The Punjab Ordinance VII of 1948 was a temporary law and the same having been repealed before it expired by efflux of time a prosecution for an offence committed under section 7 of the Ordinance prior to its repeal could be validly started even after the repeal.
The term "anything done '. ' occurring in section 11 of the Punjab Act XII of 1948 does not mean any act done by a person in contravention of the provisions of the East Punjab Refugees (Registration of Land Claims) Ordinance VII of 1948.
The term "anything clone" refers to official acts done in the exercise of the powers conferred by or under the Ordinance.
Danmal Parshotamdas vs Baburam ((1935) I.L.R. 58 All. 495), distinguished.
114 894
|
Appeal No. 457 of 1970.
Appeals by special leave from the judgment and order dated April 24, 1968 of the Allahabad High Court in Civil Misc.
Writ No).
1401 of 1968.
J. P. Goyal and V. C. Prashar, for the appellant.
C. B. Agarwala and O. P. Rana, for the respondent.
The Judgment of the Court was delivered by Shah, J.
The appellants held a licence under the U.P. Sugar Dealers ' Licensing Order, 1962, to deal in sugar as "wholesale distributors" they also held a licence under the U.P. Food grains Dealers ' Licensing Order, 1964.
By letter dated June 5, 1967 the appellants were called upon to explain certain irregularities detected on inspection of their shop by the Assistant Commissioner of Food and Civil Supplies on April 24, 1967.
On the following day the appellants were directed to hand over all their stocks of sugar and flour to the Bindki Co operative Marketing Society.
Representations against the order directing the appellants to deliver their stocks made to the District Magistrate, Fatehpur, were not even attended to, and the appellants were obliged to surrender their stocks of sugar and flour.
By letter dated June 28, 1967, the appellants were informed that the District Magistrate, Fathpur, had cancelled their licences as dealers in sugar and flour.
The appellants applied for a copy of the order, but it was not supplied.
Against the order of the District Magistrate, the appellants submitted an appeal under cl. 8 of the Sugar Dealers ' Licensing Order, 1962, on July 19, 1967.
By letter dated January 11, 203 1969, the Deputy Secretary to the Government of U.P., Food and Rationing Department, intimated the appellants that their appeal against the cancellation of the licence by the District Magistrate was rejected.
The reasons for the order passed by the State Government were also not communicated to the appellants.
The appellants then moved a petition in the High Court of Allahabad for a writ quashing the orders of the District Magistrate and the State Government in appeal.
The petition was rejected by a Division Bench of the High Court.
With special leave, the appellants have appealed to this Court.
The proceedings of the authorities exercising power under the Sugar Dealers ' Licensing Order, 1962, and the Foodgrain Dealers ' Licensing Order,, 1964, strike at the very root of the rule of law.
The appellants have by a series of official acts which flout the rule of law deprived of even the semblance of protection they may claim in an administration functioning under a democratic Constitution.
A day after the date on which the appellants were called upon to submit their explanation regarding the irregularities alleged to be discovered at the inspection,, they were ordered to part with the stocks of sugar and flour in their possession.
Objections raised by the appellants before the District Magistrate were never attended to.
No attempt is made to disclose the source of the power and the necessity to exercise that power.
By the action of the authorities, the appellants were deprived of their right to carry on business in sugar and flour without even an opportunity to explain the alleged irregularities.
Their protests addressed to the District Magistrate were ignored; the District Magistrate cancelled their licences without disclosing any reasons, and the State Government rejected the statutory appeal also without recording any reasons.
This series of actions and orders passed by the executive authorities require something more than a plea of ignorance of law on the part of the authorities to explain.
The appellants were entitled at least to be told the reasons for cancelling their licences.
The District Magistrate intimated the cancellation of the licences by an official communication, giving no reasons, and the result of the appeal to the State Government was communicated by a letter from the Deputy Secretary to the Government of U.P., without disclosing even the identity of the officer who considered the objections and the, reasons for rejecting the objections.
The case discloses a disturbing state of affiairs.
The authorities have disclosed by their conduct a reckless disregard of the rights of the appellants.
The order passed by the District Magistrate cancelling the licences was a quasi judicial : it could be made only on a consideration of the charges and the explanation 204 given by the appellants.
That necessarily implied that the District Magistrate had to give some reasons why he held the charges proved, and the explanation unacceptable.
When the matter was carried in appeal, the State Government could at least have acted with some awareness that citizens have rights which must be protected against possible arbitrary action by subordinate officials.
The District Magistrate is not made the final authority in cancelling the licence.
The appellants had a right to carry on their business, and they held a licence to carry on their business they could be deprived of their right by an executive order supported by good and adequate reasons.
The relevant rules granted a right of appeal to the State.
Government against that order, and that implied that the aggrieved party must have an Opportunity to convince the State Government that the order passed by the District Magistrate was erroneous.
That right could be effectively exercised if reasons be recorded by the District Magistrate and supplied to the aggrieved party.
If the aggrieved party is not supplied the reasons, the right to appeal is an empty formality.
From the materials on the record it cannot be determined as to who considered the appeal addressed to the State Government, and what was considered by the authority exercising power on behalf of the State Government.
The practice of the executive authority dismissing statutory appeals against orders which prima facie seriously prejudice the rights of the aggrieved party without giving reasons is a negation of the rule of law.
This Court had occasion to protest against this practice in several decisions : see Madhya Pradesh Industries Ltd. vs Union of India & Others(1) (per Subba Rao, J.,); Bhagat Raja vs Union of India and Ors(2); State of Madhya Pradesh and Anr.
vs Seth Narsinghdas Jankidas Mehta(2).
The State of Gujarat vs Patel Raghav Natha and Ors.(4); and Prag Das Umar Vaishya vs The Union of India and Ors.(5).
The power of the District Magistrate was quasi judicial : exercise of the power of the State Government was subject to the supervisory power of the High Court under article 227 of the Constitution and of the appellate power of this Court under article 136 of the Constitution.
The High Court and this Court would be placed under a great disadvantage if no reasons are given, and the appeal is dismissed without recording and communicating any reasons.
Opportunity to a party interested in the dispute to present his case on questions of law as well as fact, ascertainment of facts (1) ; (2) ; (3) C.A. No. 621 of 1966 decided on April 29, 1969.
(4) C.A. No. 723 of 1966 decided on April 21, 1969.
(5) C.A. No. 657 of 1965 decided on Aug. 17, 1967.
205 from materials before the Tribunal after disclosing the materials to the party against whom it is intended to use them, and adjudication by a reasoned judgment upon a finding of the facts in controversy and application of the law to the facts found, are attributes of even a quasi judicial determination.
It must appear not merely that the authority entrusted with quasi judicial authority has reached a conclusion on the problem before him : it must appear that he has reached a conclusion which is according to law and just, and for ensuring that end he must record the ultimate mental process leading from the dispute to its solution.
Satisfactory decision of a disputed claim may be reached only if it be, supported by the most cogent reasons that appeal to the authority.
Recording of reasons in support of a decision on a disputed claim by a quasi judicial authority ensures that the decision is reached according to law and is not the result of caprice, whim or fancy or reached on grounds of policy or expediency.
A party to the dispute is ordinarily entitled to know the grounds on which the authority has rejected his claim.
If the order is subject to appeal, the necessity to record reasons is greater, for without recorded reasons the appellate authority has no material on which it may deter mine whether the facts were properly ascertained, the relevant law was correctly applied and the decision was just.
The High Court in rejecting the petition filed by the appellants has observed that the District Magistrate in considering the explanation of the appellants has "considered all the materials" and also that "the State Government in considering the appeal had considered all the materials".
We have, however, nothing on the record to show what materials, if any, were considered by the District Magistrate and the State Government.
The High Court has also observed that cl. 7 of the Sugar Dealers ' Licensing Order does not require "the State Government to pass a reasoned order.
All that is required is to give an aggrieved person an opportunity of being heard.
" We are of the view that the High Court erred in so holding.
The appellants has a right not only to have an opportunity to make a representation, but they are entitled to have their representation considered by an authority unconcerned with the dispute and to be given information which would show the decision was reached on the merits and not on; considerations of policy or expediency.
This is a clear implication of the nature of the jurisdiction exercised by the appellate authority : it is not required to be expressly mentioned in the statute.
There is nothing on the record which shows that the representations made by the appellants was even considered.
The fact that cl. 7 of the Sugar Dealers ' Licensing Order to which the High Court has referred does not "require the State Government to pass a reasoned order" is wholly irrelevant.
The nature of 206 the proceeding requires that State Government must give adequate reasons which disclose that an attempt was made to reach a conclusion according to law and just.
Counsel appearing on behalf of the State has not attempted to support the reasons given by the High Court.
He merely contended that there are in the files of the Government, orders passed by the District Magistrate and also of the State Government which gave reasons in support of the orders.
The orders have, however, not been communicated to the appellants, and were not even produced before the High Court.
Obviously we cannot consider those orders, if any, at this stage.
The orders passed by the District Magistrate and the State Government cancelling the licences of the appellants are quashed.
The State will pay the costs of the appellants in this Court and in the High Court.
R.K.P.S. Appeal allowed and Orders quashed.
| IN-Abs | The appellants, who were holders of a licence under the U.P. Sugar Dealers ' Licensing Order, 1962, to deal in sugar and were also licenced to deal in flour, were called upon by a letter dated June 5,1967 to explain certain irregularities detected on inspection of their shop.
The next day they were directed to hand over their stocks of sugar and flour to a Cooperative Marketing Society.
Their representations against this direction to the District Magistrate were not attended to, and they were therefore obliged to surrender their stocks.
By a letter dated June 28, 1967, the appellants were informed that the District Magistrate had cancelled their licences as dealers in sugar and flour but no reasons were given for this order.
An appeal under clause 8 of the Order of 1962 to the State Government was rejected but no reasons were communicated to the appellants for this rejection.
A writ petition challenging the orders of the District Magistrate and the State Government in appeal was dismissed by the High Court.
On appeal to this Court, HELD : The orders passed by the District Magistrate and the State Government cancelling the licences of the appellants must be quashed.
The authorities had disclosed by their conduct a reckless disregard of the rights of the appellants.
The order passed by the District Magistrate cancelling the licences was quasi judicial; it could be made only on a consideration of the charges and the explanation given by the appellants.
That necessarily implied that the District Magistrate had to give some reasons why he held the charges proved, and the explanation unacceptable.
The appellants had a right to carry on their business and they could be deprived of their right only by an order supported by good and adequate reasons ' Under the rules appellant had a right of appeal to the State Government.
Unless reasons were given in the District Magistrate 's Order the aggrieved party had no opportunity to convince the State Government that the order was erroneous.
, if the aggrieved party was not supplied the reasons the right of appeal was an empty formality.
[203 H 204 D] There was nothing on the record to show that the representations made by the appellants to the State Government were even considered.
The fact that cl. 7 of the Sugar Dealers ' Licensing Order to which the High Court had referred does not "require the State Government to pass a reasoned order" is wholly irrelevant.
The nature of the proceeding requires that the State Government must give adequate reasons which disclose that an attempt was made to reach a conclusion, which was according to law and just.
[205 H] Opportunity to a party interested in the dispute to present his case on questions of law as well as fact, ascertainment of facts from materials L 11 Sup.
C 1 14 20 2 before the Tribunal after disclosing the materials to the party against whom it is intended to use them, and adjudication by a reasoned judgment upon a finding of the facts found, are attributes of even a quasi judicial deter mination.
It must appear not merely that the authority entrusted with quasi judicial authority has reached a conclusion on the problem before him: it must appear that he has reached a conclusion which is according to law and just, and for ensuring that he must record the ultimate mental process leading from the dispute to its solution.
[204 H] Madhya Pradesh Industries Ltd. vs Union of India & Others (per Subba Rao, J.) ; ; Bhagat Raja vs Union of India and Ors. ; ; State of Madhya Pradesh and Anr.
vs Seth Narsinghdas Jankidas Mehta, C.A. No. 621 of 1966 decided on April 29, 1969.
The Slate of Gujrat vs Patel Raghav Natha and Ors., C.A. No. 723 of 1966 decided on April 21,1969 and Prag Das Umar Vaishya vs The Union of India and Ors., C.A. No. 657 of 1965 decided on Aug. 17, 1967; referred to.
|
Appeal No. 2210 of 1966.
Appeal by special leave from the judgment and order dated January 20, 1966 of the Assam and Nagaland High Court in Civil Rule No. 184 of 1964.
Naunit Lal, for the appellants.
D. N. Mukherjee, for respondent No. 1.
The Judgment of the Court was delivered by Vaidialingam, J.
This appeal, by special leave, is directed against the judgment, dated January 20, 1966 of the High Court of Assam and Nagaland, in Civil Rule No. 184 of 1964 by which the High Court quashed the inquiry proceedings conducted by the 4th respondent therein and the order, dated December 3, 1958 passed by the 3rd respondent dismissing the first respondent (hereinafter shortly referred to as the respondent) from service and the orders of the appellate authorities confirming the same.
89 The respondent joined the Assam Police Service as a constable in 1933 and was promoted to the post of Assistant Sub Inspector of Police in 1936.
He was then promoted as Sub Inspector of Police in 1944.
He was made permanent as Sub Inspector of .police in 1952.
In 1955, when the respondent was the Officer incharge of the Sorbhog Police Station, certain allegations appear to have been made against him in consequence of which a confidential enquiry was conducted by the Superintendent of Police, Anti Corruption Branch, who submitted a report to the Government on December 21, 1957.
In view of the complaints received against him, the respondent had already been placed under suspension with effect from July 24, 1957.
The Sub Divisional Police Officer, Barpeta, having been authorised under section 7 of the framed charges against the respondent on March 22, 1958.
It is not really necessary to enumerate the various items of charges, but they can be grouped under three broad heads.
Under charge No. 1, the respondent was alleged not to have taken cognisance of the items of cognizable offences reported to him and enumerated under that charge and, as such, he had neglected to perform his duty as a police officer in charge of a Police Station.
The second charge related to his having accumulated assets in his name as well as in .the name of his wife, far beyond his known sources of income.
Items of assets purchased by the respondent were again given in detail.
The third charge related to the respondent having concealed the items, enumerated therein, and given false statements regarding his assets in the declaration of assets submitted to the authorities on July 22, 1957.
The respondent submitted his explanation contravening the allegations made against him.
The enquiry was conducted by the Sub Divisional Police Officer, Barpeta (shortly referred to as the Enquiry Officer) and,.
as many as 14 witnesses were examined on the side of the prosecution.
The respondent cross examined those witnesses and he also examined four witnesses on his side.
The Enquiry Officer, by his report dated September 11, 1958 found the respondent guilty of the various charges, excepting regarding one item under the first charge.
He declined to place any reliance on the evidence adduced by the respondent and rejected the explanation furnished by him.
Ultimately, the Enquiry Officer, after finding the respondent guilty, submitted his report to the Superintendent of Police, Kamrup.
The Superintendent of Police, after referring to the charges framed against the respondent, the nature of the evidence adduced before the Enquiry Officer as well as the finding recorded by the said Officer, issued a memo, dated October 18, 1958 asking the respondent to submit his explanation.
A copy of the report of the Enquiry L 11 SupCI/70 7 90 Officer had already been given to the respondent.
Still the Superintendent of Police also sent a copy along with his memo.
On receipt of this memo, the respondent requested the Super intendent of Police, by his letter dated October 29, 1958 for being furnished with copies of the depositions of the prosecution and defence witnesses recorded by the Enquiry Officer to enable him to submit his explanation.
But this request was rejected by the Superintendent of Police stating that there was no rule for giving copies of statements.
The respondent submitted a fairly long explanation, dated November 21, 1958.
He disputed the correctness of the findings recorded against him by the Enquiry Officer and, ultimately stated that he was innocent and was not guilty of any offence.
He prayed that if in case he was found guilty, he should not be awarded the extreme punishment of dismissal from service.
But he ,added a request to the effect that he should be allowed to examine witnesses and submit documents and he should be exonerated by the Superintendent of Police after a perusal and consideration of the same.
On receipt of the explanation, the Superintendent of Police, by his order dated December 3, 1958 rejected the explanation of the respondent, accepted the findings of the Enquiry Officer and holding that the charges had been proved beyond all reasonable doubt, dismissed the respondent from service with immediate effect.
In the said order, the Superintendent of Police had referred to the charges framed against the respondent, the explanation furnished by him as well as the evidence recorded during the enquiry and the findings recorded by the Officer and the explanation sent by the respondent to the show cause notice and ultimately held that the charges had all been proved established and that the findings recorded by the Enquiry Officer were correct.
With regard to the request made by the respondent in his explanation dated November 21, 1958 the disciplinary authority stated that the respondent was afforded a full and fair opportunity to adduce all evidence that he desired to be placed before the Enquiry Officer and that opportunity had also been fully utilised by the respondent.
Therefore there was no further necessity for giving the respondent an opportunity to furnish documentary or oral evidence.
Regarding the punishment to be awarded, the Superintendent of Police stated that the charges proved against the respondent, who was a member of the Police force, were very serious and hence no leniency could be shown.
The respondent filed an appeal.
before the Deputy Inspector General of Police, Range, Assam, who, by his order dated May 11, 1960 dismissed the same.
91 The respondent thereupon filed a revision before the Inspector General of Police, Assam, which, again, was rejected on June 30, 1961.
A further revision, filed before the State Government was also dismissed on January 21, 1964.
On August 17, 1964 the respondent filed the writ petition in question, challenging the disciplinary proceedings initiated against him and the orders of dismissal passed on the basis of the enquiry conducted by the Enquiry Officer.
He had taken several grounds of attack as against the disciplinary proceedings.
He alleged that no reasonable opportunity was afforded to him during the enquiry proceedings.
During the enquiry, the Enquiry Officer was in frequent consultation and contact with the Deputy Superintendent of Police of the Anti Corruption Branch, regarding the charges which were being tried by him.
In particular, he referred to the record made by the Enquiry Officer in his proceedings that on July 14 and 15, 1958 he consulted the Deputy Superintendent of Police, Anti Corruption Branch about the proceedings and went through his records relating to the charges.
He averred that the nature of the consolation and the materials collected by the Enquiry Officer from the Deputy Superintendent, Anti Corruption Branch, were not made known to him and those materials had been taken into account in recording the findings against him.
He also alleged that copies of the report of the Anti Corruption Department, on the basis of which disciplinary proceedings had been initiated, had not been furnished to him nor were the copies of the evidence recorded during the enquiry given to him, though a specific request was made in that behalf.
On all these grounds, he sought to have all the orders quashed on the ground that there had been a gross violation of the principles of natural justice.
He took a further ground of attack that he had been appointed by the Inspector General of Police and the order of dismissal by a subordinate authority, viz., the Superintendent of Police, was illegal and void.
The allegations made by the respondent in the writ petition were controverted by the appellants.
They averred that the respondent was not entitled to a copy of the report of the Anti Corruption Branch, which was only in the nature of a preliminary investigation into the complaints received against the respondent to enable the disciplinary authority to consider whether disciplinary action against the respondent should be initiated or not.
It was further stated that the respondent was given a full and fair opportunity to participate in the enquiry and the witnesses were all examined in his presence and, apart from cross examining the prosecution witnesses, he had also adduced defence evidence on his behalf.
The State further averred that the mere circumstance that the Enquiry Officer consulted the Deputy Superintendent of 92 Police, Anti Corruption Branch, did not vitiate the enquiry proceedings as no information or material gathered therein had been used by the Enquiry Officer when he recorded findings against the respondent.
According to the State, the findings had been recorded on the basis of the evidence adduced during the actual enquiry.
It was also pointed out that the disciplinary authority, viz., the Superintendent of Police, after receipt of the report of the Enquiry Officer, had himself gone into the various items of evidence and, after a due consideration of the explanation submitted by the respondent, had agreed with the findings recorded by the Enquiry Officer and, after further consideration of the explanation submitted by the respondent to the show cause notice, ultimately passed the order of dismissal.
The appellate authority, the.
Deputy Inspector General of Police had also considered the matter in great detail and had upheld the order of the Superintendent of Police.
The State further averred that the appointing authority of persons like the respondent, was the Superintendent of Police and not the Inspector General of Police, and, as such, the order of dismissal passed by the former was perfectly legal.
On these grounds the State maintained that the enquiry proceedings were valid and legal and did not suffer from any infirmity.
Though, as pointed out above, several grounds of attack against the disciplinary proceedings initiated against the respondent were taken in the writ petition, it is seen from the judgment of the High Court under appeal that the order of dismissal was ultimately assailed only on two grounds : (1) The request of the respondent, made on October 29, 1958 after receipt of the second show cause notice dated October 18, 1958 issued by the Superintendent of Police, for supply of copies of the statements of the witnesses recorded at the enquiry, was arbitrarily rejected on the ground that there was no rule under which copies could be given and hence the respondent did not have any reasonable opportunity to show cause against the action proposed against him.
(2) The Enquiry Officer, during the course of the enquiry was keeping himself in regular contact with the Anti Corruption Branch and had utilised the material so gathered by him, behind the back of the respondent, against the respondent in the enquiry proceedings.
The respondent 's request for being furnished with a copy of the report of the Anti Corruption Branch had also been refused and therefore there had been a violation of the principles of natural justice in the conduct of the enquiry.
So far as the first ground of objection is concerned, the High Court did not accept the same as it was satisfied that the witnesses were all examined in the enquiry in the presence of the respondent 93 and that he had a full and fair opportunity of cross examining the prosecution witnesses and also of examining witnesses on his behalf.
Though the request of the respondent, made on October 29, 1958 for being furnished with copies of the evidence recorded during the enquiry was rejected, the High Court was of the view that as the respondent was fully aware of the nature of the evidence adduced in his presence during the enquiry, his grievance that he had no reasonable opportunity to show cause to the notice issued by the Superintendent of Police was unfounded.
So far as the second ground of objection was concerned, the High Court was impressed by the fact that the Enquiry proceedings showed that on July 14, 1958 and July 15, 1958 the Enquiry Officer consulted the Deputy Superintendent of Police of the Anti Corruption Branch about the proceedings and went through his records relating to those charges.
Based upon those entries found in the record of the enquiry proceedings, the High Court came to the conclusion that it was abundantly clear that the Enquiry Officer had discussion with the Anti Corruption Branch, the report of which had not been furnished to the respondent.
The High Court was further of the view that the Enquiry Officer had taken into consideration the materials gathered from the records of the Anti Corruption Branch.
It was the further view of the High Court that inasmuch as a copy of the report of the Anti Corruption Branch as well as the materials that were gathered by the Enquiry Officer during his consultation with that Branch had not been furnished to the respondent, the enquiry held under such circumstances was in clear violation of the principles of 'natural justice and hence the order dismissing the respondent from service was void.
In this view the High Court set aside the order of dismissal and allowed the writ petition, Mr. Naunit Lal, learned counsel for the appellant State, raised two contentions : (1) The report of the Enquiry Officer, dated September 11, 1958 clearly shows that the findings against the respondent have been recorded exclusively on the basis of the evidence adduced before him and there is nothing to show that the Enquiry Proceedings have been influenced by the consultations that the Enquiry Officer had with the Deputy Superintendent of Police, Anti Corruption Branch, on July 14 15, 1958.
(2) In any event, the disciplinary authority, viz., the Superintendent of Police, before accepting the findings recorded by the Enquiry Officer, has himself considered the entire evidence bearing upon the charges and the explanations offered by the respondent and it is after such a consideration that he has agreed with the findings of the Enquiry Officer regarding the guilt of the respondent.
The appellate authority, the Deputy Inspector General of Police, has also made a similar approach when disposing of the appeal 94 filed by the respondent and therefore there has been no violation of the principles of natural justice.
Mr. D. N. Mukherjee, learned counsel for the respondent, has urged that the High Court 's view that the enquiry proceed ings is vitiated inasmuch as the Enquiry Officer has acted upon the information collected from the Anti Corruption Branch is perfectly justified, especially in view of the record made by the Enquiry Officer himself.
Counsel pointed out that the examination of witnesses commenced on June 23, 1958 and concluded only on August 30, 1958.
It was during this period when the.
enquiry was actually going on that the Enquiry Officer, on July 14 and 15, 1958 consulted the Anti Corruption Branch about the matters connected with the enquiry proceedings and had gone through the records available with that Branch relating to the charges levelled against the respondent and which were being tried by the Enquiry Officer.
Counsel further urged that the respondent was not furnished with a copy of the report of the Anti Corruption Branch nor was he furnished with the information and materials that must have been gathered by the Enquiry Officer in his consultation with the Anti Corruption Branch and from their records which he inspected on July 14 and 15, 1958.
All these circumstances would clearly show that there had been a violation of the principles of natural justice in the conduct of the enquiry.
When once the enquiry proceedings were so vitiated,, the order of dismissal based upon the findings recorded at such an enquiry, has been rightly held by the High Court to be illegal and void.
We are of opinion that in the particular circumstances of this case, which will be indicated presently, the High Court has not made a proper approach when it came to the conclusion that there had been a violation of the principles of natural justice in the conduct of the enquiry, on the second ground of objection raised by the respondent.
The principle, in this regard, has been laid down by this Court in State of Mysore vs section section Makapur(1) "For a correct appreciation of the position, it is necessary to repeat what has often been said that tribunals exercising quasi judicial functions are not courts and that therefore they are not bound to follow the procedure prescribed for trial of actions in Courts nor are they bound by strict rules of evidence.
They can, unlike Courts, obtain all information material for the points under enquiry from all sources, and through all channels, without being fettered by rules and procedure, which govern proceedings in Court.
The only obligation which the law casts on them is that they should not (1) ; , 947.
95 act on any information which they may receive unless they put it to the party against whom it is to be used and give him a fair opportunity to explain it.
What is a fair opportunity must depend on the facts and circumstances of each case but where such an opportunity had been given, the proceedings are not open to attack on the ground that the enquiry was not conducted in accordance with the procedure followed in courts.
" It has been further laid down by this Court in The Collector of Central Excise and Land Customs vs Sanawarmal Purohit (1) that: "A quasi judicial authority would be acting contrary to the rules of natural justice if it acts upon information collected by it which has not been disclosed to the party concerned and in respect of which full opportunity of meeting the inferences which arise out of it has not been given.
" The above two extracts, it will be noted, emphasize that rules of natural justice can be considered to have been violated only if the authority concerned acts upon information collected by it and the said information has not been disclosed to the party against whom the material has been used.
In paragraph 10 of his writ petition the respondent had alleged that the Enquiry Officer had, during the course of the enquiry, maintained regular correspondence and contact with the Deputy Superintendent of Police, Anti Corruption Branch, Gauhati.
In para 12 he had further alleged that the Enquiry Officer started recording statements of witnesses on and from July 23, 1958 and after recording the statements of thirteen witnesses, came to Gauhati on July 14, 1958 and had consultation with the Deputy Superintendent, Anti Corruption Branch, about the proceedings against the respondent and also went through the record of the Anti Corruption Branch on July 15, 1958.
The request of the respondent for being furnished with a copy of the report of the Anti Corruption Branch was not complied with.
He further alleged that the enquiry proceedings show that the enquiry officer had taken into consideration, against the respondent, the report of the Anti Corruption Branch.
In the counter affidavit on behalf of the State, filed in the writ petition, it was contended in para 10 that the report of the Anti Corruption Branch being a confidential document and not having been used as an Exhibit in the disciplinary proceedings, the respondent was not entitled to a copy of the same.
It was further averred in para 11 that the findings of the Enquiry Officer, (1) Civil Appeals Nos.
1362 1363/1967 decided on 16 2 1968.
96 Barpeta, recorded against the respondent were based on the evidence recorded during the enquiry and not on any consultation with the Anti Corruption Branch officers.
It was further averred in Para 13 that as the report of the Anti Corruption Branch was not exhibited in the disciplinary proceedings, there was no question of the Enquiry Officer taking the said report into consideration and, as a matter of fact also the report was not taken into consideration by the Enquiry Officer and the findings against the respondent had been recorded on the basis of the evidence recorded by the Enquiry Officer and no part of it is based on the report of the Anti Corruption Branch.
From the above averments it will be noted that the respon dent no doubt made a grievance of the consultation stated to have taken place during the midst of the enquiry between the Enquiry Officer and the Anti Corruption Branch.
But his specific averment was that the findings against him recorded in the enquiry were based upon the report of the Anti Corruption Branch the copy of which was not furnished to him.
The State, on the other hand, did not controvert the fact that the Enquiry Officer did have consultation with the Anti Corruption Branch on the dates mentioned in the record of proceedings.
But, according to the State, no part of any information contained in that report had been taken into account in the enquiry proceedings and that on the other hand the report of the Enquiry Officer was exclusively based on the evidence adduced during the enquiry.
A perusal of the report of the Enquiry Officer, in the pro ceedings before us, shows that there is absolutely no reference to any data or material, if any, collected by him when he consulted the Deputy Superintendent of Police, Anti Corruption Branch on July 14 and 15, 1958.
But, we have to state that it is highly improper for an Enquiry Officer during the conduct of an enquiry to attempt to collect any materials from outside sources and not make that information, so collected, available to the delinquent officer and further make use of.
the same in the enquiry proceedings.
There may also be cases where a very clever and astute enquiry officer may collect outside information behind the back of the delinquent officer and, without any apparent reference to the information so collected, may have been influenced in the conclusion recorded by him against the delinquent officer concerned.
, If it is established that the material behind the back of the delinquent officer has been collected during the enquiry and such material has been relied on by the enquiry officer, without its having been disclosed to the delinquent officer, it can be stated that the enquiry proceedings are vitiated.
It was, under such circumstances, that this Court, in Executive Committee of U.P. State 97 Warehousing Corporation vs Chandra Kiran Tyagi(1) accepted the view of the High Court that the enquiry proceedings were vitiated by the enquiry officer collecting information from outside sources and utilising the same in his findings recorded against the delinquent officer without disclosing that information to the accused officer.
It was again, under similar circumstances that this Court in Sanawarmal Purohit 's Case (2 ) upheld the order of the High Court holding the enquiry proceedings to be contrary to the principles of natural justice when the enquiry officer had collected information from third parties and acted upon the information so collected, without disclosing the same to the accused.
If the disciplinary authority himself had been also the enquiry officer and, during the course of the enquiry he had collected materials behind the back of the accused and used such materials without disclosing the same to the officer concerned, the position will be still worse and the mere fact that such an order passed by the disciplinary authority had even been confirmed by an appel late authority without anything more, will not alter the position in favour of the department.
But, in the case before us, it is no doubt true that the enquiry officer has made a note that he consulted the Deputy Superintendent of Police, Anti Corruption Branch on July 14 and 15, 1958 and perused the records relating to the charges.
But the enquiry report does not show that materials, if any, collected by the Enquiry Officer on those two days, have been utilised against the respondent.
We do not find any warrant for the High Court 's view that : "there is no doubt that the S.D.P.O. took into consideration the materials found by the Anti Corruption Branch.
" On the other hand, a perusal of the report shows that each and every item of charge had been discussed with reference to the evidence bearing on the same and findings recorded on the basis of such evidence.
Therefore, it cannot be stated that the Enquiry Officer in this case has taken into account materials if any that he may have collected from the Anti Corruption Branch.
Nor is there anything to show that, in the discussion contained in his report, the Enquiry Officer was in any way influenced by the consultation that he had with the Anti Corruption Branch.
If so, it cannot be held that the enquiry proceedings are violative of the principles of natural justice.
The fact that a copy of the report of the Superintendent of Police, Anti Corruption Branch, dated December 21, 1957 was (1) C. A. No. 559 of 1967, decided on 8 9 1969.
(2) Civil Appeals Nos.
1362 1363/67 decided on 16 2 1968.
98 not furnished to the respondent is, in our opinion,, of no consequence in relation to the actual enquiry conducted against the respondent.
That report was necessitated in view of the complaints received against the respondent and the enquiry made by the Anti Corruption Branch was only for the purpose of enabling the Government to consider whether disciplinary proceedings should be initiated against the respondent.
On receipt of the report, the Government felt that disciplinary proceedings will have to be initiated against the respondent and that is how the enquiry proceedings were commenced.
The validity of the enquiry will have to be decided only by the manner in which it has been conducted.
So far as that is concerned, it is clear from the record that the respondent had a full opportunity of participating in the enquiry and adducing evidence on behalf of himself and of cross examining the witnesses for the prosecution and the entire evidence was recorded in his presence.
The non furnishing of the copy of the report of the Superintendent of Police, Anti Corruption Branch, does not vitiate the enquiry proceedings.
Over and above these circumstances, it is also to be seen that the enquiry officer was not the disciplinary authority competent to impose the punishment against the respondent.
The competent authority is the Superintendent of Police.
The show cause notice, issued on October 18, 1958 as well as the order of dismissal passed by the Superintendent of Police, dated December 3, 1958 clearly show that the said officer has independently gone into the evidence on record in respect of the charges for which the respondent was tried and has, after taking into account the explanations furnished by him, independently come to the conclusion that the respondent is guilty.
Similarly, the Deputy Inspector General of Police, Range Assam, before whom the respondent filed an appeal has also very elaborately and in considerable detail discussed the entire evidence on record and has agreed with the conclusions regarding the guilt of the respondent.
We have already held that there is no violation of the rules of natural justice in the enquiry proceedings.
Even assuming that there was any defect in the said enquiry proceedings, inasmuch as the punishing authority and the appellate authority, the Superintendent of Police and the Deputy Inspector General of Police, respectively, have independently considered the matter and found the respondent guilty on the evidence on record, it must be held that in the circumstances of this case there has been no violation of the principles of natural justice when the order of dismissal was passed.
We may state that the respondent, when he sent his explanation on November 21, 1958 to the show cause notice issued by the Superintendent of Police on October 18, 1958 did not make any 99 grievance regarding the consultation by the Enquiry Officer with the Anti Corruption Branch on July 14 and 15, 1958.
For the first time the respondent took this ground of objection to the enquiry proceedings only when he filed the appeal before the Deputy Inspector General of Police and the latter has quite rightly rejected this objection holding that any consultation that the Enquiry Officer had with the Anti Corruption Branch has not affected the case in any way since the findings had been recorded against the respondent entirely on the evidence adduced during the enquiry.
The High Court has not considered the various aspects, referred to above.
Both the contentions of the learned counsel for the appellant, in the circumstances, will have to be accepted and, in consequence, it must be held that the view of the High Court that the order of dismissal is illegal and void is erroneous.
Mr. Mukherjee, learned counsel for the respondent, raised the contention that the materials on record disclose that the respondent was appointed permanent Sub Inspector by the Inspector General of Police whereas the order of dismissal has been passed by a subordinate authority, the Superintendent of Police and therefore the order of dismissal is illegal and void.
Normally, this contention should not be entertained, because it is stated by the High Court that apart from the two points considered by it, no other grounds of objection were raised by the respondent against the order of dismissal.
But, if really the records support this contention of Mr. Mukherjee, that will make the order of dismissal illegal and so we permitted the counsel to raise this contention.
But, after a reference to the material on record, we are satisfied that this contention is devoid of merit.
The respondent, no doubt, averred in his writ petition that he, was appointed to the substanive post of Sub Inspector of Police by order of the Inspector General of Police, Assam, and therefore the order of dismissal passed by a subordinate authority, viz., the: Superintendent of Police, is illegal and ultra vires.
In the counter affidavit filed before the High Court, the State maintained that the Superintendent of Police was the appointing authority of a Sub Inspector of Police and it placed reliance upon rule 66, as corrected by the Correction Slip No. 150, dated June 1, 1938 of the Assam Police Manual, The State further categorically stated that the Superintendent of Police is the appointing and punishing authority of the Sub Inspector of Police and the respondent has been properly and validly dismissed by the competent authority.
Rule 66, referred to above, clearly supports the '.
contention of the State in this regard.
Annexure X to the counter affidavit of the State in the High Court is the order of the Inspector General of Police, Assam,, 100 dated December 16, 1952.
That refers to the selection for confirmation as Sub Inspectors of.
Police of the persons mentioned therein.
The respondent is serial number 5 in the said order.
Note No. 2 to this order specifically directs the Superintendents of Police to send to the Inspector General of Police, Assam, copies of confirmation orders issued by them in respect of the officers.
In accordance with the orders of the, Inspector General of Police dated December 16, 1952 the Superintendent of Police passed an order D.O. No. 3777 dated December 31, 1952 that among other officers, the respondent, who was officiating as Sub Inspector, has been selected for confirmation as Sub Inspector of Police (Unarmed Branch) with effect from September 1, 1951 and that he has been confirmed as Sub Inspector of Police (Unarmed Branch) from the same date and absorbed against an existing substantive vacancy in the district.
These orders clearly show that the respondent was appointed permanent Sub Inspector of Police not by the Inspector General of Police but by the Superintendent of Police.
Obviously because of these records, such a contention, as is now taken on behalf of the respondent, was not raised before the High Court.
The appeal is accordingly allowed and the judgment of the High Court set aside.
The first respondent will pay the costs of the appeal to the appellants.
G.C. Appeal allowed.
| IN-Abs | The first respondent was at the relevant time a Sub Inspector in the service of the State of Assam.
In regard to certain allegations a confidential enquiry was held against him by the Superintendent of Police Anti Corruption Branch who submitted his report to the Government in 1957.
A departmental enquiry was thereafter held.
On receipt of the enquiry officer 's report, the Superintendent of Police asked for the respondent 's explanation and thereafter in December 1958 ordered his dismissal.
The respondent 's appeal before the Deputy Inspector General of Police and his revisions before the Inspector General and the State Government failed.
Thereupon the respondent filed a writ petition before the High Court challenging the validity of the departmental enquiry and the order of dismissal.
The High Court allowed the petition on the ground that the enquiry officer had during the course of the enquiry consulted the Superintendent of Police Anti Corruption Branch and had taken into consideration the materials gathered from the records of the Anti Corruption Branch without making the report of that Branch and the said material available to the respondent.
The State appealed to this Court by special leave contending that : (i) the enquiry officer was not influenced by his consultations with the Superintendent of Police Anti Corruption Branch and (ii) in any event the Superintendent of Police before ordering the respondent 's dismissal had himself considered the entire evidence.
It was submitted that the appellate authority, i.e., the Deputy Inspector General of Police had also made a similar approach while considering the respondent 's appeal and therefore there had been no denial of natural justice.
On behalf of the respondent it was urged that the orders relating to the appointment of the respondent as permanent Sub Inspector had been passed by the Inspector General of Police and therefore the Superintendent of Police was not competent to order his dismissal.
HELD : (i) It is highly improper for an enquiry officer during the conduct of an enquiry to attempt to collect any materials from outside sources and not make that information so collected, available to the delinquent officer and further make use of the same in the enquiry proceedings.
There may also be cases where a very clever and astute enquiry officer may collect outside information behind the back of the delinquent officer and, without any apparent reference to the information so collected, may have been influenced in the conclusions recorded by him against the delinquent officer concerned.
If it is established that any material had been collected during the enquiry behind the back of the delinquent officer and such material had been relied on by the enquiry officer, without being disclosed to the delinquent officer, it can be stated that the enquiry proceedings are vitiated.
[96 F H] 88 In the present case however there was no warrant for the High Court 's view that the enquiry officer took into consideration the materials found by the Anti Corruption Branch.
On the other hand, a perusal of the report showed that each and every item of charge had been discussed with reference to the evidence bearing on the same and findings recorded on the basis of such evidence.
Therefore it could not be stated that the enquiry officer in this case had taken into account the materials if any that he may have collected from the Anti Corruption Branch.
Nor was there anything to show, in the discussion contained in his report that the enquiry officer was in any way influenced by the consultations that he had with the Anti Corruption Branch.
If so, it could not be held that the enquiry proceedings were violative of the principles of natural justice.[97 E G] The fact that a copy of the report, of the Anti Corruption Branch was not furnished to the respondent was of no consequence in relation to the actual enquiry conducted against the respondent inasmuch as he had a full opportunity to cross examine the witnesses for the prosecution and of adducing evidence in his favour.
Even assuming that there was some defect in the enquiry proceedings, there was no violation of principles of natural justice in the present case because the punishing authority, the Superintendent of Police, and the appellate authority, the Deputy Inspector General of Police had independently considered the matter and found the respondent guilty on the evidence on record.
[98 A E] State of Mysore vs section section Makapur, ; , The Collector of Central Excise and Land Customs vs Sanawarmal Purhoit, Civil Appeals Nos. 1362 1363 of 1967 decided on 16 2 1968, applied.
Executive Committee of U.P. State Warehousing Corporation vs Chandra Kiran Tyagi, Civil Appeal No. 559 of 1967, decided on 8 9 1969, distinguished.
(iii) In view of Rule 66 of Part 11 of the Assam Police Manual and in view of the evidence on record the contention of the respondent that the Superintendent of Police is not the appointing authority for a Sub Inspector, could not be accepted.
[99 F H; 100 C D]
|
Appeals Nos.
664 to 669 of 1967.
Appeals from the judgment and order dated March 22, 1962, July 23, 1962, July 24, 1962, July 12, 1963 and August 14, 1963 in Writ Petitions Nos.
1077 of 1959, 19 and 739 of 1960, 157 of 1961, 970 of 1962 and 594 of 1963.
Jagadish Swarup, Solicitor General, section K. Aiyar and R. N. Sachthey, for the appellants (in all the appeals).
section V. Gupte, A. K. Varma, J. B. Dadachanji, 0.
C. Mathur and Ravinder Narain, for the respondent.
(in C. A. Nos. 664 and 668 of 1967).
O. P. Rana, for the intervener for the State of U.P. M. R. K. Pillai, for the intervener for the State of Kerala.
B. Sen, Santosh Chatterjee and G. section Chatterjee for Sukumar Bose, for the State of West Bengal.
section Govind Swaminathan, Advocate General, Tamil Nadu, A. V. Rangam and M. Subramaniam, for the State of Tamil Nadu.
Lal Narayan Sinha, Advocate General, Bihar, D. P. Singh nad V. J. Francis, for the intervener for the State of Bihar.
K. A. Chitaley, Advocate General, State of Madhya Pradesh, M.N. Shroff and I. N. Shroff, for the intervener for the State of Madhya Pradesh.
E. section Venkataramiah, Advocate General, Mysore and section P. Nayar, for the intervener for the State of Mysore.
J. C. Medhi, Advocate General, Assam and Naunit Lal, for the intervener for the State of Assam.
The Judgment of the Court was delivered by Hidayatullah, C.J.
These six appeals by certificate under article 132(1) of the Constitution are filed against the decision of the High Court of Mysore, declaring that Parliament had no power to legislate with respect to taxes on gift of lands and buildings.
The High Court passed a detailed judgment on two of the petitions by which the competence of Parliament was challenged and followed its own decision in the other four cases.
It is not necessary to give the facts of the six petitions in the High Court.
As illustrative of the facts involved we may mention on W.P. No. 1077 of 1959.
In that case a certain D. H. Nazareth, owner of a coffee plantation, 197 made a gift by registered deed, January 22, 1958, of a coffee plantation and other properties in favour of his four sons.
The market value of the property was Rs. 3,74,080 and the coffee plantation accounted for Rs. 3,24,700.
Gift tax of Rs. 35,612/ was demanded.
If the coffee _plantation was left out of consideration the tax was liable to be reduced by Rs. 3,4,036.
The authority to charge gift tax on the gift of the coffee plantation was challenged and the right of Parliament to impose a gift tax on lands and buildings questioned.
In some of the other cases agricultural or paddy lands or buildings were the subjects of gifts and they were similarly taxed and the tax questioned.
The High Court held that, entry 49 of the State List read with entry 18 of the same list reserved the power to tax lands and buildings to the Legislature of the States and Parliament could not, therefore, use the residuary power conferred by entry 97 of the Union list.
This decision is challenged before us.
The Gift Tax Act was passed in 1958 and subjected gifts made in the year ending March 31, 1958 to tax.
The Act contained the usual exempted limits and other exemptions.
We need not concern ourselves with them here.
We are only concerned with the validity of parliamentary legislation imposing gift tax at all.
To consider the objection to the Gift Tax Act which was sus tained by the High Court a few general principles may be borne in mind.
Under article 245 Parliament makes laws for the whole or any part of the territory of India and the Legislatures of the States for the whole or part of their respective States.
The subject matter of laws are set out in three lists in the Seventh Schedule.
List I (usually referred to as the Union List) enumerates topics of legislation in respect to which Parliament has exclusive power to make laws and List II (usually referred to as the State List) enumerates topics of legislation in respect to which the State Legislatures have exclusive power to make laws.
List III (usually referred to as the Concurrent List) contains topics in respect to which both Parliament and Legislature of a State have power to make laws.
Inconsistency between laws made by Parliament and those made by the Legislatures of the State, both acting under the Concurrent List, is resolved by making Parliamentary law to prevail over the law made by the State Legislature.
So long as the Parliamentary law continues, the State law remains inoperative but becomes operative once the Parliamentary law, throwing it into shadow, is removed.
Then there is the declaration in article 248 of the residuary powers of legislation.
Parliament has exclusive power to make any law in respect to any matter not enumerated in the Concurrent List or State List and this power includes the power of mak ing any law imposing a tax not mentioned in either of those lists.
198 For this purpose, and to avoid any doubts, an entry has also been included in the Union List to the following effect: "97.
Any other matter not enumerated in List II or List III including any tax not mentioned in either of those lists".
It will, therefore, be seen that the sovereignty of Parliament and the Legislatures is a sovereignty of enumerated entries, but within the ambit of an entry, the exercise of power is as plenary as any legislature can possess, subject, of course, to the limitations arising from the Fundamental Rights.
The entries themselves do not follow any logical classification or dichotomy.
As was said in State of Rajasthan vs section Chawla and another(1) the entries in the list must be regarded as enumeratio simplex of broad categories.
Since they are likely to overlap occasionally, it is usual to examine the pith and substance of legislation with a view to determining to which entry they can be substantially related, a slight connection with another entry in another list notwithstanding.
Therefore, to find out whether a piece of legislation falls within any entry its true nature and character must be in respect to that particular entry.
The entries must of course receive a large and liberal interpretation because the few words of the entry are intended to confer vast and plenary _powers.
If, however, no entry in any of the three lists covers it, then it must be regarded as a matter not enumerated in any of the three lists.
Then it belongs exclusively to Parliament under entry 97 of the Union List as a topic of legislation.
The Gift Tax Act was enacted by Parliament and it is admit ted that no entry in the Union List or the Concurrent List mentions such a tax.
Therefore, Parliament purported to use its powers derived from entry 97 of the Union List read with article 248 of the Constitution.
This power admittedly could not be invoked if the subject of taxes on gifts could be said to be comprehended in any entry in the State List.
The High Court has accepted the contention of the tax payers that it is so comprehended in entries 18 and 49 of the State List.
Those entries read 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; land improvement and agricultural loans; colonization." "49.
Taxes on lands and buildings.
" The argument is that by entry 18, 'land ' of all description is made subject to legislation in the States and by entry 49 taxes of (1) [1959] Supp. 1 S.C.R. 904.
199 whatever description on lands in that large sense and buildings generally fall also in the jurisdiction of the State.
Reference is made to entries 45, 46, 47 and 48 of the State List in which certain taxes are to be imposed on land and agricultural land or income from agriculture exclusively by the States in contrast with entries 82, 86, 87 and 88 where the taxes are imposed on properties other than agricultural land or income from agriculture.
It is submitted, therefore, that the general scheme of division of taxing and other entries by which land particularly agricultural land and income therefrom is reserved for the States shows that taxes on lands and buildings read liberally must also cover taxes in respect of gifts of land particularly agricultural land and buildings.
If the entry so read can be reasonably said to include the tax, then there can be no question of recourse to the residuary powers of Parliament.
The matter is not res integra and however attractive the argument, it cannot be accepted.
Many High Courts in India have considered this matter before the Supreme Court decided it.
The Mysore view was not followed in section Dhandapani vs Addl.
Gift Tax Officer, Cuddalore(1) (Madras High Court); Shyam Sunder vs Gift Tax Officer(2) (disapproved on another point in the Supreme Court).
A contrary view was earlier also expressed in Jupadi Sesharatnam vs Gift Tax Officer, Palacole(3) (Andhra Pradesh High Court) and Joseph vs Gift Tax Officer (4) (Kerala High Court).
In fact the judgment under appeal stands alone.
The subject of entry 49 of the State List in relation to imposition of Wealth Tax came up for consideration in Sudhir Chandra Nawn vs Wealth Tax Officer, Calcutta & ors.(5) and the view of the High Court on the construction of this entry was affirmed.
Although the judgment ' under appeal was not referred to expressly the result is that it must be taken to be impliedly overruled.
In view of the decision of this Court it is not necessary to deal with the matter except briefly.
The Constitution divides the topics of legislation into three broad categories : (a) entries enabling laws to be made, (b) entries enabling taxes to be imposed, and (c) entries enabling fees and stamp duties to be collected.
It is not intended that every entry gives a right to levy a tax.
The taxes are separately mentioned and in fact contain the whole of the power of taxation.
Unless a tax is specifically mentioned it cannot be imposed except by Parliament in the exercise of its residuary powers already mentioned.
Therefore, entry 18 of the State List does not confer additional power (1) (3) (5) (2) A.I.R. 1967 All. 19.
(4) 200 of taxation.
At the most fees can be levied in respect of the items mentioned in that entry, vide entry 66 of the same list.
Nor ,is it possible to read a clear cut division of agricultural land in favour of the States although the intention is to put land in most of its aspects in the State List But however wide that entry, it cannot still authorise a tax not expressly mentioned.
Therefore, either the pith and substance of the Gift Tax Act falls within entry 49 of State List or it does not.
If it does, then Parliament will have no power to levy the tax even under the residuary powers.
If it does not, then Parliament must undoubtedly possess that power under article 248 and entry 97 of the Union List.
The pith and 'substance of Gift Tax Act is to place the tax on the gift of property which may include land and buildings.
It is not a tax imposed directly upon lands and buildings but is a tax upon the value of the total gifts made, in a year which is above the exempted limit.
There is no tax upon lands or buildings as units of taxation.
Indeed the lands and buildings are valued to find out the total amount of the gift and what is taxed is the gift.
The value of the lands and buildings is only the measure of the value of the gift.
A gift tax is thus not a tax on lands and buildings as such (which is a tax resting upon general ownership of lands and buildings) but is a levy upon a particular use, which is transmission of title by gift.
The two are not the same thing and the incidence of the tax is not the same.
Since entry 49 of the State List contemplates a tax directly levied by reason of the general ownership of lands and buildings, it cannot include the gift tax as levied by Parliament.
There being no other entry which covers a gift tax, the residuary powers of Parliament could be exercised to enact a law.
The appeals must, therefore, be allowed but there shall be no order about costs throughout.
The appeal 666/67 however abates as the sole respondent died.
V.P.S. Appeals allowed.
| IN-Abs | Gift tax was levied under the Gift Tax Act, 1958, on gifts, of coffee plantations, paddy and other agricultural lands and buildings, made by the respondents.
The Gift Tax Act was enacted by Parliament but there is no entry in the Union or Concurrent Lists mentioning such a tax.
The High Court held that Parliament was not competent to enact a law impos ing a gift tax on lands and buildings, because, entries 18 and 49 of the State List reserved the power to State Legislatures.
On appeal to this Court.
HELD : The Constitution divides the topics of legislation into three broad categories : (a) entRies enabling laws to be made, (b) entries enabling taxes to be imposed, and (c) entries enabling fees and stamp duties to be collected.
The taxes are separately mentioned and contain the whole of the power of taxation, except entry 97 of the Union List under which, Parliament ha, , exclusive power to make a law in respect of any matter not enumerated in the Concurrent or State Lists and the power includes the power of making a law imposing a tax not mentioned in either of the Lists.
[199 G H] Entry 18 of the State List dealing with 'land ', though very wide, does not therefore confer any power of taxation and cannot authorise a tax not expressly mentioned.[199 H] Entry 49 of the State List contemplates a tax directly levied bY reason of the general ownership of lands and buildings.
But the pith and substance of the Gift Tax Act,is to place the tax on the gift of property which may include land, and buildings.
It is not a tax imposed directly upon lands and buildings but is a tax upon the value of the total gifts made in a year which is above the exempted limit.
The lands and buildings are valued only as a measure of the value of the gift and what is taxed is the gift.
A gift tax is thus not a tax on lands and buildings as such but is a levy upon a particular use, namely, the transmission of title by gift.
[200 A E] There being no other entry in the State List which might cover a gift tax, the residuary powers of Parliament under article 248, and entry 97 of the Union List, could be exercised by Parliament to enact the law.
[200 E F] Sudhir Chandra Nawn vs Wealth Tax Officer, Calcutta & Ors. followed.
section Dhandapani vs Addl.
Gift Tax Officer, Cuddalore, , Shyam Sunder vs Gift Tax Officer, A.I.R. 1967 All. 19, Jupadi Sesharatnam vs Gift Tax officer, Palacole, and Joseph vs Gift Tax, Officer, , approved.
|
Appeals Nos.
2525 and 2526 of 1969.
Appeals from the judgment and decree dated October 8, 1969 of the Madras High Court in Writ Appeals Nos.
296 and 297 of 1969.
section Govind Swaminathan, Advocate General for the State of Tamil Nadu, section Mohan and A. V. Rangam, for the appellants (in both the appeals).
D. Munikanaiah and G. section Rama Rao, for the respondent (in C. A. No. 2525/1969).
D. Munikanaiah and G. Narasimhulu, for the respondents (in C. A. No. 2526/1969).
The Judgment of the Court was delivered by Grover, J.
These appeals from a judgment of the Madras High Court involve the true ambit, scope and content of Section 72 of the Madras Co operative Societies Act, 1961 (hereinafter called the Act).
229 The facts may be briefly stated.
On 4th January, 1969 the Joint Registrar of Co operative Societies issued a Notice u/s 72 of the Act to the Committee of the North Arcot District Cooperative Supply and Marketing Society Ltd. It was stated in the notice that the Committee had not been functioning properly for sometime past.
Charges were mentioned in detail and the Committee was called upon to make a representation against the proposal to dissolve it in view of the defects and irregularities mentioned in the notice.
After examining the representation 'which was quite lengthy and detailed, the Registrar recorded an Order on 11th April, 1969 dealing with each charge and holding that the Committee had not been functioning properly and had failed to perform its duties and discharge its responsibilities as required under the Act.
The Committee was ordered to be suspended for a period of one year from.
12th April, 1969 to 11th April, 1970.
The Deputy Registrar of Cooperative Societies was appointed to work as a Special Officer and to manage its affairs for that period.
The matter was taken in appeal to the Registrar by the Committee.
The Registrar affirmed the Order of the Joint Registrar.
Thereafter the President and the Director of the Cooperative Society moved the High Court under Article 226 of the Constitution.
A number of points were taken in the writ petition but the main emphasis was laid on the proper procedure not having been followed under sections 64, 65 and 66 of the Act before taking action u/s 72.
The learned single Judge of the High Court allowed the writ petition which had been filed by the President and the Director of the Co operative Society.
The learned Judge was not satisfied that there was any justification for the action taken by the Joint Registrar in the matter of supersession of the Committee.
On appeals having been taken before a Division Bench under clause 15 of the Letters Patent the case was referred to a full Bench.
The full Bench based its decision largely on the view that the procedure laid down, in sections 64, 65 and 66 must be followed before any order could be made by the Joint Registrar or the Registrar u/s 72.
We may refer to the following portion of the judgment; "Sections 64, 65 and 66, which, are the statutory procedural stems which interdict the apparently arbitrary course of action which a Registrar could undertake to interfere with the affairs of a society, its members or officers, provide a sufficient help to tighten up such indiscriminate and unguided exercise of the powers by the Registrar, when it becomes necessary.
In each of those sections it is incumbent on the Registrar to give opportunity to the member concerned officer concerned or the Society to rectify the defects" . 230 "In our view and under the scheme of the Act, the condition precedent to the exercise of jurisdiction by the Registrar under one or the other of the sections considered above and in particular Section 72 is to secure an audit memorandum or a report of inspection or inquiry, so that he may be provided with the necessary material 'to act thereon.
Unless such a fact finding authority has provided the Registrar with the hypothesis to act and , ultimately supersede an elected body, the impugned ,order of supersession will undoubtedly be tainted with the absence of a jurisdictional basis.
Whether such a basis exists, is subject to review by this Court in exercise of its jurisdiction under Article 226 of the Constitution of India".
The full Bench affirmed the decision of the learned single Judge.
The points which have been argued before us and which have to be determined are : (i) Whether the Registrar before taking action u/s 72 must have an audit made u/s 64 and inquiry held u/s 65 and an inspection made u/s 66 of the Act and must also give an opportunity for rectification of the, defects which may come to light as a result of such audit, inquiry or inspection ? (ii) What is the scope of interference by the High Court with the Order of a Registrar made u/s 72 of the Act ? The Act was enacted to amend and consolidate the law relat ing to and to make better provision for the, Organisation of Cooperative Societies in the State of Madras.
Section 2 (2) defines the expression "Committee " to mean the governing body of a registered society to whom the management of its affairs is entrusted.
By Section 2 (1) the "Registrar" is defined to mean a person appointed to perform the duties of a Registrar of Cooperative Societies under the Act, and includes a person on whom all or any of the powers of a Registrar under the Act have been conferred under section 3.
Section 4 provides for the societies which may be registered.
Chapter III gives the sections relating to the Qualifications of the members and their rights and liabili ties.
Chapter IV contains provisions in respect of management of registered societies.
Under section 26 (1) the ultimate authority of a registered society vests in the general body of its members.
Under section 27 the general body of a registered society 231 has to constitute a Committee in accordance with the bye laws and entrust the management of the affairs of the registered society to such Committee.
The term of office of an elected member of any Committee is 3 years but one third of the members elected to the Committee at the first election have to retire at the end of the first year after such election and the other one third of the members elected have to retire at the end of the second year after such election and so on The members so to retire at the end of the first and second years have to be determined by lot by the Committee.
According to section 28 (4) no member of a Committee against whom an order under sub section (1) of section 71 has been passed, shall be eligible for election or appointment as a member of the Committee for a period of three years.
Sub section 5 of section 28 provides that no member of a Committee which has been superseded shall be eligible for election or appointment to the Committee for a period of three years from the date of expiry of the period of supersession.
Section 28 (A) is in the following terms "(1) Where in the course of an audit under Section 64 or an inquiry under Section 65 or an inspection under section 66 or section 67, it appears that a person who is, or was, a member of a Committee has misappropriated or fraudulently retained any money or other property or been guilty of breach of trust in relation to the society or of gross or persistent negligence in connection with the conduct and management of, or of gross mismanagement of the affairs of the society or of misfeasance or default in carrying out his obligations and functions under the law, the Registrar may, without prejudice to any other action that may be taken against such member, by order in writing, remove such person from the office of member of committee if he holds such office, or disqualify him from holding in future the office of a member of the committee, if he has ceased to hold such office.
(2) No person shall be removed or disqualified under sub section (1) without being given an opportunity of making his representations, A copy of the order removing or disqualifying him shall be communicated to him".
Chapter V relates to the duties and privileges of registered societies.
Chapter VI relates to State aid to registered societies and Chapter VI relates to their property and funds.
We are concerned primarily with the provisions of Chapter VIII which begins with section 64.
Sub section ( 1 ) thereof makes it obligatory on the Registrar to audit or cause to be audited by some person authorised by 232 him in writing the accounts of every registered society once at least in every year.
Under sub section (4) every person who is or has been an officer or employee of the society and every member and past member has to furnish such information in regard to the transactions and working of the society as the Registrar or the person authorised by him may require.
Sub section (5) says that the Registrar may, by order in writing, direct any officer of the society to take such action as may be, specified in the order to remedy within such time as may be specified the defects, if any, disclosed as a result of the audit.
Section 65 authorises the Registrar on his own motion or on the application of a majority of the Committee or on the request of the Collector, to hold an inquiry, or direct some person authorised by him in writing to hold an inquiry into the constitution, working and financial condition of a registered society.
Under Subsection (2) powers have been conferred interalia to have free access to the books of accounts etc., summoning and examination of persons on oath having knowledge of the affairs of the society.
When an inquiry is held u/s 65 the Registrar must communicate its result in the manner and to the persons and institute ions set out in sub section (3).
Sub section (4) lays down that Registrar may, by order in writing, direct any officer of the society or its financing bank to take such action as may be specified in the order to remedy the defects, disclosed as a result of the enquiry.
Section 66 empowers the Registrar on his own motion or on the application of a creditor of a registered society to inspect or direct any person to inspect the books of the society.
After the inspection has been made the Registrar has to communicate the results of the inspection in the manner set out in sub section (2).
Subsection (3) enables the Registrar to direct any officer of the society to take such action as may be specified in the order to remedy the defects, if any, disclosed as a result of the inspection.
Section 67 gives the right to a financing bank to inspect the books of any registered society which is indebted to it.
Section 70 (1) is reproduced below: "70(1) Where in the course of an audit under section 64 or an inquiry under section 65 or an inspection under section 66 or section 67, it is brought to the notice of the Registrar that a paid officer or servant of a registered society has committed or has been otherwise responsible for misappropriation, breach of trust or other offence.
in relation to the society, the Registrar, may, if in his opinion, there is prima facie evidence against such paid officer or servant and the suspension of such paid officer or servant is necessary in the interests of the society, direct the committee of the society pending the investigation and disposal of the matter, to place or cause to be placed such paid officer or servant 233 under suspension from such date and for such period as may be specified by him".
Section 71 contains provisions relating to surcharge and says that where in the course of an audit u/s 64 or an inquiry u/s 65 or an inspection u/s 66 or section 67 or the winding up of a society, it appears that any person who is or was entrusted with the Organisation for management of the society or any past or present officer or servant of the society has misappropriated or fraudulently retained any money or other property or has been guilty of breach of trust in relation to the society or has caused any defi ciency in the assets of the society by breach of trust or wilful negligence. the Registrar may enquire into the conduct of such person, officer or servant and make an order requiring him to repay or restore the money or property or to contribute such sum to the assets of the society by way of compensation.
Under the proviso, such an inquiry must be held within 6 years from the date of any act or omission and an opportunity must be afforded to the person against whom the order is sought to be made.
Section 72 (1) (a) which is material for our purposes reads : "72(1) (a).
If, in the opinion of the Registrar, the committee of any registered society is not functioning properly or wilfully disobeys or wilfully fails to comply with any lawful order or direction issued by the Registrar under this Act or the rules, he may, after giving the committee an opportunity of making its representations, by order in writing, dissolve the committee and appoint either a person (hereinafter referred to as the special officer) or a committee of two or more persons (hereinafter referred to as the managing committee) to manage the affairs of the society for a specified period not ex ceeding two years".
Sub section (6) makes it obligatory on the Registrar to consult the financing bank to which the society is indebted before taking any action under sub section (1).
It will be useful at this stage to reproduce section 8 5 (1) which relates to winding up of registered societies "85(1).
If the Registrar, after an inquiry has been held under section 65 or an inspection has been made under section 66 or section 67, or on receipt of an application made by not less than three fourths of the members of a registered society, is of opinion that the society ought to be wound up, he may, after giving the society an opportunity of making its representations, by order in writing direct it to be wound up.
A copy of the order 234 shall forthwith be communicated to the society by registered post".
It is significant that section 72(1) does not contain any mention of sections 64 to 67 which appear in section 70(1) and of sections 65, 66 and 67 which are expressly mentioned in section 85(1).
If the intention of the Legislature was that the supersession of the Committee under section 72 can be ordered by the Registrar only after recourse to sections 64, 65, and 66, there is no reason why language analogous to section 70(1) or section 85 (1) containing an express mention of the aforesaid sections, should, not have been employed.
An audit under section 64 has to be done every year in view of the mandatory form of the language of that section 64.
But as regards sections 65 and 66 the Registrar has been given discretionary powers to make an inquiry or an inspection in accordance with those sections, there is no duty or obligation cast on him for doing so before he proceeds to take action u/s 72.
All that is required by section 72 (1) (a) is that the Registrar should form an opinion that the Committee of any Registered society is not functioning properly or has wilfully disobeyed or failed to comply with any lawful order or direction issued by him.
So far as the question of the society not functioning properly is concerned, that may depend on what the Registrar discovers after a proper audit, enquiry and inspection.
But he can form that option even on material aliunde and the language of the section does not warrant by necessary implication the taking of the view that he is bound to form that opinion after following the entire procedure prescribed by the other sections under discussion.
At any rate it is not possible to read a requirement while taking action u/s 72 of satisfying the provisions in the aforesaid sections by making a direction in the first instance to remedy the defects disclosed as a result of the audit, inquiry or inspection.
The functioning of the society may be so irregular and the defects disclosed so blatant and prejudicial to the society that no question can arise of any direction being made in the first instance for their being remedied by the persons or officers concerned.
It may 'be that when the Registrar acts under the second limb of section 72 (1) (a) and proposes to supersede the committee for wilful disobedience or wilful failure to comply with any lawful order or direction issued by the Registrar under the Act or the rules that the provisions contained in sections 64, 65 and 66 may become relevant.
But that does not and cannot mean that the Registrar must as a condition precedent give a direction under those sections for the defects or the irregularities to be remedied and should take action only under the second limb i.e. when there is a wilful disobedience or wilful failure to comply with those orders or directions.
It may be that the opinion which the Registrar has to 235 form must be based on some objective facts but those objective.
facts in the absence of any clear indication u/s 72 cannot be confined to what may be disclosed after the Registrar has exercised.
powers in the matter of audit,, inquiry and inspection under the provisions of sections 64, 65 and 66.
Thus even though the opinion. may be a purely subjective process, there must be cogent material on which the Registrar has to form his opinion that the society is not functioning properly in order to sustain the issuance of a notice.
u/s 72 ( 1 ) (a) and subsequent supersession of the Committee after considering its representation, The requisite opinion has indisputably to be formed honestly and after applying his mind by the Registrar to the relevant material before him the only condition precedent for taking action u/s 72(1) is that the Registrar must consult the financing bank to which the society is indebted (vide sub section 6).
There is no other requirement or condition.
precedent laid down by the Legislature which the Registrar must fulfil before he acts in the matter of supersession of the Committee.
We are unable to concur in the view of the High Court that an action taken u/s 72 without giving an opportunity to the member, officer or the society to rectify the defects found after an audit,, inquiry or inspection held under sections 64, 65 and 66 would.
constitute an exercise of power without jurisdiction.
The Single Judge laid a great deal of emphasis on the Com mittee being an elected body and the prejudice that would be caused to its members if they are visited with the consequences of supersession on account of irregularities and improper functioning of the previous members of the Committee.
What was argued before the High Court was that one third members of the Committee have to retire every year and fresh members have to be elected.
If certain grave irregularities are committed say in the year 1964, 1965, it would be unfair to the new members who have been.
elected to supersede the Committee in 1968.
We do not consider that that would be the correct approach in construing section 72 ' which is meant for superseding the Committee as a whole when its working disclose s such irregularities or improprieties as would justify its supersession.
Normally it would be expected that only that Committee would be superseded whose functioning has been found to be highly defective.
The object of supersession apparently is to appoint a Special Officer or a managing committee in order to set the working of the society right.
It is not difficult to envisage a situation where maladministration by a committee has so adversely affected the functioning of the society that it is essential in the interests of the society itself to give temporarily the control of its affairs to a neutral authority.
At any rate if the operation of section 72 in certain circumstances is likely to operate harshly so far as certain members of the committee are concerned, it is not 236 possible to read into it other provisions of the Act which are not incorporated in the section expressly or by necessary implication.
We have been taken through the material parts of the orders of the Registrar and the Joint Registrar and we do not find any such infirmities in them which would justify interference by the High Court under Article 226 of the Constitution.
The High Court could not act as an appellate Court and reappraise and re examine the relevant facts and circumstances which led to the making of the orders of supersession as if the matter before it had been brought by way of appeal.
The limits of the jurisdiction of the High Court under Article 226 when a writ in the nature of cer tiorari is to be issued are well known and well settled by now and it is pointless to re state the grounds on which any such writ or direction can be issued.
We are satisfied that there was no justification whatsoever for quashing the orders of the Joint Registrar and that of the Registrar in appeal.
The appeals are consequently allowed with costs and the judgment of the High Court is set aside.
The writ petitions are ordered to be dismissed One hearing fee.
G.C. Appeals allowed.
L11 SupCI(NP)/70 2500 30 6 71 GIPF.
| IN-Abs | On 4th January, 1969 the Joint Registrar, Cooperative Societies issued a notice under section 72 of the Madras Cooperative Societies Act, 1961 to the committee of the North Arcot District Cooperative Supply and Marketing Society Ltd.
After examining the representation made by the committee in reply to the notice, the Registrar recorded an order on 11 th April, 1969 holding that the committee had not been functioning properly and had failed to perform its duties and discharge its responsibilities as required under the Act.
The committee was ordered to be suspended for a period of one year and the Deputy Registrar of Cooperative Society ties was appointed to work as Special Officer to manage its affairs.
The matter was taken in appeal to the Registrar, who affirmed the order of the Joint Registrar.
Thereafter the President and Director of the Co operative Society moved the High Court under article 226 of the Constitution.
The writ petition was allowed by a Single Judge on the view that an order under section 72(1) can be passed only after the procedure under sections 64, 65 & 66 of the Act has been followed.
The Full Bench to which the matter was referred in Letters Patent Appeal took the same view.
In appeal before this Court against the judgment of the High Court the questions that fell for consideration were : (1) Whether the Registrar before taking action under section 72 must have an audit made under section 64 and an inquiry held under section 65 and an inspection made under section 66 of the Act and must also give an opportunity for rectification of the defects which may come to light as a result of such audit, inquiry or inspection ? (2) What is the scope of interference by the High Court with the order of a Registrar made under section 72 of the Act ? HELD,:(1) (a) If the intention of the Legislature was that the supersession of the Committee under section 72 can be ordered by the Registrar only after recourse to sections 64, 65 & 66 there is no reason why language analogous to section 70(1) which expressly mentions sections 64 to 67 and section 85(1) which refers to sections 65 to 67 should not have been employed.
[234 B] All that is required by section 72(1) (a) is that the Registrar should form an opinion that the Committee of any Registered Society is not functioning properly or has wilfully disobeyed or 'failed to comply with any lawful order or direction issued by him.
The section cannot be read to mean that before forming an opinion as to the proper functioning of the society the Registrar must in the first instance issue a direction to remedy the defects disclosed as a result of the audit, inquiry or inspection, The functioning of the society may be so irregular and the defects so blatant and prejudicial to the society that no question can arise of any direction 228 being made in the first instance for their being remedied by the persons of officers concerned.
[234 D F] It may be that the opinion which the Registrar has to form must be based on some objective facts but those objective facts in the absence of any clear indication in section 72 cannot be confined to what may be disclosed after the Registrar has exercised his powers in the matter of audit, inquiry and inspection under the provisions of sections 64, 65 & 66.
The requisite opinion has indisputably to be formed honestly and after applying his mind by the Registrar to the relevant material before him.
The only condition precedent for taking action under section 72(1) is that provided in sub section (6), namely, that the Registrar must consult the financing bank to which the society is indebted.
No other requirement or condition precedent is laid down by the legislature,.
it was accordingly not possible to concur with the view taken by the High Court.
[235 A D] (b) The fact that one third of the members of the committee retire every year and new members have to be elected in their place could not lead to a different conclusion.
Section 72 is meant for superseding the committee as a whole.
Even if the operation of section 72 in certain circums tances is likely to operate harshly so far as the newly elected members of the committee are concerned, it is not possible to read into it other provisions of the Act which are not incorporated in the section expressly or by necessary implication.
[235 F H] (ii) There were no infirmities in the orders of the Joint Registrar or Registrar in the present case which could justify the interference by the High Court under article 226 of the Constitution.
The High Court could not act as an appellate court and reappraise and re examine the relevant facts and circumstances which led to the making of the orders of supersession.
[236 B]
|
l Appeal Nos.
1952 and 1953 of 1966.
Appeals from the judgment and order dated February 25, 1965 of the Punjab High Court, Circuit Bench at Delhi in Letters Patent Appeals Nos.
38 D and 42 D, and 39 D and 43 D of 1963.
section T. Desai and Naunit Lal, for the appellants (in both the appeals).
C. B. Agarwala, K. P. Gupta and R. C. Chadha, for respondent No. 1 (in both the appeals).
The Judgment of the Court was delivered by Shelat, J.
These two appeals, under certificate, are directed against the common judgment and order of the High Court of Punjab, dated February 25, 1965, passed in four Letters Patent appeals filed by the two appellant companies and the respondent company against the judgment and order of a learned Single Judge of the High Court.
The said appeals were the outcome of two applications filed in the High Court under section 111 of the ; XLIII of 1958 (referred to hereinafter as the Act) for rectification of the register in respect of two registered Trade Marks, Nos. 161543 and 161544, registered on November 20, 1953 in respect of cycle bells manufactured by the respondent company.
Registered Trade Mark No. 161543 was the numeral '50 ' and Trade Mark No. 161544 was the figure 'Fifty '.
The two appellant companies carry on business in Kapurthala in Punjab, one of them the National Bell Co. Ltd. claimed to be manufacturing bells with numerals '33 ', '50 ', '51 ' and '40 ' inscribed on them since 1957, and the other M/s Gupta Industrial Corporation since 1947 with numerals, '20 ', '50 ' and '60 ' inscribed on cycle bells manufactured by it.
The two applications for rectification arose out of suits filed in the District Court, Lucknow by the respondent company against the two appellant companies on the ground of infringement of its said registered trade marks, the numeral '50 ' and the figure 'Fifty '.
On April 24, 1961 the District Court stayed the said suits at the instance of the appellant companies giving them time for filing the said rectification applications in the High Court.
The grounds alleged in the applications were (1) that the numeral '50 ' and the word 'Fifty ' were common to the trade at the time of the original registration and were therefore not distinctive of the bells manufactured by the respondent company, Sup.
CI 6 74 (2)that many other manufacturers in the market were using the numeral '50 ' and the word 'Fifty ' on or in relation to cycle bells, and therefore, the distinctiveness of the said marks in relation to the bells manufactured by the respondent company, if any, had been lost, (3) that the respondent company did not get the registration of these marks with any bona fide intention of using them in relation to their cycle bells and that in fact there had been no bona fide use of the said trade marks in relation to their goods before the date of the applications.
They also alleged that the respondent company had fraudulently declared at the time of registration that they were the originators or proprietors of the said two marks '50 ' and 'Fifty '.
Both sides led evidence, oral and documentary, the latter including several price lists from the possession of some of the dealers in cycle spare parts.
The learned Single Judge, who in the first instance tried the applications, found on a consideration of the evidence that cycle bells with different numerals and in particular the numeral '50 ' were being sold in the market before the respondent company put its cycle bells with the numeral '50 ' and the figure 'Fifty ' inscribed on them in the market and continued to be sold right upto 1952 when import of foreign manufactured cycle bells was prohibited, and that despite such prohibition those cycle bells were being sold in the market as late as 1958, presumably from old stocks still lingering in the market, though not from any new imported stock.
The learned Single Judge also found that there was no evidence of the original registration having been fraudulently obtained by the respondent company, that there was no averment by the appellant companies that Lucas or any other concern had obtained registration of any mark either of the numeral '50 ' or the figure 'Fifty ', and that therefore, cl.
(a) of section 32 did not apply.
He further found that cl.
(b) of section 32 also did not apply.
He held, however, that the trade mark, namely, the numeral '50 ' was not at the commencement of the proceedings distinctive of the goods of the respondent company as (a) numerals are prima facie not distinctive except in the case of textile goods as recognised by Part HI of the Trade and Merchandise Marks Rules, 1959, and (b) that the numeral '50 ' was being commonly used by several dealers and manufacturers subsequent to the registration thereof by the respondent company, and that therefore, the registered trade mark, the numeral '50 ', was hit by cl.
(c) of section 32.
So far as the trade mark of the figure 'Fifty was concerned, he held that there was no evidence that it was used by other parties either prior to or after the registration thereof by the respondent company and in that view declined to rectify or expunge the trade mark 'Fifty ' as seven years had already elapsed by the time the rectification proceedings were launched and could not, therefore, be challenged on the ground of absence of distinctiveness as laid down in section 32.
75 The learned Single Judge, on the basis of his aforesaid conclusions, cancelled the trade mark No. 161543, i.e., of the numeral '50 '.
In the appeals filed against the said judgment the Division Bench of the High Court held (1) that though the use of the numeral '50 ' in relation to cycle bells dated back at least 30 years as in the case of Lucas and certain other foreign concerns, the imports of such goods stopped from ;about 1952, though some bells were being sold till 1958 presumably from the remaining previous stock, (2) that the numeral '50 ' in connection with those foreign made bells was never intended as a trade mark but was used only as an indication of the type or quality, and (3) that statements Exs.
R 2, R 3 and R 4 produced by the respondent company showed that sales of its bells with the trade marks '50 ' and 'Fifty ' inscribed on them had risen from the value of Rs. 19,644 in 1949 50 to Rs. 14.83 lacs in 1961 62.
The Division Bench agreed with the Trial Judge that cl.
(a) of section 32 did not apply as there was no question of the original registration having been fraudulently procured in 1953.
It also held that the trade marks in question could not be cancelled merely on the ground that if their registration had been opposed they would not have been registered, and that therefore, the question for determination was whether it was liable to cancellation in view of section 32(c), which lays down that the section would not apply in cases where the trade mark in question was not distinctive at the commencement of the proceedings.
According to the Division Bench, the word "commencement of proceedings" in cl.
(c) of section 32 meant the commencement of the infringement suits filed by the respondent company as the proceedings for cancellation were the off shoots arising from those suits, that therefore, the situation in respect of section 32(c) had to be assessed in the light of the state of affairs existing in 1959.
According to the Division Bench, the earliest use of the mark '50 ' by any concern other than Lucas and other foreign manufacturers was in 1953 by M/s Indian Union Manufacturers Ltd. The respondent company, however, had filed a suit against that company in 1954 which resulted in a compromise dated February 5, 1955 whereunder the said company recognised the exclusive right of the respondent company to the use of the word% 'Fifty ', 'Thirty ' and the numerals '50 ' and '30 ', while the respondent company recognised the right of the said company to the exclusive use of the words and numerals 'Thirty one ', 'Forty one ' and 'Fifty one ' and '31 ', '41 ' and '51 ', that the respondent company had also in 1956 similarly taken action against K. R. Berry & Co. of Jullundur for use by that company of the mark 'Five 50 '.
The suit, however, had to be withdrawn in 1958 on account of lack of jurisdiction of the Banaras court where it was filed that though no fresh suit was 76 filed against that company, the respondent company had opposed an application by that company for registration of the mark 'Five Fifty ' before the Registrar and that application was then pending in 1962, and lastly, that the respondent company had filed in 1959 the two suits against the appellant companies out of which these rectification proceedings arose.
The Division Bench held that though there was some evidence of the use of the numeral '50 ' by certain other concerns after 1953, no importance could be attached to such breaches as there, was hardly any evidence as to when the infringers started manufacturing and the extent of their manufacture and sales, and that the correct principle applicable in such cases was that a few unchallenged, scattered infringements by a number of traders did not render a registered trade mark common.
As regards the earlier use of the word 'Fifty ' and the numeral '50 ' by Lucas and other foreign concerns, the Division Bench held that they were not the registered trade marks of those companies and that those concerns had used those marks as merely type marks.
Though the idea of using '50 ' and 'Fifty ' was not the original idea of the respondent company when it obtained registration in 1953, the foreign concerns had ceased importing the goods and though sales of those bells continued until 1958, such sales were from the stock still remaining unsold.
Such sales could not he in any appreciable bulk.
Even if the idea of using, the two marks might have been conceived by the respondent company from the marks used by Lucas and other foreign concerns, there was no question of any piracy or infringement of those marks as the respondent company was the first to convert what were originally type marks into registered trade marks.
Lastly, it held that the statements of sales produced by the respondent company demonstrated that its sales had been steadily increasing and that some concerns, finding the use by the respondent company of its marks '50 ' and 'Fifty ' highly successful, had sought in recent years to take advantage of am popularity of the cycle bells of respondent company by imitating its marks.
This fact, however,, could not mean that either in 1959 when the respondent company filed the suits or in 1961 when rectification proceedings commenced, the marks had ceased to be .distinctive in relation to the goods of the respondent company or were, therefore, liable to cancellation under section 56 by reason of cl.
(c) of section 32.
Accordingly, the Division Bench allowed the. respondent company 's appeals and set aside the order of the learned Single Judge cancelling the registration of its trade mark No. 161543 in respect of the numeral '50 ' and dismissed the appeals of the appellant companies.
Mr. section T. Desai for the appellant companies contended that the two trade marks in question were liable to cancellation on the grounds that (1) they were common and not distinctive at the 77 date of their registration, and therefore, ought never to have been registered, (2) that in any event, the numeral '50 ' is prima facie not distinctive unless shown to be of such extensive use as to make it distinctive, (3) that there was clear evidence that the respondent company had imitated the use of these marks by Lucas and other manufacturers, and that therefore, these marks would be disentitled to protection in a court of law, and (4) that the said marks were not, at the commencement of the proceedings distinctive, that is, adapted to distinguish the goods of the respondent company.
Mr. Agarwala, on the other hand,, argued that, (1) the two marks having been registered in 1953 and seven years since then having elapsed at the commencement of these proceedings, the question whether they were distinctive at the time of registration was not open to dispute, (2) that that being so, there was no question of any alleged piracy by the respondent company of the marks of Lucas and other concerns, and therefore, the marks could not be said to be disentitled to protection by a court, (3) that the marks had not lost their distinctiveness at the date of these proceedings under section 56, and (4) that the Letter Patent Bench was, therefore, justified in dismissing these proceedings by the appellant companies.
A mark under section 2(j) includes a word, letter or numeral or any combination there of.
A trade mark, as difined in section 2(v) means in relation to Chapter X (i.e. for offences and penalties provided in that chapter) a registered trade mark or a mark used in relation to the goods for the purpose of indicating or so as to indicate a connection in the course of trade between the goods and some person having the right as proprietor to use the mark, and in relation to the other provisions of the Act a mark used or proposed to be used in relation to the goods for the purpose of indicating or so as to indicate a connection in the course of trade between the goods and some person having the right, either as proprietor or as registered user, to use the mark and includes a certification trade mark registered as such under the provisions of Chapter VIII.
Under section 9, a trade mark is not registerable in Part A of the register unless it contains or consists of at least one ,of the essential particulars mentioned therein.
One of these particulars in "any other distinctive mark".
(3) of section 9 defines the expression "distinctive" in relation to the goods in respect of which a trade mark is proposed to be registered, as meaning "adapted to distinguish goods with which the proprietor of the trade mark is or may be connected in the course of trade from goods in the case of which no such connection subsists either generally or, where the trade mark is proposed to be registered subject to limitations, in relation to use within the "tent of the registration.
" In determining whether a trade mark is distinctive, regard is to be had whether it is inherently distinctive or is 78 inherently capable of distinguishing and by reason of its use or any other circumstances it is in fact adapted to distinguish or is capable of distinguishing the goods.
section 1 1 prohibits certain trade marks from being registered.
These are marks the use of which would be likely to deceive or cause confusion, or the use of which would be contrary to any law or which comprises or contains scandalous or obscene matters or any matter likely to hurt the religious susceptibilities of any class or section of the citizens, or "(e) which would otherwise be disentitled to protection in a court".
On registration of a trade mark, the registered proprietor gets under section 28 the exclusive right to the use of such trade marks in relation to the goods in respect of which the trade mark is registered and to obtain relief in respect of any infringement of such trade mark.
Under section 31, registration is prima facie evidence of its validity.
The object of the section is obviously to facilitate proof of title by a plaintiff suing for infringement of his trade mark.
He has only to produce the certificate of registra tion of his trade mark and that would be prima facie evidence of his title.
Such registration is prima facie evidence also in rectification applications under section 56, which means that the onus of proof is on the person making such application.
Being prima facie evidence, the evidence afforded by the registration may be rebutted, but in view of section 32 that can be done if seven years have not elapsed since the original registration.
Even where such rebuttal is possible, i.e., where seven years have not elapsed, and it is shown that the mark in question was not registerable under section 9 as no evidence of distinctiveness was submitted to the Registrar, the registration would not be invalid if it is proved that the trade mark had been so used by the registered proprietor or his predecessor in interest as to have become distinctive at the date of registration.
Sec. 32, with which we are immediately concerned, reads as follows : "Subject to the provisions of section 35 and section 46, in all legal proceedings relating to a trade mark registered in Part A of the register (including applications under section 56), the original registration of the trade mark shall, after the expiration of seven years from the date of such registration, be taken to be valid in all respects unless it is proved (a) that the original registration was obtained by fraud; or (b) that the trade mark was registered in contravention of the provisions of section 11 or offends 79 against the provisions of that section on the date of commencement of the proceedings; or (c) that the trade mark was not, at the commencement of the proceedings, distinctive of the goods of the registered proprietor.
" We are not concerned with cl.
(a) as no such case was even averred in the applications as pointed out both by the Trial Judge and the Division Bench.
As regards cl.
(b), it will be at once noticed that the clause relates to facts existing both at the time of and after registration.
If a mark at the time of registration was such that it was likely to deceive or cause confusion or its use would be contrary to any law or contained or consisted of scandalous or obscene matters or matter likely to hurt religious susceptibilities or which would otherwise be disentitled to protection of a court, and therefore, was under section 1 1 prohibited from being registered, cl.
(b) would apply, and the rule as to conclusiveness of the validity of the registration cannot be invoked.
That would also be so, if the trade mark at the date of the rectification proceedings was such as to offend against the provisions of section 11.
But, unlike cl.
(b), cl.
(c) relates to facts which are post registration facts, existing at the date of the commencement of the proceedings.
If the trade mark at such date is not distinctive in relation to the goods of the registered proprietor, the rule as to conclusiveness enunciated in section 32 again would not apply.
It would seem that the word 'distinctive ' in cl.
(c) is presumably used in the same sense in which it is defined in section 9(3), as the definition of that expression therein commences with the words "for the purposes of this Act" and not the words "for the purposes of this section," the intention of the legislature, thus, being to give uniform meaning to that expression all throughout the Act.
section 56 deals with the power to cancel or vary registration and to rectify the register.
Sub section 2 thereof confers a right to any person "aggrieved" by an entry made in the register without sufficient cause or by an entry wrongly remaining in the register to apply to the tribunal for expunging or varying such an entry.
The expression "aggrieved person" has received liberal construction from the courts and includes a person who has, before registration, used the trade mark in question as also a person against whom an infringement action is taken or threatened by the registered proprietor of such a trade mark.
The words "without sufficient cause" in the section have clearly relation to the time of the original registration.
Therefore, a person can apply for cancellation on the ground that the trade mark in question was not at the date of the commencement of the proceedings distinctive in the sense of section 9(3).
The burden of proof, however, in such a case is, as aforesaid, on the applicant applying under section 5 6. 80 The contention was that numerals, such as '50 ', are prima facie not considered distinctive and to be, registerable there must be evidence of extensive use.
The contention was sought to be fortified by showing that contrary to the practice in England, rules 139 and 140 of the Rules of 1959 permit numerals to be registered as trade marks only in the case of textile goods.
But that is permitted on account of a long standing practice in that particular trade of using numerals with a view to distinguish goods of a particular manufacturer or a particular type or quality.
It will, however, be noticed that although in the 8th edition of Kerly on Trade Marks, page 135, it was stated that numerals are considered to be prima facie not distinctive and registerable only upon proof of their extensive use, the 9th edition of the same work does not reproduce that passage.
On the contrary, at p. 284, the learned editor states that numerals are capable of registration and that such marks exist.
For this change the learned editor relies, on the registered trade mark, "4711" for eau de Cologne, which was the subject matter of dispute in Reuter vs Mutblens(1).
In that case, however, no contention was raised as to whether the trade mark consisting of a numeral could be distinctive or not and the court, therefore, was not called upon to decide such a point.
But the parties appear to have proceeded on the assumption that the numeral "471 1 " was validly registered as a trade mark for that particular brand of eau de Cologne by reason of its having gained distinctiveness by extensive use.
It is, therefore, not an inflexible rule and that was also conceded by Mr. Desai, that a mark consisting of a numeral is necessarily not distinctive and is not registerable, except only in the case of textile goods, in spite of proof of extensive use.
section 32 in clear terms provides that the original registration of a trade mark, after expiry of seven years from the date of its registration shall be taken to be valid in all respects in all legal proceedings including those under section 56, except in the three categories of cases mentioned therein.
It follows, therefore, that no objection that the trade mark in question was not distinctive and therefore was not registerable under section 9 can be entertained if such an objection is raised after seven years have lapsed since the date of its registration as in the present came, nor can an objection be entertained that no proof of distinctiveness was adduced or insisted upon at the time of the original registration.
This is clear also from the fact that the three exceptions set out in section 32 against conclusiveness as to the validity of the registration relate to, (1) fraud, (2) contravention of section 11, and (3) absence of distinctiveness at the commencement of the proceedings in question and not at the time of registration.
No contention, therefore, (1) 81 can be raised that the trade marks, '50 ' and 'Fifty ', were not distinctive, i.e., adapted to distinguish the cycle bells of the respondent company at the date of the registration, and therefore, were not registerable as provided by section 9 (cf.
Paine & Co. vs Daniells & Sons ' Breweries Ltd.(1).
But the argument was that the appellant companies were en titled to show under cls.
(b) and (c) in section 32, (1) that these marks were registered in contravention of section 11, or that they offended against the provisions of that section on the date of the commencement of these proceedings, and (2) that they were not distinctive at the date of the commencement of these proceedings.
S.11, as already noticed,, does not, as section 9 does, lay down the requisites for registration, but lays down prohibition against certain marks from being registered.
(b), (c) and (d) of section 1 1 obviously do not apply in the present case but reliance was placed on cls.
(a) and (e), i.e., that the use of these trade marks would be likely to deceive or cause confusion and that they were such that they were otherwise disentitled to protection in a court.
The burden of proof being on the appellant companies, the question is : has that burden been satisfactorily discharged ? The evidence relied on by them was that of dealers in cycle spare parts including bells, certain price lists produced through them and the two representatives of the two appellant companies.
That evidence, no doubt, shows, (1) that for a number of years prior to 1952 bells manufactured by Lucas and certain other foreign concerns with various numerals such as '30 ', '50 ' and 61 ' inscribed either on the belts or on their cartons were in the market, (2) that even after 1952 bells with inscriptions thereon, such as "Berry 50", "National 50", manufactured by one of the appellant companies, "Five 50", "Padam 50", "Balco 50" etc.
were sold in the market, (3) that Gupta Industrial Corporation, one of the appellant companies, claimed to have started the manufacture of bells since 1947, calling them "Gupta 50" and the National Bell Company likewise began to produce bells, calling them "National 50" since 1957.
But both the learned Single Judge and the Division Bench clearly found, (1) that there was no evidence of any fraud having been committed by the respondent company at the time of the registration; (2) that there was no averment by the appellant companies, much less any evidence, that Lucas or any other foreign concerns had obtained registration of trade, marks either of the numeral '50 ' or the word 'Fifty ', that the indication, on the contrary, was that those concerns used the different nume rals, '30 ', '61 ', '50 ' etc.
for distinguishing one type of bell from the other manufactured by them; and (3) that about a year prior (1) , 232. 82 to the registration of the trade marks in question in 1953 foreign bells were prohibited from being imported.
Obviously, therefore, the evidence as to purchases and sales by the dealers examined by the appellant companies related to bells which had remained unsold from out of the stock earlier imported.
As regards the bells called "Gupta 50" said to have been manufactured by one of the appellant companies since 1947, no evidence was led to show either the extent of manufacture or sale between 1947 and 1953 or thereafter from which the High Court could be asked to draw any inference as to the likelihood of deception or confusion.
Though there was some evidence that foreign made bells Such as Lucas "30", "50" and "61" were being sold as late as 1958, such sales must have been few and far between as they could only be from the remaining stock out of the earlier imports.
Such sales could hardly be considered as evidence showing a,likelihood of confusion or deception as contemplated by section 1 1 (a).
In fact, the evidence was that purchasers used to call those bells not by their numerals but simply as Lucas ' bells and those manufactured by the respondent company, as "Asia bells", and in some cases "Asia 50".
As against the voluminous sales by the respondent company shown by the statements filed by it for the years 1949 50 to 1961 62, there was no such corresponding evidence, indicating the sales of other bells with numerals, such as "50" inscribed on them from which any likelihood of confusion or deception could be deduced.
Regarding deception, there was indeed no evidence whatsoever in that regard.
There was no question of piracy also on the part of the respondent company as argued by counsel as there was nothing to show that Lucas or any other foreign concerns used this numeral except for distinguishing one type of bell from another manufactured by them.
In our view, cl.
(a) of section 11, therefore, is clearly not attracted.
The next question is whether the trade mark "50" or "Fifty" is one which would otherwise be disentitled to protection in a court as laid down in cl.
(e) of section 1 1 so as to attract cl.
(b) of section 32.
While construing cl.
(e) of section II, it is necessary to repeat that it deals with prohibition and not with requisites of registration.
Therefore, although a mark cannot be registered, for instance, because it is not distinctive, as provided by section 9, such a mark is not for that reason only one the registration of which is prohibited by section 1 1.
The section lays down positive objection to registration and not to mere lack of qualification.
This is clear from cl.
(e) of section 11, which uses the expression "disentitled to protection", and not the expression "not entitled to protection".
The former contemplates some illegal or other disentitlement inherent in the mark itself.
(see Kerly, 9th ed. 344).
83 In Imperial Tobacco Co. Ltd. vs De Pasqualil & Co.(1) the appellant company was the proprietor of two trade marks con sisting of "Regimental Cigarettes" and "Regimental Tobacco".
The company brought an action for infringement of its trade marks and for passing off against the respondent who sold cigarettes under the name of "Pasquali 's the Regiment" in packets and boxes decorated with regimental crests.
The respondent moved to have the trade marks expunged contending that the word "Regimental" was only a laudatory adjective in on use.
It was proved that for many years it had been the practice of regiments to have their crests stamped on their mess cigrettes which were known as "Regimental Cigarettes".
The appellant company, on the other hand, contended that under section 41 of the Trade Marks Act, 1905 (equivalent to section 32 of our Act) their trade mark could not be expunged and that section 1 1 (equivalent also to our section 11 ) read in conjunction with section 41 was not relevant to the question whether or not a trade mark was registerable.
The Trial Court held against the appellant company stating that if the appellant company 's contention was correct, the combined effect of sections 1 1 and 41 would be to perpetuate as distinctive a trade mark that was incapable of being distinctive and that such a contention was erroneous.
On appeal, the Court of Appeal reversed the judgment and held that section 11 was a qualification of section 9, that sections 1 1 and 41 must be construed together, that the more fact that a mark did not comply with the requisites of section 9 (i.e. not being distinctive and therefore not registerable) did not bring it within section II, that the marks did not offend against section 11 and that under section 41 their registration was valid.
At page 203 of the Report,Swinfen Eady, M.R. observed that section 11 contained a prohibition as to what it shall not be lawful to register and it followed upon section 9 which provided for the essentials of a trade mark.
section 9 laid down what a registerable trade mark must contain and unless it contained one or the other requisites there set out, it was not re gisterable and it was only registerable trade marks which were entitled to registration.
But even if a mark were to fall within, section 9, that alone was not necessarily sufficient to entitle it to registration because it might offend against section 11.
section 11, being a qualification of section 9 and being a provision laying down a prohibition ', it did not contemplate any enquiry on the question whether the, trade mark complied with one or the other requisites enumerated in section 9, e.g., whether it had the quality of being distinctive or not.
Dealing with section 41, he observed that it formed a new departure in dealing with trade marks and differed widely from the earlier Acts.
The present section expressly enacted that the original registration shall, after a lapse of seven years, be taken to 'be valid in all respects, that is to say, whether the mark originally consisted of or (1) 84 contained one or the other essential proofs or not, that cannot be enquired into after the lapse of seven years.
It had to be taken to be valid in all respects and what had to be taken to be valid in all respects was the registration of the trade mark unless it offended against the provisions of section 1 1.
That section was a prohibitive section as to a matter which was disentitled to protection in a court, that is, it was intended to exclude from registration what would, otherwise be included or covered under section 9.
It did not extend to a mark disentitled to protection because originally not containing one of the essential particulars.
It applied to a different set of circumstances such as that its use was likely to deceive or confuse etc.
The words "disentitled to protection", he further observed, were not equivalent to "not entitled to protection", which was the expression used in the earlier Acts.
In other words, they did not mean that a trade mark was not entitled to protection because it ought not originally to have been registered as a valid trade mark falling within section 9.
The construction of cl.
(e) of section 11 contended for on behalf of the appellant companies is, therefore, not correct.
The true construction of cl.
(e) is that even assuming that the trade marks in question were not distinctive and for that reason not registerable as not falling within section 9, that fact by itself would not mean that they became disentitled to the protection in a court.
That being the true import of section 1 1 (e), the rule as to conclusiveness of the validity of registration embodied in section 32 applies even to those cases where if full facts had been ascertained at the time of the registration that registration would not have been allowed provided of course that it does not offend against the provisions of s.11, i.e., by there being a likelihood of deception or confusion or its bring contrary to any law or containing obscene matter etc.
or which would otherwise, i.e., in addition to the matters in cls.(a) to (d) in section 1 1 be disentitled to protection in a court.
Conse quently, the appellant companies cannot bring their case for cancellation of the trade marks in question under cl.
(b) of section 32.
There then remains the question whether cl.
(c) of section 32 applies, i.e., that the trade marks were not at the commencement of the proceedings distinctive of the goods of the respondent company.
The distinctiveness of the trade mark in relation to the goods of a registered proprietor of such a trade mark may be lost in a variety of ways, e.g., by the goods not being capable of being distinguished as the goods of such a proprietor or by extensive piracy so that the marks become publici juris.
The principle underlying cl.
(c) of section 32 is that the property in a trade mark exists so long as it continues to be distinctive of the goods of the registered proprietor in the eyes of the public or a section of the public.
If the proprietor is not in a position to use the mark to 85 distinguish his goods from those of others or has abandoned it or the mark has become so common in the market that it has ceased to connect him with his goods, there would hardly be any justification in retaining it on the register.
The progressive increase in the sales of 'Asia Fifty ' and 'Asia 50 ' bells from 1949 50 and onwards together with the evidence of witnesses examined by the respondent company shows that the said trade marks distinguished the goods of the respondent company from those of other manufacturers in the field.
Under section 32 (c) the marks have to be distinctive at the commencement of the proceedings.
Prima facie, the expression "commencement of the proceedings" would mean the commencement of proceedings in which the question as to the conclusive character of the registration, as laid down in section 32, arises.
Such a question may arise in a suit for infringement of the trade mark in which the registered proprietor may rely on section 32 to prove his title to the registered trade mark as also in rectification proceedings filed as a result of such a suit or otherwise, and the period of seven years would have to be calculated according to the particular proceedings in which the conclusive nature of the validity of registration is relied on.
In the prevent case, whether the crucial date for the purpose of section 32(c) is taken to be 1959 when the suits were filed or 1961 when the appellant companies took out the.
rectification proceedings it makes no difference as it is not possible from the evidence on record to say that the trade marks in question were not or had ceased to be distinctive.
The indication, on the contrary, is that they were distinctive.
That is to be found from the zeal with.
which the respondent company tried to maintain its right in them.
The evidence shows that when the respondent company found in 1954 that M/s Indian Union Manufacturers Ltd., Calcutta had been inscribing the word 'Fifty ' on its bells, it at once filed an infringement action.
The action ended in a compromise by which the said company acknowledged the respondent company 's rights in its trade marks of 'Fifty ' and '50 '.
Again, when the attention of the respondent company was drawn to an advertisement "Five 50", it addressed a notice to the manufacturers of those bells.
The case of the respondent company was that Gupta Industrial Corporation started using the word 'Fifty ' on its bells in 1958 and not in 1948 as contended by Mr. Desai.
In the absence of any evidence as to the extent of manufacture and sale of those bells it would not be possible to say with any certainty that the respondent company did not come to know about it till 1958, and therefore, presumed that Gupta Corporation had started using the word 'Fifty ' on its bells in that year.
According To the appellant National Bell Co., it went into production only in 1957 and in 1959 the respondent company commenced action against it.
A similar notice of infringement followed by a suit was also given to M/s Berry & Co., but the suit became infructuous on account 86 of lack of the jurisdiction of the Court of Banaras where it was filed.
This evidence negatives any abandonment of trade marks or letting infringements go unchallenged or misleading the other manufacturers that the respondent company would not interfere it they were to use the same marks.
Rights in a mark can, of course, be abandoned by its owner but so long as he remains the registered proprietor of the mark and carried on the business to which the mark is attached, a plea of abandonment is difficult to sustain.
It would, however, be a different matter if it is shown that there, were repeated, undisturbed infringements.
The evider in the present case does not show that there were repeated breaches which went unchallenged though known to the proprietor.
Mere neglect to proceed does not necessarily constitute abandonment if it is in respect of infringements which are not sufficient to affect the distinctiveness of the mark even if the proprietor is aware of them.
(see Re. Farina(1) Where neglect to challenge infringements is alleged, the character and extent of the trade of the infringers and their position have to be reckoned in considering whether the registered proprietor is barred by such neglect.
[see Rowland vs Mitchell(2) ].
The plea of common use must fail, for, to establish it the use by other persons should be substantial.
Though evidence was produced by the appellant companies to show that there were other bells in the market with 'Fifty ' or '50 ' inscribed on them, no evidence was led to show that the use of the word 'Fifty ' or the numeral '50 ' was substantial.
In these circumstances, it is impossible to sustain the contention founded on cl.
(c) of section 32.
Under section 56, the power to rectify is undoubtedly discretionary.
Where such discretion has been properly exercised, a court of, appeal would refuse to interfere.
In the present case, however, the Trial Court did not appreciate the principle embodied in sections 32 and 1 1, with the result that the Division Bench was justified in interfering with the discretion exercised by the Trial Court.
In our view, the contentions urged on behalf of the appellant companies cannot be sustained and consequently the two appeals fail and are dismissed with costs.
There will be one hearing fee.
V.P.S. Appeals dismissed.
| IN-Abs | For a number of years prior to 1952 cycle bells manufactured by Lucas And other foreign concerns bearing the numbers '50 ' and other numerals were in the Indian market.
After 1952, the import of foreign bells was prohibited, and though foreign made bells with the numerals '50 ' were being sold as late as 1958, the sales were from the stock remaining out of the earlier imports and were few and far between.
In 1953, the respondent company got registered two trade marks in respect of cycle bells being the numeral '50 ' and the figure 'Fifty '.
The appellant companies were manufacturers and also dealers in cycle bells and were selling their cycle bells with the numeral '50 ' inscribed on them.
The respondent therefore, filed suits in 1959, against the appellants, alleging infringement of its trade marks.
In 1961, the appellants applied for stay of trial of the suits and filed applications in the High Court for rectification of the register by cancelling the trade marks of the respondent under section 56 of the .
A single Judge of the High Court, refused to expunge the trade mark 'Fifty ' but ordered the cancellation of the trade mark '50 '.
In appeals to the Division Bench of the High Court, the order cancelling the trade mark '50 ' was set aside.
In appeals to this Court, it was contended that : (1) the trade marks in question were common and not distinctive at the date of their registration as required by section 9(3), and therefore, ought never to have been registered; (2) that the numeral '50 ' is not distinctive; (3) that the use of the trade mark was likely to deceive or cause confusion and hence the registration should be cancelled under section 32(b) and section II (a); (4) that the respondent had imitated the use of the marks by Lucas and other foreign concerns that therefore they would be disentitled to protection under section 11(e) and hence the registration should be cancelled under section 32(h); and (5) that the trade marks were not, at the commencement of the proceedings, distinctive 'and hence liable to be cancelled under section 32(c).
HELD : (1) Under section 32(b) and (c) the original registration of the trade mark has, after the expiration of 7 years from the date of registration to be taken to be valid in all respects including in rectification applications under section 56 unless it is proved : (1) the trade mark was registered in contravention of the provisions of section 11 or offends against the provisions of that section on the date of the commencement of the proceeding or (2) that the trade mark was not, at the commencement of the proceedings distinctive of the goods of the registered proprietor.
Section 11(a) prohibits the registration of trade mark which would be likely to deceive or cause confusion, and section 11(e) prohibits the registration of trade marks if they were such that they were otherwise disentitled to protection in a court.
Section 71 56(2) confers a right on any person aggrieved by an entry made in the register without sufficient cause or by an entry wrongly remaining in the register, to apply for expunging or varying such an entry.
Since 'an aggrieved person ' includes a person who has, before registration, used the trade mark, and a person against whom an infringement action is taken, and the words 'without sufficient cause ' relate to the time of original registration,.
the appellant could apply for cancellation on the ground that the trade mark in question was not distinctive within the meaning of section 9(3).
But in view of the language of section 32, no contention could be raised in the present case, that the trade mark '50 ' and 'Fifty ' were not distinctive under section 9(3), that is, adapted to distinguish the cycle bells of the respondent, at the date of registration, as, seven years had elapsed since the date of the Registration.
[78 D F; 79 B H] Paine & Co. vs Doniells & Sons" Breweries Ltd. (1893) R.P.C. 217, 232, referred to.
(2) It is not an inflexible rule that except in the case of textile goods.
a mark consisting of a numeral is necessarily not distinctive and is not registerable.
[80 E] Kerly on Trade Marks, 9th End.
p. 284, and Reuiter vs Hublens, , referred to.
(3) Section 32(b) relates to facts existing both at the time of and after registration.
If the mark at the time of registration was likely to deceive or cause confusion or would otherwise be disentitled to protection of a court, and therefore, was, under section 11 (a) and (e) prohibited from being registered, the rule as to conclusiveness of the validity of the registration in section 32 cannot be invoked and that would also be so, if the trade mark at the date of commencement of rectification proceedings was such as to offend against the provisions of section 11.
[80F H] The sales of foreign bells with numeral '50 ' after 1953 were 'so few that they could hardly be considered as evidence for showing a likelihood of confusion or deception.
In fact the purchasers used to call those bells, not by the numerals, but by the manufacturers ' names.
As regards bells said to have been manufactured by one of the appellant companies since 1947 and bearing the numeral '50 ', no evidence was led to show either the extent of manufacture or sale between 1947 1953 or thereafter from which the High Court could be asked to draw any inference as to the likelihood of deception or confusion.
As against the voluminous sales of the respondent for the years 1949 1962, there was no corresponding evidence on behalf of the appellants indicating sales of their bells with number '50 ' from which any likelihood of confusion or deception could be deduced.
Therefore, section 11(a) was not attracted.[816 C, G H; 82 D F] (4) The true construction of section 11(e) is that even assuming that the trade marks in question were not distinctive and for that reason not registerable as not falling within section 9, that fact, by itself, would not mean that they became disentitled to protection in a court.
That is, although a mark cannot be registered because it is not distinctive as provided by section 9, such a mark is not for that reason only one, the registration of which is prohibited by section 11, because, the section lays down positive objection to registration, and not mere lack of qualification, by using the words disentitled to protection.
Therefore, unless the trade 'mark offends the provisions of section II, that is, offends any of the matters in cls.
(a) to (d) of section 11, or is disentitled to protection in a court under section 11(e), the rule 72 as to conclusiveness of the validity of registration embodied in section 32 applies.
In the present case, in fact, there was no evidence of any, fraud having been committed by the respondent at the time of the registration.
There was neither averment by the appellants nor evidence, that Lucas or any ,other foreign concern had obtained registration of trade marks of '50 ' or 'Fifty '. 'nose concerns merely used various numerals for distinguishing one type of bell from another manufactured by them and there was no question of any piracy by the respondent.
The trade mark had also be,come distinctive with respective to the respondent.
[82 F H; 84 D F] Imperial Tobacco Co. Ltd. vs De Pasquali & Co. 35 R.P.C. 186, referred to.
(5) The principle underlying section 32(c) is that property in a trade mark exists so long as it continues to be distinctive of the goods of the registered proprietor in the eyes of the public or a section of the public.
If the proprietor is not in a position to use the mark to distinguish his goods from those of others or has abandoned it or the mark has become so common in the market that it has ceased to connect him with his goods then there would be no justification for retaining the mark on the register.
Under section 32(c) the marks have to be distinctive at the 'commencement of the proceedings ', that is the proceedings in which the conclusive character of the ' Registration arises.
Therefore, it may be the date when a suit for infringement is filed by the proprietor of the trade mark or the date on which the rectification proceedings ;ire filed as a result of the suit.
Rights in a trade mark could be abandoned by the owner, but when such abandonment is sought to be inferred from the proprietors neglect to challenge infringement the character and extent of the trade of the infringers and their position would have to be reckoned in considering .whether the registered proprietor was barred by such neglect [84 F H; 85 A C, D E] In the present case, the progressive increase of the sales of the respondent 's bells from 1949 together with the evidence of witnesses of the respondent shows that the said trade marks distinguished the goods of the respondent from those of other manufacturers.
Also, whether the crucial date is taken as 1959 or 1961, the date of suit or the date of rectification proceedings, the evidence on record indicates that the trade marks were distinctive.
The respondent has all along been zealously trying to maintain its right, against all infringements.
There were no repeated breaches which went unchallenged by the respondent when known to the respondent.
Mere neglect in a few cases to proceed did not necessarily constitute abandonment, because, it was in respect of infringements which were not sufficient to affect the distinctiveness of the mark.
There was no .evidence to show that the use by others of the word 'Fifty ' or the numeral '50 ' was substantial and the plea that there was common use of the trade marks must fail.
Therefore, it is impossible to sustain the contention founded on section 32(c).
[86 A E] Re.
Farina, and Rowland vs Mitchell, , applied.
(6) The power to rectify under section 56 is discretionary and when such .discretion was properly exercised, a court of appeal would refuse to interfere.
But, in the present case, the single Judge did not appreciate the principles of sections, 11 and 32, and hence, the Division Bench was justified in setting aside his order.
|
Appeals Nos.
2200, 2200A and 2200B of 1968.
Appeals from the judgment and order dated November 30, 1967 of, the Allahabad High Court in Income tax Reference No. 366 of 1963.
M. C. Chagla and P. N. Tiwari, for the appellant (in all the appeals).
B. Sen, G. L. Sharnia and R. N. Sachthey, for the respondent (in all the appeals).
239 The, judgment of the Court was delivered by Hegde J.
In these appeals by certificate the question that falls for decision is whether oil the facts and in the circumstances of the case registration under section 26(A) of the Indian Income Tax Act, 1922 (to be hereinafter referred to as the act) was rightly refused to the appellant firm on the ground that the partnership in question violated the provisions of section 4 of the Indian Companies Act, 1913.
The authorities under the Act as well as the High Court of Allahabad have answered that question in the affirmative.
The assessee challenges that conclusion.
The above appeals relate to different assessment years of the same assessee, the relevant assessment years being 1952 53, 1953 54 and 1954 55.
In all these years the Income Tax Officer had refused to register the appellant firm under section 26A.
All the partnership deeds are, we are told, similar in terms.
We have before us the deed executed on July 7, 1950.
It shows that the firm consists of 18 partners.
Ex facie that deed does not show that any of the partners had joined the deed as representatives of their Hindu Undivided Families.
From the tenor of the document, they appear to be partners in their own right.
The Income Tax Officer, the Appellate Assistant Commissioner and the Tribunal have come to the conclusion that some of them had joined the partnership as Kartas of their respective Hindu Undivided Families.
All the authorities under the Act as well as the High Court have opined that the partnership in question is not lawful in view of section 4(3) of the Indian Companies Act, 1913.
The material portion of that provision reads (4).
(1). (2) No company, association or partnership consisting of more than twenty persons shall be formed for the purpose of carrying on any other business that has for its object the acquisition of gain by the company, association or partnership or by the individual members thereof, unless it is registered as a company under this Act, or is formed in pursuance of an Act of Parliament of the United Kingdom or some other Indian law or Royal Charter or Letters Patent.
(3) This section shall not apply to a joint family carrying on joint family trade or business and where two or more such joint families form a partnership, in computing the number of persons for the purpose of this section, minor members of such families shall be excluded.
240 (4) Every member of a company, association or partnership carrying on business in contravention of this section shall be personally liable for all liabilities incurred in such business.
(5). . . .
The Income Tax Officer, the Appellate Assistant Commissioner as well as the Tribunal were of the opinion that some partners of the assessee firm having entered into the partnership as representatives of their respective Hindu Undivided Families, the adult members of those families should be taken into consideration for determining whether or not the total number of partners exceeded twenty.
On that basis they have arrived at the conclusion that the firm has more than twenty partners and the same having not been registered as a company under the Companies Act, nor having formed 'in pursuance of an Act of Parliament of the United Kingdom or some other Indian law or Royal Charter or Letters Patent, it must be held to be an unlawful partnership.
When the question formulated earlier was referred to the High Court under section 66(1) of the Act, it was heard by Jagdish Sahai and Beg, JJ.
Jagdish Sahai J. was of the opinion that the partnership in question was not lawful.
Beg J. differed from him and answered the question in favour of the assessee.
In view of this difference of opinion, the matter was referred to Takru J.
He agreed with Jagdish Sahai J. By a majority the question referred to the High Court was answered in favour of the revenue.
Hence these appeals.
Mr. Chagla appearing on behalf of the assessee urged that no Hindu joint family as such can Join a partnership and it is now well settled that when a karta of Hindu Undivided Family joins a firm as a partner even if he contributes his share from out of the family funds, the other members of his family do not ipso facto 'become partners of that firm.
So far as the partnership is concerned, he is the only partner though he may be accountable to the members of his family as regards the profits earned.
According to the learned counsel, for the purpose of working out the rights and liabilities of the partners inter se one cannot go behind the partnership deed.
Proceeding further he urged that in considering whether a partnership should be registered under section 26A or not, the Income tax Officer has merely to see, whether the requirements of section 26A of the Act and the relevant rules are complied with or not.
He is not entitled to investigate into the question as to who are beneficially interested in the partnership.
According to him if the requirements of section 26A and the relevant rules are complied with, the Income tax Officer is bound to register the partnership.
The counsel urged that the second limb of section 4(3) of the Indian Companies Act, 1913, proceeds on the erroneous impression that 241 a joint Hindu family can enter into a partnership, which in law it cannot as it has no legal personality.
Mr. B. Sen, learned counsel for the department did not contest the position that when a karta or a member of a Hindu Joint family joins a partnership the other members of his family do not become partners ipso facto.
But according to him it is open to the department to go behind the partnership deed and find out whether the individual who has joined as a partner has joined in his own right or as a representative of any other body.
His contention was that in view of section 4(3) of the Indian Companies Act, 1913, once the Income tax Officer comes to the conclusion that one of the partners of a firm is a representative of a joint family, he must deem that the adult members of that family are also partners of that firm and on that 'basis find out whether the total number of partners exceed twenty.
If they exceed twenty he cannot register the partnership, as such a partnership contravenes section 4 (2) of the Indian Companies Act, 1913, Section 2 (6B) of the Act provides that the expression 'firm ', partner ' and 'partnership ' in the Act have the same meaning respectively as in the .
Section 4 of the Partnership Act, 1932 prescribes "Partnership" is the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all.
Persons who have entered into partnership with one another are called individually 'partners" and collectively "a firm" and the name under which their business is carried on is called the 'firm name '.
In view of the aforementioned provision only "persons" can join as partners.
Section 2(42) of the General Clauses Act says a "Person" shall include any company or association or body of individuals whether incorporation or not.
But this definition applies when there is nothing repugnant in the subject or context.
After examining the provisions of the Partnership Act, the Privy Council in SenaJi Kapurchand vs Pannaji Devichand(1) and this Court in Dulichand Laxminarayana vs Commissioner of Income Tax, Nagpur(2) , have held that an association of persons is not a person within the meaning of that expression in the Partnership Act, It is true that section 2(9) of the Act says that unless the context otherwise requires "person" includes Hindu Undivided Family, This definition cannot be imported into the Partnership Act, the provisions of which alone are relevant for finding as to who could join as partners.
It is only partnership constituted according to (1) A.I.R. 1930 P.C. 300.
(2) 242 the provisions of the Partnership Act that can be considered as partnerships under the Act.
The definition of 'person ' in the Act is intended for the purpose of levying income tax and for other cognate matters.
On the basis of certain observations of the Judicial Committee in Lala Lachman Das vs Commissioner of Income Tax(1), it Was contended on behalf of the department that a joint Hindu family can enter into a partnership.
Those observations have to be read in the context in which they were made.
The department in that case had requested the tribunal to refer the question "can there 'be a partnership within the meaning of section 2 sub section
6(B) of the Indian Income tax Act, 1922 between a Hindu Undivided Family as such on the one part and one of its undivided members in his indi vidual capacity on the other part.
" But that question was ultimately not referred as being unnecessary on the facts of the case.
But the following observations of the Judicial Committee in its judgment are relevant : "It is unnecessary to consider in this case the question relating to the validity of a partnership between a Hindu Undivided family as such of the one part and one of its undivided members in his individual capacity of the other.
With reference to the latter kind of partnership there seems to be some authority favouring the view that such a partnership cannot exist under the rules.
of Hindu law but their Lordships do not propose to deal with that question in this case.
" In that case the partnership was between the karta of a joint Hindu family and an undivided member of that family.
Hence the observations in the judgment that the Hindu Undivided family was a partner has really reference to the karta who was a partner as representing the family.
In Commissioner of Income tax,, West Bengal vs Kalu Babu Lal Chand(2), this Court observed that it is now well settled that Hindu Undivided Family cannot as such enter into a contract of partnership with another person or persons.
,Several other decisions have taken the same view.
No decision taking a contrary view was ' brought to our notice.
The concept of a Hindu Undivided Family joining a partnership presents considerable difficulty.
A Hindu Undivided Family is a fleeting body.
Its composition changes by births, deaths, marriages and divorces.
Such a partnership is likely to have a precarious existence.
The assumption in section 4(3) of the Companies ' Act, 1913 that a Hindu Joint family can be a partner in a partnership appears to be based on an erroneous view of the law.
(1) 74.
I.A. 277.
(2) 243 The next question is whether when a deed of partnership does not on the face of it show that any Hindu Undivided Family has joined the partnership, is it open to the Income tax Officer to behind the deed and find out for the purpose of registration under section 26A whether the ostensible partner is the representative of someone else.
The Judicial Committee in P. K. P. section Pichappa Chettiar and Ors.
vs Chokalingam Pillai and Ors.
(1) ruled that where a managing member of a joint family enters into a partnership with a stranger, the other members of the family do not ipso facto become partners in the business so as to clothe them with all the rights and obligations of a partner as defined by Contract Act.
In such a case the family as a unit does not become a partner but daily such of its members as in fact enter into contractual relationship with the stranger.
In Kshetra Mohan Sannyasi Charan Sadhukhan vs Commr. of Excess Profits Tax, West Bengal,(1) this Court laid down that a Hindu Undivided Family is included in the expression "person, as defined in the Indian Income tax Act but it is not a juristic person for all purposes; when two kartas of Hindu Undivided Families.
enter into a partnereship agreement, the partnership though popularly known as one between two Hindu Undivided Families in the eye of the law, it is a partnership between the two kartas and the other members of the families do not ipso facto become partners; there is, however, nothing to prevent the individual members of one Hindu Undivided Family from entering into a partnership with the individual members of another Hindu Undivided Family and in such a case it: is a partnership between the individual members and it is wholly inappropriate to describe such a partnership as one between two Hindu Undivided Families.
In Firm Bhagat Ram Mohan Lal vs Commissioner of Excess Profits Tax, Nagpur and anr.(3), this Court ruled that when the karta of a joint family enters ' into a partnership with the stranger, the members of the family do not ipso facto become partners in that firm.
They have no right to take part in its management or to sue for its dissolution.
The creditors of the firm would no doubt be entitled to proceed against the joint family assets including the shares of the non Partner co parceners for realisation of their debts.
But that is because under the Hindu law, the karta has.
the right when properly carrying on business to pledge the H credit of the joint family to the extent of its assets, and not because the junior members become partners in the business.
The liability (1) A.I.R. 1934, P.C. 192.
(3) (2)(1953) 244 of the latter arises by reason ' of their status as coparceners and not by reason of any contract of partnership by them.
In Commissioner of Income tax, Bombay City vs Nandlal Gandalal(1), this Court again observed that the position in Hindu law with 'regard to a coparcener, even when he is the karta entering into partnership with others in carrying on a business is well settled.
The partnership that is created is a contractual partnership and is governed by the provisions of the .
The partnership is not between the family and the other partners; it is a partnership between the _coparcener individually and his other partners.
The coparcener is undoubtedly accountable to the family for the income received, but the partnership is exclusively one between the contracting members, including the individual coparcener and the strangers.
On the death of the coparcener, the surviving members of the family cannot claim to continue as partners with the others or institute a suit for dissolution of partnership; nor can the stranger partners sue them as partners for the coparcener 's share of the loss.
Therefore, so far as the partnership is concerned, both under partnership law and under Hindu law, the control and management is in the hands of the individual coparcener who is the partner, and not in the family.
In Commissioner of Income tax, Madras vs Bagyalakshmi and Co. Udamalpet(2), this Court observed that contract of partnership has no concern with the obligation of the partners to others in respect of their shares of profit in the partnership.
it only regulates the rights and liabilities of the partners.
A partner may be the karta of a joint Hindu family, he may be a trustee, he may enter into sub partnership with others, he may under an agreement express or implied, be the representative of a group of persons; he may be a benamidar for another.
In all such cases he occupies a dual position qua the partnership, he functions in his personal capacity; qua the third parties in his representative capacity; third parties, whom one of the partner represents, cannot enforce their rights against the other partners nor can the other partners do so against the said third parties.
Their right is only to a share in the profits of their partner representative in accordance with law or in accordance with the terms of the agreement, as the case may be.
The law of partnership and Hindu law function in different fields.
A divided member or some of the divided members of the erstwhile joint family can certainly enter into a partnership, with third parties under some arrangement among the members of the divided family.
Their shares in the partnership depend on the terms of the partnership; the shares of the members of the divided (1) (1960) 40 I.T.R.1.
(2) ; 245 family in the interest of their representative in the partnership depend upon the terms of the partition deed.
From these decisions it follows that for the purpose of finding, out as to who are all partners of.
a firm, one has only to look to the partnership deed and not to go behind it.
Another contention urged by Mr. Chagla was that the scope of the enquiry I under section 26A is a limited one; if the application made for registration complies with the requirements of that section and the rules framed thereunder.
, then it is not open to the income tax Officer to refuse to register the firm.
Section 26A says : (1) Application may be made to the Income7tax officer on behalf of any firm, constituted under an instrument of partnership specifying the individual shares of the partners, for registration for the purposes, of this Act and of any other enactment for the time being in force relating to the Income tax or super tax.
(2) The application shall be made by such person or persons, and at such times and shall contain such particulars and shall be in such form, and be verified in such manner, as may be prescribed and it shall be dealt with by the Income tax Officer in such manner as may be prescribed.
" The conditions of registration prescribed in this section and the relevant rules are : (1) on behalf of the firm, an application ,should be made to the Income tax Officer by such person and at such times and containing such particulars, being in such form and verified in such manner as are prescribed by the rules;, (2) the firm should be constituted under an instrument of partnership; (3) the instrument must specify the individual shares of the part ners and (4) the partnership must be valid and genuine and must actually exist in the terms specified in the instrument.
If all the above conditions are fulfilled, the Income tax Officer is bound to register the firm unless the assessee has contravened section 23(4) of the Act.
In Commissioner of Income Tax, Madras vs Sivakashi Match Exporting Co. (1) this Court held that the combined effect of section 26A and the rules made thereunder was that the Income tax Officer could not reject an application made by a firm if it gave the necessary particulars prescribed by the rules and if there was a firm in existence as shown in the instrument of partnership.
A firm is said to be not in existence if it was a bogus and not a (1) , Sup.
Cl/70 2 246 genuine one or if in law the constitution of the partnership was void.
The jurisdiction if the Income tax Officer was, therefore, confined to ascertaining two facts namely (1) whether the application for registration was in conformity with the rules framed under the Act and (2) whether the firm shown in the document presented for registration was a bogus one or had no legal existence.
Further the discretion conferred on the Income tax Officer under section 26A was a judicial one and he could not refuse to register a firm on mere speculation.
He had to base his conclusion on relevant evidence.
Therein this Court further held that there was no prohibition under the Partnership Act against a partner or partners of other firms combining together to form a separate partnership to carry on a different business.
The fact that such a partner entered into sub partnership with others in respect of his share did not detract from the validity of the partnership; nor was the manner in which he dealt with his share of the profits of any relevance to the question of the validity of the partnership.
In Commissioner of Income Tax Gujarat vs A. Abdul Rahim and Co. (1), this Court ruled that registration of a partnership deed under s.26A of the Act could not 'be refused on the ground that one of the partners was a benamidar for someone else.
Therein this Court observed that it is a settled law that if a partnership is a 'genuine and valid one, the Income tax Officer has no power to reject its registration if the other provisions of s.26A and the rules framed thereunder are complied with.
When a firm makes an application under s.26A for registration, the Income tax Officer can reject the same if he comes to the conclusion that the partnership is not genuine or the instrument of partnership does not specify correctly the individual share of the partners.
But once he comes to the conclusion that the partnership is genuine and a valid one, he cannot refuse registration on the ground that one of the partners is a benamidar of another.
If the partnership is genuine and legal, the share given to the benamidar will be the correct specification of his individual share in the partnership.
The beneficial interest in the income pertaining to the share of the said benamidar may have relevance to the matter of assessment but none in regard to the question of registration.
His beami character does not affect the benaamidar 's capacity as partner or his relationship with the other members of the partnership.
If a partner is only a benamidar for, another, it can only mean that he is accountable to the real owner for the profits earned by him from and out of the partnership.
Therefore a benamidar is a mere trustee of the real owner and he has no beneficial interest in the property or the business of the real owner.
But, in law, just as in the case of a trustee, he can also enter into a partnership with (1) 247 others.
The benamidar of a partner, qua the other partners, has separate And real existence; he is governed by the terms of the partnership deed, his rights and liabilities are governed by the terms of the contract and by the provisions of the partnership Act; his liability to third parties for the acts of the partnership is coequal with that of the other partners; the other partners have no concern with the real owner; they can only look to him for enforcing their rights or discharging their obligations under the partnership deed.
Any internal arrangement between him and ,another is not governed by the terms of the partnership; that arrangement operates only on the profits accruing to the benamidar; it is outside the partnership arrangement.
If a benamidar possesses the legal character to enter into a partnership with another, the fact that he is accountable for his profits to, and has the right to be indemnified for his losses by a third party or even by one of the partners does not discharge him of the said character.
As mentioned earlier, the persons who are shown in the part nership deed with which we are concerned in these appeals as partners, appeared to have joined the same in their individual capacity.
There is nothing in the partnership deed to indicate that they have joined the partnership as kartas of their respective families.
It was not open to the Income tax Officer to go behind the deed and find out, for the purposes of registration under section 26A whether the partners mentioned in the deed have joined the partnership in their own right or as representing others.
Hence the partnership must be held to have been validly formed as law did not at the relevant time prohibit any one, otherwise competent to contract from entering into a contract of partnership even though, the beneficial interest in his share may vest in others.
The application made for registration complies with the requirements of section 26A and the rules framed thereunder.
Therefore the Income tax Officer was bound to register the partnership.
For the reasons mentioned above, we allow these appeals, set aside the order made by the High Court and answer the question referred to the High Court in the negative and in favour of the assessee.
The department shall pay the costs of the assessee in this Court as well as in the High Court.
One hearing fee.
R.K.P.S. Appeals allowed.
| IN-Abs | A firm consisted of 18 partners.
The partnership deed did not show that any of the partners joined the deed as representatives of their Hindu Undivided Families.
The firm applied for registration under section 26A of the Income Tax Act, 1922.
The income tax Officer, the Appellate Assistant Commissioner and the Tribunal were of the opinion that some partners of the firm having entered into the partnership as representatives of their respective Hindu undivided families, in view of section 4(3) of the Companies Act, 1913, the adult members of these families should be taken into consideration for determining whether or not the total number of partners exceeded twenty.
On that basis they arrived at the conclusion that the firm had more than 20 partners and the same having not been registered as a company under the Companies Act, the partnership was un lawful.
The High Court answered a reference made to it in favour of the revenue.
In the appeal to this Court it was contended; (i) Section 4(3) of the Companies Act, 1913 proceeded on the erroneous impression that a joint Hindu Family can enter into a partnership which in law it cannot as it has no legal personality; (ii) it was not open to the Income Tax Officer to go behind the deed for the purpose of registration under section 26A and (iii) if the application, for registration complied with the requirements of that section and the rules made thereunder, it was not open to the Income Tax Officer to refuse to register.
Allowing the appeal, HELD : (i) It is only partnership constituted according to the provisions of the partnership Act that can be considered as partnership under the Act.
Under the Partnership Act only "persons" can join as partners.
An association of persons is not a person within the meaning of that expression in the Partnership Act.
The definition of "Person" in the Income Tax Act including within the definition Hindu Undivided Family is intended for levying income tax and other cognate matters and cannot be imported into the Partnership Act, the provisions of which alone are relevant for finding as to who could join as partners.
A Hindu undivided family cannot as such enter into a contact of Partnership with another person or persons.
The concept of a Hindu undivided family joining a partnership presents considerable difficulty.
It is a fleeting body and such a partnership is likely to have a precarious.
existence.
Therefore, the assumption in section 4(3) of the Companies Act, 1913, that a Hindu Joint Family can be a partner in a partnership appear& to be based on an erroneous view of the law.
[241 H 242 G H] 238 Senaji Kapurchand V. Pannaji Devichand, A I.R. 1930 P.C. 300, Dulichand Laxminarayana vs Commissioner of income tax Nagpur, and Commissioner of Income tax West Bengal vs Kalu Babu Lal Chand, , referred to.
Lala Lachman Das vs Commissioner of Income Tax, 74 I.A. 277, distinguished '.
(ii) For the purpose of finding out as to who are all partners of a firm, one has only to look to, the partnership deed and not to go behind it.
It is well settled that when a co parcener, even when he is the Karta, enters into partnership with others the partnership that is created is a contractual partnership; that partnership is not between the family and the other partners, it is a partnership between the coparcener individually and his other partners.
[244 B C] P. K. P. section Pichappa Chettiar vs Chokalingam Pillai.
A.I.R. 1934 P.C. 192, Kshetra Mohan Sannyasi Charan Sadhukhan vs Commr.
of Excess Profits Tax, West Bengal, , Firm Bhagat Ram Mohan Lal vs Commissioner of Excess Profits Tax, Nagpur and And.
and Commissioner of Income tax, Bombay City vs Nandlal Gandalal, , referred to.
(iii) The Income tax Officer has no, power to reject an application for registration under section 26.A if the provisions of the section and the rules framed thereunder are complied with.
The jurisdiction of the Income tax Officer is confined to ascertaining two facts, namely, (1) whether the application for registration is in conformity with the rules framed under the Act and (2) whether the firm shown in the document %,as a bogus one or had no legal existence.
It is not open to the Income tax Officer to go behind the deed and find out for the purpose of registration whether the, partners mentioned in the deed have joined the partnership in their own right or as representing others.
In the present cast the application made for registration complies with the requirements of the section and the rules framed thereunder.
Hence the partnership must be held to have been validly formed as law did not at the relevant time prohibit anyone, otherwise competent to contract from entering into a contract of partnership even though the beneficial interest in his share may vest in others.
[246 A B, 247 E F] Commissioner of Income tax, Madras vs Sivakashi Match Exporting Co. and Commissioner of Income Tax Gujarat vs ,I. Abdul Rahim and Co., , referred to.
|
Appeal No. 615 of 1966.
Appeal by special leave from the judgment and decree dated June, 25, 1962 of the Bombay High Court, Nagpur Bench in Appeal No. 191 of 1956 from original Decree,.
B. R. L. Iyengar, section K. Mehta, for the appellant.
section N. Kherdekar, G. L. Sanghi and A. G. Ratnaparkhi, for respondent No. 1.
The Judgment of the Court was delivered by Hegde, J.
One Prem Sukh was the owner of the suite pro perties.
Parvatibai was his wife They had no children.
Prem Sukh gifted some of his properties to his wife on June 14, 1943.
Dr. Madan Lal 's (1st respondent in this appeal) case is that Prem Sukh adopted him on July 12, 1943.
Thereafter it is said that Prem Sukh adopted on April 10, 1946, the appellant Vallabh Das.
On April 29, 1946, Dr. Madan Lal instituted a suit for a declaration that he is the adopted son of Prem Sukh and for partition and possession of his share in the family properties.
Prem Sukh denied the adoption pleaded by Dr. Madan Lal.
On the other hand he alleged that Vallabh Das was his adopted son.
In view of that allegation, Vallabh Das was added as a supplemental defendant in that suit.
No relief was claimed against him.
During the pendency of that suit Prem Sukh died.
Thereafter Dr. Madan Lal moved the court to withdraw the suit.
He was permitted to withdraw the same with liberty to file a fresh suit on the same cause of action on condition that he pays the defendants ' costs of that suit before instituting a fresh suit.
Thereafter Parvatibai bequeathed her properties to Dr. Madan Lal and died soon after.
The suit from which this appeal arises was brought on November 29, 1951 even before the costs of Vallabh Das (the appellant herein) in the previous suit had been paid.
Vallabh Das resisted the suit on various grounds.
He contended that Dr. Madan Lal was not adopted by Prem Sukh; even if he 213 had been adopted, that adoption was not valid under the Benaras School of Hindu law by which the parties were governed as Madan Lal was a married man on July 12, 1943 and lastly the suit as brought is not maintainable as Dr. Madan Lal had not paid the costs due to him under the order in the previous suit before instituting the present suit.
Both the trial court as well as the High Court in appeal rejected every one of the contentions taken by Vallabh Das and decreed the suit as prayed for.
Thereafter this appeal was brought after obtaining special leave from this Court.
The factum of the adoption has been upheld both by the trial court as well as by the High Court.
There is evidence to support that finding.
No convincing circumstance was brought to our notice requiring us to review the evidence over again.
This Court ordinarily does not interfere with concurrent findings of fact.
We see no justification to disturb the concurrent finding of fact arrived at by the trial court and the High Court.
As regards the validity of the adoption, the contention of Vallabh Das that the adoption was invalid rests on the plea that on July 12, 1943, Dr. Madan Lal was a married man.
This plea has been negatived by the trial court as well as by the High Court.
They have come to the conclusion that Dr, Madan Lal was not a married man on that date and that he was married subsequently.
Here again there is no good ground for us to interfere with the finding of fact reached by those courts.
The only contention that was seriously pressed before us on behalf of the appellant was that the suit under appeal is not maintainable as the condition precedent imposed by the court in the earlier suit namely the payment of defendants ' costs by the plaintiff before bringing a fresh suit on the same cause of action had not been complied with.
We do not think that this contention is well founded.
Rule 1, Order 23, Code of Civil Procedure empowers the courts to permit a plaintiff to withdraw from the suit brought by him with liberty to institute a fresh suit in respect of the subject matter of that suit on such terms as it thinks fit.
The terms imposed on the plaintiff in the previous suit was that before bringing a fresh suit on the same cause of action, he must pay the costs of the defendants.
Therefore we have to see whether that condition governs the institution of the present suit.
For deciding that question we have to see whether the suit from which this appeal arises is in respect of the same subject matter that was in litigation in the, previous suit.
The expression "subject matter" is not defined in the Civil Procedure Code.
It does not mean property.
That expression has a reference to a right in the property 214 which the plaintiff seeks to enforce.
That expression includes the cause of action and the relief claimed.
Unless the cause of action and the relief claimed in the second suit are the same as in the first suit, it cannot be said that the subject matter of the second suit is the same as that in the previous suit.
Now coming to the case before us in the first suit Dr. Madan Lal was seeking to enforce his right to partition and separate possession.
In the present suit he seeks to get possession of the suit properties from a trespasser on the basis of his title.
In the first suit the cause of action was the division of status between Dr. Madan Lal and his adoptive father and the relief claimed was the conversion of joint possession into separate possession.
In the present suit the plaintiff is seeking possession of the suit properties from a trespasser.
In the first case his cause of action arose on the day he got separated from his family.
In the present suit the cause of action, namely, the series of transactions which formed the basis of his title to the suit properties, arose on the death of his adoptive father 'and mother.
It is true that both in the previous suit as well as in the present suit the factum and validity of adoption of Dr. Madan Lal came up for decision.
But that adoption was not the cause of action in the first nor is it the cause of action in the present suit.
It was merely an antecedent even which conferred certain rights on him.
Mere identity of some of the issues in the two suits does not bring about an identity of the subject matter in the two suits.
As observed in Rakhma Bai vs Mahadeo Narayan(1), the expression "subject matter" in Order 23, Rule 1, Code of Civil Procedure means the series of acts or transactions alleged to exist giving rise to the relief claimed.
In other words "subject matter" means the bundle of facts which have to be proved in order to entitle the plaintiff to the relief claimed by him.
We accept as correct the observations of Wallis C.J. in Singa Reddi vs Subba Reddi(2), that where the cause of action and the relief claimed in the second suit are not the same as the cause of action and the relief claimed in the first suit, the second suit cannot be considered to have been brought in respect of the same subject matter as the first suit.
For the reasons mentioned above this appeal fails and the same is dismissed with costs.
G.C. Appeal dismissed.
(1)I.L.R. 42 Bom.1155.
| IN-Abs | P was the owner of the suit properties.
He had no children.
He gifted some of his properties to his wife on June 14, 1943.
On April 29, 1946 the first 'respondent instituted a suit for a declaration that he was the adopted son of P and for partition and possession of his share in the family property.
The first respondent claimed to have been adopted on July 12, 1943, P denied the said adoption and alleged that in fact he had adopted the appellant on April 10, 1946.
In view of that allegation the appellant was added as a supplemental defendant in the said suit, but no relief was claimed against him.
During the pendency of that suit P died.
Thereafter the first respondent moved the court to withdraw the suit.
He was permitted to withdraw the 'same with liberty to file a fresh suit on the same cause of action on condition that he paid the defendants ' costs of that suit before instituting a fresh suit.
Thereafter P 's widow bequeathed her properties to the first respondent and died soon after.
On November 29, 1951 the first respondent brought a fresh suit without having paid the costs of the appellant in the earlier suit.
The appellant resisted the suit on several grounds.
However the trial court and the High Court decided in favour of the first respondent.
Thereupon by special leave the present appeal was filed by the appellant.
The main question that fell for consideration was whether the suit under appeal was maintainable when the condition precedent imposed by the court in the earlier suit namely, the payment of defendants ' costs by the plaintiff before bringing a fresh suit on the same cause of action had not been complied with.
HELD : (i) Rule 1, 0.
23, Code of Civil Procedure empowers the courts to permit a plaintiff to withdraw from the suit brought by him with liberty to institute a fresh suit in respect of the subject matter of that suit on such terms as it thinks fit.
The expression 'subject matter ' is not defined in the Code.
It does not mean property.
That expression has a reference to a right in the property which the plaintiff seeks to enforce.
That expression includes the cause of action and the relief claimed.
Unless the cause of action and the relief claimed in the second suit are the same as in the first suit it cannot be said that the subject matter of the second suit is the same as in the previous suit.
[213 G 214 B] (ii) The non fulfilment of the condition imposed by the Court at the time of withdrawal of the first suit did not bar the present suit because the subject matter of the two suits was not the same.
In the first suit the first respondent was seeking to enforce his right to partition and separate possession.
In the present suit he sought to get possession of the suit properties from a trespasser on the basis of his, title.
In the first suit the cause of action was the division of status between the first respondent and his adoptive father and the relief claimed was the conversion of joint possession into separate possession.
In the present suit the plaintiff was seeking possession of the suit properties from a trespasser 212 In the first case his cause of action arose on the day he got separated from his family.
In the present suit the cause of action, namely, the series of transactions which formed the basis of the title to the suit properties arose on the death of his adoptive father and mother.
[214 B D] Mere identity of some of the issues in the two suits did not bring about an identity of the subject matter in the two suits.
[214 D E] The appeal must accordingly be dismissed.
Rakhma Bai vs Mahadeo Narayan, I.L.R. and Singa Reddy vs Subba Reddy, I.L.R. , approved and applied.
|
minal Appeal No. 245 of 1969.
Appeal by special leave from the judgment and order dated July 17, 1969 of the Mysore High Court in Criminal Appeal No. 111 of 1968 and Criminal Referred Case No. 2 of 1968.
K. M. K. Nair, for the appellant.
section section Javali and section P. Nayar, for the respondent.
The Judgment of the Court was delivered by Dua, J.
The appellant was convicted by the Sessions Judge, Shimoga, under section 302, I.P.C. for the murder of one Govindappa, a village postman and was awarded capital sentence.
He was also held guilty of an offence under section 201, I.P.C. and sentenced to rigorous imprisonment for 7 years.
The High Court of Mysore confirmed the conviction and sentence under section 302, I.P.C. It also upheld his conviction under section 201, I.P.C. but set aside the sentence on this count observing that when a person is convicted both under section 302 and section 201, I.P.C. it is undesirable to pass separate sentence for both offences.
In this appeal with, special leave the appellant challenges his conviction and sentence under section 302, I.P.C. The appellant was tried, along with Laxmamma (accused No. 2) wife of the deceased Govindappa and her mother Gangamma (accused No. 3) wife of late Mylappa.
The two women were charged with abetment of murder and were acquitted by the trial court.
We are not concerned with them in this appeal.
There is no eye witness in the case and the courts below have accepted the prosecution story on circumstantial evidence.
The question before us is whether the circumstantial evidence accepted by the courts below establishes the murder of the deceased by the appellant beyond reasonable doubt.
The prosecution story may now be stated.
The deceased, Govindappa resident of Kommanal village in Shimoga Taluk worked as Extra Departmental Delivery Agent in the postal department.
He was attached to the post 217 office at Kommanal and was in common parlance called a postman.
G. Sangaiah (P.W. 1) resident of village Abbalagere worked as an Assistant School Teacher in Kommanal.
The distance between the two villages is 1 3/4 miles.
P.W. 1 also worked as Branch Postmaster in Kommanal, and was called Extra Departmental Postmaster.
According to him the duties of the deceased were to bring the postal bags from the M.M.S. Bus on the main road in the morning at about 8.30 a.m. and after the bags were opened by P.W. 1 to deliver the postal articles to their respective addressees.
At about 4.30 p.m. he would return to the post office to take the postal bags to the Mail Service Bus.
Six villages were, attached to this post office.
The deceased used to deliver postal articles in two groups of three villages each on alternate days.
On July 21, 1967 at about 10 a.m. the deceased received the postal articles from P.W. 1 for, delivering them to the addressees in, villages Kittadal, Kunchenhalli and Bikkonahalli.
The articles to be delivered included two registered letters addressed to Krishna Naika and Halanaika of Kittadal.
At about 3.30 p.m. the deceased returned and told P.W. 1 that the addressees, having gone to their fields, were not in the village, and that he would again try to deliver the. registered articles to them.
The deceased took the postal bags from the post office for delivery to the Mail bus.
He did not return to duty thereafter.
As the deceased had been in the service of the post office for nearly 32 years, P.W. 1 did not suspect his bona fides.
On July 22, 1967 P.W. I went to the house of the deceased but did not find him there.
Thinking that the deceased might have been unavoidably held up somewhere P.W. 1 in addition to his own duties performed those of the deceased as well on that day.
On July 23, P.W. 1 went to village KittadaJ to inquire about the delivery of the registered articles to the addressees.
There he learnt from Krishna Naika (P.W. 15) that on July 21, 1967 the deceased had delivered to him.
the registered article at about 6 p.m. P.W. 15 on being questioned by the court gave the time of delivery to be about 4 p.m.
But this differences as to time, in the opinion of the trial court, was due to the fact that the witness had no precise idea of time.
After having waited for another day on July 24, 1967 P.W. I reported to the Postal Inspector, Shimoga Circle about the disappearance of the deceased exhibit P 1 is this report.
P.W. I informed the Postal Inspector of the steps taken by him in his search for the deceased.
Those steps included the inquiries made by him from the addressees of the registered letters which had been delivered by the deceased.
P.W. I had looked at those registered letters and left instructions for their production when required.
It was further reported that the receipts L11 Sup.
CI 15 218 pertaining to the delivery of RL No. 456/Udipi, and RL No. 825/Udipi and the visit book had not been returned by the deceased to the post office.
A request was made by P.W. 1 for the appointment of someone in place of the deceased so that the registered articles received on the 24th and 25th July, 1967 be ,delivered to their respective addressees.
The Postal Inspector was asked to visit Kommanal for making the necessary arrangements.
This report reached the Inspector (S.W. Pawar, P.W. 2) on July 26, 1967 and he visited Kommanal on July 27, 1967.
There he collected four Panchayatdars and examined Laxmamma, the wife of the deceased.
The same day he submitted his report, exhibit P 3, to the Sub Inspector of ' Police, Kasaba Police Station, Shimoga, attaching with it a copy of the report of P.W. 1, and also a copy of the statement of LaxmaMma.
in this report all the relevant facts were stated.
The important thing to be noted about this report is that according to it the deceased had two keys of letters boxes fixed at Kunchenhalli and Somanakoppa.
The duplicate keys of these locks were, however, available with P.W. 1.
This report was sent because, according to P.W. 2, neither the wife of the deceased nor anyone else from the village had reported to the police about the disappearance of the de ceased While investigation into the fact of disappearance of the deceased pursuant to this report was going on, it appears that Bheema Naika, (P.W. 3), resident of Kommanal while grazing his cattle near Ayanoor forest sensed some foul smell from a spot near 'Korakalu '.
On going closer, he saw, what appeared to him to be, a human skeleton with Khakhi half pants, khakhi shirt and belt and a pair of chappals.
He got frightened and reported to the village patel about what he had seen.
As it was late in the evening the patel did not go to the spot that day.
The following morning, August 4, 1967, P.W. 3 took the pate (Shankargowda, P.W. 12) and some others to the spot and showed them what he had seen.
The pate then reported the matter to the Sub Inspector of Police, Shimoga Taluk (exhibit P 11) Investigation then appears to have started for establishing the identity of the dead body, the cause of his death and, if his death was considered to be homicidal, who was the offender.
As a result of the investigation the three accused persons, as observed earlier, were sent up for trial.
The three questions requiring consideration by us relate to the identity of the dead body represented to be of the deceased, the cause of the death and whether the appellant has committed the murder.
In so far as the question of identity is concerned, there can hardly be any doubt that the skeleton was that of the deceased.
The Khakhi shirt, exhibit M.O. 1 and the half pant exhibit M.O. 2 have 219 been identified by P.W. 1 as the uniform given to the deceased. ' The visit book (exhibit M.O. 5) is also proved by P.W. 1 to have been delivered to the deceased The two postal acknowledgments entrusted to the deceased with the registered articles (exhibit M.O. 6) and the two duplicate keys (Exs. MO 3) of the locks of the post boxes at Kunchenhalli and Somanakoppa have also been identified and proved by P.W. 1.
All these articles were recovered from near the dead body.
This evidence leaves little doubt that the skeleton was of the deceased.
Some doubt was sought to be created on the question whether the bones found at the spot were those of a human body.
But on this point the testimony of Dr. Shambulingaswami, Assistant Surgeon, Mccann Hospital, Shimoga (P.W. 26) is clear and it establishes beyond doubt that the bones found were those of a human being.
For the present we are leaving out of consideration the evidence of Ganga (P.W. 4) and the oral confession made by the appellant to this witness.
We will deal with that witness a little later Turning to the question whether the deceased died a natural death or his death was homicidal, Dr. Ramu, Associate Professor of Forensic Medicine , Bangalore Medical College, was required to examine this question and the skeleton concerned was forwarded to him.
His report (exhibit P 20) records.
the following opinion "I am of opinion that (a) all the bones sent are of ' human origin and appear to belong to the same individual; (b) the bones belong to a male; (c) the age of the person is between 25 35 years; (d) the height of the person is about 5 feet 6 inches one inch; (e) the cause of death is due to external violence; (f) the time since death is about 4 8 weeks from the date of examination.
" This report is dated August 30, 1967.
When Dr. Ramu appeared as a witness he was cross examined by the counsel for the, appellant.
A suggestion was thrown that, the dead body might have been bitten by wild animals.
This suggestion was denied by the witness who replied that the gnawing by the wild animals would result in irregular surface which was not the case in respect of the bones sent to him.
The witness also refuted the suggestion that the base of the skull in question could have been fractured by a violent fall.
The fracture of bones caused by wild animals trampling on them was also stated by the witness to be different in 220 nature from the fractures which were found in the present case.
The doctor was clearly of opinion that the injuries caused to the bones sent to him for examination were ante mortem and not postmortem.
On being questioned by the court the doctor replied that at least two blows must have been given to the deceased, one on the nape of the neck and the other on the left cheek.
He further stated that the spinal cord must have been cut and completely severed because the two pieces M.O. 18 and M.O. 18 (a) were completely severed and this result could not have come about without the spinal cord being cut.
The injury on the base of the skull, he continued, must have been the result of a very hard blow and this was by itself sufficient in the ordinary course of nature to cause death.
The man whose bones were sent to him, must, according to the doctor, have been brutally attacked with a sharp cutting instrument.
This evidence, in our opinion, convincingly establishes that the deceased was the victim of grievous assault as a result of which he died and the courts below were quite right in so concluding.
We now come to the question whether it, was the appellant who committed the murder.
It is in evidence that the deceased was last seen in the company of the appellant at about 4.30 p.m. when the deceased had gone to deliver the mail bags to the bus.
At about 3.30 p.m., according to P.W. 1, the deceased had gone to the post office and taken the postal bags to be delivered to the Mail Bus, M.M.S. Bus Service.
He had also told the witness that he would again try to contact Krishna Naika and Halla Naika of Kittadal for delivering the registered articles.
Chennabasappa (P.W. 16) has also deposed that he saw Govindappa and the appellant delivering the mail bags to the bus after they had taken coffee in the hotel near the bus stop that evening.
P.W. 9, the brother of the appellant who was also at the bus stop that evening saw the deceased and the appellant travelling in the same bus.
Gangamma (P.W. 8), the wife of the brother of the deceased who lives in a portion of the same house in which the deceased lived.
has stated that she saw the deceased on Friday evening at about 4.30 p.m. with the appellant going from their house towards the post office building.
The appellant was at that time carrying an axe on his shoulder.
The demeanor of this witness was described by the trial court as natural.
Sulochana, an eleven year old daughter of the deceased, appeared as P.W. 10 and stated that on Friday, the day her father disappeared, at about 4.30 p.m. he left the house to deliver the mail bags.
At about 5 p.m. the appellant took an axe from her mother and proceeded towards the 'Post office.
At about 8 p.m. the appellant returned home.
According to this witness four or five days earlier, the appellant had suggested to the deceased to accompany him to the forest area for bringing 221 teak logs so as to be able to make some money.
People of village Haramghatta required teak logs and the deceased, according to the suggestion, could earn at least Rs. 151.
The deceased first expressed his inability to spare time from his official duties but the suggestion, could earn at least Rs. 151 .
The deceased first expresed his inability to spare time from his official duties but the suggestion having been repeated the deceased ultimately agreed.
This witness, though being only 1 1 years old was not administered oath, created a favourable impression on the trial court as is obvious from the following note "The witness gave her evidence without faltering or visible signs of hesitancy.
She speaks clearly, precisely and straight to the question.
" The trial court also interrupted the witness in the middle of her testimony, in order to satisfy itself, by breaking the continuity of the story, that she was not reproducing a tutored version.
On going through her statement we are satisfied that she is a truthful witness and her evidence deserves to be accepted and was rightly accepted by the courts below.
There is in our opinion, cogent and trustworthy evidence.
to support the conclusion of the courts below that the deceased was last seen with the appellant a short time before his disappearance.
Having upheld this conclusion, we may appropriately examine the appellant 's explanation.
He has merely denied, by expressing his ignorance, that the deceased had been last seen alive with him.
In fact he has simply described as false all the material allegations including that of his acquaintance with Laxmamma and that he used to stay in Kommanal.
This bare denial without any explanation is not wholly unimportant.
This takes us to the motive for the appellant to get rid of the deceased.
There can be little doubt on the evidence on the record that the appellant had developed close intimacy with the wife of the deceased.
The evidence of Gangamma (P.W. 8), wife of the brother of the deceased who, it may recalled, lives in one portion of the ancestral house owned by the two brothers, is quite clear on the point.
Laxmamma, the wife of the deceased, used to run her shop in the other half of the same house.
P.W. 8 was, therefore, in a position to know about the appellant 's frequent visits to that shop.
According to her the appellant sometimes used to take his food in Laxmamma 's house and also to sleep there.
This was due to their intimacy.
Though many customers used to come to that shop no one ever stayed on in the house except the appellant.
P.W. 8 has also deposed that the deceased and his wife used to quarrel with each other and the deceased used to 222 protest against her feeding the appellant and neglecting him in the matter of food.
To this Laxamma used to report that the deceased did not provide her with enough money for that purpose whereas the appellant did.
The suggestion that her husband and the deceased had quarrelled over partition of a field was repudiated by her.
The trial court was favourably impressed by the demeanor of this witness as well.
P.W. 9, the brother of the deceased, has also stated about the quarrels between the deceased and his wife.
He has deposed : "My brother and his wife A2 were often quarreling bitterly.
That was after Ugadi of last year.
lie used to complain to his wife that she was not cooking food at the proper time.
A2 in turn used to reply that he was not supplying her with provision and therefore he could not expect her to cook food in time.
He sometimes used to thrash A2.
She would weep and sleep away.
When my brother used to go away without food, I used to invite him to take his food.
Sometimes he used to take his food in my house.
After the last Ugadi, Thimma (A1) 's visit and stay in my brother 's house increased.
Al and A2 used to go together for work.
They used to go to Nyamathi Shandy to fetch goods.
Al used to carry the goods back to Komminal from Nyamathi.
Two days prior to the disappearance of my brother there was a bitter quarrel between A2 and himself.
During that quarrel, Govindappa questioned A2 how Al remained under his roof and that she fed him and that by the time he returned, there was nothing left for him.
A2 replied that he earns and supplied the provi sions and therefore she was feeding him whereas he (Govindappa) did not supply the provisions and consequently she did not look after him.
The quarrel resulted in severe beating of A2 by my brother.
A2 never served him food.
" From this evidence the motive on the part of the appellant to do away with the deceased is obvious.
We now turn to the extra judicial confessions of the appellant and his conduct on the day following the disappearance of the deceased.
Ganga (P.W. 4) is a nephew of the appellant, being the son of his elder brother.
The appellant, according to this witneSS, had taken up a contract of uprooting plants and trees so as to render the land cultivable.
This witness used to visit Laxmamma 's shop when he was working at Kommanal and he 223 also knew the deceased.
On Saturday following the day when the deceased had disappeared, in the early hours of the morning a little before sunrise. the appellant went to the house of the witness in Bodekanna colony near Kommannal and woke him up.
As the witness began to tether his bullocks the appellant went to, his father 's house nearby.
After, a short while the appellant returned and told the witness that the previous evening he had gone to the field of one Mahadevappa and had lost his purse containing Rs. 200/ .
The appellant desired the witness to accompany him to find the lost purse.
On their way through the forest by the side of the hill they met one Sivappanavar Basappa (P.W. 13) on whose enquiry as to what had brought them there so early, the appellant replied that he had some work in the fallow land of Mahadevappa .
On reaching the 'Korakalu ' which was about 2 1/2 ft.
deep, the witness saw the dead body of Govindappa.
The dead body was lying flat on its back and the witness observed injuries on the neck, face and chest of the deceased.
He also saw near the dead body Khakhi shirt (M.O. 1), Khakhi half pants (M.O. 2), a pair of chappals (M.O. 7), a plaster belt (M.O. 8) and banian (M.O. 10).
The appellant then pulled the red waist thread (M.O. 10) worn by the deceased and as he took it into his hands, a pair of small keys (M.O. 3 A) were noticed by the witness.
The appellant remarked that those were not the keys he wanted.
So saying he threw away the thread, the keys and a talisman (M.O. 11) which was also found there.
Directing the witness to keep a watch from a higher elevation the appellant cut some branches of the trees and after collecting some twigs covered the dead body with them.
After picking up some papers the appellant and the witness started on return journey.
After covering some distance the appellant threw away the papers in a bush.
The appellant told the witness that he had killed the deceased with the sickle (matchu) given by the wife of the deceased and that the same had been thrown away by him in a bush.
As they reached the main road the appellant warned the witness not to disclose to anyone what he had seen and learnt, otherwise he was threatened with the same fate as the deceased had met.
The trial court was not favourably impressed by the testimony of Ganga (P.W. 4) though it felt convinced that on the day following the disappearance of the deceased he had knowledge both of the commission of the offence and of the place where the dead body was lying.
That court did not rely _on his testimony in regard to the extra judicial confession because it was considered incredible.
The High Court on appeal disagreed with the trial court in its appreciation of the evidence of P.W. 4.
According to the High Court the evidence of P.W. 4 was corroborated by the evidence of P.W. 13 and P.W. 25.
The extra judicial confession was, 224 therefore, held to be admissible and trust Worthy.
Before us it was contended, that the extra judicial confession said to have "been made to P.W. 4 is inadmissible and in any event without corroboration in material particulars from independent source it is unsafe to act upon it.
It was emphasised that P.W. 4 was at one stage of the investigation suspected of complicity in this murder and, therefore, he should be treated no better than an accomplice.
In our opinion, this criticism is not justified.
An unambiguous confession, if admissible in evidence, and free from suspicion suggesting its falsity, is a valuable piece of evidence which possesses a high probative force because it emanates directly from the person committing the offence.
But in the process of proof of an alleged confession the court has to be satisfied that, it is voluntary, it does not appear to be the result of inducement, threat or promise as contemplated by section 24, Indian Evidence Act and the surrounding circumstances do not indicate that it is inspired by some improperly or collateral consideration suggesting that it may not be true.
For this purpose, the court must scrutinise all the relevant factors, such as, the person to whom the confession is made, the time and place of making it, the circumstances in which it is made and finally the actual words.
In the case in hand it is quite clear that P.W. 4 is not a person in authority.
There can thus be no question of any inducement, threat or promise rendering the confession irrelevant.
Nor has any cogent reason ' been suggested why the appellant should have made an untrue confession to P.W. 4 within 24 hours of the disappearance of the deceased.
On the other hand, the appellant appears to have been impelled by some inner urge to take the assistance of P.W. 4, his real nephew, to go to the place of occurrence to see as to what had happened to the dead body of his victim.
Such behaviour cannot be considered unnatural.
The confession appears to us to be free from any taint which would throw suspicion on its voluntary character and it has a ring of truth in it.
The fact that during the investigation P.W. 4 was suspected of being involved in the murder would also not cast any doubt on the voluntary character of the confession or on its true nature because it is the knowledge of P.W. 4 derived from this very confession which perhaps invited suspicion on him.
We do not consider this to be a cogent ground for holding that P.W. 4 had any motive to concoct the story of confession.
This confession is, therefore, admisible in evidence and being true, deserves to be acted upon.
The words used are quite clear and 'admit of no doubt of the appellant 's guilt.
And then though the evidence of P.W. 4 does not need any corroboration we find that corroboration in material particulars is forthcoming on the record.
The existence of the dead body and all the other articles at the place where they were later found and the evidence of Basappa (P.W. 13) which proves the visit of the 225 appellant and P.W. 4 to the spot on Saturday following the disappearance of the deceased furnish strong corroboration.
The High Court was thus quite right in relying on the extra judicial confession made to P.W. 4.
The confessions said to have been made to P.W. 31 and to Abdul Rahman (P.W. 22) stand on a different footing.
Both the courts below have not considered it safe to rely on these confessions and we do not find any sufficient reason for disagreeing with them.
Reliance on behalf of the prosecution was also placed on the information given by the appellant which led to the discovery of the dead body and other articles found at the spot.
It was contended that the information received from him related distinctly to the facts discovered and, therefore, the statement conveying the information was admissible in evidence under section 27 of the Indian 'Evidence Act.
This information, it was argued, also lends support to the appellant 's guilt.
It appears to us that when P.W. 4 was suspected of complicity in this offence he would in all probability have disclosed to the police the existence of the dead body and the other articles at the place where they were actually found.
Once a fact is discovered from other sources there can be no fresh discovery even if relevant information is extracted from the accused and courts have to be watchful against the ingenuity of the investigating officer in this respect so that the protection afforded by the wholesome provisions of sections 25 and 26 of the Indian Evi dence Act is not whittled down by mere manipulation of the record of case diary.
It would, in the circumstances, be somewhat unsafe to rely on this information for proving the appellant 's guilt.
We are accordingly disinclined to take into consideration this statement.
The trial court and the High Court have also been influenced by the fact that the appellant had absconded after September 1, 1967 when the police got suspicious of his complicity in this offence.
It is true that the appellant did make himself scarce with effect from September 1, 1967 till he was arrested on September 5, 1967 and this conduct is relevant under section 8 of.
the Indian Evidence Act and might well be indicative to some extent of guilty mind.
But this is not the only conclusion to which it must lead the court.
Even innocent persons may, when suspected of grave crimes, be tempted to, evade arrest: such is the instinct of self preservation in an average human being.
We are, therefore, not inclined to attach much significance to this conduct on the peculiar facts and circumstances of this case.
In this case the appellant being a pauper was provided with counsel at State expense in the trial court.
The entire prosecution case depends on circumstantial evidence and the dead body 226 was actually recovered in a decomposed state when it was not capable of identification.
In view of these peculiar features we undertook to examine the evidence ourselves, a course which this Court as a matter of settled practice, does not ordinarily adopt.
We are satisfied that the evidence on the record establishes the appellant 's guilt beyond reasonable doubt and the courts below were quite right in convicting him.
On the question of sentence also we do not find any cogent ground for interference.
This appeal fails and is dismissed.
Y.P. Appeal dismissed.
| IN-Abs | The appellant was convicted of the offence under section 302 I.P.C. Being a pauper he was defended by counsel at State expense.
The entire evidence was circumstantial and the dead body, when it was recovered, was in a, decomposed state and was incapable of identification.
Therefore, this Court, examined the evidence afresh, contrary to its settled practice and came to the conclusion that the evidence on record established the appellant 's guilt beyond all reasonable doubt.
With respect to three items of evidence, namely, (1) an extra judicial confession by the appellant to his nephew; (2) the 'recovery of the dead body as a result of the appellant 's statement; and (3) the conduct of the appellant in absconding immediately after the police suspected his complicity in the crime, HELD : (1) An unambiguous confession if admissible in evidence, and free from suspicion suggesting its falsity, is a valuable piece of evidence.
which possesses a high probative force because it emanates directly from the person committing the offence.
The Court, must however be satisfied that it is voluntary and was not the result of inducement, threat or promise as contemplated by section 24 of the Evidence Act and that the surrounding circumstances do not indicate that it was inspired by improper or collateral considerations.
For this purpose, the court must scrutinise all the relevant factors, such as the person to whom the confession is.
made, the time and place of making it, the circumstances in which it was made and finally, the actual words used.
[224 C] In the present case, the person to whom the extra judicial confession.
was made was not a person in authority and there was no question of any inducement, threat or promise.
Nor has any cogent reason been suggested as to why the appellant should have made an untrue confession within 24 hours of the disappearance of the deceased.
The appellant appears to have been impelled by some inner urge to take the assistance of his nephew to go to the place of occurrence and see what happened to the dead body, Such behaviours cannot be considered unnatural.
The confession is free from any taint which would throw suspicion on its voluntary character and it has a ring of truth in it.
The fact that during the investigation the nephew was also suspected of being involved in the murder would also not cast any doubt on the voluntary character of the confession or on its true nature, because, it was his knowledge derived from the confession that invited suspicion on him.
Further, though the evidence of the nephew does not require corroboration, the finding of the dead body and other articles and other evidence on record corroborate it in material particulars.
Therefore the confession to, the nephew is admissible in evidence and being true, deserves to be acted upon.
[224 E H] (2) When the nephew was suspected of complicity he would have in all probability, disclosed to the police the existence of the dead body and 216 the other articles at the place where they were actually found.
Therefore, it would, in the circumstances of the case, be unsafe to rely upon the information given by the accused, leading to the discovery of the dead body, for proving his 'guilt.
[225 D F] (3) Evidence of absconding is relevant as evidence of conduct under section 8 of the Evidence Act but the guilty mind of the accused is not the only conclusion that could be drawn by the Court, because, even innocent persons when suspected of grave crimes are tempted to evade arrest.
[225 G H]
|
l Appeals Nos. 2419 to 2421 and 2423 to 2425 of 1966.
Appeals by special leave from the judgment and order dated February 22, 1966 of the Bombay High Court, Nagpur Bench in Special Civil Applications Nos. 140 to 142 of 1962.
A. K. Sen, G. L. Sanghi, Rameshwar Nath, for the appellant (in all the appeals).
section C. Manchanda, section K. Aiyar and R. N. Sachthey, for the respondent (in all the appeals).
The Judgment of the Court was delivered by Hegde, J.
In these appeals by special leave, the only ques tion of law that arises for decision is whether the respondent was competent to initiate proceedings under section 34 of the Indian Income Tax Act, 1922 (which will hereinafter be refer red to as the Act).
The respondent initiated proceedings under section 34 of the Act against the appellant by issuing notices under that section on December 26, 1960 in respect of the assessment years 1953 54, 1954 55 and 1955 56.
The appellant challenged the validity of 268 those proceedings by means of a writ petitions under article 226 and 227 of the Constitution in the High Court of Judicature at Bombay (Nagpur Bench) .
Those petitions were summarily dismissed.
The appellant thereafter appealed to this Court after obtaining special leave from this Court.
This Court allowed those appeals on April 8, 1965 holding that the High Court was not justified in summarily dismissing the writ petitions as the allegations made therein merited examination.
Thereafter the High Court issued rule nisi in those petitions.
The respondent opposed those petitions.
After hearing the parties, the High Court again dismissed those writ petitions.
Hence these appeals.
The facts of the case material for deciding these appeals have been set out in detail in this Court 's order dated April 8, 1965.
We shall briefly refer to them.
The above appeals relate to proceedings under section 34 of the Act in respect of three assessment periods.
It would be sufficient if we set out the facts relating to the assessment year 1953 54.
There is no dispute that if the proceedings relating to that year are held to be invalid, similar would be the position regarding the proceedings relating to the other two assessment periods.
On the other hand, if they are held to be valid, the same would be true in respect of the other assessment periods.
The appellant, Madhya Pradesh Industries Ltd. (hereinafter referred to as the company), is engaged in the business of mining ,manganese ore.
On March 18, 1952, the company appointed M/s. J. K. Alloys Ltd. (hereinafter called 'Alloys ') as its selling agents.
In the account year relating to the assessment year 1953 54, the company paid as commission, Rs. 1,13,052/8/9 to the selling agents and claimed that amount as a revenue outgoing in the computation of its profits for that year.
The Income tax Officer made the order of assessment without expressly referring to the said deduction but proceeding on the basis that it is a per missible deduction.
On December 26, 1960, the Income tax Officer issued a notice to the company in exercise of his powers under section 34 of the Act reciting therein that he having "reason to believe that" the income of the company assessable to income tax for the assessment year 1953 54 had (a) escaped assessment and (b) under assessed, he proposes to reassess the income that had escaped assessment or had been under assessed.
He called upon the company to deliver a return of the total income of the company assessable for the said assessment year 1953 54.
In response to a letter sent by the company, the Income tax Officer informed the company that the notice issued by him was under section 34 (1) (a).
Thereafter there was some correspondence between the Income tax Officer and the company.
The Income tax 269 Officer required the company to give him the information called for in the questionnaire issued by him.
The company did not send any reply to the said questionnaire.
On December 21, 1961, the Income tax Officer informed the company that since the questions asked were not replied to, he presumed that no correspondence with Alloys existed and the payment of commission had been made without any justification, Alloys having rendered no service as selling agents.
On April 2, 1962, the company moved the High Court of Judicature of Bombay (Nagpur Bench) praying for the issue of a writ of certiorari under article 226 of the Constitution or an appropriate direction or order under article 227 of the Constitution calling for the record of the case and for the issue of writs in the nature of Prohibition or Mandamus restraining the Income tax Officer from taking any action or proceeding in enforcement or implementation of the notice dated December 26, 1960.
The petition, as mentioned earlier, was rejected in limini.
In the writ petition, the plea taken by the company was that in issuing the notice under section 34(1) (a) of the Act, the Income tax Officer acted without jurisdiction and for a colourable purpose.
Its case as set out in the writ petition is as follows In its return the company disclosed for the year ending March 31, 1953 Rs. 15,70,587/ as its total profits according to its books of account.
In the statement under section 38 (3) of the Act filed with the return, the company disclosed that it had paid Rs. 1,13,052/8/9 as "commission sales" "on different dates" by cheques to Alloys and Rs. 6,091/4/ to J. section Williams on October 4, 1952 by cheque as commission on sales.
In the profit and loss account of the company filed with the return, the amount of Rs. 29,76,067/10/8 was disclosed as received by "sales less com mission".
On December 7, 1953, R. K. Gupta, a Director of the company made a statement before the Income tax Officer stating that the commission was paid to Williams on the sales accounted for during the year ended March 31, 1953 and that the same should be allowed as deduction and that "similar was the case with the commission payable to J. K. Alloys Ltd., which had already been paid subsequently." On February 21, 1954, the Income tax Officer called upon the company to produce amongst other documents, certificates showing whether any receipt included in the income, profits or gains had been credited or transferred to any assets, capital account, or any other liability account, a similar certificate regarding any credit for important expenses claimed under the head "profit and loss A/c", a list of buyers with full addresses along with quantity, number and net proceeds of export business as well as Indian sales, a statement setting out full details of various items of indirect expenses debited to profit 270 and loss account and a statement of expenses grouped and sorted out under the heads, wages, salary and other emoluments.
On June 21, 1954, the company filed the certificates and the statements demanded together with the statement showing that out of the sale proceeds, commission paid to Alloys and J. section Williams was deducted.
In the course, of the assessment proceedings, R. section Agarwal, a representative of the company appeared before the Income tax Officer and agreed that the commission "debited as paid to Williams may be added back ' and about Alloys he said that the commission "had already been paid".
Thereafter on February 14, 1955, the assessment of the company was com pleted by the Income tax Officer.
The Income tax Officer rejected the commission said to have been paid to Williams and added back that amount to the gross profits of the company.
He took no objection to the commission paid to the Alloys.
The case pleaded by the company in the writ petition is that it had placed before the Income tax Officer all the material facts; the Income tax Officer before making the assessment had examined those facts and was satisfied with the explanation given by the company.
The company denied that the Income tax Officer had any reason to believe that by reason of the omission or failure on the part of the company to disclose fully 'and truly all material facts necessary for his assessment for the year in question income, profits or gains chargeable to income tax have escaped assessment for that year or have been under assessed.
The company dis puted that the Income tax Officer had any reason before him to have the required belief.
It also denied the fact that it had omitted or failed to disclose fully and truly all material facts necessary for the assessment in question or that any income, profits, or gains chargeable to income tax have escaped assessment in that year.
Section 34(1) of the Act as at the relevant time read (a) The Income tax Officer has reason to believe that by Mason of the omission or failure on the part of an assessee to make a return of his income under section 22 for any year or to disclose fully and truly ail material facts necessary for his assessment for that year, income, profits or gains chargeable to income tax have escaped assessment for that year, or have been under assessed, or assessed at too low a rate, or have been made the subject of excessive relief under the Act, or excessive loss or depreciation allowance has been computed, or (b) notwithstanding that there has been no omission or failure as mentioned in clause (a) on the part 271 of the assessee, the Income tax Officer has in consequence of information in his 'possession reason to believe that income, profits or gains chargeable to income tax have been under assessed or assessed at too low a rate, or have been made the subject of excessive relief under this Act, or that excessive loss or depreciation allowance has been computed.
he may in cases falling under clause ( a) at any time within eight years and in cases falling under clause (b) at any time within four years of the end of that year, serve on the assessee, or, it the assessee is a company, on the principal officer, thereof, a notice containing all or any of the requirements which may be included in a notice under sub section (2) of section 22 and may proceed to assess or re assess such income, profits or ,gains or recompute the loss or depreciation allowance; and the provisions of this Act shall, so far as may be, apply accordingly as if the notice were a notice issued under that subsection Provided that (i) the Income tax Officer shall not issue a notice under this sub section, unless he has recorded his reasons for doing so and the Commissioner is satisfied on such reasons recorded that it is a fit case for the issue of such notice; (ii) the tax shall be chargeable at the rate at which it would have been charged had the income, profits or gains not escaped assessment or full assessment, as the case may be; and (iii) where the assessment made or to be made is an assessment made or to be made on a person deemed to be the agent of a non resident person under section 43, this sub section shall have effect as if for the periods of eight years and four years a period of one year was substituted.
Explanation.
Production before the Income tax Officer of account books or other evidence from which material facts could with due diligence have been discovered by the Income tax Officer will not necessarily amount to disclosure within the meaning of this, section.
In Calcutta Discount Company Ltd. vs Income Tax Officer Companies Dist.1 and another(1), this Court ruled that before an Income tax Officer could issue a notice under section 34 (1) (a) of the Act, two conditions must co exist, namely, that he must have reason to believe (1) that income, profits or gains had been under assessed and (2) that such under assessment was due to non disclosure of material facts by the assessee.
It was observed therein that where, however, the Income tax Officer has prima facie reasonable grounds for believing that there has been a nondisclosure of a primary material fact, that by itself gives him the jurisdiction to issue a notice under section 34 of the Act and the adequacy or otherwise of the grounds of such belief is not open to investigation by the court.
It is for the assessee who wants to challenge such jurisdiction to establish that the Income tax Officer had no material for such belief.
Speaking for the majority Das Gupta J. observed therein "To confer jurisdiction under this section to issue notice in respect of assessments beyond the period of four years, but within a period of eight years, from the end of the relevant year two conditions have therefore to be satisfied.
The first is that the income tax Officer must have reason to believe that income, profits or gains chargeable to income tax have 'been under assessed.
The second is that he must have also reason to believe that such "under assessment" has occurred by reason of either (i) omission or failure on the part of an assessee to make a return of his income under section 22, or (ii) omission or failure on the part of an assessee to disclose fully and truly all material facts necessary for his assessment for that year.
Both these conditions are conditions precedent to be satisfied before the Income tax Officer could have jurisdiction to issue a notice for the assessment or re assessment beyond the period of four years but within the period of eight years, from the end of the year in question."
Proceeding further the learned judge observed "The position therefore is that if there were in fact some reasonable grounds for thinking that there had been any non disclosure as, regards any primary fact, which could have a material bearing on the question of 'under assessment ' that would be sufficient to give jurisdiction to the Income tax Officer to issue the notices under section 34.
Whether these grounds were adequate or not for arriving at the conclusion that there was a non disclosure of material facts would not be open for the (1) ; 273 court 's investigation.
In other words, all that is necessary to give this special jurisdiction is that the Income tax Officer had when he assumed ' jurisdiction some prima facie grounds for thinking that there had been some non disclosure of material facts".
Shah J. (one of us) in his dissenting judgment has observed that the expression "has reason to believe" in section 34(1) (a) of the Indian Income Tax Act does not mean a purely subjective satisfaction of the Income tax Officer but predicates the existence of reasons on which such belief has to be founded.
That belief, therefore cannot be founded on mere suspicion and must be based on evidence and any question as to the adequacy of such evidence is wholly immaterial at that stage.
He further observed that where the existence of reasonable belief that there had been under assessment due to non disclosure by the assessee, which is a condition precedent to exercise of the power under section 34(1)(a) is asserted by the assessing authority and the record prima facie supports its existence, any enquiry as to whether the authority could reasonably hold the belief that the under assessment was due to non disclosure by the assessee of material facts necessary for the assessment must, be barred.
In section Narayanappa and ors.vs Commissioner of Income Tax, Bangalore(1), this Court held that two conditions must be satisfied in order to confer jurisdiction on the Income tax Officer to issue the notice under section 34 of the Act in respect of assessments beyond the period of four years, but within a period of eight years, from the end of the relevant year, viz. (i) the Income tax Officer must have reason to believe that income, profits or gains chargeable to income tax had been under assessed and (ii) he must have reason to believe that such "under assessment" had occurred by reason of either (a) omission or failure on the part of the assessee to make a return of his income under section 22 or (b) omission or failure on the part of the assessee to disclose fully and truly all the material facts necessary for his assessment for that year.
Both these conditions are conditions precedent to be satisfied before the Income tax Officer acquires jurisdiction to issue a notice under the section.
If there are in fact some reasonable grounds for the Income tax Officer to believe that there had been any non disclosure as regards any fact, which could have a material bearing on the question of under assessment, that would be sufficient to give jurisdiction to the Income tax Officer to issue the notice under section 34.
Whether these grounds are adequate or not is not a matter for the Court to investigate.
In other words, the sufficiency of the grounds which induced the Income tax Officer to Act is not a justiciable issue.
It is of course open for the assessee (1) 63, I.T.E., 219 274 to contend that the Income tax Officer did not hold the belief that there had been such nondisclosure.
In ' other words, the existence of the belief can be challenged by the assessee but not sufficiency of the reasons for the belief.
Therein it was observed that the expression "reason to believe" in section 34 does not mean purely subjective satisfaction on the part of the Income tax Officer.
The belief must be held in good faith : it cannot be merely a pretence.
It is open to the court to examine whether the reasons for the belief have a rational connection or a relevant bearing to the formation of the belief and are not extraneous or irrelevant to the, purpose of the section.
To this limited extent the action of the Income tax Officer in starting proceedings under section 34 of the Act is open to challenge in a court of law.
The same view was again expressed by this Court in Karitamani Venkata Narayana and Sons vs First Additional Income Tax Officer, Rajahmundry (1).
In these cases, the company in its writ petitions had repudiated the assertion of the Income tax Officer that he had reason to believe that due to the omission or failure on the part of the company to give material facts, some income had escaped assessment.
Under those circumstances one would have expected the officer who issued the notices under section 34(1) (a) to file an affidavit setting out the circumstances under which he formed the necessary belief.
We were told that one Mr. Pandey had issued the notices in question.
That officer had not filed any affidavit in these proceedings.
The proceedings recorded by him before issuing the notices have not been produced nor his report to the Commissioner or even the Commissioner 's sanction has not been produced.
Hence it is not possible to hold that the Income tax Officer had any reason to form the belief in question or the reasons before him were relevant for the purpose.
We have no basis before us to hold that the Income tax Officer had jurisdiction to issue, the impugned notices.
Hence the proceedings taken by him have to be quashed.
For the reasons mentioned above, we allow these appeals, set aside the order of the High Court and quash the proceeding$ taken under section 34 (1) (a) of the Act.
The respondent shall pay the costs of these appeals hearing fee one set.
Y.P. Appeal allowed.
| IN-Abs | The assessee paid commission to A, one of its selling agents, and claimed that amount as a revenue outgoing in the computation of its profits for that year.
The Income tax Officer made the order of assessment without expressly referring to the said deduction but proceeding on the basis that it was a permissible deduction.
Later, the Income tax Officer issued notices under section 34(1)(a) of the Income tax Act, 1922 stating that he had "reason to believe that" the income of the assessee had escaped assessment and was under assessed.
He sent a questionnaire to the assessee.
Since the assessee , did not reply to the questionnaire, the income tax officer informed the assessee, that he presumed that no correspondence with A existed that no service was rendered by A and the payments made were without justification.
The assessee filed petitions under articles 226 and 227 of the Constitution for restraining the Income tax Officer from taking any action on the notices.
The assessee 's case was that it had placed all the material facts before the income tax officer that the Income tax Officer had examined those facts before making the assessments, and that the Income tax officer had added back the commission paid to another selling agent to the profits of the assessee, but took no objection to the commission paid to A.
The High Court dismissed the petition.
Allowing the assessee 's appeal, this Court HELD : The proceedings taken under section 34(1) (a) must be quashed.
Two conditions must be satisfied in order to confer jurisdiction on the Income tax Officer to issue the notice under section 34 of the Act in respect of assessments beyond the period of four years, but within a period of eight years, from the end of the relevant year, viz. (i) the Income tax Officer must have reason to believe that income, profits or gains chargeable to income tax had been under assessed, and (ii) he must have reason to believe that such "under assessment" had occurred by reason of either (a) omission or failure on the part of the assessee to make a return of his income under section 22 or (b) omission or failure on the part of the assessee to disclose fully and truly all the material facts necessary for his assessment for that year.
Both these conditions are conditions precedent to be satisfied before the Income tax Officer acquires jurisdiction to issue a notice under the section.
If there are in fact some reasonable grounds for the Income tax Officer to believe that there had been any nondisclosure as regards any fact, which could have a material bearing on the question of under assessment, that would be sufficient to give jurisdiction to the Income tax Officer to issue the notice under section 34.
Whether these grounds are adequate or not is not a matter for the Court to investigate.
In other words, the sufficiency of the grounds which induced the Income tax Officer to act is not a justiciable issue.
It is of course open for the assessee to contend that the Income tax Officer did not hold the belief that there had been such non disclosure.
In other words, the existence of 267 the belief can be challenged by the assessee, but not the sufficiency of the reasons for the belief.
The expression, "reason to believe" in section 34 does not mean purely subjective satisfaction on the part of the Income tax Officer.
The belief must be held in good faith , it cannot be merely a pretence.
It is open to the court to examine whether the reasons for the belief have a rational connection or a relevant bearing to the formation of the belief and are not extraneous or irrelevant to the purpose of the section.
To this limited extent, the action of the Income tax Officer is starting proceedings under section 34 of the Act is open to challenge in a court of law.
[273 E H; 274 A C] Calcutta Discount Company Ltd. vs Income tax Officer Companies Dist.
1 and another; ; ; section Nailayanappa and Ors.
vs Commissioner of Income tax Bangalore, ; Kantamani Venkata Narayana and Sons vs First Addl.
Income tax Officer, Rajahmundry; , followed.
In the present case, the assessee in its writ petitions had repudiated the assertion of the Income tax Officer that he had reason to believe, that due to the omission or failure on t he part of the company to give material facts, some income had escaped assessment.
Under those circumstances the officer who issued the notices under section 34(1) (a) was expected to file an affidavit setting out the circumstances under which he formed the necessary belief.
That officer had not filed any affidavit in these proceedings.
The proceedings recorded by him before issuing the notices had not been produced nor his report to the Commissioner and even the Commissioner 's sanction had not been produced.
Hence it was not possible to hold that the Income tax Officer had any reason to form the belief in question or the reasons before him were relevant for the purpose.
[274 D F]
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